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AGREEMENT OF LEASE
between
38-32 ASSOCIATES,
Landlord,
and
24/7 MEDIA INC.
Tenant,
Dated: April 30, 1998
PREMISES:
1250 Broadway
Twenty-Seventh (27th) Floor
New York, New York
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TABLE OF CONTENTS
Page
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ARTICLE 1 RENT ............................................................ 1
ARTICLE 2 PREPARATION OF THE DEMISED PREMISES.............................. 3
ARTICLE 3 ADJUSTMENTS OF RENT.............................................. 3
ARTICLE 4 ELECTRICITY...................................................... 9
ARTICLE 5 USE ............................................................. 12
ARTICLE 6 ALTERATIONS AND INSTALLATIONS.................................... 12
ARTICLE 7 REPAIRS ......................................................... 15
ARTICLE 8 REQUIREMENTS OF LAW.............................................. 17
ARTICLE 9 INSURANCE, LOSS, REIMBURSEMENT, LIABILITY........................ 18
ARTICLE 10 DAMAGE BY FIRE OR OTHER CAUSE.................................... 21
ARTICLE 11 ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.......................... 23
ARTICLE 12 CERTIFICATE OF OCCUPANCY......................................... 29
ARTICLE 13 ADJACENT EXCAVATION SHORING...................................... 29
ARTICLE 14 CONDEMNATION..................................................... 29
ARTICLE 15 ACCESS TO DEMISED PREMISES; CHANGES.............................. 31
ARTICLE 16 CONDITIONS OF LIMITATION......................................... 32
ARTICLE 17 RE-ENTRY BY LANDLORD, INJUNCTION................................. 34
ARTICLE 18 DAMAGES ......................................................... 35
ARTICLE 19 LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS................. 36
ARTICLE 20 QUIET ENJOYMENT.................................................. 37
ARTICLE 21 SERVICES AND EQUIPMENT........................................... 37
ARTICLE 22 DEFINITIONS...................................................... 39
ARTICLE 23 INVALIDITY OF ANY PROVISION...................................... 40
ARTICLE 24 BROKERAGE........................................................ 40
ARTICLE 25 SUBORDINATION.................................................... 41
ARTICLE 26 CERTIFICATES OF LANDLORD TENANT.................................. 42
ARTICLE 27 LEGAL PROCEEDINGS WAIVER OF JURY TRIAL........................... 43
ARTICLE 28 SURRENDER OF PREMISES............................................ 43
ARTICLE 29 RULES AND REGULATIONS............................................ 44
ARTICLE 30 CONSENTS AND APPROVALS........................................... 44
ARTICLE 31 NOTICES ......................................................... 45
ARTICLE 32 NO WAIVER........................................................ 45
ARTICLE 33 CAPTIONS......................................................... 46
ARTICLE 34 INABILITY TO PERFORM............................................. 46
ARTICLE 35 NO REPRESENTATIONS BY LANDLORD................................... 47
ARTICLE 36 NAME OF BUILDING................................................. 47
ARTICLE 37 RESTRICTIONS UPON USE............................................ 47
ARTICLE 38 ARBITRATION...................................................... 48
ARTICLE 39 INDEMNITY........................................................ 48
ARTICLE 40 MEMORANDUM OF LEASE.............................................. 48
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ARTICLE 41 SECURITY......................................................... 49
ARTICLE 42 MISCELLANEOUS.................................................... 51
ARTICLE 43 RIGHT OF FIRST REFUSAL........................................... 52
ARTICLE 44 WORK CREDIT...................................................... 57
SCHEDULES
A Floor Plan
B Rules and Regulations
C First Refusal Space
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AGREEMENT OF LEASE made as of this 30th day of April, 1998 between
38-32 ASSOCIATES, a New York limited partnership, having an office at c/o Edward
S. Gordon Co., Inc., 200 Park Avenue, New York, New York 10166 (hereinafter
referred to as "Landlord") and 24/7 MEDIA, INC., a Delaware corporation, having
an address at 1290 Avenue of the Americas, 7th Floor, New York, New York 10104
(hereinafter referred to as "Tenant").
W I T N E S S E T H :
Landlord hereby leases and Tenant hereby hires from Landlord, in the
building (hereinafter referred to as the "Building") known as 1250 Broadway, New
York, New York, the following space: the entire twenty seventh (27th) floor as
shown hatched on the plan annexed hereto as Schedule A (which space is
hereinafter referred to as "the demised premises"); for a term of approximately
five (5) years and five (5) months, to commence on a date (hereinafter referred
to as the "Commencement Date") which shall be either (i) May 1, 1998 (subject to
postponement of such specific date as hereinafter set forth) or (ii) the date
Tenant or anyone claiming under or through Tenant first occupies the demised
premises for the conduct of its business, whichever occurs earlier and shall end
on September 30, 2003 (such date on which the term of the Lease expires is
hereinafter referred to as the "Expiration Date") or until such term shall
sooner cease and terminate as hereinafter provided.
The parties hereto, for themselves, their heirs, distributees,
executors, administrators, legal representatives, trustees, successors and
assigns, hereby covenant as follows:
ARTICLE 1
RENT
1.01. Tenant shall pay to Landlord a fixed annual rent
(hereinafter referred to as "fixed annual rent") at the annual rate of THREE
HUNDRED EIGHTY ONE THOUSAND THREE HUNDRED SEVENTY FIVE AND 00/100 ($381,375.00)
DOLLARS.
Tenant agrees to pay the fixed annual rent in lawful money of the
United States of America, in equal monthly installments in advance on the first
day of each calendar month during said term, at the office of Landlord or such
other place
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in the United States of America as Landlord may designate, without any setoff or
deduction whatsoever, except such deduction as may be occasioned by the
occurrence of any event permitting or requiring a deduction from or abatement of
rent as specifically set forth in this Lease. Should the obligation to pay fixed
annual rent commence on any day other than on the first day of a month, or end
on a date other than the last day of the month, then the fixed annual rent for
such month shall be prorated on a per diem basis.
The first month's installment of fixed annual rent due under this
Lease shall be paid by Tenant upon the execution of this Lease.
1.02. Tenant shall pay the fixed annual rent and additional rent
as above and as hereinafter provided, by good and sufficient check (subject to
collection) drawn on a New York City bank. All sums other than fixed annual rent
payable by Tenant hereunder shall be deemed additional rent (for default in the
payment of which Landlord shall have the same remedies as for a default in the
payment of fixed annual rent), and shall be payable twenty (20) days after
demand, unless other payment dates are hereinafter provided.
1.03. If Tenant shall fail to pay when due any installment of
fixed annual rent or any payment of additional rent for a period of nine (9)
days after such installment or payment shall have become due, Tenant shall pay
interest thereon at the Interest Rate (as such term is defined in Article 22
hereof), from the date when such installment or payment shall have become due to
the date of the payment thereof, and such interest shall be deemed additional
rent.
1.04. If any of the fixed annual rent or additional rent payable
under the terms and provisions of this Lease shall be or become uncollectible,
reduced or required to be refunded because of any Legal Requirement (as such
term is defined in Article 22 hereof) Tenant shall enter into such agreement(s)
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
maximum rents which from time to time during the continuance of such legal rent
restriction may be legally permissible (and not in excess of the amounts
reserved therefor under this Lease). Upon the termination of such legal rent
restriction, (a) the rents shall become and thereafter be payable in accordance
with the amounts reserved herein for the periods following such termination and
(b) Tenant shall pay to Landlord, to the maximum extent legally permissible, an
amount
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equal to (i) the rents which would have been paid pursuant to this Lease but for
such legal rent restriction less (ii) the rents paid by Tenant during the period
such legal rent restriction was in effect.
1.05. Notwithstanding anything in subsection 1.01 to the contrary,
and provided that Tenant is not in default under any of the monetary terms,
covenants or provisions of this Lease beyond any applicable notice and grace
periods, the monthly installments of fixed annual rent (but not the portion
thereof constituting the ERIF) payable by Tenant hereunder shall be abated
during the period commencing on the Commencement Date and ending of September
30, 1998. The day following the expiration of the foregoing rent abatement
period (ie., October 1, 1998) is hereinafter sometimes referred to as the "Rent
Commencement Date".
ARTICLE 2
PREPARATION OF THE DEMISED PREMISES
2.01. Tenant has examined the demised premises and, subject to the
provisions of Article 7 of this Lease, agrees to accept the same in their
condition and state of repair existing as of the date hereof subject to normal
wear and tear and to the removal therefrom of the property of the existing
tenant or occupant thereof, if any, and understands and agrees that Landlord
shall not be required to perform any work, supply any materials or incur any
expense to prepare the demised premises for Tenant's occupancy.
2.02. If the Commencement Date is other than the specific date
hereinabove set forth, then Tenant shall at Landlord's request, execute a
written agreement confirming the Commencement Date. Any failure of the parties
to execute such written agreement shall not affect the validity of the
Commencement Date as fixed and determined by Landlord as aforesaid.
ARTICLE 3
ADJUSTMENTS OF RENT
3.01. For the purposes of this Article 3, the following
definitions shall apply:
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(a) The term "Base Tax" shall be deemed to mean the Taxes for
the Tax Year commencing July 1, 1998.
(b) The term "Tenant's Tax Proportionate Share" shall be deemed
to mean 2.18 (2.18%) percent.
(c) The term "Taxes" shall mean all real estate taxes,
assessments, governmental levies, business improvement district charges and
assessments, municipal taxes, county taxes or any other governmental charge,
general or special, ordinary or extraordinary, unforeseen as well as foreseen,
of any kind or nature whatsoever, which are or may be assessed, levied or
imposed upon all or any part of the Land, the Building and the sidewalks, plazas
or streets in front of or adjacent thereto, including any tax, excise or fee
measured by or payable with respect to any rent, and levied against Landlord
and/or the Land and/or Building, under the laws of the United States, the State
of New York, or any political subdivision thereof. If, due to a future change in
the method of taxation or in the taxing authority, a new or additional real
estate tax, or a franchise, income, transit, profit or other tax or governmental
imposition, however designated, shall be levied against Landlord, and/or the
Land and/or Building, in addition to, or in substitution in whole or in part for
any tax which would constitute "Taxes", or in lieu of additional Taxes, such tax
or imposition shall be deemed for the purposes hereof to be included within the
term "Taxes". Except as provided in the preceding sentence, Tenant shall not be
responsible to pay any gross receipts taxes, franchise taxes, capital stock
taxes, inheritance, estate, succession, transfer, gift or other tax which is
measured in any manner by income or profit of Landlord.
(d) The term "Tax Year" shall mean each period of twelve months,
commencing on the first day of July of each such period, in which occurs any
part of the term of this Lease or such other period of twelve months occurring
during the term of this Lease as hereafter may be duly adopted as the fiscal
year for real estate tax purposes of the City of New York.
(e) The term "Operating Year" shall mean the full calendar year
after 1998 in which the term of this Lease commences and each succeeding
calendar year thereafter.
(f) The term "Base Year" shall mean the calendar year 1998.
