AGREEMENT OF LEASE
BETWEEN
THE 110 WALL COMPANY,
OWNER
AND
KHAN, XXXXXXX & COMPANY, INC.,
TENANT
PREMISES
ENTIRE 00XX XXXXX
000 XXXX XXXXXX
XXX XXXX, XXX XXXX
DATED AS OF 2/29, 1996
TABLE OF CONTENTS
ARTICLE 1 Demised Premises, Term, Rents
ARTICLE 2 Use and Occupancy
ARTICLE 3 Alterations
ARTICLE 4 Ownership of Improvements
ARTICLE 5 Repairs
ARTICLE 6 Compliance With Laws
ARTICLE 7 Subordination, Attornment, Etc.
ARTICLE 8 Property Loss, Etc.
ARTICLE 9 Destruction-Fire or Other Casualty
ARTICLE 10 Eminent Domain
ARTICLE 11 Assignment and Subletting
ARTICLE 12 Existing Conditions/Owner's Initial Work
ARTICLE 13 Access to Demised Premises
ARTICLE 14 Vault Space
ARTICLE 15 Certificate of Occupancy
ARTICLE 16 Default
ARTICLE 17 Remedies
ARTICLE 18 Damages
ARTICLE 19 Fees and Expenses; Indemnity
ARTICLE 20 Entire Agreement
ARTICLE 21 End of Term
ARTICLE 22 Quiet Enjoyment
ARTICLE 23 Escalation
ARTICLE 24 No Waiver
ARTICLE 25 Mutual Waiver of Trial by Jury
ARTICLE 26 Inability to Perform
ARTICLE 27 Notices
ARTICLE 28 Partnership Tenant
ARTICLE 29 Utilities and Services
ARTICLE 30 Table of Contents, Etc.
ARTICLE 31 Miscellaneous Definitions, Severability and Interpretation Provisions
ARTICLE 32 Adjacent Excavation
ARTICLE 33 Building Rules
ARTICLE 34 Broker
ARTICLE 35 Security
ARTICLE 36 Arbitration, Etc.
ARTICLE 37 Parties Bound
SCHEDULE A Building Rules
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LEASE dated as of the 29th day of February, 1996, between THE 110 WALL
COMPANY, a New York partnership having its principal office at 000 Xxxx
Xxxxxx, Xxxxxxx of Manhattan, City, County, and State of New York, as
landlord (referred to as "Owner"), and KHAN, XXXXXXX & COMPANY, INC., a New
York corporation, having its principal office at 00 Xxxxx Xxxx Xxxxx,
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000, as tenant (referred to as "Tenant").
W I T N E S S E T H:
Owner and Tenant hereby covenant and agree as follows:
ARTICLE 1
DEMISED PREMISES, TERM, RENTS
SECTION 1.01. DEMISED PREMISES: Owner hereby leases to Tenant and Tenant
hereby hires from Owner the entire twenty-fourth (24th) floor in the building
known as 000 Xxxx Xxxxxx, in the Borough of Manhattan, City of New York (said
building is referred to as the "Building", and the Building together with the
plot of land upon which it stands is referred to as the "Real Property"), at
the annual rental rate or rates set forth in Section 1.03, and upon and
subject to all of the terms, covenants and conditions contained in this
Lease. The premises leased to Tenant, together with all appurtenances,
fixtures, improvements, additions and other property attached thereto or
installed therein at the commencement of, or at any time during, the term of
this Lease, other than Tenant's Personal Property (as defined in Article 4),
are referred to, collectively, as the "Demised Premises".
SECTION 1.02. DEMISED TERM: A. The Demised Premises are leased for a term
(referred to as the "Demised Term") to commence on the execution and delivery
of this Lease and to end on August 31, 2001, unless the Demised Term shall
sooner terminate pursuant to any of the terms, covenants or conditions of
this Lease or pursuant to law.
B. The date upon which the Demised Term shall commence pursuant to
Subsection A of this Section is referred to as the "Commencement Date",
and the date fixed pursuant to said Subsection A as the date upon which
the Demised Term shall end is referred to as the "Expiration Date".
C. Tenant waives any right to rescind this Lease under Section 223-a of
the New York Real Property Law or any successor statute of similar import
then in force and further waives the right to recover any damages which
may result from Owner's failure to deliver possession of the Demised
Premises on the date set forth in Subsection A of this Section, or in any
notice given pursuant to Subsection B of this Section, for the
commencement of the Demised Term.
D. After the determination of the Commencement Date, Tenant agrees, upon
demand of Owner, to execute, acknowledge and deliver to Owner, an
instrument, in form satisfactory to Owner, setting forth said Commencement
Date and the Expiration Date.
SECTION 1.03. FIXED RENT: A. The Lease is made at the following annual
rental rates (referred to as "Fixed Rent"):
1. SEVENTEEN THOUSAND FIVE HUNDRED AND 00/100 ($17,500.00) DOLLARS
with respect to the period referred to as the "First Rent Period" from
the Commencement Date to and including August 31, 1996; and
2. ONE HUNDRED FIFTY-SEVEN THOUSAND FIVE HUNDRED AND 00 100 ($157,500.00)
DOLLARS with respect of the remainder of the Demised Term (referred to
as the "Section Rent Period").
B. The Fixed Rent, any increases in the Fixed Rate and any additional
rent payable pursuant to the provisions of this Lease shall be payable by
Tenant to Owner at its office (or at such other place as Owner may
designate in a notice to Tenant) in lawful money of the United States
which shall be legal tender in payment of all debts and dues, public and
private, at the time of payment or by Tenant's good check drawn on a bank
or trust company whose principal office is located in New York City and
which is a member of the New York Clearinghouse Association, without prior
demand therefor and without any offset or deduction whatsover except as
otherwise specifically provided in this Lease. The Fixed Rent shall be
payable in equal monthly installments in advance, on the first (1st) day
of each month during the Demised Term (except as otherwise provided in
Subsection C of this Section) as follows:
1. ONE THOUSAND FOUR HUNDRED FIFTY-EIGHT AND 33/100 ($1,458.33) DOLLARS
with respect to the First Rent Period; and
2. THIRTEEN THOUSAND ONE HUNDRED TWENTY-FIVE AND 00/100 ($13,125.00) with
respect to the Second Rent Period.
C. The sum of ONE THOUSAND FOUR HUNDRED FIFTY-EIGHT AND 33/100
($1,458.33) DOLLARS, representing the installment of Fixed Rent for the
month of March, 1996, is due and payable at the time of execution and
delivery of this Lease.
D. If Tenant shall use or occupy all or any part of the Demised Premises
for the conduct of business prior to the Commencement Date, such use or
occupancy shall be deemed to be under all of the terms, covenants and
conditions of this Lease, including, without limitation, the covenant to
pay Fixed Rent for the period from the commencement of said use or
occupancy to and including the date immediately preceding the Commencement
Date, without, however, affecting the Expiration Date. The provisions of
the foregoing sentence shall not be deemed to give to Tenant any right to
use or occupy all or any part of the Demised Premises prior to the
Commencement Date without the consent of Owner.
SECTION 1.04. TENANT'S GENERAL COVENANT: Tenant covenants (i) to pay the
Fixed Rent, any increases in the Fixed Rent, and any additional rent payable
pursuant to the provisions of this Lease, and (ii) to observe and perform,
and to permit no violation of, the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed.
SECTION 1.05. RENT HOLIDAY: If the Commencement Date shall occur prior to
March 1, 1996, then Tenant shall be entitled to a rent holiday and shall not
be required to pay any portion of the Fixed Rent and any increases therein
pursuant to the provisions of Articles 23 and 29 with respect to the period
from the Commencement Date to and including February 29, 1996, but during
such period Tenant shall otherwise be required to comply with all of the
other terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed.
ARTICLE 2
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USE AND OCCUPANCY
SECTION 2.01. GENERAL COVENANT OF USE: Tenant shall use and occupy the
Demised Premises for the following purpose: executive and general offices of
Tenant.
SECTION 2.02. NO ADVERSE USE: Tenant shall not use or occupy, or permit
the use or occupancy of, the Demised Premises or any part thereof, for any
purpose other than the purpose specifically set forth in Section 2.01, or in
any manner which, in Owner's judgment, (a) shall adversely affect or
interfere with (i) any services required to be furnished by Owner to Tenant
or to any other tenant or occupant of the Building, or (ii) the proper and
economical rendition of any such service, or (iii) the use or enjoyment of
any part of the Building by any other tenant or occupant, or (b) shall tend
to impair the character or dignity of the Building.
ARTICLE 3
ALTERNATIONS
SECTION 3.01. GENERAL ALTERNATION COVENANTS: Tenant shall not make or
perform, or permit the making or performance of, any alternations,
installations, decorations, improvements, additions or other physical changes
in or about the Demised Premises (referred to collectively, as "Alterations"
and individually as an "Alteration") without Owner's prior consent in each
instance. Owner agrees not unreasonably to withhold its consent to any
non-structural Alterations proposed to be made by Tenant to adapt the Demised
Premises for Tenant's business purposes. Owner agrees that Tenant may,
without Owner's prior consent, make non-structural Alterations in the Demised
Premises other than Tenant's Initial Installation (as defined in Section
3.08) the estimated cost of which in an independent architect's opinion
constituting a single project shall not exceed Fifty Thousand and 00/100
($50,000.00) Dollars and which shall not adversely affect the electrical,
plumbing and heating, ventilation and air conditioning systems in the
Building or any portion of the Building outside of the Demised Premises.
Notwithstanding the foregoing provisions of this Section or Owner's consent
to any Alterations, all Alternations and shall be made and performed in
conformity with and subject to the following provisions:
A. All Alterations shall be made and performed at Tenant's sole cost and
expense and at such time and in such manager as Owner may, from time to
time, designate:
B. No Alteration shall adversely affect the structural integrity of the
Building;
C. Alterations shall be made only by contractors or mechanics approved by
Owner, such approval not unreasonly to be withheld (notwithstanding the
foregoing, all Alterations requiring mechanics in trades with respect to
which Owner has adopted or may hereafter adopt a list or lists of approved
contractors shall be made only by contractors selected by Tenant from such
list or lists);
D. No Alteration shall affect any part of the Building other than the
Demised Premises or adversely affect any service required to be furnished
by Owner to Tenant or to any other tenant or occupant of the Building
(including, without limitation, the Building-wide standard systems
required to provide elevator, heat, ventilation, air-conditioning and
electrical and plumbing services in the Building);
E. No Alteration shall reduce the value or utility of the Building or any
portion thereof;
F. No Alternation shall affect the Certificate of Occupancy for the
Building or the Demised Premises;
G. No Alteration shall affect the outside appearance of the Building or
the color or style of any venetian blinds (except that Tenant may remove
any venetian blinds provided that they are promptly replaced by Tenant
with blinds of a similar type, material and color);
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H. All business machines and mechanical equipment shall be placed and
maintained by Tenant in settings sufficient. In Owner's judgment, to
absorb and prevent vibration, noise and annoyance to other tenants or
occupants of the Building:
I. Tenant shall submit to Owner detailed plans and specifications stamped
by Tenant's architect (including layout, architectural, mechanical and
structural drawings) for each proposed Alteration and shall not commence
any such Alteration without first obtaining Owner's approval of such plans
and specifications and following the completion of each Alteration. Tenant
shall submit to Owner a computerized "as built" drawing file for the
Demised Premises (or if the Demised Premises comprise more than one (1)
floor, for each floor of the Demised Premises being altered); such file
will be in DXF format and contain, on a separate layer, all ceiling-height
partitions and doors within the Demised Premises (or if the Demised
Premises comprise more than one (1) floor, within each floor of the
Demised Premises being altered);
J. Prior to the commencement of each proposed Alteration. Tenant shall
have procured and paid for and exhibited to Owner, so far as the same may
be required from time to time, all permits, approvals and authorizations
of all Governmental Authorities (as defined in Section 6.01.) having or
claiming jurisdiction;
K. Prior to the commencement of each proposed Alteration. Tenant shall
furnish to Owner duplicate original policies of workmen's compensation
insurance covering all persons to be employed in connection with such
Alteration, including those to be employed by all contractors and
subcontractors, and of comprehensive public liability insurance (including
property damage coverage) in which Owner, its agents, the holder of any
Mortgage (as defined in Section 7.01.) and any lessor under any Superior
Lease (as defined in Section 7.01.) shall be named as parties insured,
which policies shall be issued by companies, and shall be in form and
amounts, satisfactory to Owner and shall be maintained by Tenant until the
completion of such Alteration.
L. In the event Owner or its agents employ any independent architect or
engineer or examine any plans or specifications submitted by Tenant to
Owner in connection with any proposed Alteration, Tenant agrees to pay to
Owner a sum equal to any reasonable fees incurred by Owner in connection
therewith.
M. All fireproof wood test reports, electrical and air conditioning
certificates, and all other permits, approvals and certificates required
by all Governmental Authorities shall be timely obtained by Tenant and
submitted to Owner;
N. All Alterations, once commenced, shall be made promptly and in a good
and workmanlike manner;
O. Notwithstanding Owner's approval of plans and specifications for any
Alteration, all Alterations shall be made and performed in full compliance
with all Legal Requirements (as defined in Section 6.01) and with all
applicable rules, orders, regulations and requirements of the New York
Board of Fire Underwriters and the New York Fire Insurance Rating
Organization or any similar body;
P. All Alterations shall be made and performed in accordance with the
Building rules and Building Rules for Alterations;
Q. All materials and equipment to be installed, incorporated or located
in the Demised Premises as a result of all Alterations shall be new and
first quality;
R. No materials or equipment shall be subject to any lien, encumbrance,
chattel mortgage or title retention or security agreement of any kind;
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S. Tenant, before commencement of each Alteration, shall furnish to Owner
a performance bond or other security satisfactory to Owner, in a amount at
least equal to the estimated cost of such Alteration, guaranteeing the
performance and payment thereof.
T. Not Alteration shall be commenced unless any preceding Alteration
shall have been fully paid for and proof of such payment furnished to
Owner;
U. All Alterations in or to the electrical facilities in or serving the
Demised Premises shall be subject to the Provisions of Subsection C(1) of
Section 29.05 (relating to increases in the Fixed Rent); and
V. Following the completion of each Alteration. Tenant, at Tenant's
expense, shall obtain certificates of final approval of such Alteration
required by any Governmental Authority and shall furnish Owner with copies
thereof.
W. Tenant agrees that Tenant will not install, affix, add or paint in or
on, nor permit, any work of visual art (as defined in the Federal Visual
Artists' Rights Act of 1990 or any successor law of similar import) or
other Alteration to be installed in or on, or affixed, added to, or
painted on, the interior or exterior of the Demised Premises, or any part
thereof, including, but not limited to, the walls, floors, ceilings,
doors, windows, fixtures and on land included as part of the Demised
Premises, which work of visual art or other Alteration would, under the
provisions of the Federal Visual Artists' Rights Act of 1990, or any
successor law of similar import, require the consent of the author or
artist of such work or alteration before the same could be removed,
modified, destroyed or demolished.
SECTION 3.02. NO CONSENT TO CONTRACTOR/NO MECHANICS LIEN: Nothing in this
Lease shall be deemed or construed in any way as constituting the consent or
request of Owner, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialmen, for the performance of any
labor or the furnishing of any material for any specific Alteration to, or
repair of, the Demised Premises, the Building, or any part of either. Any
mechanic's or other lien filed against the Demised Premises or the Building
or the Real Property for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant or any person claiming through or
under Tenant or based upon ay act or omission or alleged act or omission of
Tenant or any such person shall be discharged by Tenant, at Tenant's sole
cost and expense, with ten (10) days after the filing of such lien.
SECTION 3.03. LABOR HARMONY: Tenant shall not, at any time prior to or
during the Demised Term, directly or indirectly employ, or permit the
employment of, any contractor, mechanic or laborer in the Demised Premises,
whether in connection with any Alteration or otherwise, if such employment
will interfere or cause any conflict with other contractors, mechanics, or
laborers engaged in the construction, maintenance or operation of the
Building by Owner, Tenant or others. In the event of any such interference or
conflict. Tenant, upon demand of Owner, shall cause all contractors,
mechanics or laborers causing such interference or conflict to leave the
Building immediately.
SECTION 3.04. COMPLIANCE WITH FIRE SAFETY: Without in any way limiting the
generality of the provisions of Section 3.01, all Alterations shall be made
and performed in full compliance with all standards and practices adopted by
Owner for fire safety in the Building. No Alteration shall affect all or any
part of any Class E Fire Alarm and Communication system installed in the
Demised Premises, except that in connection with any such Alteration Tenant
may relocate certain components of such system, provided (i) such relocation
shall be performed in a manner first approved by Owner, (ii) the new location
of any such component shall be first approved by Owner, (iii) prior to any
such relocation Tenant shall submit to Owner detailed plans and
specifications therefor which shall be first approved by Owner and (iv) Owner
shall have the election of relocation such components either by itself or by
its contractors, in which event all expenses incurred by Owner shall be
reimbursed by Tenant upon
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demand of Owner, as additional rent.
SECTION 3.05. SPRINKLERS: In the event that Tenant performs any
Alterations in the Demised Premises, Tenant, as part of such Alterations,
shall be required to install a sprinkler system in the Demised Premises and
in connection therewith the following provisions of this Section shall apply:
(i) such sprinkler system shall comply with all applicable laws, orders,
rules and regulations; (ii) the supplying and installing of any such
sprinkler system shall be made in accordance with the provisions of this
Lease, including but not limited to the provisions of this Article and
Article 6 and the type, brand, location and manner of installation of such
sprinkler system shall be subject to Owner's prior approval; and (iii) Tenant
shall make all repairs and replacements, as and when necessary, to such
sprinkler system and any replacements thereof. Notwithstanding the aforesaid
provisions of this Section, Owner shall have the election of supplying and
installing such sprinkler system either by itself or by its agents or
contractors, in which event all costs and expenses incurred by Owner in
connection with supplying and installing such sprinkler system and any
repairs or replacements of such sprinkler system and any replacements thereof
made by Owner, at Owner's election, shall be paid by Tenant to Owner within
ten (10) days next following the rendition of a statement thereof by Owner to
Tenant. In addition to paying all costs and expenses in connection with the
supplying and installing of such sprinkler system, Tenant shall pay to Owner,
for each floor of the Building on which any portion of the Demised Premises
is located, a fee equal to Tenant's pro rata share of all of the costs and
expenses incurred by Owner, if any, in supplying and installing a "sprinkler
loop" on such floor which pro rata share shall be a fraction in which the
numerator shall be the number of rentable square feet of that portion of the
Demised Premises located on such floor and the denominator shall be the
number of rentable square feet on such floor, provided however, that
notwithstanding anything contained in this Section to the contrary, Owner
shall have no obligation to install such "sprinkler loop" on any floor of the
Building which shall be entirely demised to Tenant. Such fee shall be payable
to Owner within ten (10) days next following the rendition of a statement
thereof by Owner to Tenant. Notwithstanding anything contained in this Lease
to the contrary, such sprinkler system, or any replacement thereof and any
installments in connection therewith, whether made by Tenant or Owner, shall
upon expiration or sooner termination of the Demised Term be deemed the
property of Owner.
SECTION 3.06. ASBESTOS OR OTHER HAZARDOUS MATERIAL: A. In the event that,
at any time during the Demised Term, in connection with any Alterations
proposed to be performed by Tenant in the Demised Premises Tenant is unable
to obtain a New York City Department of Environmental Protection Form ACP5
dated 10/88 (or any successor form), signed by a certified asbestos
investigator, or any other form or approval required by Federal, State,
County or Municipal authorities, indicating that said Alterations do not
constitute an asbestos project. Owner agrees, upon notice from Tenant to such
effect, to perform such work as shall be required to enable Tenant to obtain
any such form or approval.
B. If any laws, orders, rules or regulations of any Federal, State,
County or Municipal authority require that any asbestos or other hazardous
material contained in or about the Demised Premises be removed or dealt
with in any particular manner, then it shall be Owner's obligation, at
Owner's expense, to remove or so deal with such asbestos or other
hazardous material in accordance with such laws, orders, rules and
regulations.
C. Notwithstanding the provisions of subsections A and B of this Section,
in the event any work performed by Owner pursuant to the provisions of
either or both of such subsections is in any way disturbed or damaged by
Tenant or any person claiming through or under Tenant, or asbestos or
other hazardous material is installed in the Demised Premises by or on
behalf of Tenant, or any person claiming through or under Tenant, Owner
shall have no responsibility in connection therewith and no obligation to
perform any work with respect thereto, but it shall be Tenant's
obligation, at Tenant's expense, to (i) perform such work as shall be
required to enable Tenant to obtain any form or approval referred to in
subsection A, and (ii) remove or so deal with such asbestos or other
hazardous material in accordance with all such laws, orders, rules and
regulations referred to in subsection B. Any work required to be performed
by Tenant pursuant to the provisions of the foregoing sentence is referred
to as the "Compliance Work". In the event Tenant is required to perform
any Compliance Work then, notwithstanding anything to the contrary
contained in this subsection C, Owner, at Owner's election, shall have the
option to itself perform any Compliance Work and, in such event, Tenant
shall pay to Owner all of Owner's costs in connection therewith within ten
(10) days next following the rendition of a statement thereof by Owner to
Tenant.
SECTION 3.07. DISPUTE RESOLUTION: Any dispute with respect to the
reasonability of any failure or refusal of Owner to grant its consent or
approval to any request for such consent or approval pursuant to the
provisions of Section 3.01 with respect to which request Owner has agreed, in
such Section not unreasonably to withhold such consent or approval, shall be
determined by arbitration in accordance with the provisions of Article 36.
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SECTION 3.08. FIRE ALARM AND COMMUNICATION SYSTEM CONNECTION FEES: In the
event that Tenant, pursuant to the provisions of this Lease, including, but
not limited to, the provisions of this Article 3 and Article 6, connects any
of the following equipment to any Class E Fire Alarm and Communication system
installed in the Demised Premises, Tenant shall pay to Owner as a one (1)
time connection fee the following sums set forth opposite the equipment
listed below (which sums shall be subject to increases due to increases in
the cost to Owner of operating and maintaining such Class E Fire Alarm and
Communication system over such costs on the date of this Lease):
A. Speakers in excess of 4 per floor of the Demised Premises (or
if the Demised Premises contain less than one (1) floor, in
excess of four in the Demised Premises) $500.00 per device
B. Strobe Lights (single unit) $100.00 per device
C. Combination Speaker/Strobe light $250.00 per device
D. Duct Detectors (supplementary air conditing system) $500.00 per point
E. Smoke Detectors (multi-purpose) $500.00 per point
F. Preaction Sprinkler System:
waterflow $500.00 per point
tamper $500.00 per point
X. Xxxxxx Phone (additional) $1,000.00 per unit
H. Fail Safe Door Release $250.00 per connection
ARTICLE 4
OWNERSHIP OF IMPROVEMENTS
SECTION 4.01. GENERAL RIGHTS OF OWNER AND TENANT: All appurtenances,
fixtures, improvements, additions and other property attached to or installed
in the Demised Premises, whether by Owner or Tenant or others, and whether at
Owner's expense, or Tenant's expense, or the joint expense of Owner and
Tenant, shall be and remain the property of Owner, except that any such
fixtures, improvements, additions and other property installed at the sole
expense of Tenant with respect to which Tenant has not been granted any
credit or allowance by Owner, and which are removable without material damage
to the Demised Premises shall be and remain the property of Tenant and are
referred to as "Tenant's Personal Property". Any replacements of any property
of Owner, whether made at Tenant's expense or otherwise, shall be and remain
the property of Owner.
