Atari Inc. Contracts
Sample Business Contracts
New York-New York-417 Fifth Avenue Lease - FS Realty Corp. and GT Interactive Software Corp.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
AGREEMENT OF LEASE
BETWEEN
F.S. REALTY CORPORATION
LANDLORD
AND
GT INTERACTIVE SOFTWARE CORP.
TENANT
PREMISES:
417 FIFTH AVENUE
7TH AND 8TH FLOORS
NEW YORK, NEW YORK 10016
-1-
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE 1 PREMISES; RENT........................................ 5
ARTICLE 2 CONDITION OF PREMISES................................. 7
ARTICLE 3 ARBITRATION........................................... 8
ARTICLE 4 REAL ESTATE TAX ESCALATION............................ 10
ARTICLE 5 USE................................................... 12
ARTICLE 6 ALTERATIONS AND INSTALLATIONS......................... 14
ARTICLE 7 REPAIRS............................................... 17
ARTICLE 8 REQUIREMENTS OF LAW................................... 19
ARTICLE 9 INSURANCE, LOSS, REIMBURSEMENT, LIABILITY............. 21
ARTICLE 10 DAMAGE BY FIRE OR OTHER CAUSE......................... 24
ARTICLE 11 ASSIGNMENT, MORTGAGING, SUBLETTING, ETC............... 26
ARTICLE 12 ELECTRICITY........................................... 31
ARTICLE 13 ADJACENT EXCAVATION - SHORING......................... 33
ARTICLE 14 CONDEMNATION.......................................... 34
ARTICLE 15 ACCESS TO PREMISES; CHANGES........................... 35
ARTICLE 16 CONDITIONS OF LIMITATION.............................. 37
ARTICLE 17 RE-ENTRY BY LANDLORD; INJUNCTION...................... 38
ARTICLE 18 DAMAGES............................................... 39
ARTICLE 19 LANDLORD'S RIGHT TO PERFORM TENANT'S
OBLIGATIONS........................................... 41
ARTICLE 20 QUIET ENJOYMENT....................................... 41
ARTICLE 21 SERVICES AND EQUIPMENT................................ 41
ARTICLE 22 HAZARDOUS MATERIALS................................... 45
ARTICLE 23 INVALIDITY OF ANY PROVISION........................... 46
ARTICLE 24 BROKERAGE............................................. 46
ARTICLE 25 SUBORDINATION......................................... 47
ARTICLE 26 CERTIFICATE OF TENANT/LANDLORD........................ 49
ARTICLE 27 LEGAL PROCEEDINGS AND WAIVER OF JURY TRIAL............ 50
ARTICLE 28 SURRENDER OF PREMISES................................. 50
ARTICLE 29 RULES AND REGULATIONS................................. 51
ARTICLE 30 CONSENTS AND APPROVALS................................ 51
ARTICLE 31 NOTICES............................................... 51
ARTICLE 32 NO WAIVER............................................. 52
ARTICLE 33 INABILITY TO PERFORM.................................. 53
ARTICLE 34 ENTIRE AGREEMENT; NO REPRESENTATIONS;
NO ORAL MODIFICATION.................................. 54
ARTICLE 35 SECURITY.............................................. 54
ARTICLE 36 INTENTIONALLY OMITTED................................. 56
ARTICLE 37 NON-LIABILITY AND INDEMNIFICATION..................... 56
-ii-
<PAGE> 3
ARTICLE 38 INTENTIONALLY OMITTED................................. 57
ARTICLE 39 RIGHT OF FIRST OFFER.................................. 57
ARTICLE 40 MISCELLANEOUS......................................... 58
ARTICLE 41 ROOF SPACE............................................ 59
ARTICLE 42 OPTION................................................ 61
SCHEDULES
1 - Floor Plan for 7th and 8th floors 2 - Cleaning
Specifications-Intentionally Omitted 3 - Form of Estoppel
Letter 4 - Rules and Regulations 5 - Construction Rules and
Regulations 6 - Crosshatch of Roof Premises
EXHIBITS
A - Work Letter
B- Assignment and Assumption Agreement
C - Nondisturbance Agreement
-iii-
<PAGE> 4
AGREEMENT OF LEASE dated as of December 12, 1996, by and between F.S.
REALTY CORP, a New York Corporation, with its office at c/o Prince Management
Corp., 57-18 Flushing Avenue, Maspeth, New York 11378 (hereinafter referred to
as "Landlord") and, GT INTERACTIVE SOFTWARE CORP., a Delaware Corporation with
an office at 16 East 40th Street, New York, New York 10016 (hereinafter referred
to as "Tenant").
REFERENCE PAGE
LEASE DEFINITIONS
In addition to other terms elsewhere defined in this Lease, the
following words and phrases whenever used in this Lease shall have the meanings
set forth in this Reference Page.
"Alteration" shall mean any and every structural addition,
construction, improvement, installation or modification of or to the Premises
which affects building services outside the Premises including, but not limited
to, electrical, plumbing, heating, ventilating and air-conditioning services.
"Base Taxes" shall mean the Taxes (as hereinafter defined) for the
twenty four-month period commencing July 1, 1996 and ending June 30, 1998
divided by two.
"Brokers" shall mean S.L. Green Real Estate and Jenel Management Corp.
"Building" shall mean the building known as 417 Fifth Avenue, New York,
New York 10016.
"Business Days" shall mean all days excluding Sundays and all days
observed by the federal, state or local governments as legal holidays as well as
all other days recognized as holidays under applicable union contracts.
"Business Hours" shall mean the hours between 8:00 a.m. and 6:00 p.m.
on Business Days except that on Saturdays Business Hours shall mean the hours
between 8:00 a.m. and 1:00 p.m.
"Commencement Date" shall mean the date that the Landlord delivers
possession of the Premises to Tenant.
"Construction Rules and Regulations" shall mean those certain rules and
regulations issued by Landlord with respect to the performance of any
construction at the Premises annexed hereto and incorporated herein as Schedule
5.
"Consumer Price Index" or the "CPI-U" shall mean the Consumer Price
Index for All Urban Consumers of the United States Department of Labor's Bureau
of Labor
-1-
<PAGE> 5
Statistics in effect for New York, Northeastern N.J. (1984=100) and generally
published at the time the computation is to be made. If the CPI-U is no longer
published, then another price index, generally recognized as authoritative,
shall be substituted by mutual agreement of Landlord and Tenant. In the event
the parties are unable to so agree, the matter shall be submitted to binding
arbitration according to the rules of the American Arbitration Association.
During any period while the determination of such a dispute is pending, Tenant
shall continue to pay the sum previously in effect; provided, however, that the
adjusted sum as finally determined shall be retroactive from the prescribed date
and any deficiency owed by Tenant shall be paid promptly upon a final
determination of the dispute.
"Expiration Date" shall mean the tenth anniversary of the Commencement
Date as the same may be extended.
"Fair Market Rental Value" shall mean the fair market rental value of
the Premises six months prior to the end of the Initial Term (as hereinafter
defined) with respect to Option 1 (as hereinafter defined) and six months prior
to the end of Option 1 with respect to Option 2 (as hereinafter defined)
respectively. In the event that Landlord and Tenant are unable to agree on the
Fair Market Rental Value of the Premises five months prior to the end of the
Initial Term for Option 1 or five months prior to the end of Option 1 with
respect to Option 2, then the same shall be determined by binding arbitration in
accordance with Article 3 of this Lease. The arbitrator shall make his/her
respective determination based upon the following assumptions and directions,
and the arbitrator shall be so instructed and bound with respect thereto:
(i) The Premises is available in the then rental market for comparable
tenant space in comparable buildings in the City of New York;
(ii) Neither Landlord nor Tenant is under a compulsion to rent;
(iii) The Premises is to be rented as a whole to a single tenant for
general office use for a term of five (5) years, taking into consideration such
market factors and other lease provisions as may then customarily be in effect
and applicable to the rental of such space in that location;
(iv) The Premises shall be rented in an "as is," condition equal to the
condition of the Premises as it exists six months prior to the end of the Term
with respect to Option 1 and equal to the condition of the Premises as it exists
six months prior to the end of Option 1 with respect to Option 2;
(v) Landlord is not paying a brokerage commission to lease the Premises
for either Option 1 or Option 2;
-2-
<PAGE> 6
(vi) Landlord is not making any improvements or alterations to the
Premises for either Option 1 or Option 2; and
(vii) Landlord is not giving Tenant any period of free rent for Option
1 or Option 2.
"Fixed Annual Rent," "Fixed Rent" or "fixed annual rent" shall mean One
Million Two-Hundred Thousand Dollars ($1,200,000.00) per annum for the period
from the first anniversary of the Commencement Date through the second
anniversary of the Commencement Date. Provided Tenant is not otherwise in
default of the terms and conditions of this Lease, beyond applicable notice and
grace periods, Fixed Annual Rent shall be abated for the period from the
Commencement Date through the first anniversary of the Commencement Date (all
additional rent (as hereinafter defined) shall remain due and payable).
Thereafter, Fixed Annual Rent shall be adjusted on each anniversary of the
Commencement Date beginning on the second anniversary of the Commencement Date
through the tenth anniversary of the Commencement Date by multiplying the
immediately preceding year's Fixed Annual Rent by a fraction, the numerator of
which shall be the Consumer Price Index (as defined herein) in effect on the
anniversary of the Commencement Date for the year in which Fixed Annual Rent is
being adjusted and the denominator of which shall be the Consumer Price Index in
effect on the immediately preceding anniversary of the Commencement Date, which
escalation shall not exceed three (3) percent per annum. The increases in the
Fixed Annual Rent set forth herein shall always be calculated upon, and added
to, the prior year's Fixed Annual Rent.
"Initial Term" shall mean a period of ten (10) years beginning on the
Commencement Date.
"Interest Rate" shall mean a fluctuating rate of interest per annum
equal to the lesser of (a) 2% above the prime commercial lending rate of
interest announced from time to time by The Chase Manhattan Bank, National
Association (or any successor institution, or, if said bank and its successors
are no longer in existence, any other member bank of The New York Clearing House
Association selected by Landlord), at its principal office in New York City, in
effect from time to time or (b) the maximum applicable legal rate of interest,
if any.
"Landlord" shall mean only the owner, or the mortgagee in possession,
of the Land (as hereinafter defined) and Building (and the owner of a lease of
the Building or of the Land and Building), so that in the event of any transfer
of title to the Land and Building or said lease, or in the event of a lease of
the Building, or of the Land and Building, upon notification to Tenant of such
transfer or lease the said transferor Landlord shall be and hereby is entirely
freed and relieved of future covenants, obligations and liabilities of Landlord
hereunder. It shall be deemed and construed as a covenant running with the land
without further agreement between the parties or
-3-
<PAGE> 7
their successors in interest, or between the parties and the transferee of title
to the Land and Building or said lease, or the said lessee of the Building, or
of the Land and Building, that the transferee or the lessee has assumed and
agreed to carry out any and all such covenants, obligations and liabilities of
Landlord hereunder from and after the date of such transfer.
"Legal Requirement(s)" shall mean (i) any laws, statutes, ordinances
(including building codes and zoning regulations and ordinances and the
Americans with Disabilities Act of 1990) and the orders, rules, regulations,
directives and requirements of all federal, state, county, city, municipal and
borough departments, bureaus, boards (including the New York Board of Fire
Underwriters), agencies, offices, commissions and subdivisions thereof, or of
any official thereof, or of any other governmental public or quasi-public
authority, whether now or hereafter in force, which may be applicable to the
Land, the Building or the Premises or any part thereof, or the sidewalks, curbs
or areas adjacent thereto, and (ii) all requirements, obligations and conditions
of all instruments of record on the date of this Lease.
"Lien" shall mean any and every lien of any kind whatsoever for the
furnishing (or alleged furnishing) of (or on account of) labor, materials,
services, facilities or any other things whatsoever.
"Premises" shall mean the entire seventh (7th) and eighth (8th) floors
of the Building and the Roof Premises (as defined in Article 41 hereof) as shown
hatched on the floor plan annexed hereto as Schedules 1 and 6 respectively.
"Permitted Use" shall mean executive and general offices including
kitchen facilities, employee cafeteria, executive dining room, employee snack
bar concession, product display room, telemarketing operation and for similar
uses excluding any and all manufacturing and retail sales to the public but for
no other purposes whatsoever.
"Security Deposit" shall have the meaning set forth in Article 35
hereof.
"Tenant's Proportionate Share" shall mean 18.2%. The Tenant's
Proportionate Share shall decrease in the proportion to the additional space
built on top of the roof of the Building and the adjustment of the Tenant's
Proportionate Share shall become effective upon the sale or rental of the
additional space.
"Term" shall mean the Initial Term as the same may be extended by
Option 1 and Option 2. Notwithstanding anything in this Lease to the contrary,
(a) provided (i) Tenant is not otherwise in default of this Lease beyond all
applicable notice and cure periods and (ii) Tenant provides Landlord with
written notice no later than six months prior to the end of the Initial Term of
its exercise of this option, Tenant is entitled to extend this Lease for an
additional five years ("Option 1") beginning on the day after the expiration of
the Initial Term and ending on the fifth anniversary of the day after
-4-
<PAGE> 8
the expiration of the Initial Term at a Fixed Annual Rent which is ninety
percent (90%) of the Fair Market Rental Value (as such term is defined herein);
and (b) provided (i) Tenant is not otherwise in default of this Lease beyond all
applicable notice and cure periods and (ii) Tenant provides Landlord with
written notice no later than six months prior to the end of the term of Option 1
of its exercise of this option, Tenant is entitled to extend this Lease for an
additional five years ("Option 2") beginning on the day after the expiration of
the term of Option 1 and ending on the fifth anniversary of the day after the
expiration of the term of Option 1 at a Fixed Annual Rent which is ninety
percent (90%) of the Fair Market Rental Value (as such term is defined herein).
The Reference Pages information is incorporated into and made a part of
the within Lease. In the event of any conflict between any Reference Pages
information and the Lease, the Lease shall control.
W I T N E S S E T H:
The parties hereto, for themselves, their heirs, distributees,
executors, administrators, legal representatives, trustees, successors and
assigns, hereby covenant as follows:
ARTICLE 1.
PREMISES: RENT
1.(a) Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, the Premises for the Initial Term to commence on the Commencement Date
and to end at 11:59 p.m. on the Expiration Date or until such term shall sooner
cease and terminate or be extended as herein provided. In the event that the
Commencement Date does not occur on or before the six-month anniversary after
the date this Lease is executed by Landlord, Tenant may elect to terminate this
Lease, by first providing Landlord with a thirty (30) day written notice of
Tenant's election to terminate this Lease, and if such situation shall continue
and shall not be remedied by Landlord within such thirty (30) days, then the
Term shall expire at the expiration of such thirty (30) days, and the estate
hereby granted shall terminate with the same effect as if that day were the end
of the Term (provided that Tenant, its agents, servants or employees are not
responsible for the Commencement Date not occurring).
1.(b) (i) From and after the Commencement Date, Tenant shall pay to
Landlord the Electrical Charge and after the first anniversary of the
Commencement Date, Tenant shall pay to Landlord the fixed annual rent at the
fixed annual rental rate set forth in the Reference Page, which shall be payable
in equal monthly installments
-5-
<PAGE> 9
in advance on the first day of each and every calendar month during the Term.
The first monthly installment of fixed annual rent due on the first anniversary
of the Commencement Date shall be payable by Tenant upon the execution of this
Lease and shall be applied to the first full installment of Fixed Annual Rent
due hereunder. Should the Commencement Date fall on any day other than the first
day of a month, the fixed annual rent due on the first day of the first
anniversary of the Commencement Date shall be pro-rated on a per diem basis, and
Tenant shall pay the amount for such partial month on the Commencement Date.
Should the last day of the Term fall on any day other than the last day of a
month, then the fixed annual rent for such partial period shall be pro-rated on
a per diem basis.
(ii) Any sum other than fixed annual rent payable hereunder
(hereinafter called "additional rent") shall be deemed additional rent, and
together with fixed annual rent shall be included in the term "rent" and shall,
unless otherwise stated, be due within seven days after demand. Fixed annual
rent and additional rent shall be paid in lawful money of the United States by
good and sufficient check (subject to collection) drawn to Landlord's order or
as Landlord may direct. Said checks shall be sent to Landlord at its address as
hereinabove set forth, or to such other party or parties and/or at such other
address(es) as Landlord shall designate by notice to Tenant.
(iii) Tenant shall pay the fixed annual rent promptly when due
without notice or demand and additional rent when billed therefor and without
offset, credit, abatement, deduction, counterclaim, set off for any reason
whatsoever, except such deduction as may be expressly set forth herein.
1.(c) 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 Requirements, Tenant shall enter
into such agreement(s) and take such other steps as Landlord may reasonably
request and as legally may be permissible to permit Landlord to collect the
maximum rents that, from time to time during the continuance of such legal rent
restriction, legally may be 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 shall 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 equal to (i) the rents that 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.(d) No payment by Tenant or receipt or acceptance by Landlord of a
lesser amount than the correct fixed annual rent or additional rent shall be
deemed to be other than a payment on account, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment be deemed
an accord and
-6-
<PAGE> 10
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance or pursue any other remedy provided in
this Lease or at law.
1.(e) In order to compensate Landlord for the expenses involved in
handling delinquent payments, Tenant shall pay, as additional rent, a late
charge of four (4%) percent of the amount of any installment of fixed annual
rent or payment of additional rent remaining unpaid on the tenth day after
written notice to Tenant. Nothing herein contained shall excuse Tenant from
paying all rent or any other sum due under this Lease on the dates when same are
due hereunder.