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(g) "Operating Expenses" shall mean the total of all the costs
and expenses incurred or borne by Landlord in connection with the operation and
maintenance of the Building, and the services provided tenants therein,
including all expenses incurred as a result of Landlord's compliance with any of
its obligations hereunder. Operating Expenses shall include, without being
limited thereto, the following: (i) salaries, wages, medical, surgical and
general welfare benefits (including group life insurance) and pension payments
of employees of the managing agent for the Building (or, in the event of a
successor Landlord or a change in the management practices of Landlord, the
employees of such managing agent or Landlord) engaged in the operation and
maintenance of the Building; (ii) payroll taxes, workmen's compensation,
uniforms and dry cleaning for the employees referred to in subdivision (i);
(iii) the cost of all charges for steam, heat, ventilation, air-conditioning and
water (including water and sewer rentals) furnished to the Building, (including
the Building including common areas thereof), together with any taxes on any
such utilities; (iv) the cost of all charges for rent, casualty, war risk (if
obtainable from the United States government), liability and other types of
insurance; (v) the cost of all building and cleaning supplies and charges for
telephone for the Building and cleaning of the Building, including common areas;
(vi) the cost of all charges for management, cleaning and service contracts for
any areas of the Building; (vii) the cost of Building electric current (for the
purposes of this clause (vii), the cost of Building electric current shall be
deemed to mean the cost of all electricity purchased, including any taxes
thereon or fuel or other adjustments in connection therewith, for use in the
Building other than that which is furnished to the demised space of other
tenants in the Building; the parties agree that fifty (50%) percent of the
Building's payment to the public utility for the purchase of electricity shall
be deemed to be payment for Building electric current); (viii) the cost relating
to the elevators and escalators; (ix) the cost relating to protection and
security; (x) the cost relating to lobby decorations and interior and exterior
landscape maintenance; (xi) repairs, replacements and improvements performed
after the Base Year which are appropriate for the continued operation of the
Building as a first class office building; (xii) painting of non-tenanted areas;
(xiii) professional and consulting fees; (xiv) association fees or dues and (xv)
the cost of capital expenditures made to the Building by reason of the laws and
requirements of any public authorities or the requirements of insurance bodies
which is incurred after the Base Year. The term "Operating Expenses", as used
and defined under this Subsection (g), shall not, however, include the following
items: (1) interest on and amortization of
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any mortgages encumbering the Land or the Building; (2) the cost of tenant
improvements made for new tenant(s) of the Building; (3) brokerage commissions;
(4) financing or refinancing costs; (5) Taxes; and (6) salaries and fringe
benefits for officers, employees and executives above the grade of building
manager; (7) all leasing and brokerage commissions, takeover obligations and
fees with respect to procuring tenants to rent space in the Building; (8)
salaries, the value of fringe benefits and compensation benefits of personnel
above the grade of building manager; (9) legal, arbitration, space planners,
accounting and other professional fees incurred in connection with any
preparation of, negotiation of, or dispute arising out of, any space lease,
lease amendments, lease terminations and lease extensions, in the Building or in
enforcing lease obligations (other than those which are common to substantially
all tenants and which relate to the management and operation of the Building),
including, without limitation, court costs; (10) the costs of any additions to
the Building which increase the leasable space thereof; (11) expenses incurred
by Landlord in connection with the transfer or disposition of the Land or
Building or any superior lease, including, without limitation, transfer, deed
and gains taxes and legal and accounting fees incurred in connection therewith;
(12) interest or penalties incurred by Landlord for late payment by Landlord;
(13) the costs of performing work or furnishing services to or for any tenant,
other than Tenant, at Landlord's expense to the extent that such work or service
is in excess of the work or services generally provided to tenants of the
Building at Landlord's expense; (14) cost of overtime HVAC for other tenants of
the Building; (15) the cost of any excess insurance premium to the extent that
Landlord is entitled to be reimbursed therefor by Tenant or any other tenant of
the Building other than pursuant to this Article or provisions in any such
Tenant's lease similar to this Article; (16) bad debt loss, rent loss or reserve
for either; (17) cost to acquire, lease or restore sculptures, paintings or
other objects of art located within or outside the Building; (18) costs, fines,
interest or penalties incurred by Landlord due to violations of any applicable
governmental law, requirement or order except to the extent the same shall be
due to the act or omission of Tenant, Tenant's agents, employees, invitees of
licensees; (19) costs associated with the operation of the business entity which
constitutes Landlord as the same is distinguished from the costs of operation of
the Building; (20) costs of financing, refinancing, mortgaging, selling,
syndicating or hypothecating Landlord's interest in the Building, including,
without limitation, legal and accounting fees in connection therewith; (21) the
value of lost income to Landlord of any office space in the Building which is
utilized for the management of
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the Building; (22) costs incurred in connection with services or utilities
furnished to any retail space in the Building; (23) costs, including, without
limitation, attorney's fees and disbursements in connection with any judgment,
settlement or arbitration award incurred by Landlord that result from Landlord's
tortious or willful misconduct; (24) any compensation paid to clerks, attendants
or other person in commercial concessions operated by Landlord; (25) costs
incurred in connection with the acquisition or sale of air rights, transferable
development rights easements of other real property interests which do not
directly or indirectly benefit the tenants of the Building.
If Landlord shall purchase any item of capital equipment or make any
capital expenditure designed to result in savings or reductions in Operating
Expenses, then the cost thereof shall be included in Operating Expenses. The
costs of capital equipment or capital expenditures are so to be included in
Operating Expenses for the Operating Year in which the costs are incurred and
subsequent Operating Years, on a straight line basis, to the extent that such
items are amortized over such period of time as reasonably can be estimated as
the time in which such savings or reductions in Operating Expenses are expected
to equal Landlord's costs for such capital equipment or capital expenditure,
with an interest factor equal to the Interest Rate at the time of Landlord's
having incurred said costs. If Landlord shall lease any such item of capital
equipment designed to result in savings or reductions in Operating Expenses,
then the rentals and other costs paid or incurred in connection with such
leasing shall be included in Operating Expenses for the Operating Year in which
they were incurred.
If during all or part of any Operating Year, including the Base Year,
Landlord shall not furnish any particular item(s) of work or service (which
would constitute an Operating Expense hereunder) to portions of the Building
(including without limitation the demised premises) due to the fact that such
portions are not occupied or leased, or because such item of work or service
which is otherwise offered on a building-wide basis is not required or desired
by the tenant (including without limitation Tenant) or such portion, or such
tenant is itself obtaining and providing such item of work of service, or for
any other reasons, then, for the purposes of computing the additional rent
payable hereunder pursuant to paragraphs A and B of Section 3.02 hereof, the
amount of the expenses for such item(s) for such period shall be deemed to be
increased by an amount equal to the additional operating and maintenance
expenses which would
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reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such item(s) of work or services to such portion of the
Building.
(h) The term "Tenant's Proportionate Share" shall be deemed to
mean 2.25 (2.25%) percent.
(i) "Tenant's Proportionate Share of Increase" shall mean the
percentage set forth in Section 3.01(h) multiplied by the increase in Operating
Expenses for an Operating Year over Operating Expenses in the Base Year.
(j) "Tenant's Projected Share of Increase" shall mean Tenant's
Proportionate Share of Increase for the prior Operating Year and the reasonably
estimated increase in costs for the current Operating Year divided by twelve
(12) and payable monthly by Tenant to Landlord as additional rent. If, however,
Landlord shall furnish any such estimate for an Operating Year subsequent to the
commencement thereof, then (a) until the first day of the month following the
month in which such estimate is furnished to Tenant, Tenant shall pay to
Landlord on the first day of each month an amount equal to the monthly sum
payable by Tenant to Landlord under this Section in respect of the last month of
the preceding Operating Year; (b) promptly after such estimate is furnished to
Tenant, Landlord shall give notice to Tenant stating whether the installments of
Tenant's Projected Share of Increase previously made for such Operating Year
were greater or less than the installments of Tenant's Projected Share of
Increase to be made for such Operating Year in accordance with such estimate,
and (i) if there shall be a deficiency, Tenant shall pay the amount thereof
within twenty (20) days after demand therefor, or (ii) if there shall have been
an overpayment, Landlord shall promptly either refund to Tenant the amount
thereof or permit Tenant to credit the amount thereof against subsequent
payments under this Lease; and (c) on the first day of the month following the
month in which such estimate is furnished to Tenant, and monthly thereafter
throughout the remainder of such Operating Year, Tenant shall pay to Landlord an
amount equal to Tenant's Projected Share of Increase as shown on such estimate.
(k) The term "Escalation Statement" shall mean a statement
setting forth the amount payable by Tenant for a specified Tax Year or Operating
Year (as the case may be) pursuant to this Article 3.
3.02. A. After the expiration of the Base Year and any Operating
Year, Landlord shall furnish Tenant an
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Escalation Statement setting forth Tenant's Proportionate Share of Increase,
with respect to the Operating Expenses incurred for such Base Year or Operating
Year. Within thirty (30) days after receipt of such Escalation Statement for any
Operating Year, Tenant shall pay Tenant's Proportionate Share of Increase to
Landlord as additional rent.
B. Commencing with the first Operating Year for which
Landlord shall be entitled to receive Tenant's Proportionate Share of Increase,
Tenant shall pay to Landlord as additional rent for the then Operating Year,
Tenant's Projected Share of Increase. If the Escalation Statement furnished by
Landlord to Tenant pursuant to Section 3.02 (A) above at the end of the then
Operating Year shall indicate that Tenant's Projected Share of Increase exceeded
Tenant's Proportionate Share of Increase, Landlord shall forthwith either (i)
pay the amount of excess directly to Tenant concurrently with the notice or (ii)
permit Tenant to credit the amount of such excess against the subsequent
payments of rent due hereunder; if such statement furnished by Landlord to
Tenant hereunder shall indicate that Tenant's Proportionate Share of Increase
exceeded Tenant's Projected Share of Increase for the then Operating Year,
Tenant shall forthwith pay the amount of such excess to Landlord.
3.03. A. Tenant shall pay as additional rent for each Tax Year a
sum (hereinafter referred to as "Tenant's Tax Payment") equal to Tenant's Tax
Proportionate Share of the amount by which the Taxes for such Tax Year exceed
the Base Tax. Tenant's Tax Payment for each Tax Year shall be due and payable in
two (2) equal installments, in advance, on the first day of each June and
December during each Tax Year, based upon the Escalation Statement furnished
prior to the commencement of such Tax Year, until such time as a new Escalation
Statement for a subsequent Tax Year shall become effective. If an Escalation
Statement is furnished to Tenant after the commencement of a Tax Year in respect
of which such Escalation Statement is rendered, Tenant shall, within fifteen
(15) days thereafter, pay to Landlord an amount equal to the amount of any
underpayment of Tenant's Tax Payment with respect to such Tax Year and, in the
event of an overpayment, Landlord shall permit Tenant to credit against
subsequent payments under this Lease the amount of Tenant's overpayment. If
there shall be any increase in Taxes for any Tax Year, whether during or after
such Tax Year, Landlord shall furnish a revised Escalation Statement for such
Tax Year, and Tenant's Tax Payment for such Tax Year shall be adjusted and paid
substantially in the same manner as provided in the preceding sentence. If
during the term of this Lease, taxes are required to be paid (either to the
appropriate taxing authorities
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or as tax escrow payments to a superior mortgagee) in full or in monthly,
quarterly, or other installments, on any other date or dates than as presently
required, then at Landlord's option, Tenant's Tax Payments shall be
correspondingly accelerated or revised so that said Tenant's Tax Payments are
due at least 30 days prior to the date payments are due to the taxing
authorities or the superior mortgagee (but not less than twenty (20) days after
the Escalation Statement from Landlord is received by Tenant). The benefit of
any discount for any early payment or prepayment of Taxes shall accrue solely to
the benefit of Landlord and such discount shall not be subtracted from Taxes.