ARTICLE 5
REPAIRS
SECTION 5.01. TENANT'S REPAIR OBLIGATIONS: Tenant shall take good care of
the Demised Premises (including, but not limited to, any Class E Fire Alarm
and Communication system and any sprinkler system installed therein and any
installations made or equipment installed therein as a result of any
requirement of New York City Local Law #16 of 1984 or any successor law or
like import) and, at Tenant's sole cost and expense, shall make all repairs
and replacements, structural and otherwise, ordinary and extraordinary,
foreseen and unforeseen as and when needed to preserve the Demised Premises
(including, but not limited to, any Class E Fire Alarm and Communication
system and any sprinkler system installed therein and any installations made
or equipment installed therein as a result of any requirement of New York
City Local Law #16 of 1984 or any successor law of like import) in good and
safe working order and in first class repair and condition, except that
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Tenant shall not be required to make any repairs or replacements to the
Demised Premises unless necessitiated or occasioned by the improper acts,
improper omissions or negligence of Tenant or any person claiming through or
under Tenant or any of their servants, employees, contractors, agents,
visitors or licensees, or by the use or occupancy or manner of use or
occupancy of the Demised premises by Tenant or any such person (in
contradistinction to the mere use and occupancy of the Demised Premises for
the purpose set forth in Section 2.01). Without affecting Tenant's
obligations set forth in the preceding sentence, Tenant, at Tenant's sole
cost and expense, shall also (i) make all repairs and replacements, and
perform all maintenance as and when necessary, to the lamps, tubes, ballasts,
and starters in the lighting fixtures installed in the Demised Premises, (ii)
make all repairs and replacements, as and when necessary, to Tenant's
Personal Property and to any Alterations made or performed by or on behalf of
Tenant or any person claiming through or under Tenant, and (iii) if the
Demised Premises shall include any space on any ground, street, mezzanine or
basement floor in the Building, make all replacements, as and when necessary,
to all windows and plate and other glass in, on or about such space, and
obtain and maintain, throughout the Demised Term, plate glass insurance
policies issued by companies, and in form and amounts, satisfactory to Owner,
in which Owner, its agents and any lessor under any ground or underlying
lease shall be named as parties insured, and (iv) perform all maintenance and
make all repairs and replacements, as and when necessary, to any air
conditioning equipment, private elevators, escalators, conveyors or
mechanical systems (other than the Building's standard equipment and systems)
which have heretofore been installed in the Demised Premises by Owner, Tenant
or others or which may hereafter be installed by Tenant or by Owner at
Tenant's request. However, the provisions of the foregoing sentence shall not
be deemed to give to Tenant any right to install air conditioning equipment,
elevators, escalators, conveyors or mechanical systems. All repairs and
replacements made by or on behalf of Tenant or any person claiming through or
under Tenant shall be made and performed in conformity with, and subject to
the provisions of Article 3 and shall be at least equal in quality and class
to the original work or installation. The necessity for, and adequacy of,
repairs and replacements pursuant to this Article 5 shall be measured by the
standard which is appropriate for first class office buildings of similar
construction and class in the Borough of Manhattan, City of New York.
ARTICLE 6
COMPLIANCE WITH LAWS
SECTION 6.01. GENERAL COVENANTS: Tenant, at Tenant's sole cost and
expense, shall comply with all Legal Requirements (hereinafter defined) which
shall impose any duty upon Owner or Tenant with respect to the Demised
Premises or the use or occupation thereof, including, but not limited to, the
maintenance of a sprinkler system to serve the Demised Premises or any part
thereof, except that Tenant shall not be required to make any structural
Alterations in order so to comply unless such Alterations shall be
necessitated or occasioned, in whole or in part, by the improper acts,
improper omissions, or negligence of Tenant or any person claiming through or
under Tenant, or any of their servants, employees, contractors, agents,
visitors or licensees, or by the use or occupancy or manner of use or
occupancy of the Demised Premises by Tenant or by any such person. For all
purposes of this Lease the term "Legal Requirements" shall mean all present
and future laws, codes, ordinances, statutes, requirements, orders and
regulations, ordinary and extraordinary, foreseen and unforeseen (including,
but not limited to, the New York State Energy Conservation Construction Code,
New York City Local Laws #5 of 1973, #16 of 1984 and #58 of 1987 and the
Americans with Disabilities Act, and any successor laws of like import) of
any Governmental Authority (hereinafter defined) and all directions,
requirements, orders and notices of violations thereof. For all purposes of
this Lease, the term "Government Authority" shall mean the United States of
America, the State of New York, the County of New York, the Borough of
Manhattan, the City of New York, any political subdivision thereof and any
agency, department, commission, board, bureau or instrumentality of any of
the foregoing, now existing or hereafter created, having jurisdiction over
Owner, Tenant, this Lease or the Real Property or any portion thereof. Any
work or installations made or performed by or on behalf of Tenant or any
person claiming through or under Tenant pursuant to the provisions of this
Article shall be made in conformity with, and subject to the provisions of
Article 3. For the purposes of this Article, the maintenance or repair of the
existing sprinkler system or any Alterations required to comply with Local
Law #5 of 1973, #16 of 1984, #58 of 1987 and the Americans With Disabilities
Act and any successor laws of like import shall be deemed to be a
non-structural Alteration.
SECTION 6.02. TENANT'S COMPLIANCE WITH OWNER'S FIRE INSURANCE: Tenant
shall not do anything, or permit anything to be done, in or about the Demised
Premises which shall (i) invalidate or be in conflict with the provisions of
any fire and/or other insurance policies covering the Building or any
property located therein, or (ii) result in a refusal by fire insurance
companies of good standing to insure the Building or any such property in
amounts reasonably satisfactory to Owner, or (iii) subject Owner to any
liability or responsibility for
8
injury to any person or property by reason of any business operation being
conducted in the Demised Premises, or (iv) cause any increase in the fire
insurance rates applicable to the Building or property located therein at the
beginning of the Demised Term at any time thereafter. Tenant, at Tenant's
expense, shall comply with all present and future rules, orders, regulations
and/or requirements of the New York Board of Fire Underwriters and the New
York Fire Insurance Rating Organization or any similar body and the issuer of
any insurance obtained by Owner covering the Building and/or the Real
Property, whether ordinary or extraordinary, foreseen or unforeseen,
including, but not limited to, the installation and maintenance of a
sprinkler system to serve the Demised Premises or any part thereof, any
requirement that asbestos or other hazardous material be removed or dealt
with in any particular manner and any requirement of New York city Local Law
#5 of 1973, #16 of 1984, #58 of 1987 and the Americans With Disabilities Act
or any successor laws of like import.
SECTION 6.03. FIRE INSURANCE RATES: In any action or proceeding wherein
Owner and Tenant are parties, a schedule or "make up" of rates applicable to
the Building or property located therein issued by the New York Fire
Insurance Rating Organization, or other similar body fixing such fire
insurance rates, shall be conclusive evidence of the facts therein stated and
of the several items and charges in the fire insurance rates then applicable
to the Building or property located therein.
ARTICLE 7
SUBORDINATION, ATTORNMENT, ETC.
SECTION 7.01. LEASE SUBORDINATION: This Lease and all rights of Tenant
under this Lease are, and shall remain, unconditionally subject and
subordinate in all respects to all ground and underlying leases now or
hereafter in effect affecting the Real Property or any portion thereof, and
to all mortgages which may now or hereafter affect such leases or the Real
Property, and to all advances made or hereafter to be made under such
mortgages, and to all renewals, modifications, consolidations, correlations,
replacements and extensions of, and substitutions for, such leases and
mortgages (such leases as above described are referred to herein collectively
as the "Superior Lease" and such mortgages as above described are referred to
herein collectively as the "Mortgage"). The foregoing provisions of this
Section shall be self-operative and no further instrument of subordination
shall be required. In confirmation of such subordination, Tenant shall
execute and deliver promptly any certificate or other instrument which Owner,
or any lessor under any Superior Lease, or any holder of any Mortgage may
request, and Tenant hereby, irrevocably constitutes and appoints Owner and
all such lessors and holders, acting jointly or severally, as Tenant's agent
and attorney-in-fact to execute any such certificate or other instrument for
or on behalf of Tenant. If in connection with obtaining financing with
respect to the Building, the Real Property, or the interest of the leasee
under any Superior Lease, any recognized lending institution shall request
reasonable modifications
9
of this Lease as a condition of such financing. Tenant covenants not
unreasonably to withhold or delay its agreement to such modifications,
provided that such modifications do not materially increase the obligations,
or materially and adversely affect the rights, of Tenant under this Lease. No
act or failure to act on the part of Owner which would entitle Tenant under
the terms of this Lease, or by law, to be relieved of Tenant's obligations
hereunder or to terminate this Lease shall result in a release or termination
of such obligations or a termination of this Lease unless (i) Tenant shall
have first given written notice of Owner's act or failure to act to the
holder or holders of any Mortgage and or the lessor under any Superior Lease
of whom Tenant has been given written notice, specifying the act or failure
to act on the part of Owner which could or would give basis to Tenant's
rights; and (ii) the holder or holders of such Mortgage and/or the lessors
under any Superior Lease, after receipt of such notice, have failed or
refused to correct or cure the condition complained of within a reasonable
time thereafter, but nothing contained in this sentence shall be deemed to
impose any obligation on any such holder or lessor to correct or cure any
such condition. "Reasonable time" as used above means and includes a
reasonable time to obtain possession of the Building if any such holder or
lessor elects to do so (provided such holder or lessor institutes proceedings
to obtain possession within a reasonable time after notice from Tenant
pursuant to the foregoing provisions and conducts such proceedings with
reasonable diligence) and a reasonable time after so obtaining possession to
correct or cure the condition if such condition is determined to exist
(provided such holder or lessor commences said cure within ten (10) days
after obtaining possession and prosecutes the work required to cure with
reasonable diligence).
SECTION 7.02. TENANT ATTORNMENT: If, at any time prior to the expiration
of the Demised Term, any Superior Lease under which Owner then shall be the
lessee shall terminate or be terminated for any reason, or the holder of any
Mortgage comes into possession of the Real Property or the Building or the
estate created by any Superior Lease by a receiver or otherwise. Tenant
agrees, at the election and upon demand of any owner of the Real Property, or
of the holder of any Mortgage so in possession, or of any lessee under any
Superior Lease covering the premises which include the Demised Premises, to
attorn, from time to time, to any such owner, holder, or lessee, upon the
then executory terms and conditions of this Lease, for the remainder of the
term originally demised in this Lease, provided that such owner, holder or
lessee, as the case may be, shall then be entitled to possession of the
Demised Premises. The provisions of this Section shall enure to the benefit
of any such owner, holder, or lessee, shall apply notwithstanding that, as a
matter of law, this Lease may terminate upon the termination of any Superior
Lease, shall be self-operative upon any such demand, and no further
instrument shall be required to give effect to said provisions. Tenant,
however, upon demand of any such owner, holder, or lessee, agrees to execute,
from time to time, instruments in confirmation of the foregoing provisions of
this Section, satisfactory to any such owner, holder, or lessee,
acknowledging such attornment and setting forth the terms and conditions of
its tenancy. Nothing contained in this Section shall be construed to impair
any right otherwise exercisable by any such owner, holder, or lessee.
Notwithstanding anything to the contrary set forth in this Article no such
owner, holder or lessee shall be bound by (i) any payment of any installment
of Fixed Rent or increases therein or any additional rent which may have been
made more than thirty (30) days before the due date of such installment
(except prepayments in the nature of security for the performance of Tenant's
obligations under this Lease), or (ii) any amendment or modification to this
Lease which is made without its consent.
SECTION 7.03. TENANT ESTOPPED CERTIFICATE: From time to time, within seven
(7) days next following Owner's request, Tenant shall deliver to Owner a
written statement executed and acknowledged by Tenant, in form satisfactory
to Owner, (i) stating that this Lease is then in full force and effect and
has not been modified (or if modified, setting forth the specific nature of
all modifications), and (ii) setting forth the date to which the Fixed Rent
has been paid, and (iii) stating whether or not, to the best knowledge of
Tenant, Owner is in default under this Lease, and, if Owner is in default,
setting forth the specific nature of all such defaults and (iv) stating that
Tenant has accepted and occupied the Demised Premises and all improvements
required to be made by Owner pursuant to the provisions of this Lease, have
been made, if such be the case. Tenant acknowledges that any statement
delivered pursuant to this Section may be relied upon by any purchaser or
owner of the Building, or of the Real Property, or any part thereof, or of
Owner's interest in the Building or the Real Property or any Superior Lease,
or by the holder of any Mortgage, or by any assignee of the holder of any
Mortgage, or by any lessor under any Superior Lease.
10
SECTION 7.04 OWNER ASSIGNMENT OF LEASE AND RENTS: If Owner assigns its
interest in this Lease, or the rents payable hereunder, to the holder of any
Mortgage or the lessor under any Superior Lease whether the assignment shall
be conditional in nature or otherwise. Tenant agrees that (a) the execution
thereof by Owner and the acceptance by such holder or lessor shall not be
deemed an assumption by such holder or lessor or any of the obligations of
the Owner under this Lease unless such holder or lessor shall, by written
notice sent to assumed Owner's obligations hereunder only upon the
foreclosure of such holder's Mortgage or the termination of such lessor's
Superior Lease and the taking of possession of the Demised Premises by such
holder or lessor as the case may be.
ARTICLE 8
PROPERTY LOSS, ETC.
SECTION 8.01. Any Building employee to whom any property shall be
entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Owner nor Owner's agents
shall be liable for any loss of or damage to any such property by theft or
otherwise. Neither (i) the performance by Owner, Tenant or others of any
decorations, repairs, alterations, additions or improvements in or to the
Building or the Demised Premises, nor (ii) the failure of Owner or others to
make any such decorations, repairs, alterations, additions or improvements,
nor (iii) any damage to the Demised Premises or to the property of Tenant,
nor any injury to any persons, caused by other tenants or persons in the
Building, or by operations in the construction of any private, public or
quasi-public work, or by any other cause, nor (iv) any latent defect in the
Building or in the Demised Premises, nor (v) any temporary or permanent
closing, darkening or bricking up of any windows of the Demised Premises for
any reason whatsoever including, but not limited to, Owner's own acts, nor
(vi) any inconvenience or annoyance to Tenant or injury to or interruption of
Tenant's business by reason of any of the events or occurrences referred to
in the foregoing subdivisions (i) through (v), shall constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner, or its
agents, or any Lessor under any Superior Lease, other than such liability as
may be imposed upon Owner by law for Owner's negligence or the negligence of
Owner's agents, servants or employees in the operation or maintenance of the
Building or for the breach by Owner of any express covenant of this Lease on
Owner's part to be performed. Tenant's taking possession of the Demised
Premises shall be conclusive evidence, as against Tenant, that, at the time
such possession was so taken, the Demised Premises and the Building were in
good and satisfactory condition.
ARTICLE 9
DESTRUCTION-FIRE OR OTHER CASUALTY
SECTION 9.01. OWNER'S REPAIR OBLIGATIONS: If the Demised Premises shall be
damaged by fire or other casualty and if Tenant shall give prompt notice to
Owner of such damage, Owner, at Owner's expense shall repair such damage.
However, Owner shall have no obligation to repair any damage to, or to
replace, Tenant's Personal Property or any other property or effects of
Tenant. Except as otherwise provided in Section 9.03, if the entire Demised
Premises shall be rendered untenantable by reason of any such damage, the
Fixed Rent shall xxxxx for the period from the date of such damage to the
date when such damage shall have been repaired, and if only a part of the
Demised Premises shall be so rendered untenantable, the Fixed Rent shall
xxxxx for such period in the proportion which the area of the part of the
Demised Premises so rendered untenantable bears to the total area of the
Demised Premises. However, if, prior to the date when all of such damage
shall have been repaired, any part of the Demised Premises so damaged shall
be rendered tenantable and shall be used or occupied by Tenant or any person
or persons claiming through or under Tenant, then the amount by which the
Fixed Rent shall xxxxx shall
11
be equitably apportioned for the period from the date of any such use or
occupancy to the date when all such damage shall have been repaired. Tenant
hereby expressly waives the provisions of Section 227 of the New York real
Property Law, and of any successor law of like import then in force, and
Tenant agrees that the provisions of this Article shall govern and control in
lieu thereof. Notwithstanding the foregoing provisions of this Section, if,
prior to or during the Demised Term, (i) the Demised Premises shall be
totally damaged or rendered wholly untenantable by fire or other casualty,
and if Owner shall decide not to restore the Demised Premises, or (ii) the
Building shall be so damaged by fire or other casualty that, in Owner's
opinion, substantial alteration, demolition, or reconstruction of the
Building shall be required (whether or not the Demised Premises shall have
been damaged or rendered untenantable), then, in any of such events. Owner,
at Owner's option, may give to Tenant, within ninety (90) days after such
fire or other casualty, a five (5) days' notice of termination of this lease
and, in the event such notice is given, this Lease and the Demised Term shall
come to an end and expire (whether or not said term shall have commenced)
upon the expiration of said five (5) days with the same effect as if the date
of expiration of said five (5) days were the Expiration Date, the Fixed Rent
shall be apportioned as of such date and any prepaid portion of Fixed Rent
for any period after such date shall be refunded by Owner to Tenant.
SECTION 9.02. OWNER'S SUBROGATION WAIVER PROVISIONS: Owner shall attempt
to obtain and maintain, throughout the Demised Term, in Owner's fire
insurance policies covering the Building, provisions to the effect that such
policies shall not be invalidated should the insured waive, in writing, prior
to a loss, any or all right of recovery against any party for loss occurring
to the Building. In the event that at any time Owner's fire insurance
carriers shall exact an additional premium for the inclusion of such or
similar provisions. Owner shall give Tenant notice thereof. In such event, if
Tenant agrees, in writing, to reimburse Owner for such additional premium for
the remainder of the Demised Term. Owner shall require the inclusion of such
or similar provisions by Owner's fire insurance carriers. As long as such or
similar provisions are included in Owner's fire insurance policies then in
force, Owner hereby waives (i) any obligation on the part of Tenant to make
repairs to the Demised Premises necessitated or occasioned by fire or other
casualty that is an insured risk under such policies, and (ii) any right of
recovery against Tenant, any other permitted occupant of the Demised
Premises, and any of their servants, employees, agents or contractors, for
any loss occasioned by fire or other casualty which is an insured risk under
such policies. In the event that at any time Owner's fire insurance carriers
shall not include such or similar provisions in Owner's fire insurance
policies, the waivers set forth in the foregoing sentence shall, upon notice
given by Owner to Tenant, be deemed of no further force or effect.
SECTION 89.03. TENANT NEGLIGENCE: Except to the extent expressly provided
in Section 9.02, nothing contained in this Lease shall relieve tenant of any
liability to Owner or to its insurance carriers which Tenant may have under
law or the provisions of this Lease in connection with any damage to the
Demised Premises or the Building caused by fire or other casualty.
Notwithstanding the provisions of Section 9.01, if any such damage, occurring
after any date when the waivers set forth in Section 9.02 are no longer in
force and effect, is due to the fault or neglect to Tenant, any person
claiming through or under Tenant, or nay of their servants, employees,
agents, contractors, visitors or licensees, then there shall be no abatement
of Fixed Rent by reason of such damage.
SECTION 9.04. TENANT SUBROGATION WAIVER PROVISIONS: Tenant acknowledges
that it has been advised that Owner's insurance policies do not cover
tenant's Personal Property or any other property of Tenant in the Demised
Premises; accordingly, it shall be Tenant's obligation to obtain and maintain
insurance covering its property in the Demised Premises and loss of profits
including, but not limited to, water damage coverage and business
interruption insurance. Tenant shall attempt to obtain and maintain,
throughout the Demised Term, in Tenant's fire and other insurance policies
covering Tenant's Personal Property and other property of Tenant in the
Demised Premises, and Tenant's use and occupancy of the Demised Premises,
and/or Tenant's profits (and shall cause any other permitted occupants of the
Demised Premises to attempt to obtain and maintain, in similar policies),
provisions to the effect that such policies shall not be invalidated should
the insured waive, in writing, prior to a loss, any or all right of recovery
against any party for loss occasioned by fire or other casualty which is an
insured risk under such policies. In the event that at any time the fire
insurance carriers issuing such policies shall exact
12
an additional premium for the inclusion of such or similar provisions. Tenant
shall give Owner notice thereof in such event, if Owner agrees, in writing,
to reimburse Tenant or any person claiming through or under Tenant as the
case may be, for such additional premium for the remainder of the Demised
Term. Tenant shall require the inclusion of such or similar provisions by
such insurance carriers. As long as such or similar provisions are included
in such insurance policies then in force. Tenant hereby waives (and agrees to
cause any other permitted occupants of the Demised Premises to execute and
deliver to Owner written instruments waiving) any right of recovery against
Owner, any lessors under any Superior Leases, the holders of any Mortgage,
and all other tenants or occupants of the Building, and any servants,
employees, agents or contractors of Owner, or of any such lessor, or holder
or any such other tenants or occupants, for any loss occasioned by fire or
other casualty which is an insured risk under such policies. In the event
that at any time such insurance carriers shall not include such or similar
provisions in any such insurance policy, the waiver set forth in the
foregoing sentence (or in any written instrument executed by any other
permitted occupant of the Demised Premises) shall, upon notice given by
Tenant to Owner, be deemed of no further force or effect with respect to any
insured risks under such policy from and after the giving of such notice.
During any period while any such waiver or right of recovery is in effect,
Tenant, or any other permitted occupant of the Demised Premises, as the case
may be, shall look solely to the proceeds of such policies to compensate
Tenant or such other permitted occupant for any loss occasioned by fire or
other casualty which is an insured risk under such policies.
ARTICLE 10
EMINENT DOMAIN
SECTION 10.01. TAKING OF THE DEMISED PREMISES: If the whole of the Demised
Premises shall be acquired for any public or quasi-public use or purpose,
whether by condemnation or by deed in lieu of condemnation, this Lease and
the Demised Term shall end as of the date of the vesting of title with the
same effect as if said date were the Expiration Date. If only a part of the
Demised Premises shall be so acquired or condemned then, except as otherwise
provided in this Section, this Lease and the Demised Term shall continue in
force and effect but, from and after the date of the vesting of title, the
Fixed Rent shall be reduced in the proportion which the area of the part of
the Demised Premises so acquired or condemned bears to the total area of the
Demised Premises immediately prior to such acquisition or condemnation. If
only a part of the Real Property shall be so acquired or condemned, then (i)
whether or not the Demised Premises shall be affected thereby, Owner, at
Owner's option may give to Tenant, within sixty (60) days next following the
date upon which Owner shall have received notice of vesting of title, a five
(5) days' notice of termination of this Lease, and (ii) if the part of the
Real Property so acquired or condemned shall contain more than ten (10%)
percent of the total area of the Demised Premises immediately prior to such
acquisition or condemnation, or if, by reason of such acquisition or
condemnation. Tenant no longer has reasonable means of access to the Demised
Premises. Tenant, at Tenant's option, may give to Owner, within sixty (60)
days next following the date upon which Tenant shall have received notice of
vesting of title, a five (5) days' notice of termination of this Lease. In
the event any such five (5) days' notice of termination is given, by Owner or
Tenant, this Lease and the Demised Term shall come to an end and expire upon
the expiration of said five (5) days with the same effect as if the date of
expiration of said five (5) days were the Expiration Date. If a part of the
Demised Premises shall be so acquired or condemned and this Lease and the
Demised Term shall not be terminated pursuant to the foregoing provisions of
this Section, Owner, at Owner's expense, shall restore that part of the
Demised Premises not so acquired or condemned to a self-contained rental
unit. In the event of any termination of this Lease and the Demised Term
pursuant to the provisions of this Section, the Fixed Rent shall be
apportioned as of the date of such termination and any prepaid portion of
Fixed Rent for any period after such date shall be refunded by Owner to
Tenant.
SECTION 10.02. CONDEMNATION AWARD OR CLAIMS: In the event of any such
acquisition or condemnation of all or any part of the Real Property, Owner
shall be entitled to receive the entire award for any such acquisition or
condemnation. Tenant shall have no claim against Owner or the condemning
authority for the
13
value of any unexpired portion of the Demised Term and Tenant hereby
expressly assigns to Owner all of its right in and to any such award. Nothing
contained in this Section shall be deemed to prevent Tenant from making a
claim in any condemnation proceedings for the value of any items of Tenant's
Personal Property which are compensable, in law, as trade fixtures.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
SECTION 11.01. GENERAL COVENANT: Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors
and assigns, covenants that, without the prior consent of Owner in each
instance, it shall not (i) assign whether by merger, consolidation or
otherwise, mortgage or encumber its interest in this Lease, in whole or in
part, or (ii) sublet, or permit the subletting of, the Demised Premises or
any part thereof, or (iii) permit the Demised Premises or any part thereof to
be occupied, or used for desk space, mailing privileges or otherwise, by any
person other than Tenant. The sale, pledge, transfer or other alienation of
(a) any of the issued and outstanding capital stock of any corporate Tenant
(unless such stock is publicly traded on a recognized security exchange or
over-the counter market or (b) any interest in any partnership or joint
venture Tenant, however accomplished, and whether in a single transaction or
in a series of related and/or unrelated transactions, shall be deemed for the
purposes of this Section as an assignment of this Lease which shall require
the prior consent of Owner in each instance.