1.(f) Landlord shall have the same rights and remedies (including,
without limitation, the right to commence a summary proceeding) for a default in
the payment of additional rent as for a default in the payment of fixed annual
rent notwithstanding the fact that Tenant may not then also be in default in the
payment of fixed annual rent.
ARTICLE 2.
CONDITION OF PREMISES
2.(a) Tenant is fully familiar with the condition of the Premises and
hereby accepts possession of the Premises in their current "as is" condition
except for latent defects other than asbestos.
2.(b) Tenant acknowledges that the Building including the Premises, is
sprinklered and that the bathrooms in the Premises will be delivered to Tenant
in their current "as-is" condition.
2.(c) Landlord shall not be required to perform any work in the
Premises except that Landlord shall, at its sole cost and expense, remove all
asbestos from the Premises of which Tenant informs Landlord in writing, prior to
the completion of Tenant's Initial Work (as hereinafter defined). Landlord shall
not be responsible for removing any asbestos from the Premises of which Tenant
fails to inform Landlord in writing prior to completion of Tenant's Initial Work
and Landlord shall not be responsible for removing any floor or ceiling tiles
containing asbestos. Landlord shall perform all such asbestos removal work: (i)
promptly after being notified of the existence of any such asbestos by Tenant in
writing; (ii) in a manner so as not to interfere with, or delay, Tenant's
Initial Work; and (iii) in compliance with all Legal Requirements. In the event
that Landlord shall fail to perform any such asbestos removal work in accordance
with all of the terms and conditions of the immediately preceding sentence and
Landlord does not remedy any such failure within ten (10) days following written
notice from Tenant, then Tenant, following an additional (10) day written notice
to Landlord, shall have the right to perform any such asbestos
-7-
<PAGE> 11
removal work on behalf of Landlord and may offset Tenant's reasonable cost
therefor against the next installments of fixed annual rent due under this
Lease. Prior to Tenant's completion of Tenant's Initial Work, Landlord shall
deliver to Tenant a letter from the asbestos removal company indicating that the
asbestos that Tenant informed Landlord of in writing was removed from the
Premises. Notwithstanding anything to the contrary contained herein, any
asbestos which may be discovered in the Premises following the completion of
Tenant's Initial Work, shall be promptly removed by Landlord, (provided Tenant
informs Landlord in writing of the asbestos to be removed), in accordance with
all Legal Requirements and in a manner so as not to interfere with Tenant's use
of the Premises. Tenant shall reimburse Landlord for one half of all of
Landlord's actual costs in connection with such removal. Landlord and Tenant
acknowledge that the removal of asbestos from the Premises by Landlord may occur
simultaneously with the performance of Tenant's Initial Work and Landlord and
Tenant agree to cooperate in good faith, with the other party so as not to
interfere with the performance of each other's work.
2.(d) All work performed by Tenant in accordance with the provisions of
this Lease shall require the installation of new materials at least comparable
to the quality now present in the Building and shall be performed in accordance
with the terms and conditions of this Lease and the Construction Rules and
Regulations.
2.(e) Landlord shall make available to Tenant, the amount of Landlord's
Contribution (as such term is defined in the Work Letter annexed hereto as
Exhibit A and made a part hereof) subject to, and in accordance with, the terms
of such Work Letter.
ARTICLE 3.
ARBITRATION
3.(a) In any case in which it is specifically provided by the terms of
this Lease that a matter shall be determined by arbitration, such arbitration
shall be conducted by a single arbitrator pursuant to applicable statutes of the
State of New York at the time in effect and, to the extent permitted by said
statutes, in the manner specified in this Article 3 and, to the extent not
inconsistent with said statutes and this Article 3, in accordance with the
Commercial Arbitration Rules for expedited arbitration at the time in effect of
the American Arbitration Association; provided that the arbitrator selected
hereunder shall be a person of recognized competence who is unaffiliated with
either party to this Lease (either by direct or indirect relationship or
significant business relationship) and shall have at least ten (10) years'
experience as a commercial real estate broker or appraiser in the City of New
York. The arbitrator shall be chosen by the American Arbitration Association in
accordance with the Commercial Arbitration Rules for expedited arbitration.
-8-
<PAGE> 12
3.(b) The party desiring such arbitration shall give written notice to
that effect to the other party and, in such notice, shall specify the nature of
the dispute to be arbitrated. Each of Tenant and Landlord shall submit (a
"Submission") stating its position (including all relevant figures and amounts,
as appropriate) in such dispute to the arbitrator, in writing, within seven (7)
days of the selection of the arbitrator and such arbitrator shall determine such
matter as promptly as possible; provided that:
(i) The arbitrator shall have the right only to interpret and apply
the terms of this Lease, and may not change any such terms or deprive any party
to this Lease of any right or remedy expressly or impliedly provided in this
Lease. Landlord and Tenant each shall be entitled to present evidence and
arguments to the arbitrator; and
(ii) The arbitrator shall select either Tenant's or Landlord's
Submission (without modification) as its decision, which decision shall be final
and binding in accordance with the provisions of the laws of the State of New
York. The arbitrator shall give written notice of its determination to Landlord
and Tenant and shall furnish to each a signed copy of such determination.
3. (c) The fees and expenses of the arbitrator shall be borne equally
by Landlord and Tenant.
3. (d) In the event of the failure, refusal or inability of the
arbitrator to act, a new arbitrator shall be appointed in his/her stead, which
appointment shall be made in the same manner as hereinbefore provided for the
appointment of the arbitrator so failing, refusing or unable to act, or to
continue to act.
3.(e) During any period of arbitration under this Article 3, neither
Landlord nor Tenant shall be deemed to be in default with respect to the
performance of any covenant, duty or obligation relating to such matter, and any
grace period or permitted delay in such performance otherwise provided for in
this Lease shall be automatically extended by such period of arbitration.
However, notwithstanding the foregoing in the event that Fair Market Rental
Value for Option 1 or Option 2 is being determined by arbitration, Tenant agrees
to pay during the period of arbitration, the Fixed Annual Rent chargeable and in
effect on the Expiration Date with respect to Option 1, and on the last day of
Option 1 with respect to Option 2, without prejudice to any of its rights until
there has been a determination of the arbitration. After such determination of
the arbitrator the Fixed Annual Rent shall be adjusted in accordance with the
arbitrator's decision and Tenant shall be credited for any overpayment or
debited for the additional Fixed Annual Rent due and owing.
-9-
<PAGE> 13
ARTICLE 4.
REAL ESTATE TAX ESCALATION
4.(a) For the purposes of this Article 4, the following definitions
shall apply:
(i) The term "Taxes" shall mean all real estate taxes,
assessments, sewer and water rents, governmental levies, 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
(excluding metered charges) that are or may be assessed, levied or imposed upon
all or any part of the land (hereinafter referred to as the "Land") on which the
Building is situated, the Building and the sidewalks, vaults (excluding vaults
used by tenants), arcades, plazas, alleys or streets in front of or adjacent
thereto, including any tax, excise or fee payable as a result of the Building
being situated in a business improvement district, including any tax, excise or
fee measured by or payable with respect to any rent levied against Landlord
and/or the Land and/or the Building as though this was the only property of the
Landlord, under the laws of the United States, the State of New York, or any
political subdivision thereof, or by the City of New York, or any political
subdivision thereof but excluding any income, franchise, corporate, estate,
inheritance, succession, capital stock, transfer or mortgage recording tax
levied on Landlord. 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 the
Building, and/or the sidewalks, arcades, plazas,--alleys or streets in front of
or adjacent thereto, 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."
(ii) 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 or such other period of twelve months occurring during the
Term as hereafter may be duly adopted as the fiscal year for real estate tax
purposes of the City of New York.
(iii) The term "Escalation Statement" shall mean a statement
setting forth the amount payable by Tenant for a specified Tax Year pursuant to
this Article 4 as reasonably estimated by Landlord (not to exceed 105% of
Tenant's Tax Payment (as hereinafter defined) for the preceding Tax Year) and a
copy of all relevant tax bills.
4.(b) (i) Tenant shall pay as additional rent for the Tax Year
beginning on July 1, 1998 and each Tax Year thereafter a sum (hereinafter
referred to as "Tenant's Tax Payment") equal to Tenant's Proportionate Share of
the amount by which the Taxes for such Tax Year exceed the Base Taxes. Tenant's
Tax Payment for each Tax
-10-
<PAGE> 14
Year shall be due and payable in advance in monthly installments on the first
day of each month during each Tax Year, initially based upon the Escalation
Statement furnished prior to the commencement of such Tax Year, until such time
as the amount of the Taxes for such Tax Year shall be determined by the City of
New York, at which point, such monthly installments shall be adjusted based on
the actual amount of the Taxes for such Tax Year. Tenant shall, within thirty
(30) days thereafter, pay to Landlord an amount equal to the amount of any
underpayment of Tenant's Tax Payment with respect to any Tax Year and, in the
event of an overpayment, Tenant may credit against subsequent payments of fixed
annual rent and additional rent 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, Taxes are required to be paid to the appropriate taxing
authorities in full or in monthly, quarterly, semiannually 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. 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. Landlord shall
provide Tenant with a copy of the tax invoices upon which the Tenant's Tax
Payment is based. Tenant shall not pay any portion of late charges or interest
on late Tax Payments.
(ii) If the real estate tax fiscal year of The City of New
York shall be changed during the Term, 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 4.(b).
(iii) If the Taxes for any Tax Year for which Tenant shall
have paid additional rent pursuant to this Article shall be adjusted, corrected
or reduced whether as the result of protest of any tentative assessment, or by
means of agreement, or as the result of legal proceedings, the additional rent
becoming due for said Tax Year pursuant to this Article shall be determined on
the basis of said corrected, adjusted or reduced Taxes. If Tenant shall have
paid any additional rent pursuant to this Article for such Tax Year prior to any
said adjustment, Landlord shall credit or refund to Tenant any excess amount
thus paid as reflected by said adjusted Taxes, less Tenant's Proportionate Share
of any cost, expense or fees, not to exceed thirty three percent (33%) of the
Tax reduction (including experts' and attorneys' fees but excluding Landlord's
actual out-of-pocket costs of administration and coordination) incurred by
Landlord in obtaining said tax adjustment. If said tax adjustment shall occur
prior to Tenant's payment of any said Taxes due hereunder as additional rent,
-11-
<PAGE> 15
Tenant shall pay, as additional rent, Tenant's Proportionate Share of any cost,
expenses or fees (including experts' and attorneys' fees but excluding
Landlord's costs of administration and coordination) incurred by Landlord in
obtaining said tax adjustment.
4.(c) In the event that the date of the expiration or other termination
of this Lease shall be a day other than the last day of a Tax Year, then, in
applying the provisions of this Article 4 with respect to any Tax Year in which
such event shall have occurred, appropriate adjustments shall be made to reflect
the occurrence of such event on the basis of the portion of such Tax Year that
shall have elapsed prior to the date of such expiration or termination in the
case of the Expiration Date or other termination.
4.(d) In no event shall the fixed annual rent be reduced by operation
of this Article 4. Except as provided in Section 4(e) hereof, the rights and
obligations of Landlord and Tenant under the provisions of this Article 4 with
respect to any additional rent shall survive the expiration or other termination
of this Lease.
4.(e) Landlord's failure to render an Escalation Statement with respect
to any Tax Year shall not prejudice Landlord's right thereafter to render an
Escalation Statement with respect thereto or with respect to any subsequent Tax
Year so long as the Escalation Statement is rendered within one (1) year of the
preceding Tax Year. For example, Landlord may render an Escalation Statement for
the 1998/1999 Tax Year through and including June 30, 2000. Subject to the
previous sentence, payments shall be made pursuant to this Article 4
notwithstanding the fact that an Escalation Statement is furnished to Tenant
after the expiration of the Term.
4.(f) Landlord shall deliver to Tenant within a reasonable time upon
its receipt, a statement containing a copy of the City's tax bill for the
applicable Tax Year ("Statement") which shall be conclusive and binding upon
Tenant unless within 60 days after receipt of such Statement, Tenant shall
notify Landlord in writing that it disputes the correctness of Tenant's Tax
Payment for such Tax Year, specifying the particular respects in which such
Statement is claimed to be incorrect. Pending the determination of such dispute,
Tenant shall pay additional rent in accordance with the relevant Escalation
Statement, without prejudice to Tenant's position.
ARTICLES 5.
USE
5.(a) The Premises may only be used by Tenant for the Permitted Use and
for no other purpose whatsoever.
-12-
<PAGE> 16
5.(b) Tenant shall not use or permit the use of the Premises or any
part thereof in any way that would violate any of the covenants, agreements,
terms, provisions and conditions of this Lease or for any unlawful purposes or
in any unlawful manner. Tenant shall not suffer or permit the 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 that shall in any way impair or interfere
with (a) the character, reputation or appearance of the Building as a high
quality office building, (b) any of the Building services, (c) the proper and
economic heating, cleaning, air-conditioning, ventilating or other servicing of
the Building or the Premises, or (d) the use of any of the other areas of the
Building by, or occasional 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 that causes any such impairment,
interference, discomfort, inconvenience or annoyance.
5.(c) If any governmental license or permit (other than a Certificate
of Occupancy for the Building or any other license or permit required of all
tenants occupying space for executive and general office use in the Borough of
Manhattan) shall be required for the proper and lawful conduct of Tenant's
business in the Premises or any part thereof or for Tenant's occupancy of the
Premises, Tenant at its expense shall procure, maintain and comply with the
terms and conditions of such license or permit and, promptly after request,
submit the same to Landlord for inspection.
5.(d) Tenant acknowledges and agrees that the value of the Premises and
the reputation of the Landlord will be seriously injured if the Premises are
used for any obscene or pornographic purposes or any sort of commercial sex
establishment. Tenant agrees that it will not bring or permit any obscene or
pornographic material on the Premises, however, Tenant may receive obscene
software for its review only and shall not permit or conduct any pornographic,
nude, or semi-nude live performances on the Premises, nor permit use of the
Premises for nude modeling, rap sessions, or as a so-called rubber goods shop,
or as a sex club of any sort, or as a "massage parlor." Tenant agrees further
that it will not permit any of these uses by any sublessee of the Premises or
assignee of this Lease. This Section 5(d) shall directly bind any successors in
interest to Tenant. Tenant agrees that if at any time it violates any of the
provisions of this Section 5(d), such violation shall be deemed a breach of a
substantial obligation of the terms of this Lease and objectionable conduct.
Pornographic material is defined for purposes of this Section 5(d) as any
written or pictorial matter with prurient appeal or any objects or instrument
that are primarily concerned with lewd or prurient sexual activity. For the
purposes of this Section 5.(d) the term "obscene material" shall have the
meaning as set forth in New York State Penal Law Section 235.00.
-13-
<PAGE> 17
ARTICLE 6.
ALTERATIONS AND INSTALLATIONS
6.(a) Tenant shall make no Alterations in or to the Premises without
Landlord's prior written consent (including, without limitation, any work in
connection with the Tenant's initial occupancy of the Premises) which approval
shall not be unreasonably withheld, conditioned or delayed. Every Alteration
shall be done at Tenant's sole cost and expense and in the case of Tenant's
Initial Work, shall be performed in accordance with the Work Letter annexed
hereto as Exhibit A and incorporated herein. Tenant shall notify Landlord in
writing of every addition, construction, improvement, installation or
modification of or to the Premises which requires filings with any state or
municipal agency, including, but not limited to the New York City Department of
Buildings and Landlord shall cooperate in processing and signing Tenant's
filings to perform such alterations.
6.(b) Every Alteration in or to the Premises shall be performed in
accordance with and shall conform to the Contractor Rules and Regulations
incorporated herein in Schedule 5 and the provisions of this Lease and shall be
effected solely in accordance with plans and specifications first approved in
writing by Landlord. Such plans and specifications shall be prepared at Tenant's
sole cost and expense by a professional registered architect and shall be
complete, finished detailed architectural drawings and specifications for the
Alteration. Landlord will not unreasonably withhold, condition or delay its
consent to any Alterations, the plans therefor or the contractors who are to
perform same.
6.(c) With respect to every Alteration:
(i) All work shall be done in a good and worker like manner
and shall not interfere with the operation of the Building or impose any
additional expense upon Landlord in the construction, maintenance, repair or
operation of the Building.
(ii) Tenant will inform Landlord in writing of the names of
any contractor or subcontractor Tenant proposes to use in the Premises at least
ten days prior to the beginning of work by such contractor or subcontractor. Any
contractor employed by Tenant (and all subcontractors) shall agree to employ
only such labor as will not result in jurisdictional disputes or strikes or
cause disharmony with other workers employed at the Building. Upon the happening
of any such dispute, strike or disharmony, Tenant shall immediately upon notice
from Landlord discontinue the labor giving rise thereto. In the event Tenant
fails to do so, Landlord, in addition to any rights available to it under this
Lease and pursuant to law, shall have the right to seek an injunction with or
without notice.
-14-
<PAGE> 18
(iii) Except with respect to Tenant's Initial Work, Tenant
shall pay its contractors or subcontractors, in a timely fashion and perform the
work shown on Tenant's approved plans and specifications subject to reasonable
retainage. Within a reasonable time, not to exceed 30 days, after completion of
the Alteration, Tenant shall furnish Landlord with reasonable evidence that
payment has been made for the Alteration together with a waiver of lien by
Tenant's contractor in the amount of such payment.
(iv) Tenant shall cause the Alteration to be made in
compliance with Legal Requirements. Tenant shall furnish to Landlord copies of
all governmental permits and authorizations that may be required in connection
with any Alteration. All such governmental permits and authorizations shall be
obtained by Tenant at its sole cost and expense and Tenant shall pay the cost of
filing Tenant's plans and specifications with the appropriate governmental
authorities.