Notwithstanding the foregoing, in the event Landlord fails to deliver an
Escalation Statement for any period within two (2) years after the end of the
period as to which such Escalation Statement would have related, Landlord shall
be deemed to have waived the payment of any theretofore unpaid additional rent
as to which such Escalation Statement would have related.
B. If the real estate tax fiscal year of The City of New
York shall be changed during the term of this Lease, any Taxes for such fiscal
year, a part of which is included within a particular Tax Year and a part of
which is not so included, shall be apportioned on the basis of the number of
days in such fiscal year included in the particular Tax Year for the purpose of
making the computations under this Section 3.03.
C. If Landlord shall receive a refund of Taxes for any Tax
Year, Landlord shall permit Tenant to credit against subsequent payments under
this Lease, Tenant's Tax Proportionate Share of the refund (after deducting all
costs incurred by Landlord to obtain such refund which have not been previously
recovered); but not to exceed Tenant's Tax Payment paid for such Tax Year.
D. If the Base Tax is reduced as a result of a certiorari
proceeding or otherwise Landlord shall adjust the amounts previously paid by
Tenant pursuant to the provisions of Section 3.03 hereof, and Tenant shall pay
the amount of said adjustment within thirty (30) days after demand setting forth
the amount of said adjustment.
3.04. Tenant shall pay to the appropriate taxing authority
occupancy tax on all rental subject thereto (including occupancy tax on prepaid
rent paid pursuant to Section 1.01 hereof). Tenant shall pay to Landlord upon
demand, as additional rent, any occupancy tax or rent tax now in effect or
hereafter enacted with respect to the rent payable hereunder, if payable by
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Landlord in the first instance or hereafter required to be paid by Landlord.
3.05. In the event that the Commencement Date shall be other than
the first day of a Tax Year or an Operating Year or the date of the expiration
or other termination of this Lease shall be a day other than the last day of a
Tax Year or an Operating Year, then in such event in applying the provisions of
this Article 3 with respect to any Tax Year or Operating Year in which such
event shall have occurred, appropriate adjustments shall be made to reflect the
occurrence of such event on a basis consistent with the principles underlying
the provisions of this Article 3 taking into consideration the portion of such
Tax Year or Operating Year which shall have elapsed after the term hereof
commences in the case of the Commencement Date, and prior to the date of such
expiration or termination in the case of the Expiration Date or other
termination.
3.06. Payments shall be made pursuant to this Article 3
notwithstanding the fact that an Escalation Statement is furnished to Tenant
after the expiration of the term of this Lease.
3.07. In no event shall the fixed annual rent ever be reduced by
operation of this Article 3 and the rights and obligations of Landlord and
Tenant under the provisions of this Article 3 with respect to any additional
rent shall survive the termination of this Lease.
3.08. Landlord's failure to render an Escalation Statement with
respect to any Tax Year or Operating Year shall not prejudice Landlord's right
to thereafter render an Escalation Statement with respect thereto or with
respect to any subsequent Tax Year or Operating Year.
3.09. Each Escalation Statement shall be conclusive and binding
upon Tenant unless within one hundred eighty (180) days after receipt of such
Escalation Statement Tenant shall notify Landlord that it disputes the
correctness of such Escalation Statement, specifying the particular respects in
which such Escalation Statement is claimed to be incorrect. Any dispute relating
to any Escalation Statement, not resolved within ninety (90) days after the
giving of such Escalation Statement, may be submitted to arbitration by either
party pursuant to Article 38 hereof. Pending the determination of such dispute,
Tenant shall pay additional rent in accordance with the Escalation Statement
that Tenant is disputing, without prejudice to Tenant's position.
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3.10. Tenant, upon no less than five (5) days prior notice, may
elect to have Tenant's designated certified public accountant examine such of
Landlord's books and records (collectively, the "Records") that are directly
relevant to the Escalation Statement in questions, provided any such examination
shall be commenced within ninety (90) days after Tenant's receipt of an
Escalation Statement and concluded within thirty (30) days after the
commencement of such examination. In making such examination, Tenant agrees, and
shall cause its designated certified public accountant to agree, to keep
confidential any and all information contained in the Records.
3.11. If Landlord shall pay or incur any costs or expenses in
contesting any Taxes for any Tax Year (other than any such year for which such
Taxes comprise all or part of the Base Tax) or in connection with any challenge
to the assessed valuation of all or part of the Building or the parcel of land
on which the Building is constructed (the "Land") or otherwise in connection
with any endeavor to lower the Taxes for any Tax Year (other than any such year
for which such Taxes comprise all or part of the Base Tax) then, within twenty
(20) days after request by Landlord, Tenant shall pay to Landlord Tenant's Tax
Proportionate Share of the aggregate amounts of such costs and expenses so paid
or incurred by Landlord.
ARTICLE 4
ELECTRICITY
4.01. Landlord shall furnish to Tenant the electric energy which
Tenant requires in the demised premises, in an amount up to six (6) watts per
square foot, on a "rent inclusion" basis, through the presently installed
electrical facilities for Tenant's reasonable use in the demised premises for
lighting, light office equipment and the usual small business machines,
including Xerox or other copying machines. Subject to the following provisions
of this Article 4, there shall be no charge to Tenant therefor by way of
measuring the same on any meter or otherwise, electric current being included as
an additional service in the fixed annual rent payable hereunder. Landlord shall
not in anywise be liable or responsible to Tenant for any loss or damage or
expense which Tenant may sustain or incur if either the quantity or character of
electric service is changed or is no longer available or suitable for Tenant's
requirements.
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4.02. (a) Tenant acknowledges and agrees (i) that the fixed
annual rent hereinabove set forth in this Lease includes an Electricity Rent
Inclusion Factor (as hereinafter defined), of THIRTY SEVEN THOUSAND ONE HUNDRED
TWENTY FIVE AND 00/100 ($37,125.00) DOLLARS to compensate Landlord for the
electrical wiring and other installations necessary for, and for its obtaining
and redistribution of, electric current as an additional service; and (ii) that
said Electricity Rent Inclusion Factor (hereinafter called "ERIF"), which shall
be subject to periodic adjustments as herein provided, has been partially based
upon Tenant's estimated connected electrical load and hours of use thereof for
ordinary lighting and light office equipment, during ordinary business hours.
The "Electricity Rent Inclusion Factor" shall mean the amount determined by
applying the estimated connected electrical load and usage thereof in the
demised premises (as determined by the electrical consultant as hereinafter
provided) to the rate charged for such load and usage in the service
classification in effect on January 1, 1998, pursuant to which Landlord then
purchased electric current for the entire Building from the public utility
corporation. If the cost to Landlord of electricity shall have been, or shall
be, increased subsequent to January 1, 1998 (whether such increase occurs prior
to or during the term of this Lease), by change in Landlord's electric rates,
charges, fuel adjustment, or service classifications, or by taxes or charges of
any kind imposed thereon, or for any other such reason, then the aforesaid ERIF
portion of the fixed annual rent shall be increased in the same percentage and
the fixed annual rent provided herein shall be increased accordingly.
(b) Any such percentage increase in Landlord's cost due to
change in Landlord's electric rates, charges, etc., shall be computed by the
application of the average consumption (energy and demand) of electricity for
the entire Building for the twelve (12) full months immediately prior to the
rate change, other change in cost, or any changed methods of or rules on billing
for same, on a consistent basis to the new rate and/or service classifications
and to the immediately prior existing rate and/or service classifications. If
the average consumption of electricity for the entire Building for said prior
twelve (12) full months cannot reasonably be applied and used with respect to
changed methods of or rules on billing, then the percentage increase shall be
computed by the use of the average consumption (energy and demand) for the
entire Building for the first three (3) months under such changed methods of or
rules on billing, projected to a full twelve (12) months; and that same
consumption, so projected, shall be applied to the rate and/or service
classifications which existed immediately prior to the
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changed methods of or rules on billing. The parties acknowledge that they
understand that it is anticipated that existing electric rates, charges, etc.,
may be changed by virtue of time of day rates or other methods of billing, and
that the foregoing reference to changes in methods of or rules on billing is
intended to include any such change. The parties agree that a reputable,
independent electrical consultant, selected by Landlord ("Landlord's electrical
consultant") and paid equally by Landlord shall determine the percentage for the
changes in the ERIF based on changes in Landlord's electric rates, charges, etc.
4.03. (a) The parties agree that Landlord's electrical consultant
may from time to time make surveys in the demised premises covering the
electrical equipment and fixtures and use of current therein, and the connected
electrical load and usage portion of the ERIF shall be changed in accordance
with such survey, and the ERIF automatically redetermined, accordingly, by
Landlord's electrical consultant. The fixed annual rent shall be appropriately
adjusted effective as of the date of any such change in connected load and
usage, as disclosed by said survey. In no event, is the originally specified
ERIF portion of the fixed annual rent (as adjusted by any electricity cost
increases of Landlord after January 1, 1998) to be reduced.
(b) The determination of change in the ERIF by Landlord's
consultant shall be binding and conclusive on Landlord and on Tenant from and
after the delivery of copies of such determination to Landlord and Tenant,
unless within forty five (45) days after the delivery of such copies, Tenant
disputes such determination. If Tenant disputes the determination, it shall, at
its own expense, obtain from a reputable, independent electrical consultant its
own survey of Tenant's electrical lighting and power load and hours of use
thereof, and a determination of such change in the ERIF in accordance with the
provisions of this Article 4. Tenant's consultant and Landlord's consultant then
shall seek to agree on a finding of such determination of such change in the
ERIF. If they cannot agree, they shall choose a third reputable electrical
consultant whose cost shall be shared equally by Landlord and Tenant, to make a
similar survey, and the determination of such ERIF change by such third
electrical consultant shall be controlling. (If they cannot agree on such third
consultant, within ten (10) days, then either party may apply to the Supreme
Court in the County of New York for the appointment of such third consultant.)
However, pending such determination, Tenant shall pay to Landlord the amount of
ERIF as determined by Landlord's independent electrical consulting firm,
provided, however, if the amount of ERIF determined as aforesaid is different
from that determined by
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Landlord's electrical consulting firm, then Landlord and Tenant shall make
adjustment for any deficiency owed by Tenant or overage paid by Tenant pursuant
to the decision of Landlord's electrical consulting firm.
4.04. Landlord reserves the right to discontinue furnishing
electric energy to Tenant at any time upon sixty (60) days' written notice to
Tenant, provided Landlord previously or contemporaneously terminates the
electrical service to no less than seventy five (75%) percent of the tenants of
the Building, and from and after the effective date of such termination,
Landlord shall no longer be obligated to furnish Tenant with electric energy,
provided, however, that such termination date may be extended for a time
reasonably necessary for Tenant to make arrangements to obtain electric service
directly from the public utility company servicing the Building. If Landlord
exercises such right of termination, this Lease shall remain unaffected thereby
and shall continue in full force and effect; and thereafter Tenant shall
diligently arrange to obtain electric service directly from the public utility
company servicing the Building, and may utilize the then existing electric
feeders, risers and wiring serving the demised premises to the extent available
and safely capable of being used for such purpose and only to the extent of
Tenant's then authorized connected load. Landlord shall be obligated to pay no
part of any cost required for Tenant's direct electric service. Notwithstanding
the foregoing, in the event such discontinuance is required by any statute,
municipal law, regulatory agency or the electric utility then servicing the
Building, Tenant shall pay all costs and expenses incurred in connecting to and
obtaining electrical service from the electric utility servicing the Building.
If the discontinuance, however, shall be due solely to Landlord's decision to
discontinue service, Landlord shall pay all reasonable costs necessary to
directly connect Tenant to an electric utility servicing the Building.
