Exhibit 10(b)
LEASE
between
[RFR ENTITY]
"Landlord"
and
SOTHEBY'S, INC.
"Tenant"
February 7, 2003
Premises:
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
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TABLE OF CONTENTS
Page
----
1. THE PREMISES.........................................................1
2. TERM AND EXTENSION OPTIONS...........................................2
3. BASE RENT............................................................4
4. SERVICES; UTILITIES..................................................5
5. IMPOSITIONS..........................................................5
6. USE..................................................................8
7. COMPLIANCE WITH LAWS AND AGREEMENTS..................................9
8. MAINTENANCE AND REPAIR..............................................10
9. TENANT CHANGES......................................................11
10. INSURANCE...........................................................15
11. INDEMNIFICATION; NON-LIABILITY......................................19
12. DAMAGE OR DESTRUCTION...............................................21
13. CONDEMNATION........................................................24
14. EQUIPMENT...........................................................27
15. SUBORDINATION AND NONDISTURBANCE....................................27
16. QUIET ENJOYMENT.....................................................29
17. ASSIGNMENT AND SUBLETTING...........................................29
18. ENTRY BY LANDLORD; RIGHT OF LANDLORD TO PERFORM
TENANT'S COVENANTS..................................................39
19. TENANT'S DEFAULT....................................................41
20. SIGNS; ROOF RIGHTS..................................................44
21. SURRENDER OF PREMISES...............................................45
22. MEMORANDUM OF LEASE.................................................47
23. RIGHT OF FIRST OFFER................................................48
24. EXCULPATION OF LANDLORD.............................................49
25. ADDITIONAL RENT; TENANT'S PAYMENTS..................................49
26. LANDLORD'S CURE AND ENFORCEMENT RIGHTS..............................50
27. COVENANT AGAINST LIENS..............................................50
28. AFFIRMATIVE WAIVERS.................................................50
29. LANDLORD'S AND TENANT'S CERTIFICATES................................51
30. LANDLORD'S CONSENT AND APPROVAL.....................................52
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31. CAPITAL LEASE; NONTERMINABILITY.....................................52
32. OMITTED.............................................................54
33. ENCROACHMENTS, RESTRICTIONS, ETC....................................54
34. OMITTED.............................................................54
35. MISCELLANEOUS PROVISIONS............................................54
36. GUARANTY; FINANCIAL STATEMENTS; ANNUAL REPORTS......................56
37. BROKER..............................................................57
38. HAZARDOUS MATERIALS; INSPECTIONS....................................57
39. LEASEHOLD MORTGAGE..................................................59
40. PUBLICITY...........................................................59
41. TRANSFER TAXES......................................................59
42. NO DEVELOPMENT RIGHTS...............................................59
43. SPECIAL BANKRUPTCY RELATED PROVISIONS...............................60
44. EXPEDITED ARBITRATION...............................................60
SCHEDULES
Schedule A Description of Land
Schedule B Base Rent
Schedule C Form of Memorandum of Lease
Schedule D Form of Tenant Non-Disturbance Agreement
Schedule E Form of Guaranty
Schedule F Ground Floor Plan
EXHIBITS
Exhibit A Definitions
Exhibit B Existing Leases
Exhibit C Agreements
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INDEX OF DEFINED TERMS
DEFINITION WHERE DEFINED
1st Floor Portion Exhibit A
AAA Section 44(a)
Affiliate Section 17(b)(2)
Assignment Consideration Section 17(s)
Base Rent Section 3(a)
Base Rental Rate Schedule B
Bond Section 9(j)
Business Days Exhibit A
Cap Ex Improvements Section 31(b)
Casualty Depositary Section 12(d)
Casualty Insurance Section 10(a)(1)
Claim Section 11(a)
Code Section 43(a)
Commencement Date Section 2(a)
Condemnation Depositary Section 13(a)(2)
Condemnation Work Section 13(b)(2)
Condemnation Work Proceeds Section 13(b)(3)(B)
Control Section 17(b)(2)
Default Rate Exhibit A
Direct Competitor Exhibit A
Dispute Resolution Period Section 2(c)
Due Date Section 3(b)
Excluded Property Exhibit A
End of Term Casualty Section 12(g)
Equipment Section 14(a)
Event of Default Section 19(a)
Exchange Date Section 2(c)
Existing Leases Section 17(t)
Extension Notice Section 2(b)
Extension Options Section 2(b)
Extension Terms Section 2(b)
Fair Market Rent Section 2(b)
Fee Mortgagee Section 15(a)
First Class Standard Section 8(a)
First Extension Option Section 2(b)
First Extension Term Section 2(b)
Floor Price Section 23(a)
GAAP Section 17(n)(2)(iv)
Guarantor Section 36(a)
Guaranty Section 36(a)
Hazardous Materials Section 38(a)
Hazmat Conditions Section 38(f)
v
Hazmat Losses Section 38(f)
XXX Section 17(u)
XXX Sublease Section 17(u)
XXX Sublease Documentation Section 17(u)
XXX Sub-sublease Section 17(u)
Imposition Section 5(a)
Impositions Section 5(a)
Improvements Section 1(a)
Indemnified Parties Section 11(a)
Initial Term Section 2(a)
Insolvency Laws Section 43(a)
Institutional Lender Exhibit A
Insurance Requirements Exhibit A
Interest Rate Exhibit A
JPMorgan Section 37
Land Section 1(a)
Landlord Cover, Recitals, Exhibit A
Landlord Party Exhibit A
Landlord's Determination Section 2(c)
Landlord's Offer Section 23(a)
Landlord's Reminder Notice Section 2(d)
Laws Exhibit A
Leasehold Mortgage Section 39
Liability Insurance Section 19(a)(2)
Losses Section 11(a)
Major Subtenant Section 17(v)
Material Tenant Change Section 9(a)(1)
Mortgage Section 15(a)
Net Casualty Insurance Proceeds Section 12(d)
Net Condemnation Work Proceeds Section 13(b)(4)
Non-Disturbance Agreement Section 15(f)
notices Section 35(a)
Occupancy Requirement Exhibit A
Offer Notice Section 23(a)
Other Sublease Consideration Section 17(r)
Permitted Occupant Section 17(c)
Permitted Occupants Section 17(c)
person Exhibit A
Plans and Specifications Section 9(b)
Premises Section 1(a)
Premiums Section 10(c)
Prohibited Tenant Change Section 9(c)
Prohibited Use Exhibit A
Proposed Sotheby's Changes Section 9(k)
Prudent Owner Standard Section 31(b)
purchase price Section 23(c)
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Rating Agencies Section 17(n)(2)(i)
Recapture Occupancy Requirement Exhibit A
Recapture Offer Section 17(e)
Recapture Transaction Section17(e)
Redemption Right Section 19(b)(2)
Removal Notice Section 9(h)(i)
Restoration Work Section 12(a)
Roof Section 20(c)
Rooftop Equipment Section 20(c)
Sale Period Section 23(a)
Satellite Antenna Section 20(c)
Second Extension Option Section 2(b)
Second Extension Term Section 2(b)
Secure Areas Section 18(c)
Separate Street Entrance Section 17(v)(B)(ii)
Six Month Holdover Date Section 21(b)(iii)
Sixty Day Holdover Date Section 21(b)(ii)
Sublease Consideration Section 17(r)
substantially all of the Premises Section 13(a)(2)(B)
Subtenant SNDA Section 17(v)
Successor Landlord Section 15(d)
Tenant Cover, Recitals, Exhibit A
Tenant Change Section 9
Tenant Changes Section 9
Tenant Named Herein Exhibit A
Tenant Party Exhibit A
Tenant's Assignment Cost Section 17(s)
Tenant's Basic Cost Section 17(r)
Tenant's Cap Ex Share Section 31(b)
Tenant's Determination Section 2(c)
Tenant's Property Exhibit A
Tenant's Proposal Section 17(d)
Tenant's Sublease Expenses Section 17(r)
Termination Notice Section 12(g)
Thirty Day Holdover Date Section 21(b)(i)
Transfer Notice Section 17(j)
Uncommon Change Exhibit A
Useful Life Section 31(b)
Worker's Compensation Insurance Section 10(a)(6)
vii
LEASE
THIS LEASE entered into this 7th day of February, 2003, by and
between [RFR Entity], a Delaware limited partnership having an office at
c/o RFR Holding LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (hereinafter called
"LANDLORD") and SOTHEBY'S, INC., a New York corporation having an office at
0000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called "TENANT").
W I T N E S S E T H:
Upon the terms and subject to the conditions hereinafter set forth,
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Premises (as hereinafter defined).
1. THE PREMISES.
(a) The property hereby leased to Tenant is that certain parcel of
land (the "LAND") more particularly described in SCHEDULE A attached hereto and
by this reference made a part hereof, TOGETHER WITH the buildings and other
improvements (inclusive of the Equipment (as hereinafter defined)) now or
hereafter located thereon (collectively, the "IMPROVEMENTS"). The Land and
Improvements, together with all appurtenances thereto, hereinafter sometimes
collectively referred to as the "PREMISES".
(b) The Premises are demised and let hereunder subject to (a) the
rights of any parties in possession thereof and the existing state of the title
thereof as of the Commencement Date (as hereinafter defined), (b) any state of
facts which an accurate survey or physical inspection thereof might show, (c)
all zoning regulations, restrictions, rules and ordinances, building
restrictions and other laws and regulations now in effect or hereafter adopted
by any governmental authority having jurisdiction, and (d) with respect to the
Improvements, their condition as of the Commencement Date, without
representation or warranty by Landlord. Tenant represents to Landlord that
Tenant has examined the title to the Premises prior to the execution and
delivery of this Lease and has found the same to be satisfactory for all
purposes hereof.
(c) TENANT HAS HAD THE OPPORTUNITY TO EXAMINE THE PREMISES AND THE
SIDEWALKS AND CURBS ADJACENT THERETO AND THE PHYSICAL CONDITION THEREOF,
INCLUDING THE EXISTENCE OR NON-EXISTENCE OF ANY HAZARDOUS SUBSTANCES THEREON OR
UNDER, AND TENANT ACCEPTS THE SAME "AS IS" AS OF THE DATE HEREOF. EXCEPT TO THE
EXTENT EXPRESSLY PROVIDED HEREIN TO THE CONTRARY, TENANT ASSUMES ALL RISKS, IF
ANY, RESULTING FROM ANY LATENT OR PATENT DEFECTS IN THE DEMISED PREMISES OR THE
SIDEWALKS AND CURBS ADJACENT THERETO OR FROM ANY FAILURE OF THE SAME TO COMPLY
WITH ANY REQUIREMENTS APPLICABLE THERETO.
(d) Landlord makes no representation or warranty with respect to the
condition of the Premises or its fitness or availability for any particular use,
and Landlord shall not be liable for any latent or patent defect therein.
2. TERM AND EXTENSION OPTIONS.
(a) The initial term of this Lease (the "INITIAL TERM") shall
commence on the date of this Lease (the "COMMENCEMENT Date") and end on the last
day of the calendar month in which occurs the day immediately prior to the
twentieth (20th) anniversary of the Commencement Date or on such earlier date
upon which said term may expire or be terminated pursuant to any of the
conditions of limitation or other provisions of this Lease or pursuant to the
provisions of any Laws (as hereinafter defined).
(b) Provided no material non-monetary Event of Default (as
hereinafter defined) or monetary Event of Default in excess of $25,000 shall
then be continuing and Tenant shall then satisfy the Occupancy Requirement,
Tenant shall have two (2) separate, successive options to extend the term of
this Lease (as the same may have been extended by a prior such option) for an
additional term of ten (10) years each (such options are herein collectively
called "EXTENSION OPTIONS", and respectively called the "FIRST EXTENSION OPTION"
and the "SECOND EXTENSION OPTION," and such renewal terms are herein
collectively called the "EXTENSION TERMS", and respectively called the "FIRST
EXTENSION TERM" and the "SECOND EXTENSION TERM". Each Extension Term shall
commence on the day after the then current expiration date of the term of this
Lease and shall expire on the tenth (10th) anniversary of such then current
expiration date. Each of the Extension Options shall be exercisable (separately)
only by Tenant by written notice to Landlord (each, an "EXTENSION NOTICE") given
not later than the date that is twenty four (24) months prior to the then
current expiration date of the term of this Lease. Each of the Extension Terms
shall be upon the same covenants, terms and conditions as in this Lease for the
Initial Term, except (i) as to the duration of the term hereof and any other
provisions of this Lease which by their terms are applicable only to any
portions of the term hereof and excluding, upon the expiration of the Second
Extension Term, any further option or right to extend the term hereof and (ii)
the annual Base Rent (as hereinafter defined) for each Extension Term shall be
the Fair Market Rent determined as hereinafter set forth. "FAIR MARKET RENT" to
be determined hereunder shall be deemed to mean the fair market renewal rent for
the Premises which would be payable by a renewal tenant to lease the Premises.
(c) If Tenant timely exercises an Extension Option, Landlord shall
give Tenant notice within ten (10) Business Days following such exercise,
specifying a date (on a Business Day) and time (during business hours) and place
(in the borough of Manhattan, City of New York) within five (5) Business Days of
such Landlord's notice (such date, the "EXCHANGE DATE") for representatives of
Landlord and Tenant to convene and exchange sealed envelopes containing
Landlord's and Tenant's good faith determination of the Fair Market Rent (with
respect to Landlord, "LANDLORD'S DETERMINATION", and with respect to Tenant,
"TENANT'S DETERMINATION"). If the parties shall not agree on the Fair Market
Rent on the Exchange Date, they shall have five (5) Business Days (the "DISPUTE
RESOLUTION PERIOD") to negotiate in good faith to reach such agreement. If the
parties shall be unable to so agree prior to the close of the Dispute Resolution
Period, the Fair Market Rent shall be determined by arbitration conducted in
accordance with the Real Estate Valuation Arbitration Rules (Expedited
Procedures) of the AAA (as hereinafter defined), except that the provisions of
this SECTION 2(c) shall supersede any conflicting or inconsistent provisions of
said rules. Landlord and Tenant shall jointly appoint an arbitrator within seven
(7) days after the expiration of the Dispute Resolution Period. If
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Landlord and Tenant fail to do so, then either Landlord or Tenant may request
the AAA to appoint an arbitrator who shall be impartial within fourteen (14)
days of such request and both parties shall be bound by any appointment so made
within such 14-day period. If no such arbitrator shall have been appointed
within such 14-day period, either Landlord or Tenant may apply to any court
having jurisdiction to make such appointment. The arbitrator only shall
subscribe and swear to an oath fairly and impartially to determine such dispute.
Within five (5) days following the appointment of such arbitrator, each party
shall submit a report to the arbitrator setting forth its determination of the
Fair Market Rent, which report shall consist of Landlord's Determination and/or
Tenant's Determination, as the case may be, together with such other information
or such other evidence as such party shall deem relevant. Within ten (10) days
following the appointment of such arbitrator, he or she shall render his or her
determination of the Fair Market Rent in writing solely by selecting whichever
of Landlord's Determination or Tenant's Determination, in the judgment of the
arbitrator, most nearly reflects the Fair Market Rent. It is expressly
understood that the decision of such arbitrator as to the Fair Market Rent shall
be final and binding upon the parties hereto and non-appealable. The arbitrator
shall not have the power to add to, modify or change any of the provisions of
this Lease. The fees and expenses of any arbitration pursuant to this SECTION
2(c) shall be borne by the parties equally, but each party shall bear the
expense of its own attorneys and experts. The arbitrator shall have at least ten
(10) years' experience in leasing and valuation of properties which are similar
in character to the Premises. After the parties' or the arbitrator's
determination, as the case may be, of the Fair Market Rent has been made, the
parties shall execute and deliver an instrument setting forth the Fair Market
Rent, but the failure to so execute and deliver any such instrument shall not
effect the determination of Fair Market Rent.
(d) In the case of each Extension Option, Landlord shall have the
right to make time of the essence as to the delivery by Tenant of an Extension
Notice by delivering written notice to Tenant ("LANDLORD'S REMINDER NOTICE")
reminding Tenant of the Extension Options. In order to be effective such
Landlord's Reminder Notice must be delivered by Landlord during the 90-day
period immediately preceding the date on which the Extension Notice must be
delivered by Tenant in order to exercise the applicable Extension Option under
SECTION 2(a) above. If Tenant fails to timely deliver an Extension Notice to
Landlord and Landlord fails to timely deliver Landlord's Reminder Notice to
Tenant, Tenant's right to exercise the applicable Extension Option by delivery
of an Extension Notice shall continue; provided, however, that if the applicable
Extension Notice is not delivered by Tenant to Landlord on or prior to the date
that is twenty-two (22) months prior to then current expiration date of the term
of this Lease (time being of the essence), Tenant shall be deemed to have waived
its option with respect to the applicable Extension Term.
(e) Notwithstanding anything to the contrary hereinabove contained,
Landlord, at its option, may render any Extension Notice null and void if, at
the time that Landlord receives the same, a material non-monetary Event of
Default or a monetary Event of Default in excess of $25,000 shall have occurred
and shall then be continuing.
(f) References herein to the "term of this Lease" or the "term
hereof" or the like shall refer to the entire term of this Lease, I.E., the
Initial Term as theretofore extended by all applicable Extension Terms; and
references to the "then current expiration date" of the term of
3
this Lease shall mean, at the time in question, the expiration of the Initial
Term as theretofore extended by all applicable Extension Terms.
3. BASE RENT.
(a) Tenant, throughout the term of this Lease, covenants to pay
Landlord, without demand therefor and without any setoff or deduction
whatsoever, a net fixed annual rent (herein called the "BASE RENT") equal to the
"Base Rental Rate" (as such term is defined in SCHEDULE B attached hereto and by
this reference made a part hereof) from time to time in effect during the term
of this Lease.
(b) The Base Rent shall be payable commencing on the Commencement
Date and thereafter in equal monthly installments in advance on the first day of
each and every calendar month during the term of this Lease (the "DUE DATE"). If
the Commencement Date is not the first day of a month, Base Rent for such
partial month preceding the first full monthly payment of Base Rent shall be
appropriately prorated and paid in arrears simultaneously with the first full
monthly payment.
(c) It is the purpose and intent of Landlord and Tenant that the Base
Rent payable hereunder shall be absolutely net to Landlord so that this Lease
shall yield, net to Landlord, the Base Rent specified herein in each year during
the term of this Lease except to the extent expressly provided herein with
respect to Cap Ex Improvements or as otherwise expressly provided herein.
(d) Landlord may, at its option, direct Tenant by written notice,
from time to time, to pay all or any portion of the Base Rent directly to any
Fee Mortgagee (as hereinafter defined) and to pay the balance of the Base Rent,
if any, to Landlord. All Base Rent shall be paid either by wire transfer of
immediately available federal funds (in which case, such wire transfer must be
made by 3:00 p.m., Eastern Standard Time, on the applicable Due Date) or in
funds that are otherwise immediately available for use in an account designated
by Landlord or any Fee Mortgagee, as the case may be, and Landlord may from time
to time designate that all Base Rent be paid to such other account or at such
other address as Landlord shall designate by written notice to Tenant. If
Landlord shall direct Tenant to pay, or if Tenant shall have otherwise elected
to pay, Base Rent by wire transfer, then Tenant shall not be in default of
Tenant's obligation to pay Base Rent, nor shall any interest (as provided for
herein) be imposed, if and for so long as Tenant shall timely comply with
Landlord's wire instructions in connection with such payments. Accordingly, if
Tenant shall have timely complied with Landlord's instructions pertaining to a
wire transfer, but the funds shall thereafter have been misdirected or not
accounted for properly by the recipient bank designated by Landlord, then the
same shall not relieve Tenant's obligation to make the payment so wired, but
shall toll the due date for such payment until the wired funds shall have been
located.
(e) If any installment of Base Rent is not paid within five (5) days
after the Due Date therefor, Tenant shall pay Landlord interest on such overdue
payment at the Default Rate (as hereinafter defined), accruing from the day
following the Due Date of such payment until the same is paid; PROVIDED,
HOWEVER, that if Tenant fails to pay any installment of Base Rent within such
5-day period two (2) times during any 12-month period during the term hereof,
then
4
for any future Base Rent payments during the term of this Lease, Tenant shall
pay interest at the Default Rate if any installment of Base Rent is not paid on
or prior to the Due Date.
4. SERVICES; UTILITIES.
Tenant shall furnish, at its own expense, all services, utilities and
facilities of every type and nature required by it in its use of the Premises
(including, without limitation, electricity, gas, steam, water, sewer, heating,
ventilating and air conditioning, cleaning and security) and shall pay or cause
to be paid, when due, all bills, expenses and charges of any kind for any such
services, utilities and facilities used on, in connection with, or chargeable
against the Premises for any period during the term of this lease. Tenant
assumes full and sole responsibility for obtaining all such services, utilities
and facilities and Tenant shall indemnify and save harmless Landlord and any
Landlord Party (as hereinafter defined) from and against any loss, cost and/or
expense in connection therewith, except to the extent Tenant's inability to
obtain services or utilities (or any interruption thereof) is caused by the
negligent actions or misconduct of Landlord or a Landlord party while performing
any right or obligation under this Lease. Notwithstanding the foregoing, in
addition to Landlord's consent rights over persons performing Tenant's changes
pursuant to section 9, Landlord's consent (not to be unreasonably withheld)
shall be required prior to Tenant's retaining the following third party service
providers: (i) property manager, (ii) elevator contractor, (iii) contractor
performing material electrical installations within the Premises, (iv) plumbing
contractor, (v) HVAC contractor and (vi) life safety contractor (it being
understood that no such consent shall be required as to any such service
providers who are providing services to the Premises as of the commencement
date.
5. IMPOSITIONS.
(a) Tenant covenants to pay, before any fine, penalty, interest or
cost may be added thereto for the nonpayment thereof, as additional rent, all
taxes, assessments (including but not limited to, all assessments for public
improvements or benefits, accruing during the term of this Lease), water, sewer
and other rents, rates and charges, charges for public utilities, excises,
levies, license and permit and inspection fees (including, without limitation,
license, permit, inspection, authorization and similar fees) and other
governmental charges, general and special, ordinary and extraordinary, foreseen
and unforeseen, of any kind and nature whatsoever, which at any time prior to or
during the term of this Lease may have been or may be assessed, levied,
confirmed, imposed upon, or grow or become due or payable out of or in respect
of, or become a lien on, (A) the Premises or any part thereof or any
appurtenance thereto, (B) any Base Rent or other sums payable hereunder
(including, without limitation, commercial rent tax), (C) this Lease or the
leasehold estate created thereby, (D) the operation, possession or use of the
Premises, (E) any personal property or the rent and income received by Tenant
from subtenants, (F) any use, possession or occupation of the Premises or
activity conducted therein, including rentals or sales (including lease
rentals), value added, ad valorem, single business, gross receipts, use and
similar taxes that are at any time levied, assessed or payable on account
thereof, (G) all transfer, recording, stamp and real property gain taxes
incurred upon the assignment, transfer, foreclosure or other disposition by
Tenant of its interest in the Premises or this Lease, (H) all claims and demands
of mechanics, laborers, materialmen and others (excluding those engaged by
Landlord or a Landlord Party) which, if unpaid, might create a lien on the
Premises, (I) all charges of utilities, communications and similar services
serving the Premises and (J) charges imposed with
5
respect to the Premises for police protection, fire protection, street and
highway maintenance, construction and lighting, sanitation and water supply, if
any, (all of the foregoing, together with any and all fines, penalties, costs
and/or interest thereon, and together with any and all Premiums, being
hereinafter sometimes collectively referred to as "IMPOSITIONS", and any of the
same being hereinafter sometimes referred to as an "IMPOSITION"). Nothing herein
contained shall require Tenant to pay income taxes assessed against Landlord, or
any of Landlord's capital levy, franchise, excess profits, estate, gift,
succession, inheritance, transfer taxes or mortgage recording taxes in
connection with any Mortgage of Landlord (other than in accordance with SECTION
41), unless and to the extent that such taxes are imposed or levied upon or
assessed as a total or partial substitute for, or in lieu of, any other
Imposition required to be paid by Tenant pursuant to this SECTION 5, in which
event same shall be deemed Impositions and shall be paid by Tenant. If, at any
time during the term of this Lease, the method of taxation shall be such that
there shall be levied, assessed or imposed on Landlord a capital levy, gross
receipts or other tax directly on the rents received therefrom and/or a
franchise tax or an assessment, levy or charge measured by or based, in whole or
in part, upon such rents, the Premises (including but not limited to the
acquisition, leasing, use, or value thereof) or the present or any future
Improvements on the Premises or the construction thereof and/or measured in
whole or in part by Landlord's income from the Premises, then to the extent that
such taxes are imposed or levied upon or assessed as a total or partial
substitute for, or in lieu of, any other Imposition required to be paid by
Tenant pursuant to this SECTION 5, all such taxes, assessments, levies and
charges, or the part thereof so measured or based, shall be deemed to be
included within the term "Imposition" for the purposes hereof, but in any event
only to the extent that such taxes would be payable if the Premises were the
only property of Landlord (it being acknowledged and agreed that any franchise,
income, profit, sales, use, occupancy, gross receipts, rental or similar tax
which is unique to Landlord and which is not related to the Premises shall be
excluded from Impositions), and Tenant shall pay and discharge the same as
herein provided in respect of the payment of Impositions. All Impositions shall
be paid directly by Tenant to the entity to whom such Impositions are due.
Tenant shall furnish to Landlord, promptly after payment of any Impositions,
official receipts or other satisfactory proof evidencing payment of such
Imposition. Notwithstanding anything to the contrary set forth in this SECTION
5(a), nothing herein shall be deemed to modify Tenant's obligation to pay any
transfer tax, mortgage recording tax or other Imposition if and to the extent
such obligation is a term set forth in any "Landlord's Offer" pursuant to
SECTION 23(a).
(b) If at any time during the term, an Event of Default resulting
from Tenant's failure to pay Impositions constituting real estate taxes has
occurred, Tenant, within ten (10) Business Days after written demand by Fee
Mortgagee (as hereinafter defined) or by Landlord in response to a demand made
upon Landlord by Fee Mortgagee, shall deposit into escrow with Fee Mortgagee, on
the first day of each and every succeeding month during the term of this Lease,
an amount equal to one-twelfth (1/12th) of the amount necessary to pay annual
Impositions constituting real estate taxes then in effect, as reasonably
estimated by such Fee Mortgagee. If, at any time, the monies so deposited by
Tenant shall be insufficient to pay in full the next installment of such
Impositions then due, then within ten (10) Business Days following demand by
Landlord, Tenant shall deposit the amount of the insufficiency with such Fee
Mortgagee, to enable such Fee Mortgagee to pay all installments of such
Impositions. If on the first anniversary of the date that Tenant shall first
become obligated to pay such Impositions into
6
escrow as provided in this SECTION 5(b), and on each subsequent anniversary of
such date, the total monthly deposits made by Tenant for the previous year
pursuant to this SECTION 5(b) shall exceed the amount of such Impositions due
with respect to such previous year, such excess (less any amounts retained by
Landlord to cure any default in the payment of Base Rent and additional rent
under the Lease) shall be refunded to Tenant within twenty (20) days of such
applicable anniversary date. The funds deposited by Tenant with Fee Mortgagee on
account of Impositions pursuant to this SECTION 5(b), and any interest accruing
thereon, shall be held in escrow for the sole and exclusive purpose of paying
Impositions to the applicable party on or before the applicable due date thereof
and shall not be used by Landlord (except as stated above), Fee Mortgagee
(subject to the terms of the Mortgage) or any other party for any other purpose
whatsoever. All interest, if any, on such funds shall be for the account of
Tenant and shall be applied to pay any outstanding Impositions or amounts due
from Tenant to Landlord, or shall be refunded to Tenant, as the case may be,
pursuant to this SECTION 5(b).