(v) Tenant shall perform any Alterations so that they: (i) are
of good quality; (ii) are free and clear of Liens; (iii) substantially conform
to the plans and specifications as approved by Landlord; and (iv) be fit for the
intended use and purpose. In the event that the Alterations do not comply with
provisions (i) through (iv) of this subparagraph, Tenant shall commence to cure
such nonconforming work within five (5) days after written notice from Landlord.
(vi) Tenant shall keep the Building and the Premises free and
clear of all Liens for any work or material claimed to have been furnished to
Tenant or to the Premises on Tenant's behalf, and all work to be performed by
Tenant shall be done in a manner that will not unreasonably interfere with or
disturb other tenants or occupants of the Building.
(vii) During the progress of the work to be done by Tenant,
said work shall be subject to reasonable inspection by representatives of
Landlord who shall be permitted access and the opportunity to inspect, at all
reasonable times on reasonable notice, but this provision shall not in any way
whatsoever create any obligation on Landlord to conduct any such inspection.
(viii) Except with respect to Tenant's Initial Work as defined
in the Work Letter annexed hereto and incorporated herein, with respect to any
Alteration costing more than $100,000.00, Tenant agrees to pay Landlord, as
additional rent, within ten days of demand, an amount equal to Landlord's out of
pocket expenses in connection with the Alteration (not to exceed $1,000.00) in
question for the review of Tenant's plans and specifications.
(ix) Prior to commencement of any Alteration, Tenant's Initial
Work, or any subsequent structural work, Tenant shall furnish to Landlord
original certificates
-15-
<PAGE> 19
of insurance naming Landlord and its designated managers and agents as
additional insureds as their respective interests may appear and evidencing the
existence of:
o Workers' compensation insurance covering all persons
employed for such work; and
o Commercial general liability (including contractual
liability) and property damage insurance, with coverage of at least $5,000,000
per occurrence for bodily or personal injury (including death) and $1,000,000 in
respect of property damage.
Such insurance shall be maintained at all times during the performance of the
work and shall not be cancelable except on 30 days' prior written notice to
Landlord.
(x) Upon completion of each Alteration, Tenant shall remove,
at its sole cost and expense, all debris from the Premises and clean the same.
(xi) Upon completion of each Alteration for which plans are
prepared, Tenant shall deliver "marked" or "as-built" plans for such Alteration
to Landlord at Tenant's sole cost and expense.
6.(d) Landlord shall not be responsible for any labor or materials
furnished to Tenant, or for delays of any kind experienced by Tenant's
contractors unless such delay is caused by Landlord. No Lien for any labor,
materials, or other services or things furnished to Tenant shall attach to or
affect Landlord's estate or interest in the Premises, the Land and/or the
Building. Tenant agrees to discharge, at Tenant's expense (whether by payment,
bonding, or otherwise) every Lien filed against the Premises, the Land and/or
the Building for work claimed to have been done for or materials claimed to have
been furnished to Tenant, within 30 days after receiving notice of the same.
Tenant shall require that all contractors and subcontractors engaged in
connection with Tenant's Alterations indemnify and hold Landlord harmless
against any and all claims for injury to persons or damage to property by reason
of such contractor's or subcontractor's use of the Premises or performance of
the work, including any claims, fines and penalties imposed due to a failure to
comply with Laws.
6.(e) 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
Premises.
6.(f) All Alterations, additions, paneling, partitions, doors, railings
and like installations installed in the Premises at any time, either by Tenant
or by Landlord or others on Tenant's behalf and whether installed or purchased
at Landlord's or
-16-
<PAGE> 20
Tenant's expense (collectively, the "Leasehold Improvements") shall become the
property of Landlord upon the expiration or earlier termination of this Lease.
The Leasehold Improvements shall remain upon, and shall be surrendered with, the
Premises.
6.(g) If any alterations, installations, additions, improvements or
other property that Tenant shall be obligated to remove are not removed on or
prior to the expiration of the Term, Landlord shall have the right to remove
such 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 Premises or
the Building resulting from the removal of the property by Tenant, Tenant shall
repair such damage or, in default thereof, shall reimburse Landlord for
Landlord's actual out of pocket cost in repairing such damage. Tenant's
obligations under this Section 6.(g) shall survive the expiration or other
termination of this Lease.
6.(h) Tenant shall keep records of Tenant's Alterations, installations,
additions and improvements costing in excess of $5,000.00, and of the component
(category) cost thereof. Tenant shall, within 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.
ARTICLE 7.
REPAIRS
7.(a) (i) Tenant shall, at its sole cost and expense, take good care of
the Premises and the fixtures and appurtenances therein (including, without
limitation, bathroom and plumbing fixtures and appurtenances) and make all
repairs thereto as and when needed to preserve them in good working order and
condition and maintain the Premises in a condition consistent with offices in
comparable office buildings. Landlord, at its sole cost and expense, shall
promptly replace all broken glass of the exterior windows in the Premises.
Tenant shall be responsible for all repairs, maintenance and replacement of wall
and floor coverings in the Premises and for the repair and maintenance of all
sanitary and electrical fixtures (excluding the Class E System) and equipment
therein. Subject to the provisions of Sections 9(h)(i) and 9(h)(iii) hereof, all
damage or injury to the Premises and to its fixtures, appurtenances and
equipment or to the Building or to its fixtures, appurtenances and equipment
caused by or which arises out of (i) Tenant moving property in or out of the
Building, or (ii) the installation or removal of furniture, fixtures or other
property by Tenant, or (iii) the performance by Tenant or existence of any
Alterations or repairs in the Premises or (iv) the installation, use or
operation of Tenant's property in the Premises or (v) negligence, wilful or
improper conduct on the part of Tenant, its servants,
-17-
<PAGE> 21
employees, agents, visitors, or licensees, shall be repaired, restored or
replaced promptly at Tenant's sole cost and expense to the reasonable
satisfaction of Landlord. However, if by reason of (1) strike, (2) labor
troubles, (3) governmental preemption in connection with a national emergency,
(4) any rule, order or regulation of any governmental agency, or (5) conditions
of supply or demand which are affected by war or other national, state or
municipal emergency (each, a "Force Majeure Event"), Tenant shall not be able to
fulfill its obligations under this Lease, this Lease and Tenant's obligation to
pay fixed annual rent and additional rent hereunder, shall not otherwise be
affected, impaired or excused, but Tenant shall not be deemed in default in the
performance of any obligations under this Lease, provided, that as soon as
Tenant shall learn of the happening of any Force Majeure Event, Tenant shall
promptly notify Landlord of same, and, if ascertainable, its estimated duration,
and Tenant will proceed promptly and diligently with the fulfillment of its
obligations as soon as reasonably possible. Any repairs required to be made by
Tenant to the mechanical, electrical, plumbing, sanitary, heating, ventilating,
Building's air-conditioning, fire safety or other systems of the Building shall
be performed only by contractor(s) who are reasonably acceptable and approved by
Landlord. All repairs, restorations and replacements made by Tenant shall be in
quality and class equal to the original work or installations currently in the
Building. If Tenant fails to make such repairs, restoration or replacements
within thirty (30) days after notice and demand, subject to any necessary
extension as a result of a Force Majeure Event, 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 ten (10) days after rendition of a bill
therefor.
(ii) Except as otherwise provided for herein, the exterior
walls of the Building, elevators and elevator shafts, and other Building shafts,
and conduits which extend to any floor above or below the Premises, and the
portions of any window sills outside the windows, and the windows are not part
of the Premises and Landlord reserves all rights to such parts of the Building.
7.(b) Tenant shall not place a load upon any floor of the Premises
exceeding the floor load per square foot area that such floor was designed to
carry and that is allowed by law. If Tenant shall desire a floor load in excess
of that which such floor was designed to carry and which is allowed by law,
Tenant shall submit plans and specifications for such floor load to Landlord for
Landlord's review and approval which shall not be unreasonably withheld,
conditioned or delayed. In determining whether to grant its consent Landlord
shall consider whether the work necessary to increase such floor load (i)
adversely affects the structure of the Building, (ii) interferes with the amount
or availability of any space adjoining alongside, above or below the Premises,
(iii) will interfere with the occupancy of other tenants in the Building and
(iv) may be accomplished without disturbing the load bearing columns, walls or
configuration of the Building.
-18-
<PAGE> 22
7.(c) Business machines and mechanical equipment used by Tenant that
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 reasonably
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.
7.(d) 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 Premises
or in or to fixtures, appurtenances or equipment thereof. Landlord shall
exercise reasonable diligence so as to minimize any interference with Tenant's
business operations, but shall not be required to perform the same on an
overtime or premium pay basis unless the inconvenience or annoyance to Tenant's
business materially interferes with Tenant's business operations.
7.(e) Tenant will not clean, nor require, permit, suffer or allow any
window in the Premises to be cleaned from the outside in violation of Section
202 of the Labor Law or any other applicable Legal Requirement.
7.(f) Landlord shall maintain and repair the exterior and structural
portions of the Building including the structural portions of the Premises and
shall maintain and repair the public portions of the Building's interior and the
Building's plumbing, fire safety, electrical, heating and ventilating systems
serving the Premises.
ARTICLE 8.
REQUIREMENTS OF LAW
8.(a) If Tenant receives any notice of any violation of any Legal
Requirement, Tenant shall give prompt written notice thereof to Landlord. Tenant
shall comply with all Legal Requirements which shall impose any violation, order
or duty upon Landlord or Tenant with respect to the Premises (including, without
limitation, the performance of any alterations under the Americans with
Disabilities Act of 1990) or the use or occupation thereof (in which event
Tenant shall effect such compliance at its sole cost and expense) provided,
however, that the need for compliance with any such Legal Requirement directly
arises out of Tenant's particular manner of use of the Premises and is not a
Legal Requirement of general application. Landlord shall be responsible, at its
own cost and expense, for compliance with all other Legal Requirements. If, as a
result of any act by Tenant in violation of this Lease, any Legal Requirement is
violated, Tenant, at its sole cost and expense, shall cause any such violation
to be promptly cured. The foregoing shall include any structural alterations
necessary to
-19-
<PAGE> 23
effect such a cure provided the act or omission by Tenant in violation of this
Lease is attributable to Tenant's use or occupancy of the Premises.
8.(b) (i) Without limiting the generality of Section 8.(a), if any
Legal Requirement shall require (i) the inspection of Building systems or any
Tenant improvement to ascertain the amount of chlorofluorocarbons ("CFCs"),
including freon, that Tenant improvements are emitting or leaking into the
atmosphere, (ii) additional maintenance of any Tenant improvements relating to
the presence of CFCs, or (iii) any Tenant improvement to reduce or eliminate the
emission or presence of CFCs, then Tenant shall pay upon written demand,
Tenant's Proportionate Share of the cost of such compliance by Landlord or
Tenant shall, at Tenant's sole cost and expense, promptly make such conversion,
change, alteration, modification or replacement of Tenant's improvements as may
be necessary or required in the Premises.
(ii) Without limiting the generality of Section 8.(a), Tenant,
at its sole cost and expense, shall comply with all Legal Requirements regarding
the collection, sorting, separation and recycling of its waste products,
garbage, refuse and trash. Tenant shall sort and separate such waste products,
garbage, refuse and trash into such categories as is provided by any Legal
Requirements. Each separately sorted category of waste products, garbage, refuse
and trash shall be placed in separate receptacles reasonably supplied by and
approved by Landlord. Such separate receptacles may, at Landlord's option, be
removed from the Premises in accordance with a collection schedule prescribed by
any Legal Requirements. Landlord reserves the right to refuse to collect or
accept from Tenant any waste products, garbage, refuse or trash that is not
separated and sorted as required by any Legal Requirement, and to require Tenant
to arrange for such collection at Tenant's sole cost and expense, utilizing a
contractor satisfactory to Landlord. In the event Landlord receives any monetary
benefit from the disposal or recycling of Tenant's garbage, refuse and trash,
Tenant shall receive a credit, after Landlord deducts its reasonable actual
expenses, in the amount of Tenant's Proportionate Share of such amount, to its
fixed annual rental payment in the month after Landlord receives such monetary
benefit.
8.(c) Notwithstanding the provisions of Sections 8.(a) and 8.(b)
hereof, Tenant, at its own cost and expense, in its name and/or (whenever
necessary) Landlord's name, 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 during the course of such
contest, provided that (a) such non-compliance shall not subject Landlord to
criminal prosecution or subject the Land and/or Building to Lien or sale, (b)
such non-compliance shall not be in violation of any fee mortgage or of any
ground or underlying lease or any mortgage thereon and (c) Tenant shall
prosecute such contest promptly and diligently to its conclusion.
-20-
<PAGE> 24
8.(d) 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 be reasonably satisfied that the facts set forth in
any such documents or pleadings are accurate.
ARTICLE 9.
INSURANCE. LOSS. REIMBURSEMENT AND LIABILITY
9.(a) Tenant shall not do, permit or suffer to be done any act or thing
upon the Premises that would invalidate or be in conflict with New York standard
fire and property damage insurance policies covering the Building, and fixtures
and property therein, or that would increase the rate of insurance applicable to
the Building to an amount higher than it otherwise would be; and Tenant shall
not do nor shall Tenant permit to be done any act or thing upon the Premises
that shall or might 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 Premises.
9.(b) If, as a result of any act or omission by Tenant or violation of
this Lease, after applicable notice, grace and cure periods, the rate of any
insurance applicable to the Building shall be increased to an amount higher than
it otherwise would be, Tenant shall reimburse Landlord and provide copies of all
insurance bills for all increases of Landlord's insurance premiums so caused
provided that Landlord provides to Tenant copies of Landlord's insurance bills
evidencing any such increase; such reimbursement to be additional rent payable
upon the first day of the month following any outlay by Landlord for such
increased insurance premiums. In any action or proceeding wherein Landlord and
Tenant are parties, a schedule or "make-up" of rates for the Building or
Premises issued by the body making insurance rates for the Premises, shall be
presumptive evidence of the facts therein stated and of the several items and
charges in the insurance rate then applicable to the Premises.
9.(c) Landlord or its agents shall not be liable for any injury or
damage to persons or property (including, but not limited to, loss of profits
and injury to business) 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 any
nature, unless any of the foregoing shall be caused by or due to the negligence
or willful misconduct of Landlord, its agents, servants, contractors or
employees.
9.(d) Landlord shall not be liable for any damage which Tenant may
sustain, if at any time any window of the Premises is broken, due to Tenant's
arbitrary or negligent acts nor shall Landlord be liable for any damage which
Tenant may sustain,
-21-
<PAGE> 25
if at any time any window of the Premises is broken, or temporarily darkened
unless same is due to Landlord's arbitrary or negligent acts. For purposes
hereof, "temporarily" shall mean five (5) days or less.
9.(e) Subject to the provisions of Section 8.(c) 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.(e),
Tenant could have any liability in connection therewith.
9.(f) Tenant shall give Landlord notice in case of fire, discovery of
asbestos or accidents in the Premises promptly after Tenant becomes aware of
such event.
9.(g) Landlord's officers, directors and members (and, in case Landlord
shall be a joint venture, partnership, tenancy-in-common, association or other
form of joint ownership, the members of any such joint venture, partnership,
tenancy-in-common, association or other form of joint ownership) shall have
absolutely no personal liability with respect to any provision of this Lease or
any obligation or liability arising therefrom. Tenant shall look solely to
Landlord's estate and interest in the Land and Building, and the lease of the
Building or of the Land and Building, the Premises and insurance proceeds 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.
No other property or assets of Landlord or any agent, officer, director or
member 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 Premises, or any other liability of Landlord to Tenant.
However, nothing contained in this Section shall be construed to permit Tenant
to offset against rents due a successor landlord a judgment (or other judicial
process) requiring the payment of money by reason of any default of a prior
landlord. Notwithstanding anything herein to the contrary, Tenant's officers,
shareholders, directors and members shall have no personal liability with
respect to any provisions of this Lease.
9.(h) (i) Landlord shall obtain all-risk insurance for the Building in
amount equal to the replacement cost thereof, including the replacement cost of
Tenant's leasehold improvements but, excluding Tenant's furniture, furnishings
and other removable personal property and fixtures. Such policies shall include
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 (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.
-22-
<PAGE> 26
(ii) Tenant shall obtain all-risk insurance in an amount equal
to the full replacement cost of Tenant's furniture, furnishings and other
removable personal property and all fixtures to the extent that the same has
been paid for by Landlord's Contribution (as defined in the Work Letter). Tenant
shall include in any property insurance policy or policies appropriate clauses
pursuant to which the insurance company or companies (i) waive the right of
subrogation against Landlord and/or 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.
(iii) 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 that 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 of the net proceeds of insurance actually received by
Landlord as a result of such loss or damage, 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 recovery which it might otherwise have
against Landlord, its servants, and employees, and against every other tenant in
the Building who shall have executed a similar waiver as set forth in this
Section 9.(h)(iii) for loss or damage to, Tenant's furniture, furnishings,
fixtures and other property removable by Tenant under the provisions hereof to
the extent of the net proceeds of insurance actually received by Tenant as a
result of such loss or damage, 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.
(iv) In the event that Tenant does not obtain the all-risk
property insurance provided for in Section 9(h)(ii) above, Tenant waives any and
all claims against Landlord for loss or damage to all such furniture,
furnishings and other removable personal property and fixtures. Notwithstanding
that such loss or damage may result from the negligence or fault of Tenant, its
servants, agents or employees, Tenant agrees to indemnify and hold Landlord
harmless against any and all claims for loss or damage to Tenant's furniture,
furnishings and other removable personal property and fixtures.
9.(i) (i) Tenant shall provide on or before the Commencement Date and
shall keep in force during the Term hereof for the benefit of Landlord and
Tenant a commercial general liability insurance policy (including contractual
liability) arising out of the use of the Premises or any appurtenances thereto
or occasioned by any occurrence on or about the Premises or any appurtenances
thereto. Such policy shall
-23-
<PAGE> 27
be not less than the amount of $5,000,000 per occurrence for bodily or personal
injury (including death) and in the amount of $1,000,000 in respect of property
damage.