Commencing with the date when Tenant receives such direct service, and as long
as Tenant shall continue to receive such service, the fixed annual rent payable
under this Lease shall be reduced to $344,250.00 per annum. The foregoing
assumes that the fixed annual rent originally set forth in this Lease has not
been increased or reduced pursuant to any of the provisions of this Lease other
than this Article 4. Should said original fixed annual rent be increased or
reduced by any of the provisions of this Lease other than this Article 4, then
the amount set forth above shall be increased or reduced by amounts equal to
such increases or reductions.
4.05. Tenant agrees not to connect any additional electrical
equipment of any type to the Building electric distribution system, other than
lamps, typewriters and other small office machines which consume comparable
amounts of electricity, without the Landlord's prior written consent, which
consent shall not be unreasonably withheld. Any additional risers, feeders, or
other equipment proper or necessary to supply Tenant's electrical requirements,
upon
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written request of Tenant, will be installed by Landlord, at the sole cost and
expense of Tenant, if, in Landlord's sole judgment, the same are necessary and
will not cause permanent damage or injury to the Building or the demised
premises, or cause or create a dangerous or hazardous condition or entail
excessive or unreasonable alterations, repair or expense or interfere with or
disturb other tenants or occupants.
4.06. In no event shall the fixed annual rent under this Lease be
reduced below the amount provided in Section 1.01 hereof by virtue of this
Article 4 except as set forth in Section 4.04 hereof.
ARTICLE 5
USE
5.01. The demised premises shall be used solely as and for
executive and general offices, and for no other purpose.
5.02. Tenant shall not use or permit the use of the demised
premises or any part thereof in any way which would violate any of the
covenants, agreements, terms, provisions and conditions of this Lease or for any
unlawful purposes or in any unlawful manner or in violation of the Certificate
of Occupancy for the demised premises or the Building, and Tenant shall not
suffer or permit the demised premises or any part thereof to be used in any
manner or anything to be done therein or anything to be brought into or kept
therein which, in the reasonable judgment of Landlord, shall in any way impair
the character, reputation or appearance of the Building as a high quality office
building, impair or interfere with any of the Building services or the proper
and economic heating, cleaning, air-conditioning or other servicing of the
Building or the demised premises, or impair or interfere with the use of any of
the other areas of the Building by, or occasion discomfort, inconvenience or
annoyance to, any of the other tenants or occupants of the Building. Tenant
shall not install any electrical or other equipment of any kind which, in the
reasonable judgment of Landlord, might cause any such impairment, interference,
discomfort, inconvenience or annoyance.
ARTICLE 6
ALTERATIONS AND INSTALLATIONS
6.01. Tenant shall make no alterations, installations, additions
or improvements in or to the demised premises without Landlord's prior written
consent which consent as to non-structural interior alterations which do not
adversely affect Building systems shall not be unreasonably withheld or delayed
and then only by contractors or mechanics first approved by Landlord which
approval shall not be unreasonably withheld or delayed provided, however, that
in connection with any alterations, installations or additions and improvement
which will affect
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any Building systems, Tenant shall use contractors or mechanics chosen from a
list to be supplied by Landlord, said list to contain no less than three (3)
firms in each trade("Landlord's Approved List"). All such work, alterations,
installations, additions and improvements shall be done at Tenant's sole expense
and at such times and in such manner as Landlord may from time to time
reasonably designate. Prior to commencement of such work, Tenant shall obtain
and deliver to Landlord written, unconditional waivers of mechanic's or other
liens on the real property in which the demised premises are located, signed by
all architects, engineers, contractors, mechanics and designers to become
involved in such work. Tenant shall also provide at Landlord's request such
financial security or proof of financial responsibility as Landlord shall
reasonably require to guarantee completion of Tenant's work and payment of all
contractors and suppliers utilized in connection therewith.
Any Tenant's work in the demised premises shall be effected solely in
accordance with plans and specifications first approved in writing by Landlord
provided Tenant need not prepare plans if same are not required to obtain a
building permit or are otherwise not required under applicable law. Tenant shall
reimburse Landlord promptly upon demand for any actual out-of-pocket costs and
expenses incurred by Landlord in connection with Landlord's review of such
Tenant's plans and specifications.
Any such approved alterations and improvements shall be performed in
accordance with the foregoing and the following provisions of this Article 6:
1. All work shall be done in a good and workmanlike manner.
2. (a) In the event Tenant shall employ any contractor to do in the
demised premises any work permitted by this Lease, such contractor and any
subcontractor shall agree to employ only such labor as will not result in
jurisdictional disputes or strikes or result in causing disharmony with other
workers employed at the Building. Tenant will inform Landlord in writing of the
names of any contractor or subcontractor Tenant proposes to use in the demised
premises at least ten (10) days prior to the beginning of work by such
contractor or subcontractor.
(b) Tenant covenants and agrees to pay to contractor, as the
work progresses, the entire cost of supplying the materials and performing the
work shown on Tenant's approved plans and specifications.
3. All such alterations shall be effected in compliance with all
applicable laws, ordinances, rules and regulations of governmental bodies having
or asserting jurisdiction in the demised premises and in accordance with
Landlord's Rules and Regulations with respect to alterations.
4. Tenant shall keep the Building and the demised premises free and
clear of all liens for any work or material claimed to have been furnished to
Tenant or to the demised
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premises on Tenant's behalf, and all work to be performed by Tenant shall be
done in a manner which will not unreasonably interfere with or disturb other
tenants or occupants of the Building.
5. During the progress of the work to be done by Tenant, said work
shall be subject to inspection by representatives of Landlord which shall be
permitted access and the opportunity to inspect, at all reasonable times, but
this provision shall not in any way whatsoever create any obligation on Landlord
to conduct such an inspection.
6. With respect to alteration or improvement work costing more than
$5,000, excluding Tenant's Work, Tenant agrees to pay to Landlord or its
managing agent, as additional rent, promptly upon being billed therefor, a sum
equal to ten (10%) percent of the cost of such work or alteration, for
Landlord's indirect costs, field supervision and coordination in connection with
such work. The provisions of the foregoing sentence shall not apply to the cost
of painting, installation of wall and floor coverings and other similar purely
decorative changes.
7. Prior to commencement of any work, Tenant shall furnish to
Landlord certificates evidencing the existence of:
(i) workmen's compensation insurance covering all persons
employed for such work; and
(ii) reasonable comprehensive general liability and property
damage insurance naming Landlord its managing agent, ground lessors, mortgagees
and Tenant as additional insureds, with coverage of at least $3,000,000 single
limit.
Notice is hereby given that Landlord shall not be liable for any labor or
materials furnished or to be furnished to Tenant upon credit, and that no
mechanic's or other lien for any such labor or materials shall attach to or
affect the reversion or other estate or interest of Landlord in and to the
demised premises.
6.02. Any mechanic's lien, filed against the demised premises or
the Building for work claimed to have been done for or materials claimed to have
been furnished to Tenant shall be discharged by Tenant at its expense within
thirty (30) days after notice to thereof, by payment, filing of the bond
required by law or otherwise.
6.03. All alterations, installations, additions and improvements
made and installed by Landlord, if any, shall be the property of Landlord and
shall remain upon and be surrendered with the demised premises as a part thereof
at the end of the term of this Lease.
6.04. All alterations, installations, additions and improvements
made and installed by Tenant, or at Tenant's expense, upon or in the demised
premises which are of a permanent nature and which cannot be removed without
damage to the demised premises or Building shall become and be the property of
Landlord, and shall remain upon and be
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surrendered with the demised premises as a part thereof at the end of the term
of this Lease, except that Landlord shall have the right and privilege at any
time up to six (6) months prior to the expiration of the term of the Lease to
serve notice upon Tenant that any of such alterations, installations, additions
and improvements of a non-building standard nature such as vaults, stairways,
bathrooms and other installations which are unusually difficult or costly to
remove, shall be removed and, in the event of service of such notice, Tenant
will, at Tenant's own cost and expense, remove the same in accordance with such
request, and restore the affected portions of the demised premises to their
original condition, ordinary wear and tear and casualty excepted.
6.05. Where furnished by or at the expense of Tenant all
furniture, furnishings and trade fixtures, including without limitation, murals,
business machines and equipment, counters, screens, grille work, special
panelled doors, cages, partitions, metal railings, closets, panelling, lighting
fixtures and equipment, drinking fountains, refrigeration and air-handling
equipment, and any other movable property shall remain the property of Tenant
which may at its option remove all or any part thereof at any time prior to the
expiration of the term of this Lease. In case Tenant shall decide not to remove
any part of such property, Tenant shall notify Landlord in writing not less than
three (3) months prior to the expiration of the term of this Lease, specifying
the items of property which it has decided not to remove. If, within thirty (30)
days after the service of such notice, Landlord shall request Tenant to remove
any of the said property, Tenant shall at its expense remove the same in
accordance with such request. As to such property which Landlord does not
request Tenant to remove, the same shall be, if left by Tenant, deemed abandoned
by Tenant and thereupon the same shall become the property of Landlord.
6.06. If any alterations, installations, additions, improvements
or other property which Tenant shall have the right to remove or be requested by
Landlord to remove as provided in Sections 6.04 and 6.05 hereof (herein in this
Section 6.06 called the "property") are not removed on or prior to the
expiration of the term of this Lease, Landlord shall have the right to remove
the property and to dispose of the same without accountability to Tenant and at
the sole cost and expense of Tenant. In case of any damage to the demised
premises or the Building resulting from the removal of the property Tenant shall
repair such damage or, in default thereof, shall reimburse Landlord for
Landlord's cost in repairing such damage. This obligation shall survive any
termination of this Lease.
6.07. Tenant shall keep records of Tenant's alterations,
installations, additions and improvements costing in excess of $5,000 and of the
cost thereof. Tenant shall, within forty-five (45) days after demand by
Landlord, furnish to Landlord copies of such records and cost if Landlord shall
require same in connection with any proceeding to reduce the assessed valuation
of the Building, or in connection with any proceeding instituted pursuant to
Article 14 hereof or for any other reason or purpose.
6.08. In the event that any asbestos or asbestos-containing
materials shall be discovered in the demised premises in connection with the
performance by Tenant of any alterations in accordance with the provisions of
this Lease, which asbestos or asbestos-containing
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materials are required by applicable Legal Requirements to be removed or
encapsulated in connection with such alterations, then provided that such
asbestos or asbestos-containing materials shall not have been introduced into
the demised premises by Tenant or its agents, contractors or employees, Landlord
shall, and Landlord's sole liability to Tenant shall be to, remove or
encapsulate the same in accordance with applicable Legal Requirements, at
Landlord's sole cost and expense. In no event shall the foregoing be deemed to
obligate Landlord to remove or otherwise dispose of or abate vinyl asbestos
tile, if any, in the demised premises.