SECTION 11.02. OWNER'S RIGHTS UPON ASSIGNMENT: If Tenant's interest in
this Lease is assigned, whether or not in violation of the provisions of this
Article, Owner may collect rent from the assignee, if the Demised Premises or
any part thereof are sublet to, or occupied by, or used by, any person other
than Tenant, whether or not in violation of this Article, Owner, after
default by Tenant under this Lease, may collect rent from the subtenant, user
or occupant. In either case, Owner shall apply the net amount collected to
the rents reserved in this Lease, but neither any such assignment,
subletting, occupancy, or use, whether with or without Owner's prior consent,
nor any such collection or application, shall be deemed a waiver of any term,
covenant or condition of this Lease or the acceptance by Owner of such
assignee, subtenant, occupant or user as tenant. The consent by Owner to any
assignment, subletting, occupancy or use shall not relieve Tenant from its
obligation to obtain the express prior consent of Owner to any further
assignment, subletting, occupancy or use. If this Lease is assigned to any
person or entity pursuant to any proceeding of the type referred to in
Subsections 16.01(c) and 16.01(d), any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall
be paid or delivered to Owner, shall be and remain the exclusive property of
Owner and shall not constitute property of Tenant or of the estate of Tenant
within the meaning of any proceeding of the type referred to in Subsections
16.01(c) and 16.01(d). Any and all monies or other considerations
constituting Owner's property under the preceding sentence not paid or
delivered to Owner shall be held in trust for the benefit of Owner and shall
be promptly paid to or turned over to Owner. Any person or entity to which
this Lease is assigned pursuant to any proceeding of the type referred to in
Subsections 16.01(c) and 16.01(d) shall be deemed without further act or deed
to have assumed all of the obligations arising under this Lease on and after
the date of such assignment. Any such assignee shall execute and deliver to
Owner upon demand an instrument confirming such assumptions. The listing of
any name other than that of Tenant on any door of the Demised Premises or on
any directory or in any elevator in the Building, or otherwise, shall not
operate to vest in the person so named any right or interest in this Lease or
in the Demised Premises, or the Building, or be deemed to constitute, or
serve as a substitute for, any prior consent of Owner required under this
Article, and it is understood that any such listing shall constitute a
privilege extended by Owner which shall be revocable at Owner's will by
notice to Tenant. Tenant agrees to pay to Owner reasonable counsel fees
incurred by Owner in connection with any proposed assignment of Tenant's
interest in this Lease or any proposed subletting of the Demised Premises or
any part thereof. Neither any assignment of Tenant's
14
interest in this Lease nor any subletting, occupancy or use of the Demised
Premises or any part thereof in any person other than Tenant, nor any
collection of rent by Owner from any person other than Tenant as provided in
this Section, nor any application of any such rent as provided in this
Section shall, in any circumstances, relieve Tenant of its obligation fully
to observe and perform the terms, covenants and conditions of this Lease on
Tenant's part to be observed or performed.
SECTION 11.03. SUBLET RIGHTS: A. (1) As long as Tenant is not in default
under any of the terms, covenants or conditions of this Lease on tenant's
part to be observed or performed. Owner agrees not to unreasonably withhold
Owner's prior consent to sublettings by Tenant of all or parts of the Demised
Premises to not more than two (2) subtenants. Each such subletting shall be
for undivided occupancy by the subtenant of that part of the Demised Premises
affected thereby, for the use expressly permitted in this Lease, and at no
time shall there be more than two (2) occupants, including Tenant, in the
Demised Premises.
(2) Without Owner's prior consent. Tenant shall not (a) negotiate or
enter into a proposed subletting with any tenant, subtenant or occupant of
any space in the Building or (b) list or otherwise publicly advertise the
Demised Premises or any part thereof for subletting at a rental lower than
the higher of (i) the Fixed Rent then in effect under this Lease,
allocable to the space sought to be sublet or (ii) the rental at which the
Owner is then offering to rent comparable space in the Building.
(3) At least sixty (60) days prior to any proposed subletting Tenant
shall submit to Owner a statement (the "Proposed Sublet Statement")
containing the name and address of the proposed subtenant, the nature of
the proposed subtenant's business and its current financial status, if
such status is obtained or obtainable by Tenant, and all of the principal
terms and conditions of the proposed subletting including, but not limited
to, the proposed commencement and expiration dates of the term thereof.
Unless the prosed sublet area shall constitute only an entire floor (or
floors), the Proposed Sublet Statement shall be accompanied by a floor
plan delineating the proposed sublet area.
(4) Owner may arbitrarily withhold consent to a proposed subletting if,
(a) in Owner's reasonable judgment, the occupancy of the proposed
subtenant will tend to impair the character or dignity of the Building or
impose any additional burden upon Owner in the operation of the Building,
or (b) the proposed subtenant shall be a person or entity with whom Owner
is then negotiating or discussing to lease space in the Building.
(5) In the event of any dispute between Owner and Tenant as to the
reasonableness of Owner's failure or refusal to consent to any subletting,
such dispute shall be submitted to arbitration in accordance with the
provisions of Article 36.
(6) Any Sublease consented to by Owner must conform to the information
contained in this Proposed Sublet Statement and shall expressly provide
that (a) the subtenant shall obtain provisions in its insurance policies
to the effect that such policies shall not be invalidated should the
insured waive, in writing, prior to a loss, any or all right of recovery
against any party for loss occasioned by fire or other casualty which is
an insured risk under such policies, as set forth in Section 9.04, and (b)
in the event of the termination, re-entry or dispossess of Tenant by Owner
under this Lease. Owner may, at its option, take over all of the right,
title and interest of Tenant, as sublessor under the sublease, and such
subtenant shall, at Owner's option, attorn to Owner pursuant to the then
executory provisions of such sublease, except that Owner shall not (i) be
liable for any act or omission of Tenant under such sublease prior to such
attornment by subtenant, (ii) be subject to any offset which accrued to
such subtenant against Tenant, (iii) be bound by any previous modification
of such sublease or by any previous prepayment of more than one month's
rent unless such modification or prepayment was previously approved by
Owner, (iv) be bound by any covenant to undertake or complete any
construction of the premises, or any portion thereof, demised by such
sublease and (v) be bound by any obligation to make any payment to or on
15
behalf of the subtenant, except for services, repairs, maintenance and
restoration provided for under the sublease to be performed after the date
of such termination, re-entry or dispossess by Owner under this Lease and
to which Owner is expressly required to perform under this Lease with
respect to the subleased space at Owner's expense it being expressly
understood, however, that Owner shall not be bound by any obligation to
make payment to or on behalf of a subtenant with respect to construction
performed by or on behalf of such subtenant in the subleased premises.
Tenant shall reimburse Owner on demand for any costs or expense that may
be incurred by Owner's review of any Proposed Sublet Statement or in
connection with any sublease consented to by Owner, including without
limitation, any reasonable processing fee, reasonable attorneys' fees and
disbursements and the reasonable costs of making investigations as to the
acceptability of the proposed subtenant.
B. Notwithstanding the foregoing provisions of this Section 11.03, Owner
shall have the following rights with respect to each proposed subletting
by Tenant:
(1) In the event Tenant proposes to sublet all or substantially all of
the Demised Premises, Owner, at Owner's option, may give to Tenant, within
sixty (60) days after the submission by Tenant to Owner of the Proposed
Sublet Statement, a notice terminating this Lease on the date (referred to
as the "Earlier Termination Date") immediately prior to the proposed
commencement date of the term of the proposed subletting, as set forth in
such statement, and, in the event such notice is given, this Lease and the
Demised Term shall come to an end and expire on the Earlier Termination
Date with the same effect as if it were the Expiration Date, the Fixed
Rent shall be apportioned as of said Earlier Termination Date and any
prepaid portion of Fixed Rent for any period after such date shall be
refunded by Owner to Tenant; or
(2) In the event Tenant proposes to sublet all or any portion of the
Demised Premises, Owner, at Owner's option, may give to Tenant, within
sixty (60) days after the submission by Tenant to Owner, of the Proposed
Sublet Statement, a notice electing to eliminate such portion of the
Demised Premises (said portion is referred to as the "Eliminated Space")
from the Demised Premises during the period (referred to as the
"Elimination Period") commencing on the date (referred to as "Elimination
Date") immediately prior to the proposed commencement date of the term of
the proposed subletting, as set forth in the Proposed Sublet Statement,
and ending on the proposed expiration date of the term of the proposed
subletting, as set forth in the Proposed Sublet Statement, and in the
event such notice is given the following shall apply:
(A) The Eliminated Space shall be eliminated from the Demised
Premises during the Elimination Period;
(B) Tenant shall surrender the Eliminated Space to Owner on or prior
to the Elimination Date in the same manner as if said Date were the
Expiration Date;
(C) If the eliminated Space shall constitute less than an entire
floor, (i) Owner, at Owner's expense, shall have the right to make any
alterations and installations in the Demised Premises required, in
Owner's judgment, reasonably exercised, to make the Eliminated Space a
self-contained rental unit with access through corridors to the
elevators and core toilets serving the Eliminated Space, and if the
Demised Premises shall contain any core toilets (for the purposes of
this Article core toilets shall be deemed to include any unisex
toilets) or any corridors (including any corridors proposed to be
constructed by Owner pursuant to this subdivision (c), providing
access from the Eliminated Space to the core area), (ii) Owner and any
tenant or other occupant of the Eliminated Space shall have the right
to use such toilets and corridors in common with Tenant and any other
permitted occupants of the Demised Premises, and the right to install
signs and directional indicators in or about such corridors indicating
the name and locations of such tenant or other occupant;
(D) During the Elimination Period, the Fixed Rent, the Demised
Premises Area (as
16
defined in Article 23) and the Electrical Inclusion Factor (as defined
in Section 29.05 as the Electrical Inclusion Factor may have been
adjusted previously pursuant to the provisions of said Section, shall
each be reduced in the proportion which the area of the Eliminated
Space bears to the total area of the Demised Premises immediately
prior to the Elimination Date (including an equitable portion of the
area of any corridors referred to in subdivision (c) of this
Subsection 11.03B(2) as part of the area of the Eliminated Space for
the purpose of computing such reduction), and in the event that the
Eliminated Space shall be the entire Demised Premises, during the
Elimination Period. Tenant shall have no rights with respect to the
Demised Premises nor any obligations with respect to the Demised
Premises, including, but not limited to any obligations to pay Fixed
Rent or any increases therein or any additional rent, and any prepaid
portion of Fixed Rent for any period after the Elimination Date
allocable to the Elimination Space shall be refunded by Owner to
Tenant:
(E) There shall be an equitable apportionment of any increase in the
Fixed Rent pursuant to Article 23 for the Escalation Year and Tax
Escalation Year (as defined in Article 23) in which said Elimination
Date shall occur;
(F) If the Elimination Period shall end prior to the Expiration Date,
the Eliminated Space, in its then existing condition, shall be deemed
restored to and once again a part of the Demised Premises during the
period (referred to as the "Restoration Period") commencing on the
date next following the expiration of the Elimination Period and
ending on the Expiration Date;
(G) During the restoration Period, if any, the Fixed Rent, the
Demised Premises Area and the Electrical Inclusion Factor, as the
Electrical Inclusion Factor may have been adjusted previously pursuant
to the provisions of Section 29.05, shall each be increased in the
proportion which the area of the Eliminated Space bears to the total
area of the Demised Premises immediately prior to the commencement of
the Restoration Period (including an equitable portion of the area of
any corridors referred to in subdivision (c) of this Subsection
11.03.B.(2) as a part of the area of the Eliminated Space for the
purpose of computing such increase) and in the event that the
Eliminated Space shall be the entire Demised Premises, during the
Restoration Period, the Demised Premises, in its then existing
condition, shall be deemed restored to Tenant and Tenant shall have
all rights with respect to the Demised Premises which are set forth in
this Lease and all obligations with respect to the Demised Premises
which are set forth in this Lease, including, but not limited to, the
obligations for the payment of Fixed Rent and any increases therein
(as it would have been adjusted if Tenant occupied the Demised
Premises during the Elimination Period) and any additional rent; and
(H) There shall be an equitable apportionment of any increase in the
Fixed Rent pursuant to Article 23 for the Escalation Year and Tax
Escalation Year in which the Restoration Period, if any, shall
commence.
However, notwithstanding the foregoing, Owner and Tenant acknowledge
the possibility that all or any of the tenants or occupants of the
Eliminated Space may not have vacated and surrendered all or any
portion, of the Eliminated Space to Owner by the commencement of the
Restoration Period; accordingly, notwithstanding anything to the
contrary contained in the foregoing provisions of this Subsection B.
the following shall apply:
(X) the Restoration Period applicable to the Eliminated Space shall
commence on the commencement date of the Restoration Period with
respect to those portions, if any, of the Eliminated Space which are
vacant on the commencement of the Restoration Period and with respect
to those portions, if any, of the Eliminated Space which are not
vacant on the
17
commencement of the restoration Period on the respective later date or
dates upon which such portions of the Eliminated Space become vacant
and Owner give notice to Tenant of such vacancy but the Expiration
Date shall not be affected thereby, the increases in the Fixed Rent,
the Demised Premises Area and the Electrical Inclusion Factor, as the
Electrical Inclusion Factor may have been adjusted pursuant to the
provisions of Section 29.05, shall be equitably adjusted to reflect
the fact that all or any portions of the Eliminated Space have not
been restored to Tenant on the commencement of the Restoration Period
but are restored to Tenant and included back in the Demised Premises
on a date or dates after the commencement of the Restoration Period;
(y) except as expressly set forth in this Subsection 11.03.B to the
contrary, neither the validity of this Lease nor the obligations of
tenant under this Lease shall be affected thereby; and
(z) Tenant waives any rights to rescind this Lease and to recover any
damages which may result from the failure of Owner to deliver
possession of all or any portions of the Eliminated Space on the
commencement of the restoration Period; Owner agrees to institute
within thirty (30) days after the commencement of the Restoration
Period, possession proceedings against any tenants and occupants who
have not so vacated and surrendered all or any portion of the
Eliminated Space, and agrees to prosecute such proceedings with
reasonable diligence.
At the request of Owner, Tenant shall execute and deliver an instrument or
instruments, in form satisfactory to Owner, setting forth any modifications
to this Lease contemplated in or resulting from the operation of the
foregoing provisions of this Subsection 11.03; however, neither Owner's
failure to request any such instrument nor Tenant's failure to execute or
deliver any such instrument shall vitiate the effect of the foregoing
provisions of this Section. The failure by Owner to exercise any option under
this Section 11.03 with respect to any subletting shall not be deemed a
waiver of such option with respect to any extension of such subletting or any
subsequent subletting of the premises affected thereby or any other portion
of the Demised Premises. Tenant agrees to indemnify Owner from all loss,
cost, liability, damage and expense, including, but not limited to,
reasonable counsel fees and disbursements, arising from any claims against
Owner by any broker or other person, for a brokerage commission or other
similar compensation in connection with any such proposed subletting, in the
event (a) Owner shall (i) fail or refuse to consent to any proposed
subletting, or (ii) exercise any of its options under this Section 11.03. or
(b) any proposed subletting shall fail to be consummated for any reason
whatsoever.
C. Tenant agrees that (1) any increase in the rental value of the Demised
Premises over and above the Fixed Rent payable pursuant to the provisions of
this Lease, as such Fixed Rent may be increased from time to time pursuant to
the provisions of this Lease, and (2) any consideration paid to Tenant or any
subtenant or other person claiming through or under Tenant in connection with
an assignment of Tenant's interest in this Lease or the interest of any
subtenant or other person claiming through or under Tenant under any sublease
whether or not such assignment shall be effected with court approval in a
proceeding of the types described in Subsection 16.01(c) or (d), or in any
similar proceeding, or otherwise, shall accrue to the benefit of Owner and
not to the benefit of Tenant, or of any subtenant or other person claiming
through or under Tenant, or of the creditors of Tenant or of any such
subtenant or other person claiming through or under Tenant. Accordingly,
Tenant agrees that if Owner shall fail to exercise its option to sooner
terminate this Lease in connection with any proposed subletting by Tenant of
all or substantially all of the Demised Premises, or its option to eliminate
the Demised Premises or to eliminate from the Demised Premises any portion
thereof, in connection with any proposed subletting by Tenant of the entire
Demised Premises or any portion thereof, or if any subtenant or other person
claiming through or under Tenant shall sublet all or any portion of the
Demised Premises, Tenant shall pay to Owner a sum equal to any Subletting
Profit, as such term is hereinafter defined. All rentals and other sums
(including, but not limited to, sums payable for the sale or rental of any
fixtures, leasehold improvements, equipment, furniture or other personal
property, less, in the case of the sale thereof, the then net unamortized [on
a straight-line basis over the term of this Lease or, in the event of a
further subletting, over the term of the initial
18
sublease, as the case may be] cost thereof, which were provided and installed
in the sublet premises at the sole cost and expense of Tenant or such
subtenant or other person claiming through or under Tenant and for which no
allowance or other credit has been given by Owner payable by any subtenant to
Tenant or to any subtenant or other person claiming through or under Tenant
in connection with (i) any subletting of the entire Demised Premises in
excess of the Fixed Rent then payable by Tenant to Owner under this Lease, or
(ii) any subletting of a portion of the Demised Premises in excess of that
proportion of the Fixed Rent applicable to the floor on which the portion of
the Demised Premises so sublet is located payable by Tenant to Owner under
this Lease which the area of the portion of the Demised Premises so sublet
bears to the total area of the Demised Premises on said floor on which the
portion of the Demised Premises so sublet is located, are referred to, in the
aggregate, as "Subletting Profit", in computing any Subletting Profit it
shall be deemed that the rental reserved under any such subletting shall
commence to accrue as of the commencement of the term of such subletting even
if such rental actually commences to accrue as of a date subsequent to such
commencement, and there shall be deducted a reasonable single brokerage
commission, if any such commission shall be incurred by Tenant or any such
subtenant or other person claiming through or under Tenant in connection with
such subletting which deduction for such reasonable single brokerage
commission shall be amortized on a straight-line basis over the entire term
of such subletting. Tenant agrees that if Tenant, or any subtenant or other
person claiming through or under Tenant, shall assign or have assigned its
interest as Tenant under this Lease or its interest as subtenant under any
sublease, as the case may be, whether or not such assignment shall be
effected with court approval in a proceeding of the types described in
Subsections 16.01(c) or (d), or in any similar proceeding, or otherwise.
Tenant shall pay to Owner a sum equal to any consideration payable to Tenant
or any subtenant or other person claiming through or under Tenant for such
assignment. All sums payable hereunder to Tenant shall be paid to Owner as
additional rent immediately upon such sums becoming payable to Tenant or to
any subtenant or other person claiming through or under Tenant and, if
requested by Owner, Tenant shall promptly enter into a written agreement with
Owner setting forth the amount of such sums to be paid to Owner, however,
neither Owner's failure to request the execution of such agreement nor
Tenant's failure to execute such agreement shall vitiate the provisions of
this Section. For the purposes of this Article, a trustee, receiver or other
representative of the Tenant's or any subtenant's estate under any federal or
state bankruptcy act shall be deemed a person claiming through or under
Tenant.
D. Neither Owner's consent to any subletting nor anything contained in
this Section shall be deemed to grant to any subtenant or other person
claiming through or under Tenant the right to sublet all or any portion of
the Demised Premises or to permit the occupancy of all or any portion of the
Demised Premises by others. Neither any subtenant referred to in this Section
nor its heirs, distributees, executors, administrators, legal
representatives, successors nor assigns, without the prior consent of Owner
in each instance, shall (i) assign, whether by merger, consolidation or
otherwise, mortgage or encumber its interest in any sublease, in whole or in
part, or (ii) sublet, or permit the subletting of , that part of the Demised
Premises affected by such subletting or any portion thereof, or (iii) permit
such part of the Demised Premises affected by such subletting or any portion
thereof to be occupied or used for desk space, mailing privileges or
otherwise, by any person other than such subtenant and any sublease shall
provide that any violation of the foregoing provisions of this sentence shall
be an event of default thereunder. The sale, pledge, transfer or other
alienation of (a) any of the issued and outstanding capital stock of any
corporate subtenant (unless such stock is publicly traded on any recognized
security exchange or over-the-counter market) or (b) any interest in any
partnership or joint venture subtenant, however accomplished, and whether in
a single transaction or in a series of related or unrelated transactions,
shall be deemed for the purposes of this Section to be an assignment of such
sublease which shall require the prior consent of Owner in each instance and
any sublease shall so provide.
SECTION 11.04. OWNER'S RIGHTS UPON LEASE DISAFFIRMANCE: A. In the event
that, at any time after Tenant may have assigned Tenant's interest in this
Lease, this Lease shall be disaffirmed or rejected in any proceeding of the
types described in Subsections 16.01(c) and (d), or in any similar
proceeding, or in the event of termination of this Lease by reason of any
such proceeding or by reason of lapse of time following notice of termination
given pursuant to Section 16.01 based upon any of the Events of Default set
forth in said Subsections. Tenant, upon request of Owner given within thirty
(30) days next following any such disaffirmance, rejection or
19
termination (and actual notice thereof to Owner in the event of a
disaffirmance or rejection or in the event of termination other than by act
of Owner), shall (i) pay to Owner all Fixed Rent, additional rent and other
charges due and owing by the assignee to Owner under this Lease to and
including the date of such disaffirmance, rejection or termination, and (ii)
as "tenant", enter into a new lease with Owner of the Demised Premises for a
term commencing on the effective date of such disaffirmance, rejection or
termination and ending on the Expiration Date unless sooner terminated as in
such lease provided, at the same Fixed Rent and then executory terms,
covenants and conditions as are contained in this Lease, except that (a)
Tenant's rights under the new lease shall be subject to the possessory rights
of the assignee under this Lease and the possessory rights of any person
claiming through or under such assignee or by virtue of any statute or of any
order of any court, and (b) such new lease shall require all defaults
existing under this Lease to be cured by Tenant with due diligence, and (c)
such new lease shall require Tenant to pay all increases in the Fixed Rent
reserved in this Lease which, had this Lease not been so disaffirmed,
rejected or terminated, would have accrued under the provisions of Article 23
of this Lease after the date of such disaffirmance, rejection or termination
with respect to any period prior thereto. In the event Tenant shall default
in its obligation to enter into said new lease for a period of ten (10) days
next following Owner's request therefor, then, in addition to all other
rights and remedies by reason of such default, either at law or in equity.
Owner shall have the same rights and remedies against Tenant as if Tenant had
entered into such new lease and such new lease had thereafter been terminated
as at the commencement date thereof by reason of Tenant's default thereunder.
Nothing contained in this Section shall be deemed to grant to Tenant any
right to assign Tenant's interest in this Lease.
B. If Tenant assumes this Lease in any proceeding of the types described
in Subsections 16.01(c) and (d), or in any similar proceeding and proposes to
assign the same pursuant to said proceeding to any person or entity who shall
have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to the Tenant, then notice of such proposed assignment shall be
given to Owner by Tenant no later than twenty (20) days after receipt by
Tenant of such offer, but in any event no later than ten (10) days prior to
the date that Tenant shall make application to a court of competent
jurisdiction for authority and approval to enter into such assignment and
assumption. Such notice shall set forth (a) the name and address of such
person, (b) all of the terms and conditions of such offer, and (c) adequate
assurance of future performance by such person under the Lease, including,
without limitation, the assurance referred to in Section 365(b)(3) of the
United States Bankruptcy Code or any provisions in substitution thereof.
Owner shall have the prior right and option, to be exercised by notice to
Tenant given at any time prior to the effective date of such proposed
assignment, to accept an assignment of this Lease upon the same terms and
conditions and for the same consideration, if any, as the bona fide offer
made by such person, less any brokerage commissions which would otherwise by
payable by Tenant out of the consideration to be paid by such person in
connection with the assignment of this Lease.
C. The term "adequate assurance of future performance" as used in this
Lease shall mean that any proposed assignee shall, among other things, (a)
deposit with Owner on the assumption of this Lease the sum of nine (9) months
of the then Fixed Rent and increases therein pursuant to Article 23 as
security for the faithful performance and observance by such assignee of the
terms and obligations of this Lease, (b) furnish Owner with financial
statements of such assignee for the prior three (3) fiscal years, as finally
determined after an audit and certified as correct by a certified public
accountant, which financial statements shall show a net worth of at least six
(6) times the Fixed Rent and increases therein pursuant to Article 23 then
payable for each of such three (3) years, (c) grant to Owner a security
interest in such property of the proposed assigned as Owner shall deem
necessary to provide adequate assurance of the performance by such assignee
of its obligations under the Lease.
20
ARTICLE 12
EXISTING CONDITIONS OWNER'S INITIAL WORK
SECTION 12.01. "AS IS" BUT FOR OWNER'S INITIAL WORK: Tenant acknowledges
that Owner has made no representations to Tenant with respect to the
condition of the Demised Premises and Tenant agrees to accept possession of
the Demised Premises in the condition which shall exist on the Commencement
Date "as is" and further agrees that Owner shall have no obligation to
perform any work or make any installation in order to prepare the Demised
Premises for Tenant's occupancy except as otherwise provided in Section 12.02
to the contrary.
SECTION 12.02. OWNER'S INITIAL WORK:
A. On or about the Commencement Date. Owner shall cause the following
work to be done in the Demised Premises (referred to herein as "Owner's
Initial Work"):
(1) paint the painted surfaces in the entire Demised Premises with a
single coat of paint, in flat finish, in colors selected by Tenant
from Building standard colors (but not more than one (1) color in any
room or area);
(2) polish existing marble floors in the Demised Premises; and
(3) shampoo existing carpeting in the Demised Premises.