(ii) All insurance required by this Lease shall be evidenced
by valid and enforceable policies issued by companies (i) licensed to do
business in the State of New York and (ii) having a financial size category of
not less than VII and with general policy holders rating of not less than "B+"
as rated by "Best's" insurance reports. All liability insurance policies
maintained by Tenant shall name Landlord and its designated managers and agents
as additional insureds. The insurance required by this Article may be carried
under a blanket policy covering the 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 15 days prior to the effective date of any such policy,
Tenant shall deliver to Landlord either a duplicate original of the aforesaid
policies or a certificate(s) evidencing such insurance. Said certificate(s)
shall contain an endorsement that such insurance may not be canceled except upon
30 days' written notice to Landlord.
ARTICLE 10.
DAMAGE BY FIRE OR OTHER CAUSE
10.(a) If the Premises or any part thereof shall be damaged by fire or
other casualty Tenant shall give immediate notice thereof to Landlord and this
Lease shall continue in full force and effect except as hereinafter set forth.
10.(b) (i) If the Premises are partially damaged or rendered partially
untenantable by fire or other casualty, the damage thereto shall be repaired,
including restoration of the leasehold improvements by and at the expense of
Landlord and the fixed annual rent and the additional rent payable under
Articles 1 and 4 shall be paid for the portion of the Premises affected to the
time of the casualty and Tenant shall resume such payment in accordance with the
provisions of Article 10(b)(iv).
(ii) If the Premises are totally or substantially damaged or
are rendered wholly or substantially untenantable by fire or other casualty, the
damage thereto shall be repaired, including restoration of the leasehold
improvements by and at the expense of Landlord and the fixed annual rent and the
additional rent payable under Articles 1 and 4 shall be paid to the time of the
casualty and Tenant shall resume such payment in accordance with the provisions
of Article 10(b)(iv).
(iii) If the Building shall be so damaged that Landlord shall
decide to demolish it or if at least 50% of the floor area of the Premises is
damaged or
-24-
<PAGE> 28
destroyed during the last eighteen (18) months of the Initial Term, or, if the
Term is extended by Tenant, then, during the last eighteen (18) months of Option
1 or Option 2, as the case may be, then, in any such events, Landlord may elect
to terminate this Lease by written notice to Tenant. Such notice shall be given
by Landlord within sixty (60) days after such fire or casualty specifying a date
for the expiration of the Lease, which date shall not be more than thirty (30)
days after the giving of such notice, and upon the expiration date specified in
such notice the Term shall expire as fully and completely as if such date were
the date set forth above for the termination of this Lease and Tenant shall
forthwith quit, surrender and vacate the Premises without prejudice, however, to
Landlord's rights and remedies against Tenant under the Lease provisions in
effect prior to such termination. Any rent owing shall be paid up to such date
(subject to abatement as provided in subparagraphs 10.(b)(i) and (ii) above) and
any payments of rent made by Tenant that were on account of any period
subsequent to such date shall be promptly returned to Tenant. Landlord shall
make the required repairs and restoration, in accordance with subparagraphs
10.(b)(i) and 10.(b)(ii) with all reasonable expedition during Business Days and
Business Hours, subject to delays due to adjustment of insurance claims, labor
troubles and causes beyond Landlord's control. Notwithstanding anything to the
contrary set forth herein, if at least thirty-three percent (33%) of the floor
area of the Premises is damaged and: (a) in the opinion of an independent
architect selected by Landlord (which Landlord shall select within fourteen (14)
days of any such casualty), and reasonably acceptable to Tenant, the Premises
cannot be substantially restored within twelve (12) months after the date of
such casualty, Tenant may, within fifteen (15) days following such
determination, terminate this Lease, by notice to Landlord and if Tenant timely
exercises such option, this Lease shall ipso facto terminate and come to an end
as of the date that is thirty (30) days after such event as fully and completely
as if such date were the date set forth herein for the expiration of this Lease
and Tenant shall forthwith quit, surrender and vacate the Premises, without
prejudice however, to Landlord's rights and remedies against Tenant under the
provisions in effect prior to such termination; or (b) if restoration of the
Premises is not substantially completed within twelve (12) months from the date
of any such casualty, Tenant may terminate this Lease, by first providing
Landlord with a thirty (30) day written notice to cure, and if such situation
shall continue and shall not be remedied by Landlord within thirty (30) days,
then Tenant may give to Landlord a notice of intention to end the Term at the
expiration of fifteen (15) days from the date of the service of such notice of
intention and upon the expiration of said fifteen (15) days this Lease and the
Term and estate hereby granted, shall terminate with the same effect as if that
day were the end of the Term. If less than 33% of the floor area of the Premises
is damaged and if Landlord does not substantially restore the Premises within
twelve (12) months of such casualty, Tenant may at its option, restore the
Premises, at its own cost and expense, and receive an abatement of the
installments of fixed annual rent in an amount equal to the actual cost of the
repairs together with interest at the Interest Rate until such time as Landlord
reimburses Tenant for such costs.
-25-
<PAGE> 29
(iv) After any such casualty, Tenant shall cooperate with Landlord's
restoration of the Premises by removing from the Premises as promptly as
reasonably possible, all of Tenant's salvageable inventory and movable
equipment, furniture and other property. Tenant's liability for rent shall
resume sixty (60) days after written notice from Landlord that the Premises is
substantially ready for Tenant's occupancy, and in fact, the Premises is
substantially ready for Tenant's occupancy.
10.(c) 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 Premises or of the Building pursuant to this
Article 10.
10.(d) Landlord will not carry separate insurance of any kind on
Tenant's property, furniture, furnishings and other removable personal property
and fixtures alterations, installations or additions (excluding Tenant's
leasehold improvements) made to the Premises, 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.
10.(e) The provisions of this Article 10 shall be considered an express
agreement governing any cause of damage or destruction of the Premises by fire
or other casualty, and Section 227-a 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.(a) Except as otherwise provided for herein, Tenant shall not by
operation of law or otherwise (a) assign or otherwise transfer this Lease or the
Term and estate hereby granted, (b) sublet the Premises or any part thereof or
allow the same to be used or occupied by others, (c) mortgage, pledge or
encumber this Lease or the Premises or any part thereof in any manner by reason
of any act or omission on the part of Tenant or (d) advertise, or authorize a
broker to advertise, for a subtenant or assignee, the price for any portion of
the Premises. 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, or the transfer of control in any limited
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, (ii) an
agreement by any other person or entity, directly or indirectly, to assume
Tenant's obligations under this Lease shall be deemed an assignment, (iii) any
person or legal
-26-
<PAGE> 30
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 (iv) a modification, amendment or extension of a sublease shall be
deemed a sublease.
11. (b) Notwithstanding anything to the contrary contained herein, any
transaction: (i) with a corporation into, or with which, Tenant is merged or
consolidated; or (ii) with an entity to which all, or substantially all, of
Tenant's assets are transferred; or (iii) with an entity that controls, or is
controlled by Tenant or is under common control with Tenant; or (vi) involving
the sale or transfer of the stock of Tenant over a nationally recognized public
stock exchange; shall not be deemed to be an assignment for purposes of this
Lease and shall not require Landlord's prior consent, except that with respect
to any transaction pursuant to which Tenant is merged or consolidated with
another entity, the same shall not require Landlord's consent provided that: (i)
if such merger or consolidation occurs during the first five (5) years of the
Term the entity resulting from such merger or consolidation shall have a net
worth of at least One Hundred Million Dollars ($100,000,000.00); and (ii) if
such merger or consolidation occurs after the first five (5) years of the Term,
the entity resulting from such merger or consolidation shall have a net worth of
at least Forty Million Dollars ($40,000,000.00). In the event that the net worth
of Tenant following any such merger or consolidation occurring during the first
five (5) years of the Term is less than One Hundred Million Dollars
($100,000,000.00), Landlord's prior consent shall not be required for any such
merger or consolidation provided that Tenant delivers to Landlord a letter of
credit, in the amount of One Million Three Hundred Thirty Three Thousand
Dollars, to be held by Landlord as additional security in accordance with the
provision of Article 35 hereof. Such letter of credit may be reduced by Tenant
to Six Hundred Sixty Seven Thousand Dollars following the fifth anniversary of
the Commencement Date. In the event that the net worth of Tenant following any
merger or consolidation occurring after the first five (5) years of the Term is
less than Forty Million Dollars ($40,000,000.00), Landlord's prior consent for
such merger or consolidation shall not be required, provided that Tenant
delivers to Landlord a letter of credit, in the amount of Six Hundred Sixty
Seven Thousand Dollars to be held by Landlord as additional security in
accordance with the provisions of Articles 35 hereof. Nothing in this Section
11(b) shall permit Tenant or any successor to use or occupy the Premises for any
purpose other than the purposes stated in Article 5 hereof.
11.(c) Any assignment or transfer, whether made with Landlord's consent
as required by Section 11(a) or without Landlord's consent pursuant to this
Article shall be made only if, and shall not be effective until, the assignee
shall execute, acknowledge and deliver to Landlord a recordable agreement, in
the form annexed hereto as Exhibit B. Tenant covenants that, notwithstanding any
assignment or transfer, whether or not in violation of the provisions of this
Lease, and notwithstanding the acceptance of rent by Landlord from an assignee
or transferee or any other party, Tenant shall remain fully and primarily liable
for the payment of the
-27-
<PAGE> 31
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.(d) The liability of Tenant, and the due performance by Tenant of
the obligations on its part to be performed under this Lease, shall not be
discharged, released or 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 to be 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.(d) of Tenant named in this 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.
11.(e) Landlord shall not withhold or delay its consent unreasonably to
an assignment of this Lease or a subletting of the whole or a part of the
Premises so long as:
(i) 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 and such references and current financial information with respect to
net worth, credit and financial responsibility as are reasonably requested by
Landlord;
(ii) 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, and with
respect to any proposed assignment, such assignment complies with those
requirements set forth paragraph 11.(c);
(iii) the nature and character of the proposed subtenant or
assignee, its business or activities and intended use of the Premises is, in
Landlord's reasonable judgment, in keeping with the standards of the Building
and the floor or floors on which the Premises are located;
(iv) in the event that there is comparable space available to
be leased in the Building, 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 six months immediately preceding Tenant's request for
Landlord's consent;
-28-
<PAGE> 32
(v) 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 Premises shall, subject to the provisions
of Article 6 with respect to alterations, installations, additions or
improvements, be borne by Tenant;
(vi) each sublease shall state specifically that (i) it is
subject to all of 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 Premises to be used by others, except in accordance with the
terms of this Article, (iii) a consent by Landlord thereto 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 premises
involved, and the occupants thereof, as if the sublease or assignment had not
been made, (iv) if Tenant defaults in the payment of any rent, beyond any
applicable notice and grace period, Landlord is authorized to collect any rents
due or accruing from any assignee, subtenant or other occupant of the Premises
and to apply the net amounts collected to the fixed annual rent and additional
rent reserved herein and (v) the receipt by Landlord of any amounts from an
assignee or subtenant, or other occupant of any part of the 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;
(vii) Tenant, shall have paid Landlord any reasonable costs
incurred by Landlord to review the requested consent including, without
limitation, any reasonable attorney's fees incurred by Landlord not to exceed
$2,500.00;
(viii) Tenant shall have complied with the provisions in
Section 11(f) with respect to any sublease;
(ix) the proposed subtenant or assignee is not (i) an
employment or recruitment agency; (ii) a school, college, university or
educational institution whether or not for profit; (iii) a government or any
subdivision or agency thereof; (iv) engaged in the business of providing office
space and facilities to sublessees or licensees; or (v) using the Premises for
manufacturing or retail sales to the public; or (vi) a public stenographer or
typist, barber shop, beauty shop, beauty parlor or shop, telephone or telegraph
agency, telephone or secretarial service, messenger service, commercial document
reproduction or offset printing service or public vending machine service;
(x) in the case of a subletting of a portion of the Premises,
the portion so sublet shall be regular in shape and suitable for normal renting
purposes; and
(xi) the nature of the occupancy of the proposed assignee or
subtenant will not cause an excessive density of employees or traffic or make
excessive demands on the Building's services or facilities.
-29-
<PAGE> 33
11.(f) All subleases for which Landlord's consent is required shall be
in a form reasonably satisfactory to Landlord's counsel and approved in writing
at least two weeks prior to the commencement date of the sublease term on all
the terms contained in this Lease, except that said sublease shall provide as
follows:
(i) The sublease shall provide that in the case of a
subletting of a portion of the Premises subtenant shall erect a demising wall as
is necessary to separate the subleased premises from the remainder of the
Premises and to provide access thereto; and
(ii) Such sublease shall negate expressly any intention that
any estate created by or under such sublease be merged with any other estate
held by either of the parties thereto.
11.(g) If Landlord shall give its consent to any assignment of this
Lease or to any sublease, Tenant, in consideration therefor, shall pay the
following to Landlord, as additional rent:
o in the case of an assignment, an amount equal to thirty
percent (30%) of all sums and other consideration paid to Tenant by the assignee
for or by reason of such assignment (including, but not limited to, sums paid
for the sale or rental of Tenant's fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property) less, in the case of a sale
thereof, an amount equal to the then net unamortized or undepreciated cost
thereof to Tenant determined on the basis of Tenant's federal income tax returns
except that, with respect to Tenant's fixtures and leasehold improvements,
depreciation shall be computed on a straight-line basis over the Term, without
regard to any renewal options); and
o in the case of a sublease, thirty percent (30%) of any
rents, additional charges and other consideration payable under the sublease to
Tenant by the subtenant 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)(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 thereof, an amount equal to the then net unamortized or
undepreciated cost thereof to Tenant determined on the basis of Tenant's federal
income tax returns except that, with respect to Tenant's Fixtures and leasehold
improvements, depreciation shall be computed on a straight line basis over the
Term, without regard to any renewal options).
The sums payable under this Section 11(g) shall be paid to Landlord as and when
paid by the assignee or subtenant to Tenant.
-30-
<PAGE> 34
11.(h) Notwithstanding anything in this Lease to the contrary, Tenant
shall be permitted to sublet, on no more than three occasions, up to
Twenty-Thousand (20,000) square feet of the Premises, in aggregate, without
first obtaining Landlord's prior written consent so long as Tenant provides
Landlord with (at least two weeks prior to its commencement date) a copy of the
sublease and erects a demising wall in accordance with Section 11.(f)(i).
11.(i) Tenant shall have the right, without obtaining Landlord's prior
written consent, to sublet all, or any part, of the Premises, to any affiliate
or related entity of Tenant for purposes hereof; "affiliate" or "related entity"
shall mean any entity in which Tenant owns more than fifty (50%) of the
interests or any entity which owns more than fifty percent (50%) of the
interests in Tenant.
11.(j) Tenant shall have the right, without obtaining Landlord's prior
written consent, to sublet all, or any part, of the Premises, to any affiliate
or related entity of Tenant. For purposes hereof, "affiliated or related entity"
shall mean any entity in which Tenant owns more than fifty (50%) of the
interests or any entity which owns more than fifty (50%) percent of the
interests in Tenant.
11.(k) Landlord shall have no liability for brokerage commissions
incurred with respect to any assignment of this Lease or any subletting of all
or any part of the Premises by or on behalf of Tenant. Tenant shall pay, and
shall indemnify and hold Landlord harmless from and against, any and all cost,
expense (including, without limitation, reasonable attorneys' fees, costs and
disbursements) and liability in connection with any compensation, commissions or
charges claimed by any broker or agent with respect to any such assignment or
subletting.
11.(k) The listing of any name other than that of Tenant, whether on
the doors of the Premises or the Building directory, or otherwise, shall not
operate to vest any right or interest in this Lease or in the Premises in the
person or entity therein named, nor shall it be deemed to be the consent of
Landlord to any assignment or transfer of this Lease or to any sublease of the
Premises or to the use or occupancy thereof by others.
ARTICLE 12.
ELECTRICITY
12.(a) For the purposes of this Article, the term "Electric Rate" shall
mean the prevailing rate Service Classification SC-9 (or successor service
classification rate), and not the time of day rate schedule (if any), including
all surcharges, taxes, fuel costs and adjustments, taxes regularly passed on to
consumers by the public utility, and other sums payable in respect thereof.
12.(b) (i) Landlord shall, upon request of Tenant, furnish and install
all replacement lighting tubes, lamps, bulbs and ballasts required in the
Premises, and Tenant shall pay to Landlord or its designated contractor upon
demand the then established charges therefor of Landlord or its designated
contractor, as the case may be. Landlord shall not be liable in any way to
Tenant for any failure or defect in the supply or character of electric energy
furnished to the Premises by reason of any requirement, act or omission of the
public utility serving the Building or for any other reason not attributable to
Landlord. Tenant shall pay for the cost of electricity consumed by any
supplemental air-conditioning equipment only servicing the Premises irrespective
of whether any such equipment is located in the Premises or in any other portion
of the Building. The term "air-conditioning equipment" as used herein shall be
-31-
<PAGE> 35
deemed to include, without limitation, all components and auxiliary equipment
used in connection with air-conditioning equipment servicing the Premises.
12.(c) Landlord will furnish 576 amps, 3 phase, 4 wire, 120/208 volts
of electric energy per floor distributed amongst four panel locations per floor
( exclusive of the Building's heating, ventilating and air-conditioning system)
to Tenant through presently existing electric facilities for Tenant's reasonable
use of its lighting, and other electrical fixtures, appliances and equipment.