(c) After prior written notice to Landlord, at Tenant's sole cost,
Tenant may contest in good faith (including seeking a reduction in the assessed
value of the Premises or an abatement or reduction of) any Impositions agreed to
be paid hereunder; provided that (i) Tenant first shall satisfy the requirements
of any Laws, including, if required, that the Impositions be paid in full before
being contested, (ii) no material non-monetary Event of Default or monetary
Event of Default in excess of $25,000 shall then be continuing and (iii) in
Landlord's reasonable judgment, failing to pay such Impositions will not subject
Landlord or Fee Mortgagee to criminal penalties or to prosecution for a crime or
(unless Tenant shall indemnify Landlord therefor) civil liability, or result in
the imminent risk of the sale, forfeiture or loss of any portion of the
Premises. Tenant agrees that each such contest shall be promptly and diligently
prosecuted to a final conclusion, except that Tenant shall have the right to
attempt to settle or compromise such contest; provided, however, that Tenant
shall not settle or compromise such contest without Landlord's prior consent,
which consent shall not be unreasonably withheld or delayed and shall be deemed
given if Landlord shall fail to respond within ten (10) Business Days following
Tenant's request for consent, such request setting forth the proposed terms of
such compromise or settlement. Tenant shall pay and save Landlord and Fee
Mortgagee harmless against any and all losses, judgments, decrees and costs
(including, without limitation, all reasonable out-of-pocket attorneys' fees and
expenses) in connection with any such contest. Tenant's right to contest any
Impositions shall be conditioned upon Tenant's depositing with Landlord (or Fee
Mortgagee) such security (in the form of cash or other security reasonably
acceptable to Landlord) for the payment of the amounts so contested and unpaid
together with all interest and penalties that may be imposed in connection
therewith, and all costs and charges which might become a lien or charge on all
or any part of the Premises in any such contest. Promptly after the conclusion
of such contest (by final determination, settlement, compromise or otherwise),
Tenant shall fully pay and discharge the amounts which shall be levied,
assessed, charged or imposed or be determined to be payable therein or in
connection therewith, together with all penalties, fines, interest, costs and
expenses thereof or in connection therewith, and perform all acts the
performance of which shall be ordered or decreed as a result thereof, provided
that Landlord shall return all amounts deposited with it with respect to the
contest of such Impositions, as aforesaid, or, at the written direction of
Tenant, Landlord shall make any such payment out of the funds on deposit with
Landlord and the balance, if any, shall be returned to Tenant. Landlord shall
not be subject to any liability whatsoever for the payment of any fees, costs
and expenses in
7
connection with such proceedings. Tenant agrees to pay all such fees (including
reasonable out-of-pocket attorneys' fees incurred by Landlord), costs and
expenses or, on demand, to make reimbursement for such payment. Landlord agrees
to cooperate with Tenant's efforts in connection with this SECTION 5(c) at no
cost or expense to Landlord. Should Tenant prevail in any such contest, Tenant
shall enjoy the benefit of any reduction in the Imposition in question
attributable to the term hereof.
(d) If Landlord elects to contest an Imposition, Landlord shall first
give Tenant written notice of such intention and Tenant shall have twenty (20)
days from the date of Landlord's notice to deliver to Landlord written notice of
Tenant's election to contest (in accordance with SECTION 5(c)) or not contest
the Imposition in question. The immediately preceding sentence notwithstanding,
if Tenant elects not to contest an Imposition with respect to real estate taxes
or assessments, Tenant shall notify Landlord thereof not less than thirty (30)
days prior to the final date upon which such Imposition may be contested without
suffering any penalty and Landlord may, after prior written notice to Tenant,
contest any such Imposition in good faith. Landlord shall not be obligated to
contest Impositions, and any such contest shall be by appropriate proceedings
conducted in the name of Landlord or in the name of Landlord and Tenant. If
Landlord elects to contest the amount or validity, in whole or in part, of any
Imposition, such contests by Landlord shall be at Landlord's sole cost and
expense, provided, however, that if the amounts payable by Tenant are reduced
(or if a proposed increase in such amounts is avoided or reduced) by reason of
Landlord's contest, Tenant shall enjoy the benefit of any such reduction or
avoidance, and Tenant shall reimburse Landlord for all reasonable out-of-pocket
costs incurred by Landlord in contesting the Imposition in question, but such
reimbursements shall not be in excess of the amount saved by Tenant by reason of
Landlord's actions in contesting such Imposition. Such reimbursement shall be
made within twenty (20) Business Days after demand accompanied by reasonable
documentation supporting the amount of any such costs or expenses.
6. USE.
(a) To the extent that Tenant Named Herein satisfies the Occupancy
Requirement, the Premises may be used for any lawful purpose that is consistent
with the First Class Standard (as hereinafter defined), including, without
limitation, office space, auction house, exhibiting gallery, museum, retail,
restaurant, medical office uses, the operation of a hospital facility and uses
incidental or ancillary to each of the foregoing uses.
(b) To the extent the conditions set forth in SECTION 6(a) are not
satisfied, the use of all or any portion of the Premises may not be changed or
modified except for the following purposes: office space, auction house,
exhibiting gallery, retail, restaurant, medical office use, and uses incidental
or ancillary to each of the foregoing uses, and such other commercial uses
approved by Landlord, such approval not to be unreasonably withheld, conditioned
or delayed (it being expressly understood, however, that unless Tenant Named
Herein shall be satisfying the Occupancy Requirement, Landlord may in its sole
discretion withhold its approval to a change in use involving the operation of a
hospital facility practicing around-the-clock care (as opposed to an
"outpatient" center for consultation and procedures which will not require
patients to remain on the Premises overnight).
8
(c) Notwithstanding anything to the contrary set forth in SECTION
6(a) or SECTION 6(b) above, Tenant shall not use or occupy or suffer the use or
occupancy of any part of the Premises in a manner (i) constituting a Prohibited
Use (as hereinafter defined) or (ii) inconsistent with the First Class Standard.
(d) Tenant shall not use or occupy or permit the Premises to be used
or occupied, nor do or permit anything to be done in or on the Premises or any
part thereof, in a manner that would in any way violate any of the Laws, zoning
ordinances, Insurance Requirements or any certificate of occupancy affecting the
Premises (as the same may be amended), or make void or voidable any insurance
then in force with respect thereto, or that may make it impossible to obtain
fire or other insurance thereon required to be furnished hereunder by Tenant, or
that will constitute a Prohibited Use, a public or private nuisance or waste.
Nothing contained in this Lease and no action or inaction by Landlord shall be
deemed or construed to mean that Landlord has granted to Tenant any right, power
or permission to do any act or to make any agreement that may create, give rise
to, or be the foundation for, any right, title, interest, lien, charge or other
encumbrance upon the estate of Landlord in the Premises;
7. COMPLIANCE WITH LAWS AND AGREEMENTS.
(a) Tenant shall, throughout the term of this Lease, and at Tenant's
sole cost and expense, promptly comply, or cause compliance: (i) with all Laws,
whether present or future, foreseen or unforeseen, ordinary or extraordinary,
and whether or not the same shall be presently within the contemplation of
Landlord and Tenant or shall involve any change of governmental policy, or
require structural or extraordinary repairs, alterations, or additions, and
irrespective of the cost thereof, which may be applicable to the Premises
(except to the extent provided herein with respect to Cap Ex Improvements) and
(ii) with any agreements, contracts, easements and restrictions affecting the
Premises or any part thereof or the ownership, occupancy or use thereof existing
on the date hereof or hereafter created by Tenant, or expressly consented to or
requested by Tenant.
(b) No abatement, diminution or reduction in Base Rent, additional
rent or any other charges required to be paid by Tenant pursuant hereto shall be
claimed by or allowed to Tenant for any inconvenience or interruption,
cessation, or loss of business caused directly or indirectly, by any present or
future Laws, or by priorities, rationing or curtailment of labor or materials,
or by war, civil commotion, terrorist action, strikes or riots, or any manner or
thing resulting therefrom, or by any other cause or causes beyond the control of
Landlord or Tenant, nor shall this Lease be affected by any such causes; and no
diminution in the amount of the space used by Tenant caused by legally required
changes in the construction, equipment, fixtures, machinery, operation or use of
the Premises shall entitle Tenant to any abatement, diminution or reduction of
the rent or any other charges required to be paid by Tenant pursuant to the
terms of this Lease.
(c) From time to time throughout the term of this Lease, Landlord
shall cooperate with Tenant in Tenant's efforts to obtain from governmental
authorities such licenses and permits as are necessary for the operation of the
Premises and the permitted use thereof, and any modification or amendment to the
Building's certificate of occupancy required in connection with the Tenant
Changes or the use of the Premises (in each case as permitted under this Lease),
9
provided and on condition that in connection therewith (i) Tenant shall promptly
reimburse Landlord (as additional rent) for all reasonable out-of-pocket costs
and expenses incurred by Landlord (including, without limitation, reasonable
out-of-pocket attorneys' fees and costs) in connection therewith within twenty
(20) days after demand accompanied by reasonable documentation supporting the
amount of any such costs or expenses, and (ii) Landlord shall not incur any
obligation or liability of any kind. Tenant shall indemnify, defend and hold
Landlord and any Landlord Party harmless from and against any and all loss,
liability, damage, cost and expense (including, without limitation, reasonable
out-of-pocket attorneys' fees and costs) incurred by Landlord and any Landlord
Party in connection with such application and/or procuring or attempting to
procure any such license and/or permits or any such modification or amendment to
the certificate of occupancy.
8. MAINTENANCE AND REPAIR.
(a) Tenant shall promptly throughout the term of this Lease, at
Tenant's cost and expense, take good care of and maintain the Premises
including, without limitation, the roof, landscaping, walls, footings,
foundations, HVAC, mechanical and electrical systems in or serving the Premises,
structural and nonstructural components and systems of the Premises and all
pathways, sidewalks, vaults, utility connections and curbs, if any, on, adjacent
and appurtenant thereto, in good working order and repair, and keep and maintain
the Premises in character and condition in accordance with the standards
applicable to a comparable first-class commercial building located in the
neighborhood in which the Improvements are located (the "FIRST CLASS STANDARD").
Tenant shall promptly remove all accumulated snow, ice and debris from any and
all pathways, sidewalks and curbs located upon or appurtenant to the Premises
and from any and all other sidewalks and curbs adjacent to the Premises. Tenant
shall promptly make all repairs and replacements, including, without limitation,
any capital improvements, at its sole cost and expense (except with respect to
Cap Ex Improvements, which Cap Ex Improvements shall be performed by Landlord
and paid for in accordance with SECTION 31(b) hereof), and in accordance with
the First Class Standard, whether interior or exterior, structural or
nonstructural, foreseen or unforeseen, ordinary or extraordinary, which may be
required to be made upon or in connection with any portion of the Premises in
order to keep and maintain the Premises in such condition as is required to
comply with Laws and to keep the building systems in working order, and whether
or not necessitated by wear and tear, obsolescence or defects, latent or
otherwise.
(b) Tenant shall not commit or suffer to be committed any waste upon
or about the Premises, and shall promptly at its cost and expense, make all
necessary replacements, restorations, renewals and repairs to the Premises and
appurtenances thereto necessary to comply with its obligations under this Lease.
Tenant shall not make any claim or demand upon or bring any action against the
Landlord for any loss, cost, injury, damage or other expense caused by any
failure or defect, structural or nonstructural, of the Premises or any part
thereof, except to the extent caused by the negligent actions or misconduct of
Landlord or a Landlord Party (as hereinafter defined).
(c) Except as expressly provided herein with respect to Cap Ex
Improvements, Landlord shall not under any circumstances have any obligation to
build any improvements on the Premises, or make any repairs, replacements,
alterations or renewals of any
10
nature or description to the Premises or to any of the Improvements, whether
interior or exterior, ordinary or extraordinary, structural or nonstructural,
foreseen or unforeseen, or to perform any maintenance or other work whatsoever
on the Premises or to the Improvements, or to make any expenditure whatsoever in
connection with this Lease or to inspect or maintain the Premises in any way.
Subject to Landlord's obligations under SECTIONS 12(f)(4), 12(g), 31(b) and
38(g), Tenant hereby waives the right to make repairs, replacements, renewals or
restorations at the expense of Landlord pursuant to any Laws.
(d) Any dispute under this SECTION 8 shall be resolved by arbitration
in accordance with SECTION 44.
9. TENANT CHANGES.
Tenant, at its sole cost and expense, shall have the right at any time
and from time to time during the term of this Lease to make alterations,
additions and other changes to the Improvements, including, without limitation,
those items constituting Proposed Sotheby's Changes (as hereinafter defined)
referred to in SECTION 9(k) below subject, however, to compliance with the
provisions of this SECTION 9 (all of the foregoing are hereinafter collectively
called "TENANT CHANGES" and any of the foregoing is called a "TENANT CHANGE"),
SUBJECT, HOWEVER, in all cases, to the following provisions:
(a) (1) Tenant shall not make any Tenant Change which is a Material
Tenant Change (as hereinafter defined) without having first obtained Landlord's
prior written approval thereof in each instance in accordance with this SECTION
9. So long as Tenant complies with the provisions of this SECTION 9 and there
shall not otherwise exist a material non-monetary Event of Default or a monetary
Event of Default in excess of $25,000 under this Lease, Landlord's approval of
any proposed Material Tenant Change shall not be unreasonably withheld,
conditioned or delayed UNLESS the proposed Material Tenant Change is a
Prohibited Tenant Change (as hereinafter defined). As used herein, the term
"MATERIAL TENANT CHANGE" shall mean any Tenant Change which (i) affects the
exterior of any Improvements (including the roof and the facade of the
Improvements), (ii) affects the structural elements of any Improvements, (iii)
affects in any material respect the electrical, plumbing, HVAC, elevator or
other mechanical or building systems of the Improvements, (iv) changes the
character of the lobby/atrium area or facade of the Improvements in any material
respect or (v) reduces the usable or rentable area of any Improvements by more
than a DE MINIMIS amount. Tenant acknowledges that Landlord, to the extent
provided for in SECTION 31(b), shall perform all Cap Ex Improvements.
(2) Notwithstanding the terms of SECTION 9(a)(1)(iv) above,
provided that Tenant Named Herein satisfies the Occupancy Requirement, Landlord
shall not withhold its consent to any Material Tenant Change performed by Tenant
Named Herein to the Sotheby's lobby/atrium area, provided that the same, in
Landlord's reasonable judgment does not (A) adversely affect the structure or
building systems of the Improvements, (B) constitute a Prohibited Tenant Change
or (C) fail to preserve or maintain the first-class architectural integrity of
such area.
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(b) Any Material Tenant Change shall be conducted under the
supervision of a licensed architect or engineer selected by Tenant and
reasonably approved by Landlord and shall be made in accordance with reasonably
detailed plans and specifications which shall be displayed on a CAD disk (the
"PLANS AND SPECIFICATIONS") and cost estimates prepared by such architect or
engineer. Any request by Tenant for Landlord's approval of any Material Tenant
Change pursuant to SECTION 9(a) above shall be accompanied by a full set of the
Plans and Specifications therefor and a copy of the cost estimates in respect
thereof; provided, however that prior to Tenant's submission of the full set of
Plans and Specifications for a proposed Material Tenant Change, Tenant shall
have the right to request in writing Landlord's preliminary approval of
schematic drawings and/or design development drawings and mechanical, electrical
and plumbing plans and specifications, pre-purchase specifications and long lead
items, provided that in the reasonable judgment of Landlord the same are
sufficiently complete and integrated for Landlord to review and comment upon.
Landlord shall respond in writing to Tenant's duly submitted request for
Landlord's approval of a Material Tenant Change and the Plans and Specifications
therefor (or Landlord's preliminary approval, as applicable) within ten (10)
Business Days of such request or, in the case of a resubmission of Plans and
Specifications in response to comments by Landlord, within seven (7) Business
Days after Landlord's receipt of such resubmission. Landlord shall be deemed to
have approved any request to which Landlord shall fail to respond within the
time periods set forth in the preceding sentence, provided that the written
request in question shall have made specific reference to such deemed consent
under this Section 9(b). Tenant shall reimburse Landlord (as additional rent)
for all reasonable out-of-pocket costs and expenses incurred by Landlord and
payable to third party architects or engineers in connection with its review of
the Plans and Specifications within twenty (20) days after demand accompanied by
reasonable documentation supporting the amount of any such costs and expenses.
If Landlord disapproves any Plans and Specifications, Landlord shall furnish a
reasonably detailed explanation for such disapproval.
(c) Notwithstanding anything to the contrary contained herein, in no
event shall Tenant make any Prohibited Tenant Change. As used herein, the term
"PROHIBITED TENANT CHANGE" shall mean any Tenant Change which (i) decreases the
size of or decreases the usable or rentable area of the Improvements by an
amount that in Landlord's reasonable judgment is greater than DE MINIMIS, (ii)
reduces the lobby/atrium area of the Premises or increases the amount of
existing retail space in the area depicted by cross-hatching on EXHIBIT F
annexed hereto and made a part hereof, (iii) reduces the value of the Premises,
(iv) constitutes a new or additional building or material structure, or (v) ties
in or connects the Premises or any Improvements thereon with any real property
outside the Premises.
(d) No Tenant Change shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction; and Landlord, at
Tenant's sole cost and expense, and upon the reasonable request of Tenant, shall
join in any applications for any permits, approvals or certificates required to
be obtained by Tenant in connection with any permitted Tenant Changes and shall
otherwise cooperate with Tenant in connection therewith, provided, and on
condition that in connection therewith (i) the applications relate to a Tenant
Change that otherwise complies with the terms of this Lease, (ii) the provisions
of applicable Laws shall require that Landlord join in such application, (iii)
Tenant shall reimburse Landlord (as
12
additional rent) for all reasonable out-of-pocket costs and expenses incurred by
Landlord in connection therewith within twenty (20) days after demand
accompanied by reasonable documentation supporting the amount of any such costs
or expenses, (iv) Landlord shall not under any circumstances incur any
obligation or liability of any kind and (v) Tenant shall indemnify, defend and
hold Landlord and any Landlord Party harmless from and against any and all loss,
liability, damage, cost or expense (including without limitation reasonable
out-of-pocket attorneys' fees and disbursements) incurred by Landlord in
connection therewith.
(e) All Tenant Changes shall be made promptly and in a good
workmanlike manner in accordance with the First-Class Standard and in compliance
with (i) all applicable permits and authorizations and building and zoning laws
and all other Laws, (ii) all Insurance Requirements and the orders, rules,
regulations and requirements of any Board of Fire Underwriters having
jurisdiction or any similar body exercising similar functions, and (iii) any
agreements, contracts, restriction, easement or covenant affecting title to or
use of the Premises or any part thereof or the ownership or occupancy thereof
existing on the date hereof or hereafter created by Tenant or Tenant Party, or
consented to or requested by Tenant or Tenant Party.
(f) Tenant covenants and agrees to pay any contractor it engages the
cost of the work being performed by such contractor in stages as the work
progresses subject only to customary retentions and amounts being disputed in
good faith. In the event of any such dispute, Tenant shall promptly furnish
Landlord with all information relating thereto as Landlord may reasonably
request. Any mechanic's lien filed against the Premises for work claimed to have
been done for, or materials claimed to have been furnished to, Tenant or any
Tenant Party shall be discharged by Tenant within thirty (30) days after Tenant
or any Tenant Party shall have received notice thereof, at Tenant or Tenant
Party's, as the case may be, sole cost and expense, by payment or filing the
bond required by law.
(g) Landlord agrees to promptly execute and deliver to Tenant, at
Tenant's sole cost and expense, such waivers of lien and consents in respect of
the leasing and financing of Tenant's Property pursuant to this SECTION 9(g) as
Tenant may reasonably request, provided (i) that the form and substance of such
consents and waivers shall be subject to Landlord's final approval, which
approval shall not be unreasonably withheld, delayed or conditioned, (ii) Tenant
shall reimburse Landlord (as additional rent) for all reasonable out-of-pocket
costs and expenses incurred by Landlord in connection therewith within twenty
(20) days after demand, (iii) Landlord shall not under any circumstances incur
any obligation or liability of any kind in Landlord's sole and absolute
discretion and (iv) Tenant shall indemnify, defend and hold Landlord and any
Landlord Party harmless from and against any and all loss, liability, damage,
cost or expense (including without limitation reasonable out-of-pocket
attorneys' fees and disbursements) incurred by Landlord in connection therewith.
(h) (i) All Tenant Changes that are of a permanent nature and cannot
be removed without damage to the Premises (unless Tenant shall repair such
damage), and all Equipment as provided in Section 14 hereof, shall become and be
the property of Landlord upon the expiration date of this Lease and shall be
surrendered to Landlord with the Premises as a part thereof. Notwithstanding the
foregoing, upon Landlord's request, by notice given at least ninety (90) days
prior to the expiration date of this Lease (the "REMOVAL NOTICE"), Tenant shall
be obligated to remove on or before the expiration date of this Lease any
Uncommon Changes (as
13
hereinafter defined), and Tenant shall repair and restore in a good and
workmanlike manner any damage to the Premises caused by such removal. If
Landlord does not timely deliver the Removal Notice, all Uncommon Changes shall
become and be the property of Landlord upon the expiration date of this Lease
and shall be surrendered to Landlord with the Premises as a part thereof. In
addition, if at the time Tenant performs an Uncommon Change, Tenant delivers a
written notice to Landlord requesting in BOLD LETTERING that Landlord notify
Tenant whether Landlord shall require such Uncommon Change be removed at the end
of the term hereof, Landlord shall, within ten (10) days following such notice,
notify Tenant of whether Landlord shall require that such Uncommon Change be
removed at the end of the term hereof.
(ii) All Tenant's Property installed by Tenant or its equipment
lessors, subtenants, concessionaires or licensees shall remain the property of
Tenant and such lessors, subtenants, concessionaires and licensees, as the case
may be, and may be removed from the Premises by Tenant at Tenant's option;
provided, however, that Tenant shall repair and restore in a good and
workmanlike manner any damage to the Premises caused by such removal. Any items
of Tenant's Property which shall remain in the Premises after the expiration
date of this Lease may, at the sole option of Landlord, be deemed to have been
abandoned, and in such case such items may be retained by Landlord as its
property or disposed of by Landlord, at Tenant's expense, without
accountability, in such manner as Landlord shall determine in its sole and
absolute discretion.
(i) Throughout the prosecution of any Tenant Change, Tenant shall
carry or cause its contractors to carry all necessary Worker's Compensation
Insurance (as hereinafter defined) and shall furnish Landlord with evidence of
any and all such coverage. No Tenant Change shall be undertaken until Tenant
shall have delivered to Landlord copies of insurance policies or abstracts
thereof issued by insurers satisfying the requirements set forth in SECTION
10(b), bearing notations evidencing the payment of premiums or accompanied by
other evidence reasonably satisfactory to Landlord of such payments, for the
insurance required under SECTION 10, which shall be kept in full force and
effect until the completion of the applicable Tenant Change.
(j) Subject to the last sentence of this SECTION 9(j), before
proceeding with any Material Tenant Change (or series of Material Tenant Changes
performed together) which cost $2,500,000 or more in the aggregate, Tenant shall
furnish to Landlord, as security for the full completion thereof, a payment and
performance bond ("BOND") issued by a bonding company reasonably satisfactory to
Landlord naming Landlord and any Fee Mortgagee as beneficiary, which bond (A)
shall be in an amount equal to one hundred five (105%) percent of Landlord's
reasonable estimate of the cost of such Material Tenant Change, (B) shall not
require any payment as a condition to the bonding company performing its
obligations under the bond, and (C) shall otherwise be in a form reasonably
satisfactory to Landlord. Tenant shall not be required to comply with the
bonding requirements set forth in this SECTION 9(j) with respect to the
performance of any Material Tenant Changes to the extent that and so long as
Tenant maintains a credit rating of at least BB (as rated by any of the Rating
Agencies (as hereinafter defined));
(k) Landlord acknowledges that Tenant Named Herein may in the future
consider performing the following Tenant Changes during the term hereof
(collectively, the "PROPOSED SOTHEBY'S CHANGES"): (i) the installation of a
separate entrance to the Improvements
14
located at 71st and/or 00xx Xxxxxx; (ii) the construction of an additional
elevator and/or upgrades to the existing elevators serving the above-ground
floors of the Improvements; (iii) alterations in the form of enhancements to the
structure, electrical and mechanical systems and other components of the
Improvements to prepare and/or separately demise space in connection with a
subletting for hospital use to the extent permitted by the terms of this Lease;
and (iv) separately demising portions of the Premises to separate the auction
area from the upper floors. Landlord hereby agrees that notwithstanding the fact
that a Proposed Sotheby's Change may constitute a Material Tenant Change
hereunder, any such Proposed Sotheby's Change shall be acceptable in principle
to Landlord so long as (A) all requirements under this SECTION 9 are complied
with in connection with the performance of each such Proposed Sotheby's Change
and (B) Tenant Named Herein satisfies the Occupancy Requirement at the time any
such Proposed Sotheby's Change is performed. Notwithstanding anything to the
contrary set forth in this SECTION 9, in connection with any of the Proposed
Sotheby's Changes described in SECTIONS 9(k)(i), 9(k)(ii) and 9(k)(iv), Landlord
and Tenant hereby agree that in addition to the approval rights reserved to
Landlord under this SECTION 9 relating to Material Tenant Changes, Landlord
shall have the right to request changes to the Plans and Specifications for such
Proposed Sotheby's Change only if the impact of such change will not increase
the estimated hard and soft costs of the Proposed Sotheby's Change by more than
two and one-half percent (2.5%).
(l) Any or all of Tenant's Property furnished or installed by Tenant
or its equipment lessors, subtenants, concessionaires or licensees in the
Premises may, from time to time, become subject to the lien of leases, financing
statements and security agreements under the Uniform Commercial Code and should
any such lien be foreclosed or terminated, subject to the provisions of SECTION
9(h) regarding the replacement of certain items and repair of damage, the
foreclosing or terminating party may remove such property from the Premises.
Landlord agrees to promptly execute and deliver to Tenant, at Tenant's sole cost
and expense, such waivers of lien and consents in respect of the leasing and
financing of Tenant's Property pursuant to this SECTION 9(l) as Tenant may
reasonably request, PROVIDED, HOWEVER, that the form and substance of such
consents and waivers shall be subject to Landlord's final approval, which
approval shall not be unreasonably withheld, delayed or conditioned.
(m) Any dispute under this SECTION 9 shall be resolved by arbitration
in accordance with SECTION 44.
10. INSURANCE.
(a) Tenant shall, throughout the term of this Lease, at its own cost
and expense, obtain and maintain in full force and effect (and shall cause any
assignees and sublessees to do the same with respect to any permitted assignment
or sublease of the Premises) and in the name of Tenant as named insured, and
with Landlord and any Fee Mortgagee (and any additional party reasonably
requested by Landlord in writing) being named as loss payee and additional
insureds:
(1) "all risk" property insurance (including but not limited to
collapse, loss or damage occasioned by fire, the perils included in the
so-called extended coverage endorsement, vandalism and malicious mischief,
water damage, flood, earthquake, Builder's Risk and against any other risks
as shall then be commercially reasonable to
15
insure) and containing an "agreed amount endorsement" or other endorsement
to eliminate application of any coinsurance clause, in amounts sufficient
to provide one hundred (100%) percent of the full replacement cost of the
Premises (without deduction for depreciation), including, without
limitation, sprinkler leakage, demolition cost, cost of debris removal,
increased cost of construction arising from operation or enforcement of
building laws and ordinances and such additional endorsement as Landlord,
or Fee Mortgagee may reasonably require; which amounts shall be determined
from time to time, but not more frequently than once in any thirty-six (36)
calendar months (unless otherwise reasonably requested by a Fee Mortgagee),
at Tenant's expense, at the request of the Landlord, by any appraiser
selected by Tenant and approved by Landlord and the insurance carrier (all
of the insurance described in this clause (1) being hereinafter sometimes
collectively referred to as the "CASUALTY INSURANCE"); PROVIDED, HOWEVER,
that notwithstanding anything in this SECTION 10 or this Lease to the
contrary, (x) Tenant Named Herein shall be required during the term of this
Lease to obtain and maintain coverage in its Casualty Insurance policy (or
in any separate policy that might become commercially available) against
loss or damage by terrorist acts in an amount equal to (but not exceeding)
a limit of $50,000,000 per occurrence, and (y) any Tenant other than Tenant
Named Herein shall be required during the term of this Lease to obtain and
maintain coverage in its Casualty Insurance policy (or in any separate
policy that might become commercially available) against loss or damage by
terrorist acts in an amount equal to 100% of the "Full Replacement Cost" of
the Premises; PROVIDED, HOWEVER, if such coverage is not commercially
available, then any Tenant other than Tenant Named Herein must obtain and
maintain such coverage in an amount equal to the highest amount then
available on commercially reasonable terms, but in no event shall any such
Tenant obtain or maintain such coverage in an amount less than $50,000,000
per occurrence;
(2) commercial general liability and umbrella insurance against
any loss, liability or damage on, about or relating to the Premises, with
deductibles in amounts not exceeding such that Landlord and Fee Mortgagee
may reasonably approve, against claims for bodily injury including death,
property damage and "personal and advertising injury" occurring in, on or
about the Premises and the adjoining streets, sidewalks and passageways
with a combined single limit with respect to each occurrence on a
per-location basis of not less than Ten Million Dollars ($10,000,000.00)
(under the primary or umbrella coverage), which amount shall be increased
or decreased from time to time to those amounts and coverages of insurance
which in Landlord's reasonable judgment are then being customarily required
by prudent landlords of properties meeting the First Class Standard (all of
the insurance described in this clause (2) being hereinafter sometimes
collectively referred to as the "LIABILITY INSURANCE"), it being agreed
that such Liability Insurance shall also provide the following protections:
(a) products and completed operations;
(b) personal and advertising injury protection;
(c) fire legal liability, if not otherwise covered under the
comprehensive form of public liability insurance;
16
(d) employees as additional insured coverage;
(e) liquor liability; and
(f) contractual liability.