ARTICLE 7
REPAIRS
7.01. (a) Tenant shall take good care of the demised premises and
the fixtures and appurtenances therein and at its sole cost and expense make all
repairs thereto as and when needed to preserve the same in good working order
and condition. With respect to the Building systems serving the demised premises
Tenant shall be responsible for (i) repair and maintenance of Tenant's internal
air-distribution system to the point at which the same connects to the main
distribution duct for the demised premises, (ii) repair and maintenance of the
internal electrical system to the panel box serving the demised premises, and
(iii) repair and maintenance of all plumbing fixtures and lines in and serving
the demised premises to the point at which the same join the main vertical
risers of the Building. All such repairs and maintenance with respect to such
Building system shall be performed by Tenant at Tenants cost and expense, by
contractors and mechanics listed on Landlord's Approved List. Except as
otherwise provided in Section 9.05 hereof, all damage or injury to the demised
premises and to its fixtures, appurtenances and equipment shall be repaired,
restored or replaced promptly by Tenant at its sole cost and expense, which
repairs, restorations and replacements shall be in quality and class equal to
the original work or installations. All damage or injury to the Building or to
its fixtures, appurtenances and equipment caused by Tenant moving property in or
out of the Building or by installation or removal of furniture, fixtures or
other property, or in any other manner caused by Tenant, its agents, servants or
contractors, shall be repaired, replaced or restored by Landlord at Tenant's
cost and expense and such expense shall be collectible as additional rent and
shall be paid by Tenant within fifteen (15) days after rendition of a bill
therefor. Notwithstanding anything to foregoing contained here, if Tenant fails
to make the repairs, restoration or replacements required under this Section
7.01 within twenty (20) days after notice thereof, same may be made by Landlord
at the expense of Tenant and such expense shall be collectible as additional
rent and shall be paid by Tenant within 15 days after rendition of a bill
therefor.
The exterior walls of the Building, the portions of any window sills
outside the windows, and the windows are not part of the premises demised by
this Lease and Landlord reserves all rights to such parts of the Building.
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7.01. (b) Landlord shall, at its sole cost and expense (except as
otherwise set forth herein), maintain and repair the structural portions of both
the Building and the demised premises and the portion of the Building systems
serving the demised premises for which Tenant is not responsible pursuant to
Paragraph (a) hereof and the common areas to the extent that same affect
Tenant's use and occupancy of, or access to, the demised premises. Tenant shall
promptly notify Landlord of all repairs required to be made within the demised
premises for which Landlord is responsible hereunder and Landlord shall perform
same at its sole cost and expense provided, however, if the necessity for any of
such repairs which are Landlord's obligation to perform shall have been
occasioned by any action, omission to act or negligence of Tenant or Tenant's
agents, employees or contractors, then Landlord shall make or cause to be made
all such repairs at Tenant's sole cost and expense, and Tenant shall pay to
Landlord as additional rent within ten (10) days of Landlord's demand therefor,
an amount equal to Landlord's cost thereof.
7.02. Tenant shall not place a load upon any floor of the demised
premises exceeding the floor load per square foot area which such floor was
designed to carry and which is allowed by law. If Tenant shall desire a floor
load in excess of that which the affected floors are designed to carry, Landlord
agrees (provided Landlord's architects, in their reasonable discretion, find
that the work necessary to increase such floor load does not adversely affect
the structure of the Building, and further provided that such work will not
interfere with the amount or availability of any space adjoining alongside,
above or below the demised premises, or interfere with the occupancy of other
tenants in the Building), to strengthen and reinforce the same so as to give the
live load desired, provided Tenant shall submit to Landlord the plans showing
the locations of and the desired floor live load for the areas in question and
provided further that Tenant shall agree to pay for or reimburse Landlord on
demand for the cost of such strengthening and reinforcement as well as any other
reasonable out-of-pocket costs to and expenses of Landlord occasioned by or
resulting from such strengthening or reinforcement.
7.03. Business machines and mechanical equipment used by Tenant
which cause vibration, noise, cold or heat that may be transmitted to the
Building structure or to any leased space to such a degree as to be
objectionable to Landlord or to any other tenant in the Building shall be placed
and maintained by Tenant at its expense in settings of cork, rubber or spring
type vibration eliminators sufficient to absorb and prevent such vibration or
noise, or prevent transmission of such cold or heat. The parties hereto
recognize that the operation of elevators, air-conditioning and heating
equipment will cause some vibration, noise, heat or cold which may be
transmitted to other parts of the Building and demised premises. Landlord shall
be under no obligation to endeavor to reduce such vibration, noise, heat or
cold.
7.04. Except as otherwise specifically 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 the making of any repairs, alterations,
additions or improvements in or to any portion of the Building or the demised
premises or in or to fixtures, appurtenances or equipment thereof. In performing
such repairs
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Landlord shall make a reasonable effort to minimize any inconvenience to Tenant
but nothing herein shall be deemed to obligate Landlord to perform same on an
overtime or premium basis.
ARTICLE 8
REQUIREMENTS OF LAW
8.01. Tenant, at Tenant's sole cost and expense, shall promptly
comply with all present and future laws, orders and regulations of all state,
federal, municipal and local governments, departments, commissions and boards
and any direction of any public officer pursuant to law, and all orders, rules
and regulations of the New York Board of Fire Underwriters, Insurance Services
Office, or any similar body which shall impose any violation, order or duty upon
Landlord or Tenant with respect to the demised premises, whether or not arising
out of Tenant's use or manner of use thereof (including Tenant's permitted use)
or, with respect to the Building if arising out of Tenant's use or manner or use
of the demised premises or the Building (including the use permitted under the
Lease). Nothing herein shall require Tenant to make structural repairs or
alterations or repairs or alterations to Building systems (unless Tenant has, by
its manner of use of the demised premises or method of operation therein,
violated any such laws, ordinances, orders, rules, regulations or requirements
with respect thereto).
8.02. Notwithstanding the provisions of Section 8.01 hereof, Tenant,
at its own cost and expense, may contest, in any manner permitted by law
(including appeals to a court, or governmental department or authority having
jurisdiction in the matter), the validity or the enforcement of any governmental
act, regulation or directive with which Tenant is required to comply pursuant to
this Lease, and may defer compliance therewith provided that:
(a) such noncompliance shall not subject Landlord to
criminal prosecution or subject the Land and/or Building to lien or sale;
(b) such noncompliance shall not be in violation of any fee
mortgage, or of any ground or underlying lease or any mortgage thereon;
(c) Tenant shall first deliver to Landlord a surety bond
issued by a surety company of recognized responsibility, or other security
reasonably satisfactory to Landlord, indemnifying and protecting Landlord
against any loss or injury by reason of such noncompliance; and
(d) Tenant shall promptly and diligently prosecute such
contest.
Landlord, without expense or liability to it, shall cooperate with
Tenant and execute any documents or pleadings required for such purpose,
provided that Landlord shall reasonably be satisfied that the facts set forth in
any such documents or pleadings are accurate.
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8.03. Landlord shall be responsible for compliance with Local Law 58
and the Americans With Disabilities Act of 1990 (collectively, the "Acts") with
respect to the bathrooms on the twenty seventh (27th) floor, provided, however,
if compliance with the Acts is required as a result of Tenant's alterations or
improvements to the demised premises, Tenant, at its sole cost and expense,
shall perform all work necessary to comply with the Acts.
ARTICLE 9
INSURANCE, LOSS, REIMBURSEMENT, LIABILITY
9.01. Tenant shall not do or permit to be done any act or thing upon
the demised premises, which will invalidate or be in conflict with New York
standard fire insurance policies covering the Building, and fixtures and
property therein, or which would increase the rate of fire insurance applicable
to the Building to an amount higher than it otherwise would be; and Tenant shall
neither do nor permit to be done at the demised premises any use or activity
which shall or might reasonably be expected to subject Landlord to any liability
or responsibility for injury to any person or persons or to property by reason
of any business or operation being carried on within the demised premises; but
nothing in this Section 9.01 shall prevent Tenant's use of the demised premises
for the purposes stated in Article 5 hereof.
9.02. If, as a result of any act or omission by Tenant or violation
of this Lease, the rate of fire insurance applicable to the Building shall be
increased to an amount higher that it otherwise would be, then in addition to
any other remedies which Landlord has hereunder for any such violations of the
terms of this Lease, Tenant shall reimburse Landlord for all increases of
Landlord's fire insurance premiums so caused; such reimbursement to be
additional rent payable upon the first day of the month following any outlay by
Landlord for such increased fire insurance premiums. In any action or proceeding
wherein Landlord and Tenant are parties, a schedule or "makeup" of rates for the
Building or demised premises issued by the body making fire insurance rates for
the demised premises, shall be presumptive evidence of the facts therein stated
and of the several items and charges in the fire insurance rate then applicable
to the demised premises.
9.03. Landlord or its agents shall not be liable for any injury or
damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water, rain or snow or leaks from any part of the
Building, or from the pipes, appliances or plumbing works or from the roof,
street or subsurface or from any other place or by dampness or by any other
cause of whatsoever nature, unless any of the foregoing shall be caused by or
due to the negligence of Landlord, its agents, servants or employees.
9.04. Landlord or its agents shall not be liable for any damage
which Tenant may sustain, if at any time any window of the demised premises is
broken or temporarily or permanently (restricted to windows on a lot line, if
permanently) closed, darkened or bricked up
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for any reason whatsoever, except only Landlord's arbitrary acts if the result
is permanent, and Tenant shall not be entitled to any compensation therefor or
abatement of rent or to any release from any of Tenant's obligations under this
Lease, nor shall the same constitute an eviction. Tenant agrees that Landlord
shall be permitted at any time to install film on the inside of the windows of
the Building to reduce the usage of energy in the Building. Tenant consents to
such installation and agrees that in the event Landlord shall exercise its
option to install such film Landlord shall have no liability with respect to any
closing or darkening of the windows of the demised premises in connection
therewith.
9.05. Tenant shall reimburse Landlord for all expenses, damages or
fines incurred or suffered by Landlord, by reason of any breach, violation or
nonperformance by Tenant, or its agents, servants or employees, of any covenant
or provision of this Lease, or by reason of damage to persons or property caused
by moving property of or for Tenant in or out of the Building, or by the
installation or removal of furniture or other property of or for Tenant or by
reason of or arising out of the carelessness, negligence or improper conduct of
Tenant, or its agents, servants or employees, in the use or occupancy of the
demised premises. Subject to the provisions of Section 8.02 hereof, where
applicable, Tenant shall have the right, at Tenant's own cost and expense, to
participate in the defense of any action or proceeding brought against Landlord,
and in negotiations for settlement thereof if, pursuant to this Section 9.05,
Tenant would be obligated to reimburse Landlord for expenses, damages or fines
incurred or suffered by Landlord.
9.06. Tenant shall give Landlord notice in case of fire or accidents
in the demised premises promptly after Tenant is aware of such event.
9.07. Tenant agrees to look solely to Landlord's estate and interest
in the Land and Building, or the lease of the Building, or of the Land and
Building, and the demised premises, for the satisfaction of any right or remedy
of Tenant for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord, in the event of any liability by Landlord, and
no other property or assets of Landlord and no property of any partner,
shareholder or principal of Landlord shall be subject to levy, execution,
attachment, or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder, or Tenant's use and occupancy of the demised premises, or any
other liability of Landlord to Tenant.
9.08. (a) Landlord agrees that, if obtainable, it will include in
its fire insurance policies appropriate clauses pursuant to which the insurance
companies (i) waive all right of subrogation against Tenant with respect to
losses payable under such policies and/or (ii) agree that such policies shall
not be invalidated should the insured waive in writing prior to a loss any or
all right of recovery against any party for losses covered by such policies. But
should any additional premiums be exacted for any such clause or clauses,
Landlord shall be released from the obligation hereby imposed unless Tenant
shall agree to pay such additional premium.
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(b) Tenant agrees to include, if obtainable, in its fire
insurance policy or policies on its furniture, furnishings, fixtures and other
property removable by Tenant under the provisions of this Lease appropriate
clauses pursuant to which the insurance company or companies (i) waive the right
of subrogation against Landlord and any tenant of space in the Building with
respect to losses payable under such policy or policies and/or (ii) agree that
such policy or policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policy or policies. But should any additional premium be
exacted for any such clause or clauses, Tenant shall be released from the
obligation hereby imposed unless Landlord or the other tenants shall agree to
pay such additional premium.