B. Owner's Initial Work required to be performed and made by Owner
pursuant to the provisions of this Section 12.02 shall be equal to
standards adopted by Owner for the Building and shall constitute a single,
non-recurring obligation on the xxx of Owner and shall be completed on or
about the Commencement Date. In the event this Lease is renewed or
extended for a further term by agreement or operation of law, Owner's
obligation to perform such work shall not apply to such renewal or
extension.
C. Owner may enter the Demised Premises to perform the foregoing work and
installation, any entry by Owner, its agents, servants, employees or
contractors for such purpose shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant form any of its
obligations under this Lease, or impose any liability upon Owner, or its
agents, by reason of inconvenience or annoyance to Tenant, or injury to,
or interruption of Tenant's business or otherwise. Owner agrees, however,
to perform said work with reasonable diligence without any obligation,
however, to employ contractors or labor at overtime or other premium pay
rates.
ARTICLE 13
ACCESS TO DEMISED PREMISES
SECTION 13.01. OWNER'S RIGHT TO ENTER: Owner and its agents shall have the
following rights in and about the Demised Premises: (i) to enter the Demised
Premises at all times to examine the Demised Premises or for any of the
purposes set forth in this Article or for the purpose of performing any
obligation of Owner under this Lease or exercising any right or remedy
reserved to Owner on this Lease, or complying with any Legal Requirement
which Owner is obligated to comply with hereunder, and if Tenant, its
officers, partners, agents or employees shall not be personally present or
shall not open and permit an entry into the Demised Premises at any time when
such entry shall be necessary or permissible, to use a master key or to
forcibly enter the Demised Premises; (ii) to erect, install, use and maintain
pipes, ducts and conduits in and through the Demised Premises;
21
(iii) to exhibit the Demised Premises to others, due to make such
decorations, repairs, alterations, improvements or additions, or to perform
such maintenance, including, but not limited to the maintenance of all
heating, air conditioning, ventilating, elevator, plumbing, electrical,
telecommunication and other mechanical facilities, as Owner may deem
necessary or desirable; (v) to take all materials into and upon the Demised
Premises that may be required in connection with any such decorations,
repairs, alterations, improvements, additions or maintenance, and (vi) to
alter, renovate and decorate the Demised Premises at any time during the
Demised Term if Tenant shall have removed all or substantially all of
Tenant's property from the Demised Premises. The lessors under any Superior
Lease and the holders of any Mortgage shall have the right to enter the
Demised Premises from time to time through their respective employees,
agents, representative and architects to inspect the same or to cure any
default of Owner or Tenant relating thereto. Owner shall have the right, from
time to time, to change the name, number or designation by which the Building
is commonly known which right shall include, without limitation, the right to
name the Building after any tenant of the Building.
SECTION 13.02. OWNER'S RESERVATION OF RIGHTS TO PORTIONS OF THE BUILDING:
All parts (except surfaces facing the interior of the Demised Premises) of
all walls, windows and doors bounding the Demised Premises (including
exterior Building walls, core corridor walls, doors and entrances), all
balconies, terraces and roofs adjacent to the Demised Premises, all space in
or adjacent to the Demised Premises used for shafts, stacks, stairways,
chutes, pipes, conduits, ducts, fan rooms, heating, air conditions,
ventilating, plumbing, electrical, telecommunication and other mechanical
facilities, closets, service closets and other Building facilities, and the
use thereof, as well as access thereto through the Demised Premises for the
purposes of operation, maintenance, alteration and repair, are hereby
reserved to Owner. Owner also reserves the right at any time to change the
arrangement or location of entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets and other public parts of the Building,
provided any such change does not permanently and unreasonable obstruct
Tenant's access to the Demised Premises. Nothing contained in this Article
shall impose any obligation upon Owner with respect to the operation,
maintenance, alteration or repair of the Demised Premises or the Building.
SECTION 13.03. ACCESS TO THIRD PARTIES: Owner and its agents shall have
the right to permit access to the Demised Premises, whether or not Tenant
shall be present, to any receiver, trustee, assignee for the benefit of
creditors, sheriff, marshal or court officer entitled, to, or reasonably
purporting to be entitled to, such access for the purpose of taking
possession of, or removing, any property of Tenant or any other occupant of
the Demised Premises, or for any other lawful purpose, or by any
representative of the fire, police, building, sanitation or other department
of the City, State or Federal Government. Neither anything contained in this
Section, nor any action taken by Owner under this Section, shall be deemed to
constitute recognition by Owner that any person other than Tenant has any
right or interest in this Lease or the Demised Premises.
SECTION 13.04. NO ACTUAL OR CONSTRUCTIVE EVICTION: The exercise by Owner
or its agents or by the lessor under any Superior Lease or by the holder of
any Mortgage of any right reserved to Owner in this Article shall not
constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Owner,
or its agents, or upon any lessor under any Superior Lease or upon the holder
of any Mortgage, by reason of inconvenience or annoyance to Tenant, or injury
to or interruption of Tenant's business, or otherwise.
ARTICLE 14
VAULT SPACE
SECTION 14.02. The Demised Premises do not contain any vaults, vault space
or other space outside the boundaries of the Real Property, notwithstanding
anything contained in this Lease or indicated on any sketch, blueprint or
plan. Owner makes no representation as to the location of the boundaries of
the Real Property All vaults and vault space and all other space outside the
boundaries of the Real Property which Tenant may be
22
permitted to use or occupy are to be used or occupied under a revocable
license, and if any such license shall be revoked, or if the amount of such
space shall be diminished or required by any Federal, State or Municipal
Authority or by any public utility company, such revocation, diminution or
requisition shall not constitute an actual or constructive eviction, in whole
or in part, or entitle Tenant to any abatement or diminution of rent, or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Owner. Any fee, tax or charge imposed by any governmental
authority for any such vault, vault space or other space shall be paid by
Tenant.
ARTICLE 15
CERTIFICATE OF OCCUPANCY
SECTION 15.01. Tenant will not at any time use or occupy, or permit the
use or occupancy of, the Demised Premises in violation of any Certificate(s)
of Occupancy covering the Demised Premises. Owner agrees that a temporary or
permanent Certificate(s) of Occupancy covering the Demised Premises will be
in force on the Commencement Date permitting the Demised Premises to be used
as "offices". However, neither such agreement, nor any other provision of
this Lease, nor any act or omission of Owner, its agents or contractors,
shall be deemed to constitute a representation or warranty that the Demised
Premises, or any part thereof, may be lawfully used or occupied for any
particular purpose or in any particular manner, in contradistinction to mere
"office" use.
ARTICLE 16
DEFAULT
SECTION 16.01. EVENTS OF DEFAULT: Upon the occurrence, at any time prior
to or during the Demised Term, of any one or more of the following events
(referred to herein, singly, as an "Event of Default" and collectively as
"Events of Default"):
(a) if Tenant shall default in the payment when due of any installment of
Fixed Rent or any increase in the Fixed Rent or in the payment when due of
any additional rent; or
(b) if Tenant shall default in the observance or performance of any term,
covenant or condition of this Lease on Tenant's part to be observed or
performed (other than the covenants for the payment of Fixed Rent, any
increase in the Fixed Rent and additional rent) and Tenant shall fail to
remedy such default within ten (10) days after notice by Owner to Tenant
of such default, or if such default is of such a nature that it cannot be
completely remedied within said period of ten (10) days and Tenant shall
not commence, promptly after receipt of such notice, or shall not
thereafter diligently prosecute to completion, all steps necessary to
remedy such default; or
(c) if Tenant shall file a voluntary petition in bankruptcy or
insolvency, or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under the present or any future federal bankruptcy act or any other
present or future applicable federal, state or other statute or law, or
shall make an assignment for the benefit of creditors, or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or of all or any part of Tenant's property; or
(d) if, within thirty (30) days after the commencement of any proceeding
against
23
Tenant, whether by the filing of a petition or otherwise, seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal
bankruptcy act or any other present or future applicable federal, state or
other statute or law, such proceeding shall not have been dismissed, or if,
within thirty (30) days after the appointment of any trustee, receiver or
liquidator of Tenant, or of all or any part of Tenant's property, without the
consent or acquiescence of Tenant, such appointment shall not have been
vacated or otherwise discharged, or if any execution or attachment shall be
issued against Tenant or any of Tenant's property pursuant to which the
Demised Premises shall be taken or occupied or attempted to be taken or
occupied; or
(e) if Tenant shall default in the observance or performance of any term,
covenant or condition on Tenant's part to be observed or performed under
any other lease with Owner of space in the Building and such default shall
continue beyond any grace period set forth in such other lease for the
remedying of such default; or
(f) if the Demised Premises shall become vacant, deserted or abandoned;
or
(g) if (i) Tenant's interest in this Lease shall devolve upon or pass to
any person, whether by operation of law or otherwise, or (ii) there shall
be any sale, pledge, transfer or other alienation described in Section
11.01 of this Lease which is deemed an assignment of this Lease for
purposes of said Section 11.01, except as expressly permitted under
Article 11;
then, during such time as such Event(s) of Default is/are continuing, Owner
may at any time, at Owner's option, give to Tenant a five (5) days' notice of
termination of this Lease and, in the event such notice is given, this Lease
and the Demised Term shall come to an end and expire (whether or not said
term shall have commenced) upon the expiration of said five (5) days with the
same effect as if the date of expiration of said (5) days were the Expiration
Date, but Tenant shall remain liable for damages and all other sums payable
pursuant to the provisions of Article 18.
SECTION 16.02. "TENANT"/MONEYS RECEIVED: If, at any time (i) Tenant shall
be comprised of two (2) or more persons, or (ii) Tenant's obligations under
this Lease shall have been guaranteed by any person other than Tenant, or
(iii) Tenant's interest in this Lease shall have been assigned, the word
"Tenant", as used in Subsections (c) and (d) of Section 16.01, shall be
deemed to mean any one or more of the persons primarily or secondarily liable
for Tenant's obligations under this Lease. Any monies received by Owner from
or on behalf of Tenant during the pendency of any proceeding of the types
referred to in said Subsections (c) and (d) shall be deemed paid as
compensation for the use and occupation of the Demised Premises and the
acceptance of any such compensation by Owner shall not be deemed an
acceptance of rent or a waiver on the part of Owner of any rights under
Section 16.01.
ARTICLE 17
REMEDIES
SECTION 17.01. OWNER'S RIGHT OF RE-ENTRY AND RIGHT TO RELET: If Tenant
shall default in the payment when due of any installment of Fixed Rent or in
the payment when due of any increase in the Fixed Rent or any additional
rent, or if this Lease and the Demised Term shall expire and come to an end
as provided in Article 16:
(a) Owner and its agents and servants may immediately, or at any time
after such default or after the date upon which this Lease and the Demised
Term shall expire and come to
24
an end, re-enter the Demised Premises or any part thereof, without notice,
either by summary proceedings or by any other applicable action or
proceeding, or by force or otherwise without being liable to indictment,
prosecution or damages therefor), and may repossess the Demised Premises
and dispossess Tenant and any other persons from the Demised Premises and
remove any and all of their property and effects from the Demised
Premises; and
(b) Owner, at Owner's option, may relet the whole or any part or parts of
the Demised Premises, from time to time, either in the name of Owner or
otherwise, to such tenant or tenants, for such term or terms ending
before, on or after the Expiration Date, at such rental or rentals and
upon such other conditions, which may include concessions and free rent
periods, as Owner, in its sole discretion, may determine. Owner shall have
no obligation to relet the Demised Premises or any part thereof and shall
in no event be liable for refusal or failure to relet the Demised Premises
or any part thereof, or, in the event of any such reletting, for refusal
or failure to collect any rent due upon any such reletting, and no such
refusal or failure shall operate to relieve Tenant of any liability under
this Lease or otherwise to affect any such liability; Owner, at Owner's
option, may make such repairs, replacements, alterations, additions,
improvements, decorations and other physical changes in and to the Demised
Premises as Owner, in its sole discretion, considers advisable or
necessary in connection with any such reletting or proposed reletting,
without relieving Tenant of any liability under this Lease or otherwise
affecting any such liability.
SECTION 17.02. WAIVER OF RIGHT TO REDEEM, ETC.: Tenant hereby waives the
service of any notice of intention to re-enter or to institute legal
proceedings to that end which may otherwise be required to be given under any
present or future law. Tenant, on its own behalf and on behalf of all persons
claiming through or under Tenant, including all creditors, does further
hereby waive any and all rights which Tenant and all such persons might
otherwise have under any present or future law to redeem the Demised
Premises, or to re-enter or repossess the Demised Premises, or to restore the
operation of this Lease, after (i) Tenant shall have been dispossessed by a
judgment or by warrant of any court or judge, or (ii) any re-entry by Owner,
or (iii) any expiration or termination of this Lease and the Demised Term,
whether such dispossess, re-entry, expiration or termination shall be by
operation of law or pursuant to the provisions of this Lease. The words
"re-enter", "re-entry" and "re-entered" as used in this Lease shall not be
deemed to be restricted to their technical legal meanings. In the event of a
breach or threatened breach by Tenant, or any persons claiming through or
under Tenant, of any term, covenant or condition of this Lease on Tenant's
part to be observed or performed, Owner shall have the right to enjoin such
breach and the right to invoke any other remedy allowed by law or in equity
as if re-entry, summary proceedings and other special remedies were not
provided in this Lease for such breach. The right to invoke the remedies
hereinbefore set forth in this Lease is cumulative and shall not preclude
Owner from invoking any other remedy allowed by law or in equity.
ARTICLE 18
DAMAGES
SECTION 18.01. AMOUNT OF OWNER'S DAMAGES: If this Lease and the Demised
Term shall expire and come to an end as provided in Article 16, or by or
under any summary proceeding or any other action or proceeding, or if Owner
shall re-enter the Demised Premises as provided in Article 17, or by or under
any summary proceeding or any other action or proceeding, then, in any of
said events:
(a) Tenant shall pay to Owner all Fixed Rent, additional rent and other
charges payable under this Lease by Tenant to Owner to the date upon which
this Lease and the Demised Term shall have expired and come to an end or
to the date of re-entry upon the Demised Premises
25
by Owner, as the case may be; and
(b) Tenant shall also be liable for and shall pay to Owner, as damages,
any deficiency (referred to as a "Deficiency") between the Fixed Rent
reserved in this Lease for the period which otherwise would have
constituted the unexpired portion of the Demised Term and the net amount,
if any, of rents collected under any reletting effected pursuant to the
provisions of Section 17.01 for any part of such period (first deducting
from the rents collected under any such reletting all of Owner's expenses
in connection with the termination of this Lease or Owner's re-entry upon
the Demised Premises and with such reletting including, but not limited
to, all repossession costs, brokerage commissions, legal expenses,
attorneys' fees, alteration costs and other expenses of preparing the
Demised Premises for such reletting). Any such Deficiency shall be paid in
monthly installments by Tenant on the days specified in this Lease for
payment of installments of Fixed Rent. Owner shall be entitled to recover
from Tenant each monthly Deficiency as the same shall arise, and no suit
to collect the amount of the Deficiency for any month shall prejudice
Owner's right to collect the Deficiency for any subsequent month by a
similar proceeding. Solely for the purposes of this Subsection (b), the
term "Fixed Rent" shall mean the Fixed Rent in effect immediately prior to
the date upon which this Lease and the Demised Term shall have expired and
come to an end, or the date of re-entry upon the Demised Premises by
Owner, as the case may be, adjusted, from time to time, to reflect any
increases which would have been payable pursuant to any of the provisions
of this Lease including, but not limited to, the provisions of Article 23
of this Lease if the term hereof had not been terminated; and
(c) At any time after the Demised Term shall have expired and come to an
end or Owner shall have re-entered upon the Demised Premises, as the case
may be, whether or not Owner shall have collected any monthly Deficiencies
as aforesaid, Owner shall be entitled to recover from Tenant, and Tenant
shall pay to Owner, on demand, as and for liquidated and agreed final
damages, a sum equal to the amount by which the Fixed Rent reserved in
this Lease for the period which otherwise would have constituted the
unexpired portion of the Demised Term exceeds the then fair and reasonable
rental value of the Demised Premises for the same period, both discounted
to present worth at the rate of four (4%) percent per annum. If, before
presentation of proof of such liquidated damages to any court, commission
or tribunal, the Demised Premises, or any part thereof, shall have been
relet by Owner for the period which otherwise would have constituted the
unexpired portion of the Demised Term, or any part thereof, the amount of
rent reserved upon such reletting shall be deemed, prima facie, to be the
fair and reasonable rental value for the part or the whole of the Demised
Premises so relet during the term of the reletting. Solely for the
purposes of this Subsection (c), the term "Fixed Rent" shall mean the
Fixed Rent in effect immediately prior to the date upon which this Lease
and the Demised Term shall have expired and come to an end, or the date of
re-entry upon the Demised Premises by Owner, as the case may be, adjusted
to reflect any increases pursuant to the provisions of Article 23 for the
Escalation Year and Tax Escalation Year immediately preceding such event.
SECTION 18.02. RENTS UNDER RELETTING: If the Demised Premises, or any part
thereof, shall be relet together with other space in the Building, the rents
collected or reserved under any such reletting and the expenses of any such
reletting shall be equitably apportioned for the purposes of this Article 18.
Tenant shall in no event be entitled to any rents collected or payable under
any reletting, whether or not such rents shall exceed the Fixed Rent reserved
in this Lease. Nothing contained in Articles 16, 17 or this Article shall be
deemed to limit or preclude the recovery by Owner from Tenant of the maximum
amount allowed to be obtained as damages by any statute or rule of law, or of
any sums or damages to which Owner may be entitled in addition to the damages
set forth in Section 18.01.
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ARTICLE 19
FEES AND EXPENSES; INDEMNITY
SECTION 19.01. OWNER'S RIGHT TO CURE TENANT'S DEFAULT: If Tenant shall
default in the observance or performance of any term, covenant or condition
of this Lease on Tenant's part to be observed or performed, Owner, at any
time thereafter and without notice, may remedy such default for Tenant's
account and at Tenant's expense, without thereby waiving any other rights or
remedies of Owner with respect to such default.
SECTION 19.02. TENANT'S INDEMNITY AND LIABILITY INSURANCE
OBLIGATIONS: A. Tenant agrees to indemnify and save Owner and "Owner's
Indemnitees" (as hereinafter defined) harmless of and from all loss, cost,
liability, damage and expense including, but not limited to, reasonable
counsel fees, penalties and fines, incurred in connection with or arising
from (i) any default by Tenant in the observance or performance of any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed
or performed, or (ii) the breach or failure of any representation or warranty
made by Tenant in this Lease, or (iii) the use or occupancy or manner of use
or occupancy of the Demised Premises by Tenant or any person claiming through
or under Tenant, or (iv) any acts, omissions or negligence of Tenant or any
such person, or the contractors, agents, servants, employees, visitors or
licensees of Tenant or any such person, in or about the Demised Premises or
the Building either prior to, during, or after the expiration of, the Demised
Term, including, but not limited to, any acts, omissions or negligence in the
making or performing of any Alterations. Tenant further agrees to indemnify
and save harmless Owner and Owner's Indemnitees of and from all loss, cost,
liability, damage and expense, including, but not limited to, reasonable
counsel fees and disbursements incurred in connection with or arising from
any claims by any persons by reason of injury to persons or damage to
property occasioned by any use, occupancy, act, omission or negligence
referred to in the preceding sentence. "Owner's Indemnitees" shall mean the
Owner, the shareholders or the partners comprising Owner and its and their
partners and shareholders, officers, directors, employees, agents (including
without limitation, any leasing and managing agents) and contractors together
with the lessor under any Superior Lease and the holder of any Mortgage. If
any action or proceeding shall be brought against Owner or Owner's
Indemnitees based upon any such claim and if Tenant, upon notice from Owner,
shall cause such action or proceeding to be defended at Tenant's expense by
counsel acting for Tenant's insurance carriers in connection with such
defense or by other counsel reasonably satisfactory to Owner, without any
disclaimer of liability by Tenant or such insurance carriers in connection
with such claim, Tenant shall not be required to indemnify Owner and Owner's
Indemnitees for counsel fees in connection with such action or proceeding.
B. Throughout the Demised Term Tenant shall maintain comprehensive public
liability and water legal liability insurance against any claims by reason of
personal injury, death and property damage occurring in or about the Demised
Premises covering, without limitation, the operation of any private air
conditioning equipment and any private elevators, escalators or conveyors in
or serving the Demised Premises or any part thereof, whether installed by
Owner, Tenant or others, and shall furnish to Owner duplicate original
policies of such insurance at least ten (10) days prior to the Commencement
Date and at least ten (10) days prior to the expiration of the term of any
such policy previously furnished by Tenant, in which policies Owner, and
Owner's Indemnitees shall be named as parties insured, which policies shall
be issued by companies, and shall be in form and amounts, satisfactory to
Owner.
SECTION 19.03. PAYMENTS: Tenant shall pay to Owner, within ten (10) days
next following rendition by Owner to Tenant of bills or statements therefor:
(i) sums equal to all expenditures made and monetary obligations incurred by
Owner including, but not limited to, expenditures made and obligations
incurred for reasonable counsel fees and disbursements, in connection with
the remedying by Owner, for Tenant's account pursuant to the provisions of
Section 19.01, of any default of Tenant, and (ii) sums equal to all losses,
costs, liabilities, damages and expenses referred to in Section 19.02, and
(iii) sums equal to all expenditures made and monetary obligations incurred
by Owner including, but not limited to, expenditures made and obligations
incurred for reasonable counsel fees and disbursements, in collecting or
attempting to collect the Fixed Rent, any additional
27
rent or any other sum of money accruing under this Lease or in enforcing or
attempting to enforce any rights of Owner under this Lease or pursuant to
law, whether by the institution and prosecution of summary proceedings or
otherwise; and (iv) all other sums of money (other than Fixed Rent) accruing
from Tenant to Owner under the provisions of this Lease. Any sum of money
(other than Fixed Rent) accruing from Tenant to Owner pursuant to any
provision of this Lease whether prior to or after the Commencement Date, may,
at Owner's option, be deemed additional rent, and Owner shall have the same
remedies for Tenant's failure to pay any item of additional rent when due as
for Tenant's failure to pay any installment of Fixed Rent when due. Tenant's
obligations under this Article shall survive the expiration or sooner
termination of the Demised Term.
SECTION 19.04. TENANT'S LATE PAYMENTS--LATE CHARGES: If Tenant shall fail
to make payment of any installment of Fixed Rent or any increase in the Fixed
Rent or any additional rent within ten (10) days after the date when such
payment is due, Tenant shall pay to Owner, in addition to such installment of
Fixed Rent or such increase in the Fixed Rent or such additional rent, as the
case may be, as a late charge and as additional rent, a sum equal to three
(3%) percent per annum above the then current prime rate (as the term "prime
rate" is defined in Section 31.03) charged by Chemical Bank or its successor
of the amount unpaid computed from the date such payment was due to and
including the date of payment.
ARTICLE 20
ENTIRE AGREEMENT
SECTION 20.01. ENTIRE AGREEMENT: This Lease contains the entire agreement
between the parties and all prior negotiations and agreements are merged in
this Lease. Neither Owner nor Owner's agents have made any representations or
warranties with respect to the Demised Premises, the Building, the Real
Property or this Lease except as expressly set forth in this Lease and no
rights, easements or licenses are or shall be acuqired by Tenant by
implication or otherwise unless expressly set forth in this Lease. This Lease
may not be changed, modified or discharged, in whole or in part, orally and
no executory agreement shall be effective to change, modify or discharge, in
whole or in part, this Lease or any provisions of this Lease, unless such
agreement is set forth in a written instrument executed by the party against
whom enforcement of the change, modification or discharge is sought. All
references in this Lease to the consent or approval of Owner shall be deemed
to mean the written consent of Owner, or the written approval of Owner, as
the case may be, and no consent or approval of Owner shall be effective for
any purpose unless such consent or approval is set forth in a written
instrument executed by Owner.
