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EXHIBIT 10.6
FIRST AMENDMENT TO LEASE
This FIRST AMENDMENT TO LEASE, dated as of July 1, 1999 (this
"Amendment"), between NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION FUND,
having an office at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Landlord"),
and INTERWORLD CORPORATION (FORMERLY KNOWN AS INTERWORLD TECHNOLOGY VENTURES), a
Delaware corporation, having an office at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Tenant").
W I T N E S S E T H
WHEREAS, Landlord and Tenant entered into that certain Lease dated as
of January 12, 1997 (along with all Exhibits thereto, the "Original Lease"),
covering the entire sixth (6th) floor (the "Original Premises") in the building
located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Building"); and
WHEREAS, Landlord and Tenant desire to modify the Original Lease to (i)
provide for the leasing by Tenant of certain additional space consisting of part
of the eighth (8th) floor of the Building, and (ii) otherwise modify the terms
and conditions of the Original Lease, all as hereinafter set forth (the Original
Lease, as modified by this Amendment, is hereinafter referred to as the
"Lease").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
1. Capitalized Terms. All capitalized terms used and not otherwise
defined in this Amendment shall have the respective meanings ascribed to them in
the Original Lease.
2. Demise of Additional Premises.
(a) Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, 50,576 square feet of the eighth (8th) floor of the Building
substantially as shown on Exhibit A annexed hereto (the "Additional Premises"),
for a term to commence on the date Landlord has substantially completed
Landlord's Additional Premises Work and delivers possession of the Additional
Premises but in no event later than October 1, 1999 (the "Additional Premises
Commencement Date"), and to end on December 31, 2015 (the "Expiration Date"), or
such earlier date upon which the term of the Lease may expire or be terminated
pursuant to the provisions of the Lease or pursuant to law.
(b) Effective as of the Additional Premises Commencement Date,
Tenant shall lease the Additional Premises upon all of the terms and conditions
of the Original Lease, except as follows:
(i) The fixed rent payable under the Lease shall be increased
by an amount per annum payable with respect to the Additional Premises
as set forth in Exhibit B hereto (the "Additional Premises Fixed
Rent"). Notwithstanding the foregoing,
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Additional Premises Fixed Rent otherwise payable under this Lease shall
be abated for the period commencing on the Additional Premises
Commencement Date and ending on the sixth (6th) month anniversary of
the Additional Premises Commencement Date (the "Partial Abatement
Period").
(ii) (x) The "Work Credit" allowed to Tenant with respect to
the Additional Premises shall be the sum of up to $354,032 and shall be
disbursed by Landlord in accordance with the provisions of Article 40
of the Original Lease provided that, as of the date on which Landlord
is required to make payments of the Work Credit: (i) the Lease is in
full force and effect, and (ii) Tenant is not in monetary default under
the Lease or material non-monetary default under the Lease beyond any
applicable notice and cure period. Tenant shall pay all costs of the
Tenant's Work in excess of the Work Credit. Landlord's Contribution
shall be payable solely on account of labor directly related to the
Tenant Improvements and materials delivered to the Additional Premises
in connection with the Tenant's Work, including "soft costs" incurred
in connection with the Tenant's Work, such as architectural, consulting
and engineering fees incurred by Tenant in connection therewith. Tenant
shall not be entitled to receive any portion of the Work Credit not
actually expended by Tenant in the performance of the Work Credit, nor
shall Tenant have any right to apply any unexpended portion of the Work
Credit as a credit against fixed rent or any other obligation of Tenant
under the Lease.
(y) Tenant shall pay to Landlord or its designee, within
twenty (20) days after demand, all out-of-pocket costs actually
incurred by Landlord in connection with the Tenant's Work (up to a
maximum amount of $5,000.00), including costs incurred in connection
with (i) Landlord's review of Tenant's Work to the Additional Premises
(including review of requests for approval thereof), and (ii) the
provision of Building personnel during the performance of the Tenant's
Work required by trade union policy or otherwise, to facilitate the
Tenant's Work.