(c) Provided that Landlord's right of full recovery under
its policy or policies aforesaid is not adversely affected or prejudiced
thereby, Landlord hereby waives any and all right of recovery which it might
otherwise have against Tenant, its servants, agents and employees, for loss or
damage occurring to the Building and the fixtures, appurtenances and equipment
therein, to the extent the same is covered by Landlord's insurance,
notwithstanding that such loss or damage may result from the negligence or fault
of Tenant, its servants, agents or employees. Provided that Tenant's right of
full recovery under its aforesaid policy or policies is not adversely affected
or prejudiced thereby, Tenant hereby waives any and all right of full recovery
which it might otherwise have against Landlord, its servants, agents and
employees, and against every other tenant in the Building who shall have
executed a similar waiver as set forth in this Section 9.08(c) for loss or
damage to, Tenant's furniture, furnishings, fixtures and other property
removable by Tenant under the provisions hereof to the extent that the same is
covered by Tenant's insurance, notwithstanding that such loss or damage may
result from the negligence or fault of Landlord, its servants, agents or
employees, or such other tenant and the servants, agents or employees thereof.
(d) Landlord and Tenant hereby agree to advise the other
promptly if the clauses to be included in their respective insurance policies
pursuant to subdivisions 9.08(a) and (b) hereof cannot be obtained. Landlord and
Tenant hereby also agree to notify the other promptly of any cancellation or
change of the terms of any such policy which would affect such clauses.
9.09. Tenant covenants and agrees to provide on or before the
Commencement Date and to keep in force during the term hereof for the benefit of
Landlord and Tenant a comprehensive general liability insurance policy
protecting Landlord and Tenant against any liability contained in the standard
extended coverage policy, occasioned by any occurrence on or about the demised
premises or any appurtenances thereto. Such policy is to be written by good and
solvent insurance companies reasonably satisfactory to Landlord, and shall be in
such limits as Landlord may reasonably require and as of the date of this Lease
Landlord reasonably requires limits of liability thereunder of not less than the
amount of Three Million ($3,000,000) Dollars single limit for bodily or personal
injury (including death) and in the amount of Three Hundred Thousand ($300,000)
Dollars in respect of property damage. Such insurance may be carried
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under a blanket policy covering the demised premises and other locations of
Tenant, if any. Prior to the time such insurance is first required to be carried
by Tenant and thereafter, at least fifteen (15) days prior to the effective date
of any such policy, Tenant agrees to deliver to Landlord either a duplicate
original of the aforesaid policy or a certificate evidencing such insurance.
Said policy or certificate, as the case may be, shall contain an endorsement
that such insurance may not be cancelled except upon ten (10) days' notice to
Landlord. Tenant's failure to provide and keep in force the aforementioned
insurance shall be regarded as a material default hereunder entitling Landlord
to exercise any or all of the remedies provided in this Lease in the event of
Tenant's default.
ARTICLE 10
DAMAGE BY FIRE OR OTHER CAUSE
10.01. If the Building or the demised premises shall be partially or
totally damaged or destroyed by fire or other cause, then whether or not the
damage or destruction shall have resulted from the fault or neglect of Tenant,
or its employees, agents, or visitors (and if this Lease shall not have been
terminated as in this Article 10 hereinafter provided), Landlord shall repair
the damage and restore and rebuild the Building and/or the demised premises, at
its expense (without limiting the rights of Landlord under any other provisions
of this Lease), with reasonable dispatch after notice to it of the damage or
destruction; provided, however, that Landlord shall not be required to repair or
replace any of Tenant's property.
10.02. If the Building or the demised premises shall be partially
damaged or partially destroyed by fire or other cause, then unless such fire or
damage shall have resulted from the negligence of Tenant, the rents payable
hereunder shall be abated to the extent that the demised premises shall have
been rendered untenantable for the period from the date of such damage or
destruction to the date the damage shall be repaired or restored.
If the demised premises or a major part thereof shall be totally
(which shall be deemed to include substantially totally) damaged or destroyed or
rendered completely (which shall be deemed to include substantially completely)
untenantable on account of fire or other cause, the rents shall abate as of the
date of the damage or destruction and until Landlord shall repair, restore and
rebuild the Building and the demised premises, provided, however, that should
Tenant reoccupy a portion of the demised premises during the period the
restoration work is taking place and prior to the date that the same are made
completely tenantable, rents allocable to such portion shall be payable by
Tenant from the date of such occupancy.
10.03. If the Building or the demised premises shall be totally
damaged or destroyed by fire or other cause, or if the Building shall be so
damaged or destroyed by fire or other cause (whether or not the demised premises
are damaged or destroyed) as to require a reasonably estimated expenditure of
more than forty (40%) per cent of the full insurable value of
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the Building immediately prior to the casualty, then in either such case
Landlord may terminate this Lease by giving Tenant notice to such effect within
one hundred eighty (180) days after the date of the casualty. If the demised
premises or any part thereof shall be damaged by fire or other casualty as set
forth in Article 10, and Landlord is required to or elects to repair and restore
the demised premises, Landlord shall, within 60 days after such damage or
destruction, provide Tenant with a written notice of the estimated date on which
the restoration of the demised premises shall be substantially completed. If
such estimated date is more than twelve (12) months after the date of such
damage or destruction, Tenant may terminate this Lease by notice to Landlord,
which notice shall be given within twenty (20) days after the date Landlord
provides the notice required by the preceding sentence, and such termination
shall be effective upon the giving of Tenant's notice. Failure by Tenant to
provide such notice within such twenty (20) day period shall be deemed an
election by Tenant not to terminate this Lease. If Tenant elects not to
terminate this Lease or is deemed to have so elected, and if Landlord has not
substantially completed the required repairs and restored the demised premises
within the period originally estimated by Landlord or within such period
thereafter (not to exceed 3 months) as shall equal the aggregate period Landlord
may have been delayed in doing so by adjustment of insurance, labor trouble,
governmental controls, act of god, or any other cause beyond Landlord's
reasonable control, then Tenant shall have the further right to elect to
terminate this Lease upon written notice to Landlord and such election shall be
effective upon the expiration of thirty (30) days after the date of such notice,
unless Landlord substantially completes such restoration within such thirty (30)
day period.
10.04. No damages, compensation or claim shall be payable by
Landlord for inconvenience, loss of business or annoyance arising from any
repair or restoration of any portion of the demised premises or of the Building
pursuant to this Article 10.
10.05. Notwithstanding any of the foregoing provisions of this
Article 10, if Landlord or the lessor of any superior lease or the holder of any
superior mortgage shall be unable to collect all of the insurance proceeds
(including rent insurance proceeds) applicable to damage or destruction of the
demised premises or the Building by fire or other cause, by reason of some
action or inaction on the part of Tenant or any of its employees, agents or
contractors, then, without prejudice to any other remedies which may be
available against Tenant, there shall be no abatement of Tenant's rents, but the
total amount of such rents not abated (which would otherwise have been abated)
shall not exceed the amount of uncollected insurance proceeds.
10.06. Landlord will not carry separate insurance of any kind on
Tenant's property, and, except as provided by law or by reason of its breach of
any of its obligations hereunder, shall not be obligated to repair any damage
thereto or replace the same. Tenant shall maintain insurance on Tenant's
property, and Landlord shall not be obligated to repair any damage thereto or
replace the same.
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10.07. The provisions of this Article 10 shall be considered an
express agreement governing any cause of damage or destruction of the demised
premises by fire or other casualty, and Section 227 of the Real Property Law of
the State of New York, providing for such a contingency in the absence of an
express agreement, and any other law of like import, now or hereafter in force,
shall have no application in such case.
ARTICLE 11
ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.
11.01. Tenant shall not (a) assign or otherwise transfer this Lease
or the term and estate hereby granted, (b) sublet the demised premises or any
part thereof or allow the same to be used or occupied by others or in violation
of Article 5, (c) mortgage, pledge or encumber this Lease or the demised
premises or any part thereof in any manner by reason of any act or omission on
the part of Tenant, without, in each instance, obtaining the prior consent of
Landlord, except as otherwise expressly provided in this Article 11. For
purposes of this Article 11, (i) the transfer of a majority of the issued and
outstanding capital stock of any corporate tenant, or of a corporate subtenant,
or the transfer of a majority of the total interest in any partnership tenant or
subtenant, however accomplished, whether in a single transaction or in a series
of related or unrelated transactions, shall be deemed an assignment of this
Lease, or of such sublease, as the case may be, except that the transfer of the
outstanding capital stock of any corporate tenant, or subtenant, shall be deemed
not to include the sale of such stock by persons or parties, through the
"over-the-counter market" or through any recognized stock exchange, or in
connection with an initial public offering conducted in accordance with the
provisions of the Securities and Exchange Act of 1933 other than those deemed
"insiders" within the meaning of the Securities Exchange Act of 1934 as amended,
(ii) any person or legal representative of Tenant, to whom Tenant's interest
under this Lease passes by operation of law, or otherwise, shall be bound by the
provisions of this Article 11, and (iii) a modification, amendment or extension
of a sublease shall be deemed a sublease.
11.02. The provisions of Section 11.01 above shall not apply to an
assignment of this Lease to any corporation into or with which Tenant is merged
or consolidated or to any corporation which shall be an affiliate, subsidiary,
parent or successor of Tenant, provided and on condition that (i) such
transaction is for a bona fide business purpose and not, either directly or
indirectly, principally for the purpose of transferring the leasehold created
hereby, and (ii) the successor to the Tenant or transferee has a net worth
immediately following such transfer of not less than the greater of (x) the net
worth of Tenant as of the Commencement Date, or (y) the net worth of Tenant
immediately preceding such transfer, and proof thereof, reasonably satisfactory
to Landlord, shall have been delivered to Landlord at least ten (10) days prior
to the effective date of such transfer.
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For the purpose of this subparagraph (b), a "subsidiary" or "affiliate" or
"successor" of Tenant shall mean the following:
(i) An "affiliate" shall mean any corporation which, directly
or indirectly, controls or is controlled by or is under common
control with Tenant. For this purpose, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such corporation,
whether through the ownership of voting securities or by contract or
otherwise.
(ii) A "subsidiary" shall mean any corporation not less than
50% of whose outstanding stock shall, at the time, be owned directly
or indirectly by Tenant. Any cessation of the affiliate or
subsidiary relationship between Tenant and the entity in question
shall constitute an assignment or subletting, as the case may be,
which shall be subject to all of the terms, provisions and
conditions of this Article.
(iii) A "successor" of Tenant shall mean (x) a corporation in
which or with which Tenant, its corporate successors or assigns, is
merged or consolidated, in accordance with applicable statutory
provisions for merger or consolidation of corporations, provided
that by operation of law or by effective provisions contained in the
instruments of merger or consolidation, the liabilities of the
corporations participating in such merger or consolidation are
assumed by the corporation surviving such merger or created by such
consolidation, or (y) a transferee of not less than 80% of the
issued and outstanding stock of Tenant, or (z) or the transfer of
all or substantially all of the assets of Tenant.