(3) rental loss and/or business interruption insurance in an
annual aggregate amount equal to the gross rentals payable with respect to
the coverage period on an actual loss sustained basis from the Premises,
such insurance to cover the period commencing on the date of any casualty
or condemnation and ending twelve (12) months following the date of such
casualty (it being understood that (x) the policy under which Tenant shall
carry such insurance shall provide that the proceeds of such policy shall
be paid with respect to the foregoing rental loss coverage before being
paid to cover any other loss, and (y) Tenant's obligation to pay rent
hereunder in the event of casualty shall be deemed satisfied to the extent
and only to the extent that Landlord receives proceeds equal to the amount
of rent and additional rent that would otherwise have been payable
hereunder (it being acknowledged that any deficiency in such proceeds shall
be payable by Tenant).
(4) if a sprinkler system shall be located in the Premises,
sprinkler leakage insurance in amounts reasonably satisfactory to Landlord
and any Fee Mortgagee;
(5) Boiler and Machinery Broad Form policy covering explosion
insurance in respect of steam and pressure boilers and similar apparatus,
if any, located on the Premises in an amount equal to one hundred (100%)
percent of the full replacement cost of the Improvements;
(6) worker's compensation and employer's liability insurance
subject to statutory limits or better in respect of any work or other
operations on or about the Premises in accordance with applicable Laws on
all employees of contractors, subcontractors, consultants and vendors
engaged on or with respect to the Premises ("WORKER'S COMPENSATION
INSURANCE"); and
(7) such other insurance with respect to the Premises and in
such amounts as Landlord or any Fee Mortgagee from time to time may
reasonably request against such other insurable hazards which at the time
in question are commonly insured against in the case of property meeting
the First Class Standard; provided that it is expressly understood that
notwithstanding anything in this SECTION 10 or this Lease to the contrary,
Tenant shall not be required to carry any insurance coverage that is not
commercially available at the time in question.
(b) All such insurance described in subparagraph (a) of this SECTION
10 shall: (i) be obtained from and maintained with reputable and financially
sound insurance company(ies) reasonably acceptable to Landlord, authorized to
issue such insurance in the State of New York, and (x) rated in Best's Insurance
Guide, or any successor thereto, as having a "Best's Rating" of A or better and
a "Financial Size Category" of at least "x" or better and (y)
17
have a claims paying ability rating of not less than AA - by S& P and Aa3 by
Xxxxx'x; (ii) be on and/or contain such terms and conditions as shall be
reasonably satisfactory to Landlord; (iii) provide that any loss otherwise
payable thereunder shall be payable notwithstanding any act or negligence of
Tenant, Landlord or any Landlord Party, which might, absent such agreement,
result in a forfeiture of all or part of the payment of such loss; and (iv)
otherwise comply with the provisions of this SECTION 10. The proceeds of any
loss under any policy or policies of Casualty Insurance shall be payable to
Landlord (and/or to any Fee Mortgagee designated by Landlord therefor) as the
sole "loss payee" thereunder, it being understood that the provisions of SECTION
12 below shall apply in respect thereof.
(c) Tenant shall furnish Landlord (and any named Fee Mortgagee) with
duplicate original(s) or original certificate(s) together with true copy(ies) of
all such insurance policies described in SECTION 10(a) above, including any
renewal and replacement policy(ies), together with written evidence that the
premiums therefor (the "PREMIUMS") have been paid, and such additional
information as Landlord or any Fee Mortgagee may reasonably require. It is
understood and agreed that said policies may be blanket policies covering other
locations operated by Tenant, its affiliates or subsidiaries, provided that such
blanket policies otherwise comply with the provisions of this SECTION 10, and
provided further that such policies shall be written on a "per occurrence" basis
so as to assure that the amount of insurance required by the provisions of this
SECTION 10 will be available notwithstanding any losses with respect to other
property covered by such blanket policies.
(d) The policies of insurance required under this Lease shall contain
an agreement by the insurer that it will not cancel or modify the provisions of
such policy relating to Tenant's obligations under this Lease except after
thirty (30) days prior written notice to Landlord (and all named Fee Mortgagees
and other parties, if any) by certified mail, return receipt requested. Not less
than thirty (30) days prior to the expiration of any such insurance policy,
Tenant shall deliver to Landlord (and all named Fee Mortgagees) a certificate
evidencing the replacement or renewal thereof.
(e) Tenant shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be furnished by
Tenant under this SECTION 10 of this Lease, unless Landlord (and all named Fee
Mortgagees), are included therein as insureds, with losses being payable as in
this SECTION 10 provided. Tenant shall immediately notify Landlord whenever any
such separate insurance is taken out and shall deliver to Landlord (and all
named Fee Mortgagees) duplicate original(s) thereof, or original certificate(s)
evidencing the same with true copies thereof, as provided in this Lease.
(f) Each insurance policy required to be maintained by Tenant under
this SECTION 10 shall include a waiver of the insurer's right of subrogation
against Landlord (and all named Fee Mortgagees). Tenant hereby releases Landlord
and all Landlord Parties, with respect to any claim (including a claim for
negligence) which it might otherwise have against the other party, for loss,
damage or destruction with respect to its property occurring during the term of
this Lease to the extent that any of the foregoing are covered by the insurance
required to be carried hereunder or would have been covered by Tenant's
insurance if Tenant had fully carried such insurance required hereunder.
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(g) If Tenant fails to provide, maintain, keep in force or deliver
and furnish the certificates of insurance required by this Lease, Landlord upon
at least ten (10) Business Days' prior written notice may, but shall not be
obligated to, procure such insurance or single-interest insurance for such risks
covering Landlord's interest (or the interest of any Fee Mortgagee) and pay the
premiums for any such insurance. All sums advanced by Landlord to pay premiums
on insurance policies which Tenant is required to maintain hereunder shall be
due and payable by Tenant to Landlord within fifteen (15) Business Days after
demand accompanied by reasonable documentation supporting the amount of any such
costs or expenses and shall earn interest from and after the date the same are
paid by Landlord, whether or not demand for repayment is then made, at the
Default Rate.
(h) Landlord shall not be limited in the proof of any damages which
Landlord may claim against Tenant arising out of or by reason of Tenant's
failure during the term of this Lease to provide and keep in force the insurance
required under this Lease to the amount of the insurance premium or premiums not
paid or incurred by Tenant and which would have been payable upon such
insurance, but Landlord shall also be entitled to recover as damages for such
breach the uninsured amount of any loss to the extent of any deficiency between
the insurance required by the provisions of this Lease and the insurance carried
by Tenant, together with all costs and expenses incurred by Landlord which
Landlord would not have incurred if the required insurance had been maintained
by Tenant.
(i) In no event shall either party shall have any liability under or
in connection with this Lease for any consequential or indirect damages suffered
by the other party or by any person claiming through such party (except to the
extent expressly provided in Section 21(b) hereof).
(j) Any dispute under this SECTION 10 shall be resolved by
arbitration pursuant to SECTION 44 hereof.
11. INDEMNIFICATION; NON-LIABILITY.
(a) Tenant shall, at its sole cost and expense, indemnify, defend and
hold harmless Landlord, Landlord's Affiliates, any Fee Mortgagee and their
respective members, officers, directors, shareholders, partners, trustees,
beneficiaries, agents and employees ("INDEMNIFIED PARTIES") from and against any
and all claims, charges, losses and costs (including reasonable out-of-pocket
attorneys fees and court costs) by or on behalf of, and any penalties imposed
by, any person that may be asserted against any Indemnified Party or the
Premises by any third party (collectively, "LOSSES") by reason of any of the
following matters: (a) the use, occupancy, operation, maintenance, repairs or
management of the Premises by Tenant or any subtenant or other person holding or
claiming under or through Tenant, (b) the alteration of any part of the
Improvements (other than the performance by Landlord of a Cap Ex Improvement),
the installation, alteration or removal of Equipment or the conduct or
management of, and the payment for, any work or thing whatsoever done in or
about the Premises, by or on behalf of Tenant (or any subtenant or other person
holding or claiming through or under Tenant) during the term of this Lease; (c)
the condition of the Premises during the term of this Lease; (d) any breach or
default on the part of Tenant in the performance of any of Tenant's covenants or
obligations under this Lease; (e) the failure to timely pay any Impositions or
comply with any
19
Laws, whether or not Tenant shall be validly contesting the same in accordance
with the terms of this Lease; (f) any wilful misconduct or negligence of Tenant,
or any of its agents, servants, employees, contractors, invitees or licensees,
or of any person holding or claiming through or under Tenant; (g) any accident,
injury or damage whatsoever caused to any person or persons or any property
damage occurring during the term of this Lease, in or about the Premises, or
upon the sidewalks or streets adjacent thereto, or (h) any participation or
cooperation or execution of any documents by Landlord requested by Tenant in
connection with any activity of Tenant (including with respect to any contest or
other proceeding brought by Tenant relating to Impositions or Laws or
otherwise). Further, Tenant agrees to indemnify and hold harmless the
Indemnified Parties against and from all Losses incurred in connection with any
claim, action or proceeding against which the Indemnified Parties are
indemnified under this SECTION 11; PROVIDED, HOWEVER, that to the extent any
Indemnified Party(ies) bring a claim, action or proceeding under this SECTION 11
against Tenant, and Tenant is the prevailing party in such claim, Tenant shall
not be obligated to pay for such Indemnified Party(ies) attorneys' fees incurred
thereby in connection with such claim. In case any claim, action or proceeding
(a "CLAIM") is brought against any Indemnified Party in respect of which
indemnification may be sought by such Indemnified Party, such Indemnified Party
shall give prompt written notice thereof to Tenant, which notice shall include
all documents and information in the possession of or under the control of such
Indemnified Party relating to such Claim and shall specifically state that
indemnification for such Claim is being sought under this SECTION 11(a);
provided, however, that the failure of such Indemnified Party to so notify
Tenant shall not limit or affect such Indemnified Party's rights to be
indemnified pursuant to this SECTION 11(a) if and to the extent Tenant is not
prejudiced thereby. Upon receipt of such notice of Claim (together with such
documents and information) from such Indemnified Party, Tenant shall, at is sole
cost and expense, in good faith defend any such Claim with counsel reasonably
satisfactory to such Indemnified Party. In the alternative, an Indemnified Party
may elect to conduct its own defense through counsel of its own choosing and at
the reasonable expense of Tenant, if (A) such Indemnified Party reasonably
determines that the conduct of its defense by Tenant could be prejudicial to its
interests, (B) Tenant refuses to defend, or (C) Tenant shall have failed, in
Landlord's reasonable judgment, to defend the Claim in good faith. Tenant may
settle any Claim against an Indemnified Party without such Indemnified Party's
consent, provided (i) such settlement is without any liability, cost or expense
whatsoever to such Indemnified Party, (ii) the settlement does not include or
require any admission of liability or culpability by such Indemnified Party
under any federal, state or local statute or regulation, whether criminal or
civil in nature and (iii) Tenant obtains an effective written release of
liability for such Indemnified Party from the party to the Claim with whom such
settlement is being made, which release must be acceptable to such Indemnified
Party, and a dismissal with prejudice of any pending legal action against such
Indemnified Party in connection with such Claim. Each Indemnified Party shall
reasonably cooperate with Tenant, at Tenant's sole cost and expense, in
connection with the defense or settlement of any Claim in accordance with the
terms hereof. If Tenant refuses to defend any Claim or if, in the reasonable
judgment of Landlord, Tenant fails to defend such Claim in good faith and the
Indemnified Party in question elects to defend such Claim by counsel of its own
choosing, Tenant shall be responsible for any good faith settlement of such
Claim entered into by such Indemnified Party. If an Indemnified Party reasonably
determines that the conduct of its defense by Tenant could be materially
prejudicial to its interests and the Indemnified Party in question elects to
defend such Claim by counsel of its own choosing,
20
Tenant shall be responsible for any reasonable settlement of such Claim entered
into by such Indemnified Party.
(b) In no event shall either party have any liability for
consequential damages resulting from the matters described in this SECTION 11.
12. DAMAGE OR DESTRUCTION.
(a) If the whole or any portion of the Premises is damaged or
destroyed by fire or other casualty, then Tenant shall forthwith give notice
thereof to Landlord, and unless Tenant shall exercise its termination option in
connection with an End of Term Casualty (as hereinafter defined) set forth in
SECTION 12(g) below, Tenant shall, at its cost and expense (subject only to the
limitation on Tenant Named Herein's obligation set forth in SECTION 12 (f)(4)
with respect to a casualty resulting from a terrorist act), forthwith repair,
restore, rebuild or replace the damaged or destroyed Improvements, fixtures or
equipment, and complete the same as soon as reasonably possible, to the
condition they were in prior to such damage or destruction, except for such
changes in design or materials as may then be required by Laws (the repair,
restoration, rebuilding and/or replacement work required of Tenant under this
SECTION 12(a) is herein collectively called the "RESTORATION WORK"). The
provisions and requirements of SECTION 9 shall apply with respect to the
Restoration Work (and the same shall constitute Tenant Changes); without
limiting the generality of the foregoing, the same shall be performed in
accordance with the Plans and Specifications to the extent required under
SECTION 9.
(b) The obligation to pay the rent provided for herein and to
otherwise perform Tenant's obligations hereunder shall continue unabated by
reason of such damage or destruction; that is, there shall be no abatement or
diminution of rent or release from any of Tenant's obligations hereunder by
reason of such damage or destruction or any insurance proceeds deficiency with
respect thereto regardless of the period of time, if any, during which the
Premises or any part thereof remain untenantable, any Laws to the contrary
notwithstanding.
(c) Promptly after any damage or destruction to the Premises by fire
or other casualty, Tenant shall submit proof of loss statements with the
insurance company(ies) under the policies of Casualty Insurance and provide
Landlord (and any named Fee Mortgagee) with a copy of all such submitted
statements. Landlord (and any named Fee Mortgagee) shall have the right to
participate with Tenant in the adjustment, collection and compromise of any and
all claims under all policies of Casualty Insurance and to execute and deliver
on behalf of Tenant all necessary proofs of loss, receipts, vouchers and
releases required by the insurers. Tenant shall not settle any claim without the
prior written approval of Landlord and the Fee Mortgagee, which shall not be
unreasonably withheld, delayed or conditioned by Landlord.
(d) The proceeds of the policies of Casualty Insurance in respect of
the damage or destruction in question shall be paid either by the insurance
company(ies) to Landlord or to any Fee Mortgagee designated by Landlord for such
purpose (in either event, the person being paid such proceeds by the insurance
company(ies) is herein called the "CASUALTY DEPOSITARY") in trust in accordance
with the following provisions of this SECTION 12. The term "NET CASUALTY
INSURANCE PROCEEDS" shall mean the proceeds of the policies of Casualty
Insurance, in respect of the damage or destruction in question, which are
actually paid by the
21
insurance company(ies), LESS the reasonable out-of-pocket cost to the Casualty
Depositary and/or Landlord, as evidenced by reasonable documentation, of
recovering, holding and/or paying out such proceeds pursuant to the provisions
of this SECTION 12 (including, without limitation, reasonable out-of-pocket
attorneys' fees, costs and disbursements and, as applicable, the costs and
expenses allocable to policing the requirements of SECTION 12(f)(1) through (5)
below, including without limitation the costs and expenses incurred in
inspecting the Restoration Work and/or any plans and specifications therefor).
(e) If the estimated cost of the Restoration Work, as reasonably
determined by the Casualty Depositary, shall be $500,000 or less, then the
Casualty Depositary shall pay the Net Casualty Insurance Proceeds to Tenant, as
trustee, and Tenant shall hold the same in trust to be applied toward the cost
of the Restoration Work.
(f) If the estimated cost of the Restoration Work, as reasonably
determined by the Casualty Depositary, shall exceed $500,000, then the Casualty
Depositary shall hold the Net Casualty Insurance Proceeds, and disburse the same
to Tenant, as reimbursement for the costs of the Restoration Work, from time to
time, as the Restoration Work progresses (but not more frequently than monthly),
SUBJECT, HOWEVER, in all events, to the following conditions:
(1) Each request for payment shall be made on ten (10) days
prior written notice to the Casualty Depositary and shall be accompanied by
a certificate to be made by the architect, engineer or other third party
professional supervising the Restoration Work stating (x) that the part of
the Restoration Work which has been completed has been performed
substantially and in material compliance with the approved plans and
specifications, (y) that the amount requested is justly required to
reimburse Tenant for payments by Tenant to, or is justly due to, the
contractor, subcontractors, materialmen, laborers, engineers, architects or
other persons rendering services or materials for the Restoration Work
(giving a brief description of such services and materials), and that, in
the reasonable opinion of such party, when added to all amounts previously
paid out by the Casualty Depositary does not exceed the value of the
Restoration Work performed to the date of such certificate, and (z) whether
or not, in the reasonable opinion of such party, the amount of the Net
Casualty Insurance Proceeds remaining in the hands of the Casualty
Depositary will be sufficient on completion of the Restoration Work to pay
for the same in full (giving in such detail, as the Casualty Depositary may
reasonably require, an estimate of the cost of such completion).
(2) Each request shall be accompanied by waivers of lien for the
work covered by the requisition immediately preceding the requisition in
question reasonably satisfactory to the Casualty Depositary covering that
part of the Restoration Work for which payment or reimbursement is being
requested and by a search prepared by a title company or by other evidence
satisfactory to the Casualty Depositary that there has not been filed with
respect to the Premises any mechanics' or other lien or instrument for the
retention of title in respect of any part of the Restoration Work which has
not been discharged of record.
22
(3) The request for any payment after the Restoration Work has
been substantially completed shall be accompanied by a copy of any
certificate or certificates required by law to permit the legal occupancy
of the Premises.
(4) If, at any time prior to completion of the Restoration Work,
the Casualty Depositary, in its reasonable judgment, shall determine that
the Net Casualty Insurance Proceeds it is holding shall be insufficient to
pay for the full completion of the Restoration Work, then Tenant shall pay
the amount of such deficiency to the Casualty Depositary to be held and
applied pursuant to this SECTION 12(f) along with the Net Casualty
Insurance Proceeds or shall provide the Casualty Depositary with security
for such payment acceptable to such Casualty Depositary; PROVIDED, HOWEVER,
that if the casualty in question is caused by a terrorist act or acts,
Tenant shall be responsible for the cost of the Restoration Work only up to
the limits covered by its Casualty Insurance Policy (or in any separate
policy that might become commercially available) against loss or damage by
terrorist acts, and Landlord shall be responsible for the remainder of such
cost.
(g) If, during the last two (2) years of (i) the initial term hereof
or (ii) either Extension Term, fifty percent (50%) or more of the Premises is
damaged or destroyed by fire or other casualty (such casualty, an "END OF TERM
CASUALTY"), and prior to the End of Term Casualty (during the initial term
hereof or either Extension Term) Tenant shall not have exercised any available
Extension Option, then Tenant shall have the option, within fifteen (15) days of
the occurrence of the End of Term Casualty, to terminate this Lease by a notice
to Landlord (the "TERMINATION NOTICE") specifying such election pursuant to this
SECTION 12(g). Failure to timely deliver the Termination Notice shall be deemed
an election by Tenant to perform all Restoration Work with respect to the End of
Term Casualty in accordance with this SECTION 12. If Tenant shall have timely
delivered the Termination Notice, the term of this Lease shall cease and come to
an end on the day that is thirty (30) days following the date of delivery of
such notice. Prior to the termination of this Lease pursuant to this SECTION
12(g):
(i) Tenant shall (a) assign to Landlord (or Fee Mortgagee or
such other designee selected by Landlord) all of its rights to receive the
proceeds of the policies of Casualty Insurance applicable to the End of Term
Casualty and (b) provide a letter from Tenant's insurance carrier (1) consenting
to the assignment of such proceeds, (2) acknowledging that Landlord (or its
designee) has all rights to collect the proceeds under such policy and (3)
representing that there are no defenses to such insurance carrier's obligation
to pay any claim to Landlord (or its designee) under such policy;
(ii) Tenant shall pay to Landlord (or its designee) the amount
of any deductible set forth in Tenant's Casualty Insurance policy; and
(iii) Tenant shall be obligated to pay to Landlord all Base
Rent, additional rent and other sums that would have been due and payable by
Tenant under this Lease if the End of Term Casualty had not occurred and the
term of this Lease would have expired as if it had not been terminated as
aforesaid.
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(h) Notwithstanding anything in this SECTION 12 to the contrary, if
an Event of Default resulting from non-payment of Base Rent and/or additional
rent shall be continuing during any period that the Casualty Depositary is
holding any insurance proceeds hereunder, then the Casualty Depositary shall
have the right, but not the obligation, to apply the whole or any part of such
proceeds to the cure or remedy of such default prior to paying over, holding
and/or applying the same in accordance with the provisions of SECTION 12(e) and
12(f) hereof.
(i) This Lease shall be considered an express agreement governing any
case of damage to or destruction of the Improvements or any part thereof by fire
or other casualty, and SECTION 227 of the Real Property Law of the State of New
York (providing for such a contingency in the absence of express agreement), and
any other law of like import now or hereafter in force, shall have application
in such case.
(j) The obligations under this SECTION 12 shall survive the
expiration of sooner termination of this Lease.
13. CONDEMNATION.
(a) If at any time during the term of this Lease, all or
substantially all of the Premises shall be taken for any public or quasi-public
purpose by any lawful power or authority by the exercise of the right of
condemnation or eminent domain or by agreement between Landlord, Tenant and
those authorized to exercise such right, then the following provisions shall
apply:
(1) This Lease and the term hereby granted shall terminate and
expire on the date of such taking and all Base Rent and additional rent
provided to be paid by Tenant shall be apportioned and paid to the date of
such taking.
(2) The entire award for the taking of the Premises (without
reduction therefrom for the value of any leasehold estate of Tenant
hereunder or any value attributable to any Tenant Changes to the
Improvements) shall be paid either to Landlord or to a Fee Mortgagee
designated by Landlord for such purpose (in either event, the "CONDEMNATION
DEPOSITARY"), in trust, and shall be retained or paid by Landlord as
follows:
(A) FIRST, the Condemnation Depositary shall pay the
reasonable fees and expenses incurred in collecting the award; and
(B) SECOND, the balance of such award (if any) shall be
paid to Landlord (and/or to any Fee Mortgagee designated by Landlord for
such purpose).
The term "SUBSTANTIALLY ALL OF THE PREMISES" shall be deemed to mean such
portion(s) of the Premises as, when so taken, would in Landlord's reasonable
judgment leave remaining a balance of the Premises which (due either to the area
so taken or the location of the part so taken in relation to the part not so
taken) would not (under economic conditions or any Laws), assuming, to the
extent feasible, the restoration of the portion of any existing Improvements not
taken and the construction of new Improvements on any Land not taken, be capable
of either (I) supporting
24
Tenant's business operations or (II) producing a fair and reasonable return as a
rental property. Nothing contained in this SECTION 13 shall be deemed to prevent
Tenant from making a separate claim in any condemnation proceeding for the then
value of Tenant's trade fixtures and personal property which have been taken,
and moving expenses incurred as a result thereof, provided that such claim would
not have the effect of reducing the amount of the award to which Landlord would
otherwise be entitled.
(b) If at any time during the term of this Lease less than
substantially all of the Premises shall be so taken or condemned, then the
following provisions shall apply:
(1) This Lease and the term hereof shall nevertheless continue,
and there shall be no abatement, diminution or reduction in Base Rent,
additional rent or any other charges required to be paid by Tenant pursuant
to this Lease;
(2) Tenant, whether or not any condemnation award is sufficient
for such purposes, shall proceed diligently to restore the remaining parts
of the Premises and the sidewalks and curbs adjacent thereto not so taken
so that the same shall be a complete, rentable, self-contained
architectural unit in good condition and repair (all such restoration work
being herein called the "CONDEMNATION WORK"). The provisions and
requirements of SECTION 9 shall apply with respect to the Condemnation Work
(and the same shall constitute Tenant Changes hereunder); without limiting
the generality of the foregoing, the same shall be performed in accordance
with the Plans and Specifications to the extent required under SECTION 9.
(3) The entire award for the taking of the applicable portion of
the Premises shall be paid to a Condemnation Depositary, in trust, and
shall be paid by the Condemnation Depositary as follows:
(A) FIRST, the Condemnation Depositary shall pay the
reasonable fees and expenses incurred in collecting the award;
(B) SECOND, the balance of such award, up to the amount
reasonably required to perform the Condemnation Work (as determined by
a mutually agreeable architect), shall be made available to Tenant to
perform the Condemnation Work, subject to and in accordance with the
provisions of SECTION 13(b)(4) below (such portion of the award being
herein called the "CONDEMNATION WORK PROCEEDS");
(C) THIRD, the balance of such award shall be paid to
Landlord (and/or any Fee Mortgagees designated by Landlord for such
purpose), up to an amount equal to the fair market value of Landlord's
Fee Estate as to the portion of the Premises taken.
(4) The Condemnation Work Proceeds shall be held and/or
disbursed by the Condemnation Depositary in accordance with the following
provisions of this SECTION 13(b)(4). The term "NET CONDEMNATION WORK
PROCEEDS" shall mean the proceeds of such award which are actually paid by
the taking authority to the Condemnation
25
Depositary, LESS the reasonable and customary cost to the Condemnation
Depositary and/or Landlord, as evidenced by reasonably detailed bills,
invoices and other records, of holding and/or paying out such proceeds
pursuant to the provisions of this SECTION 13(b)(4) (including, without
limitation, reasonable attorneys' fees, costs and disbursements and, as
applicable, the costs and expenses allocable to policing the requirements
of SECTION 13(b)(4)(B) below, including without limitation costs and
expenses incurred in inspecting the Condemnation Work and/or any plans and
specifications therefor). The Net Condemnation Work Proceeds shall be held
and/or disbursed as follows:
(A) If the estimated cost of the Condemnation Work, as
determined by a mutually agreeable architect, shall be $500,000 or
less, then the Condemnation Depositary shall pay the Net Condemnation
Work Proceeds to Tenant, and Tenant shall hold the same in trust to be
applied toward the cost of the Condemnation Work.
(B) If the estimated cost of the Condemnation Work, as
reasonably determined by a mutually agreeable architect, shall exceed
$500,000, then the Condemnation Depositary shall disburse the Net
Condemnation Work Proceeds to Tenant, as reimbursement for the costs
of the Condemnation Work, from time to time, as the Condemnation Work
progresses (but not more frequently than monthly), SUBJECT, HOWEVER,
in all events, to the following conditions set forth in SECTION
12(f)(1) through (5), applied MUTATIS MUTANDIS, to the Condemnation
Work and the Condemnation Depositary.
(c) If the temporary use of the whole or any part of the Premises
shall be taken at any time during the term of this Lease for any public or
quasi-public purpose by any lawful power or authority by the exercise of the
right of condemnation or eminent domain, or by agreement between Tenant and
those authorized to exercise such right, Tenant shall give prompt notice thereof
to Landlord. Tenant shall be entitled, except as hereinafter set forth, to
receive that portion of the award or payment for such taking which represents
compensation for the use and occupancy of the Premises, for the taking of
Tenant's Property, and for the cost of any Condemnation Work required to be
performed by Tenant pursuant to subsection (c) hereof and for moving expenses.