12.(d) Tenant's use of electric energy in the Premises shall not at any
time, in the reasonable judgment of Landlord cause or result in any impairment
or interference with Building systems, annoyance or inconvenience to other
tenants or the overloading of the risers or feeders serving the Building.
12.(e) If any tax is imposed upon Landlord's receipts from the sale or
resale of electrical energy service to Tenant by any Federal, state or municipal
authority, Tenant covenants and agrees that, where permitted by law, Tenant's
pro rata share of such taxes based on Tenant's actual electrical usage shall be
passed on, and included in the bill of, and paid by, Tenant to Landlord. All
sums due and payable to Landlord or its contractor, consultant or designee under
this Article 12 shall be payable as additional rent. If all or part of the
amounts payable by Tenant under this Article 12 for electrical energy becomes
uncollectible or reduced or refundable by virtue of any law, order or
regulation, the parties agree that, at Landlord's option, in lieu of electrical
submetering or direct metering, and in consideration of Tenant's use of the
Building's electrical distribution system and receipt of redistributed
electricity and payment by Landlord of the consultant's fees and other
distribution expenses, the fixed annual rent payable under this Lease shall be
increased by an amount equal to the actual cost to Landlord of Tenant's usage,
subject to Tenant's right to dispute such charge in accordance with Section
12(i) hereof.
12.(f) Landlord reserves the right to discontinue furnishing electrical
energy to Tenant in the Premises at any time upon not less than 120 days' notice
to Tenant. If Landlord exercises such right, this Lease shall continue in full
force and effect and shall be unaffected thereby, except that from and after the
effective date of such termination Landlord shall not be obligated to furnish
electric energy to Tenant. If Landlord so discontinues furnishing electric
energy to Tenant, Tenant shall arrange to obtain electric energy directly from
the public utility company furnishing electric energy to the Building. Such
electric energy may be furnished to Tenant by means of the then existing
building system feeders, risers and wiring to the extent that the same are, in
Landlord's reasonable judgment, available, suitable and safe for such purpose.
All meters and additional panel boards, feeders, risers, wiring and other
conductors and equipment whatsoever, which may be required to obtain electric
energy directly from such public utility company whether currently available for
Tenant's use or
-32-
<PAGE> 36
requiring Landlord's installation shall be furnished and installed by Landlord
at Landlord's sole cost and expense.
12.(g) (i) Notwithstanding anything to the contrary contained in this
Article, Tenant, at any time during the Term on not less than 30 days' prior
written notice to Landlord, may purchase electricity directly from Consolidated
Edison or any other supplier of electric energy. If Tenant shall elect to
purchase electricity directly from Consolidated Edison or any other supplier of
electric energy, then all meters and additional panel boards, feeders, risers,
wiring and other conductors and equipment whatsoever, which may be required to
obtain electric energy directly from such public utility company, shall be
furnished and installed by Tenant at Tenant's sole cost and expense (but with
Landlord's reasonable cooperation).
(ii) If and so long as Landlord provides electricity to the
Premises on a submetering basis:
o Tenant covenants and agrees to purchase the same from
Landlord or Landlord's designated agent at the Electric Rate plus an overhead
charge ("Overhead Charge") equal to four percent (4%) (collectively "Electrical
Charge") excluding the 4% Overhead Charge on any sales taxes, representing the
Landlord's administrative costs.
12.(h) INTENTIONALLY OMITTED
12.(i) In the event Landlord or Tenant shall dispute any findings under
this Article, either party may, within 1 year of receiving notice of such
findings, dispute the findings by serving a notice in accordance with Article 31
hereof on the other party. The right to dispute such findings shall be deemed
waived unless such a notice is served in accordance with this Lease within the 1
year period. In the case where a notice is timely served in accordance with
Article 31 hereof the dispute shall be resolved by arbitration in accordance
with Article 3 of this Lease.
ARTICLE 13.
ADJACENT EXCAVATION -- SHORING
13.(a) If an excavation or other substructure work shall be made upon
land adjacent to the Building, 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 Premises for the purpose of doing such work as shall be necessary
to preserve the wall of the Building of which the Premises form a part from
injury or damage and to support the same by proper foundations.
-33-
<PAGE> 37
ARTICLE 14.
CONDEMNATION
14.(a) In the event that the whole of the Premises lawfully shall be
condemned or taken in any manner for any public or quasi-public use, this Lease
and the Term and estate hereby granted shall cease and terminate as of the date
of vesting of title, as if that were the Expiration Date, and the fixed annual
rent and the additional rent payable pursuant to Articles 1 and 4 of this Lease
shall be apportioned as of such date.
14.(b) In the event that only a part of the Premises shall be so
condemned or taken, then, unless a greater part of the Premises is no longer
useful, effective as of the date of vesting of title, the fixed annual rent and
the additional rent payable pursuant to Articles 1 and 4 hereof shall be abated
in an amount thereof apportioned according to the area of the Premises so
condemned or taken. In the event that such condemnation or taking shall be of a
substantial part of the Premises or materially affects Tenant's use of the
Premises or of a substantial part of the means of access thereto, including use
of the semi-exclusive entrance on 37th Street, Tenant, at Tenant's option, by
delivery of notice in writing to Landlord within 30 days following the date on
which Tenant shall have received notice of vesting of title, may terminate this
Lease and the Term and estate hereby granted as of the date of vesting of title,
if neither Landlord nor Tenant elects to terminate this Lease, as aforesaid,
this Lease shall be and shall remain unaffected by such condemnation or taking,
except that the fixed annual rent and the additional rent payable pursuant to
Articles 1 and 4 shall be abated to the extent hereinbefore provided in this
Article 14. In the event that only a part of the 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 Premises are not terminated as hereinbefore
provided, Landlord, with reasonable diligence and at its expense, will restore
the remaining portion of the Premises as nearly as practicable to the same
condition as it was in prior to such condemnation or taking.
14.(c) 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 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 shall be
entitled to make a separate claim for the value of its trade fixtures actually
taken and for moving expenses.
-34-
<PAGE> 38
14.(d) If the temporary use or occupancy of all or any part of the
Premises shall be taken by condemnation or in any other manner for any public or
quasi-public use or purpose during the Term, Tenant shall be entitled, except as
hereinafter set forth, to receive that portion of the award or payment for such
taking which represents compensation for the use and occupancy of the Premises,
for the taking of Tenant's property and for moving expenses, and Landlord shall
be entitled to receive that portion which represents reimbursement for the cost
of restoration of the Premises. This Lease shall be and remain unaffected by
such taking and Tenant shall continue to be responsible for all of its
obligations hereunder insofar as such obligations are not affected by such
taking and shall continue to pay in full the fixed annual rent and additional
rent due. If the period of temporary use or occupancy shall extend beyond the
Expiration Date, that part of the award which represents compensation for the
use and occupancy of the Premises (or a part thereof) shall be given to Tenant
so that Tenant shall receive so much thereof as represents the period up to and
including the Expiration Date.
14.(e) In the event of any taking of less than the whole of the
Building that 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 Premises
that 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 Premises to substantially their former
condition to the extent that the same may be feasible and so as to constitute a
tenantable Building and Premises.
14.(f) In the event that any part of the Premises shall 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, (a) 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 (b) if such compliance is the obligation of Landlord under this
Lease, the fixed annual rent payable under Article 1 shall be reduced and
additional rent payable under Articles 1 and 4 shall be adjusted in the same
manner as is provided in Section 14(a) according to the reduction in rentable
area of the Premises resulting from such taking.
ARTICLE 15.
ACCESS TO PREMISES; CHANGES
15.(a) Tenant shall permit Landlord (i) to erect, use and maintain
pipes, ducts and conduits in and through the Premises, provided the same are
installed and concealed behind walls and ceilings of the Premises or in an
innocuous manner or in such manner as shall not unreasonably impair Tenant's use
of the Premises, and (ii) to use any air-conditioning rooms, telephone equipment
rooms, heating, ventilating,
-35-
<PAGE> 39
air-conditioning, electrical and mechanical facilities and service closets
(collectively, the "Building Equipment") in the Premises in a manner so as not
to unreasonably impair Tenant's use of such rooms and facilities. Landlord or
its agents or designees shall have the right: (i) to enter the Premises, at
reasonable times on reasonable notice during Business Hours on Business Days, to
examine such pipes, ducts, conduits and Building Equipment or to make any
repairs or alterations in a reasonable manner that Landlord may deem necessary
or reasonably desirable for the Building or that 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 (ii) to take all material into and upon the 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 way 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; provided,
however, that Landlord shall exercise reasonable diligence to minimize any
disturbance to Tenant but nothing contained herein shall be deemed to require
Landlord to perform the same on an overtime or premium pay basis unless the
inconvenience or annoyance to Tenant's business materially interferes with
Tenant's business operations.
15.(b) 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 (except for the semi-exclusive elevator(s) and Building
entrance located on 37th street designated for Tenant's use as set forth in
Article 21 of this Lease), stairways, toilets and other public parts of the
Building; provided, however, that: (i) Tenant shall continue to have access to
the Building; and (ii) Landlord does not interfere with Tenant's use of the
semi-exclusive entrance to the Building on 37th Street or Tenant's exclusive use
of one of two existing elevators in the Building on 37th Street. Landlord shall
use reasonable efforts not to have any floors of the Premises designated as fire
"re-entry" floors.
15.(c) Landlord may, during the last year of the term hereof, on
reasonable prior notice to Tenant, exhibit the Premises to prospective tenants;
provided, however, that in the event of a default, after applicable notice and
grace periods, by Tenant hereunder, Landlord may exhibit the Premises to
prospective tenants at reasonable times on reasonable notice. Landlord shall
also have the right to enter the Premises at reasonable times on reasonable
notice for the purpose of exhibiting them to prospective purchasers or lessees
of the entire Building or to prospective mortgagees 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.
15.(d) If Tenant shall not be present personally to open and to permit
an entry into the Premises at any time when for any reason an entry therein
urgently shall be necessary in case of fire or other emergency, Landlord or
Landlord's agents may enter
-36-
<PAGE> 40
the same forcibly 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
16.(a) This Lease and the Term and estate hereby granted are subject to
the limitation that whenever Tenant shall be unable to pay its debts generally
as they become due, or shall make an assignment of the property of Tenant for
the benefit of creditors, or shall consent to, or acquiesce in, the appointment
of a liquidator, receiver, trustee, or other custodian of itself or the whole or
any part of its properties or assets, or shall commence a voluntary case for
relief under the United States Bankruptcy Code or file a petition or take
advantage of any bankruptcy or insolvency act or applicable law of like import,
or whenever an involuntary case under the United States Bankruptcy Code shall be
commenced against Tenant or if a petition shall be filed against it seeking
similar relief under any bankruptcy or insolvency or other applicable law of
like import, or whenever a receiver, liquidator, trustee, or other custodian of
Tenant or of or for substantially all of the property of Tenant shall be
appointed without Tenant's consent or acquiescence, then, (a) at any time after
receipt of 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 120 days, Landlord may give Tenant a notice of intention to end the Term at
the expiration of five days from the date of service of such notice of
intention, and upon the expiration of said five 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.
16.(b) This Lease and the Term and estate hereby
granted are subject to further limitation as follows:
(i) whenever Tenant shall do or permit anything to be done,
whether by action or inaction, contrary to any of Tenant's obligations
hereunder, other than the failure to pay fixed annual rent or additional rent,
and if such situation shall continue and shall not be remedied by Tenant within
twenty (20) days (within ten (10) days, in the case of Tenant's failure (A) to
keep in force insurance throughout the Term and furnish any certificate of
insurance required under Article 6 or 9 or (B) to furnish any instrument
required under Article 25 or 26), after Landlord shall have given to Tenant a
notice specifying the same or in the case of a happening or default that cannot
with due diligence be cured within a period of twenty (20) days and the
continuation of
-37-
<PAGE> 41
which for the period required for cure will not subject Landlord to the risk of
criminal liability (as more particularly described in Article 8 hereof) or
termination of any superior lease or foreclosure of any superior mortgage, if
Tenant shall not, (i) within said 20 day period advise Landlord of Tenant's
intention duly to institute all steps necessary to remedy such situation, (ii)
duly institute within said 20 day period, and thereafter diligently and
continuously prosecute to completion all steps necessary to remedy the same and
(iii) complete such remedy within such time after the date of the giving of said
notice by Landlord as shall reasonably be necessary, or
(ii) whenever any event shall occur or any contingency shall
arise whereby this Lease or the estate hereby granted or the unexpired balance
of the Term hereof, by operation of law or otherwise, would devolve upon or pass
to any person, firm or corporation other than Tenant, except as expressly
permitted by Article 11 and the same shall not be remedied within five (5) days
after written notice by Landlord in accordance with Article 31 hereof, or
(iii) whenever Tenant shall abandon the Premises or vacate
the Premises without paying the Fixed Annual Rent and the same shall not be
remedied within five (5) days after written notice by Landlord in accordance
with Article 31 hereof, or
(iv) whenever Tenant shall default in the due keeping,
observing or performance of any covenant, agreement, provision or condition of
Article 5 hereof on the part of Tenant to be kept, observed or performed and
such default shall continue and shall not be remedied by Tenant within 72 hours
after Landlord shall have given to Tenant a notice specifying the same,
then in any of said cases set forth in the foregoing subsections (i)-(iv)
Landlord may give to Tenant a notice of intention to end the Term of this Lease
at the expiration of seven days from the date of the service of such notice of
intention, and upon the expiration of said seven days 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 end of
the Term, but Tenant shall remain liable for damages as provided in Article 18.
ARTICLE 17.
RE-ENTRY BY LANDLORD; INJUNCTION
17.(a) If Tenant shall default in the payment of any installment of
fixed annual rent, or of any additional rent, on any date that the same becomes
due, and such default shall continue uncured for ten days after notice and
demand, or if this Lease shall expire as in Article 16 provided, Landlord or
Landlord's agents and employees immediately or at any time thereafter may
re-enter the Premises, or any part thereof, either by summary dispossess
proceedings or by any suitable action or proceeding at
-38-
<PAGE> 42
law, without being liable to indictment, prosecution or damages therefor, to the
end that Landlord may have, hold and enjoy the Premises again as and of its
first estate and interest therein. The word re-enter, as herein used, is not
restricted to its technical legal meaning. In the event of any termination of
this Lease under the provisions of Article 16 or if Landlord shall re-enter the
Premises under the provisions of this Article 17 or in the event of the
termination of this Lease, or of re-entry, by or under any summary dispossess or
other proceeding or action or any provision of law by reason of default
hereunder on the part of Tenant, (a) Tenant thereupon shall pay to Landlord the
fixed annual rent and additional rent payable by Tenant to Landlord up to the
time of such termination of this Lease, or of such recovery of possession of the
Premises by Landlord, as the case may be, and (b) Tenant also shall pay to
Landlord damages as provided in Article 18.
17.(b) In the event of a breach or threatened breach by Landlord or
Tenant of any of its obligations under this Lease, Landlord and Tenant shall
have the right of injunction. The special remedies to which Landlord and Tenant
may resort hereunder are cumulative and are not intended to be exclusive of any
other remedies or means of redress to which Landlord and Tenant lawfully may be
entitled at any time and Landlord and Tenant may invoke any remedy allowed at
law or in equity as if specific remedies were not provided for herein.
17.(c) If this Lease shall terminate under the provisions of Article
16, or if Landlord shall re-enter the Premises under the provisions of this
Article 17, or in the event of the termination of this Lease, or of re-entry, by
or under any summary dispossess or other proceeding or action or any provision
of law by reason of default hereunder on the part of Tenant, Landlord shall be
entitled to retain all moneys, if any, paid by Tenant to Landlord, whether as
advance rent, security or otherwise, but such moneys shall be credited by
Landlord against any fixed annual rent or additional rent due from Tenant at the
time of such termination or re-entry or, at Landlord's option against any
damages payable by Tenant under Article 18 or pursuant to law.
17.(d) Tenant expressly waives any and all rights of redemption granted
by or under any present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event of Landlord obtaining possession of
the Premises, by reason of the violation by Tenant of any of the covenants and
conditions of this Lease or otherwise.
ARTICLE 18.
DAMAGES
18.(a) If this Lease is terminated under the provisions of Article 16,
or if Landlord shall re-enter the Premises under the provisions of Article 17,
or in the event of the termination of this Lease, or of re-entry, by or under
any summary dispossess
-39-
<PAGE> 43
or other proceeding or action or any provision of law by reason of default
hereunder on the part of Tenant, Tenant shall pay to Landlord as damages, at the
election of Landlord, either
(i) a sum which at the time of such termination of this
Lease or at the time of any such re-entry by Landlord, as the case may be,
represents the then value of the excess, if any, of
(1) the aggregate of the fixed annual rent and the
additional rent payable hereunder that would have been
payable by Tenant (conclusively presuming the additional
rent to be the same as was payable for the year immediately
preceding such termination except that additional rent on
account of increases in Taxes shall be presumed to increase
at the average of the rates of increase thereof previously
experienced by Landlord during the period (not to exceed 3
years) prior to such termination) for the period commencing
with such earlier termination of this Lease or the date of
any such re-entry, as the case may be, and ending with the
Expiration Date, had this Lease not so terminated or had
Landlord not so reentered the Premises, over
(2) the aggregate rental value of the Premises for the
same period (each sum in subparagraphs (1) and (2) being
first discounted to present value at the rate then being
paid by new ten year U.S. Treasury Bonds); or
(ii) sums equal to the aggregate of the fixed annual rent
and the additional rent (as above presumed) payable hereunder that would have
been payable by Tenant had this Lease not so terminated, or had Landlord not so
reentered the Premises, payable upon the due dates therefor specified herein
following such termination or such re-entry and until the Expiration Date,
provided, however, that if Landlord shall re-let the Premises during said
period, Landlord shall credit Tenant with the net rents received by Landlord
from such re-letting, such net rents to be determined by first deducting from
the gross rents as and when received by Landlord from such reletting, the
expenses incurred or paid by Landlord in terminating this Lease or in reentering
the Premises and in securing possession thereof, as well as the expenses of
reletting, including altering and preparing the Premises for new tenants,
brokers' commissions, attorneys' fees and disbursements, and all other expenses
properly chargeable against the Premises and the rental thereof; it being
understood that any such re-letting may be for a period shorter or longer than
the remaining Term and that Landlord may grant concessions and free rent; but in
no event shall Tenant be entitled to receive any excess of such net rents over
the sums payable by Tenant to Landlord hereunder, or shall Tenant be entitled in
any suit for the collection of damages pursuant to this subsection to a credit
in respect of any net rents from a re- letting, except to the extent that such
net rents actually are received by Landlord. If
-40-
<PAGE> 44
the Premises or any part thereof should be re-let in combination with other
space, then proper apportionment on a square foot basis shall be made of the
rent received from such re-letting and of the expenses of re-letting. Landlord
in no event shall be liable in any way whatsoever for failure to re-let the
Premises nor shall such failure affect Tenant's liability for damages.