ARTICLE 21
END OF TERM
SECTION 21.01. END OF TERM: On the date upon which the Demised Term shall
expire and come to an end, whether pursuant to any of the provisions of this
Lease or by operation of law, and whether on or prior to the Expiration Date,
Tenant, at Tenant's sole cost and expense, (i) shall quit and surrender the
Demised Premises to Owner, broom clean and in good order and condition,
ordinary wear excepted, and (ii) shall remove all of Tenant's Personal
Property and all other property and effects of Tenant and all persons
claiming through or under Tenant from the Demised Premises and the Building,
and (iii) shall repair all damage to the Demised Premises occasioned by such
removal and (iv) shall, at Owner's election, exercisable within six (6)
months following the expiration or earlier termination of the Demised Term,
remove any private interior staircases in the Demised Premises or connecting
the Demised Premises or any part thereof with any other space (referred to
herein as the "Other Space") in the Building occupied by Tenant, and restore
those portions of the Demised Premises, the Other Space and the Building
affected by any such staircases (including, but not limited to, the slabbing
over of any openings) to the condition of each which existed prior to the
installation of any such staircases, and repair any
28
damage to the Demised Premises, Other Space and the Building occasioned by
such removal. Notwithstanding the provisions of subdivision (iv) of the
foregoing sentence, in the event Owner does not elect to have removed any
such staircase referred to therein, any such staircase shall be and remain
the property of Owner at no cost or expense to Owner. Owner shall have the
right to retain any property and effects which shall remain in the Demised
Premises after the expiration or sooner termination of the Demised Term, and
any net proceeds from the sale thereof, without waiving Owner's rights with
respect to any default by Tenant under the foregoing provisions of this
Section. Tenant expressly waives, for itself and for any person claiming
through or under Tenant, any rights which Tenant or any such person may have
under the provisions of Section 2201 of the New York Civil Practice Law and
Rules and of any successor law of like import then in force, in connection
with any holdover summary proceedings which Owner may institute to enforce
the foregoing provisions of this Article. If said date upon which the Demised
Term shall expire and come to an end shall fall on a Sunday or holiday, then
Tenant's obligations under the first sentence of this Section shall be
performed on or prior to the Saturday or business day immediately preceding
such Sunday or holiday. Tenant's obligations under this Section shall survive
the expiration or sooner termination of the Demised Term.
ARTICLE 22
QUIET ENJOYMENT
SECTION 22.01. QUIET ENJOYMENT: Owner covenants and agrees with Tenant
that upon Tenant paying the Fixed Rent and additional rent reserved in this
Lease and observing and performing all of the terms, covenants and conditions
of this Lease on Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the Demised Premises during the Demised Term,
subject, however, to the terms, covenants and conditions of this Lease
including, but not limited to, the provisions of Section 37.01, and subject
to the Superior Lease and the Mortgage referred to in Section 7.01.
ARTICLE 23
ESCALATION
SECTION 23.01. DEFINITIONS: In the determination of any increase in the
Fixed Rent under the provisions of this Article, Owner and Tenant agree that
the following terms shall have the following meanings:
A. The term "Tax Escalation Year" shall mean each fiscal year commencing
July 1st and ending on the following June 30th which shall include any part
of the Demised Term.
B. The term "Escalation Year" shall mean each calendar year which shall
include any part of the Demised Term.
C. The term "Taxes" shall be deemed to include all real estate taxes and
assessments, special or otherwise, upon or with respect to the Real Property
imposed by the City or County of New York or any other taxing authority,
including, but not limited to, any charges imposed upon or with respect to
the Real Property pursuant to a city business improvement district. If, due
to any change in the method of taxation, any franchise, income, profit,
sales, rental, use and occupancy or other tax shall be substituted for, or
levied against Owner or any owner of the Building or the Real Property, in
lieu of any real estate taxes or assessments upon or with respect to the Real
Property, such tax shall be included in the term Taxes for the purposes of
this Article.
D. The term "Owner's Basic Tax Liability" shall mean a sum equal to Taxes
29
payable for the fiscal tax year beginning on July 1, 1995 and ending on June
30, 1996.
E. The term "Demised Premises Area" shall mean 7,000 square feet.
F. The term "Building Area" shall mean 245,000 square feet.
G. The term "Tenant's Proportionate Share" shall mean the fraction, the
denominator of which is the Building Area and the numerator of which is the
Demised Premises Area.
H. (1) The term "Operating Expenses" shall, subject to the provisions of
Paragraph (2) of this Subsection 23.01.H, mean the aggregate cost and expense
incurred by Owner in the operation, maintenance, management and security of
the Real Property and any plazas, sidewalks and curbs adjacent thereto
including, without limitation, the cost and expense of the following:
(a) salaries, wages, medical, surgical and general welfare and other
so-called "fringe" benefits (including group insurance and retirement
benefits) for employees (including, but not limited to, employees who
provide twenty four (24) hour services, seven (7) days per week throughout
the year) of Owner or any contractor of Owner engaged in the cleaning,
operation, maintenance or management of the Real Property, or engaged for
security purposes and/or for receiving or transmitting deliveries to and
from the Building, and payroll taxes and workmen's compensation insurance
premiums relating thereto,
(b) gas, steam, water and sewer rental,
(c) fifty (50%) percent of all electrical costs incurred in the operation
of the Building, provided, however, in the event that Owner discontinues
the redistribution or furnishing of electrical energy to the tenants and
occupants of the Building, then the cost and expense incurred by Owner for
electricity shall thereafter be deemed to be one hundred (100%) percent of
the total cost and expense to Owner of purchasing electricity for the
Building.
(d) utility taxes,
(e) rubbish removal,
(f) fire, casualty, liability, rent and other insurance carried by Owner,
(g) repairs, repainting, replacement, maintenance of grounds, and
Included Improvements (as provided in Paragraph (2) of this Subsection
23.01.H),
(h) Building supplies,
(i) uniforms and cleaning thereof,
(j) snow removal,
(k) window cleaning,
(l) service contracts with independent contractors for any of the
foregoing (including, but not limited to, elevator, heating, air
conditioning, ventilating, sprinkler
30
system, fire alarm and telecommunication equipment maintenance),
(m) management fees (whether or not paid to any person, firm or
corporation having an interest in or under common ownership with Owner or
any of the persons, firms or corporations comprising Owner) in the amount
of one ($1.00) dollar per rentable square foot of the Building Area in the
Base Escalation Year (as hereinafter defined in Subsection I) which amount
for management fees shall increase in each Escalation Year subsequent to
the Base Escalation Year by the same percentage of increase as the
percentage of increase in the aggregate of all other Operating Expenses.
(n) legal fees and disbursements and other expenses (excluding, however,
legal fees and expenses incurred in connection with any application or
proceeding brought for reduction of the assessed valuation of the Real
Property or any part thereof),
(o) auditing fees,
(p) advertising and promotion expenses,
(q) all costs of compliance under the provisions of any present or future
Superior Lease other than the payment of rental and impositions thereunder
and increase in the basic rent under such leases as a result of
adjustments in such basic rent, and
(r) all other costs and expenses incurred in connection with the
operation, maintenance, management and security of the Real Property, and
any plazas, sidewalks and curbs adjacent thereto.
(2) The cost and expense of the following shall be excluded from the
calculation of operating expenses:
(a) leasing commissions;
(b) executives' salaries above the grade of building manager and
superintendent;
(c) capital improvements and replacements which under generally accepted
accounting principles and practice would be classified as capital
expenditures, except the cost and expense of any improvement, alteration,
replacement or installation which is either (i) required by any Legal
Requirement, or (ii) designed, in Owner's judgment, to result in savings
or reductions in Operating Expenses or (iii) designed, in Owner's
judgment, to benefit the tenants of the Building (such improvements,
alterations, replacements and installations are referred to as "Included
Improvements"); the cost and expense of Included Improvements whenever
made shall be included in Operating Expenses for any Escalation Year
subsequent to the Base Escalation Year to the extent of (x) the annual
amortization or depreciation of the cost and expense to Owner of such
Included Improvements, as amortized or depreciated on a straight line
basis over ten (10) years allocable to such Escalation Year plus (y) an
annual charge for interest upon the unamortized or undepreciated portions
of such cost and expense at the average prime rate (as defined in Section
31.03) during the Escalation Year in question;
31
(d) any other item which under generally accepted accounting principles
and practice would not be regarded as an operating, maintenance or
management expense;
(e) any item for which Owner is compensated through proceeds of
insurance;
(f) any specific compensation which Owner receives from any tenant for
services rendered to such tenant by Owner above and beyond those services
generally rendered by Owner to tenants in the Building without specific
compensation therefor; and
(g) fifty (50%) percent of all electrical costs incurred in the operation
of the Building, provided however, in the event that Owner discontinues
the redistribution or furnishing of electrical energy to the tenants and
occupants of the Building, then the aforesaid exclusion of fifty (50%)
percent of such electrical costs shall not apply.
I. The term "Base Operating Expenses" shall mean a sum equal to Operating
Expenses for the calendar year 1996 (which calendar year is referred to as
the "Base Escalation Year").
J. The term "Owner's Tax Statement" shall mean an instrument containing a
computation of any increase in the Fixed Rent pursuant to the provisions of
Section 23.02 A. of this Article.
K. The term "Owner's Operating Expense Statement" shall mean an instrument
containing a computation of any increase in the Fixed Rent pursuant to the
provisions of Section 23.04 of this Article.
L. The term "Monthly Escalation Installment" shall mean a sum equal to
one-twelfth (1/12th) of the increase in the Fixed Rent payable pursuant to
the provisions of Subsection 23.04 A. for the Escalation Year with respect to
which Owner has most recently rendered an Owner's Operating Expense
Statement, appropriately adjusted to reflect (i) in the event such Escalation
Year is a partial calendar year, the increase in the Fixed Rent which would
have been payable for such Escalation Year if it had been a full calendar
year, and (ii) the amount by which current Operating Expenses as reasonably
estimated by Owner exceed Operating Expenses as reflected in such Owner's
Operating Expense Statement; and (iii) any net credit balance to which Tenant
may be entitled pursuant to the provisions of Subsection 23.05 C.
M. The term "Monthly Escalation Installment Notice" shall mean a notice
given by Owner to Tenant which sets forth the current Monthly Escalation
Installment; such Notice may be contained in a regular monthly rent xxxx, in
an Owner's Operating Expense Statement, or otherwise, and may be given from
time to time, at Owner's election.
N. Owner and Tenant acknowledge that Owner may apply for a certificate of
eligibility from the Department of Finance of the City of New York
determining that Owner is eligible to apply for exemption from tax payments
for the Real Property pursuant to the provisions of Section 11-256 through
11-267 (the "ICIP Program") of the Administrative Code of the City of New
York and the regulations promulgated pursuant to the ICIP Program. Any such
tax exemption for the Real Property is referred to as "Tax Exemption" and the
period of such Tax Exemption is referred to as the "Tax Exemption Period".
Owner agrees that Tenant shall not be required to (a) pay Taxes or charges
which become due because of the willful neglect or fraud by Owner in
connection with the ICIP Program or (b) otherwise relieve or indemnify Owner
from any personal liability arising under the ICIP Program, except where
imposition of such Taxes, charges or liability is occasioned by actions of
Tenant in violation of this Lease. Tenant agrees to report to Owner, as often
as is necessary under such regulations,
32
the number of workers engaged in employment in the Demised Premises, the
nature of each worker's employment and the residency of each worker and to
provide access to the Demised Premises by employees and agents of the
Department of Finance of the City of New York at all reasonable times at the
request of Owner. Tenant represents to the Owner that, within the seven (7)
years immediately preceding the date of this Lease, Tenant has not been
adjudged by a court of competent jurisdiction to have been guilty of (x) an
act, with respect to a building, which is made a crime under the provisions
of Article 150 of the Penal Law of the State of New York or any similar law
of another state, or (y) any act made a crime or violation by the provisions
of Section 235 of the Real Property Law of the State of New York, nor is any
charge for a violation of such laws presently pending against Tenant. Upon
request of Owner, from time to time, Tenant agrees to update said
representation when required because of the ICIP Program and regulations
thereunder. Tenant further agrees to cooperate with Owner in compliance with
such ICIP Program and regulations to aid Owner in obtaining and maintaining
the Tax Exemption and, if requested by Owner, to post a notice in a
conspicuous place in the Demised Premises and to publish a notice in a
newspaper of general circulation in the City of New York, in such form as
shall be prescribed by the Department of Finance stating that persons having
information concerning any violation by Tenant of Section 235 of the Real
Property Law or any Section of Article 150 of the Penal Law or any similar
law of another jurisdiction may submit such information to the Department of
Finance to be considered in determining Owner's eligibility for benefits.
Tenant acknowledges that its obligations under the provisions of Subsection
23.02A may be greater if Owner fails to obtain a Tax Exemption, and agrees
that Owner shall have no liability to Tenant nor shall Tenant be entitled to
any abatement or diminution of rent if Owner fails to obtain a Tax Exemption.
SECTION 23.02. TAXES: A. If Taxes payable in any Tax Escalation Year shall
be in such amount as shall constitute an increase above Owner's Basic Tax
Liability, the Fixed Rent for such Tax Escalation Year shall be increased by
a sum equal to Tenant's Proportionate Share of any such increase in Taxes.
B. Unless the Commencement Date shall occur on a July 1st, any increase in
the Fixed Rent pursuant to the provisions of Subsection A of this Section
23.02 for the Tax Escalation Year in which the Commencement Date shall occur
shall be apportioned in that percentage which the number of days in the
period from the Commencement Date to June 30th of such Tax Escalation Year,
both inclusive, bears to the total number of days in such Tax Escalation
Year. Unless the Demised Term shall expire on a June 30th, any increase in
the Fixed Rent pursuant to the provisions of said Subsection A for the Tax
Escalation Year in which the date of the expiration of the Demised Term shall
occur shall be apportioned in that percentage which the number of days in the
period from July 1st of such Tax Escalation Year to such date of expiration,
both inclusive, bears to the total number of days in such Tax Escalation
Year.
SECTION 23.03. CALCULATION AND PAYMENT OF TAXES: A. Owner shall render to
Tenant, either in accordance with the provisions of Article 27 or by personal
delivery at the Demised Premises, an Owner's Tax Statement with respect to
each Tax Escalation Year, either prior to or during such Tax Escalation Year.
Owner's failure to render an Owner's Tax Statement with respect to any Tax
Escalation Year shall not prejudice Owner's right to recover any sums due to
Owner hereunder with respect to such Tax Escalation Year, nor shall it
deprive Tenant of any credit to which it otherwise might be entitled with
respect to such Tax Escalation Year pursuant to the provisions of Subsection
D of this Section 23.03. The obligations of Owner and Tenant under the
provisions of Section 23.02 and this Section 23.03 with respect to any
increase in the Fixed Rent or any credit to which Tenant may be entitled
shall survive the expiration or any sooner termination of the Demised Term.
Within ten (10) days next following rendition of the first Owner's Tax
Statement which shows an increase in the Fixed Rent for any Tax Escalation
Year, Tenant shall pay to Owner one half ( 1/2) of the amount of the increase
shown upon such Owner's Tax Statement for such Tax Escalation Year (in the
event that the Commencement Date shall occur during such Tax Escalation Year
on a date other than a July 1st, the sum payable by Tenant under the
foregoing provisions of this Subsection 23.03A shall be apportioned so that
Tenant shall pay that percentage thereof which the number of days in the
period from the Commencement Date to the date upon which the next instalment
of Taxes is required to be paid by Owner bears to one hundred eighty (180)
days thereby giving effect to the apportionment provisions of Subsection B of
Section 23.02). In order to provide for current payments on account of (i)
the next
33
installment of Taxes payable by Owner for such Tax Escalation Year, if any,
and (ii) future potential increases in the Fixed Rent which may be payable by
Tenant pursuant to the provisions of Subsection A of Section 23.02 for future
Tax Escalation Years, Tenant shall (a) pay to Owner, on the first day of the
calendar month next following the rendition of such Owner's Tax Statement, a
sum equal to one twelfth (1/12th) of the increase in the Fixed Rent shown
upon such Owner's Tax Statement for such Tax Escalation Year (before any
apportionment pursuant to the provisions of Subsection B of Section 23.02)
multiplied by the number of months which may have elapsed between either (x)
July 1st of such Tax Escalation Year if such Owner's Tax Statement is
rendered between July 1st and December 31st of such Tax Escalation Year and
the month in which such payment is made or (y) January 1st of such Tax
Escalation Year if such Owner's Tax Statement is rendered between January 1st
and June 30th of such Tax Escalation Year and the month in which such payment
is made, and (b) thereafter pay to Owner on the first day of each month of
the Demised Term (until rendition by Owner of a new Owner's Tax Statement) a
sum equal to one twelfth (1/12th) of the increase in the Fixed Rent payable
pursuant to the provisions of Subsection A of Section 23.02 for the Tax
Escalation Year with respect to which Owner has most recently rendered an
Owner's Tax Statement (before any apportionment pursuant to the provisions of
Subsection B of Section 23.02); each such monthly installment shall be added
to and payable as part of each monthly installment of Fixed Rent.
B. Following rendition of each subsequent Owner's Tax Statement a
reconciliation shall be made as follows: Tenant shall be debited with any
increase in the Fixed Rent shown upon such Owner's Tax Statement and credited
with the aggregate amount, if any, paid by Tenant in accordance with the
provisions of Subsection A of this Section on account of potential future
increases in the Fixed Rent pursuant to Subsection 23.02.A which has not
previously been credited against increases in the Fixed Rent shown upon
Owner's Tax Statements. Tenant shall pay any net debit balance to Owner
within ten (10) days next following rendition by Owner, either in accordance
with the provisions of Article 27 or by personal delivery at the Demised
Premises, of an invoice for such net debit balance; any net credit balance
shall be applied as an adjustment against the next accruing monthly
installment as provided in subdivision (b) of Subsection A of this Section
23.03.
C. Tenant acknowledges that under the present law Taxes are payable by
Owner (i) with respect to a fiscal year commencing July 1st and ending on the
following June 30th and (ii) in two (2) installments, in advance, the first
of which is payable on July 1st and the second and final payment of which is
payable on the following January 1st. Tenant further acknowledges that it is
the purpose and intent of this Section 23.03 to provide Owner with Tenant's
Proportionate Share of the increase in the Fixed Rent pursuant to the
provisions of Subsection A of Section 23.02 at or about the time such
installment of Taxes is required to be paid by Owner without penalty or
interest. Accordingly, Tenant agrees that if the number of such installments,
and/or the time for payment thereof, and/or the fiscal year used for purposes
of Taxes, is changed, then, (a) prior to the time that any such revised
installment is payable by Owner, Tenant shall pay to Owner the amount which
shall provide Owner with Tenant's Proportionate Share of the increase in the
Fixed Rent pursuant to the provisions of Subsection 23.02.A applicable to the
revised installment of Taxes then required to be paid by Owner and (b) this
Article shall be appropriately adjusted to reflect such change and the time
of payment by Tenant to Owner of Tenant's Proportionate Share of any increase
in Taxes as provided in this Article shall be appropriately revised so that
Owner shall always be provided with Tenant's Proportionate Share of the
increase in the Fixed Rent prior to the installment of Taxes required to be
paid by Owner.
D. If, as a result of any application or proceeding brought by or on
behalf of Owner, Owner's Basic Tax Liability shall be decreased, Owner's Tax
Statement next following such decrease shall include any adjustment of the
Fixed Rent for all prior Tax Escalation Years reflecting a debit to Tenant
equal to the amount by which (a) the aggregate Fixed Rent payable with
respect to all such prior Tax Escalation Years (as increased pursuant to the
operation of the provisions of Subsection A of Section 23.02) based upon such
reduction of Owners' Basic Tax Liability shall exceed (b) the aggregate Fixed
Rent actually paid by Tenant with respect to all such prior Tax Escalation
Years. If, as a result of any application or proceeding brought by or on
behalf of Owner for reduction of the assessed valuation of the Real Property
for any fiscal tax year subsequent to the fiscal tax year commencing July
1st, 1995, and expiring June 30th, 1996, there shall be a decrease in Taxes
for
34
any Tax Escalation Year with respect to which Owner shall have previously
rendered an Owner's Tax Statement. Owner's Tax Statement next following such
decrease shall include an adjustment of the Fixed Rent for such Tax
Escalation Year reflecting a credit to Tenant equal to the amount by which
(i) the Fixed Rent actually paid by Tenant with respect to such Tax
Escalation Year (as increased pursuant to the operation of the provisions of
Subsection A of Section 23.02), shall exceed (ii) the Fixed Rent payable with
respect to such Tax Escalation Year (as increased pursuant to the operation
of the provisions of Subsection A of Section 23.02) based upon the reduction
of the assessed valuation. Tenant shall not bring or cause to be brought any
application or proceeding for reduction of the assessed valuation of the Real
Property. Tenant shall pay to Owner within thirty (30) days after demand, as
additional rent under this Lease, a sum equal to Tenant's Proportionate Share
of all costs and expenses including, without limitation, counsel fees, paid
or incurred by Owner in connection with any application or proceeding brought
for reduction of the assessed valuation of the Real Property or any other
contest of Taxes upon the Real Property for any Tax Escalation Year, whether
or not such application, proceeding or other contest was commenced and/or
settled and/or determined prior to the Tax Escalation Year in question.
SECTION 23.04. OPERATING EXPENSES: A. If Operating Expenses in any
Escalation Year shall be in such an amount as shall constitute an increase
above Base Operating Expenses, the Fixed Rent for such Escalation Year shall
be increased by a sum equal to Tenant's Proportionate Share of any such
increase.
B. Unless the Commencement Date shall occur on a January 1st, any increase
in the Fixed Rent pursuant to the provisions of Subsection A of this Section
23.04 for the Escalation Year in which the Commencement Date shall occur
shall be apportioned in that percentage which the number of days in the
period from the Commencement Date to December 31st of such Escalation Year,
both dates inclusive, bears to the total number of days in such Escalation
Year. Unless the Demised Term shall expire on December 31st any increase in
the Fixed Rent pursuant to the provisions of Subsection A of this Section
23.04 for the Escalation Year in which the date of the expiration of the
Demised Term shall occur shall be apportioned in that percentage which the
number of days in the period from January 1st of such Escalation Year to such
date of expiration, both dates inclusive, bears to the total number of days
in such Escalation Year.
C. In the determination of any increase in the Fixed Rent pursuant to the
foregoing provisions of this Section 23.04, if the Building shall not have
been fully occupied during any Escalation Year, Operating Expenses for such
Escalation Year shall be equitably adjusted (by including such additional
expenses as Owner would have incurred) to the extent, if any, required to
reflect full occupancy.
SECTION 23.05. CALCULATION AND PAYMENT OF OPERATING EXPENSES: A. Owner
shall render to Tenant, either in accordance with the provisions of Article
27 or by personal delivery at the Demised Premises, an Owner's Operating
Expense Statement with respect to each Escalation Year on or before the next
succeeding October 1st. Owner's failure to render an Owner's Operating
Expense Statement with respect to any Escalation Year shall not prejudice
Owner's right to recover any sums due to Owner hereunder with respect to such
Escalation Year.
B. Within thirty (30) days next following rendition of the first Owner's
Operating Expense Statement which shows an increase in the Fixed Rent for any
Escalation Year, Tenant shall pay to Owner the entire amount of such
increase. In order to provide for current payments on account of future
potential increases in the Fixed Rent which may be payable by Tenant pursuant
to the provisions of Subsection 23.04.A, Tenant shall also pay to Owner at
such time, provided Owner has given to Tenant a Monthly Escalation
Installment Notice, a sum equal to the product of (i) the Monthly Escalation
Installment set forth in such Notice multiplied by (ii) the number of months
or partial months which shall have elapsed between January 1st of the
Escalation Year in which such payment is made and the date of such payment,
less any amounts theretofore paid by Tenant to Owner on account of increases
in the Fixed Rent for such Escalation Year pursuant to the provisions of the
penultimate sentence of this Subsection 23.05.B; thereafter Tenant shall make
payment of a Monthly Escalation Installment throughout each month of the
Demised Term. Monthly Escalation Installments shall be added
35
to and payable as part of each monthly installment of Fixed Rent.
Notwithstanding anything to the contrary contained in the foregoing
provisions of this Article, prior to the rendition of the first Owner's
Operating Expense Statement which shows an increase in the Fixed Rent for any
Escalation Year, Owner may render to Tenant a pro forma Owner's Operating
Expense Statement containing a bona fide estimate of the increase in the
Fixed Rent to the Escalation Year in which the Commencement Date shall occur
and/or the subsequent Escalation Year. Following the rendition of such
pro-forma Owner's Operating Expense Statement, Tenant shall pay to Owner a
sum equal to one twelfth (1/12th) of the estimated increase in the Fixed Rent
shown thereon for such Escalation Year or Years multiplied by the number of
months which may have elapsed between the Commencement Date and the month in
which such payment is made and thereafter pay to Owner, on the first day of
each month of the Demised Term (until the rendition by Owner of the first
Owner's Operating Expense Statement) a sum equal to one twelfth (1/12th) of
the increase in the Fixed Rent shown on such pro-forma Owner's Operating
Expense Statement. Any sums paid pursuant to the provisions of the
immediately preceding sentence shall be credited against the sums required to
be paid by Tenant to Owner pursuant to the Owner's Operating Expense
Statement for the first Escalation Year to which there is an increase in the
Fixed Rent pursuant to the provisions of Subsection A.