Except as hereinafter set forth, this Lease shall be and remain unaffected by
any such taking and Tenant and Landlord shall each continue to be responsible
for all of its respective obligations hereunder insofar as such obligations are
not affected by such taking and Tenant shall continue to pay in full the Base
Rent and additional rent due hereunder. If all of the Premises shall be taken
and the period of temporary use or occupancy shall extend beyond the expiration
date, this Lease shall terminate as of the date of such taking, and Landlord
shall be entitled to the entire award which represents compensation for the use
and occupancy of the Premises. If less than all of the Premises shall be so
taken and the period of temporary use or occupancy shall extend beyond the
expiration date, that part of the award which represents compensation for the
use and occupancy of the Premises (or a part thereof) shall be divided between
Landlord and Tenant so that Tenant shall receive so much thereof as represents
the period up to and including such expiration date (as same may have been
extended or accelerated) and Landlord shall receive so much thereof as
represents the period after such expiration date (as
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same may have been extended or accelerated). All monies payable to Tenant as, or
as part of, an award for temporary use and occupancy for a period beyond the
date to which the rent has been paid shall be received, held in a
interest-bearing account and applied by Landlord as a trust fund for payment of
the rent becoming due hereunder.
(d) In any and all proceedings pursuant to which the Premises or any
part thereof, or the temporary use of the whole or any part thereof, shall be so
taken or condemned, Landlord and Tenant shall be entitled solely to the amounts,
if any, payable to them pursuant to the provisions of this SECTION 13. In each
such proceeding, Landlord and Tenant agree to execute any and all documents that
may be required to facilitate collection of the award(s) in such proceeding.
(e) Notwithstanding anything herein to the contrary, if an Event of
Default resulting from non-payment of Base Rent and/or additional rent shall be
continuing during any period that the Condemnation Depositary is holding any
proceeds of any condemnation award hereunder, then the Condemnation Depositary
shall have the right, but not the obligation, to apply the whole or any part of
such proceeds to the cure or remedy of such default prior to paying over,
holding and/or applying the same in accordance with the provisions of SECTION
13(a) and 13(b) hereof.
14. EQUIPMENT.
(a) The Equipment, as herein provided, shall be deemed part of the
"Improvements", and, as such, may not be removed by Tenant during the term of
this Lease except as part of Tenant Changes pursuant to SECTION 9 hereof. As
used herein, the term "EQUIPMENT" shall mean any item of property (other than
any property constituting Excluded Property) now or hereafter installed in or on
the Premises that is an integral part of the Improvements, including, without
limiting the generality of the foregoing, heating, base building security
systems, ventilating, and air-conditioning plants and systems, electrical and
plumbing fixtures and systems and other like equipment and fixtures, if any
(including, without limitation, all machinery, engines, dynamos, boilers,
elevators, elevator shafts, radiators, air conditioning compressors, sprinkler
equipment, electrical equipment, ducts, fire protection equipment, pipes,
conduits and fittings and any other systems servicing or furnishing utilities to
the Improvements at any time now or hereafter erected, constructed, affixed or
attached to or placed in or placed upon the Land or the Improvements, and any
and all alterations, renewals and replacements thereof, additions thereto and
substitutes therefor).
15. SUBORDINATION AND NONDISTURBANCE.
(a) For purposes of this Lease, the following definitions shall
apply:
"MORTGAGE" shall mean any mortgage or deed of trust held by an
Institutional Lender which may now or hereafter affect Landlord's fee estate in
the Land and/or the Improvements, or any part of either (whether or not such
mortgage or deed of trust shall also cover other properties), and shall include
each and every advance made or hereafter to be made under such mortgage or deed
of trust, and to each and every renewal, modification, replacement
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or extension of such mortgage or deed of trust and any spreader or consolidation
of such mortgage or deed of trust, and "FEE MORTGAGEE" shall mean any holder of
any Mortgage.
(b) Subject to the provisions of SECTION 15(f) below and the delivery
to Tenant of a Non-Disturbance Agreement as provided therein (so long as Tenant
complies with its obligations therein), this Lease, and all rights of Tenant
hereunder, are and shall be subject and subordinate to all Mortgages. In
confirmation of such subordination, Tenant shall promptly execute, acknowledge
and deliver any instrument that Landlord or a Fee Mortgagee may reasonably
request to evidence such subordination.
(c) If any act or omission of Landlord would give Tenant the right,
immediately or after lapse of a period of time, to cancel or terminate this
Lease, or to xxxxx or offset against the payment of rent or to claim a partial
or total eviction, Tenant shall not exercise such right (I) until it has given
written notice of such act or omission to Landlord and each Fee Mortgagee whose
name and address shall previously have been furnished to Tenant, and (II) until
a reasonable period for remedying such act or omission shall have elapsed
following the giving of such notice and following the time when such Fee
Mortgagee shall have become entitled under such Mortgage to remedy the same
(which reasonable period shall in no event be less than the period to which
Landlord would be entitled under this Lease or otherwise, after similar notice,
to effect such remedy plus thirty (30) days), provided such Fee Mortgagee within
thirty (30) days following Tenant's notice shall give Tenant notice of its
intention to, and with due diligence commence and continue to, remedy such act
or omission.
(d) If any Fee Mortgagee, or any designee of any Fee Mortgagee or any
other person, shall succeed to the rights of Landlord under this Lease through a
possession or foreclosure action or delivery of a deed in lieu of foreclosure or
other exercise of such Fee Mortgagee's remedies, then at the request of such
party so succeeding to Landlord's rights (herein called "SUCCESSOR LANDLORD"),
and upon such Successor Landlord's written agreement to accept Tenant's
attornment pursuant to a Non-Disturbance Agreement (as hereinafter defined),
Tenant shall attorn to and recognize such Successor Landlord as Tenant's
landlord under this Lease and shall promptly execute and deliver any instrument
that such Successor Landlord may reasonably request to evidence such attornment.
(e) If any Fee Mortgagee shall require any modification(s) of this
Lease, Tenant shall, at Landlord's request, promptly execute and deliver to
Landlord such instruments effecting such modification(s) as Landlord shall
reasonably require, provided that such modification(s) do not affect, except to
a DE MINIMIS extent, any of Tenant's rights or obligations under this Lease.
(f) (1) Notwithstanding the foregoing provisions of SECTION 15(b),
this Lease shall not be subject and subordinate to any Mortgage unless and until
Landlord shall have obtained for Tenant a Non-Disturbance Agreement from the Fee
Mortgagee under such Mortgage. As used herein, the term "NON-DISTURBANCE
AGREEMENT" shall mean an agreement by the holder of such Mortgage duly executed
and in statutory form for recordation and otherwise substantially in the form
annexed hereto and made a part hereof as SCHEDULE D.
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(2) Notwithstanding the foregoing provisions of SECTION 15(f)(1)
above, a Non-Disturbance Agreement shall be deemed to have been obtained for
Tenant if either (i) Landlord shall have delivered to Tenant a form of
Non-Disturbance Agreement (meeting the criteria set forth above in the
definition of the same) executed by the Fee Mortgagee under such Mortgage, or
(ii) (x) Landlord shall have delivered to Tenant, for execution by Tenant, a
form of Non-Disturbance Agreement (meeting the criteria set forth above in the
definition of the same) which is not yet executed by the Fee Mortgagee under
such Mortgage, and (y) Tenant shall fail to execute such form and re-deliver the
same back to Landlord within ten (10) days after the delivery thereof to Tenant.
16. QUIET ENJOYMENT.
Provided no Event of Default has occurred and is continuing, Tenant
may peaceably and quietly have, hold and enjoy the Premises during the term of
this Lease, subject, however, to all the terms of this Lease. The preceding
sentence notwithstanding, no failure by Landlord to comply with the foregoing
covenant shall give Tenant any right to cancel or terminate this Lease or to
xxxxx, reduce or make any deduction from or offset against any rent or any other
sum payable under this Lease, or to fail to perform any other obligations of
Tenant hereunder.
17. ASSIGNMENT AND SUBLETTING.
(a) Subject to the further provisions of this SECTION 17, neither
this Lease nor the term and estate hereby granted, nor any part hereof or
thereof, shall be assigned, mortgaged, pledged, encumbered or otherwise
transferred voluntarily, involuntarily, by operation of law or otherwise, and
neither the Premises, nor any part thereof, shall be subleased, licensed, used
or occupied by any person or entity other than Tenant or be encumbered in any
manner by reason of any act or omission on the part of Tenant, and no rents or
other sums receivable by Tenant under any sublease of all or any part of the
Premises shall be assigned or otherwise encumbered, without the prior written
consent of Landlord. The dissolution or direct or indirect transfer of control
of Tenant (however accomplished, including, by way of example, the admission of
new partners or members or withdrawal of existing partners or members, or
transfers of interests in distributions of profits or losses of Tenant, issuance
of additional stock, transfer of stock, redemption of stock, stock voting
agreement, or change in classes of stock) shall be deemed an assignment of this
Lease regardless of whether the transfer is made by one or more transactions, or
whether one or more persons or entities hold the controlling interest prior to
the transfer or afterwards. The transfer of shares of Tenant (if Tenant is a
corporation or trust) for purposes of this SECTION 17 shall not include the sale
of shares by persons other than those deemed "insiders" within the meaning of
the Securities Exchange Act of 1934, as amended, which sale is effected through
the "over-the-counter market" or through any recognized stock exchange
(including, without limitation, in connection with a public offering). An
agreement under which another person or entity becomes responsible for all or a
portion of Tenant's obligations under this Lease shall be deemed an assignment
of this Lease. No assignment or other transfer of this Lease and the term and
estate hereby granted, and no subletting of all or any portion of the Premises
shall relieve Tenant of its liability under this Lease except as expressly
provided in SECTION 17(n) below or of the obligation to obtain Landlord's prior
consent to any further assignment, other
29
transfer or subletting. Any attempt to assign this Lease or sublet all or any
portion of the Premises in violation of this SECTION 17 shall be null and void.
(b) (1) Notwithstanding SECTION 17(a), Landlord's prior written
consent shall not be required in the case of a proposed assignment to (i) an
entity created by merger, reorganization or recapitalization of or with Tenant
or (ii) a purchaser of all or substantially all of Tenant's assets or of a
controlling interest in Guarantor (such controlling interest to be purchased for
the purpose of continuing the Sotheby's business and for utilizing the
Improvements as a first-class auction house); PROVIDED, in the case of both
CLAUSE (i) and CLAUSE (ii), that (A) Landlord shall have received a notice of
such assignment from Tenant, (B) the assignee assumes by written instrument
reasonably satisfactory to Landlord all of Tenant's obligations under this
Lease, and (C) such assignment is for a valid business purpose and not to avoid
any obligations under this Lease.
(2) Notwithstanding SECTION 17(a), without the consent of
Landlord, Tenant may assign this Lease or sublet all or any part of the Premises
to an Affiliate of Tenant; PROVIDED that (i) Landlord shall have received a
notice of such assignment or sublease from Tenant; and (ii) in the case of any
such assignment, (A) the assignment is for a valid business purpose and not to
avoid any obligations under this Lease and (B) the assignee assumes by written
instrument reasonably satisfactory to Landlord all of Tenant's obligations under
this Lease. "AFFILIATE" means, as to any designated person or entity, any other
person or entity which controls, is controlled by, or is under common control
with, such designated person or entity. "CONTROL" (and with correlative meaning,
"controlled by" and "under common control with") means ownership or voting
control, directly or indirectly, of 50% or more of the voting stock, partnership
interests or other beneficial ownership interests of the entity in question.
(c) Notwithstanding SECTION 17(a), so long as Tenant shall satisfy
the Occupancy Requirement, Tenant shall have the right without the consent of
Landlord, subject to all of the applicable terms and conditions of this Lease,
to permit any temporary use or occupancy of space in the Premises only by
persons who have a specific business arrangement with Tenant or a Tenant Party
(such persons who shall be permitted to occupy portions of the Premises pursuant
to this SECTION 17(c) being referred to individually as a "PERMITTED OCCUPANT",
or collectively as the "PERMITTED OCCUPANTS"), provided that (i) no demising
walls shall be or shall be required by any Laws to be erected in the Premises
separating the space used by a Permitted Occupant from the remainder of the
Premises, (ii) there shall be no separate identification of any Permitted
Occupant in the lobby or any entrance to the Premises, (iii) Tenant shall ensure
that the Permitted Occupants use the Premises in conformity with and comply with
all applicable provisions of this Lease, (iv) in no event shall the use of any
portion of the Premises by any Permitted Occupant create or be deemed to create
any right, title or interest of the Permitted Occupant in or to the Premises,
(v) such arrangement will terminate automatically upon the termination of this
Lease, (vi) Tenant shall receive no rent, payment or other consideration in
connection with the occupancy by a Permitted Occupant in excess of the pro rata
portion of the Base Rent, Impositions, additional rent and operating expenses
attributable to such space plus reasonable out-of-pocket expenses for any
services rendered by Tenant and (vii) to the extent any Tenant Party is a
subtenant or sub-subtenant of Tenant at the Premises, such subtenants' or
sub-subtenants' Permitted Occupants shall only be permitted to
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occupy an amount of space that is no greater than ten percent (10%) of such
subleased premises. At least five (5) days prior to a Permitted Occupant taking
occupancy of a portion of the Premises, Tenant shall give notice to Landlord
advising Landlord of (x) the character and nature of the business to be
conducted by such Permitted Occupant, (y) the rentable square footage to be
occupied by such Permitted Occupant, and (z) the duration of such occupancy
together with a copy of any executed license or occupancy agreement between
Tenant and such Permitted Occupant. Within fifteen (15) days after request by
Landlord, Tenant shall provide Landlord with a list of the names of all
Permitted Occupants then occupying any portion of the Premises.
(d) If Tenant desires (other than in accordance with SECTIONS 17(b)
or 17(c)) to assign this Lease or sublet all or any portion of the Premises,
Tenant shall give to Landlord notice ("TENANT'S PROPOSAL") thereof, specifying
(i) in the case of a proposed subletting pursuant to this SECTION 17(d), the
location of the space to be sublet and the term of the subletting of such space,
(ii) (A) in the case of a proposed assignment, Tenant's good faith offer of the
consideration Tenant desires to receive or pay for such assignment or (B) in the
case of a proposed subletting, Tenant's good faith offer of the fixed annual
rent which Tenant desires to receive for such proposed subletting and (iii) the
proposed assignment or sublease commencement date.
(e) If the proposed transaction is (x) an assignment of this Lease or
a sublet of all or substantially all of the Premises for a term of five (5)
years or more or (y) a sublet of any portion of the Premises for a sublease term
which runs for all or substantially all of the remainder of the Term, (either of
(x) or (y) is a "RECAPTURE TRANSACTION") Tenant's Proposal shall be deemed an
offer from Tenant to Landlord (a "RECAPTURE OFFER") whereby Landlord (or
Landlord's designee) may, at Landlord's option, (i) terminate and release Tenant
(it being understood that such release shall be solely with respect to any
obligations or liability of Tenant accruing on or after the date of such
termination) under this Lease (if the proposed transaction is an assignment or a
sublease of all or substantially all of the Premises or a sublease of a portion
of the Premises which, when aggregated with other subleases then in effect,
covers all or substantially all of the Premises) or (ii) terminate and release
Tenant (it being understood that such release shall be solely with respect to
any obligations or liability of Tenant accruing on or after the date of such
termination) under this Lease with respect to the space covered by the proposed
sublease (if the proposed transaction is a sublease of part of the Premises).
Notwithstanding the preceding sentence, in the event that Tenant shall satisfy
the Recapture Occupancy Requirement (as hereinafter defined), Tenant's Proposal
shall not be deemed to be a Recapture Offer and the rights of Landlord set forth
in clauses (i) and (ii) above shall not apply. Said option may be exercised by
Landlord by notice to Tenant within thirty (30) days after a Tenant's Proposal,
together with all information required pursuant to this SECTION 17, has been
given by Tenant to Landlord.
(f) If Landlord exercises its option under SECTION 17(e) to terminate
this Lease, then this Lease shall terminate on the proposed assignment or
sublease commencement date specified in the applicable Tenant's Proposal and all
Base Rent, additional rent and other sums payable to Landlord shall be paid and
apportioned to such date.
(g) If Landlord exercises its option under SECTION 17(e) to terminate
this Lease with respect to the space covered by a proposed sublease, then (i)
this Lease shall terminate with
31
respect to such part of the Premises on the effective date of the proposed
sublease; (ii) from and after such date the Base Rent and any additional rent
and other costs payable herewith (collectively defined Rent) by Tenant shall be
adjusted, based upon the proportion that the rentable area of the Premises
remaining bears to the total rentable area of the Premises and (iii) Tenant
shall pay to Landlord, within twenty (20) days after demand accompanied by
reasonable documentation supporting the amount of any such costs or expenses,
the reasonable out-of-pocket costs and expenses incurred by Landlord in demising
separately such part of the Premises and in complying with any Laws relating to
such demise.
(h) If Landlord exercises its option under SECTION 17(e) to terminate
this Lease with respect to the space covered by a proposed sublease, so long as
Tenant Named Herein satisfies the Occupancy Requirement, any new lease that
Landlord may enter into with respect to such terminated space shall provide that
the tenant under such lease (1) shall not be a Direct Competitor (as hereinafter
defined) of Tenant and (2) shall not be permitted to use all or any portion of
the premises therein demised for a Prohibited Use.
(i) In the case of a Recapture Transaction, Tenant shall not sublet
any space to a third party at a rental which is less (on a per rentable square
foot basis) than the rental (on a per rentable square foot basis) specified in
Tenant's Proposal with respect to such space, without complying once again with
all of the provisions of SECTIONS 17(d),(e),(f),(g),(i), AND (j) and re-offering
such space to Landlord at such lower rental. In the case of a proposed
assignment, Tenant shall not assign this Lease to a third party where Tenant
pays greater consideration or grants a greater concession to such third party
for such assignment then the consideration offered to be paid or concession
offered to be granted to Landlord in Tenant's Proposal without complying once
again with all of the provisions of SECTIONS 17(d),(e),(f),(g),(i), AND (j) and
re-offering to assign this Lease to Landlord and pay such consideration or grant
such concession to Landlord.
(j) If Tenant delivers to Landlord a Tenant's Proposal with respect
to any Recapture Transaction and Landlord does not timely exercise its option to
terminate the same under SECTION 17(e), if Tenant thereafter desires to assign
this Lease or sublet the space specified in Tenant's Proposal, or if Tenant
desires to sublease a portion of the Premises which sublease does not constitute
a Recapture Transaction (expressly excluding in accordance with SECTIONS 17(b),
17(c), and 17(t)), in all such cases, Tenant shall notify Landlord (a "TRANSFER
NOTICE") of such desire, which notice shall be accompanied by (i) a copy of the
proposed assignment or sublease and all related agreements, the effective date
of which shall be conditioned upon Landlord's consent pursuant to this Lease,
(ii) a statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use of the
Premises, (iii) current financial information with respect to the proposed
assignee or subtenant, including, without limitation, its most recent financial
statement and (iv) such other information as Landlord may reasonably request,
and Landlord's consent to the proposed assignment or sublease shall not be
unreasonably withheld, delayed or conditioned (and shall be deemed given if
Landlord shall fail to respond to such Transfer Notice within fifteen (15)
Business Days of Tenant's delivery of a Transfer Notice making specific
reference to such deemed consent under this SECTION 17(j)), provided, that:
32
(A) In Landlord's reasonable judgment the proposed assignee or
subtenant will use the Premises in a manner that (x) is in keeping with the
First Class Standard, (y) is limited to the use expressly permitted under this
Lease with respect to the space in question (provided, that Landlord shall
comply with SECTION 6(a) with respect to any proposed subtenant or assignee) and
(z) will not be used for any Prohibited Use;
(B) The proposed assignee or subtenant is, in Landlord's
reasonable judgment, a reputable person or entity of good character and with
sufficient financial worth (or is ready, willing and able to post sufficient
security, a letter of credit or a guaranty) considering the responsibility
involved;
(C) The form of the proposed sublease shall be reasonably
satisfactory to Landlord and shall comply with the applicable provisions of this
SECTION 17;
(D) In connection with any sublease entered into by Tenant, the
term of which runs during (I) any portion of the last five (5) years of the
Initial Term or (II) any Extension Term, the aggregate rent to be paid by the
proposed subtenant is not less than the greater of (x) the fair rental value of
the sublet space as sublet space or (y) 90% of the fair rental value of the
sublet space if such space were being leased directly by Landlord;
(E) Tenant shall reimburse Landlord within twenty (20) days
after demand accompanied by reasonable documentation supporting the amount of
any such costs or expenses for any reasonable out-of-pocket costs and expenses
incurred by Landlord in connection with said assignment or sublease, including,
without limitation, the costs of making investigations as to the acceptability
of the proposed assignee or subtenant, and legal costs incurred in connection
with the granting of any requested consent; and
(F) No material non-monetary Event of Default or monetary Event
of Default in excess of $25,000 shall be continuing at the time (x) that
Tenant's Proposal was delivered to Landlord or (y) on the date of the proposed
assignment or subletting, as the case may be.
(k) If Landlord consents to a proposed assignment or sublease and
Tenant fails to execute and deliver the assignment or sublease to which Landlord
consented within 60 days after the giving of such consent, then Tenant shall
again comply with this SECTION 17 before assigning this Lease or subletting all
or part of the Premises.
(l) If this Lease is assigned, whether or not in violation of this
Lease, Landlord may collect rent from the assignee. If the Premises or any part
thereof are sublet or occupied by anybody other than Tenant, whether or not in
violation of this Lease, Landlord may, after default by Tenant, and expiration
of Tenant's time to cure such default, collect rent from the subtenant or
occupant. In either event, Landlord may apply the net amount collected against
Rent, but no such assignment, subletting, occupancy or collection shall be
deemed a waiver of any of the provisions of SECTION 17(a), or the acceptance of
the assignee, subtenant or occupant as tenant, or a release of Tenant or
Guarantor from the performance of Tenant's and Guarantor's obligations under
this Lease and the Guarantor (as applicable).
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(m) No assignment or transfer shall be effective until the assignee
delivers to Landlord an agreement in form and substance reasonably satisfactory
to Landlord whereby the assignee assumes Tenant's obligations under this Lease.
(n) (1) Subject to SECTIONS 17(n)(2) and 17(n)(3), notwithstanding
any assignment or transfer, whether or not in violation of this Lease, and
notwithstanding the acceptance of any Base Rent or additional rent by Landlord
from an assignee, transferee, or any other party, Tenant and Guarantor, jointly
and severally, shall remain fully liable for the payment of the Rent and the
performance of all of Tenant's and Guarantor's other obligations under this
Lease and the Guaranty (as applicable). The joint and several liability of
Tenant and Guarantor and any immediate or remote successor in interest of Tenant
shall not be discharged, released or impaired in any respect by any agreement
made by Landlord extending the time to perform, or otherwise modifying, any of
the obligations of Tenant under this Lease, or by any waiver or failure of
Landlord to enforce any of the obligations of Tenant under this Lease (except
that no modification or amendment insofar as it increases the obligations of the
then Tenant hereunder shall be binding on such prior Tenant or Guarantor).
(2) Notwithstanding SECTION 17(n)(1), following an assignment
otherwise permitted under this SECTION 17, the joint and several liability of
Tenant Named Herein and Guarantor for the obligations under this Lease shall be
released (solely to the extent such obligations accrue on or after the date of
such assignment) only after each of the following conditions have been satisfied
and any attempted release which is not in compliance with the following
provisions shall be deemed null and void and of no force or effect:
(i) such proposed assignee and/or substitute guarantor, as the
case may be, shall have a credit rating of at least BBB- (as rated by Standard &
Poors (or the equivalent rating issued by Xxxxx'x, the National Association of
Insurance Companies or such other rating agency reasonably acceptable to
Landlord and Fee Mortgagee (collectively, the "RATING AGENCIES")) on the date of
such assignment and following such assignment date maintains a credit rating of
at least BBB- for a continuous twelve (12) month period;
(ii) Landlord shall have received confirmation in writing from a
Rating Agency that rates the securitization pool of which the Mortgage is a part
that Guarantor's release and such subsequent assignee or guarantor's assumption
of the obligations under the Lease shall not result, in and of itself, in a
downgrade, withdrawal or qualification of any rating then assigned to such
securitization pool;
(iii) such proposed assignee and/or substitute guarantor shall
(1) assume full liability for the payment of Base Rent, additional rent,
Impositions and the performance of all of Tenant's and Guarantor's other
obligations under this Lease and the Guaranty accruing on or after the date of
such assignment, (2) agree to perform and observe, from and after the effective
date of such assignment, all of the terms, covenants and conditions of this
Lease (and/or the substitute guaranty, as applicable) to be observed and
performed by such assignee or substitute guarantor from and after the effective
date of such assignment and (3) be bound by all of the other provisions of this
Lease (and/or substitute guaranty);
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(iv) in the case of a substitute guarantor seeking such
assumption, such substitute guarantor shall deliver a substitute guaranty
substantially in the form of the Guaranty;
(v) the assignee and/or substitute guarantor is, in the
reasonable determination of Landlord and Fee Mortgagee, a reputable person of
good character and business dealings;
(vi) the foregoing release of Tenant Named Herein and Guarantor
and the subsequent assumption and agreement by such assignee and/or substitute
guarantor shall be effectuated pursuant to an instrument or instruments duly
executed by Tenant Named Herein and/or Guarantor, such assignee and/or
substitute guarantor, and Landlord;
(vii) Tenant Named Herein shall deliver certified financial
statements for the proposed assignee and/or substitute guarantor prepared in
accordance with generally acceptable accounting principles consistently applied
("GAAP") for the two (2) full years prior to proposed assignment (or, if such
information is not available, such other information that any Fee Mortgagee may
reasonably request, PROVIDED that such information shall, at such proposed
assignee and/or substitute guarantor's request, be subject to a confidentiality
agreement); and
(viii) the assignee and/or substitute guarantor shall deliver
organizational documents, certificates or other instruments reasonably requested
by Landlord and Fee Mortgagee evidencing the direct and indirect ownership
interests of such assignee and/or substitute guarantor.
(3) Following the release of Tenant Named Herein and Guarantor,
any future Tenant and/or guarantor shall only be released from its obligations
under this Lease and the guaranty after (A) any such future proposed assignee
and/or substitute guarantor shall have fully complied with all the conditions
precedent set forth in SECTION 17(n)(2) and (B) the immediately succeeding
Tenant and/or substitute guarantor shall have on the date of assignment a credit
rating (given by a Rating Agency) equal to or better than the credit rating of
the "released" Tenant and/or guarantor on such assignment date and following
such assignment date shall maintain such equal or better credit rating for a
continuous twelve (12) month period.
(o) Each subletting by Tenant shall be subject to the following:
(i) No subletting shall be for a term (including any renewal or
extension options contained in the sublease) ending later than one day prior to
the expiration or sooner termination of this Lease;
(ii) No subtenant shall take possession of the Premises or any
part thereof, until there has been delivered to Landlord, both (A) an executed
counterpart of such sublease, and (B) a certificate of insurance evidencing that
(x) Landlord and any Fee Mortgagee are additional insureds under the insurance
policies required to be maintained by occupants of the Premises pursuant to
SECTION 10, and (y) there is in full force and effect, the insurance otherwise
required by SECTION 10; and
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(iii) Each sublease shall provide that it is subject and
subordinate to this Lease, and that in the event of termination, reentry or
dispossess by Landlord under this Lease Landlord may, at its option, take over
all of the right, title and interest of Tenant, as sublessor, under such
sublease, and such subtenant shall, at Landlord's option, attorn to Landlord
pursuant to the then executory provisions of such sublease.
(p) Each sublease shall provide that the subtenant may not assign its
rights thereunder or further sublet the space demised under the sublease, in
whole or in part, except in compliance with all of the terms and conditions of
this SECTION 17 (including, without limitation, Landlord's consent rights),
which for purposes of this SECTION 17(p) shall be deemed to be appropriately
modified to take into account that the transaction in question is an assignment
of the sublease or a further subletting of the space demised under the sublease,
as the case may be.
(q) No Tenant other than a Tenant meeting the Occupancy Requirement
may publicly advertise the availability of the Premises or any portion thereof
as sublet space or by way of an assignment of this Lease, without first
obtaining Landlord's consent, which consent shall not be unreasonably withheld
or delayed provided that in any event such advertising shall be done in a first
class manner and in no event shall the rental rate or any description thereof be
publicly advertised.