11.03. Any assignment or transfer, whether made with Landlord's
consent as required by Section 11.01 hereof or without Landlord's consent
pursuant to Section 11.02 hereof, shall be made only if, and shall not be
effective until, the assignee shall execute, acknowledge and deliver to Landlord
a recordable agreement, in form and substance reasonably satisfactory to
Landlord, whereby the assignee shall assume the obligations and performance of
this Lease and agree to be bound by and upon all of the covenants, agreements,
terms, provisions and conditions hereof on the part of Tenant to be performed or
observed from and after the effective date of such assignment and whereby the
assignee shall agree that the provisions of this Article 11 hereof shall,
notwithstanding such an assignment or transfer, continue to be binding upon it
in the future. Tenant covenants that, notwithstanding any assignment or
transfer, whether or not in violation of the provisions of this Lease, and
notwithstanding the acceptance of fixed annual rent by Landlord from an assignee
or transferee or any other party, Tenant shall remain fully and primarily liable
for the payment of the fixed annual rent due and to become due under this Lease
and for the performance of all of the covenants, agreements, terms, provisions
and conditions of this Lease on the part of Tenant to be performed or observed.
11.04. The liability of Tenant for the due performance by Tenant of
the obligations on its part to be performed under this Lease, shall not be
discharged, released or
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impaired in any respect by an agreement or stipulation made by Landlord or any
grantee or assignee of Landlord, by way of mortgage, or otherwise, extending the
time of or modifying any of the obligations contained in this Lease, or by any
waiver or failure of Landlord to enforce any of the obligations on Tenant's part
to be performed under this Lease, and Tenant shall continue liable hereunder. If
any such agreement or modification operates to increase the obligations of a
tenant under this Lease, the liability under this Section 11.04 of the tenant
named in the Lease or any of its successors in interest, (unless such party
shall have expressly consented in writing to such agreement or modification)
shall continue to be no greater than if such agreement or modification had not
been made. To charge Tenant named in this Lease and its successors in interest,
no demand or notice of any default shall be required; Tenant and each of its
successors in interest hereby expressly waives any such demand or notice.
11.05. Landlord shall not unreasonably withhold or delay its consent
to an assignment of this Lease or a subletting of the whole or a part of the
demised premises for substantially the remainder of the term of this Lease,
provided:
(a) Tenant shall furnish Landlord with the name and business
address of the proposed subtenant or assignee, information with respect to the
nature and character of the proposed subtenant's or assignee's business, or
activities, such references and current financial information with respect to
net worth, credit and financial responsibility as are reasonably satisfactory to
Landlord, and the documentation required in Section 11.06 (a) and (b) herein, as
the case may be;
(b) The proposed subtenant or assignee is a reputable party
whose financial net worth, credit and financial responsibility is, considering
the responsibilities involved, reasonably satisfactory to Landlord;
(c) The nature and character of the proposed subtenant or
assignee, its business or activities and intended use of the demised premises
is, in Landlord's reasonable judgment, in keeping with the standards of the
Building and the floor or floors on which the demised premises are located;
(d) The proposed subtenant or assignee is not then an
occupant of any part of the Building or a party who dealt with Landlord or
Landlord's agent (directly or through a broker) with respect to space in the
Building during the 6 months immediately preceding Tenant's request for
Landlord's consent;
(e) All costs incurred with respect to providing reasonably
appropriate means of ingress and egress from the sublet space or to separate the
sublet space from the remainder of the demised premises shall, subject to the
provisions of Article 6 with respect to alterations, installations, additions or
improvements, be borne by Tenant;
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(f) Each sublease shall specifically state that (i) it is
subject to all the terms, covenants, agreements, provisions, and conditions of
this Lease, (ii) the subtenant or assignee, as the case may be, will not have
the right to a further assignment thereof or sublease or assignment thereunder,
or to allow the demised premises to be used by others, without the consent of
Landlord in each instance;
(g) Tenant shall together with requesting Landlord's consent
hereunder, have paid Landlord any actual reasonable out-of-pocket attorney's
fees incurred by Landlord to review the proposed assignment or subletting
including attorneys fees incurred by Landlord;
(h) Tenant shall have complied with the provisions in
Section 11.06 and Landlord shall not have made any of the elections provided for
in Section 11.06;
(i) The proposed subtenant or assignee is not (i) a bank
trust company, safe deposit business, savings and loan association or loan
company; (ii) an employment or recruitment agency; (iii) a school, college,
university or educational institution whether or not for profit; (iv) a
government or any subdivision or agency thereof;
(j) In the case of a subletting of a portion of the demised
premises, the portion so sublet shall be regular in shape and suitable for
normal renting purposes;
(k) Tenant shall have granted to Landlord or Landlord's
agent the exclusive right to sublease the demised premises or such portion
thereof as Tenant proposes to sublet, or to assign this Lease as the case may
be; provided, however, if at the time of the proposed sublet or assignment there
are any other full floor spaces available for rent between and including the
twenty-seventh (27th) and thirty-eighth (38th) floors of the Building, the
provisions of this section 11.05(k) shall not apply; and
(l) The proposed assignment shall be for a consideration or
the proposed subletting shall be at a rental rate not less than eighty five
percent (85%) of the rental rates then being charged under leases being entered
into by Landlord for comparable space in the Building and for a comparable term
and in no event shall Tenant advertise or list with brokers at such lower rental
rate.
11.06. (a) Should Tenant agree to assign this Lease, other than by
an assignment contemplated by Section 11.02, Tenant shall deliver to Landlord
(i) a "term sheet" setting forth the terms of the proposed assignment and (ii) a
letter signed by the proposed assignee confirming that the provisions of the
"term sheet" represent a bona fide offer on the part of the proposed assignee to
enter into an assignment, not less than sixty (60) days prior to the effective
date of the contemplated assignment and Landlord shall than have the right to
elect, by notifying Tenant within thirty (30) days of such delivery, to (i)
terminate this Lease, as of such effective date as if it were the Expiration
Date set forth in this Lease or (ii) accept an assignment
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of this Lease from Tenant, and Tenant shall then promptly execute and deliver to
Landlord, or Landlord's designee if so elected by Landlord, in form reasonably
satisfactory to Landlord's counsel, an assignment which shall be effective as of
such effective date.
(b) Should Tenant agree to sublet the demised premises or
any portion thereof, other than by a sublease contemplated by Section 11.02,
Tenant shall deliver to Landlord (i) a "term sheet" setting forth the terms of
the proposed subletting and (ii) a letter signed by the proposed subtenant
confirming that the provisions of the "term sheet" represent a bona fide offer
on the part of the proposed subtenant to enter into a sublease, not less than
sixty (60) days prior to the effective date of the contemplated sublease, and
Landlord shall then have the right to elect, by notifying Tenant within thirty
(30) days of such delivery, to (i) terminate this Lease as to the portion of the
demised premises affected by such subletting or as to the entire demised
premises in the case of a subletting thereof, as of such effective date, (ii) in
the case of a proposed subletting of the entire demised premises accept an
assignment of this Lease from Tenant, and Tenant shall then promptly execute and
deliver to Landlord, or Landlord's designee if so elected by Landlord, in form
reasonably satisfactory to Landlord's counsel, an assignment which shall be
effective as of such effective date, (iii) accept a sublease from Tenant of the
portion of the demised premises affected by such proposed subletting or the
entire demised premises in the case of a proposed subletting thereof, and Tenant
shall then promptly execute and deliver a sublease to Landlord, or Landlord's
designee if so elected by Landlord, for the remainder of the demised term less
one day, commencing with such effective date, at (x) the rental terms reflected
in the proposed sublease or (y) the rental terms contained in this Lease on a
per rentable square foot basis, as elected by Landlord in such notice.
(c) If Landlord should elect to have Tenant execute and
deliver a sublease pursuant to any of the provisions of this Section 11.06, said
sublease shall be in a form reasonably satisfactory to Landlord's counsel and on
all the terms contained in this Lease, except that:
(i) The rental terms, if elected by Landlord, may be
either as provided in item (x) or item (y) of subsection
11.06(b) hereof.
(ii) The sublease shall not provide for any work to be
done for the subtenant or for any initial rent concessions or
contain provisions inapplicable to a sublease, except that in
the case of a subletting of a portion of the demised premises
Tenant shall reimburse subtenant for the cost of erecting such
demising walls as are necessary to separate the subleased
premises from the remainder of the demised premises and to
provide access thereto,
(iii) The subtenant thereunder shall have the right to
underlet the subleased premises, in whole or in part, without
Tenant's consent,
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(iv) The subtenant thereunder shall have the right to
make, or cause to be made, any changes, alterations,
decorations, additions and improvements that subtenant may
desire or authorize provided, however, that Tenant shall not
be responsible for the removal thereof or any restoration
which would otherwise be required as a result thereof under
Article 6,
(v) Such sublease shall expressly negate any intention
that any estate created by or under such sublease be merged
with any other estate held by either of the parties thereto,
(vi) Any consent required of Tenant, as lessor under
that sublease, shall be deemed granted if consent with respect
thereto is granted by Landlord,
(vii) There shall be no limitation as to the use of the
sublet premises by the subtenant thereunder,
(viii) Any failure of the subtenant thereunder to comply
with the provisions of said sublease, other than with respect
to the payment of rent to Tenant, shall not constitute a
default thereunder or hereunder if Landlord has consented to
such noncompliance, and
(ix) Such sublease shall provide that Tenant's
obligations with respect to vacating the demised premises and
removing any changes, alterations, decorations, additions or
improvements made in the subleased premises shall be limited
to those which accrued and related to such as were made prior
to the effective date of the sublease.
(d) If pursuant to the exercise of any of Landlord's options
pursuant to Section 11.06 hereof this Lease is terminated as to only a portion
of the demised premises, then the fixed annual rent payable hereunder and the
additional rent payable pursuant to Article 3 and 4 hereof shall be adjusted in
proportion to the portion of the demised premises affected by such termination.
(e) If Landlord shall give its consent to any assignment of
this Lease or to any sublease, Tenant shall in consideration therefor, pay to
Landlord, as additional rent:
(i) in the case of an assignment, an amount equal to
fifty (50%) percent of the sums and other considerations paid
to Tenant by the assignee for or by reason of such assignment
(including, but not limited to, sums paid for the sale of
Tenant's fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property, less, in
the
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case of a sale of any of the foregoing other than leasehold
improvements, the then net unamortized or undepreciated cost
thereof determined on the basis of Tenant's federal income tax
returns); and
(ii) in the case of a sublease, fifty (50%) percent of
the rents, additional charge or other consideration payable
under the sublease to Tenant by the subtenant which is in
excess of the fixed annual rent and additional rent accruing
during the term of the sublease in respect of the subleased
space (at the rate per square foot payable by Tenant
hereunder) pursuant to the terms hereof (including, but not
limited to, sums paid for the sale or rental of Tenant's
fixtures, leasehold improvements, equipment, furniture or
other personal property, less, in the case of the sale of any
of the foregoing other than leasehold improvements, the then
net unamortized or undepreciated cost thereof determined on
the basis of Tenant's federal income tax returns).
The sums payable under this subsection 11.06(e) shall be paid to Landlord as and
when paid by the subtenant to Tenant. In calculating the amounts due Landlord,
Tenant shall be allowed to deduct Tenants Costs with respect to the assignment
or sublease in question. As used herein, the term "Tenant's Costs" shall mean:
(x) the reasonable brokerage commissions, legal expenses and advertising
expenses incurred by Tenant to third parties in connection with the
subletting or assignment in question; and
(y) the actual out-of-pocket cost to Tenant of performing commercially
reasonable alterations to the demised premises to prepare same for
occupancy by the subtenant or assignee in question, the foregoing
costs and/or allowances to be amortized ratably over the term of the
sublease in question.