(iii) Tenant has inspected the Additional Premises and agrees (x)
to accept possession of the Additional Premises in the "as is" condition
existing on the Additional Premises Commencement Date, (y) that neither the
Landlord nor Landlord's agents have made any representations or warranties with
respect to the Additional Premises or the Building except as expressly set forth
herein, and (z), except for the Landlord removing the pre-existing computer room
(not including the removal of the raised floor therein) and telephone room and
security camera system from the Additional Premises and the xxxxxxx in of the
internal staircase between the eighth (8th) and ninth (9th) floors of the
Building ("Landlord's Additional Premises Work"), Landlord has no obligation to
perform any work, supply any materials, incur any expense or make any
alterations or improvements to the Additional Premises or the Building to
prepare the Additional Premises for Tenant's occupancy. Landlord shall use its
best efforts to substantially complete such Landlord's Additional Premises Work
on or prior to July 31, 1999. Landlord shall not be deemed to have substantially
completed any portion of Landlord's Additional Premises Work if such failure in
any way impedes or delays Tenant's Work. Tenant shall afford Landlord and its
employees, contractors and agents access to the Additional Premises at all
reasonable times upon reasonable prior notice for the performance of Landlord's
Additional Premises Work, and Tenant shall use reasonable efforts to avoid any
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interference with the performance of Landlord's Additional Premises Work.
Landlord shall use reasonable efforts to minimize interference with Tenant's
performance of the Tenant's Work during the performance of Landlord's Additional
Premises Work, provided that Landlord shall have no obligation to employ
contractors or labor at overtime or other premium pay rates or to incur any
other overtime costs or additional expenses whatsoever. There shall be no
allowance to Tenant for a diminution of rental value, no actual or constructive
eviction of Tenant, in whole or in part, no relief from any of Tenant's other
obligations under the Lease, and no liability on the part of Landlord, by reason
of inconvenience, annoyance or injury to business arising from the performance
or delays in the performance of Landlord's Additional Premises Work. Landlord
shall deliver to Tenant keys to the Additional Premises on or prior to the
Additional Premises Commencement Date.
(iv) The following provisions of the Original Lease shall not be
applicable to the Additional Premises or the Original Premises during the
Additional Period:
Sections 1.08, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12.
(v) Article 41 (Cancellation Option) of the Original Lease is
hereby deleted in its entirety.
(vi) The Original Lease is hereby further amended as follows:
(A) The term "Tax Base" as defined in Section 4.01(b)
of the Original lease shall remain unchanged for the original
Premises but, with respect to the Additional Premises, shall mean
the Taxes for the Tax Year commencing July 1, 1999 and ending on
June 30, 2000.
(B) The Term "Tax Year" as defined in Section 4.01(c)
of the Original Lease shall remain unchanged for the Original
Premises but, with respect to the Additional Premises, shall mean
the fiscal year for which Taxes are levied by the governmental
authority.
(C) From and after the Additional Premises
Commencement Date, Tenant's Proportionate Share, as such term is
defined in Section 4.01(d) of the Original Lease, shall be
18.1967%.
(D) Section 14.02 of the Original Lease is hereby
amended by deleting the words "(connected load)" therefrom.
Hereafter, Tenant shall, with respect to the Premises and the
Additional Premises be supplied with six (6) xxxxx per square foot
of electricity demand load.
(E) From and after the Additional Premises
Commencement Date the term Operating Expense Base (for the Original
Premises) shall mean the Operating Expenses for Calendar year 1999.
There shall be no Tenant Operating Expense Payment for the
Additional Premises or during the Additional Period with respect to
the Original Lease.
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(F) The amount of the "Work Credit" as such term is
defined in Section 40.01 of the Original Lease shall be $354,032.00
as it relates to the Additional Premises.
(G) Article 42 of the Original Lease shall be modified
as hereinafter set forth. Tenant shall deposit with Landlord an
additional $1,200,000 (the "Additional Security") as security for
the faithful performance and observance by Tenant of the terms,
provisions and covenants and conditions of the Lease. Except as set
forth in this paragraph (g), all of the terms and provisions of
Article 42 of the Original Lease shall apply to the Additional
Security, including, without limitation, the provisions of Section
42.06, however, solely with respect to the Additional Security and
reductions thereof, the term "Commencement Date" as used in Section
42.06 shall be deemed to mean the Additional Premises Commencement
Date. On the second anniversary of the Commencement Date and every
two years thereafter on the Commencement Date anniversary, the
amount of the Additional Security shall be reduced by the sum of
$150,000.00 provided, however, that the Additional Security shall
never be less than two months Additional Premises Fixed Rent.