(r) Upon any subletting of all or any part of the Premises (excluding
any subletting pursuant to SECTION 17(b) or SECTION 17(t)), from and after the
date on which Tenant shall recoup the full amount of Tenant's Sublease Expenses,
Tenant shall pay to Landlord as additional rent hereunder, in monthly
installments, as and when received from the subtenant thereunder, 50% of the
Sublease Consideration received by Tenant for such subletting. "SUBLEASE
CONSIDERATION" shall mean the amount by which the aggregate of the amounts
payable on account of fixed and additional rent under a sublease of any part of
the Premises and the amount of any Other Sublease Consideration payable to
Tenant by such subtenant, whether received in a lump-sum payment or otherwise
shall be in excess of Tenant's Basic Cost therefor at the time in question.
Tenant shall deliver to Landlord within fifteen (15) Business Days of Landlord's
written request made within (x) sixty (60) Business Days after the end of each
calendar year or (y) within sixty (60) Business Days after the expiration or
earlier termination of this Lease, a statement specifying each sublease in
effect during such calendar year or partial calendar year, the rentable area
demised thereby, the term thereof and a computation in reasonable detail showing
the calculation of the amounts paid and payable by the subtenant to Tenant, and
by Tenant to Landlord, with respect to such sublease for the period covered by
such statement. "TENANT'S BASIC COST" for sublet space at any time means the sum
of the portion of the Base Rent, Impositions, additional rent and operating
expenses incurred and paid by Tenant with respect to the Premises that are
properly attributable to the sublet space. "TENANT'S SUBLEASE EXPENSES" shall
mean the costs and expenses of Tenant actually incurred in connection with the
specific sublease in question (which would not otherwise be payable but for such
sublease): including, without limitation (i) out-of-pocket brokerage
commissions; (ii) out-of-pocket attorneys' fees and disbursements and
advertising fees; (iii) out-of-pocket cost of improvements or alterations made
by Tenant for the purpose of preparing such part of the Premises specifically
for such subtenant; (iv) the unamortized and unreimbursed cost of any Tenant
Changes or Tenant's Property sold or leased to and used by such subtenant; (v)
the amount of rent
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concessions given by Tenant to such subtenant; (vi) any moving expenses of the
subtenant paid for by Tenant; (vii) any sums paid in connection with obtaining
Landlord's consent to such sublease under this SECTION 17; (viii) the amount of
rental attributable to the period (if any) commencing on the day that such
portion of the Premises is unused by Tenant and not sublet and continuing until
the day immediately preceding the rent commencement date of the sublease; (ix)
any other reasonable tenant inducement costs incurred by Tenant; and (x) any
payments required to be, and actually made, by Tenant in connection with such
sublease pursuant to any real property transfer tax of the United States or the
State of New York. "OTHER SUBLEASE CONSIDERATION" means all sums paid over and
above fixed and additional rent paid by such subtenant for the furnishing of
services by Tenant and the sale or rental of Tenant's Property less, in either
case, the then net unamortized or undepreciated cost thereof determined on the
basis of Tenant's federal income tax returns (or if such property is leased
rather than owned by Tenant less any rentals that may be due to the third party
lessor thereof).
(s) Upon any assignment of this Lease (excluding any assignment
pursuant to SECTION 17(b), from and after the date on which Tenant shall recoup
the full amount of Tenant's Assignment Cost, Tenant shall pay to Landlord as
additional rent hereunder, as and when received from the assignee thereunder,
50% of the Assignment Consideration received by Tenant for such assignment.
"ASSIGNMENT CONSIDERATION" means an amount equal to all sums and other
consideration paid to Tenant by the assignee for or by reason of such assignment
(including, without limitation, sums paid for the furnishing of services by
Tenant and the sale or rental of Tenant's fixtures, leasehold improvements,
equipment, furniture, furnishings or other personal property, less, in the case
of a sale thereof, the then net unamortized or undepreciated cost thereof
determined on the basis of Tenant's federal income tax returns (or if such
property is leased rather than owned by Tenant less any rentals that may be due
to the third party lessor thereof)). "TENANT'S ASSIGNMENT COST" shall mean the
costs and expenses of Tenant actually incurred in connection with the specific
sublease in question (which would not otherwise be payable but for such
assignment) including, without limitation (i) the out-of-pocket expenses of
Tenant incurred in connection with such assignment including, without
limitation, brokerage commissions and attorney's fees and disbursements and
advertising fees; (ii) the out-of-pocket cost of improvements or alterations
made by Tenant for the purpose of preparing the Premises for such assignee;
(iii) the unamortized and unreimbursed cost of any Tenant Changes or Tenant's
Property sold or leased to and used by such assignee; (iv) the amount of rent
concessions given by Tenant to such assignee; (v) any moving expenses of the
assignee paid for by Tenant; (vii) any sums paid in connection with obtaining
Landlord's consent under this SECTION 17; (viii) the amount of rental
attributable to the period (if any) commencing on the day that such portion of
the Premises is unused by Tenant and not assigned and continuing until the day
immediately preceding the rent commencement date of the assignment; and (ix) any
other reasonable tenant inducement costs incurred by Tenant; and (x) any
payments required to be, and actually made, by Tenant incurred in connection
with such assignment pursuant to any real property transfer tax of the United
States or the State of New York.
(t) It is hereby expressly acknowledged and agreed that Landlord's
consent shall not be required in connection with the conversion of the Existing
Leases into subleases between Tenant, as sublandlord, and the tenant under each
Existing Lease, as subtenant. "EXISTING LEASES" shall mean the leases entered
into by Landlord's predecessor-in-interest listed
37
on Exhibit B annexed hereto and made a part hereof. In addition, the
profit-sharing provisions of SECTION 17(r) shall not apply to such Existing
Leases.
(u) Subject to the last sentence of this SECTION 17(u), without
limiting any other provisions of this SECTION 17, Tenant shall have the right,
without being required to obtain the consent of Landlord, to enter into an
agreement with the New York City Industrial Development Agency (the "XXX")
pursuant to which Tenant may sublease from time to time (including any interim
sublease) all or any portion of the Premises to the XXX (the "XXX SUBLEASE"),
and the XXX shall sub-sublease such portion of the Premises to Tenant (the "XXX
SUB-SUBLEASE"); provided that: (i) the XXX Sublease shall be entered into
simultaneously with the entering into of the XXX Sub-sublease and shall have a
scheduled expiration date no later than one day prior to the scheduled
expiration date of this Lease and shall terminate automatically upon the earlier
termination of this Lease with respect to the portion of the Premises demised
thereby; (ii) the XXX Sublease and the XXX Sub-sublease (collectively, the "XXX
SUBLEASE DOCUMENTATION") shall be entered into for the sole purpose of
implementing a sales tax exemption and other governmental economic incentives
package for Tenant, as the case may be; (iii) the XXX Sublease Documentation
shall grant no right of occupancy to any party other than Tenant (provided,
however, that the foregoing shall not be deemed to limit Tenant's rights under
this SECTION 17); (iv) the XXX Sublease Documentation shall not release Tenant
from any liability or obligation of Tenant under this Lease, (v) the XXX
Sublease Documentation shall not impose any additional obligation or liability
on Landlord or decrease any of the term hereof, but shall not relieve Landlord
from Landlord's obligations under this Lease; (vi) Tenant shall comply with, and
the XXX Sublease Documentation shall be in compliance with, the provisions of
this SECTION 17; (vii) Tenant shall indemnify, defend and save and hold Landlord
and any Landlord Party harmless from and against any and all losses, costs,
demands, liabilities and expenses (including reasonable attorneys' fees and
disbursements) which Landlord may incur arising out of or in connection with the
XXX Sublease Documentation; (viii) Tenant, as sub-subtenant under the XXX
Sub-sublease, shall be entitled to exercise all of Tenant's rights under this
Lease, as if the XXX Sublease Documentation had not been executed; and (ix)
Landlord shall consent to the form and substance of the XXX Sublease
Documentation and all ancillary agreements thereto, which consent shall not be
unreasonably withheld, conditioned or delayed. Without limiting the generality
of clause (vii) of the immediately preceding sentence, if Landlord shall incur
any reasonable out-of-pocket cost or expense in connection with the XXX Sublease
Documentation, Tenant shall reimburse Landlord for such reasonable out-of-pocket
costs or expenses, as additional rent within twenty (20) Business Days after
demand accompanied by reasonable documentation supporting the amount of any such
costs or expenses. Notwithstanding anything to the contrary set forth herein,
the rights created pursuant to this SECTION 17(u) shall only benefit Tenant and
any assignees of Tenant, and expressly exclude any subtenants of Tenant or any
assignees.
(v) Notwithstanding the above provisions of this ARTICLE 17, subject
to the terms of this SECTION 17(v), Landlord shall not unreasonably withhold,
condition or delay its consent to entering into a subordination, non-disturbance
and attornment agreement (a "SUBTENANT SNDA") with any Major Subtenant
identified by Tenant Named Herein so long as the Subtenant SNDA shall be in a
form reasonably satisfactory to Landlord (taking into account the same criteria
set forth in SECTION 17(j) above (other than SECTION 17(J)(D))) and on
reasonable
38
market terms with a reasonable market rent. The term "MAJOR SUBTENANT" as used
herein shall mean either of the following:
(A) any subtenant whose sublease provides for occupancy of a
minimum of (i) two (2) contiguous floors of the Premises (the lowest of such
floors being the 1st Floor Portion (as hereinafter defined) of the Premises), or
(ii) if a Major Subtenant meeting the criteria set forth in the preceding clause
(i) shall then be in occupancy, any subtenant whose sublease provides for
occupancy of two (2) or more floors contiguous to the floors occupied by the
Major Subtenant meeting the criteria set forth in the preceding clause (i),
PROVIDED that the sublease term with respect to such occupancy may not extend
beyond the term of the sublease with respect to the sublease entered into by the
Major Subtenant meeting the criteria set forth in the preceding clause (i); or
(B) any subtenant whose sublease provides for occupancy of a
minimum of (i) three (3) contiguous floors of the Premises, if such occupant or
Tenant (on such occupant's behalf) shall have installed a street entrance to the
Premises serving such subleased premises which is located in an area of the
Premises that is separate and distinct from the then main street entrance to the
Premises (a "SEPARATE STREET ENTRANCE"), or (ii) if a Major Subtenant meeting
the criteria set forth in the preceding clause (i) shall then be in occupancy,
any subtenant whose sublease provides for occupancy of two (2) or more floors
contiguous to the floors occupied by the Major Subtenant meeting the criteria
set forth in the preceding clause (i), PROVIDED that such occupant shall either
have access through the Separate Street Entrance accessed by the Major Subtenant
meeting the criteria set forth in the preceding clause (i) or such occupant (or
Tenant on such occupant's behalf) shall have installed an additional Separate
Street Entrance, and FURTHER PROVIDED that the sublease term with respect to
such occupancy may not extend beyond the term of the sublease with respect to
the sublease entered into by the Major Subtenant meeting the criteria set forth
in the preceding clause (i).
Notwithstanding the provisions of this SECTION 17(v), Landlord shall not be
required to deliver a Subtenant Non-Disturbance Agreement with respect to any
subtenant of a Tenant other than a Major Subtenant of Tenant Named Herein or
other sub-subtenants or any other immediate or remote undertenants.
(w) Any dispute under this SECTION 17 shall be resolved by
arbitration pursuant to SECTION 44 hereof.
18. ENTRY BY LANDLORD; RIGHT OF LANDLORD TO PERFORM TENANT'S
COVENANTS.
(a) Landlord, and persons authorized by Landlord, shall have the
right to enter the Premises accompanied by a representative of Tenant at all
reasonable times, after reasonable notice, for the purposes of:
(i) inspecting the conditions of same, and making such repairs,
alterations, additions, or improvements thereto as may be necessary or desirable
if Tenant fails to do so as required hereunder (but Landlord shall have no duty
whatsoever to make any such inspections, repairs, alterations, additions, or
improvements); and
39
(ii) exhibiting the same to persons who may wish to purchase or
lease the same, and, during the last twenty-four (24) months of the term of this
Lease, placing a notice of reasonable size on the Premises offering the same or
any part thereof for sale or for rent.
(b) If Tenant shall fail to make any payment or perform any act
required to be made or performed by Tenant hereunder, Landlord may (but shall be
under no obligation to) without waiving or releasing any obligation or default:
(i) in case of emergency, reasonably foreseeable or actual
criminal liability, or if, in Landlord's reasonable judgment, complying with the
notice and cure provisions set forth in SECTION 18(b)(ii) below will have an
imminent material adverse effect on the Improvements or will cause injury to
third parties on or near the Premises,
(ii) if such failure is under any provision of this Lease
(including this SECTION 18), if Landlord shall give written notice to Tenant
referring to this SECTION 18(b) and specifying such failure and requiring it to
be remedied and Tenant shall not remedy such failure within five (5) Business
Days after the giving of such notice (or diligently commence to remedy any such
failure which is not susceptible of being cured within such five (5) Business
Day period);
make such payment or perform such act for the account and at the expense of
Tenant, and may enter upon the Premises or any part thereof for such purpose and
take all such action thereon as, in the reasonable opinion of Landlord, may be
necessary or appropriate therefor. All payments so made by Landlord and all
costs and expenses (including, without limitation, reasonable attorneys' fees
and expenses) incurred in connection therewith, together with interest thereon
at the Interest Rate, shall be paid by Tenant to Landlord within twenty (20)
Business Days after Tenant's receipt of Landlord's demand therefor referring to
this SECTION 34 and accompanied by reasonable documentation supporting the
amount of any such costs and expenses.
(c) Tenant shall have the right to designate, by written notice to
Landlord, certain areas ("SECURE AREAS") within the Premises (including, without
limitation, any area containing valuables (such as artwork), a safe or Tenant's
main computer room, telephone equipment room or closet) as secure areas, to
which Landlord shall not have access unless accompanied at all times by a
representative of Tenant, except in the case of an emergency, as determined in
Landlord's reasonable judgment. Tenant agrees to cooperate with Landlord with
respect to making a representative of Tenant available to Landlord during any
access required or permitted hereunder. If, in connection with any reasonable
request by Landlord to gain access to a particular Secure Area accompanied by a
representative of Tenant, Tenant does not provide such reasonably requested
access to Landlord after Landlord's second (2nd) such request, then Landlord
shall be able to access such Secure Area at any reasonable time during business
hours for the purposes stated in such request.
(d) Any dispute under this SECTION 18 shall be resolved by
arbitration pursuant to SECTION 44 hereof.
19. TENANT'S DEFAULT.
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(a) EVENTS OF DEFAULT. Each of the following events shall constitute
an "EVENT OF DEFAULT":
(1) If Tenant shall default in the payment of any Base Rent,
additional rent or other amount payable hereunder, and such default shall
continue, in the case of Base Rent for five (5) days, and in the case of
additional rent or other amounts, for ten (10) days, after written notice
thereof from Landlord;
(2) If there shall occur a default under the provisions of
SECTION 17 of this Lease, and such default shall continue for ten (10)
Business Days after written notice thereof from Landlord;
(3) If Tenant shall fail to maintain any insurance required to
be maintained under SECTION 10 and such failure shall continue for five (5)
Business Days after written notice of such default is given to Tenant
(provided that Landlord shall be entitled to deliver any such notice at any
time after receiving notice from any insurance carrier that any insurance
required to be maintained under this Lease is being cancelled);
(4) If Tenant shall, whether by action or inaction, be in
default of any of its obligations under this Lease (other than a default
described in SECTION 19(a)(1), (2) OR (3) above) and such default shall
continue and not be remedied as soon as practicable and in any event within
twenty (20) days after Landlord shall have given to Tenant a notice
specifying the same, or, in the case of a default which cannot with due
diligence be cured within a period of twenty (20) days, if Tenant shall not
(x) within such 20-day period advise Landlord of Tenant's intention to take
all steps necessary to remedy such default, (y) duly commence within such
20-day period, and thereafter diligently prosecute to completion, all steps
necessary to remedy the default, and (z) complete such remedy within a
reasonable time after the date of such notice of Landlord;
(5) If any execution or attachment shall be issued against
Tenant or any of its property whereby the Premises or any portion thereof
shall be taken or occupied by someone other than Tenant (other than
pursuant to a Leasehold Mortgage meeting the requirements of SECTION 39
hereof), and the same shall not be bonded, dismissed or discharged as
promptly as possible;
(6) If Tenant shall make or file, or have made or filed against
Tenant, any bankruptcy proceeding or any assignment or other arrangement
for the benefit or creditors under any state or federal insolvency or
bankruptcy laws, which proceeding, assignment or arrangement is not vacated
or dismissed within ninety (90) days after the commencement thereof;
(7) If a receiver, trustee or liquidator of Tenant or of all or
substantially all of the assets of Tenant or of the Premises or Tenant's
estate therein shall be appointed in any proceeding brought against Tenant
and shall not be discharged within ninety (90) days after such appointment;
(8) if Tenant shall dissolve or liquidate; or
41
(9) if Guarantor shall default under any of its obligations
under the Guaranty.
(b) TERMINATION, RE-ENTRY, DAMAGES, ETC.
(1) This Lease and the estate hereby granted are subject to the
limitation that if an Event of Default shall occur, then, in any such case,
Landlord may give to Tenant a notice of intention to terminate this Lease
and the term hereof as of the fifth (5th) day after the giving of such
notice, and, in which event, as of such fifth (5th) day, this Lease and the
term hereof shall terminate with the same effect as if such day was the
date of expiration of this Lease, BUT Tenant shall not be relieved of its
obligations hereunder, all of which shall survive such termination, and any
subsequent re-entry, repossession, removal or reletting.
(2) If this Lease shall be terminated as provided in Section
19(b)(1) above, Landlord, or its agents or employees, may re-enter the
Premises at any time and remove therefrom Tenant and any Tenant Parties,
together with any of its, or their, property, either by summary dispossess
proceedings or by any suitable action or proceeding at law or otherwise. In
the event of such termination, Landlord may repossess and enjoy the
Premises. Landlord shall be entitled to the benefits of all provisions of
law respecting the speedy recovery of lands and tenements. Tenant waives
any rights to the service of any notice of Landlord's intention to reenter
provided for by any present or future law. Landlord shall not be liable in
any way in connection with any action it takes pursuant to the foregoing.
Notwithstanding any such reentry, recession, dispossession or removal, if
this Lease is terminated prior to the then current expiration date by
reason of an Event of Default, Tenant's liability under the provisions of
this Lease shall continue until the date the term of this Lease would have
expired had such termination not occurred. Notwithstanding anything to the
contrary set forth in Sections 19(b)(1) and 19(b)(2), in the event Landlord
initiates a holdover or termination proceeding in connection with any
monetary Event of Default, Tenant Named Herein shall have the right (the
"Redemption Right") to defeat such proceeding by tendering such payment as
is necessary to cure such Event of Default on or before the date of such
proceeding. Tenant Named Herein may only exercise the Redemption Right once
during any five (5) year period.
(3) In any case of termination of this Lease, or reentry or
repossession of the Premises, whether the same is the result of the
institution of summary or other proceedings, Tenant shall remain liable (in
addition to theretofore accrued liabilities) to the extent legally
permissible for: (I) the rent, together with (A) all other charges provided
for herein until the date this Lease would have expired had such
termination, reentry or repossession not occurred, (B) all reasonable
out-of-pocket costs and expenses which Landlord may incur in (w) reentering
or repossessing the Premises, (x) making good any default of Tenant, (y)
painting, altering or dividing the Premises, combining the same with other
space, or placing the same in proper repair, (z) protecting and preserving
the Premises by placing therein watchmen and caretakers, (C) all reasonable
out-of-pocket costs and expenses which Landlord may incur in reletting the
Premises (including attorneys' fees and disbursements, xxxxxxxx'x fees and
brokerage fees), and (D) any
42
expenses which Landlord may incur during the occupancy of any new tenant,
LESS (II) the net proceeds of any reletting. Tenant agrees to pay to
Landlord the difference between items (I) and (II) hereinabove with respect
to each month, at the end of such month. Any suit brought by Landlord to
enforce collection of such difference for any one month shall not prejudice
Landlord's right to enforce the collection of any difference for any
subsequent month. In addition to the foregoing, Tenant shall reimburse
Landlord all reasonable attorneys' fees and disbursements incurred by
Landlord with respect to any such action or proceeding to collect such
difference and/or any action or proceeding to otherwise collect any rent
and/or to enforce any of Tenant's other obligations under this Lease and/or
any summary or other dispossess proceedings.
(4) Landlord may, in its sole discretion, relet the whole or any
part of Premises for the whole or any part of the unexpired term of this
Lease, or longer, or from time to time for shorter periods, for any rental
it wishes and giving such concessions of rent and making such special
repairs, alterations, decorations and paintings for any new tenant as it
may in its sole and absolute discretion deem advisable, and Landlord may
collect and receive the rents thereunder. In no event shall Landlord ever
be obligated to relet or to attempt to relet the Premises or any part
thereof.
(5) If, after a termination of this Lease as aforesaid,
Landlord, in its sole discretion, so elects, Tenant shall pay Landlord,
within fifteen (15) Business Days after demand, as liquidated and agreed
final damages, a sum equal to the amount by which the rent for the period
which otherwise would have constituted the unexpired portion of the term
exceeds the then fair and reasonable rental value of the Premises for the
same period, both discounted to the present value (calculated at a discount
rate of 10%), less the aggregate amount of deficiencies theretofore
collected by Landlord pursuant to this SECTION 19 for the same period. Upon
payment of such liquidated and agreed final damages, Tenant shall have no
further liability with respect to the period after the date of such demand.
(c) ADDITIONAL REMEDIES. The specific remedies granted to Landlord
under this Lease are cumulative and are not intended to be exclusive of each
other or of any other remedies which may be available to Landlord at law or in
equity. Landlord may exercise any and/or all such rights and remedies (whether
specifically granted herein or otherwise available to Landlord at law or in
equity) at such times, in such order, to such extent, and as often, as Landlord
deems advisable without regard to whether the exercise of any such right or
remedy precedes, is concurrent with or succeeds the exercise of another such
right or remedy.
(d) Tenant expressly waives, for itself and for any person claiming
by, through or under Tenant, any rights which Tenant or any such persons 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 summary holdover proceedings which Landlord may institute to enforce the
provisions of this SECTION 19. Tenant's obligations under this SECTION 19 shall
survive the expiration of sooner termination of this Lease.
20. SIGNS; ROOF RIGHTS.
43
(a) Subject to the consent requirements set forth in SECTION 20(b)
below, Tenant may, during the term of this Lease, upon obtaining any and all
necessary permits from governmental authorities, paint or erect and maintain and
repair, at its cost and expense, signs of such dimensions and materials as it
may reasonably deem appropriate in or about the Premises (for its own use only
and not for the purpose of leasing or licensing to any third party, or any other
purpose). The nature, design, size and character of such signs shall be
consistent with the First Class Standard. Such signs shall be removed by Tenant
Named Herein prior to, or upon, the expiration or earlier termination of this
Lease. All such signs shall comply with all applicable Laws. It is expressly
understood that Tenant's installation of signage under this SECTION 20(a) shall
not be deemed a Material Tenant Change requiring Landlord's consent unless such
installation would adversely affect (other than to a de minimis extent) the
exterior, structural elements or mechanical or building systems of the
Improvements.
(b) The installation of any signage at the Premises by or on behalf
of any party other than Tenant Named Herein, or by or on behalf of Tenant Named
Herein at any time the Occupancy Requirement is not met, shall be subject to
Landlord's consent, not to be unreasonably withheld, conditioned or delayed, and
shall be removed prior to, or upon, the expiration or earlier termination of
this Lease. All such signs shall comply with all applicable Laws.
(c) It is expressly understood that the Premises includes the roof of
the Improvements (herein called the "ROOF") and that Tenant shall, during the
term of this Lease, have the sole and exclusive right to the use and enjoyment
thereof. Subject to the provisions of this SECTION 20, Tenant shall have the
right to install, operate and maintain on the Roof: (a)equipment systems
servicing the Premises, including mechanical, electrical, plumbing,
telecommunications and technology systems and all equipment and other
installations that Tenant shall deem necessary or desirable in connection
therewith, including emergency generators, switch-gear, UPS equipment,
telecommunications equipment, and related distribution systems ("ROOFTOP
EQUIPMENT") and (b) microwave(s), satellite(s) or other antenna communications
systems and related equipment ("SATELLITE ANTENNA") that transmits or receives
signals to or from other communications installations located off-site,
provided, that: (i) the installation of all such items (including all structural
reinforcement, framing and waterproofing) shall be performed subject to the
provisions of SECTIONS 9(d), (e) and (f) hereof and (ii) Tenant, promptly
following notice from Landlord, shall repair any damage to the Improvements
caused by such installation, operation or maintenance.
(d) Tenant shall be responsible for providing such detailed and fully
complete plans and specifications for the Rooftop Equipment, including, without
limitation, plans and specifications for the installation thereof. All plans and
specifications, which shall be prepared by an architect or engineer licensed in
the State of New York and stamped and certified by such architect or engineer,
shall be prepared in strict compliance with applicable building standards and
requirements as set forth in this Lease and shall otherwise be reasonably
satisfactory to Landlord. All construction documents and calculations prepared
by or on behalf of Tenant, including, without limitation, preliminary drafts of
the plans and specifications, shall be submitted by Tenant to Landlord for
approval, which shall not be unreasonably withheld; PROVIDED HOWEVER, Landlord
shall not be deemed to have unreasonably withheld its consent to
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the plans and specifications showing the installation of the Rooftop Equipment
if the Rooftop Equipment (i) would adversely affect the electrical or mechanical
systems of the Improvements, as reasonably determined by Landlord, or (ii) would
adversely affect the structure of the Improvements, and FURTHER PROVIDED, that
to the extent Tenant Named Herein satisfies the Occupancy Requirement,
Landlord's consent thereto shall be deemed to have been given. Within ten (10)
days after Landlord's receipt of plans and specifications for the Rooftop
Equipment, Landlord shall return to Tenant one set of plans and specifications
with any of Landlord's suggested modifications and/or approval. If Landlord
disapproves the plans and specifications or approves the plans and
specifications subject to certain comments and requirements (which approval
shall be granted or denied in accordance with the provisions of this Section
20(b)), Tenant will promptly have the plans and specifications revised and
resubmitted to Landlord for approval. Tenant shall have the sole responsibility
for compatibility of such plans with the existing electrical, mechanical and
other systems servicing the Improvements and structure of the Improvements.
(e) Any assignees and any subtenants (including, without limitation,
Landlord and any of its assignees or subtenants in the case of a Recapture
Transaction) shall each have the right to use and maintain a portion of the
Rooftop Equipment and Satellite Antenna in an amount no greater than each such
assignee's or subtenant's pro rata share of rentable square footage demised
thereto at the Premises at the time of such use. No Tenant other than Tenant
Named Herein shall have the right to resell the use, or rights to the use, of
the Satellite Antenna or Rooftop Signage, including the granting of any
licensing or other rights, except to one or more assignees or subtenants. In no
event, however, shall any party other than Tenant Named Herein have the right to
sell, lease or license the use of the Satellite Antenna to a third party for
profit (and any such lease or license entered into by Tenant Named Herein after
December 16, 2002 shall be shared equally (50/50) between Tenant Named Herein
and Landlord in accordance with the profit-sharing provisions set forth in
SECTION 17(r)). The rights granted in this Section are granted in connection
with, and as part of the rights created under, this Lease, and are not
separately transferable or assignable other than in connection with an
assignment of Tenant's rights under this Lease as permitted by this Lease.
(f) Tenant shall procure and maintain throughout the balance of the
term of this Lease, such insurance, in addition to the insurance coverage
required pursuant to the provisions of SECTION 10 above, as Landlord shall
reasonably require in connection with Tenant's installation, operation and
maintenance of the Rooftop Equipment and Satellite Antenna, which additional
insurance coverage shall be commensurate with that which prudent owners of other
comparable buildings would require for such installation, operation and
maintenance. Tenant shall also indemnify and hold Landlord and any Landlord
Party harmless from and against any and all liability and damages suffered by
Landlord in connection therewith.
(g) Any dispute under this SECTION 20 shall be resolved by
arbitration pursuant to SECTION 44 hereof.
21. SURRENDER OF PREMISES.
(a) At the expiration or sooner termination of the term of this
Lease, Tenant shall surrender the Premises in good order and condition (subject
to reasonable wear and tear and
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to the limitations on Tenant's obligations set forth in SECTIONS 12(g) and 38(g)
hereof, and further subject to Landlord's obligations under SECTIONS 12(f)(4)
and 31(b) hereof), and with the removals, repairs and restorations required
under SECTION 9(h) hereof completed (if required by Landlord), and shall
surrender all keys for the Premises to Landlord at the place then fixed for the
payment of rent and shall inform Landlord of all combinations on locks, safes
and vaults, if any, in the Premises. Additionally, Tenant shall furnish to
Landlord copies of all books and records, plans and specifications, and such
other documents and materials in Tenant's possession utilized in connection with
the operation, maintenance and repair of the Premises, including any
construction or contract warranties or guaranties.