C. Following rendition of the first Owner's Operating Expense Statement
and each subsequent Owner's Operating Expense Statement a reconciliation
shall be made as follows: Tenant shall be debited with any increase in the
Fixed Rent shown on such Owner's Operating Expense Statement and credited
with the aggregate amount, if any, paid by Tenant in accordance with the
provisions of Subsection B of this Section on account of future increases in
the Fixed Rent pursuant to Subsection 23.04.A, which has not previously been
credited against increases in the Fixed Rent shown on Owner's Operating
Expense Statements. Tenant shall pay any net debit balance to Owner within
thirty (30) days next following rendition by Owner, either in accordance with
the provisions of Article 27 or by personal delivery at the Demised Premises
of an invoice for such net debt balance; any net credit balance shall be
applied as an adjustment against the next accruing Monthly Escalation
Installment as provided in Subsection L of Section 23.01.
SECTION 23.06. DISPUTE RESOLUTION: A. In the event of any dispute between
Owner and Tenant arising out of the application of the Operating Expense
provisions of this Article, such dispute shall be determined by arbitration
in New York City in accordance with the provisions of Article 36.
Notwithstanding any such dispute and submission to arbitration, or any
dispute with respect to the Tax Escalation provisions of this Article (which
dispute shall not be subject to arbitration but which can only be prosecuted
by the institution of legal proceedings by Tenant), any increase in the Fixed
Rent shown upon any Owner's Operating Expense Statement or any Monthly
Escalation Installment Notice or any Owner's Tax Statement shall be payable
by Tenant within the time limitation set forth in this Article. If the
determination in such arbitration or legal proceedings shall be adverse to
Owner, any amount paid by Tenant to Owner in excess of the amount determined
to be properly payable shall be credited against the next accruing
installments of Fixed Rate due under this Lease. However, if there are no
such installments, such amounts shall be paid by Owner to Tenant within ten
(10) days following such determination.
B. In the event Tenant disagrees with any computation or other matter
contained in any Owner's Operating Expense Statement or any Monthly
Escalation Installment Notice, Tenant shall have the right to give notice to
Owner within sixty (60) days next following rendition of such Statement or
Notice setting forth the particulars of such disagreement. If the matter is
not resolved within thirty (30) days next following the giving of such notice
by Tenant, it shall be deemed a dispute which either party may submit to
arbitration pursuant to the provisions of Subsection A of this Section. If
(i) Tenant does not give a timely notice to Owner in accordance with the
foregoing provisions of this Subsection disagreeing with any computation or
other matter contained in any Owner's Operating Expense Statement or any
Monthly Escalation Installment Notice and setting forth the particulars of
such disagreement, or (ii) if any such timely notice shall have been given by
Tenant, the matter shall not have been resolved and neither party shall have
submitted the dispute to arbitration within thirty (30) days next following
the giving of such notice by Tenant, Tenant shall be deemed conclusively to
have accepted such Owner's Operating Expense Statement or Monthly Escalation
Installment Notice, as the case may be, and shall have no further right to
dispute the same.
36
C. (1) Tenant or its usual auditors of its normal books and records
(provided same are certified public accountants) in each case at Tenant's
expense, shall have the right to examine those portions of Owner's records
which are reasonably required to verify the accuracy of any amounts shown on
any Owner's Operating Expense Statement provided Tenant shall notify Owner of
its desire to so examine such records within sixty (60) days next following
rendition of such Owner's Operating Expense Statement. Owner shall maintain
such records for a period of three (3) years following the expiration of the
Escalation Year to which they relate. Upon Tenant's timely request, Owner
shall make such records available and any such examination shall be conducted
at the office of Owner's accountants or at such other reasonable place
designated by Owner during normal office hours.
(2) Tenant acknowledges and agrees that not more than three (3) of its
employees or three (3) persons employed by such auditors shall be entitled to
entry to the offices of Owner at any one time for the purposes of such review
and inspection. Tenant hereby recognizes the confidential, privileged and
proprietary nature of such records and the information and data contained
therein, as well as any compromise, settlement or adjustment reached between
Owner and Tenant relating to the results of such examination, and Tenant
covenants and agrees for itself, and its employees, agents and
representatives (including, but not limited to, such auditors, and any
attorneys or consultants retained by Tenant as hereinafter provided), that
such books, records, information, data, compromise, settlement and adjustment
will be held in the strictest confidence and not be divulged, disclosed or
revealed to any other person except (x) to the extent required by law, court
order or directive of any Governmental Authority or (y) to such auditors or
any attorneys retained by Tenant or consultants retained by Tenant in
connection with any action or proceeding between Owner and Tenant as to
Operating Expenses or Owner's Operating Expense Statement and no examination
of any such records shall be permitted unless and until such auditors,
attorneys and consultants affirmatively agree and consent to be bound by the
provisions of this Section 23.06C.
(3) Tenant agrees that this Section 23.06C is of material importance to
Owner and that any violation thereof shall result in immediate harm to Owner
and Owner shall have all rights allowed by law or equity if Tenant, its
employes, agents, and representatives (including, but not limited to, such
auditors, attorneys or consultants) violate the terms of this Section 23.06C,
including, but not limited to, the right to terminate Tenant's right to audit
Owner's records in the future pursuant to this Section 23.06C, and Tenant
shall indemnify and hold Owner harmless of and from all loss, cost, damage,
liability and expense (including, but not limited to counsel fees and
disbursements) arising from a breach of the foregoing obligations of Tenant
or any of its employees, agents and representatives, (including, but not
limited to, such auditors, attorneys or consultants). This obligation of
Tenant and its employees, agents and representatives (including, but not
limited to, any such auditors, attorneys or consultants) shall survive the
expiration or sooner term of the Demised Term.
SECTION 23.07. COLLECTION OF INCREASES IN FIXED RENT: The obligations of
Owner and Tenant under the provisions of this Article with respect to any
increase in the Fixed Rent, or any credit to which Tenant may be entitled,
shall survive the expiration or any sooner termination of the Demised Term.
All sums payable by Tenant under this Article shall be collectible by Owner
in the same manner as Fixed Rent.
ARTICLE 24
NO WAIVER
SECTION 24.01. OWNER'S TERMINATION NOT PREVENTED: Neither any option
granted to Tenant in this Lease or in any collateral instrument to renew or
extend the Demised Term, nor the exercise of any such option by Tenant, shall
prevent Owner from exercising any option or right granted or reserved to
Owner in this Lease or in any collateral instrument or which Owner may have
by virtue of any law, to terminate this Lease and the Demised Term or any
renewal or extension of the Demised Term either during the original Demised
Term or
37
during the renewed or extended term. Any termination of this Lease and the
Demised Term shall serve to terminate any such renewal or extension of the
Demised Term and any right of Tenant to any such renewal or extension,
whether or not Tenant shall have exercised any such option to renew or extend
the Demised Term. Any such option or right on the part of Owner to terminate
this Lease shall continue during any extension or renewal of the Demised
Term. No option granted to Tenant to renew or extend the Demised Term shall
be deemed to give Tenant any further option to renew or extend.
SECTION 24.02. NO TERMINATION BY TENANT/NO WAIVER: No act or thing done by
Owner or Owner's agents during the Demised Term shall constitute a valid
acceptance of a surrender of the Demised Premises or any remaining portion of
the Demised Term except a written instrument accepting such surrender,
executed by Owner. No employee of Owner or of Owner's agents shall have any
authority to accept the keys of the Demised Premises prior to the termination
of this Lease and the Demised Term, and the delivery of such keys to any such
employee shall not operate as a termination of this Lease or a surrender of
the Demised Premises; however, if Tenant desires to have Owner sublet the
Demised Premises for Tenant's account, Owner or Owner's agents are authorized
to receive said keys for such purposes without releasing Tenant from any of
its obligations under this Lease, and Tenant hereby relieves Owner of any
liability for loss of, or damage to, any of Tenant's property or other
effects in connection with such subletting. The failure by Owner to seek
redress for breach or violation of, or to insist upon the strict performance
of, any term, covenant or condition of this Lease on Tenant's part to be
observed or performed, shall not prevent a subsequent act or omission which
would have originally constituted a breach or violation of any such term,
covenant or condition from having all the force and effect of an original
breach or violation. The receipt by Owner of rent with knowledge of the
breach or violation by Tenant of any term, covenant or condition of this
Lease on Tenant's part to be observed or performed shall not be deemed a
waiver of such breach or violation. Owners' failure to enforce any Building
Rule against Tenant or against any other tenant or occupant of the Building
shall not be deemed a waiver of any such Building Rule. No provision of this
Lease shall be deemed to have been waived by Owner unless such waiver shall
be set forth in a written instrument executed by Owner. No payment by Tenant
or receipt by Owner of a lesser amount than the aggregate of all Fixed Rent
and additional rent then due under this Lease shall be deemed to be other
than on account of the first accruing of all such items of Fixed Rent and
additional rent then due, no endorsement or statement on any check and no
letter accompanying any check or other rent payment in any such lesser amount
and no acceptance of any such check or other such payment by Owner shall
constitute an accord and satisfaction, and Owner may accept any such check or
payment without prejudice to Owner's right to recover the balance of such
rent or to pursue any other legal remedy.
ARTICLE 25
MUTUAL WAIVER OF TRIAL BY JURY
SECTION 25.01. Owner and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by Owner or Tenant against the other on
any matter whatsoever arising out of or in any way connected with this Lease,
the relationship of landlord and tenant, the use or occupancy of the Demised
Premises by Tenant or any person claiming through or under Tenant, any claim
of injury or damage, and any emergency or other statutory remedy; however,
the foregoing waiver shall not apply to any action for personal injury or
property damage. The provisions of the foregoing sentence shall survive the
expiration or any sooner termination of the Demised Term. If Owner commences
any summary proceeding, or any other proceeding of like import, Tenant
agrees: (i) not to interpose any counterclaim of whatever nature or
description in any such summary proceeding, or any other proceeding of like
import, unless failure to interpose such counterclaim would preclude Tenant
from asserting such claim in a separate action or proceeding; and (ii) not to
seek to remove to another court or jurisdiction or consolidate any such
summary proceeding, or other proceeding of like import, with any action or
proceeding which may have been, or will be, brought by Tenant. In the event
that Tenant shall breach any of its obligations set forth in the immediately
preceding sentence, Tenant agrees (a) to pay all of Owner's attorneys' fees
38
and disbursements in connection with Owner's enforcement of such obligations
of Tenant and (b) in all events to pay all accrued, present and future Fixed
Rent and increases therein and additional rent payable pursuant to the
provisions of this Lease.
ARTICLE 26
INABILITY TO PERFORM
SECTION 26.01. If, by reason of strikes or other labor disputes, fire or
other casualty (or reasonable delays in adjustment of insurance), accidents,
any Legal Requirements, any orders of any Governmental Authority or any other
cause beyond Owner's reasonable control, whether or not such other cause
shall be similar in nature to those hereinbefore enumerated, Owner is unable
to furnish or is delayed in furnishing any utility or service required to be
furnished by Owner under the provisions of Article 29 or any other Article of
this Lease or any collateral instrument, or is unable to perform or make or
is delayed in performing or making any installations, decorations, repairs,
alterations, additions or improvements, whether or not required to be
performed or made under this Lease or under any collateral instrument, or is
unable to fulfill or is delayed in fulfilling any of Owner's other
obligations under this Lease or any collateral instrument, no such inability
or delay shall constitute an actual or constructive eviction, in whole or in
part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Owner or its agents by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business, or otherwise.
ARTICLE 27
NOTICES
SECTION 27.01. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given
or required to be given under this Lease shall be effective only if rendered
or given in writing, sent by registered or certified mail (return receipt
requested optional), addressed as follows:
(a) TO TENANT (i) at Tenant's address set forth in this Lease if mailed
prior to Tenant's taking possession of the Demised Premises, or (ii) at
the Building if mailed subsequent to Tenant's taking possession of the
Demised Premises, or (iii) at any place where Tenant or any agent or
employee of Tenant may be found if mailed subsequent to Tenant's vacating,
deserting, abandoning or surrendering the Demised Premises, or
(b) TO OWNER at Owner's address set forth in this Lease, with a copy to
Xxxxxxxx & Fleece, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Partner-in-Charge, Xxxxx Management, or
(c) addressed to such other address as either Owner or Tenant may
designate as its new address for such purpose by notice given to the other
in accordance with the provisions of this Section. Any such xxxx,
statement, notice, demand, request or other communication shall be deemed
to have been rendered or given on the date when it shall have been mailed
as provided in this Section.
Nothing contained in this Section 27.01 shall preclude, limit or modify
Owner's service of any notice, statement, demand or other communication in
the manner required by law, including, but not limited to, any demand for
rent under Article 7 of the New York Real Property Actions and Proceedings
Law or any successor law of like import.
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ARTICLE 28
PARTNERSHIP TENANT
SECTION 28.01. If Tenant is a partnership or professional corporation or
limited liability company (or is comprised of two (2) or more persons,
individually and as co-partners of a partnership or shareholders of a
professional corporation or members of a limited liability company) or if
Tenant's interest in this Lease shall be assigned to a partnership or
professional corporation or limited liability company (or to two (2) or more
persons, individually and as co-partners of a partnership or shareholders of
a professional corporation or members of a limited liability company)
pursuant to Article 11 (any such partnership, professional corporation,
limited liability company and such persons are referred to in this Section as
"Partnership Tenant"), the following provisions of this Section shall apply
to such Partnership Tenant: (i) the liability of each of the persons
comprising Partnership Tenant shall be joint and several, individually and as
a partner or shareholder or member, with respect to all obligations of the
Tenant under this Lease whether or not such obligations arose prior to,
during, or after any period when any party comprising Partnership Tenant was
a member or shareholder of Partnership Tenant, and (ii) each of the persons
comprising Partnership Tenant, whether or not such person shall be one of the
persons comprising Tenant at the time in question, hereby consents in advance
to, and agrees to be bound by, any written instrument which may hereafter be
executed, changing, modifying or discharging this Lease, in whole or in part,
or surrendering all or any part of the Demised Premises to Owner, and by any
notices, demands, requests or other communications which may hereafter be
given by Partnership Tenant or by any of the persons comprising Partnership
Tenant, and (iii) any bills, statements, notices, demands, requests or other
communications given or rendered to Partnership Tenant or to any of the
persons comprising Partnership Tenant shall be deemed given or rendered to
Partnership Tenant and shall be binding upon Partnership Tenant and all such
persons, and (iv) if Partnership Tenant shall admit new partners or
shareholders or members, all of such new partners or shareholders or members,
as the case may be, shall, by their admission to Partnership Tenant, be
deemed to have assumed performance of all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed, and
shall be liable for such performance, together with all other parties,
jointly or severally, individually and as a partner or shareholder or member,
whether or not the obligation to comply with such terms, covenants or
conditions arose prior to, during or after any period when any party
comprising Partnership Tenant was a member or shareholder of Partnership
Tenant and (v) Partnership Tenant shall give prompt notice to Owner of the
admission of any such new partners, or shareholders, or members, as the case
may be, and, upon demand of Owner, shall cause each such new partner or
shareholder or member to execute and deliver to Owner an agreement, in form
satisfactory to Owner, wherein each such new partner or shareholder or member
shall so assume performance of all of the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed whether or not the
obligation to comply with such terms, covenants or conditions arose prior to,
during or after any period when any party comprising Partnership Tenant was a
member or shareholder of Partnership Tenant (but neither Owner's failure to
request any such such agreement nor the failure of any such new partner,
shareholder or member to execute or deliver any such agreement to Owner shall
vitiate the provisions of subdivision (iv) or any other provision of this
Section).
ARTICLE 29
UTILITIES AND SERVICES
SECTION 29.01. ELEVATORS. As long as Tenant is not in default under any of
the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, Owner, at Owner's expense, shall furnish necessary
passenger elevator facilities on business days (as defined in Section 31.01)
from 8:00 A.M. to 6:00 P.M. and on Saturdays from 8:00 A.M. to 1:00 P.M. and
shall have a passenger elevator subject to call at all other times Tenant
shall be entitled to the non-exclusive use of the freight elevator in common
with other tenants and occupants of the Building from 8:00 A.M. to 6:00 P.M.
on business days, subject to such reasonable rules as Owner may
40
adopt for the use of the freight elevator. At any time or times all or any of
the elevators in the Building may, at Owner's option, be automatic elevators,
and Owner shall not be required to furnish any operator service for automatic
elevators. If Owner shall, at any time, elect to furnish operator service for
any automatic elevators, Owner shall have the right to discontinue furnishing
such service with the same effect as if Owner had never elected to furnish
such service.
SECTION 29.02. HEAT: As long as Tenant is not in default under any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed
or performed, Owner, at Owner's expense, shall furnish heat to the Demised
Premises, as and when required by law, on business days from 8:00 A. M. to
6:00 P.M. and on Saturdays from 8:00 A.M. to 1:00 P.M.
SECTION 29.03. AIR CONDITIONING AND VENTILATION: As long as Tenant is not
in default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed, Owner, at Owner's expense, shall
furnish and distribute to the Demised Premises (i) conditioned air at
reasonable temperatures, pressures and degrees of humidity and in reasonable
volumes and velocities, on business days from 8:00 A.M. to 6:00 P.M. and on
Saturdays from 8:00 A.M. to 1:00 P.M. during the months of May, June, July,
August, September and October when required for the comfortable occupancy of
the Demised Premises; and (ii) mechanical ventilation through the Building
air conditioning system on business days from 8:00 A.M. to 6:00 P.M. and on
Saturdays from 8:00 A.M. to 1:00 P.M. throughout the year, except when
conditioned air or heat is being furnished. Notwithstanding the foregoing
provisions of this Section, Owner shall not be responsible if the normal
operation of the Building air conditioning system shall fail to provide
conditioned air at reasonable temperatures, pressures or degrees of humidity
or in reasonable volumes or velocities in any portions of the Demised
Premises (a) which, by reason of any machinery or equipment installed by or
on behalf of Tenant or any person claiming through or under Tenant, shall
have an electrical load in excess of four (4) xxxxx per square foot of usable
area for all purposes (including lighting and power), or which shall have a
human occupancy factor in excess of one person per 100 square feet of usable
area (the average electrical load and human occupancy factors for which the
Building air conditioning system is designed) or (b) because of any
rearrangement of partitioning or other Alterations made or performed by or on
behalf of Tenant or any person claiming through or under Tenant. Whenever
said air conditioning system is in operation, Tenant agrees to cause all the
windows in the Demised Premises to be kept closed and to cause the venetian
blinds in the Demised Premises to be kept closed if necessary because of the
position of the sun. Tenant agrees to cause all the windows in the Demised
Premises to be closed whenever the Demised Premises are not occupied. Tenant
shall cooperate fully with Owner at all times and abide by all regulations
and requirements which Owner may reasonably prescribe for the proper
functioning and protection of the air conditioning and ventilating system. In
addition to any and all other rights and remedies which Owner may invoke for
a violation or breach of any of the foregoing provisions of this Section,
Owner may discontinue heating, air conditioning and ventilating service
during the period of such violation or breach, and such discontinuance shall
not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Owner,
or its agents, by reason of inconvenience or annoynace to Tenant, or inuury
ot or interruption of Tenant's business, or otherwise.
SECTION 29.04. CLEANING: A. As long as Tenant is not in default under any
of the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, and provided Tenant shall keep the Demised Premises in
order, Owner, at Owner's expense, shall cause the office areas of the Demised
Premises to be cleaned and shall cause Tenant's ordinary office waste paper
refuse to be removed, all at regular intervals in accordance with standards
and practices adopted by Owner for the Building. Tenant shall cooperate with
any waste and garbage recycling program of the Building and shall comply with
all reasonable rules and regulations of Owner with respect thereto. Tenant
acknowledges that Owner's obligation to cause the office areas of the Demised
Premises to be cleaned excludes any portion of the Demised Premises not used
as office areas (e.g., storage, mail and computer areas, private lavatories
and areas used for the storage, preparation, service or consumption of food
or beverages). Tenant shall pay Owner at Building standard rates or, if there
are no such rates, at reasonable rates.
41
for the removal of any of Tenant's refuse or rubbish other than ordinary
office waste paper refuse from the Building, and Tenant's expense, shall
cause all portions of the Demised Premises used for the storage preparation,
service or consumption of food or beverages to be cleaned daily in a manner
satisfactory to Owner, and to be exterminated against infestation by vermin,
roaches or rodents and, in addition, whenever there shall be evidence of any
infestation.
B. Tenant acknowledges and is aware that the cleaning services required
to be furnished by Owner pursuant to this Section may be furnished by a
contractor or contractors employed by Owner and agrees that Owner shall not
be deemed in default of any of its obligations under this Section 29.04
unless such default shall continue for an unreasonable period of time after
notice from Tenant to Owner setting forth the specific nature of such
default.
C. Notwithstanding the provisions of Subsection A of this Section. Tenant
shall have the option to contract independently for the removal of such other
refuse and rubbish and for office cleaning services in addition to those
furnished by Owner. In the even Tenant exercises such option, the removal of
such other refuse and rubbish and the furnishing by Owner. In the event
Tenant exercises such option, the removal of such other refuse and rubbish
and the furnishing of office cleaning services to Tenant by persons other
than Owner and its contractors shall be performed in accordance with such
regulations and requirements as, in Owner's judgement, are necessary for the
proper operation of the Building, and Tenant agrees that Tenant will not
permit any person to enter the Demised Premises or the Building for such
purposes, or for the purpose of providing extermination services required to
be performed by Tenant pursuant to Subsection A of this Section, other than
persons first approved by Owner, such approval not unreasonably to be
withheld.
Section 29.05. Electricity: A. As long as Tenant is not in default under
any of the terms, covenants or conditions of this Le3ase on Tenant's part to
be observed or performed, Owner, at Owner's expense, shall redistribute or
furnish electrical energy to or for the use of Tenant in the Demised Premises
for the operation if the lighting fixtures and the electrical receptacles
installed in the Demised Premises on the Commencement Date. There shall be no
specific charge by way of measuring such electrical energy on any meter or
otherwise, as the charge for the service of redistributing or furnishing such
electrical energy has been included in the Fixed Rent on a so-called "rent
inclusion" basis. The parties agree that although the charge for the service
of redistrituting of furnishing electrical energy is included in the Fixed
Rent on a so-called "rent inclusion" basis, the value to Tenant of such
service may not be fully reflected in the Fixed Rent. Accordingly, Tenant
agrees that Owner may cause and independent electrical engineer or electrical
consulting firm, selected by Owner, to make a determination, following the
commencement of Tenant's normal business activities in the Demised Premises,
of full value to Tenant of such services supplied by Owner, to wit: the
potential electrical energy supplied to Tenant annually based upon the
estimate capacity of the electrical feeders, risers and wiring and other
electrical facilities serving the Demised Premises. Such engineer or
consulting firms shall certify such determination in writing to Owner and
Tenant. If it shall be determined that the full value to Tenant of such
service is in excess of SEVENTEEN THOUSAND FIVE HUNDRED AND 00/100
($17,500.00) DOLLARS (such sum is referred to as the "Electrical Inclusion
Factor"), the parties shall enter into a written supplementary agreement, in
form satisfactory to Owner, modifying this Lease as of the Commencement Date
by increasing the Fixed Rent and the Electrical Inclusions Factor for the
entire Demised Term by an annual amount equal to such excess. However, if it
shall be so determined that the full value to Tenant of such service does not
exceed the Electrical Inclusion Factor, no such agreement shall be executed
and there shall be no increase or decrease in the Fixed Rent or the
Electrical Inclusion Factor by reason of such determination. If either the
quantity or character of electrical service is changed by the public utility
corporation supplying electrical service to the Building or is no longer
available or suitable for Tenant's requirements, no such change,
unavailability or unsuitability shall constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or
diminution of rent, or relieve Tenant form any of its obligations under this
Lease, or impose any liability upon Owner, or its agents, by reason of
inconvenience or annoyance to Tenant, or injury to or interuption of Tenant's
business, or otherwise.
B. Owner represents that the electrical feeder or riser capacity
serving the
42
Demised Premises on the Commencement Date shall be adequate to serve the
lighting fixtures and electrical receptacles installed in the Demised
Premises on the Commencement date. Subject to the provisions of Subsection
C(1) of this Section 29.05, any additional feeders or risers to supply
Tenant's additional electrical requirements, and all other equipment proper
and necessary in connection with such feeders or risers, shall be installed
by Owner upon Tenant's request, at the sole cost and expense of Tenant,
provided that, in Owner's judgement, such additional feeders or risers are
necessary and are permissible under applicable laws (including, but not
limited to, the New York State Energy Conservation Construction Code) and
insurance regulations and the installation of such feeders or risers will not
cause permanent damage or injury to the Building or the Demised Premises or
cause or create a dangerous or hazardous condition or entail excessive or
unreasonable alterations or repairs or interfere with or disturb other
tenants or occupants of the Building. Tenant covenants that at no time shall
the use of electrical energy in the Demised Premises exceed the capacity of
the exiting feeders or wiring installations then serving the Demised
Premises. Tenant shall not make or perform, or permit the making or
performance of, any Alterations to wiring installations or other electrical
facilities in or serving the Demised Premises or any additions to the
business machines, office equipment or other appliances in the Demised
Premises which utilize electrical energy without the prior consent of Owner
in each instance. Any such Alterations, additions or consent by Owner shall
be subject to the provisions of Subsection C(1) of this Section 29.05, as
well as to the other provisions of this Lease including, but not limited to,
the provisions of Article 3.