18.(b) If the Premises or any part thereof shall be re-let by Landlord
for the unexpired portion of the Term, or any part thereof, before presentation
of proof of such damages to any court, commission or tribunal, the amount of
rent reserved upon such re-letting, prima facie, shall be the fair and
reasonable rental value for the Premises, or part thereof, so re-let during the
term of the re-letting.
18.(c) Suit or suits for the recovery of such damages, or any
installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall be deemed to require Landlord to
postpone suit until the date when the Term would have expired if it had not been
so terminated under the provisions of Article 16, or under any provision of law,
or had Landlord not reentered the Premises.
ARTICLE 19.
LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
If Tenant shall default in the observance or performance of any term or
covenant on Tenant's part to be observed or performed under or by virtue of any
of the terms or provisions in any Article of this Lease beyond all applicable
grace and cure periods after notice, (a) Landlord may, but shall not be
obligated to, remedy such default for the account of Tenant, immediately and
without notice in case of emergency, or in any other case only provided that
Tenant shall fail to remedy such default with all reasonable dispatch after
Landlord shall have notified Tenant in writing of such default and the
applicable grace period for curing such default shall have expired; and (b) if
Landlord makes any expenditures or incurs any obligations for the payment of
money in connection with such default (including, but not limited to, reasonable
attorneys' fees in instituting, prosecuting or defending any action or
proceeding), such sums paid or obligations incurred shall be deemed to be
additional rent hereunder and shall be paid by Tenant to Landlord within fifteen
days after rendition of a bill to Tenant therefor together with interest at the
Interest Rate.
ARTICLE 20.
QUIET ENJOYMENT
Landlord covenants and agrees that, subject to the terms, obligations
and provisions of this Lease, if, and so long as, Tenant keeps and performs each
and every
-41-
<PAGE> 45
covenant, agreement, term, provision and condition herein contained on the part
or on behalf of Tenant to be kept or performed, then Tenant may peaceably and
quietly enjoy the Premises and Tenant's rights under this Lease shall not be cut
off or ended before the expiration of the Term of this Lease.
ARTICLE 21.
SERVICES AND EQUIPMENT
21.(a) Landlord shall throughout the Term, provided that Tenant is not
in default of any of the terms or conditions of this lease, beyond applicable
notice and grace periods:
(i) provide Tenant with a separate and semi-exclusive
entrance to the Building on 37th Street together with only the other tenants at
the Building for which the 37th street entrance is its sole means of egress. One
of the two existing elevators located in the 37th Street lobby shall be used for
the sole and exclusive use of Tenant. The second elevator shall be made
available to all tenants at the Building for which the 37th street entrance is
its sole means of egress. The elevator facilities (excluding the 5th Avenue
entrance which will be made available during Business Hours on Business Days),
will be provided to Tenant 24 Hours per day, 7 days per week. Landlord has
advised Tenant that the three elevators servicing the Fifth Avenue entrance to
the Building may be upgraded and refurbished.
(ii) maintain and keep in good order and repair the heating
and building- wide air-conditioning systems that serve the Premises. Landlord
shall provide heat during Business Hours on Business Days and air-conditioning
supplied by the Building's system (and not by any supplemental system servicing
the Premises) during Business Hours on Business Days, maintaining interior
conditions of 72(degree) - 77(degree) in the cooling season and
66(degree)-74(degree) in the heating season and will provide fresh air in a
quantity not less than .14 (14/100) cubic feet per minute per square foot of
floor area provided that in any given room or area of the Premises the occupancy
does not exceed one (1) person for each 100 square feet. Landlord shall have no
responsibility or liability for the ventilating conditions and/or temperature of
the Premises during the hours or days Landlord is not required to furnish heat
or air conditioning pursuant to this Article. Tenant shall cause all of the
windows in the Premises to be kept closed and shall keep entirely unobstructed
all the vents, intakes, outlets and grilles whenever the air-conditioning or
heating system is in operation and shall comply with and observe all reasonable
regulations and requirements prescribed by Landlord for the proper functioning
of the heating, ventilating and air-conditioning systems. Notwithstanding
anything in this Lease to the contrary, Tenant shall be solely responsible for
all maintenance costs of the supplemental air-conditioning system presently
servicing the Premises. Nothing contained herein shall be deemed to require
Landlord to furnish at Landlord's expense such electric energy as is required to
operate the supplemental air-
-42-
<PAGE> 46
conditioning and ventilating systems serving the Premises. Subject to the
provisions of Article 12 hereof all such electric energy shall be furnished by
Landlord to Tenant at Tenant's cost and expense except for electric energy for
the building-wide air-conditioning systems which Landlord shall furnish at
Landlord's cost. If Tenant shall require air conditioning at times when Landlord
is not required to furnish same, Tenant shall give Landlord notice, by noon of
the same day, of such requirement and, if same is furnished by Landlord, Tenant
shall pay on demand Landlord's reasonable charges not to exceed $90.00 per hour
for the entire Premises, as additional rent for air-conditioning Monday through
Friday after 6:00 P.M., Saturdays after 1:00 P.M. and Sundays all day which
overtime charge may be increased by Landlord in direct proportion to Landlord's
costs increase therefor. If Tenant shall require heating at times when Landlord
is not required to furnish same, Tenant shall give Landlord notice, by noon of
the same day, of such requirement and, if same is furnished by Landlord, Tenant
shall pay on demand Landlord's reasonable charges not to exceed $90.00 per hour
for the entire Premises as additional rent for heating Monday through Friday
after 6:00 P.M., Saturdays after 1:00 P.M. and Sundays all day, which overtime
charge may be increased by Landlord in direct proportion to Landlord's costs
increase therefor. In the event another Tenant in the Building advises Landlord
that it requires overtime heating or air-conditioning service from Landlord and
Tenant subsequently requests overtime heating or air-conditioning service,
Landlord shall not charge Tenant for such overtime service so long as Landlord
receives full compensation for such overtime service.
(iii) Tenant shall maintain the Premises in a neat and clean
manner. Tenant shall provide, at its sole cost and expense, all cleaning
supplies and materials as Tenant deems necessary, Landlord shall have no
obligation to provide any cleaning services whatsoever or furnish any cleaning
supplies or materials to the Premises, except that Landlord shall be responsible
for the carting and disposal of all of Tenant's refuse and rubbish. In
consideration thereof, the Fixed Annual Rent due hereunder shall be decreased
("Decrease") by Seventy-Eight Thousand Dollars ($78,000.00) per annum from the
date Tenant takes physical occupancy of the Premises through the day immediately
preceding the second anniversary of the Commencement Date, which Decrease shall
be increased on each anniversary of the Commencement Date by multiplying the
Decrease for the immediately preceding year by a fraction, the numerator of
which shall be the CPI in effect on the immediately preceding anniversary of the
Commencement Date and the denominator of which shall be the CPI in effect on
such anniversary of the Commencement Date. The amount of the Decrease, for each
year of the Term, (including the first year of the Term) shall be credited, in
equal monthly installments, against the next installments of fixed annual rent
payable hereunder. For example, if Tenant takes physical occupancy of the
Premises on March 1, 1997 and the Commencement Date of this Lease is December 1,
1996, the total Decrease for the period through the date preceding the second
anniversary of the Commencement Date would be equal to $136,500.00 ($78,000.00 /
12 =$6,500.00 x 21 months) which will be credited against fixed annual rent from
the
-43-
<PAGE> 47
first anniversary of the Commencement Date through the second anniversary of the
Commencement Date in equal monthly installments of $11,375.00.
(iv) Furnish hot and cold water for lavatory, drinking,
plant watering and office cleaning purposes. If Tenant uses or consumes water
for any other purposes in unusual quantities, Landlord may install a meter or
meters or other means to measure Tenant's water consumption, and Tenant shall
reimburse Landlord for the cost of the meter or meters and the installation
thereof, and shall pay for the maintenance of said meter equipment and/or shall
pay Landlord's costs of other means of measuring such water consumption by
Tenant. Tenant shall reimburse Landlord for the cost of all water consumed in
unusual quantities, including sewer rents, as measured by said meter or meters
or as otherwise measured, and the cost to heat such water.
21.(b) Landlord reserves the right, without any liability whatsoever
and without abatement of fixed annual rent or additional rent, to stop the
heating, air-conditioning, elevator, plumbing, sanitary, electric and other
systems when necessary by reason of accident or emergency or for repairs,
alterations, replacements or improvements, provided that except in case of
emergency, Landlord will notify Tenant in advance, if possible, of any such
stoppage and, if ascertainable, its estimated duration, and will proceed
diligently with the work necessary to resume such service as promptly as
possible and in a manner so as to minimize interference with Tenant's use and
enjoyment of the Premises. Landlord shall not be liable in any way to Tenant for
any failure of the heating, air-conditioning, elevator, plumbing, sanitary,
electric and other systems by reason of any failure or defect in the supply or
character of electric energy furnished to the Building or the Premises by the
public utility serving the Building.
21.(c) Landlord, at Tenant's request, shall maintain listings on the
Building directory of the names of Tenant, permitted assignees or subtenants,
and the names of any of Tenant's officers and employees, provided, however, that
the aggregate number of names so listed shall not exceed sixty-seven (67). The
reasonable charge of Landlord for any changes in such listings requested by
Tenant shall be paid by Tenant to Landlord on demand.
21.(d) Landlord shall not be required to furnish any other services,
except as otherwise provided in this Lease. However, Landlord agrees to provide
Tenant, throughout the Term, services similar to those of comparable buildings
in the borough of Manhattan.
21. (e) Landlord upon reasonable notice from Tenant, shall provide
Tenant with access to building risers, shafts and conduits for the purpose of
running cabling or wiring in connection with Tenant's installation of a
communication system.
-44-
<PAGE> 48
21. (f) Landlord shall maintain the sprinkler system servicing the
Premises. However, Landlord shall not be obligated to repair the sprinkler
system servicing the Premises if damage to the sprinkler system is due to
Tenant's negligence or wilful conduct.
ARTICLE 22.
HAZARDOUS MATERIALS
22.(a) Tenant shall not, without the prior written consent of Landlord,
cause or knowingly permit, any Hazardous Material (hereinafter defined) to be
brought or remain upon, kept or used in or about the Premises or the Building.
As used in this Lease, "Hazardous Material(s)" shall mean any hazardous, toxic
or radioactive substance, material, matter or waste which is or becomes
regulated by any federal, state or local law, rule regulation, code, ordinance
or any other governmental restriction or requirement. However, "Hazardous
Materials" shall not include asbestos or substances which are used in the
ordinary course of a business similar to Tenant's as permitted pursuant to
Article 5 of this Lease, provided, however, that such substances are used,
handled, transported or stored in strict compliance with any applicable Legal
Requirement. If such substances are not so used, handled, transported or stored
then they shall be deemed "Hazardous Materials" for purposes of this Lease.
Should Landlord consent in writing to Tenant bringing, using or storing any
Hazardous Material in or upon the Premises or the Building, Tenant shall
strictly obey and adhere to any and all Legal Requirements which in any way
regulates, governs or impacts Tenant's possession, use, storage or disposal of
said Hazardous Material. Upon Landlord's written request, prior to the
Commencement Date of this Lease, and on January 1 of each year thereafter,
Tenant shall disclose in writing to Landlord the names and amounts of all
Hazardous Material which Tenant is then currently or is intending to bring, use,
or store in or upon the Premises or the Building, or which Tenant has in the
past brought, used or stored in or upon the Premises or the Building.
22.(b) In addition to, and in no way limiting Landlord's duties and
obligations as set forth in this Lease, should Tenant breach any of its
respective duties and obligations as set forth in this Article or if the
presence of any Hazardous Material in or upon the Premises or the Building that
Tenant causes or knowingly permits to brought upon, used, remained upon or kept
at the Premises (excluding those Hazardous Materials that were present in the
Premises prior to Tenant's occupancy and those Hazardous Materials brought upon
the Premises by Landlord after Tenant's occupancy) results in contamination of
the Premises, the Building, any land or the Building, the atmosphere, or any
water or waterway (including groundwater), or if contamination of the Premises,
or the Building by any Hazardous Material otherwise occurs for which Tenant is
otherwise legally liable to Landlord for damage resulting
-45-
<PAGE> 49
therefrom, Tenant shall indemnify, save harmless, and, at Landlord's option and
with attorneys approved in writing by Landlord (which approval shall not be
unreasonably withheld or delayed), defend Landlord, its agents, employees,
partners, officers, directors, and mortgagees, if any, from any and all claims,
demands, damages, expenses, fees, costs, fines, penalties, suits, proceedings,
actions, causes of action, and losses of any and every kind and nature,
including, without limitation, diminution in value of the Premises or the
Building, damages for the loss or restriction on use of the rentable or usable
space or of any amenity of the Premises or the Building, damages arising from
any adverse impact on marketing space in the Building, and sums paid in
settlement of claims and for reasonable attorneys' fees, consultant fees and
expert fees, which may arise during or after the Lease Term or any extension
thereof as a result of such contamination. This includes, without limitation,
reasonable costs and expenses incurred in connection with any investigation of
site conditions or any cleanup, remedial, removal or restoration work required
by any federal, state or local governmental agency or political subdivision
because of Hazardous Material present on or about the Premises (excluding those
Hazardous Materials that were present in the Premises prior to Tenant's
occupancy and those Hazardous Materials brought upon the Premises by Landlord
after Tenant's occupancy, that Tenant causes or permits knowingly to be brought
upon, used, remained upon or kept at the Premises) or because of the presence of
Hazardous Material anywhere else which came or otherwise emanated from Tenant or
the Premises (excluding those Hazardous Materials that were present in the
Premises prior to Tenant's occupancy and those Hazardous Materials brought upon
the Premises by Landlord after Tenant's occupancy, that Tenant causes or permits
knowingly to be brought upon, used, remained upon or kept at the Premises).
Without limiting the foregoing, if the presence of any Hazardous Material on or
about the Premises, or the Building caused or permitted by Tenant results in any
contamination of the Premises or the Building, Tenant shall, at its sole
expense, promptly take all actions as are necessary to return the Premises and
the Building to the condition existing prior to the introduction or any such
Hazardous Material to the Premises and the Building; provided, however, that
Landlord's approval of such actions shall first be obtained.
ARTICLE 23.
INVALIDITY OF ANY PROVISION
If any term, covenant, condition or provision of this Lease or the
application thereof to any circumstance or to any person, firm or corporation
shall be invalid or unenforceable to any extent, the remaining terms, covenants,
conditions and provisions of this Lease or the application thereof to any
circumstances or to any person, firm or corporation other than those as to which
any term, covenant, condition or provision is held invalid or unenforceable,
shall not be affected thereby and each
-46-
<PAGE> 50
remaining term, covenant, condition and provision of this Lease shall be valid
and shall be enforceable to the fullest extent permitted by law.
ARTICLE 24.
BROKERAGE
Tenant covenants, represents and warrants that Tenant has had no
dealings or negotiations with any broker or agent other than the Brokers in
connection with the consummation of this Lease, and Landlord covenants,
represents and warrants that Landlord has had no dealings or negotiations with
any broker or agent other than the Brokers in connection with the consummation
of this Lease. Tenant and Landlord covenant and agree to pay, hold harmless and
indemnify each other from and against any and all cost, expense (including
reasonable attorneys' fees) and liability in connection with any compensation,
commissions or charges claimed by any broker or agent, claiming to have dealt
with it, other than the Brokers, with respect to this Lease or the negotiation
thereof. Landlord agrees to pay S.L. Green Real Estate in connection with the
consummation of this Lease and Tenant agrees to pay Jenel Management Corp. in
connection with the consummation of this Lease a commission in accordance with
the terms of separate brokerage agreements between Landlord and S.L. Green Real
Estate and Tenant and Jenel Management Corp. respectively. Landlord shall not
bear any responsibility whatsoever for the payment of Jenel Management Corp.'s
brokerage commission and Tenant shall not bear any responsibility whatsoever for
the payment of S.L. Green Real Estate's brokerage commission. The provisions of
this Article shall survive the expiration or sooner termination of this Lease.
ARTICLE 25.
SUBORDINATION
25.(a) Subject to the provisions of Section 25(e) hereof, this Lease is
and shall be subject and subordinate to all present and future ground or
underlying leases and to all mortgages, options, and building loan agreements
that may now or hereafter affect such leases or the real property of which the
Premises are a part and to all renewals, modifications, consolidations,
replacements and extensions of any such ground or underlying leases, options,
building loan agreements and mortgages. The provisions of this Section 25(a)
shall be self-operative and no further instrument of subordination shall be
required. In confirmation of such subordination, Tenant shall execute and
deliver promptly at its own cost and expense any instrument, in recordable form
if required, that Landlord, the lessor of the ground or underlying lease or the
holder of any such mortgage or any of their respective successors in interest
may reasonably request to evidence such subordination.