Except for the foregoing, all of the terms of Article 42 of the
Original Lease shall remain unchanged. Landlord acknowledges that
Tenant's financial condition may significantly improve and Landlord
agrees, without commitment of any kind, at Tenant's request, to
review the financial statements of the Tenant and consider, in its
sole and absolute discretion, a reduction in the security deposit.
(vii) In the event that any portion of the eighth (8th) floor of the
Building that is not part of the Additional Premises (the "Remainder") becomes
vacant and the Landlord, in its sole discretion chooses to market such Remainder
to non-Affiliate third parties, Tenant shall have a right of first offer on the
Remainder. Upon receipt of written notice from Landlord of Landlord's intention
to market the Remainder, or any part thereof, to any non-Affiliate third party,
Tenant shall have fifteen (15) business days in which to exercise it right of
first offer by written notice to Landlord in which Tenant shall agree to lease
all of the Remainder, or such part thereof to be marketed by Landlord. If
Landlord shall not have received such written notice by Tenant within such
fifteen (15) business day period, Tenant's right of first offer with respect to
the Remainder, or such part thereof to be marketed by Landlord, shall be
extinguished. Fixed rent for the Remainder, or any part thereof, shall be equal,
on a dollar per square foot basis, to the Additional Premises Fixed Rent as the
same may have been and may thereafter be adjusted from time to time in
accordance with the terms hereof. There shall be no rent abatement associated
with the lease of the Remainder nor shall the Landlord extend any credit for
tenant improvements to the Remainder. The term "Affiliate", as such term is used
in this Amendment, shall mean Landlord, the New York City District Council of
Carpenters, the New York City District Council of Carpenters Apprenticeship
Journeyman's Retraining Education and Industry Fund, all other New York City
District Council of Carpenters Benefit Funds (including, without limitation, the
Welfare Fund, Vacation Fund, Annuity Fund and Labor Management Cooperative
Fund), all related or affiliated benefit funds and union locals (including,
without limitation, Resilient Floor Coverers Local 2287, Dockbuilders, Pier
Carpenters, Shorers, House Movers, Pile
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Drivers, Drivers, Tenders and Foundations and Marine Constructors Local Union
1456), the collective bargaining units thereof, and all employees, agents,
managers (including third-party managers) and trustees of any of the foregoing.
(viii) Except as provided in this Amendment, all references in the
Original Lease to the "Demised Premises" shall be deemed to include the
Additional Premises for all purposes of the Lease.
3. Modifications. Effective as of the date hereof, the Original Lease
shall be amended as follows:
(a) Article I, Section 1.03 of the Original Lease is amended by
replacing the term "Expiration Date", used twice in such Section with the term
"Original Expiration Date" and adding the following sentence at the end thereof:
(b) The term of the Lease shall be extended for a term (the
"Additional Period") commencing on the Original Expiration Date and ending on
December 31, 2015. Hereafter, the term "Expiration Date" as used in the Lease
shall mean December 31, 2015.
(c) Article I, Section 1.04(a) of the Original Lease is amended by
(i) deleting the word "and" at the end of clause (i) thereof, (ii) deleting the
term "Expiration Date" in clause (ii) thereof and replacing it with the term
"Original Expiration Date", (iii) deleting the period at the end of clause (ii)
thereof and replacing it with a semicolon followed by the word "and", and (iv)
adding the following clause (iii) after clause (ii) thereof:
"(iii) the amount per annum payable with respect to
the Original Premises (as such term is defined in the First
Amendment to Lease) as listed in Exhibit C attached to the First
Amendment to Lease for the duration of the Additional Period (the
"Original Premises Additional Period Fixed Rent").