(b) The parties recognize and agree that the damage to Landlord
resulting from any failure by Tenant to timely surrender possession of the
Premises upon the expiration or other termination of the term will be
substantial, will exceed the amount of the monthly installments of the Base Rent
and additional rent theretofore payable hereunder and will be impossible to
accurately measure. Tenant therefore agrees that if possession of the Premises
is not surrendered to Landlord within twenty-four (24) hours after the
expiration date of this Lease, in addition to any other rights or remedies
Landlord may have hereunder or at law, Tenant shall pay to Landlord the
following:
(i) for each month and for each portion of any month during
which Tenant holds over in the Premises during the period commencing upon the
expiration date of this Lease up to and including the date that is thirty (30)
days following such expiration date (the "THIRTY DAY HOLDOVER DATE"), a sum
equal to one and one-half (1.5) times that portion of the Base Rent and
additional rent which was payable under this Lease for the last full calendar
month of the term;
(ii) for each month and for each portion of any month during
which Tenant holds over in the Premises during the period commencing on the day
immediately following the Thirty Day Holdover Date up to and including the date
that is sixty (60) days following the expiration date of this Lease (the "SIXTY
DAY HOLDOVER DATE"), a sum equal to one and three-quarters (1.75) times that
portion of the Base Rent and additional rent which was payable under this Lease
for the last full calendar month of the term; and
(iii) for each month and for each portion of any month during
which Tenant holds over in the Premises during the period commencing on the day
immediately following the Sixty Day Holdover Date up to and including the date
that is one hundred and eighty (180) days following the expiration date of this
Lease (the "SIX MONTH HOLDOVER DATE"), a sum equal to two (2) times that portion
of the Base Rent and additional rent which was payable under this Lease for the
last full calendar month of the term.
Nothing herein contained shall be deemed to permit Tenant to retain
possession of the Premises after the expiration date and no acceptance by
Landlord of payments from Tenant after the expiration date shall be deemed to be
other than on account of the amount to be paid by Tenant in accordance with the
provisions of this SECTION 21(b). Tenant's obligations under this Section shall
survive the expiration or earlier termination of this Lease. 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
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Practice Law and Rules and of any successor law of like import then in force in
connection with any holdover summary proceedings which Landlord may institute to
enforce the foregoing provisions of this Section. If Tenant shall hold over or
remain in possession of any portion of the Premises beyond the expiration date,
Tenant shall be subject to summary proceeding and all damages related thereto,
other than consequential or indirect damages. Notwithstanding the foregoing, if
Tenant shall hold over or remain in possession of any portion of the Premises
beyond the Six Month Holdover Date, Tenant shall be subject to summary
proceedings and all damages related thereto, including but not limited to any
consequential or indirect damages provided that Landlord, within twenty (20)
Business Days of Tenant's request made at any time prior to the Six Month
Holdover Date, shall have provided Tenant with written notice advising Tenant of
(i) Landlord's good faith estimate of any rent abatements or other fines,
penalties or costs to be paid or suffered by Landlord as a result of Tenant's
continued holdover and (ii) any termination rights of any successor tenant to
the Premises that would be triggered by such holdover by Tenant. All damages to
Landlord by reason of such holding over by Tenant may be the subject of a
separate action and need not be asserted by Landlord in any summary proceedings
against Tenant.
22. MEMORANDUM OF LEASE.
(a) Simultaneously with the execution of this Lease, Landlord and
Tenant shall execute a memorandum of this Lease (substantially in the form set
forth on SCHEDULE C attached hereto) in recordable form, setting forth
information regarding this Lease, including, without limitation, the right of
first offer contained in SECTION 23, the dates of commencement and expiration of
this Lease and any other information required to be included therein by SECTION
291-C of the Real Property Law of the State of New York. Tenant, at its expense,
shall cause the memorandum to be recorded in the appropriate land records. If
and when the parties hereto shall amend this Lease, then, at such time, either
party, at the request of the other party, shall execute, acknowledge and deliver
a memorandum in respect of such amendment to this Lease, which memorandum shall
be sufficient for recording and in form reasonably satisfactory to other party,
and which memorandum shall thereafter be recorded by Tenant, at its expense, in
the appropriate land records. Notwithstanding the foregoing, no such memorandum
shall recite the amounts or rates of Base Rent or any additional rent payable
hereunder, or any price to be paid under any purchase option, or the amount of
any allowance hereunder. Neither Landlord nor Tenant shall record this Lease or
any instrument modifying this Lease. In no event shall any memorandum of this
Lease or any amendment hereof be deemed to change or otherwise affect any of the
obligations or provisions of this Lease or such amendment hereof.
(b) In the event of a termination of this Lease, Tenant, within
thirty (30) days of the date of such termination, shall execute, acknowledge and
deliver to Landlord all necessary instrument(s) in recordable form evidencing a
termination of this Lease and sufficient to discharge any memorandum hereof, and
any memorandum of any amendment hereof, of record, and Tenant shall pay for all
costs, taxes and/or expenses necessary to the effective recordation of such
instrument(s). If there occurs a termination of this Lease and Tenant shall
fail, for any reason whatsoever, to execute all of the aforementioned
instrument(s) within the aforementioned 30-day period, then, without limiting
any other rights or remedies that Landlord may have on account thereof, (i)
Landlord shall be deemed to be and Tenant hereby irrevocably appoints
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Landlord, Tenant's attorney-in-fact, coupled with an interest, to execute such
instrument(s) in the name of Tenant and on Tenant's behalf and any other
instrument(s) necessary to the effective recordation of such instrument(s) and
the discharge of record of any memorandum or memoranda, (ii) Tenant shall pay
for all costs, taxes and/or expenses necessary to effectuate the recordation of
all such instrument(s), and (iii) Tenant shall be liable for all damages that
Landlord incurs as a result of Tenant's failure.
23. RIGHT OF FIRST OFFER.
(a) So long as no material non-monetary Event of Default or monetary
Event of Default in excess of $25,000 is then continuing and Tenant Named Herein
shall satisfy the Occupancy Requirement, if Landlord desires to sell the
Premises, Landlord shall give notice to Tenant Named Herein (an "OFFER NOTICE")
of such proposed transaction (such proposal, "LANDLORD'S OFFER"), and a
statement of Landlord's proposed purchase price and deposit and the proposed
closing date of the transaction for the Premises. Upon receipt of the Offer
Notice, Tenant Named Herein shall have thirty (30) days to accept or reject
Landlord's Offer. In the event Tenant Named Herein rejects Landlord's Offer,
then for the 270-day period thereafter (the "SALE PERIOD"), Landlord may sell
the Premises to a third party for a purchase price equal to or greater than 97%
of the purchase price set forth in the Offer Notice (the "FLOOR PRICE"). If
within the Sale Period (i) Landlord desires to sell the Premises for a purchase
price which is less than the Floor Price, (ii) Landlord shall not have entered
into any contract of sale with respect to the Premises on such terms and
conditions as set forth in Landlord's Offer or (iii) Landlord shall have timely
entered into a contract of sale with respect to the Premises on such terms and
conditions as provided in Landlord's Offer, but Landlord shall not have
consummated the sale of the Premises within nine (9) calendar months thereafter,
then Landlord shall again be required to comply with the provisions of this
SECTION 23(a) if Landlord intends to sell the Premises to a third party. Nothing
contained in the foregoing clause (iii) shall be construed to permit Landlord to
avoid Landlord's obligations to Tenant Named Herein pursuant to this SECTION
23(a) by consummating the sale of the Premises at a purchase price that shall be
less than ninety-seven (97%) percent of the purchase price or on otherwise more
favorable (to purchaser) terms than were set forth in Landlord's Offer without
being once again required to comply with the provisions of this SECTION 23(a).
(b) Notwithstanding anything to the contrary set forth in this
SECTION 23, if Tenant fails to timely deliver an Extension Notice under SECTION
2 or Tenant shall otherwise not satisfy the conditions precedent to exercising
an Extension Option, then this SECTION 23 shall be of no force or effect.
(c) For the purposes of this SECTION 23: all references to "purchase
price" shall be deemed to refer to the actual purchase price as adjusted to
reflect the economic value of all material business terms contained in
Landlord's Offer and the terms "sell" and "sale" shall include any transaction
which results in (x) the day-to-day control of Landlord being vested in, or the
powers customarily reserved to a managing general partner, managing member or
equivalent party being granted to, parties other than the principals of RFR
Holding LLC and /or Fee Mortgagee; PROVIDED, HOWEVER, that the granting of
approval rights of the type that are customary to be granted in similar
circumstances with respect to certain major decisions to other partners, members
or equivalent parties of the entity or entities constituting Landlord shall not
be
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deemed to be a violation of this clause (x), or (y) in a sale of all or
substantially all of the ownership interest in Landlord, it being deemed that
only a sale of at least 80% of such ownership interests shall constitute a sale
of all or substantially all of the same.
(d) Any dispute under this SECTION 23 shall be resolved by
arbitration pursuant to SECTION 44 hereof.
24. EXCULPATION OF LANDLORD.
The obligations of Landlord under this Lease shall not be binding upon
Landlord after the sale, conveyance, assignment or transfer by such Landlord of
its interest in the Premises, and in the event of any such sale, conveyance,
assignment or transfer, Landlord shall be and hereby is entirely freed and
relieved of all covenants and obligations of Landlord. Neither Landlord nor any
of the direct or indirect partners, shareholders, directors or officers of
Landlord shall be personally liable for the performance of Landlord's
obligations under this Lease. Tenant shall look solely to Landlord to enforce
Landlord's obligations hereunder. Prior to any such sale, conveyance, assignment
or transfer, the liability of Landlord for Landlord's obligations under this
Lease shall be limited to Landlord's interest in the Premises and Tenant shall
not look to any other property or assets of Landlord or the property in seeking
either to enforce Landlord's obligations under this Lease or to satisfy a
judgment for Landlord's failure to perform such obligations. After any such
sale, conveyance, assignment or transfer, to the extent that Landlord has any
liability at all, the liability of Landlord for such obligations shall be
limited to the proceeds of such transfer received by Landlord.
25. ADDITIONAL RENT; TENANT'S PAYMENTS.
(a) Each and every payment and expenditure, other than Base Rent and
other than costs for any Tenant Changes, or any repairs or replacements to the
Improvements, which are required to be paid by Tenant under this Lease shall be
deemed to be additional rent hereunder, whether or not the provisions requiring
payment of such amounts specifically so state, and shall be payable, unless
otherwise provided in this Lease, within ten (10) Business Days after demand
accompanied by reasonable documentation evidencing the amount of any such costs
or expenses by Landlord, and, in the case of the nonpayment of any such amount,
Landlord shall have, in addition to all of its other rights and remedies, all of
the rights and remedies available to Landlord hereunder or by Laws in the case
of non-payment of Base Rent. Unless expressly otherwise provided in this Lease,
the performance and observance by Tenant of all the terms, covenants and
conditions of this Lease to be performed and observed by Tenant hereunder shall
be performed and observed by Tenant at Tenant's sole cost and expense.
(b) Tenant covenants and agrees to pay all rent, as and when the same
is due and payable hereunder, without notice or demand therefor and without any
abatement, deduction or setoff for any reason whatsoever, except, in either
case, as may be expressly provided in this Lease. If, pursuant to any provision
of this Lease, Tenant shall be obligated to pay any additional rent to Landlord
and no due date or payment period therefor is specified herein, then such
additional rent shall be paid by Tenant to Landlord within fifteen (15) Business
Days after being billed therefor.
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26. LANDLORD'S CURE AND ENFORCEMENT RIGHTS. In addition to its
obligations under SECTION 18(b) hereof, Tenant within fifteen (15) Business Days
after demand accompanied by reasonable supporting documentation, shall reimburse
Landlord for any reasonable out-of-pocket costs and expenses incurred by
Landlord (including reasonable attorneys' fees) pursuant to, or in connection
with collecting or endeavoring to collect rent or any component thereof, or
enforcing or endeavoring to enforce any of Landlord's rights against Tenant
hereunder or any of Tenant's obligations hereunder, together, in either case,
with interest thereon, at the Default Rate, from the date that such expenses
were incurred by Landlord to the date that the same are reimbursed to Landlord
by Tenant, but only if Landlord shall be the prevailing party in any dispute
relating thereto.
27. COVENANT AGAINST LIENS.
(a) Commencing as of the date hereof, Tenant shall pay and discharge
before the imposition of any fine, lien, interest or penalty all additional rent
and other amounts and obligations which Tenant assumes or agrees to pay or
discharge pursuant to this Lease, together with every fine, lien, penalty and
interest with respect thereto. If, because of any act or omission or alleged act
or omission of Tenant where Tenant has a duty to act, any mechanic's or other
lien, charge or order for the payment of money or other encumbrances shall be
filed or imposed against Landlord, any Fee Mortgagee and/or any portion of the
Premises (whether or not such lien, charge, order or encumbrance is valid or
enforceable as such), Tenant shall, at its cost and expense, cause same to be
discharged of record or bonded within thirty (30) days after notice to Tenant of
the filing or imposition thereof; and Tenant shall indemnify and defend Landlord
and any Landlord Party against and save Landlord and any Landlord Party harmless
from all losses, costs, damages, expenses, liabilities, suits, fines, charges,
penalties, claims, demands and obligations, including, without limitation,
reasonable counsel fees, resulting therefrom. If Tenant fails to comply with the
foregoing provisions, Landlord shall have the option of discharging or bonding
any such lien, charge, order or encumbrance, and Tenant agrees to reimburse
Landlord (as additional rent) for all losses, costs, damages, and expenses
resulting therefrom or incurred in connection therewith, together with interest
at the Default Rate, within fifteen (15) Business Days after demand accompanied
by reasonable documentation supporting the amount of any such costs or expenses.
(b) All materialmen, contractors, artisans, mechanics, laborers and
any other persons now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to any portion of the Premises, are
hereby charged with notice that they must look exclusively to Tenant to obtain
payment for same. Notice is hereby given that the Landlord shall not be liable
for any labor, services, materials, supplies or equipment furnished or to be
furnished to Tenant upon credit, and that no mechanic's or other lien for any
such labor, services, materials, supplies or equipment shall attach to or affect
the estate or interest of the Landlord in and to the Premises.
28. AFFIRMATIVE WAIVERS. Landlord and Tenant hereby waive trial by
jury in any action, proceeding or counterclaim brought by either against the
other on any matter whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the
Premises, including any claim of injury or damage, and any emergency and other
statutory remedy with respect thereto. Tenant shall not interpose
50
any counterclaim of any kind in any action or proceeding commenced by Landlord
to recover possession of the Premises (except to the extent set forth in
SECTIONS 12, 13, 31(b) and 38(g)). Subject to SECTION 19(b)(2), Tenant hereby
waives any right of redemption or similar right that it may have with respect to
this Lease after the termination hereof.
29. LANDLORD'S AND TENANT'S CERTIFICATES
(a) Landlord, at any time and from time to time, on or prior to the
tenth (10th) Business Day following a written request by Tenant, shall execute
and deliver to Tenant (and/or to a party designated by Tenant) a statement (i)
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), (ii) certifying to the Commencement
Date, the then current expiration date of this Lease, and the dates to which
Base Rent has been received (as well as the number of remaining Extension
Options and the terms thereof), (iii) stating whether or not, to the best
knowledge of Landlord, Landlord is in default in performance of any of its
obligations under this Lease (and, if so, specifying each such default of which
Landlord shall have knowledge), and (iv) stating whether or not, to the best
knowledge of Landlord, any Event of Default has occurred which is then
continuing (or any event has occurred which with the giving of notice or passage
of time, or both, would constitute an Event of Default), and, if so, specifying
each such event. Landlord also shall include or confirm in any such statement
such other information concerning this Lease as Tenant may reasonably request,
to the extent the same is readily accessible to Landlord.
(b) Tenant, at any time and from time to time, on or prior to the
tenth (10th) Business Day following a written request by Landlord, shall execute
and deliver to Landlord (and/or to a party designated by Landlord) a statement
(i) certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), (ii) certifying to the Commencement
Date, the then current expiration date of this Lease, and the dates to which
Base Rent has been paid (as well as the number of remaining Extension Options
and the terms thereof), (iii) stating whether or not, to the best knowledge of
Tenant, Landlord is in default in performance of any of its obligations under
this Lease (and, if so, specifying each such default of which Tenant shall have
knowledge), (iv) stating whether or not, to the best knowledge of Tenant, Tenant
has any counterclaims, defenses or right to offset against any amounts due to
Landlord under this Lease, and whether or not, to the best knowledge of Tenant,
Tenant is entitled to any concessions, rebates or any rent reductions under this
Lease for whatever reason as of the date such statement is given, (v) stating
whether there exists any material unrepaired damage to the Premises from fire or
other casualty, (vi) stating whether Tenant has received written notice of any
actions or proceedings pending against the Premises before any governmental
authority to condemn the Premises or any portion thereof or any interest therein
and whether, to Tenant's knowledge, any such actions or proceedings have been
threatened, (vii) stating that the estoppel shall be binding upon Tenant, and
may be relied upon by Landlord (and/or a party designated by Landlord) and
(viii) stating whether or not, to the best knowledge of Tenant, any Event of
Default has occurred which is then continuing (or any event has occurred which
with the giving of notice or passage of time, or both, would constitute an Event
of Default), and, if so, specifying each such event. Tenant also shall include
or confirm in any such statement such other information concerning
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this Lease as Landlord may reasonably request, to the extent the same is readily
accessible to Tenant.
30. LANDLORD'S CONSENT AND APPROVAL.
If Tenant shall request Landlord's consent or approval and Landlord
shall fail or refuse to give such consent or approval, Tenant shall not be
entitled to any damages for any withholding by Landlord of its consent or
approval (unless a court determines that Landlord's failure to consent or
approve was made in bad faith), it being intended that Tenant's sole remedy
shall be an action for specific performance or injunction, and that such remedy
shall be available only in those cases where Landlord has expressly agreed in
writing not to unreasonably withhold its consent or where as a matter of law
Landlord may not unreasonably withhold its consent or approval.
31. CAPITAL LEASE; NONTERMINABILITY.
(a) This is a capital lease and, except as otherwise specifically
provided in SECTIONS 12 or 13 hereof, this Lease shall not terminate nor shall
Tenant have any right to terminate this Lease; nor shall Tenant be entitled to
any abatement, deduction, deferment, suspension or reduction of, or setoff,
defense or counterclaim against, any rentals, charges, or other sums payable by
Tenant under this Lease except as otherwise specifically provided in SECTIONS
12, 13, 31(b) and 38(g) hereof; nor shall the respective obligations of Landlord
and Tenant be otherwise affected by reason of damage to or destruction of the
Premises from whatever cause, any taking by condemnation, eminent domain or by
agreement between Landlord and those authorized to exercise such rights, the
lawful or unlawful prohibition of Tenant's use of the Premises, the interference
with such use by any persons, corporations or other entities, or by reason of
any eviction by paramount title, or by reason of Tenant's acquisition of
ownership of the Premises otherwise than pursuant to an express provision of
this Lease, or by reason of any default or breach of any warranty by Landlord
under this Lease or any other agreement between Landlord and Tenant, or to which
Landlord and Tenant are parties, or for any other cause whether similar or
dissimilar to the foregoing, any Laws to the contrary notwithstanding; it being
the intention that the obligations of Landlord and Tenant hereunder shall be
separate and independent covenants and agreements and that the Base Rent,
additional rent and all other charges and sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provisions of this Lease; and Tenant
covenants and agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
cancel, rescind or void this Lease, notwithstanding the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Landlord or any assignee of, or successor to,
Landlord, and notwithstanding any action with respect to this Lease that may be
taken by a trustee or receiver of Landlord or any assignee of, or successor to,
Landlord or by any court in any such proceeding. Except as specifically provided
in SECTIONS 12(f)(4), 31(b), and 38(g), Tenant shall pay all expenses related to
the operation, management, development, use, occupancy, maintenance and repair
of the Premises, including, without limitation, the costs of utilities, real
estate taxes and insurance, which arise or become payable during or after (but
attributable to a period falling within) the term hereof.
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(b) Notwithstanding the foregoing or anything in this Lease to the
contrary, during the period commencing on the fifteenth (15th) anniversary of
the Commencement Date and ending on the expiration date of the Initial Term, if
any of the repairs, replacements or improvements to be made by Tenant to comply
with Section 8(a) hereof are capital in nature and are to be made with respect
to the roof, structural elements of the Building, exterior walls or the
elevators located at the Premises, and such improvements shall have a useful
life (as determined in accordance with GAAP) that extends more than one (1) year
beyond the expiration of the Initial Term (such improvements, the "CAP EX
IMPROVEMENTS"), and a reasonably prudent owner of premises comparable to the
Premises would, after taking account all relevant factors that such owner would
reasonably consider, including the then remaining term of this Lease it being
understood that the First Class Standard and all applicable Laws must in any
event be complied with (such standard, the "PRUDENT OWNER STANDARD"), Landlord
shall perform such Cap Ex Improvements. The cost of any such Cap Ex Improvement
(including the cost of the contract price to perform such Cap Ex Improvement
(and any cost overruns) and any reasonable fees and disbursements of any
architects, engineers or attorneys retained by Landlord and Tenant in connection
with such Cap Ex Improvement, shall be calculated on a straight line
depreciation basis and be apportioned between Tenant and Landlord as follows:
Tenant's proportionate share of such cost ("TENANT'S CAP EX SHARE") shall be
equal to a fraction, the numerator of which shall be equal to the number of
months remaining in the Initial Term from and after the date that, in Landlord's
reasonable estimation, the applicable Cap Ex Improvement shall be substantially
completed, and the denominator of which shall be the number of months of the
reasonably estimated useful life of the applicable Cap Ex Improvement (the
"USEFUL LIFE"), and Landlord shall be responsible for a portion of the cost of
any such Cap Ex Improvement equal to a fraction, the numerator of which shall be
equal to the number of months remaining in the Useful Life from and after the
expiration of the Initial Term, and the denominator of which shall be equal to
the Useful Life. All Cap Ex Improvements shall be performed by Landlord,
provided that Landlord's performance thereof shall be performed at times and
during hours that are mutually agreeable to the parties and in a manner that
does not unreasonably disturb or interfere with Tenant's operation of its
business at the Premises. Tenant shall reimburse Landlord for Tenant's Cap Ex
Share of any xxxx (i) submitted in connection with a Cap Ex Improvement by
paying Tenant's Cap Ex Share of such xxxx within twenty (20) days following
delivery by Landlord of such xxxx (and other reasonable supporting
documentation) OR (ii) in equal monthly installments pro rated based on the
number of months remaining in the Initial Term from the date of Landlord's
delivery of such xxxx, provided, that with respect to this clause (ii), Tenant
shall pay interest on the amount of Tenant's Cap Ex Share of each such xxxx in
an amount equal to the Default Rate. If Tenant shall exercise either of its
Extension Options, from and after the commencement of the Extension Term, Tenant
shall have no obligation to pay Tenant's Cap Ex Share of any Cap Ex Improvements
being performed during the Extension Term, and Landlord shall perform such Cap
Ex Improvements (to the extent required under this SECTION 31(b)) at its sole
cost and expense and in accordance with the Prudent Owner Standard.
(c) Any dispute under this SECTION 31(b) shall be resolved by
arbitration pursuant to SECTION 44 hereof.
32. OMITTED.
53
33. ENCROACHMENTS, RESTRICTIONS, ETC.
If, as a result of Tenant Changes, any of the Improvements shall, at
any time, encroach upon any property, street or right of way adjoining or
adjacent to the Premises, or shall violate the agreements or conditions
contained in any restrictive covenant existing as of the date hereof or to which
Tenant or any Tenant Party shall have consented in writing or other agreement
affecting the Premises existing as of the date hereof or to which Tenant or any
Tenant Party shall have consented to in writing, or any part thereof, or shall
hinder or obstruct any easement or right-of-way to which the Premises are
subject existing as of the date hereof or to which Tenant or any Tenant Party
shall have consented to in writing, or shall impair the rights of others under
such easement or right-of-way, then promptly upon the request of the Landlord at
the behest of any persons affected by any such encroachment, violation,
hindrance, obstruction or impairment, Tenant shall, at its cost and expense,
either (i) obtain valid and effective waivers or settlements of all claims,
liabilities and damages resulting from each such encroachment, violation,
hindrance, obstruction or impairment, whether the same shall affect Landlord or
Tenant, or (ii) make such changes in the Improvements and take such other
actions as shall be necessary to remove such encroachments, hindrances or
obstructions and to end such violations or impairments, including, if necessary,
but only with Landlord's prior written consent, the alteration or removal of any
of the Improvements. Any such alteration or removal consented to by Landlord
shall be made by Tenant in accordance with the requirements of Section 9 hereof.
Tenant's obligations under this SECTION 33 shall survive the expiration or
sooner termination of this Lease.
34. OMITTED.
35. MISCELLANEOUS PROVISIONS.
(a) NOTICES. Any xxxx, notice, statement, demand, consent, approval
or other communication required or permitted to be given, rendered or made by
either Landlord or Tenant pursuant to this Lease (collectively, "NOTICES") shall
be in writing and shall be deemed to have been properly given, rendered or made
only if sent by (i) registered or certified mail, return receipt requested,
posted in a United States post office station or letter box in the State of New
York (in which event such notice shall be deemed to have been given, rendered or
made on the third (3rd) Business Day after the day so mailed), or (ii) overnight
courier service or by hand against a signed receipt (in which event such notice
shall be deemed to have been given, rendered or made when delivered), and to the
other party at the address(es) hereinabove set forth at the beginning of this
Lease. Either party may, by notice as aforesaid, designate a different address
or addresses for notices intended for it.
(b) RELATIONSHIP OF THE PARTIES. It is the intention of the parties
hereto to create the relationship of Landlord and Tenant, and no other
relationship whatsoever, and unless expressly otherwise provided herein, nothing
herein shall be construed to make the parties hereto liable for any of the
debts, liabilities or obligations of the other party.
(c) GOVERNING LAWS. This Lease shall be governed by the provisions
hereof and by the laws of the State of New York, as same may from time to time
exist.
54
(d) INVALIDITY OF PARTICULAR PROVISIONS. If any term or provision of
this Lease or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
(e) NON-WAIVER. No delay or omission by Landlord or by Tenant in
exercising a right or remedy shall exhaust or impair such right or remedy or
constitute a waiver of, or acquiescence in, any default by Tenant or Landlord,
as the case may be. A single or partial exercise of a right or remedy shall not
preclude a further exercise thereof, or the exercise of another right or remedy,
from time to time. The receipt by Landlord of rent with knowledge of any default
by Tenant shall not be deemed a waiver of such default, and no provision of this
Lease, nor any default by either party hereunder, shall be deemed to have been
waived by the other party unless such waiver be in writing signed by such party.
No payment by Tenant or receipt by Landlord of a lesser amount than the rent
herein stipulated shall be deemed to be other than on account of the stipulated
rent. No endorsement or statement of any check or any letter accompanying any
check or payment as rent shall be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such rent or pursue any other remedy in this Lease
provided.
(f) COUNTERPARTS. This Lease may be executed in several counterparts,
each of which shall be deemed an original, and such counterparts shall
constitute but one and the same instrument.
(g) SOLE AGREEMENT. This Lease sets forth all the promises,
inducements, agreements, conditions and understandings between Landlord and
Tenant relative to the Premises, and there are no promises, agreements,
conditions or understandings, either oral or written, expressed or implied
between them concerning Tenant's use and occupancy of the Premises during the
term of this Lease, other than as expressly set forth on EXHIBIT C or as
otherwise agreed to in writing by Landlord and Tenant. Except as herein
otherwise provided, no subsequent alteration, amendment, change or addition to
this Lease shall be binding upon Landlord or Tenant, unless reduced to writing
and signed by the party(ies) to be charged therewith.
(h) CAPTIONS. The captions of the several Sections and subsections of
this Lease and table of contents are not a part of the context hereof and shall
be ignored in construing this Lease. They are intended only as aids in locating
various provisions hereof.