-47-
<PAGE> 51
25.(b) In the event of a termination of any ground or underlying lease,
or if the interests of Landlord under this Lease are transferred by reason of,
or assigned in lieu of, foreclosure or other proceedings for enforcement of any
mortgage, or if the holder of any mortgage acquires a lease in substitution
therefor, then Tenant under this Lease, at the option to be exercised in writing
by the lessor under such ground or underlying lease or such mortgagee or
purchaser, assignee or lessee, as the case may be, either (a) will attorn to it
and will perform for its benefit all the terms, covenants and conditions of this
Lease on Tenant's part to be performed with the same force and effect as if said
lessor, such mortgagee or purchaser, assignee or lessee, were the landlord
originally named in this Lease, or (b) will enter into a new lease with said
lessor or such mortgagee or purchaser, assignee or lessee, as landlord, for the
remaining Term and otherwise on the same terms and conditions and with the same
options, if any, then remaining. The foregoing provisions of clause (a) of this
Section 25(b) shall enure to the benefit of such lessor, mortgagee, purchaser,
assignee or lessee, shall be self-operative upon the exercise of such option,
and no further instrument shall be required to give effect to said provisions.
Tenant, however, upon demand of any such lessor, mortgagee, purchaser, assignee
or lessee, shall execute, from time to time, instruments in confirmation of the
foregoing provisions of this Section 25(b) reasonably satisfactory to any such
lessor, mortgagee, purchaser, assignee or lessee, acknowledging such attornment
and setting forth the terms and conditions of its tenancy.
25.(c) Anything herein contained to the contrary notwithstanding, under
no circumstances shall any lessor under any ground lease or mortgagee or
purchaser, assignee or lessee, as the case may be, whether or not it shall have
succeeded to the interests of the landlord under this Lease, be:
(i) liable for any act, omission or default of any prior
landlord or for the return of any security deposit or part thereof not actually
received by such lessor, mortgagee, purchaser, assignee, or lessee, as the case
may be; or
(ii) subject to any offsets, claims or defenses that Tenant
might have against any prior landlord: or
(iii)bound by any rent or additional rent that Tenant might
have paid to any prior landlord for more than one month in advance or for more
than three months in advance where such rent payments are payable at intervals
of more than one month (other than payments for Tenant's Tax Payment which shall
be paid in accordance with the terms and conditions of Article 4 of this Lease);
or
(iv) bound by any modification, amendment or abridgment of
this Lease, or any cancellation or surrender of the same, made without its prior
written approval.
-48-
<PAGE> 52
25.(d) If, in connection with the financing of the Land and/or the
Building, the holder or prospective holder of any mortgage shall request
reasonable modifications in this Lease as a condition of approval thereof,
Tenant will not unreasonably withhold, delay or defer making such modifications.
25.(e) As a condition to this lease being subordinate to any future
mortgage or ground lease, anything herein contained to the contrary
notwithstanding, Landlord shall provide Tenant with a non-disturbance agreement,
in the form annexed hereto as Exhibit C, in recordable form executed by all such
future mortgagees or ground lessors .
ARTICLE 26.
CERTIFICATE OF TENANT/LANDLORD
26.(a) Landlord or Tenant, without charge, at any time and from time to
time, within ten days after request by the party requesting it, shall deliver a
written instrument to Landlord or Tenant or any other person, firm or
corporation specified by Landlord or Tenant, duly executed and acknowledged,
certifying
(i) that this Lease is unmodified and in full force and
effect or, if there has been any modification, that the same is in full force
and effect as modified and stating any such modification, that there is no
existing basis to cancel or terminate this Lease, and to the best of Tenant's
knowledge, Landlord is not in default thereunder and if requested by Tenant, to
the best of Landlord's knowledge, Tenant is not in default thereunder;
(ii) whether the Term has commenced and rent become payable
under this Lease, and whether Tenant is in possession of all of the Premises
except for such portions of the Premises that have been sublet or being held for
sublet pursuant to the provisions of this Lease;
(iii)whether or not there are then existing any defenses or
offsets that are not claims under paragraph (v) of this Section 26.(a) against
the enforcement of any of the agreements, terms, covenants, or conditions of
this Lease and any modification thereof upon the part of Tenant to be performed
or complied with, and, if so, specifying the same;
(iv) the amount of the fixed annual rent payable under this
Lease and the dates to which the fixed annual rent and additional rent and other
charges hereunder have been paid;
(v) whether or not Tenant has made any claim against
Landlord under this Lease and, if so, the nature and the dollar amount, if any,
of such claim.
-49-
<PAGE> 53
26.(b) Tenant agrees that, except for the first month's rent hereunder,
it will pay no rent under this Lease more than one month in advance of its due
date. In the event of any act or omission by Landlord, Tenant will not exercise
any right to terminate this Lease or to remedy the default and deduct the cost
thereof from rent due hereunder until Tenant shall have given written notice of
such act or omission to the ground lessor and to the holder of any mortgage on
the fee or the ground lease who shall have furnished such lessor's or holder's
last address to Tenant and until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notices, during which
time such lessor or holder shall have the right, but shall not be obligated, to
remedy or cause to be remedied such act or omission. Tenant shall not exercise
any right pursuant to this Section 26(b) if the holder of any mortgage or such
aforesaid lessor commences to cure such aforesaid act or omission within a
reasonable time and diligently prosecutes such cure thereafter.
26.(c) At Landlord's or Tenant's request, the other party shall deliver
promptly to the requesting party and to the holder of any mortgage on the fee or
ground lease and the lessor under any ground or underlying lease, after the
occurrence of the Commencement Date, a letter signed by Tenant or Landlord and
acknowledged, in substantially the form annexed hereto as Schedule 3.
ARTICLE 27.
LEGAL PROCEEDINGS AND
WAIVER OF JURY TRIAL
27.(a) Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matters whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the
Premises, and/or any other claims (except claims for personal injury or property
damage), and any emergency statutory or any other statutory remedy. If Landlord
commences any summary proceeding, Tenant shall not interpose and hereby waives
the right to interpose any counterclaim of whatever nature or description in any
such proceeding.
ARTICLE 28.
SURRENDER OF PREMISES
28.(a) Upon the expiration or other termination of the Term, Tenant
shall quit and surrender the Premises to Landlord, broom clean, in good order
and condition, ordinary wear and tear and damage by fire, the elements or other
casualty excepted, and Tenant shall remove all of its moveable property as
herein provided. Tenant's
-50-
<PAGE> 54
obligation to observe or perform the covenants in this Article 28 shall survive
the expiration or other termination of the Term.
28.(b) If possession of the Premises is not surrendered to Landlord
within 24 hours after the date of the expiration or sooner termination of the
Term then, notwithstanding anything to the contrary contained in this Lease,
Tenant shall pay to Landlord for each month and the pro rata portion of any
month during which Tenant holds over in the Premises after the expiration or
sooner termination of the Term of this Lease, rent at the greater of (a) a rate
equal to one and a half times the aggregate of that portion of the fixed annual
rent and additional rent that was payable under this Lease for the last month of
the Initial Term or the last month of Option 1 or Option 2, if exercised, or (b)
the then market rent for the Premises; provided, however, that in no event shall
Landlord be entitled to receive an amount in excess of the maximum amount
permitted by Legal Requirements. Nothing herein contained shall be deemed to
permit Tenant to retain possession of the Premises after the expiration or
sooner termination of the Term. The provisions of this Section 28.(b) shall
survive the expiration or other termination of the Term.
ARTICLE 29.
RULES AND REGULATIONS
29.(a) Tenant and Tenant's servants, employees and agents shall observe
faithfully and comply strictly with the Rules and Regulations set forth in
Schedule 4 annexed hereto and made part hereof entitled "Rules and Regulations"
and such other and further reasonable Rules and Regulations as Landlord or
Landlord's agents may adopt from time to time. In the event of any conflict or
inconsistency between the provisions of this Lease and of any of the Rules and
Regulations as originally or as hereafter adopted, the provisions of this Lease
shall control. Reasonable written notice of any additional Rules and Regulations
shall be given to Tenant. Landlord shall not enforce the Rules and Regulations
against Tenant in a discriminatory manner.
29.(b) Nothing in this Lease contained shall be construed to impose
upon Landlord any duty or obligation to enforce the Rules and Regulations or the
terms, covenants or conditions in any other lease, against any other tenant of
the Building, and Landlord shall not be liable to Tenant for violation of the
same by any other tenant, its servants, employees, agents, visitors or
licensees.
ARTICLE 30.
CONSENTS AND APPROVALS
30.(a) Wherever in this Lease Landlord's consent or approval is
required, if Landlord shall delay or refuse such consent or approval, Tenant in
no event shall be
-51-
<PAGE> 55
entitled to make, nor shall Tenant make, any claim, and Tenant hereby waives any
claim, for money damages (nor shall Tenant claim any money damages by way of
set-off, counterclaim or defense) based upon any claim or assertion by Tenant
that Landlord unreasonably withheld or unreasonably delayed its consent or
approval. Tenant's sole remedies, except as otherwise set forth in this Lease,
shall be: (i) an action or proceeding to enforce any such provision, or (ii)
arbitration as set forth in Article 3 herein, in each such instance for specific
performance, injunction or declaratory judgment.
ARTICLE 31.
NOTICES
Any notice, demand, consent, approval, disapproval, or statement
(collectively, "Notices") from Landlord to Tenant or from Tenant to Landlord
shall be in writing and shall be deemed duly given (a) if mailed by registered
or certified mail, postage prepaid, return receipt requested, (b) if delivered
by recognized national overnight delivery service with receipt acknowledged, or
(c) only in the case of Notices that are Escalation Statements or bills for
rent, if mailed by first class mail, postage prepaid, to the address(es) for
Notices set forth in this Article 31. Notices to Tenant shall be sent to Tenant
at the Premises with a copy of default notices only to Kramer Levin Naftalis &
Frankel attention: Larry Loeb, Esq. Notices to Landlord shall be sent (i) to the
address of Landlord set forth on page 1 of this Lease or (ii) to such other
address as Landlord shall have last designated by notice in writing to Tenant,
with a copy of default notices only to Belkin Burden Wenig & Goldman, LLP
attention: Daniel T. Altman, Esq. Notice shall be deemed given on the third
business day after depositing same in an official depository of the United
States Postal Service, Return Receipt Requested (or successor organization) or,
if given by overnight delivery, upon delivery to Landlord or Tenant, as the case
may be.
ARTICLE 32.
NO WAIVER
No agreement to accept a surrender of this Lease shall be valid unless
in writing signed by Landlord. No employee of Landlord or of Landlord's agents
shall have any power to accept the keys to the Premises prior to the termination
of this Lease. The delivery of keys to any employee of Landlord or of Landlord's
agent shall not operate as a termination of this Lease or a surrender of the
Premises. If Tenant at any time desires to have Landlord sublet the Premises for
Tenant's account, Landlord or Landlord's agents are authorized to receive said
keys for such purpose without releasing Tenant from any of the obligations under
this Lease. The failure of Landlord to seek redress for violation of, or to
insist upon the strict performance of, any covenant or condition of this Lease
or any of the Rules and Regulations set forth
-52-
<PAGE> 56
herein, or hereafter adopted by Landlord, shall not prevent a subsequent act,
which would have originally constituted a violation, from having all the force
and effect of an original violation. The receipt by Landlord of rent with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. The failure of Landlord to enforce any of the Rules and
Regulations set forth herein, or hereafter adopted, against Tenant and/or any
other tenant in the Building shall not be deemed a waiver of any such Rules and
Regulations. No provision of this Lease shall be deemed to have been waived by
Landlord, unless such waiver be in writing signed by Landlord. No payment by
Tenant or receipt by Landlord of a lesser amount than the monthly rent herein
stipulated shall be deemed to be other than on the account of the earliest
stipulated rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment of rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease provided.
ARTICLE 33.
INABILITY TO PERFORM
If, for any reason within Landlord's control, Tenant is not
provided with: (i) electricity in accordance with Article 12 hereof; or (ii)
heating and air-conditioning in accordance with Article 21 hereof; or (iii)
elevator service; or (iv) water; and such condition is not remedied within three
(3) business days following notice to Landlord of any such event, Tenant's
obligation to pay fixed annual rent and additional rent hereunder shall
proportionately abate in relation to the rentable square footage of the portion
of the Premises Tenant is unable to reasonably use and which Tenant in fact does
not use and has vacated, provided that Tenant shall not be entitled to any such
abatement if the rentable square footage of the portion of the Premises affected
by such condition is less than 1,200 rentable square feet. However, if it is
finally determined by a court of competent jurisdiction that Tenant has
unreasonably withheld payment of fixed annual rent and additional rent and that
Tenant was able to reasonably use the Premises so affected, Tenant, for the
purposes of this Article 33 only, shall reimburse Landlord, on demand, for all
costs and expenses, including reasonable legal fees, incurred by Landlord as a
result of Tenant withholding any such fixed annual rent and additional rent.
-53-
<PAGE> 57
ARTICLE 34.
ENTIRE AGREEMENT;
NO REPRESENTATIONS; NO ORAL MODIFICATION
34.(a) This Lease and the Schedules attached hereto set forth all of
the covenants, promises, assurances, agreements, representations, conditions,
warranties, statements and understandings (collectively, the "Representations")
between Landlord and Tenant concerning the Premises and the Building, and there
are no Representations, either oral or written, between Landlord and Tenant
other than those set forth in this Lease.
34.(b) This Lease supersedes and revokes all previous negotiations,
arrangements, letters of intent, offers to lease, lease proposals, brochures,
Representations, and information conveyed, whether oral or in writing, between
Landlord and Tenant or their respective representatives or any other person
purporting to represent Landlord or Tenant. Landlord and Tenant acknowledge that
they have not been induced to enter into this Lease by any representations not
set forth in this Lease, they have not relied on any such representation, no
such representations shall be used in the interpretation or construction of the
Lease, and Landlord and Tenant shall have no liability for any consequences
arising as a result of any such representations.
34.(c) Except as otherwise provided in this Lease, no subsequent
alteration, amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant unless in writing and signed by the party against whom
enforcement of the alteration, amendment, change or addition is sought.
ARTICLE 35.
SECURITY
35.(a) Simultaneous with the execution of this Lease, Tenant shall
deliver to Landlord a clean, unconditional, irrevocable standby Letter of Credit
(the "LC") having a one (1) year term, automatically renewable through and
including the third anniversary after the Commencement Date, naming Landlord as
beneficiary, in a form and substance reasonably satisfactory to Landlord,
initially in an amount equal to One Million Six Hundred and Sixty-Six Thousand
Six Hundred Sixty-Six Dollars and Sixty- Six cents ($1,666,666.66) as and for
the security deposit (the "Security Deposit") for the faithful performance and
observance by Tenant of the terms, provisions, covenants and conditions of this
Lease including the terms and conditions of the Work
-54-
<PAGE> 58
Letter annexed as Exhibit A. Provided that Tenant is not in default in respect
of any of the terms, provisions, covenants and conditions of this Lease beyond
applicable notice and grace periods, including, but not limited to, the
provisions of the Work Letter annexed as Exhibit A, the LC may be replaced by
Tenant with an amendment reducing the amount of LC to Six Hundred and Sixty-Six
Thousand Six Hundred Sixty- Six Dollars and Sixty-Six cents ($666,666.66) on the
second anniversary after the Commencement Date. Landlord shall return the LC to
Tenant on the third anniversary after the Commencement Date. If Tenant defaults
in respect of any of the terms, provisions, covenants and conditions of this
Lease beyond applicable notice and grace periods, including, but not limited to,
the payment of fixed annual rent and additional rent, Landlord may use, apply or
retain the whole or any part of the Security Deposit to the extent required for
the payment of any fixed annual rent and additional rent or any other sum as to
which Tenant is in default or for any sum that Tenant is obligated to pay
Landlord or that Landlord may expend or may be required to expend by reason of
Tenant's default in respect of any of the terms, provisions, covenants and
conditions of this Lease beyond any applicable notice and grace period,
including but not limited to any damages payable by Tenant pursuant to Article
18 hereof. To the extent that Landlord, during the Term, so uses, applies, or
retains all or any part of the Security Deposit, Tenant, on demand, shall pay to
Landlord as additional rent a sum sufficient to restore the Security Deposit to
the amount then required to be deposited. If Tenant shall comply fully and
faithfully with all of the terms, provisions, covenants and conditions of this
Lease, the Security Deposit shall be returned to Tenant within a reasonable
number of days after the date fixed as the end of the Lease (not to exceed 14
days) and after delivery of entire possession of the Premises to Landlord.
35.(b) In the event of a sale of the Land and the Building or the
leasing or transfer of the Building, Landlord shall transfer the Security
Deposit to the vendee or lessee or transferee and Landlord thereupon shall be
released by Tenant from all liability for the return of such Security Deposit.
Tenant shall look solely to the new landlord for the return of the Security
Deposit. The provisions hereof shall apply to every transfer or assignment made
of the Security Deposit to a new landlord.
35.(c) Tenant covenants that it will not assign, transfer or encumber
or attempt to assign, transfer or encumber the money deposited as the Security
Deposit under this Lease (except in connection with an assignment of this Lease
in accordance with the terms hereof) and that neither Landlord nor its
successors or assigns shall be bound by any such assignment, transfer,
encumbrance, attempted assignment, transfer or attempted encumbrance. In the
event that any bankruptcy, insolvency, reorganization or other debtor-creditor
proceedings shall be instituted by or against Tenant, its successors or assigns,
or any guarantor of Tenant hereunder, the Security Deposit shall be deemed to be
applied to the payment of the fixed annual rent and for additional rent due
Landlord for periods prior to the institution of such proceedings and the
balance, if any, may be retained by Landlord in partial satisfaction of
Landlord's damages.