(d) The second sentence of Section 15.01 of the Original Lease is
deleted and shall be replaced with the following:
"Tenant shall pay to Landlord a condenser water
connection charge of $1,575.00 per ton for any supplemental
air-conditioning (excluding any Building Systems) now or hereafter
installed in or serving the Additional Premises, together with a
charge for condenser water capacity at a rate of $700 per ton per
year, promptly upon the rendition of Landlord's xxxx therefor, on a
monthly basis."
(e) Article 16, Section 16.01 of the Original Lease is amended by
deleting the brackets around the words "shall be delivered to the Building's
Managing Agent (Attn: District Manager - 000 Xxxxxx Xxxxxx)".
(f) Article 16, Section 16.04 of the Original Lease is amended by
deleting the reference to "Xxxxxxxx Real Estate, Inc." and replacing it with
"Xxxxxxx & Xxxxxxxxx."
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(g) All references to Xxxxxxxx Real Estate, Inc. in Section 32.01 of
the Original Lease are hereby deleted. Hereafter, all notices to Landlord shall
be delivered in accordance with Section 32.01 to:
Building Manager
Xxxxxxx & Xxxxxxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxx Xxxxxxx, Esq.
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(h) Copies of all notices to Tenant shall also be delivered to the
attention of the General Counsel.
4. Landlord and Tenant each covenant, warrant and represent to the
other that it had no negotiations or other dealings with any broker or finder
except Xxxxxxx & Xxxxxxxxx ("Broker") concerning the leasing of the Additional
Premises and the Extension Period. Landlord and Tenant each agrees to hold the
other harmless against any claims for a brokerage commission arising out of any
negotiations or other dealings had by Landlord or Tenant, respectively, with any
broker or finder except the Broker. Landlord shall pay the commission to the
Broker pursuant to a separate agreement. Landlord and Tenant acknowledge that
the renting of the Additional Premises and the renting of the Original Premises
during the Extension Period are not pursuant to or in accordance with any
provision of the Original Lease but are transactions entered into independent of
and unrelated to any options or rights granted to the Tenant under the Original
Lease.
5. Representations and Warranties. Tenant hereby represents and
warrants to Landlord that, as of the date hereof, (a) the Original Lease is in
full force and effect and has not been modified except pursuant to this
Amendment; (b) there exist no valid abatements, causes of action, counterclaims,
disputes, defenses, offsets, credits, deductions, or claims against the
enforcement of any of the terms and conditions of the Lease; and (d) this
Amendment has been duly authorized, executed and delivered by Tenant and
constitutes the legal, valid and binding obligation of Tenant.
6. Subject to approval of the provisions of the terms of the sublease
agreement, which approval shall not be unreasonably withheld, delayed or
conditioned, Landlord hereby consents to the subletting of a portion of the
Additional Premises to UGO Networks, Inc. This consent does not in any way
modify Tenant's primary liability and obligation under the terms of the Original
Lease, as herein modified.
7. Miscellaneous.
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(a) Except as specifically set forth herein, nothing contained in
this Amendment shall be deemed to amend or modify in any respect the terms of
the Original Lease and such terms shall remain in full force and effect as
modified hereby. If there is any inconsistency between the terms of this
Amendment and the terms of the Original Lease, the terms of this Amendment shall
be controlling and prevail.
(b) This Amendment contains the entire agreement of the parties
with respect to its subject matter and all prior negotiations, discussions,
representations, agreements and understandings heretofore had among the parties
with respect thereto are merged herein.
(c) This Amendment may be executed in duplicate counterparts, each
of which shall be deemed an original and all of which, when taken together,
shall constitute one and the same instrument.
(d) This Amendment shall not be binding upon Landlord or Tenant
unless and until Landlord shall have delivered a fully executed counterpart of
this Amendment to Tenant.
(e) This Amendment shall be binding upon and inure to the benefit
of Landlord and Tenant and their successors and permitted assigns.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this
Amendment as of the day and year first above written.
LANDLORD:
NEW YORK CITY DISTRICT COUNCIL OF
CARPENTERS PENSION FUND
By:
--------------------------------
Name:
Title:
By:
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Name:
Title:
TENANT:
INTERWORLD CORPORATION
By:
--------------------------------
Name:
Title:
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