C. (1) If, at any time or times prior to or during the Demised Terms,
electrical feeders, risers, wiring or other electrical facilities serving the
Demised Premises shall be installed by Owner, Tenant or others, on behalf of
Tenant or any person claiming through or under Tenant in addition to feeders,
risers, wiring or other electrical facilities necessary to serve the lighting
fixtures and electrical receptacles installed in the Demised the Commencement
date, the Fixed Rent and the Electrical Inclusion Factor shall be increase in
an annual amount which shall reflect the value to Tenant of the additional
service to be furnishable by Owner, to wit: the potential additional
electrical energy made available to Tenant annually based upon the estimated
capacity of such additional electrical feeders, risers, wiring or other
electrical facilities. The amount of any such increase in the Fixed Rent and
the Electrical Inclusions Factor shall be finally determined by an
independent electrical engineer or consulting firm selected by Owner who
shall certify such determination in writing to Owner and Tenant. Following
such determination, Owner and Tenant shall enter into a written supplementary
agreement, in form satisfactory to Owner, modifying this Lease by increasing
the Fixed Rent and the Electrical Inclusion Factor for the remainder of the
Demised Term in an annual amount equal to the value of such additional
service as so determine. Any such increase shall be effective as of the date
of the first availability to Tenant of such additional service and shall be
retroactive to such date if necessary.
(2) If, at any time or times after February 1, 1996, the rates at which
Owner purchases electrical energy from the public utility corporation
supplying electrical service to the Building or any charges incurred or taxes
payable by Owner in connection therewith shall be increased or decreased, as
the case may be, upon demand of either party, in an annual amount which shall
fairly and proportionately reflect the estimated increase or decrease, as the
case may be, in the annual cost to Owner of purchasing electrical energy for
the Building provided that notwithstanding anything to the contrary contained
in the provisions for the Section 29.05 in no event shall (a) the Electrical
Inclusion Factor ever be decreased below the original amount thereof set
forth in Subsection A of this Section and (b) the Fixed Rent ever be
decreased by more than such decrease in the Electrical Inclusion Factor as so
limited by the provisions of the aforesaid Subdivision (a) of this Subsection
C.(2). If, within ten (10) days after any such demand, Owner and Tenant shall
fail to agree upon the amount of such increase or decrease, as the case may
be, in the Fixed Rent and the Electrical Inclusion Factor then, in lieu of
such agreement, such estimated increase or decrease, as the case may be,
shall be finally determined by an independent electrical engineer or
consulting firm selected by Owner who shall certify such determination in
writing to Owner and Tenant. Following any such agreement or determination,
Owner and Tenant shall enter into a written supplementary agreement, in form
satisfactory to Owner, modifying this Lease by increasing, or decreasing, as
the case may be, the Fixed Rent and the Electrical Inclusion Factor for the
remainder of the Demised Term in an annual amount equal to such estimated
43
increase or decrease as so agreed or determined. Any such increase or
decrease in the Fixed Rent and the Electrical Inclusion Factor shall be
effective as of the effective date of such increase or decrease, and shall be
retroactive to such date if necessary.
(3) Any increase in the Fixed Rent pursuant to the provisions of
Subsection A or this Subsection C with respect to the period from the
effective date of such increase to the last day of the month in which such
increase shall be fixed by agreement or determination shall be payable by
Tenant upon demand of Owner. Any decrease in the Fixed Rent pursuant to the
provisions of this Subsection C with respect tot he period from the effective
date of such decrease to the last day of the month in which such decrease
shall be fixed by agreement or determination shall be credited to Tenant
against the next monthly installment of the Fixed Rent. The monthly
installments of the Fixed Rent payable after the date upon which any such
increase or decrease is so fixed shall be proportionately adjusted to reflect
such increase or decrease in the Fixed Rent.
D. Owner may, at any time, elect to discontinue the redistribution or
furnishing of electrical energy. In the event of any such election by Owner,
(i) Owner agrees to give reasonable advance notice of any such discontinuance
to Tenant, (ii) Owner agrees to permit Tenant to receive electrical service
directly from the public utility corporation supplying electrical service to
the Building and to permit the existing feeders, risers, wiring and other
electrical facilities serving the Demised Premises to be used by Tenant from
such purpose to the extent they are suitable and safely capable, (iii) Owner
agreed to pay such charges and costs, if any, as such public utility
corporation may impose in connection with the installation of Tenant's
meters, (iv) the Fixed Rent shall be decreased, as of the date of such
discontinuance, by an amount equal to the Electrical Inclusion Factor to
reflect such discontinuance; and (v) this Lease shall remain in full force
and effect and such discontinuance shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent except as expressly provided in subdivision
(iv) of this Subsection D, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Owner or its agents by reason
of inconvenience or annoyance to Tenant, or injury to or interruption of
Tenant's business, or otherwise.
E. The following method of computation shall be employed by any electrical
engineer or electrical consulting firm selected by Owner pursuant to the
provisions of Subsection c(2) of this Section 29.05 in finally determining
any estimated increase or decrease in the Fixed Rent and the Electrical
Inclusion Factor, under the provisions of this Section resulting from public
utility corporation (referred to as "The Corporation") electrical rate and
fuel charge changes and taxes (collectively "Electrical Changes") payable in
connection therewith.
(1) Owner's bills from The Corporation for the Building for the twelve
(12) month period immediately preceding the Electrical Change in question
shall be averaged for demand and consumption (Kw and Kwh) and the rate
structure in effect immediately prior to the Electrical Change in question
shall be applied to such average demand and consumption factors of Owner's
xxxxxxxx for the Building for said twelve (12) month period resulting in an
agreed determination of the cost to Owner of electricity for the Building
immediately prior to the Electrical Change in question; and
(2) The new rate structure pursuant to which Owner is billed by The
Corporation, i.e., the rate structure which includes the Electrical Change in
question, shall be applied to the average demand and consumption factors of
Owner's xxxxxxxx for the Building for said twelve (12) month period resulting
in an agreed estimate of the cost to Owner by reason of the Electrical Change
in question; and
(3) The difference in the costs determined pursuant to the foregoing
subdivisions (1) and (2) shall be deemed to be the amount of the estimated
annual change in cost and the amount of such estimated annual change in cost
shall be divided by the cost determined pursuant to the foregoing subdivision
(1); and
44
4. The resulting quotient shall be applied to Tenant's then current
Electrical Inclusion Factor to produce the increase or decrease in the Fixed
Rent and Electrical Inclusion Factor.
(For example: Assume (1) an Electrical Change i.e. a rate increase; (2) an
application of the rate schedule in effect immediately prior to such
Electrical Change to the averaged electrical demand and consumption factors
shown on Owner's electrical bills for the twelve (12) month period
immediately preceding such Electrical Change resulting in an estimated annual
cost of $100,000.00; (3) an application of the new rate schedule to the cost
of $110,000.00; (4) deduction of the sum of $100,000.00 referred to in step
(2) from said sum of $110,000.00 referred to in step (3), resulting in a
difference of $10,000.00; and (5) that Tenant's Electrical Inclusion Factor
was $3,000.00. The $10,000.00 annual estimated increase for the Building,
when divided by $10,000.00, the estimated annual cost to Owner of electricity
for the Building prior to the Electrical Change in question, results in a
quotient of 10% which, when applied to Tenant's Electrical Inclusion Factor
increases the Fixed Rent and the Electrical Inclusion Factor by $300.00.)
F. Notwithstanding anything to the contrary set forth in this Lease, any
sums payable or granted in any way by the public utility corporation
supplying electricity to the Building resulting from the installation in the
Demised Premises of energy efficient xxxxxxx, special supplemental heating,
ventilation and air conditioning systems or any other Alterations, which sums
are paid or given by way or rebate, direct payment, credit or otherwise,
shall be and remain the property of Owner, and Tenant shall not be entitled
to any portion thereof, unless such xxxxxxx, supplemental heating,
ventilation and air conditioning systems or other Alterations were installed
by Tenant, solely at Tenant's expense, without any contribution, credit or
allowance by Owner, in accordance with all of the provisions of this Lease.
Nothing contained in the foregoing sentence, however, shall be deemed to
obligate Owner to supply or install in the Demised Premises any such xxxxxxx,
supplemental hearing, ventilation and air conditioning systems or other
Alterations.
SECTION 29.06. WATER: If Tenant requires, uses or consumes water for any
purpose in addition to ordinary lavatory and drinking purposes, Owner may
install a hot water meter and a cold water meter and thereby measure Tenant's
consumption of water for all purposes. Tenant shall pay to Owner the cost of
any such meters and their installation, and Tenant shall keep any such meters
and any such installation equipment in good working order and repair, at
Tenant's cost and expense. Tenant agrees to pay for water consumed as shown
on said meters, and sewer charges, taxes and any other governmental changes
thereon, as and when bills are rendered. In addition to any sums required to
be paid by Tenant for hot water consumed and sewer charges, taxes and any
other governmental charges thereon under the foregoing provisions of this
Section, Tenant agrees to pay Owner, for the heating of said hot water, an
amount equal to three (3X) times the total of said sums required to be paid
by Tenant for hot water and sewer charges thereon. For the purposes of
determining the amount of any sums required to be paid by Tenant under this
Section, all hot and cold water consumed during any period when said meters
are not in good working order shall be deemed to have been consumed at the
rate of consumption of such water during the most comparable period when such
meters were in good working order.
SECTION 29.07. OVERTIME PERIODS: The Fixed Rent does not reflect or
include any charge to Tenant for the furnishing or distributing of any
necessary elevator facilities, heat, conditioned air or mechanical
ventilation to the Demised Premises during periods (referred to as "Overtime
Periods") other than the hours and days set forth above in this Article for
the furnishing and distributing of such services. Accordingly, if Owner shall
furnish any such elevator facilities, heat, conditioned air or mechanical
ventilation to the Demised Premises at the request of Tenant during Overtime
Periods, Tenant shall pay Owner for such services at the standard rates then
fixed by Owner for the Building or, if no such rates are then fixed, at
reasonable rates. Owner shall not be required to furnish any such service
during Overtime Periods, unless Owner has received reasonable advance notice
from Tenant requesting such services. If Tenant fails to give Owner
reasonable advance notice requesting such service during any Overtime
Periods, then, whether or not the Demised Premises are habitable during such
overtime Periods, failure by Owner to furnish or distribute any such services
during such Overtime Periods shall not
45
constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Owner
or its agents by reason of inconvenience or annoyance to Tenant, or injury to
or interruption of Tenant's business or otherwise.
SECTION 29.08. OWNER'S RIGHT TO STOP SERVICE: Owner reserves the right to
stop the service of the heating, air conditioning, ventilating, elevator,
plumbing, electrical or other mechanical systems or facilities in the
Building when necessary by reason of accident or emergency, or for repairs,
alterations, replacements or improvements, which, in the judgment of Owner
are desirable or necessary, until said repairs, alterations, replacements or
improvements shall have been completed. The exercise of such right by Owner
shall not constitute an actual or constructive eviction, in whole or in part,
or entitle Tenant to any abatement or diminution of rent, or relieve Tenant
from any of its obligations under this Lease, or impose any liability upon
Owner or its agents by reason of inconvenience or annoyance to Tenant, or
injury to or interruption of Tenant's business, or otherwise.
ARTICLE 30
TABLE OF CONTENTS, ETC.
SECTION 30.01. TABLE OF CONTENTS/CAPTIONS: The Table of Contents and the
captions following the Articles and Sections of this Lease have been inserted
solely as a matter of convenience and in way define or limit the scope or
intent of any provisions of this Lease.
ARTICLE 31
MISCELLANEOUS DEFINITIONS, SEVERABILITY AND INTERPRETATION PROVISIONS
SECTION 31.01. The term "business days" as used in this Lease shall
exclude Saturday's, Sundays and holidays, the term "Saturdays" as used in
this Lease shall exclude holidays and the term "holidays" as used in this
Lease shall mean all days observed as legal holidays by either the New York
State Government or the Federal Government.
SECTION 31.02. The terms "person" and "persons" as sued in this Lease
shall be deemed to include natural persons, firms, corporations, associations
and any other price or public entities, whether any of the foregoing are
acting on their own behalf or in a representative capacity.
SECTION 31.03. The term "prime rate" shall mean the rate of interest
announced publicly by Chemical Bank, or its successor, from time to time, as
Chemical Bank's or such successor's base rate, or if there is no such base
rate, then the rate of interest charged by Chemical Bank or its successor to
its most credit worthy customers on commercial loans having a ninety (90) day
duration.
SECTION 31.04. If any term, covenant or condition of this Lease or any
application thereof shall be invalid or unenforceable, the remainder of this
Lease and any other application of such term, covenant or condition shall not
be affected thereby.
SECTION 31.05. This Lease shall be construed without regard or any
presumption or other rule requiring construction against the party causing
this Lease to be drafted. In the even of any action, suit, dispute or
proceeding affecting the terms of this Lease, no weight shall be given to any
deletions or striking out of any of the terms of this Lease contained in any
draft of this Lease and no such deletion or strike out shall be entered into
evidence in any such action, suit or dispute or proceeding given any weight
therein.
46
ARTICLE 21
ADJACENT EXCAVATION
SECTION 32.01. IF an excavation shall be made upon land adjacent to the
Real Property, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation license to enter upon
the Demised Premises for the purpose of doing such world as said person shall
deem necessary to prefoundations and no such entry shall constitute an actual
or constructive eviction, in whole or in part, or entitled Tenant to any
abatement or diminution of rent, or relive Tenant from any of its obligations
under this Lease, or impose any liability upon Owner or said person.
ARTICLE 33
BUILDING RULES
SECTION 33.01. Tenant shall observe faithfully, and comply strictly with,
and shall not permit the violation of the Building Rules set forth in
Schedule A annexed to and made a part of this Lease and such additional
reasonable Building Rules as Owner may, from time to time, adopt. All of the
terms, covenants and conditions of Schedule A are incorporated in this Lease
by reference and shall be deemed part of this Lease as through fully set
forth in the body of this Lease. The term "Building Rules" as used in this
Lease shall include those set forth in Schedule A and those hereafter made or
adopted as provided in this Section. In case Tenant disputes the
reasonableness of any additional Building Rule hereafter adopted by Owner,
the parties hereto agree to submit the question of the reasonableness of such
Building Rule hereafter adopted by Owner, the parties hereto agree to submit
the question of the reasonableness of such Building Rule for decision to the
Chairman of the Board of Directors of the Management Division of the Real
Estate Board of new York, Inc., or its successor (the "Chairman"), or to such
impartial person or persons as the Chairman may designate, whose
determination shall be final and conclusive upon Owner and Tenant. Tenant's
right to dispute the reasonableness of any additional Building Rule shall be
deemed waived unless asserted by service of a notice upon Owner within ten
(10) days after the date upon which Owner shall give notice to Tenant of the
adoption of any such additional Building Rule. Owner shall have no duty or
obligation to enforce any Building Rule, or any term, covenant or condition
of any other lease, against any other tenant or occupant of the Building, and
Owner's failure or refusal to enforce any Building Rule or any term, covenant
or condition of any other lease against any other tenant or occupant of the
Building shall not constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution or rent, or relieve
Tenant form any of its obligations under this Lease, or impose any liability
upon Owner or its agents by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business, or otherwise.
ARTICLE 34
BROKER
SECTION 34.10. Tenant and warrants to Owner that no broker was responsible
for bringing about this Lease and that this Lease was negotiated directly
between Owner and Tenant. Tenant shall indemnify Owner from all loss, cost,
liability, damage and expenses, including, but no limited to, reasonable
counsel fees and disbursement, arising from any breach of the foregoing
representation and warranty.
47
ARTICLE 35
SECURITY
SECTION 35.01. LETTER OF CREDIT: A. Tenant has deposited with Owner, a the
time of the execution and delivery of this Lease, an unconditional,
irrevocable letter of credit issued by United Jersey Bank (referred to as the
"Bank"), in favor of Owner, in the sum of TWENTY-SIX THOUSAND TWO HUNDRED
FIFTY AND 00/100 ($26,250.00) DOLLARS in funds available immediately or same
day funds in the City of New York, as security for the faithful observance
and performance by Tenant of the terms, covenants and conditions or this
Lease on Tenant's part to be observed and performed. Such letter of credit is
for a term of not less than one (1) year which term shall be automatically
renewed for successive on (1) year terms, unless the Bank gives not less than
on hundred twenty (120) days prior written notice that it will not so renew
the letter of credit for such successive term and the last term of the letter
of credit shall end not less than sixty (60 days after the Expiration Date.
If such letter of credit is not automatically renewed as aforesaid, Tenant
agrees to cause the Bank to renew such letter of credit, from time to time,
during the Demised Term, at least ninety (90) days prior to the expiration of
said letter of credit or any renewal or replacement, upon the same terms and
conditions. In the event of any transfer of said letter of credit pursuant to
Section 35.05, and notice of such transfer to Tenant, Tenant, within twenty
(20) days thereafter, shall cause a new letter of credit to be issued by said
Bank to the tranferee, upon the same terms and conditions, in replacement of
the letter of credit to transferred and Owner agrees that, simultaneously
with the delivery of such new letter of credit, it will return to said Bank
the letter of credit being replaced. The letter of credit deposited
hereunder, and all renewals and replacements, are referred to, collectively,
as the "Letter of Credit". The Letter of Credit shall be held in trust by
Owner for the purposes set forth in this Article and shall not be transferred
except for transfer (a) to an agent for collection, or (b) pursuant to the
provisions of Section 35.05. In the event Tenant defaults beyond any
applicable grace period hereunder in the performance of its obligations to
issue a replacement Letter of Credit, or in the observance or performance of
Tenant's agreement to cause the Bank to renew the Letter of Credit, in
addition to all rights and remedies which Owner may have under this Lease or
at law, shall have the right to require the Bank to make payment to Owner of
the entire sum of TWENTY-SIX THOUSAND TWO HUNDRED FIFTY AND 00/100
($26,250.00) DOLLARS or the undrawn portion thereof, as the case may be,
represented by the Letter of Credit, which sum shall be held by Owner as Cash
Security (as said term is hereinafter defined) in the same manner as if said
sum had been deposited with Owner pursuant to the provisions of Subsection B
of this Section. Of said payment of the entire sum of TWENTY-SIX THOUSAND TWO
HUNDRED FIFTY AND 00/100 ($26,250.00) DOLLARS is made to Owner by reason of
Tenant's failure to renew or replace the Letter of Credit in accordance with
the foregoing provisions of this Subsection, such default by Tenant shall be
deemed cured by such payment, with the effect that Owner shall not have the
right to terminate this Lease or the term hereof by reason of such default,
but the foregoing provision shall not apply to any other default under this
Lease. The Letter of Credit provides for partial drawings. In the event
Tenant defaults in the payment when due of an installment of Fixed Rent or in
the payment when due of any additional rent and such default shall continue
for a period of ten (10) days after notice by Owner to Tenant of such default
or if this Lease and the Demised Term shall expire and come to an end as
provided in Article 16 or by or under any summary proceeding or any other
action or proceeding, or if Owner shall re0enter the Demised Premises as
provided in Article 17, or by or under any summary proceeding or any other
action or proceeding, then Owner, in addition to all rights and remedies
which Owner may have under this Lease or at law, may from time to time, draw
on the Letter of Credit in one or more drawings for the amount of any Fixed
Rent or additional rent then due and for any amount then due and payable to
Owner under Article 18 or Article 19. In the event of a partial drawing, as
provided in the immediately preceding sentence, Tenant shall, within five (5)
days after demand, cause the Bank to issue an amendment to the Letter of
Credit restoring the amount available thereunder to TWENTY-SIX THOUSAND TWO
HUNDRED FIFTY AND 00/100 ($26,250.00) DOLLARS. Notwithstanding anything to
the contrary set forth in this Lease, including, but no limited to, the
foregoing provisions of this Article, in addition to all rights granted to
Owner pursuant to the provisions of the Lease, if this Lease and the Demised
Term shall expire and come to an end as provided in Article 16, or by or
under any summary proceeding, or any other action or proceeding, or if Owner
shall re-enter the Demised Premises as provided in Article 17, or by or under
any summary proceeding or any other action
48
or proceeding. Owner, in addition to all rights and remedies which Owner may
have under this Lease or at law, shall have the right to require the Bank to
make payment to Owner of the entire sum of TWENTY-SIX THOUSAND TWO HUNDRED
FIFTY AND 00/100 ($26,250.00) DOLLARS or the undrawn portion thereof, as the
case may be, represented by the Letter of Credit, which sum shall be held by
Owner as Cash Security in the same manner as if said sum had been deposited
with Owner pursuant to the provisions of Subsection B of this Section.
B. At any time during the term of this Lease, Tenant may require that
Owner return the Letter of Credit by depositing with Owner, in lieu thereof,
as security for the faithful observance and performance by Tenant of the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed, the sum of TWENTY-SIX THOUSAND TWO HUNDRED FIFTY AND 00/100
($26,250.00) DOLLARS, in cash or by a cashier's check, drawn by or on a bank,
which is a member of the New York Clearing House Association, and payable to
the order of Owner, which sum is referred to as the "Cash Security". Any Cash
Security shall be held subject to the provisions of Section 7-103 of the
General Obligations Law or any similar statute successor thereto.
SECTION 35.02. APPLICATION OF CASH SECURITY: In the event Tenant defaults
in the observance or performance of any term, covenant or condition of this
Lease on Tenant's part to be observed or performed, including, gut not
limited to, the covenant for the payment of Fixed Rent and additional rent,
beyond the applicable grace period provided under this Lease for curing such
default, Owner may use, apply or retain the whole or any part of any Cash
Security held by Owner under any of the provisions of Section 35.01, to the
extent required for the payment of any Fixed Rent, additional rent or nay
other sum with respect to which Tenant is in default, or for the payment of
any sum which Owner may expend or incur because of Tenant's default in the
observance or performance of any such term, covenant of condition, including,
but not limited to, the payment of any damages or deficiency in the reletting
of the Demised Premises, whether such damage or deficiency accrued before or
after summary proceedings or other re-entry by Owner, without thereby waiving
any other rights or remedies of Owner with respect to such default, and Owner
shall hold the remainder of such Cash Security as security for the faithful
performance and observance by Tenant of the terms, covenants and conditions
of this Lease on Tenant's part to be observed and performed with the same
rights as hereinabove set forth to use, apply or retain all or any part of
such remainder in the event of any further default by Tenant under this
Lease.
SECTION 35.03. RESTORATION OF CASH SECURITY: If Owner uses, applies or
retains the whole or any part of the Cash Security held by Owner under any of
the provisions of Section 35.01, Tenant, promptly after notice thereof, shall
deliver to Owner, in cash or by a cashier's check, or Tenant's certified
check, in either case drawn by or on a bank which is a member of the New York
Clearing House Association and payable to the order of Owner, the sum
necessary to restore the Cash Security to the sum of TWENTY-SIX THOUSAND TWO
HUNDRED FIFTY AND 00/100 ($26,250.00) DOLLARS.
SECTION 35.04. RETURN OF SECURITY: The Letter of Credit and/or nay
remaining portion of any Cash Security then held by Owner for the performance
of Tenant's obligations under this Lease as security shall be returned to
Tenant after (i) the Expiration Date and (ii) the full observance and
performance by Tenant of all of the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed, including, but not
limited to, the provisions of Article 21.
SECTION 35.05. TRANSFER OF LETTER OF CREDIT: In the event of a sale or
other transfer of the Land and /or Building, or Owner's interest in this
Lease, Owner shall transfer the Letter of Credit an/or any remaining portion
of any Cash Security then held by Owner as security for the performance of
Tenant's obligations under this Lease to the transferee, and Owner shall
thereupon be released from all liability for the return of such security;
Tenant agrees to look solely to the transferee for the return of any such
security and it is agrees that the provisions of this sentence shall apply to
every sale or transfer of the Land and/or Building or Owner's interest in
49
this Lease by Owner named herein or its successors, and to every transfer or
assignment made of any such security. Any transferee shall be deemed to have
agreed that any Letter of Credit or Cash Security Transferred to such
transferee pursuant to this Section shall be held in trust for the purposes
of this Article. A lease of the entire Building pursuant to which the lessee
shall be entitled to collect the rents hereunder shall be deemed a transfer
within the meaning of this Section.