-55-
<PAGE> 59
35.(d) Landlord shall deposit a cash Security Deposit into an
interest-bearing account at a banking organization selected by Landlord. All
interest and/or dividends, if any, accruing on the Security Deposit, less a 1%
per annum charge for administrative expense, shall be added to, held and
included within the term Security Deposit and, provided that Tenant is not in
default in the performance of the terms, provisions, covenants and conditions of
this Lease beyond any applicable notice and grace, shall accrue to the account
of Tenant and paid to Tenant on a quarterly basis. Landlord shall not be
required to credit Tenant with any interest for any period during which Landlord
does not receive interest on the Security Deposit.
ARTICLE 36.
INTENTIONALLY OMITTED
ARTICLE 37.
NON-LIABILITY INDEMNIFICATION
37.(a) No partner, member, director, officer, agent, servant or
employee of Landlord shall be liable to Tenant for any loss, injury, damage,
except to the extent the same are caused by or result from the negligence of
Landlord, its agents, partners, members, directors, officers, agents, servants
or employees. Further, neither Landlord nor Tenant, nor any respective partner,
member, director, officer, agent, servant or employee of Landlord or Tenant
shall be liable (a) for any damage caused by other tenants or persons in, upon
or about the Building or caused by the operations in construction of any
private, public or quasi-public work; or (b) even if negligent, for
consequential damages in any action relating to this Lease.
37.(b) Except as otherwise provided for in this Lease, including, the
provisions of Sections 9(h)(i), 9(h)(iii) and 37(a) hereof, Tenant shall
indemnify and hold harmless Landlord and all lessors under underlying leases,
of, and mortgagees under mortgages affecting, the Land and/or the Building and
its and their respective partners, members, directors, officers, agents and
employees from and against any and all claims arising from or in connection with
(a) the use or occupation of the Premises by Tenant or anyone in the Premises
with Tenant's permission, or the conduct or management of the Premises or of any
business therein, or any work or thing whatsoever done (other than by Landlord,
its agents, servants or employees), or any condition created in the Premises
during the Term or during the period of time, if any, prior to the Commencement
Date, that Tenant may have been given access to the Premises; (b) any act,
omission or negligence of Tenant or any of its sublessees or licensees or its or
their partners, members, directors, officers, agents, employees or contractors;
(c) any accident, injury or damage whatsoever (except to the extent caused by
the negligence of Landlord, its agents, servants or employees) occurring in, at
or upon the Premises; and (d) any breach or default by Tenant in the full and
prompt payment and
-56-
<PAGE> 60
performance of Tenant's obligations under this Lease. Tenant's indemnity shall
include the payment to Landlord of all reasonable costs, expenses and
liabilities incurred in or in connection with each such claim or action or
proceeding brought thereon, including without limitation, all reasonable
attorneys' fees, costs and expenses. In case any action or proceeding shall be
brought against Landlord and/or any such lessor or mortgagee and/or its or their
partners, directors, officers, agents and/or employees by reason of such claim,
Tenant, upon notice from Landlord or such lessor or mortgagee (as the case may
be), shall resist and defend such action or proceeding (by Tenant's counsel,
Kramer Levin, Naftalis & Frankel or Tenant's assigned insurance counsel).
ARTICLE 38.
INTENTIONALLY OMITTED
ARTICLE 39.
RIGHT OF FIRST OFFER
Each time that the entire sixth (6th), ninth (9th) or tenth (10th)
floors or any portion of such floors ("Contiguous Space") becomes vacant and
available to lease in the Building, Landlord shall promptly give notice
("Notice") to Tenant in accordance with Article 31 of this Lease, that
Contiguous Space is available. The Notice shall include the location of the
Contiguous Space, the approximate square footage, the term for which the
Landlord would lease the Contiguous Space to Tenant and such other business
terms (the "Terms") as Landlord deems relevant including, without limitation,
the fair market rent per square foot of the Contiguous Space and the proposed
fair market escalations. If the Contiguous Space is less than Five Thousand
square feet, within thirty (30) days after the giving of such Notice, Tenant may
elect to lease the Contiguous Space, by notifying Landlord ("Acceptance Notice")
that the Terms contained in the Notice are acceptable. If the Contiguous Space
is more than Five Thousand square feet, within forty-five (45) days after the
giving of such Notice, Tenant may elect to lease the Contiguous Space, by
notifying Landlord in an Acceptance Notice that the Terms contained in the
Notice are acceptable. In the event that Tenant wishes to lease the Contiguous
Space contained in the Notice, but Landlord and Tenant cannot agree on the Terms
for the Contiguous Space, Tenant shall notify Landlord, within the above stated
time frames (within 30 days for less than 5000 sq. ft. and within 45 days for
5000 sq. ft. and over) that it wishes to lease the Contiguous Space but it
disputes that the Terms contained in the Notice are the fair market terms for
the Contiguous Space. The right to dispute the Terms contained in the Notice
shall be deemed waived unless the Acceptance Notice is served in accordance with
this Article. In the case where an Acceptance Notice is timely served in
accordance with this Article, the dispute as to the Terms of the Premises, shall
be resolved by binding arbitration in accordance with Article 3 of this
-57-
<PAGE> 61
Lease. In determining each of the Terms for the Contiguous Space, the arbitrator
shall make his/her decision based upon what the fair market value would be for
the Contiguous Space at the time the Notice is sent to Tenant. In connection
with such arbitration, Landlord shall submit a Submission to the arbitrator in
accordance with Article 3 containing the Terms in its Notice. However,
notwithstanding the foregoing, Tenant agrees to pay during the period of
arbitration the Fixed Annual Rent in effect for the immediately preceding year
without prejudice to any of Landlord's or Tenant's rights until there has been a
determination of the arbitration.
ARTICLE 40.
MISCELLANEOUS
40.(a) Irrespective of the place of execution or performance, this
Lease shall be governed and construed in accordance with the laws of the State
of New York.
40.(b) This Lease shall be construed without regard to any presumption
or other rule requiring construction against the party causing this Lease to be
drafted.
40.(c) Intentionally Omitted.
40.(d) All terms and words used in this Lease, regardless of the number
or gender in which they are used, shall be deemed to include any other number
and other gender as the context may require.
40.(e) Time shall be of the essence with respect to the exercise of any
option granted under this Lease.
40.(f) Except as otherwise provided in this Lease, whenever the payment
of interest is required to be made by Tenant to Landlord by the terms hereof it
shall be at the Interest Rate.
40.(g) In the event that Tenant is in arrears in the payment of fixed
annual rent or additional rent hereunder, Tenant waives Tenant's right, if any,
to designate the items against which any payments made by Tenant are to be
credited, and Tenant agrees that Landlord may apply any payments made by Tenant
to any items it sees fit, irrespective of and notwithstanding any designation or
request by Tenant as to the items against which any such payments shall be
credited.
40.(h) The submission of this document for examination does not
constitute an option or an offer to lease space in the Building. This Lease
shall have no binding effect on the parties unless executed by Landlord and
Tenant and a fully executed copy is delivered to Landlord and Tenant.
-58-
<PAGE> 62
40.(i) The captions are inserted only as a matter of convenience and
for reference, and in no way define, limit or describe the scope of this Lease
or the intent of any provision hereof.
40.(j) Landlord, upon reasonable notice to Tenant, shall have the full
right at any time to name and change the name of the Building and to change the
designated address of the Building. The Building may be named after any person,
firm, or otherwise, whether or not such name is, or resembles, the name of a
tenant of the Building (except that the building shall not be named for one of
Tenant's direct competitors). The cost or expense associated with changing
Tenant's address, not to exceed $5,000.00, shall be borne by Landlord.
40.(k) Tenant shall be permitted to install signage in the Premises so
long as such signage complies with the terms and conditions of this Lease and
has been approved in advance by Landlord, which approval shall not be
unreasonably withheld or delayed. Under no circumstances shall any signage in
the Premises (and visible outside of the Premises) be illuminated (including,
without limitation, a "light box" or any sign with neon). Signs and canopies are
permitted at the exclusive entrance, lobby and elevator of the Building and are
to be installed at Tenant's expense, subject to Landlord's prior written
approval which approval shall not be unreasonably withheld or delayed. Tenant
may use the name of an affiliate or division of Tenant on entrance, lobby and
elevator of Building, subject to Landlord's prior written approval which
approval shall not be unreasonably withheld or delayed. In addition, Tenant, at
its sole cost and expense, shall be permitted, subject to Article 6 of this
Lease, to make Alterations or improvements to the semi-exclusive lobby of the
Building located at the 37th Street entrance to the Building.
40.(l) This Lease may be executed in several counterparts each of which
shall be deemed an original, and such counterparts shall constitute but one and
the same instrument.
ARTICLE 41
ROOF SPACE
41. (a) Landlord hereby leases to Tenant, without charge, one hundred
(100) square feet of space on the rooftop of the Building as shown on Schedule 6
annexed hereto and made a part hereof (the "Roof Premises"). Tenant may elect to
relocate the Roof Premises at its sole cost and expenses so long as it does not
interfere with the penthouse tenant's use and occupancy of its premises and the
Building systems.
(b) Tenant shall use the Roof Premises for the installation, operation
and maintenance of telecommunication equipment, associated antenna, base
stations, dishes, switches, power supplies, batteries and accessories (the
"Installation"). The
-59-
<PAGE> 63
Installation or other property attached to or otherwise brought onto the Roof
Premises shall at all times remain Tenant's personal property and are not
considered fixtures. Tenant, at its sole cost and expense, shall be responsible
for obtaining electrical service for the Roof Premises from the utility company
servicing the Building and shall pay for such electricity, on a submetered
basis, in accordance with the provisions of Article 12 of this Lease. Tenant
shall be responsible, at its own cost and expense, to install and maintain any
submeters necessary for the metering of the electric consumption of the
Installation. Landlord, at Tenant's sole cost and expense, shall make available
to Tenant the panel boards, feeders, conduits and risers in the Building as may
be necessary in order to bring electric energy to the Roof Premises.
(c) The placement of the Installation on the Roof Premises shall be
deemed to be an Alteration and shall be subject to the provisions of Article 6
hereof and to any other applicable provisions of this Lease. Landlord agrees to
cooperate with Tenant, at Tenant's expense, in making application for, and
obtaining, any local, state, and federal licenses, permits and any other
approvals which may be required to allow Tenant to use the Roof Premises. Tenant
shall employ due diligence to obtain said approvals within a timely manner.
(d) Landlord agrees to provide Tenant, Tenant's employees and
authorized agents, at reasonable times and on reasonable notice (which may be
oral), access to the Roof Premises.
(e) The Installation may be removed by Tenant at any time during the
Term, and, in such event, Tenant shall be responsible, at its sole cost and
expense, to repair any damage to the Roof Premises resulting from Tenant's
removal of the Installation. Furthermore, Tenant shall repair any damage to the
Roof Premises caused by Tenant during the Term, ordinary wear and tear and
damage from the elements excepted, and said obligation shall survive the
expiration or sooner termination of the Lease.
(f) In the event that Landlord elects, in its sole discretion, to
construct additional floors to the Building above the Roof Premises, Landlord
shall provide Tenant with comparable space on the new roof of the Building (the
"New Roof Premises") promptly following the completion of any such addition and
Tenant may, at its sole cost and expense, move the Installation to the New Roof
Premises. Landlord shall not be responsible or liable in any manner whatsoever,
for any costs, damages, abatements and/or set-offs due to an interruption in the
use and occupancy of the Roof Premises during such construction period.
(g) Tenant agrees not to cause any unreasonable interference to the
telecommunication operation of Landlord or any other tenants in the Building.
Tenant shall operate the Installation in compliance with all applicable Federal
Communications Commission (FCC) regulations.
-60-
<PAGE> 64
(h) Notwithstanding any provision in this Lease to the contrary, Tenant
may not sublet or assign any portion of the Roof Premises (except in connection
with an assignment of this Lease in accordance with the terms hereof) without
the prior written consent of Landlord, which consent may be withheld by Landlord
in its sole discretion.
ARTICLE 42
OPTION
42. (a) Tenant shall have the right, exercisable by sending written
notice (the "Notice") to Landlord on or before January 26, 1997, time being of
the essence, to lease the entire ninth (9th) floor of the Building effective on
the date (the "Effective Date") set forth in the Notice, which Effective Date
shall not be later than five (5) business days following the date of the Notice.
In the event that Tenant timely sends the Notice to Landlord, the ninth (9th)
floor of the Building shall be, and be deemed to be, a part of the Premises
subject to all of the terms and conditions of this Lease, except that from and
after the Effective Date:
(i) The phrase "One Million Two Hundred Thousand Dollars
($1,200,000.00)" in the definition of "Fixed Annual Rent" contained on page 3 of
this Lease shall be replaced with "One Million Eight Hundred Thousand Dollars
($1,800,000.00);
(ii) "Tenant's Proportionate Share" shall mean 27.3%;
(iia) The following changes shall be made to Article 11(b)
of this Lease: the phrase "One Hundred Million Dollars ($100,000,000.00)" on the
twelfth and seventeenth lines shall be replaced with "One Hundred Twenty-Five
Million Dollars ($125,000,000.00)," the number "Forty Million Dollars
($40,000,000.00)" on the fifteenth and twenty-fifth lines shall be replaced with
"Fifty Million Dollars ($50,000,000.00)," the number "One Million Three Hundred
Thirty Three Thousand Dollars ($1,333,000.00)," on the nineteenth line shall be
replaced with "Two Million Dollars ($2,000,000.00)," the number "Sixty Hundred
Sixty Seven Thousand Dollars ($667,000.00)" on lines twenty-two and twenty seven
shall be replaced with "One Million Dollars ($1,000,000.00)."
(iii) The following changes shall be made to paragraph
21(a)(iii) of this Lease: the phrase "Seventy-Eight Thousand Dollars
($78,000.00)" on the seventh (7th) line thereof shall be replaced with "One
Hundred Seventeen-Thousand Dollars ($117,000.00)," the number "$136,500.00" on
the twentieth (20th) line thereof shall be replaced with "$204,750.00" the
number "$78,000.00" on the twentieth (20th) line thereof shall be replaced with
"$117,000.00", the number "$6,500.00" on the twenty-first (21st) line thereof
shall be replaced with "$9,725.00" and the number
-61-
<PAGE> 65
"$11,375.00" on the twenty-third (23rd) line thereof shall be replaced with
"$17,062.50";
(iv) The number "sixty-seven" (67) on the fourth (4th) line
of paragraph 21(c) of this Lease shall be replaced with "one hundred (100)";
(v) The following changes shall be made to Article 35 of
this Lease: the phrase "One Million Six Hundred and Sixty-Six Thousand Six
Hundred Sixty-Six and 66/100 Dollars ($1,666,666.66)" beginning on the fifth
(5th) line thereof shall be replaced with "Two Million Five Hundred Thousand
Dollars ($2,500,000.00", the phrase "Six Hundred and Sixty-Six Thousand Six
Hundred Sixty Six and 66/100 Dollars ($666,666.66)" beginning on the thirteenth
(13th) line thereof shall be replaced with "One Million Dollars
($1,000,000.00)";
(vi) the phrase "ninth" (9th) on the first (1st) line of Article 39 of
this Lease shall be deleted in its entirety; and
(vii) the following changes shall be made to Exhibit A of this Lease:
the number "$2,700,000.00" on the third (3rd) line of paragraph 4A shall be
replaced with "$4,050,000.00," the phrase "Two Hundred and Seventy Thousand
Dollars ($270,000.00)" beginning on the seventh (7th) line of such paragraph 4A
shall be replaced with "Four Hundred Five Thousand Dollars ($405,000.00)," the
number "$2,550,000.00" on the tenth (10th) line of such paragraph 4A shall be
replaced with "$3,900,000.00," the phrase "Eight Hundred Thousand Dollars
($800,000.00)" on the fifth (5th) line of paragraph 4C thereof shall be replaced
with "One Million Two Hundred Thousand Dollars ($1,200,000.00)," the number
"$1,900,000.00" on the first (1st) line of the second (2nd) paragraph of such
paragraph 4C shall be replaced with "$2,850,000.00" and the number "$800,000.00"
on the fourth (4th) line of the second (2nd) paragraph of such Exhibit A shall
be replaced with "$1,200,000.00."
(b) On or before the Effective Date:
(i) Tenant shall deliver to Landlord an amendment to the LC
required to be delivered by Tenant pursuant to the provisions of Article 35 of
this Lease increasing the amount thereof to $2,500,000.00; and (ii) Landlord
shall deliver to Tenant: (x) an amendment to the LC required to be delivered by
Landlord pursuant to the provisions of Exhibit A of this Lease increasing the
amount thereof to $1,200,000.00; and (y) a check, in the amount of $8,333.33,
representing the payment to Tenant for Tenant's installation of submeters on the
ninth (9th) floor of the Building.
(c) In the event that Tenant does not timely send the
Notice, Tenant's right to exercise its option pursuant to this Article 42 shall
be of no further force and effect. Nothing contained herein shall limit Tenant's
rights with respect to the sixth (6th), ninth (9th) and tenth (10th) floors of
the Building pursuant to the terms of Article 39 of this Lease.
-62-
<PAGE> 66
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.
LANDLORD:
F.S. Realty Corp.
By: /s/ Joseph Chetrit
-------------------------------------
Name: Joseph Chetrit
Title:
TENANT:
GT INTERACTIVE SOFTWARE CORP.
By: /s/ Joseph Cayre
-------------------------------------
Name: Joseph Cayre
Title: Chairman of the Board
-63-