Tenant shall provide Landlord with evidence reasonably satisfactory to
Landlord of Tenant's Costs within thirty (30) days after the effective date of
the assignment of this Lease or commencement date of the sublease to which same
apply.
11.07. Landlord's consent to any sublease or assignment shall not be
deemed or construed to modify, amend or affect the terms and provisions of this
Lease, or Tenant's obligations hereunder, which shall continue to apply to the
occupants thereof, as if the sublease or assignment had not been made.
Notwithstanding any assignment or sublease, Tenant shall remain fully liable for
the payment of fixed annual rent and additional rents and for the other
obligations of this Lease on the part of Tenant to be performed or observed. In
the event that Tenant defaults in the payment of any rent, Landlord is
authorized to collect any rents due or accruing from any assignee, subtenant or
other occupant of the demised premises and to apply the net amounts collected to
the fixed annual rent and additional rent reserved herein, and the
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receipt of any such amounts by Landlord from an assignee or subtenant, or other
occupant of any part of the demised premises, shall not be deemed or construed
as releasing Tenant from Tenant's obligations hereunder or the acceptance of
that party as a direct tenant.
11.08. Notwithstanding anything to the contrary contained herein,
Tenant shall not be obligated to make the offer described in Section 11.06
hereof, and Tenant shall not be required to obtain Landlord's consent to the use
of desk space in the demised premises by entities or individuals with whom
Tenant has a continuing business relationship provided, however, that Tenant
shall not (subject to the method of calculation provided below) permit the use
of desk space involving more in the aggregate than twenty (20%) percent of the
area of the demised premises. Permission to such persons to use the demised
premises shall not create a tenancy or any other interest in the demised
premises except a license revocable by Tenant at will which shall cease and
expire in any event automatically without notice upon the expiration or
termination of the letting under the Lease, and all acts, omissions and
operations of such persons and/or their employees shall be deemed acts,
omissions and operations of Tenant. Use of the demised premises pursuant hereto
shall not be deemed to entitle any such occupant to the rights or privileges
which Landlord has or may hereafter accord to lessees of space in the Building.
For purposes of determining compliance with the foregoing limitation on the
square foot area of the demised premises allocable to desk space, there shall be
included (i.e., added) to the space devoted specifically to such purposes, an
allocable share of reception, secretarial, file and other common areas
comprising part of the demised premises. Any such desk space shall remain at all
times a part of and shall not be separately demised or separated from the
balance of the demised premises, and the occupants thereof shall at all times
gain access to their space through reception and corridor areas shared with
Tenant.
ARTICLE 12
CERTIFICATE OF OCCUPANCY
12.01. Tenant will not at any time use or occupy the demised
premises in violation of the Certificate of Occupancy issued for the Building.
ARTICLE 13
ADJACENT EXCAVATION SHORING
13.01. If an excavation or other substructure work shall be made
upon land adjacent to the demised premises, or shall be authorized to be made,
Tenant shall afford to the person causing or authorized to cause such
excavation, license to enter upon the demised premises for the purposes of doing
such work as shall be necessary to preserve the wall of or the Building of which
the demised premises form a part from injury or damage and to support the
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same by proper foundations without any claim for damages or indemnity against
Landlord, or diminution or abatement of rent.
ARTICLE 14
CONDEMNATION
14.01. In the event that the whole of the demised premises shall be
lawfully condemned or taken in any manner for any public or quasi-public use,
this Lease and the term and estate hereby granted shall forthwith cease and
terminate as of the date of vesting of title. In the event that only a part of
the demised premises shall be so condemned or taken, then, effective as of the
date of vesting of title, the fixed annual rent under Article 1 hereunder and
additional rents under Articles 3 and 4 hereunder shall be abated in an amount
thereof apportioned according to the area of the demised premises so condemned
or taken. In the event that a material part of the Building shall be so
condemned or taken, then (a) Landlord (whether or not the demised premises be
affected) may, at Landlord's option, terminate this Lease and the term and
estate hereby granted as of the date of such vesting of title by notifying
Tenant in writing of such termination within sixty (60) days following the date
on which Landlord shall have received notice of vesting of title, or (b) if such
condemnation or taking shall be of a substantial part of the demised premises or
of a substantial part of the means of access thereto, Tenant may, at Tenant's
option, by delivery of notice in writing to Landlord within thirty (30) days
following the date on which Tenant shall have received notice of vesting of
title, terminate this Lease and the term and estate hereby granted as of the
date of vesting of title, or (c) if neither Landlord nor Tenant elects to
terminate this Lease, as aforesaid, this Lease shall be and remain unaffected by
such condemnation or taking, except that the fixed annual rent payable under
Article 1 and additional rents payable under Articles 3 and 4 hereof shall be
abated to the extent hereinbefore provided in this Article 14. In the event that
only a part of the demised premises shall be so condemned or taken and this
Lease and the term and estate hereby granted with respect to the remaining
portion of the demised premises are not terminated as hereinbefore provided,
Landlord will, with reasonable diligence and at its expense, restore the
remaining portion of the demised premises as nearly as practicable to the same
condition as it was in prior to such condemnation or taking and to the extent
reasonably practicable, make the demised premises a single architectural unit.
14.02. In the event of its termination in any of the cases
hereinbefore provided, this Lease and the term and estate hereby granted shall
expire as of the date of such termination with the same effect as if that were
the Expiration Date, and the fixed annual rent and additional rents payable
hereunder shall be apportioned as of such date.
14.03. In the event of any condemnation or taking hereinbefore
mentioned of all or a part of the Building, Landlord shall be entitled to
receive the entire award in the condemnation proceeding, including any award
made for the value of the estate vested by this Lease in Tenant, and Tenant
hereby expressly assigns to Landlord any and all right, title and
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interest of Tenant now or hereafter arising in or to any such award or any part
thereof, and Tenant shall be entitled to receive no part of such award. Tenant
may make a claim for Tenant's relocation costs and the unamortized cost of any
Tenant property taken thereby, provided that such claim shall not reduce or
adversely affect Landlord's award.
14.04. It is expressly understood and agreed that the provisions of
this Article 14 shall not be applicable to any condemnation or taking for
governmental occupancy for a limited period.
14.05. In the event of any taking of less than the whole of the
Building which does not result in a termination of this Lease, or in the event
of a taking for a temporary use or occupancy of all or any part of the demised
premises which does not result in a termination of this Lease, Landlord, at its
expense, and whether or not any award or awards shall be sufficient for the
purpose, shall proceed with reasonable diligence to repair, alter and restore
the remaining parts of the Building and the demised premises and means of access
thereto to substantially their former condition to the extent that the same may
be feasible and so as to constitute a complete and tenantable Building and
demised premises.
14.06. In the event any part of the demised premises be taken to
effect compliance with any law or requirement of public authority other than in
the manner hereinabove provided in this Article 14, then, (i) if such compliance
is the obligation of Tenant under this Lease, Tenant shall not be entitled to
any diminution or abatement of rent or other compensation from Landlord
therefor, but (ii) if such compliance is the obligation of Landlord under this
Lease, the fixed annual rent hereunder shall be reduced and additional rents
under Article 3 hereof shall be adjusted in the same manner as is provided in
Section 14.01 according to the reduction in rentable area of the demised
premises resulting from such taking.
ARTICLE 15
ACCESS TO DEMISED PREMISES; CHANGES
15.01. Tenant shall permit Landlord to erect, use and maintain
pipes, ducts and conduits in and through the demised premises, provided the same
are installed adjacent to or concealed behind walls and ceilings of the demised
premises. Landlord shall to the extent reasonably practicable install such
pipes, ducts and conduits by such methods and at such locations as will not
materially interfere with or impair Tenant's layout or use of the demised
premises. Landlord or its agents or designees shall have the right, upon
reasonable advance notice (except in the case of emergency) to Tenant or any
authorized employee of Tenant at the demised premises, to enter the demised
premises, at reasonable times during business hours, for the making of such
repairs or alterations as Landlord may deem necessary for the Building or which
Landlord shall be required to or shall have the right to make by the provisions
of this Lease or any other lease in the Building and, subject to the foregoing,
shall also have the right to
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enter the demised premises for the purpose of inspecting them or exhibiting them
to prospective purchasers or lessees of the entire Building or to prospective
mortgagees of the fee or of the Landlord's interest in the property of which the
demised premises are a part or to prospective assignees of any such mortgages or
to the holder of any mortgage on the Landlord's interest in the property, its
agents or designees. Landlord shall be allowed to take all material into and
upon the demised premises that may be required for the repairs or alterations
above mentioned as the same is required for such purpose, without the same
constituting an eviction of Tenant in whole or in part, and the rent reserved
shall in no wise abate while said repairs or alterations are being made by
reason of loss or interruption of the business of Tenant because of the
prosecution of any such work. Landlord shall exercise reasonable diligence so as
to minimize the disturbance but nothing contained herein shall be deemed to
require Landlord to perform the same on an overtime or premium pay basis. Tenant
agrees that Landlord shall have the right at any time to install in the Building
on the inside of the windows thereof, a film to reduce the usage of energy in
the Building. Tenant agrees that in the event Landlord shall exercise its option
to install such film the foregoing provisions of this Section shall apply to the
installation, maintenance or replacement of such film.
15.02. Landlord reserves the right, without the same constituting an
eviction and without incurring liability to Tenant therefor, to change the
arrangement and/or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairways, toilets or other public parts of the Building;
provided, however, that access to the Building shall not be materially impaired
and that there shall be no unreasonable obstruction of access to the demised
premises or unreasonable interference with the use or enjoyment thereof.
15.03. Landlord reserves the right to light from time to time all or
any portion of the demised premises at night for display purposes without paying
Tenant therefor.
15.04. Landlord may, during the (12) months prior to expiration of
the term of this Lease, exhibit the demised premises to prospective tenants upon
advance notice (which may be given orally) to Tenant.
15.05. If Tenant shall not be personally present to open and permit
an entry into the demised premises at any time when for any reason an entry
therein shall be urgently necessary by reason of fire or other emergency,
Landlord or Landlord's agents may forcibly enter the same without rendering
Landlord or such agents liable therefor (if during such entry Landlord or
Landlord's agents shall accord reasonable care to Tenant's property) and without
in any manner affecting the obligations and covenants of this Lease.
ARTICLE 16
CONDITIONS OF LIMITATION
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16.01. This Lease and the term and estate hereby granted are subject
to the limitation that whenever Tenant shall make an assignment of the property
of Tenant for the benefit of creditors, or shall file a voluntary petition under
any bankruptcy or insolvency law or any involuntary petition alleging an act of
bankruptcy or insolvency shall be filed against Tenant under any bankruptcy or
insolvency law, or whenever a petition shall be filed by or against Tenant under
the reorganization provisions of the United States Bankruptcy Act or under the
provisions of any law of like import, or whenever a petition shall be filed by
Tenant under the arrangement provisions of the United States Bankruptcy Act or
under the provisions of any law of like import, or whenever a permanent receiver
of Tenant or of or for the property of Tenant shall be appointed, then, Landlord
may, (a) at any time after receipt of such notice of the occurrence of any such
event, or (b) if such event occurs without the acquiescence of Tenant, at any
time after the event continues for ninety (90) days, give Tenant a notice of
intention to end the term of this Lease at the expiration of five (5) days from
the date of service of such notice of intention, and upon the expiration of said
five (5) day period, this Lease and the term and estate hereby granted, whether
or not the term shall theretofore have commenced, shall terminate with the same
effect as if that day were the Expiration Date, but Tenant shall remain liable
for damages as provided in Article 18 hereof.
16.02. This Lease and the t