(i) SUCCESSORS AND ASSIGNS. Except as may be expressly otherwise
provided herein, the terms, covenants and conditions hereof shall inure to the
benefit of and shall be binding upon Landlord and its successors and assigns and
the terms, covenants and conditions hereof shall inure to the benefit of and
shall be binding upon Tenant and its successors and permitted assigns.
(j) NO MERGER. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof,
55
by reason of the fact that the same person, firm, corporation or other entity
may acquire or own or hold, directly or indirectly, (i) this Lease or the
leasehold estate created by this Lease, or any interest in this Lease or in any
such leasehold estate, and (ii) any such other estate or interest in the
Premises or any part thereof; and no such merger shall occur unless and until
all persons, corporations, firms and other entities having an interest
(including a security interest) in (i) this Lease or the leasehold estate
created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
(k) OWNERSHIP OF PREMISES. Tenant acknowledges that the Premises
are the property of Landlord and that Tenant has only the right to the
possession and use thereof upon the terms, covenants and conditions set forth in
this Lease.
(l) ACCEPTANCE OF SURRENDER. No surrender to Landlord of this Lease
or of the Premises, or any part thereof, or of any interest therein, shall be
valid or effective unless agreed to and accepted in writing by Landlord, and no
act or omission by Landlord or any representative or agent of Landlord, other
than such a written acceptance by Landlord, consented to as aforesaid, shall
constitute an acceptance of any such surrender.
36. GUARANTY; FINANCIAL STATEMENTS; ANNUAL REPORTS.
(a) As security for the performance of payment of all of Tenant's
obligations under this Lease, Sotheby's Holdings, Inc. ("GUARANTOR") has
simultaneously herewith delivered to Landlord a Guaranty of Lease (the
"GUARANTY") in the form annexed hereto as SCHEDULE E.
(b) Guarantor agrees to furnish to Landlord upon Landlord's request:
(1) copies of the most recently prepared consolidated financial statements of
Tenant and Guarantor (I.E., annual balance sheets, income statements and
statements of cash flow, audited and certified by Guarantor's independent
certified public accountants); and (2) other financial statements, reports and
documents which Tenant: (i) files with or otherwise sends to the Securities and
Exchange Commission, whether pursuant to the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934 including, without limitation, Annual
Report on Form 10K, Quarterly Report on Form 10Q, Current Report on Form 8-K and
Proxy Statements and other soliciting materials; (ii) files with any other
governmental commission, department or agency or any securities exchange; and
(iii) sends to or makes available to its shareholders (but only if at the time
in question Guarantor has securities registered under the Securities Exchange
Act of 1934, as amended). Tenant and Guarantor shall provide such other
financial materials that are in Guarantor's or Tenant's possession (or are
otherwise reasonably available to Tenant) as may be reasonably requested by
Landlord or Fee Mortgagee, subject to any prohibitions against such disclosure
under applicable Laws and provided that Landlord shall keep and shall direct Fee
Mortgagee to keep any such financial information confidential. The obligations
of this SECTION 36 with respect to Guarantor shall not diminish for any reason,
including, without limitation, if Guarantor ceases to be a publicly traded
entity.
(c) Within one hundred twenty (120) days of the end of each of
Tenant's fiscal years during the term hereof, Tenant shall furnish to Landlord a
statement of operating expenses for the Improvements for such fiscal year
together with a schedule of any subleases of
56
all or any part of the Premises indicating the premises demised, commencement
date, renewal options, base rent, escalation provisions and any other
information that Landlord shall reasonably request; provided, that if Tenant
shall not have furnished such statements within such 120-day period, then Tenant
shall furnish the same within fifteen (15) days following Landlord's request.
37. BROKER.
Landlord and Tenant each represents and warrants that it has had no
dealings or conversations with any broker in connection with the negotiation and
execution of this Lease. X.X. Xxxxxx Securities, Inc. and X.X. Xxxxxx Realty
Advisors, Inc. (collectively, "JPMORGAN") acted as financial advisors in
connection with this transaction. Landlord and Tenant each agrees to defend,
indemnify and hold harmless the other against all liabilities arising from any
claims for commissions, fees, compensation or reimbursement of expenses,
asserted by any person other than JPMorgan who dealt with or claims to have
dealt with Landlord, Tenant or any Affiliates thereof, as the case may be, in
connection with this Lease, including the reasonable cost of counsel fees and
disbursements. Tenant Named Herein acknowledges that it is obligated to
compensate JPMorgan pursuant to a separate agreement.
38. HAZARDOUS MATERIALS; INSPECTIONS.
(a) For the purposes hereof, the term "HAZARDOUS MATERIALS" shall
include, without limitation, substances defined as "hazardous substances",
"hazardous materials" or "toxic substances" in any Laws.
(b) Tenant represents and warrants that, except as herein set forth,
it will not use, store or dispose of any Hazardous Materials in the Premises
except in compliance with all applicable Laws.
(c) If, at any time during the term hereof, Hazardous Materials shall
be found in or on the Premises, then Tenant shall remove or remediate the same
to the extent required by any applicable Laws, and in compliance with all
applicable Laws; provided, however, that this SECTION 38(c) and Tenant's
compliance herewith shall not be deemed to be a waiver of any claims or rights
Tenant may have against Landlord or any prior owner of the Premises arising out
of, in respect of or in connection with the release, threatened release or
presence of any Hazardous Materials at, on or under the Premises; provided,
further that any such rights or claims of Tenant shall not give rise to any
right of setoff, counterclaim, recoupment, abatement, suspension, reduction or
defense against Base Rent, additional rent and any other sums due to Landlord
under this Lease.
(d) Upon reasonable prior notice, Landlord and Fee Mortgagee, their
agents, representatives and employees shall have the right at all reasonable
times and during normal business hours, except to the extent such access is
limited by applicable Law, to enter upon and inspect all or any portion of the
Premises, provided that such inspections are conducted in the presence of a
representative designated by Tenant and such inspections shall not unreasonably
interfere with the operation of the Premises. Tenant shall reimburse Fee
Mortgagee or Landlord within fifteen (15) Business Days after demand accompanied
by reasonable documentation supporting the amount of any such costs or expenses
for all costs and expenses (including
57
reasonable attorneys' fees and disbursements, administrative and similar costs
of Fee Mortgagee or Landlord) reasonably relating to or incurred by Fee
Mortgagee or Landlord in connection with the inspections, tests and reports
described in this SECTION 38 if Fee Mortgagee or Landlord, as applicable, has
reasonable grounds to believe (based on the receipt of notice relating to such
fact) at the time any such inspection is ordered, that there exists an
environmental violation or that a Hazardous Material is present on, under or
emanating from the Premises in violation of Laws or this Lease.
(e) To the extent that Tenant has knowledge thereof, Tenant shall
promptly provide notice to Landlord and Fee Mortgagee of:
(i) any proceeding or investigation commenced or threatened by
any governmental authority with respect to the presence of any Hazardous
Materials affecting the Premises; and
(ii) all claims made or any lawsuit or other legal action or
proceeding brought by any person against (A) Tenant or Landlord or the Premises,
or (B) any other party occupying the Premises or any portion thereof, in any
such case relating to any loss or injury allegedly resulting from any Hazardous
Materials or relating to any violation or alleged violation of any Law.
(f) Subject to SECTION 38(g), Tenant shall be solely responsible for
and shall defend, indemnify and hold each Landlord Party harmless from and
against all claims, including costs and expenses of any kind, including without
limitation reasonable expenses of investigation by engineers, environmental
consultants and similar technical personnel and reasonable fees and
disbursements of counsel (collectively, "HAZMAT LOSSES"), arising out of, in
respect of or in connection with (i) Tenant's breach of its obligations under
this Section or (ii) the release, threatened release or presence of any
Hazardous Materials at, on or under the Premises at any time first occurring
during the term of this Lease (collectively, "HAZMAT CONDITIONS"); provided that
Tenant shall not be required to indemnify, defend or hold harmless any Landlord
Party for any such matter arising due to the gross negligence or wilful
misconduct of any Landlord Party.
(g) Notwithstanding SECTION 38(f), Tenant's liability with respect to
any HazMat Losses arising out of, in respect of or in connection with any HazMat
Conditions resulting from a terrorist act shall be limited to the amount of
coverage Tenant is required to maintain in its Casualty Insurance policy against
loss or damage by terrorist acts pursuant to SECTION 10(a)(1).
(h) The indemnity obligations of Tenant and the rights and remedies
of Landlord under this SECTION 38 shall survive the termination of this Lease.
39. LEASEHOLD MORTGAGE.
Notwithstanding anything contained in Section 17 hereof or otherwise
in this Lease to the contrary, Tenant shall have the right with Landlord's prior
written consent, which shall not be unreasonably withheld, delayed or
conditioned, to mortgage, pledge, encumber or otherwise hypothecate its interest
in this Lease or the Premises or any part thereof (any of the
58
foregoing being referred to as a "LEASEHOLD MORTGAGE"), provided that (i) such
Leasehold Mortgage is to be held by an Institutional Lender, (ii) the Leasehold
Mortgage shall not increase Landlord's obligations or reduce Landlord's rights
under this Lease (except to the limited extent provided under a recognition
agreement as set forth below), and (iii) in Landlord's reasonable judgment,
Tenant entering into the Leasehold Mortgage is unlikely to have an adverse
effect on Landlord's ability to obtain financing with respect to the Premises.
Solely to the extent that Landlord has consented to a Leasehold Mortgage in
accordance with the immediately preceding sentence, Landlord shall provide such
cooperation in connection with the creation of such Leasehold Mortgage as is
reasonably requested by Tenant, which shall include execution and delivery of
such customary and reasonable agreements as the leasehold mortgagee shall
require, including, without limitation, a recognition agreement in favor of the
leasehold mortgagee containing reasonable and customary provisions as to the
cure by leasehold mortgage of Tenant defaults and the like. Tenant shall
reimburse Landlord for the customary and reasonable expenses (including
reasonable attorneys' fees) incurred by Landlord in connection therewith, within
fifteen (15) Business Days after demand therefor. Notwithstanding anything set
forth in this SECTION 39, in any Leasehold Mortgage shall be subject and
subordinate to Landlord's interest in this Lease and any Mortgage in all
respects.
40. PUBLICITY.
Landlord and Tenant hereby agree that they will not authorize or issue
any publicity of this Lease or the matters contained herein without first
obtaining the written consent of the others. Nothing herein contained shall
limit any parties right to disclose this Lease and matters contained therein to
prospective lenders, partners, tenants, title companies and governmental
agencies (to the extent required by law) and to Landlord's and Tenant's
respective attorneys, accountants and engineers.
41. TRANSFER TAXES.
Tenant shall pay the cost of any transfer or similar tax, if any,
imposed in connection with the execution and delivery of this Lease.
42. NO DEVELOPMENT RIGHTS.
Tenant acknowledges that it has no rights to any development rights,
air rights or comparable rights appurtenant to the Premises and Tenant consents,
without further consideration, to any utilization of such rights by Landlord.
Tenant shall promptly execute and deliver any instruments which may be requested
by Landlord, including instruments merging zoning lots, evidencing such
acknowledgment and consent. The provisions of this SECTION 42 shall be construed
as an express waiver by Tenant of any interest Tenant may have as a "party in
interest" (as such term is defined in SECTION 12-10 of Zoning Lot of the Zoning
Resolution of the City of New York) in the Premises.
43. SPECIAL BANKRUPTCY RELATED PROVISIONS.
(a) All amounts payable by Tenant to or on behalf of Landlord under
this Lease, whether or not expressly denominated Base Rent or additional rent,
shall constitute rent
59
for the purpose of SECTION 502(b)(6) of the United States Bankruptcy Code (the
"CODE"), as same may be amended and for the purpose of any similar section of
Title 11 of the Code, as the same may hereafter be amended or replaced, or any
federal, state or foreign law covering all or part of the same or similar
subject matter as is covered by the Code (collectively, "INSOLVENCY LAWS").
(b) If the original Tenant named herein assigns its interest in this
Lease and such Tenant is not released of further liability under this Lease, and
this Lease is thereafter disaffirmed or rejected in any proceeding under any
Insolvency Laws, or in the event of the termination of this Lease by reason of
any such proceeding, the original Tenant herein named, upon request of Landlord
given within sixty (60) days after such disaffirmance or rejection, shall (i)
pay to Landlord all Base Rent and additional rent then due and payable to
Landlord under this Lease to and including the date of such disaffirmance or
rejection and (b) enter into a new lease as lessee with Landlord of the Premises
for a term commencing on the effective date of such disaffirmance or rejection
and ending on the date that would have been the expiration date if this Lease
had not been disaffirmed or rejected, at the same Base Rent and additional rent
and upon the then executory terms and conditions contained in this Lease, except
that (i) the rights of the lessee under the new lease shall be subject to any
possessory rights of the last assignee of this Lease and any rights of persons
claiming through or under such assignee, (ii) such new lease shall require all
defaults existing under this Lease which are susceptible of cure by such lessee
to be cured by the lessee with reasonable diligence, and (iii) such new lease
shall require the lessee to pay all Base Rent and additional rent which, had
this Lease not been disaffirmed or rejected, would have become due after the
effective date of such disaffirmance or rejection. If the original Tenant herein
named shall fail or refuse to enter into the new lease within thirty (30) days
after Landlord's request to do so, then in addition to all other rights and
remedies by reason of such default under this Lease, at law or in equity,
Landlord shall have the same rights and remedies against the original Tenant
herein named as Landlord would have had if the original Tenant herein named had
entered into such new lease had thereafter been terminated at the beginning of
its term by reason of the default of the lessee thereunder. If the original
Tenant herein enters into such new lease, then simultaneously therewith,
Landlord shall assign to the original Tenant named herein all rights that
Landlord may have thereafter against the last assignee of this Lease and shall
pay to the original Tenant named herein all amounts which the last assignee of
this Lease would otherwise be entitled to receive under this Lease.
44. EXPEDITED ARBITRATION.
(a) If there is a dispute between Landlord and Tenant as to any
matter under any Section of this Lease that makes specific reference to this
Section 44, then such dispute shall, at the request of either party, be resolved
solely by arbitration in the City of New York under the Expedited Procedures
provisions (it being the intention of the parties that such provisions shall
apply even if the amount at issue exceeds $50,000, notwithstanding the fact that
such provisions may provide otherwise) of the Commercial Arbitration Rules of
the American Arbitration Association or any successor thereto (the "AAA");
PROVIDED, HOWEVER, that the provisions of this SECTION 44(a) shall supersede any
conflicting or inconsistent provisions of said provisions; and FURTHER PROVIDED,
that with respect to any such arbitration, (i) the list of arbitrators referred
to in Rule E-5 shall be returned within five (5) days from the date of mailing;
(ii) the parties shall notify the AAA by telephone, within four (4) days of any
objections to the arbitrator appointed
60
and shall have no right to object if the arbitrator so appointed was on the list
submitted by the AAA and was not objected to in accordance with Rule E-5(b);
(iii) the Notice of Hearing referred to in Rule E-5(c) shall be four (4) days in
advance of the hearing; (iv) the hearing shall be held within five (5) days
after the appointment of the arbitrator; (v) the arbitrator shall have no right
to award damages on account of any unreasonable or allegedly unreasonable
withholding of any consent; and (vi) the decision and award of the arbitrator
shall be final and conclusive on the parties. Time shall be of the essence as to
the time periods set forth in this SECTION 44(a).
(b) No later than twenty four (24) hours prior to the scheduled
hearing, Landlord and Tenant shall each: (i) first, simultaneously submit to the
arbitrator and then (ii) second, simultaneously submit to the other party such
party's specific written proposal stating such party's last and final position
and proposed award. Each such written proposal may be accompanied by such data
and memoranda in support of the submitter's position as the submitter may deem
reasonably necessary or appropriate in the circumstances.
(c) The arbitrator shall within three (3) Business Days after the
hearing choose either (i) Landlord's position with respect to all individual
matters being arbitrated or (ii) Tenant's position with respect to all such
matters, in either case as set forth in the proposal described in this Section
44, whichever of the two considered in the aggregate ("i" or "ii") the
arbitrator believes is closer to the appropriate resolution of all such disputed
matters. The arbitrator shall have no authority to establish or impose any
solution or remedy other than "i" or "ii" and may not combine elements of "i"
and "ii" to produce a hybrid award.
(d) It is expressly understood that the decision of any arbitrator in
accordance with this SECTION 44 shall be final and binding upon the parties
hereto and non-appealable. The arbitrator conducting any arbitration shall be
bound by the provisions of this Lease and shall not have the power to add to,
subtract from, or otherwise modify such provisions. Landlord and Tenant agree to
sign all documents and to do all other things necessary to submit any such
matter to arbitration and further agree to, and hereby do, waive any and all
rights they or either of them may at any time have to revoke their agreement
hereunder to submit to arbitration and to abide by the decision rendered
thereunder which shall be binding and conclusive on the parties and shall
constitute an "award" by the arbitrator within the meaning of the AAA rules and
applicable Laws.
(e) The arbitrator shall be a qualified, disinterested and impartial
person who shall have had at least ten (10) years experience in New York City in
a calling connected with the matter of the dispute. Each party hereunder shall
pay its own costs, fees and expenses in connection with any arbitration brought
under this Article, and the expenses and fees of the arbitrators selected shall
be shared equally by Landlord and Tenant, but each party shall bear the expense
of its own attorneys and experts.
61
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of
the day and year first above written.
LANDLORD:
0000 Xxxx Xxxxxx LP
-----------------------------,
a Delaware limited partnership
------------------------------
By: /s/ XXXXXXX XXXXX
------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and Managing Member
TENANT:
SOTHEBY'S, INC.,
a New York corporation
-------------------------------
By: /s/ XXXXXXX X. XXXXXXXX
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 36
ONLY:
SOTHEBY'S HOLDINGS, INC.,
a Michigan corporation
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
62
SCHEDULE A
DESCRIPTION OF LAND
ALL the certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York, bounded and described
as follows:
BEGINNING at the corner formed by the intersection of the easterly side of York
Avenue (formerly Avenue A) and the southerly side of 00xx Xxxxxx; running thence
in a southerly direction along the easterly side of York Avenue 204 feet 4
inches to the corner formed by the intersection of the easterly side of York
Avenue and the northerly side of 00xx Xxxxxx; running thence in an easterly
direction along the northern side of 71st Street, 198 feet; thence in a
northerly direction and parallel with York Avenue 204 feet 4 inches to the
southerly side of 00xx Xxxxxx; and thence in a westerly direction along with
southerly side of 00xx Xxxxxx 198 feet to the point or place of BEGINNING.
SCHEDULE B
SCHEDULE OF BASE RENT
The "BASE RENTAL RATE" shall be the following:
Period Annual Rent
------ ------------
Commencement Date-> 3rd anniversary of the Commencement Date $18,025,000.00
3rd anniversary of the Commencement Date-> 6th anniversary
of the Commencement Date $19,286,750.00
6th anniversary of the Commencement Date-> 9th anniversary
of the Commencement Date $20,636,822.50
9th anniversary of the Commencement Date-> 12th anniversary
of the Commencement Date $22,081,400.08
12th anniversary of the Commencement Date-> 15th anniversary
of the Commencement Date $23,627,098.08
15th anniversary of the Commencement Date-> 18th anniversary
of the Commencement Date $25,280,994.95
18th anniversary of the Commencement Date-> 20th anniversary
of the Commencement Date $27,050,664.59
SCHEDULE C
FORM OF MEMORANDUM OF LEASE
[RFR ENTITY]
LANDLORD,
AND
SOTHEBY'S, INC.
TENANT.
------------------------------------------------------------------------
MEMORANDUM OF LEASE
------------------------------------------------------------------------
DATED AS OF FEBRUARY 7, 2003
THE PREMISES AFFECTED BY THE WITHIN INSTRUMENT LIES IN XXX XXXX
XX XXX XXXX, XXXXXX XX XXX XXXX, XXXXX OF NEW YORK
ADDRESS OF PROPERTY: 0000 XXXX XXXXXX
XXX XXXX, XXX XXXX 00000
LOT: 1
BLOCK: 1483
RECORD AND RETURN TO:
XXXXX, DAY, XXXXXX & XXXXX
000 XXXX 00xx XXXXXX
XXX XXXX, XXX XXXX 00000
ATTENTION: XXXXXXX X. XXXXX, ESQ.
MEMORANDUM OF LEASE
PURSUANT TO SECTION 291-C OF
THE REAL PROPERTY LAW OF THE STATE OF NEW YORK
DATE OF EXECUTION OF LEASE: February 7, 2003
NAME AND ADDRESS OF LANDLORD: 0000 Xxxx Xxxxxx L.P.
c/o RFR Holding LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
NAME AND ADDRESS OF TENANT: Sotheby's, Inc.
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DESCRIPTION OF DEMISED PREMISES: All of the land and the improvements thereon
known by the street address 0000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx in the Borough of
Manhattan, City, County and State of New
York, as more particularly described on
SCHEDULE A attached hereto and made a part
hereof.
EXPIRATION OF LEASE: February 28, 2023
RENEWAL OPTIONS: Tenant has the right to extend the term of
the Lease two consecutive times, each for a
ten year term, by written notice to Landlord
prior to the end of the then current term, as
more particularly provided in the Lease.
MEMORANDUM OF LEASE: This instrument, executed in connection with
the Lease, is intended to be and is entered
into as a memorandum thereof for the purpose
of recordation and the giving of notice of
the tenancy created by the Lease and of the
rights and obligations of Landlord and Tenant
thereunder, and shall not, in any event, be
construed to change, vary, modify or
interpret the Lease or any of the terms,
covenants or conditions thereof, or any part
thereof, which are set forth, described or
summarized herein and reference is hereby
made to the Lease for any and all purposes.
All of the terms, covenants and conditions
contained in the
-1-
Lease are hereby incorporated herein by
reference with like effect as if set forth
herein verbatim.
SUBORDINATION: This Memorandum of Lease shall be subject and
subordinate to all fee mortgages and all
renewals and modifications thereof, subject
to and in accordance with Section 15 of the
Lease.
COUNTERPARTS: This Memorandum of Lease may be executed in
counterparts, any one of which or all of
which shall be deemed one and the same
agreement.
[SIGNATURE PAGE FOLLOWS]
-2-
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum
of Lease as of this 6th day of February, 2003.
LANDLORD: 0000 XXXX XXXXXX L.P., a Delaware
limited partnership
By: /s/ XXXXXXX XXXXX
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President and
Managing Member
TENANT: SOTHEBY'S, INC., a New York corporation
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
-0-
XXXXX XX XXX XXXX )
COUNTY OF NEW YORK ) ss.:
On the 5th day of February in the year 2003 before me, the undersigned,
personally appeared Xxxxxxx Xxxxx, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
Xxx Xxxxx
----------------------------
Signature and Office of individual
taking acknowledgment
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss.:
On the 6th day of February in the year 2003 before me, the undersigned,
personally appeared Xxxxxxx X. Xxxxxxxx, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
Xxxxxx Xxxxxx
----------------------------
Signature and Office of individual
taking acknowledgment
-4-
SCHEDULE A
LEGAL DESCRIPTION
ALL the certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York, bounded and described
as follows:
BEGINNING at the corner formed by the intersection of the easterly side of York
Avenue (formerly Avenue A) and the southerly side of 00xx Xxxxxx; running thence
in a southerly direction along the easterly side of York Avenue 204 feet 4
inches to the corner formed by the intersection of the easterly side of York
Avenue and the northerly side of 00xx Xxxxxx; running thence in an easterly
direction along the northern side of 71st Street, 198 feet; thence in a
northerly direction and parallel with York Avenue 204 feet 4 inches to the
southerly side of 00xx Xxxxxx; and thence in a westerly direction along the
southerly side of 00xx Xxxxxx 198 feet to the point or place of BEGINNING.
SCHEDULE D
FORM OF TENANT NON-DISTURBANCE AGREEMENT
6
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the
"AGREEMENT") is made as of this 7th day of February, 2003, which date shall
be the effective date of this Agreement, between Sotheby's, Inc., a New York
corporation (the "TENANT") and BANK OF AMERICA, N.A., a national banking
association, a wholly owned subsidiary of BankAmerica Corporation, and having
its principal offices in Charlotte, North Carolina (together with its
successors and/or assigns the "Lender").
The Tenant is the lessee under the lease described in EXHIBIT A
attached hereto (as the same may from time to time be assigned, subleased,
renewed, extended, amended, modified or supplemented, collectively the "LEASE").
The Lender has previously made or is about to make a loan to 0000
Xxxx Xxxxxx L.P., a Delaware limited liability company or its successor
and/or assigns with respect to the landlord's interest under the Lease (the
"Landlord"), evidenced by a promissory note in the original principal amount
of approximately $129,500,000 executed by the Landlord and payable to the
Lender and secured by a first priority deed of trust, mortgage or deed to
secure debt on certain real and personal property and improvements (the
"PREMISES"), recorded or to be recorded in the appropriate records of New
York County, New York (the "SECURITY INSTRUMENT").
The Lender has requested the Tenant to confirm the fact that the Lease
is subject and subordinate to the Security Instrument.
The Tenant is willing to confirm the subordination of the Lease,
provided it obtains assurance from the Lender that its possession of the
premises demised under the Lease (the "DEMISED PREMISES"), which Demised
Premises is all or a portion of the Premises, and its right to use any common
areas will not be disturbed by reason of or in the event of the foreclosure of
the Security Instrument.
The Lender is willing to give such assurance.
NOW, THEREFORE, for and in consideration of the mutual agreements
herein contained and other good and valuable consideration, the parties hereto
do hereby mutually covenant and agree as follows:
1. (a) The Tenant hereby subordinates the Lease and all terms and
conditions contained therein and all rights, options, liens and charges created
thereby to the lien of the Security Instrument, and to all present or future
advances under the obligations secured thereby and to all renewals, extensions,
amendments, modifications and/or supplements of same, to the full extent of all
amounts secured thereby from time to time.
7
(b) Lender hereby consents to the execution and delivery of
the Lease by Landlord and, subject to the applicable terms and conditions
hereof, Lender agrees to recognize all of Tenant's rights, remedies and options
under and as described in the Lease which may be exercised in accordance with
the terms of the Lease without Lender's consent.
2. So long as no event of default on the part of the Tenant under
the Lease shall exist which would entitle the Landlord to terminate the Lease,
or if such an event of default shall exist, so long as the Tenant's time to cure
the default shall not have expired, the term of the Lease shall not be
terminated or modified in any respect whatsoever and the Tenant's right of
possession to the Demised Premises and its rights in and to any common areas and
its other rights arising out of the Lease will all be fully recognized and
protected by the Lender and shall not be disturbed, canceled, terminated or
otherwise affected by reason of the Security Instrument or any action or
proceeding instituted by the Lender to foreclose the Security Instrument, or any
extension, renewal, consolidation or replacement of same, or other exercise of
Lender's rights and remedies under the Security Instrument, irrespective of
whether the Tenant shall have been joined in any action or proceeding.
3. In the event that the Lender takes possession of the Premises,
either as the result of foreclosure of the Security Instrument or accepting a
deed to the Premises in lieu of foreclosure, or otherwise, or the Premises shall
be purchased at such a foreclosure by a third party unaffiliated with Landlord,
the Tenant shall attorn to the Lender or such third party and recognize the
Lender or such third party as its landlord under the Lease, and the Lender or
such third party will recognize and accept the Tenant as its tenant thereunder,
whereupon, the Lease shall continue in full force and effect as a direct lease
between the Lender or such third party and the Tenant for the full term thereof,
together with all extensions and renewals thereof, and the Lender or such third
party shall thereafter assume and perform all of the Landlord's obligations, as
the landlord under the Lease with the same force and effect as if the Lender or
such third party were originally named therein as the Landlord; provided,
however, that the Lender or such third party unaffiliated with Landlord shall
not be:
(a) liable for any act or omission of any prior landlord (including
the Landlord), except to the extent the Lender was furnished notice and
opportunity to cure the same in accordance with the provisions of this Agreement
prior to taking possession of such Premises; or
(b) subject to any offsets or defenses which the Tenant might have
against any prior landlord (including the Landlord), except to the extent the
Lender was furnished notice and opportunity to cure the same in accordance with
the provisions of this Agreement prior to taking possession of such Premises; or
(c) bound by any rent or additional rent which the Tenant might have
paid for more than two (2) months in advance to any prior landlord (including
the Landlord); or
(d) bound by any amendment or modification of the Lease not consented
to in writing by the Lender (excluding any amendment or modification reflecting
the exercise by Landlord or Tenant of any right or option contained in the Lease
in accordance with the applicable terms and provisions thereof).