SECTION 35.06. DEPOSIT OF CASH SECURITY IN INTERST-BEARING ACCOUNT: Owner
agrees that, if not prohibited by law or the general policies of lending
institutions in New York City, Owner shall deposit any Cash Security held by
Owner in an interest-bearing savings account at a bank or banks selected by
Owner, and all interest accruing thereon shall be added to and become part of
such Cash Security and shall be retained by Owner under the same conditions
as the principal sum held as Cash Security. Notwithstanding anything to the
contrary set forth in this Article with respect to any Cash Security. Owner
shall be entitled to retain the one (1%) percent administrative fee permitted
by law to be retained by landlords with respect to cash security deposits.
SECTION 35.07. NO ASSIGNMENT of Security by Tenant: Tenant agrees that it
will not assign, mortgage or encumber, or attempt to assign, mortgage or
encumber, the Letter of Credit or any Cash Security held by Owner under this
Lease, and that neither Owner nor its successors or assigns shall be bound by
any such assignment, mortgage, encumbrance, attempted assignment, attempted
mortgage or attempted encumbrance. Owner shall not be required to exhaust its
remedies against Tenant before having recourse to the Letter of Credit, the
Cash Security or any other security held by Owner shall not affect any
remedies of Owner which are provided in this Lease or which are available in
law or equity.
ARTICLE 36
ARBITRATION, ETC.
SECTION 36.01. Any dispute (i) with respect to the reasonability of any
failure or refusal or Owner to grant its consent of approval or any request
for such consent or approval pursuant to the provisions of Section 3.01 or
11.03 with respect to which request Owner has agrees, in such Section, not
unreasonably to withhold such consent or approval, or (ii) arising our of the
application of the Operating Expenses provisions of Article 23, which is
submitted to arbitration shall be finally determined by arbitration in the
City of New York in accordance with the rules and regulations then obtaining
of the American Arbitration Association or its successor. Any such
determination shall be final and binding upon the parties, whether or not a
judgment shall be entered in any court. In making their determination, the
arbitrators shall not subtract from, add to, or otherwise modify any of the
provisions of this Lease. Owner and Tenant may, at their own expense, be
represented by counsel and employ expert witnesses in any such arbitration.
Any dispute with respect to the reasonability of any failure or refusal of
Owner to grant its consent or approval or any request for such consent or
approval pursuant to any of the provisions of this Lease (other than Section
3.01 and 11.03) with respect to which Owner has covenanted not unreasonable
to withhold such consent or approval, and any dispute arising with respect to
the increases in Fixed Rent due to the provisions of Section 23.02 shall
determined by applicable legal proceedings. If the determination of any such
legal proceedings, or of any arbitration held pursuant to the provisions of
this Section with respect to disputes arising under Section 3.01 and 11.03 or
the Operating Expense provision of Article 23, shall be adverse to Owner,
Owner shall be deemed to have granted the requested consent or approval, or
be bound by any determination as to Taxes and Operating Expenses and the
increases in Fixed Rent relating thereto, but that shall be Tenant's sole
remedy in such event and Owner shall not be liable to Tenant for a breach of
Owner's covenant not unreasonably to withhold such consent or approval, or
otherwise. Each party shall pay its own counsel and expert witness fees and
expenses, if any, in connection with any arbitration held pursuant to the
provisions of this Section and parties will share all other expenses and fees
of any such arbitration.
50
ARTICLE 37
PARTIES BOUND
SECTION 37.01. The terms, covenants and conditions contained in this Lease
shall bind and inure to the benefit of Owner and Tenant and, except as
otherwise provided in this Lease, their respective heirs, distributees,
executors, administrators, successors and assigns. However, the obligations
of Owner under this Lease shall no longer be binding upon Owner named herein
after the sale, assignment or transfer by Owner named herein (or upon any
subsequent Owner after the sale, assignment or transfer by such subsequent
Owner) of its interest in the Building as owner or lease, and in the event of
any such sale, assignment or transfer, such obligations shall thereafter be
binding upon the grantee, assignee or other transferee of such interest, and
any such grantee, assignee or transferee, by accepting such interest, shall
be deemed to have assumed such obligations. A lease of the entire Building
shall be deemed a transfer within the meaning of the foregoing sentence.
Neither the partners (direct or indirect) comprising Owner, nor the
shareholders (nor any of the partners comprising same), partners, directors
or officers of any of the foregoing (collectively, the "Owner's Parties")
shall be liable for the performance of Owner's obligations under the Lease.
Tenant shall look solely to Owner to enforce Owner's obligations hereunder
and shall not seek any damages against any of the Owner's Parties.
Notwithstanding anything contained in this Lease to the contrary, Tenant
shall look solely to the estate and interest of Owner, its successors and
assigns, in the Real Property and Building for the collection or satisfaction
of any judgment recovered against Owner based upon the breach by Owner of any
of the terms, conditions or covenants of this Lease on the part of Owner to
be performed, and no other property or assets of Owner or any of Owner's
Parties shall be subject to levy, execution or other enforcement procedure
for the satisfaction of Tenant's remedies under or with respect to either
this Lease, the relationship of landlord and tenant hereunder, or Tenant's
use and occupancy of the Demised Premises.
IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed
this Lease Fas of the day and year first above written.
THE 110 WALL COMPANY
Witness:
----------------------------------- By:
--------------------------------------
Owner
Name:
Title: Partner
KHAN, XXXXXXX & COMPANY, INC.
Assets: By:
Acting Secretary Tenant
Name: Xxxxxxxx Xxx Khan
Title: President
00
XXXXX XX XXX XXXXXX )
) ss.:
COUNTY OF MIDDLESEX )
On this 29 day of February, 1996, before me personally came Xxxxxxxx Xxx
Khan & Xxxx Xxxxx, to me known, who being by me duly sworn, did depose and
say that he resides in 00 Xxxxx Xxxx, Xxxx xx Xxxxxxxx Xxxx, Xxxxx of NY,
that he is the President & Acting Secretary of KHAN, XXXXXXX & COMPANY, INC.
the corporation described in and which executed the foregoing Lease, as
Tenant; and that he signed his name thereto by authority of the Board of
Directors of said corporation.
/s/ Xxxx Xxxxxx
-----------------------------------
Notary Public
XXXX XXXXXX
A Notary Public of New Jersey
My Commission Expires Jan. 4,
1999
52
SCHEDULE A
BUILDING RULES
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed or
encumbered or used for any purpose other than ingress and egress to and from
the premises demised to any tenant or occupant. Any tenant whose premises are
situate on the ground floor of the Building shall, at said tenant's own
expense, keep the sidewalks and curb directly in front of said premises clean
and free from ice and snow.
2. No awnings or other projections shall be attached to the outside walls
or windows of the Building without the prior consent of Owner. No curtains,
blinds, shades, or screens shall be attached to or hung in, or used in
connection with, any window or door of the premises demised to any tenant or
occupant, without the prior consent of Owner. Such awnings, projections,
curtains, blinds, shades, screens or other fixtures must be of a quality,
type, design and color, and attached in a manner, approved by Owner.
3. No sign, advertisement, object notice, or other lettering shall be
exhibited, inscribed, painted or affixed on any part of the outside or inside
of the premises demised to any tenant or occupant or of the Building without
the prior consent of Owner. Interior signs on doors and directory tablets, if
any, shall be of a size, color and style approved by Owner.
4. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed, nor shall any bottles, parcels,
or other articles be placed on any window xxxxx.
5. No showcases or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in the halls, corridors,
vestibules or other public parts of the Building.
6. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and
no sweepings, rubbish, rags, or other substances shall be thrown therein. No
tenant shall bring or keep, or permit to be brought or kept, any inflammable,
combustible or explosive fluid, material, chemical or substance in or about
the premises demised to such tenant.
7. No tenant or occupant shall xxxx, paint, drill into, or in any way
deface any part of the Building or the premises demised to such tenant or
occupant. No boring, cutting or stringing of wires shall be permitted, except
with the prior consent of Owner, and as Owner may direct. No tenant or
occupant shall install any resilient tile or similar floor covering in the
premises demised to such tenant or occupant except in a manner approved by
Owner.
8. No bicycles, vehicles or animals of any kind shall be brought into or
kept in or about the premises demised to any tenant. No cooking shall be done
or permitted in the Building by any tenant without the approval of Owner. No
tenant shall cause or permit any unusual or objectionable odors to emanate
from the premises demised to such tenant.
9. No space in the Building shall be used for manufacturing, for the
storage of merchandise, or for the sale of merchandise, goods or property of
any kind at auction.
10. No tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or
A-1
interfere with other tenants or occupants of the Building or neighboring
buildings or premises whether by the use of any musical instrument, radio,
television set or other audio device, unmusical noise, whistling, singing, or
in any other way. Nothing shall be thrown out of any doors or windows.
11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows, nor shall any changes be made in locks or the mechanism
thereof. Each tenant must, upon the termination of its tenancy, restore to
Owner all keys of stores, offices and toilet rooms, either furnished to, or
otherwise procured by, such tenant.
12. All removals from the Building, or the carrying in or out of the
Building or the premises demised to any tenant, of any safes, freight,
furniture or bulky matter of any description must take place at such time and
in such manner as Owner or its agents may determine, from time to time. Owner
reserves the right to inspect all freight to be brought into the Building and
to exclude from the Building all freight which violates any of the Building
Rules or the provisions of such tenant's lease.
13. No tenant shall use or occupy, or permit any portion of the premises
demised to such tenant to be used or occupied, as an office for a public
stenographer or typist, or as a xxxxxx or manicure shop, or as an employment
bureau. No tenant or occupant shall engage or pay any employees in the
Building, except those actually working for such tenant or occupant in the
Building, nor advertise for laborers, giving an address at the Building.
14. No tenant or occupant shall purchase spring water, ice, food,
beverage, lighting maintenance, cleaning, towels, or other like service, from
any company or persons not approved by Owner, such approval not unreasonably
to be withheld.
15. Owner shall have the right to prohibit any advertising by any tenant
or occupant which, in Owner's opinion, tends to impair the reputation of the
Building or its desirability as a building for offices, and upon notice from
Owner, such tenant or occupant shall refrain from or discontinue such
advertising.
16. Owner reserves the right to exclude from the Building, between the
hours of 6 P.M. and 8 A.M. on business days and at all hours on Saturdays,
Sundays and holidays, all persons who do not present a pass to the Building
signed by Owner. Owner will furnish passes to persons for whom any tenant
requests such passes. Each tenant shall be responsible for all persons for
whom it requests such passes and shall be liable to Owner for all acts of
such persons.
17. Each tenant, before closing and leaving the premises demised to such
tenant at any time, shall see that all entrance doors are locked and all
windows closed.
18. Each tenant shall, at its expense, provide artificial light in the
premises demised to such tenant for Owner's agents, contractors and employees
while performing janitorial or other cleaning services and making repairs or
alterations in said premises.
19. No premises shall be used, or permitted to be used, for lodging or
sleeping or for any immoral or illegal purpose.
20. The requirements of tenants will be attended to only upon application
at the office of Owner. Building employees shall not be required to perform,
and shall not be requested by any tenant or occupant to perform, any work
outside of their regular duties, unless under specific instructions from the
office of Owner.
21. Canvassing, soliciting and peddling in the Building are prohibited and
each tenant and occupant
A-2
shall cooperate in seeking their prevention.
22. There shall not be used in the Building, either by any tenant or
occupant or by their agents or contractors, in the delivery or receipt of
merchandise, freight or other matter, any hand trucks or other means of
conveyance except those equipped with rubber tires, rubber side guards and
such other safeguards as Owner may require.
23. If the premises demised to any tenant become infested with vermin,
such tenant, at its sole cost and expense, shall cause its premises to be
exterminated, from time to time, to the satisfaction of Owner, and shall
employ such exterminators therefor as shall be approved by Owner.
24. No premises shall be used, or permitted to be used, at any time, as a
store for the sale or display of goods, wares or merchandise of any kind, or
as a restaurant, shop, booth bootblack or other stand, or for the conduct of
any business or occupation which predominantly involves direct patronage of
the general public in the premises demised to such tenant, or for
manufacturing or for other similar purposes.
25. No tenant shall clean, or permit to be cleaned, any window of the
Building from the outside in violation of Section 202 of the New York Labor
Law or any successor law or statute, or of the rules of the Board of
Standards and Appeals or of any board or body having or asserting
jurisdiction.
26. No tenant shall move, or permit to be moved, into or out of the
Building or the premises demised to such tenant, any heavy or bulky matter,
without the specific approval of Owner. If any such matter requires special
handling, only a person holding a Master Rigger's license shall be employed
to perform such special handling. No tenant shall place, or permit to be
placed, on any part of the floor or floors of the premises demised to such
tenant, a load exceeding the floor load per square foot which such floor was
designed to carry and which is allowed by law. Owner reserves the right to
prescribe the weight and position of safes and other heavy matter, which must
be placed so as to distribute the weight.
A-3
ADDITIONAL SPACE AND LEASE MODIFICATION AND EXTENSION AGREEMENT
AGREEMENT made as of the 23rd day of January, 1997 between THE 110 WALL
COMPANY, a New York partnership having its principal office at 000 Xxxx
Xxxxxx, Xxxxxxx xx Xxxxxxxxx, Xxxx, Xxxxxx and State of New York, as landlord
(referred to herein as "Owner"), and XXXXX XXXX AND SHIRE INCORPORATED, a New
York corporation having an office at 000 Xxxx Xxxxxx, Xxxxxxx xx Xxxxxxxxx,
Xxxx, Xxxxxx and State of New York, as tenant (referred to herein as
"Tenant").
WITNESSETH:
WHEREAS:
1. Under date of February 29, 1996, Owner and Khan, Xxxxxxx & Company,
Inc., as predecessor-in-interest to Tenant, entered into a lease affecting
the entire twenty-fourth (24th) floor in the building (referred to herein as
the "Building"), known as 000 Xxxx Xxxxxx, Xxxxxxx xx Xxxxxxxxx, Xxxx, Xxxxxx
and State of New York; and
2. Said lease, as modified by various written agreements, if any, is for a
term (referred to herein as the "Demised Term") which shall end on August 31,
2001, unless sooner terminated pursuant to any of the terms, covenants or
conditions of the Lease or pursuant to law and is referred to herein as the
"Lease"; and the premises so leased to Tenant pursuant to the provisions of
the Lease, together with all appurtenances, fixtures, improvements, additions
and other property attached thereto or installed therein at any time during
the Demised Term other than Tenant's Personal Property (as defined in the
Lease), are referred to herein, collectively, as the "Demised Premises"; and
3. Tenant now desires to lease and add to the Demised Premises the entire
nineteenth (19th) floor of the Building and Owner is willing to lease said
entire nineteeth (19th) floor to Tenant, subject to the provisions of this
Agreement (said entire nineteenth (19th) floor of the
A-4
Building, together with all appurtenances, fixtures, improvements, additions
and other property attached thereto or installed therein at any time during
the Demised Term, other than Tenant's Personal Property as defined in the
Lease, is referred to herein as the "Additional Space"); and
4. The parties desire to record herein their understanding with respect to
the foregoing.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
FIRST: The Lease is hereby modified as follows:
A. Owner hereby leases to Tenant and Tenant hereby hires from Owner the
Additional Space for a term to commence, on February 15, 1997 and to end on
the Expiration Date of the Lease, i.e. August 31, 2002, as herein extended
pursuant to the provisions of Article SECOND hereof, unless the Demised Term
shall sooner terminate pursuant to any of the terms, covenants or conditions
of the Lease or pursuant to law (the date on which the term applicable to the
Additional Space shall commence is sometimes referred to herein as the
"Additional Space Commencment Date").
B. (1) Tenant acknowledges that Owner had made no representations to
Tenant as to the condition of the Additional Space and Tenant agrees to
accept possession of the Additional Space in the condition which shall exist
on the Additional Space Commencement Date "as is" and further agrees that
Owner shall have no obligation to perform any work or make any installations
in order to prepare the Additional Space for Tenant's occupancy, except that
on or about the Additional Space Commencement Date and without otherwise
affecting the Additional Space Commencement Date, Owner shall cause the
following work to be done in the Additional Space at Owner's sole cost and
expense (referred to herein as "Owner's Initial Work"):
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1. Remove temporary wall near telephone closet;
2. Remove wall covering in Additional Space and in common corridor;
3. Paint the painted surfaces in the Additional Space and the common
corridor with a single coat of paint in flat finish, in colors selected by
Tenant from Building standard colors (but not more than one (1) color in any
room or area);
4. Supply and install Building standard carpeting;
5. Patch ceiling, where required; and
6. Touch up woodwork.
(2) Owner's Initial Work required to be performed and made by Owner
pursuant to the provisions of paragraph B(1) of this Article FIRST shall be
equal to standards adopted by Owner of the Building and shall constitute a
single, non-recurring obligation on the part of Owner and shall be completed
on or about the Additional Commencement Date. In the event this Lease is
renewed or extended for a further term by agreement or operation of law,
Owner's obligation to perform such work shall not apply to such renewal or
extension.
(3) Owner may enter the Additional Space to perform the foregoing work and
installations, and entry by Owner, its agents, servants, employees or
contractors for such purpose shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement, or
diminution of rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Owner, or its agents, by reason of
inconvenience or annoyance to Tenant, or injury to, or interruption of
Tenant's business or otherwise.
(4) If Tenant fails to designate its selection of such Building standard
paint color(s) and/or carpeting on or prior to execution of this Agreement by
Tenant, Tenant shall be deemed to have waived its right to have such paint
color(s) and/or carpeting not so selected form a part of Owner's Initial
Work.
C. From and after the Additional Space Commencment Date, the Lease shall
be deemed modified, as follows:
(i) The Demised Premises shall include the Additional Space for all
purposes of the Lease;
(ii) The Fixed Rent reserved in the Lease shall be increased, subject to
the provisions of subparagraph (iv) of the Paragraph C, by the sum of
SEVENTEEN THOUSAND FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS per annum
("First Rent Period") from the Additional Space Commencement Date to August
14, 1997, ONE HUNDRED FIFTY THOUSAND FIVE HUNDRED and 00/100 ($150,000.00)
DOLLARS per annum ("Second Rent Period") from August 15, 1997 to and
including August 14, 1998 and the sum of ONE HUNDRED FIFTY-SEVEN THOUSAND
FIVE HUNDRED and 00/100 ($157,500.00) DOLLARS ("Third Rent Period") from
August 15, 1998 to the Expiration Date, as herein extended, and the monthly
installments of Fixed Rent shall be increased accordingly by the sum of ONE
THOUSAND FOUR HUNDRED FIFTY-EIGHT and 33/100 ($1,458.33) DOLLARS for the
First Rent Period. TWELVE THOUSAND FIVE HUNDRED FOFTY-ONE and 67/100
($12,541.67) DOLLARS for the Second Rent
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Period and THIRTEEN THOUSAND ONE HUNDRED TWENTY-FIVE and 00/100 ($13,125.00)
DOLLARS for the Third Rent Period to conform with such increases in the Fixed
Rent.
(iii) The sum of "SEVENTEEN THOUSAND FIVE HUNDRED and 00/100 ($17,500.00)
DOLLARS" appearing in subsection A of Section 29.05 of the Lease (as said sum
may have been increased or decreased pursuant to the provisions of said
Section and the Lease), shall be increased by the sum of SEVENTEEN THOUSAND
FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS, subject to the provisions of
subparagraph (iv) of this Paragraph C;
(iv) (1) If, at any time or times between January 10, 1997 and the
effective Additional Space Commencement Date, the rates at which Owner
purchases electrical energy from the the public utility corporation supplying
electrical service to the Building or any charges incurred on taxes payable
by Owner in connection therewith shall have been increased or decreased, the
amount of the increase in the Fixed Rent set forth in subparagraph (ii) of
this Paragraph C shall be increased or decreased, as the case may be, in an
annual amount which shall fairly reflect the estimated increase or decrease,
as the case may be, in the annual cost to Owner of redistributing or
furnishing electrical service to Tenant in the Additional Space provided that
notwithstanding anything to the contrary contained in the provisions of this
subdivision (1), in no event shall (a) the increase determined in accordance
with subparagraph (iii) of this Paragraph C ever be decreased below SEVENTEEN
THOUSAND FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS and (b) the Fixed Rent
ever be decreased by more than such decrease in the increase as so limited by
the provisions of subclause (a) of this subdivision (1). If, within ten (10)
days after Owner shall have notified Tenant of any such increase or decrease,
Owner and Tenant shall fail to agree upon the amount of such increase or
decrease, as the case may be, in lieu of such agreement, the estimated
increase or decrease, as the case may be, in the annual cost to Owner of
redistributing or furnishing electrical service to Tenant in the Additional
Space shall be finally determined by an independent electrical engineer or
electrical consulting firm selected by Owner who shall certify such
determination in writing to Owner and Tenant. Following any such agreement or
determination, Owner and Tenant shall enter into a written supplementary
instrument, in form reasonably satisfactory to Owner modifying the Lease by
(x) increasing or decreasing, as the case may be, the Fixed Rent for the
entire term applicable to the Additional Space in the amount equal to such
estimated increase or decrease in the annual cost to Owner of redistributing
or furnishing electrical service to Tenant in the Additional Space as so
agreed or determined and (y) increasing or decreasing, as the case may be,
the sum of SEVENTEEN THOUSAND FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS
appearing in subparagraph (iii) of this Paragraph C in a like amount. Failure
to enter into such written supplementary instrument shall not vitiate any
such agreement or determination;
(2) The parties agree that although the charge for the service of
redistributing and furnishing electrical energy in the Additional Space has
been included in the increase in the Fixed Rent set forth in subparagraph
(ii) of this Paragraph C on a so-called "rent inclusion basis", Owner and
Tenant agree that the value to Tenant of such
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service may not be fully reflected in said increase in the Fixed Rent.
Accordingly, Tenant agrees that Owner shall have the right to cause an
independent electrical engineer or electrical consulting firm selected by
Owner to make a determination at any time following full commencement of
Tenant's normal business activities in the entire Additional Space of the
full value to Tenant on an annual basis of such services supplied by Owner,
to wit: the potential electrical energy made available to Tenant annually
based upon the estimated capacity of the electrical feeders, risers, wiring
and other electrical facilities servicing the Additional Space. If it shall
be determined that the full value to Tenant of such service is in excess of
the sum of SEVENTEEN THOUSAND FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS
per annum [as said sum may previously have been adjusted pursuant to the
provisions of subdivision of (1) this subparagraph (iv)], the parties shall
enter into a written supplementary instrument in form reasonably satisfactory
to Owner, modifying the Lease as of the Additional Space Commencement Date by
further increasing the Fixed Rent for the remainder of the Demised Term by an
annual amount equal to such excess, in which event the sums of SEVENTEEN
THOUSAND FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS" set forth in
subsection A of Section 29.05 of the Lease (as said sum may previously have
been adjusted pursuant to the provisions of the Lease and this Agreement)
shall be increased in a like amount. However, if it shall be so determined
that the full value to Tenant of such services does not exceed SEVENTEEN
THOUSAND FIVE HUNDRED and 00/100 ($17,500.00) DOLLARS [as said sum may
previously have been adjusted pursuant to the provisions of subdivision (1)
of this subparagraph (iv)], no such instrument shall be executed and there
shall be no increase or decrease in the Fixed Rent by reason of such
determination. Failure to enter into such written supplementary instrument
shall not vitiate any such determination;.
(3) The Demised Premises Area set forth in Section 23.01 of the Lease
shall be increased by 7,000 square feet to a total of 14,000 square feet; and
(4) The provisions of Section 11.03 of the Lease shall be modified to the
extent that the number "two (2)" appearing in the first sentence thereof,
shall be increased by two (2) to a total of "four (4)".
SECOND: From and after the Additional Space Commencement Date, the
Expiration Date of the Lease shall be deemed extended to and including August
31, 2002 and all of the terms, covenants and conditions of the Lease shall
apply with respect to the Lease as so extended.
THIRD: Tenant represents and warrants to Owner that no broker was
responsible for bringing about this Agreement and that this Agreement was
negotiated directly between Owner and Tenant.
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FOURTH: Except to the extent expressly modified by the foregoing
provisions of this Agreement, the Lease is hereby ratified and confirmed in
all respects.
IN WITNESS THEREOF, the parties hereto have here unto set their hands and
seals as of the day and year first above written.
THE 000 XXXX XXXXXX COMPANY, OWNER
By:
------------------------------------------
Partner
XXXXX XXXX AND SHIRE INCORPORATED, TENANT
By:
------------------------------------------
Oper. Mgr.
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XXXXX XX XXX XXXX )
ss.:
COUNTY OF NEW YORK )
On the 22nd day of January, 1997, before me personally came Xxxx X. Xxxx
to me known, who, being by me duly sworn, did depose and say that he resides
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx that he is the officer of XXXXX XXXX
AND SHIRE INCORPORATED, the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by authority of the
Board of Directors of said corporation.
Xxxxxx X. Xxxx
Notary Public
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