Common use of Air Rights Clause in Contracts

Air Rights. (a) Landlord shall retain air rights and transferable development rights (collectively “Air Rights”) to the Demised Premises. Subject to the provisions of this Section 33.02 Landlord may transfer any and all Air Rights, either to a non-related party or an affiliate, provided Landlord’s affiliate is an adjoining property owner (if the adjoining ownership requirement is then existing under the Zoning Resolution of the City of New York) and further provided that the offer to purchase the Air Rights is a bona fide offer. Prior to transferring any Air Rights, Landlord shall transmit a written notice to Tenant (the “Air Rights Request Notice”) setting forth the material terms of the proposed transfer (the “Material Terms”), no later than forty-five (45) days prior to the effective date of such transfer. Tenant may by written notice to Landlord (the “Air Rights Response Notice”) within forty-five (45) days of receipt of the Air Rights Request Notice elect to either (i) approve the transfer, (ii) purchase the Air Rights on the Material Terms, (iii) terminate the Lease or (iv) disapprove the transfer, in which event Tenant, contemporaneously with the transmittal of the Air Rights Response Notice, shall pay Landlord an amount equal to the Air Rights Payment (as hereinafter defined). In the event Tenant elects either (ii) or (iii) above, Landlord by written notice (the “Air Rights Withdrawal Notice”) transmitted within thirty (30) days of Landlord’s receipt of the Air Rights Response Notice, may withdraw the Air Rights Request Notice and Tenant shall have no right to acquire the Air Rights or terminate the Lease, as the case may be. In the event Tenant elects (ii) above, and Landlord does not transmit an Air Rights Withdrawal Notice within the required time period, Tenant may assign its right to acquire the Air Rights to the New York City Economic Development Corporation (“EDC”). (b) The Air Rights Payment shall be the amount equal to the consideration stated in the Air Rights Request Notice multiplied by an amount equal to the Prime Rate plus 3%, payable monthly for the balance of the Term and all Renewal Terms, which Air Rights Payment shall be increased in the same percentage and contemporaneously with the increased Fixed Rent under Section 3.01. If Tenant does not respond to Landlord’s Air Rights Request Notice within forty-five (45) days of Tenant’s receipt of the Air Rights Request Notice, Tenant shall be deemed to have approved the Transfer. Landlord shall not seek Tenant’s approval for the transfer of Air Rights for the first five (5) years of the Term and for the first two (2) years of each Renewal Term. Landlord is permitted to transfer Air Rights during the last five (5) years of the last Renewal Term without seeking Tenant’s approval. If a Renewal Option is not exercised, Landlord shall not be required to seek Tenant’s approval to transfer Air Rights. Under no circumstances will the use of any Air Rights by Landlord or its transferee interfere with the Tenant’s current operations.