8
Except as expressly and specifically set forth above, nothing
contained in this paragraph 3 shall diminish any of Landlord's obligations under
the Lease.
4. Notwithstanding anything to the contrary in this Agreement or
otherwise, in the event the Lender or a third party takes possession of the
Premises as provided in paragraph 3 above, the personal liability of the Lender
or such third party under the Lease shall be limited to the Lender's or such
third party's, as the case may be, interest in the Premises, and upon any
assignment or other transfer of the Lender's or such third-party's interest in
the Premises, the Lender or such third party, as applicable, shall be discharged
and released from any obligation or liability under the Lease arising or
accruing after the date of such assignment or transfer.
5. Except as Tenant may be required to do under the Lease, Tenant
agrees not to subordinate the Lease to any other lien or encumbrance which (i)
affects the Premises under the Lease, or any part thereof, or (ii) is junior to
the Security Instrument, without the express written consent of the Lender, and
any such subordination or any such attempted subordination or agreement to
subordinate without such consent of Lender, shall be void and of no force and
effect. The foregoing provision shall not affect Tenant's right under the Lease
to encumber its interest in the Lease and, except as expressly and specifically
set forth in the Lease, no consent of Lender shall be required in connection
with such encumbrance.
6. Tenant agrees to provide copies of all notices given
Landlord under the Lease to the following parties at the following addresses:
Lender: Bank of America, N.A.
Capital Markets Servicing Group
000 Xxxxx Xxxxxx Xxxxxx
6th Floor
CA9-703-04-42
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Servicing Manager
Telephone No: (000) 000-0000
Fascimile No: (000) 000-0000
With a copy to: Bank of America Legal Department
GCIB/CMBS
NC1-007-20-01
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fascimile No: (000) 000-0000
or to such other address as such parties shall designate in writing; and all
such notices shall be in writing and shall be considered as properly given if
(i) mailed to the addressee by first class United States mail, postage prepaid,
registered or certified with return receipt requested, (ii) by delivering same
in person to the addressee, or (iii) by delivery to a third party commercial
delivery service for same day or next day delivery to the office of the
addressee with proof of delivery; any notice so given shall be effective, as
applicable, upon (a) the third (3rd) day following the day such notice is
deposited with the United States mail, (b) delivery to the addressee, or (c)
upon delivery to such third party delivery service; and any notice given in any
other manner shall be effective only if and when received by the addressee.
7. In the event Landlord shall fail to perform or observe any of the
terms, conditions or agreements in the Lease, Tenant shall give written notice
thereof to Lender and Lender shall have the right (but not the obligation) to
cure such default. Except in the case of an emergency, Tenant shall not take any
action with respect to such default under the Lease (including without
limitation any action in order to terminate, rescind or avoid the Lease or to
withhold any rent or other monetary obligations thereunder) for a period of
thirty (30) days following receipt of written notice by Lender that it intends
to cure such default; provided, however, that in the case of any default which
cannot with diligence be cured within such thirty (30) day period, if Lender
9
proceeds to promptly to cure such default or thereafter prosecutes the curing of
such default with diligence and continuity, then the time within which such
default may be cured shall be extended for such period as may be reasonably
necessary to complete the curing of such default with diligence and continuity.
8. Nothing contained in this Agreement shall in any way impair or
affect the lien created by the Security Instrument, except as specifically set
forth herein.
9. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, including,
without limitation, any subtenant, assignee or leasehold mortgagee of Tenant
permitted pursuant to the applicable terms and conditions of the Lease;
provided, however, that in the event of the assignment or transfer of the
interest of the Lender to a party that assumes the Lender's obligations and
liabilities hereunder, all obligations and liabilities of the Lender under this
Agreement shall terminate, and thereupon all such obligations and liabilities
shall be the responsibility of the party to whom the Lender's interest is
assigned or transferred.
10. In the event of any litigation or other legal proceeding arising
between the parties to this Agreement, whether relating to the enforcement of a
party's rights under this Agreement or otherwise, the prevailing party shall be
entitled to receive its reasonable attorney's fees and costs of suit from the
non-prevailing party in such amount as the court shall determine.
11. Tenant hereby acknowledges and agrees Lender is a "Fee
Mortgagee" (as such term is defined in Section 15(a) of the Lease) and the
Security Instrument is a "Mortgage" (as such term is defined in Section 15(a)
of the Lease), and all provisions relating to "Fee Mortgagees" and
"Mortgages" under the Lease shall be deemed to relate to Lender and the
Security Instrument. Pursuant to Section 39 of the Lease, Lender agrees that
Lender shall not unreasonably withhold, condition or delay Lender's consent
to a Leasehold Mortgage provided that the conditions set forth in Section 39
related thereto have been satisfied (including, without limitation, the
conditions set forth in clauses (i) through (iii) thereof).
12. This Agreement may be executed in several counterparts, each
of which counterparts, shall be deemed an original instrument and all of
which shall constitute a single agreement.
[NO FURTHER TEXT ON THIS PAGE]
10
IN WITNESS WHEREOF the undersigned have executed this Agreement as of
the date and year first written above.
WITNESS/ATTEST: TENANT:
Xxxxxx English Sotheby's Inc., a New York corporation
------------------------- --------------------------------------
WITNESS/ATTEST: By: /s/ XXXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------
Title: Executive Vice President
------------------------- -----------------------------
WITNESS/ATTEST: LENDER:
BANK OF AMERICA, N.A., a national
banking association
-------------------------
WITNESS/ATTEST:
By: /s/ XXXX XXXXXX
---------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Principal
------------------------- -------------------------------
11
ACKNOWLEDGED AND AGREED:
WITNESS/ATTEST: GUARANTOR:
SOTHEBY'S HOLDINGS, INC., a Michigan
Xxxxxx English corporation
------------------------- --------------------------------------
WITNESS/ATTEST: By: /s/ XXXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------
Title: Executive Vice President
------------------------- -----------------------------
WITNESS/ATTEST: LANDLORD:
0000 XXXX XXXXXX L.P., a Delaware
limited partnership
-------------------------
By: 1334 XX XX LLC, a Delaware
liability company,
WITNESS/ATTEST:
limited By: /s/ XXXXXXX XXXXX
its general partner ---------------------------------
Name: Xxxxxxx Xxxxx
-------------------------------
Title: Managing Member and Vice
President
------------------------- -------------------------------
00
XXXXX XX XXX XXXX )
SS:
COUNTY OF NEW YORK )
On the 6th day of February, in the year 2003 before me, the
undersigned, personally appeared Xxxxxxx X. Xxxxxxxx, the Executive Vice
President of Sotheby's, Inc., personally known to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
/s/ JULIAN ENTER
---------------------------
Notary Public
13
STATE OF NEW YORK )
ss:
COUNTY NEW YORK )
On the 4th day of February, in the year 2003 before me, the undersigned,
personally appeared Xxxx Xxxxxx, the Principal of Bank of America, N.A.,
personally known to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged
to me that he/she executed the same in his/her capacity, and that by his/her
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
/s/ XXXXXXXX XXXXX
---------------------
Notary Public
00
XXXXX XX XXX XXXX )
ss:
COUNTY NEW YORK )
On the 6th day of February, in the year 2003 before me, the undersigned,
personally appeared Xxxxxxx X. Xxxxxxxx, the Executive Vice President of
Sotheby's Holdings, Inc. personally known to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he/she executed the same in his/her capacity, and
that by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.
/s/ XXXXXX XXXXXX
---------------------
Notary Public
00
XXXXX XX XXX XXXX )
ss:
COUNTY NEW YORK )
On the 4th day of February, in the year 2003 before me, the undersigned,
personally appeared Xxxxxxx Xxxxx, the Managing Member and Vice President of
1334 XX XX LLC, the general partner of 0000 Xxxx Xxxxxx L.P., personally known
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
/s/ XXX XXXXX
---------------------
Notary Public
16
EXHIBIT A
LEASE
That certain lease, dated as of the date hereof, by and among Sotheby's,
Inc., as tenant, and 0000 Xxxx Xxxxxx, as landlord, relating to the Premises
generally described as 0000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx together with
that certain Guaranty of Lease dated as of the date hereof executed by
Sotheby's Holdings, Inc. as each of the same assigned, subleased, renewed,
extended, amended, modified or supplemented from time to time, collectively,
the Lease).
SCHEDULE E
FORM OF GUARANTY
GUARANTY OF LEASE
GUARANTY (this "GUARANTY") made as of this day of this 7th day of
February 2003, by SOTHEBY'S HOLDINGS, INC., a Michigan corporation having an
address at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
("GUARANTOR") to [RFR Entity], a Delaware limited partnership having an
address at c/o RFR Holding LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
("LANDLORD").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS Guarantor has requested Landlord to enter into a lease with
Sotheby's, Inc., as tenant ("TENANT"), dated as of the date hereof (such lease,
together with any modifications, amendments, extensions and renewals being
collectively called the "LEASE"), with respect to that certain parcel of real
property located in the City of New York, State of New York, as is more
particularly described in SCHEDULE A attached hereto and by this reference made
a part hereof, together with the buildings and other improvements now or
hereafter located thereon (capitalized terms not otherwise defined herein have
the meanings specified in the Lease); and
WHEREAS, Landlord has refused to enter into the Lease unless Guarantor
guaranties the performance by Tenant of all of the terms, covenants, conditions,
obligations and agreements contained in the Lease on the part of Tenant to be
performed thereunder (collectively, the "COVENANTS"), subject to and in
accordance with the terms of this Guaranty.
NOW, THEREFORE, Guarantor agrees with Landlord as follows:
1. Guarantor unconditionally guaranties to Landlord the prompt
payment when due of the rent, additional rent and other charges payable under
the Lease and full and faithful performance and observance of any and all
Covenants (including, without limitation, the indemnity contained in Section 11
of the Lease); and Guarantor unconditionally covenants to Landlord that if
default or breach shall at any time be made by Tenant in the Covenants to pay
rent and additional rent or any other charges payable under the Lease or in the
performance of any of the other Covenants, and notice of any such default or
breach shall have been given by Landlord to Tenant and Tenant shall not have
cured such default or breach within the grace period, if any, provided for in
the Lease, Guarantor shall well and truly perform the Covenants, and pay said
rent, additional rent or other charges or arrears thereof that may remain due
thereon to Landlord, and also all damages that may arise in consequence of the
non-performance of the Covenants, or any of them, or as the result of the breach
of any of the conditions of limitation set forth in Section 19 of the Lease,
including, without limitation, all damages stipulated in Section 19(b) of the
Lease; PROVIDED, HOWEVER, that Guarantor shall not have any liability in
connection with this Guaranty or the Lease for any consequential or indirect
damages (except to the extent that Tenant incurs liability for such
consequential or indirect damages pursuant to SECTION 21(b) of the Lease).
Guarantor shall pay to Landlord on demand (or if Guarantor is not an Affiliate
of Tenant, within ten (10) days after written notice to Guarantor) all expenses
(including, without
limitation, Landlord's reasonable out-of-pocket attorneys' fees and
disbursements) of, or incidental to, or relating to the enforcement or
protection of Landlord's rights hereunder or under the Lease.
2. The liability of Guarantor hereunder shall not be impaired,
abated, deferred, diminished, modified, released, terminated or discharged, in
whole or in part, or otherwise affected, by any event, condition, occurrence,
circumstance, proceeding, action or failure to act, with or without notice to,
or the knowledge or consent of, Guarantor, including, without limitation:
(a) any amendment, modification or extension of the Lease or any
Covenant;
(b) any extension of time for performance, whether in whole or
in part, of any Covenant given prior to or after default thereunder;
(c) any exchange, surrender or release, in whole or in part, of
any security which may be held by Landlord at any time for or under the Lease;
(d) any other guaranty now or hereafter executed by Guarantor or
anyone else;
(e) any waiver of or assertion or enforcement or failure or
refusal to assert or enforce, in whole or in part, any covenant, claim, cause of
action, right or remedy which Landlord may, at any time, have under the Lease or
with respect to any Guarantee or any security which may be held by Landlord at
any time for or under the Lease or with respect to Tenant;
(f) any act or thing or omission or delay to do any act or thing
which may in any manner or to any extent vary the risk of Guarantor or which
would otherwise operate as a discharge of Guarantor as a matter of law;
(g) the release of any other guarantor from liability for the
performance or observance of any Covenant, whether by operation of law or
otherwise;
(h) Landlord's consent to any assignment or subletting or the
assignment or successive assignments of the Lease by Tenant, or any subletting
of the premises demised under the Lease by Tenant;
(i) the failure to give Guarantor any notice whatsoever;
(j) any right, power or privilege that Landlord may now or
hereafter have against any person, entity or collateral;
(k) any assignment, conveyance, mortgage, merger or other
transfer, voluntary or involuntary (whether by operation of law or otherwise),
of all or any part of Tenant's interest in the Lease, including, without
limitation, any assumption of the Lease by Guarantor pursuant to Section 6
hereof or the occurrence of any such assignment, conveyance,
mortgage, merger or other voluntary or involuntary transfer which results in
Guarantor becoming the tenant under the Lease; or
(l) any assignment, conveyance, mortgage, merger or other
transfer, voluntary or involuntary (whether by operation of law or otherwise) of
all or part of the interest or rights of Landlord under the Lease.
If any agreement between Landlord and Tenant shall extend the
time of performance or modify any of the Covenants, Guarantor shall continue to
be liable upon this Guaranty according to the tenor of any such agreement.
Notwithstanding the foregoing, to the extent that Guarantor is not an Affiliate
of Tenant, Guarantor shall not be bound to the extent any amendment,
modification, extension or waiver with respect to an unaffiliated Tenant
increases Guarantor's obligations hereunder; PROVIDED, that the exercise by any
such unaffiliated Tenant of any Extension Option under the Lease shall not be
deemed to be an amendment, modification, extension or waiver thereof.
3. To charge Guarantor under this Guaranty no demand shall be
required, Guarantor hereby expressly waiving any such demand; PROVIDED, HOWEVER,
that to the extent that Guarantor is not an Affiliate of Tenant (pursuant to any
assignment of Tenant's interest in the Lease made in accordance with the
provisions set forth in SECTIONS 17(d),(j),(k),(m), and (s) of the Lease, any
charge to Guarantor under this Guaranty may be made by Landlord upon ten (10)
days prior written notice. Landlord shall have the right to enforce this
Guaranty without pursuing any right or remedy of Landlord against Tenant or any
other party, or any security Landlord may hold, it being intended that if there
occurs any breach or default by Tenant in the performance or observance of any
Covenant and notice of any such default or breach shall have been given by
Landlord to Tenant and Tenant shall have failed to cure such default or breach
within the grace period, if any, provided for in the Lease, or upon the
occurrence of any condition of limitation in the Lease, Guarantor shall be
obligated to Landlord as provided in this Guaranty. Landlord may commence any
action or proceeding based upon this Guaranty directly against Guarantor without
making Tenant or anyone else a party defendant in such action or proceeding. Any
one or more successive and/or concurrent actions may be brought hereon against
Guarantor either in the same action, if any, brought against Tenant and/or any
other party or in separate actions, as often as Landlord, in its sole
discretion, may deem advisable.
4. This Guaranty shall be binding upon Guarantor and its successors
and assigns, and shall inure to the benefit of and may be enforced by the
successors and assigns of Landlord or by any party to whom Landlord's interest
in the Lease or any part thereof, including the rents, may be assigned whether
by way of mortgage or otherwise. Wherever in this Guaranty reference is made to
either Landlord or Tenant, the same shall be deemed to refer also to the then
successor or assign of Landlord or Tenant.
5. Guarantor hereby expressly waives and releases (a) notice of the
acceptance of this Guaranty and notice of any change in Tenant's financial
condition; (b) the right to interpose any substantive or procedural defense of
the law of guarantee, indemnification or suretyship, except the defense of prior
payment or prior performance by Tenant (of the obligations which Guarantor is
called upon to pay or perform under this Guaranty) or any other defense that is
available and that Tenant is entitled to assert under the Lease); (c) all rights
and
remedies accorded by applicable law to guarantors or sureties, including
without limitation, any extension of time conferred by any law now or hereafter
in effect; (d) the right to trial by jury, in any action or proceeding of any
kind arising on, under, out of, or by reason of or relating, in any way, to this
Guaranty or the interpretation, breach or enforcement thereof; (e) the right to
interpose any defense (except as allowed under (b) above), set off or
counterclaim of any nature or description in any action or proceeding; and (f)
any right or claim of right to cause a marshalling of Tenant's assets or to
cause Landlord to proceed against Tenant and/or any collateral held by Landlord
at any time or in any particular order.
6. Without limiting Guarantor's obligations elsewhere under this
Guaranty, if Tenant, or Tenant's trustee, receiver or other officer with similar
powers with respect to Tenant, rejects, disaffirms or otherwise terminates the
Lease pursuant to any bankruptcy, insolvency, reorganization, moratorium or any
other law affecting creditors' rights generally, Guarantor shall automatically
be deemed to have assumed, from and after the date such rejection, disaffirmance
or other termination of the Lease is deemed effective, all obligations and
liabilities of Tenant under the Lease to the same extent as if Guarantor had
been originally named instead of Tenant as a party to the Lease and the Lease
had never been so rejected, disaffirmed or otherwise terminated. Guarantor, upon
such assumption, shall be obligated to perform and observe all of the Covenants
whether theretofore accrued or thereafter accruing and Guarantor shall be
subject to any rights or remedies of Landlord which may have theretofore accrued
or which may thereafter accrue against Tenant on account of any default under
the Lease, notwithstanding that such defaults existed prior to the date
Guarantor was deemed to have automatically assumed the Lease or that such rights
or remedies are unenforceable against Tenant by reason of such rejection,
dissaffirmance or other termination. Guarantor shall confirm such assumption in
writing at the request of Landlord upon or after such rejection, dissaffirmance
or other termination, but the failure to do so shall not affect such assumption.
Guarantor, upon the assumption of the Lease, shall have all of the rights of
Tenant under the Lease (to the extent permitted by law). Neither Guarantor's
obligation to make payment in accordance with this Guaranty nor any remedy for
the enforcement thereof shall be impaired, modified, changed, stayed, released
or limited in any manner by any impairment, modification, change, release,
limitation or stay of the liability of Tenant or its estate in bankruptcy or any
remedy for the enforcement thereof, resulting from the operation of any present
or future provision of the Bankruptcy Code of the United States or other statute
or from the decision of any court interpreting any of the same, and Guarantor
shall be obligated under this Guaranty as if no such impairment, stay,
modification, change, release or limitation had occurred.
7. (a) This Guaranty and all rights, obligations and liabilities
arising hereunder shall be construed according to the laws of the State of New
York. Guarantor hereby irrevocably submits, to the extent permitted by
applicable law, to the non-exclusive jurisdiction of (i) the United States
Courts for the Southern District of New York, or the courts of the State of New
York, in any action or proceeding arising out of or relating to this Guaranty,
and Guarantor hereby irrevocably agrees that all claims against it in respect of
such action or proceeding against Guarantor may be heard and determined in such
courts. Guarantor hereby appoints [PLEASE PROVIDE] as its attorney-in-fact and
agent in its name, place and stead to accept service of legal process in any
such action or proceeding in any court described above, and consents that
service of legal process in any such action or proceeding may be made upon it by
service upon [PLEASE PROVIDE]. To the extent permitted by applicable law,
Guarantor agrees that a final judgment
obtained in any court described above in any action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) Nothing in this SECTION 7 shall affect the right of Landlord
to serve legal process in any other manner permitted by law. Guarantor
hereby consents that service of process by registered or certified mail, return
receipt requested, addressed to Guarantor at the address hereinabove set forth
will be sufficient.
(c) To the extent that Guarantor has or hereafter may acquire
any immunity from jurisdiction of any such court referred to in CLAUSE (a)(i) or
(a)(ii) above or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, to the extent permitted by
applicable law, Guarantor hereby irrevocably waives such immunity in respect of
its obligations under this Guaranty.
(d) Guarantor hereby irrevocably waives, to the extent permitted
by applicable law, any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of FORUM NON CONVENIENS, that
Guarantor may now or hereafter have to the bringing of any such action or
proceeding in such respective courts referred to in CLAUSES (a)(i) and (a)(ii)
above.
8. Guarantor hereby waives any and all rights of subrogation (if
any) which it may have against Tenant as a result of actions taken or amounts
paid in connection with or relating to this Guaranty or to the Lease until all
of Guarantor's obligations hereunder are satisfied or Guarantor is released
pursuant to SECTION 16 below.
9. Guarantor represents and warrants to Landlord that as of the date
hereof:
(a) Guarantor has full power, authority and legal right to
execute, deliver, perform and observe this Guaranty, including, without
limitation, the payment of all moneys hereunder.
(b) The execution, delivery and performance by Guarantor of this
Guaranty have been duly authorized by all necessary corporate action.
(c) This Guaranty constitutes the legal, valid and binding
obligation of Guarantor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, and other laws affecting
creditors' rights generally, to moratorium laws from time to time in effect and
to general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
10. Guarantor shall not merge or consolidate with any corporation or
sell all or substantially all of its assets unless either (a) Guarantor shall be
the surviving corporation or (b) contemporaneously with such merger or
consolidation or sale, the surviving or purchasing corporation executes and
delivers to Landlord a guaranty of the Lease, substantially in the form and
substance of this Guaranty, together with reasonably satisfactory evidence of
the due authorization, execution, delivery, validity and binding effect thereof,
but whether or not such
execution and delivery shall take place the surviving or purchasing corporation
shall be bound by this Guaranty as if it had so executed and delivered such
guaranty.
11. If Landlord shall be obligated by reason of any bankruptcy,
insolvency or other legal proceeding to pay or repay to Tenant or to Guarantor
or to any trustee, receiver or other representative of either of them, any
amounts previously paid by Tenant or Guarantor pursuant to the Lease or this
Guaranty, Guarantor shall reimburse Landlord for any such payment or repayment
and this Guaranty shall extend to the extent of such payment or repayment made
by Landlord, except to the extent, if any, that such payment or repayment is
prohibited by law or that such payment or repayment constitutes merely a
reimbursement of any overpayment. Landlord shall not be required to litigate or
otherwise dispute its obligation or make such payment or repayment if in good
faith and on written advice of counsel Landlord believes that such obligation
exists.
12. Landlord and Guarantor shall each, at any time and from time to
time, within ten (10) business days following request by the other, execute,
acknowledge and deliver to the other a statement certifying that this Guaranty
is unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating such
modifications) and that to the best of the certifying party's knowledge,
Guarantor is not in default hereunder (or if there is such a default, describing
such default in reasonable detail).
13. All remedies afforded to Landlord by reason of this Guaranty or
the Lease, or otherwise available at law or in equity, are separate and
cumulative remedies and no one remedy, whether or not exercised by Landlord,
shall be deemed to be in exclusion of any other remedy available to Landlord and
shall not limit or prejudice any other legal or equitable remedy which Landlord
may have.
14. If any term, covenant, condition or provision of this Guaranty or
the application thereof to any circumstance or to Guarantor shall be invalid or
unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Guaranty or the application thereof to any circumstances or
to Guarantor other than those as to which any term, covenant, condition or
provision is held invalid or unenforceable, shall not be affected thereby and
each remaining term, covenant, condition and provision of this Guaranty shall be
valid and shall be enforceable to the fullest extent permitted by law.
15. Any notice hereunder shall be in writing and personally delivered
or sent by certified or registered mail, return receipt requested to Landlord or
Guarantor at their respective addresses hereinabove set forth or such other
address designated by Landlord or Guarantor by ten (10) days prior notice. Any
notice hereunder to be delivered to Guarantor by Landlord shall also delivered
to Tenant concurrently at the following address (or such other address
designated by Tenant by ten (10) days prior notice):
Sotheby's, Inc.
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Any notice shall be deemed given as of the date of delivery as indicated by
affidavit in case of personal delivery or by the return receipt in the case of
mailing; and in the event of failure to deliver by reason of changed address of
which no notice is given or refusal to accept delivery, as of the date of such
failure as indicated by affidavit or return receipt as aforesaid.
16. Notwithstanding anything in this Guaranty to the contrary,
Guarantor shall be released from its obligations hereunder (a) upon the
satisfaction of all of the conditions set forth in SECTIONS17(n)(2) or 17(n)(3),
as the case may be, and (b) only to the extent such obligations accrue on or
after the date of such release.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day
and year first above written.
SOTHEBY'S HOLDINGS, INC., a Michigan
corporation
By: XXXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
SCHEDULE A
The Leased Premises
ALL the certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York, bounded and described
as follows:
BEGINNING at the corner formed by the intersection of the easterly side of York
Avenue (formerly Avenue A) and the southerly side of 00xx Xxxxxx; running thence
in a southerly direction along the easterly side of York Avenue 204 feet 4
inches to the corner formed by the intersection of the easterly side of York
Avenue and the northerly side of 00xx Xxxxxx; running thence in an easterly
direction along the northern side of 71st Street, 198 feet; thence in a
northerly direction and parallel with York Avenue 204 feet 4 inches to the
southerly side of 00xx Xxxxxx; and thence in a westerly direction along with
southerly side of 00xx Xxxxxx 198 feet to the point or place of BEGINNING.
SCHEDULE F
GROUND FLOOR PLAN
EXHIBIT A
DEFINITIONS
For the purposes of this Lease, the following definitions shall be
applicable:
"BUSINESS DAYS" shall mean all days except Saturday, Sundays, New
Year's Day, Washington's Birthday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, the day following Thanksgiving, Christmas and any other days which
are either observed by both the federal and the state governments or by the
labor unions servicing the Improvements as legal holidays.
"DEFAULT RATE" shall mean the Interest Rate plus one percent (1%); but
in no event shall the "Default Rate" be a rate greater than the highest lawful
rate from time to time in effect.
"DIRECT COMPETITOR" shall mean any art or antiques auction house.
"EXCLUDED PROPERTY" shall mean (i) all art work located in the
Improvements, which art work is owned, leased or otherwise held, including on
consignment, by Tenant, its Affiliates or a client of Tenant, (ii) all fixtures,
furniture, furnishings, equipment, supplies, tools, machinery, security systems
(solely relating to Tenant's business as opposed to base building security
systems, if any), computer software or other personal property (such as trade
fixtures in, on, around or affixed to the Improvements) owned or leased by any
contractor or employee or any client of Tenant and its Affiliates or by a
subtenant of Tenant Named Herein, and (iii) all fixtures, furniture,
furnishings, equipment, supplies, tools, machinery, security systems (relating
to Tenant's business as opposed to base building security systems, if any),
computer software and other personal property (including, without limitation,
trade fixtures in, on, around or affixed to the Improvements) which is owned or
leased by Tenant or its Affiliates or otherwise used by Tenant or its Affiliates
solely in connection with the operation of Tenant's or its Affiliates' business
(in contradistinction to the operation of the Property), including, without
limitation, all specialized fixtures and equipment used by Tenant or its
Affiliates, such as, for example, audio-visual equipment.
"INSTITUTIONAL LENDER" shall mean a savings bank, a savings and loan
association, a commercial bank or trust company (whether acting individually or
in a fiduciary capacity), an insurance company organized and existing under the
laws of the United States or any state thereof, an opportunity fund, investment
banking, merchant banking or brokerage firm, a real estate investment trust
sponsored by an Institutional Lender (which is not another real estate
investment trust), a religious, educational or eleemosynary institution, a
union, federal, state, municipal or secular employee's welfare, benefit, pension
or retirement fund or any combination of Institutional Lenders; provided, that
each of the above entities shall qualify as an Institutional Lender within the
provisions of this Section only if it shall (a) be subject, or submit itself, to
the jurisdiction of the courts of the State of New York in any actions arising
out of this Lease, (b) be subject to the supervision of the Comptroller of the
Currency of the United States or the Insurance Department or the Banking
Department or the Comptroller of the State of New York, or the Comptroller of
New York City, or any federal, state or municipal agency or public benefit
corporation or public authority advancing or assuring mortgage loans or making
payments
which, in any manner, assist in the financing, development, operation and
maintenance of improvements, or, in the case of a secular employee's welfare,
benefit, pension or retirement fund, be the subject of a then current favorable
Determination Letter from the Internal Revenue Service pursuant to SECTIONS 401
AND 501 of the Internal Revenue Code, and (c) have net assets (combined with any
agency, department or Affiliate of the same) of not less than $250,000,000.
"INSURANCE REQUIREMENTS" shall mean all orders, rules, regulations,
requirements or policies of any board of fire underwriters, fire rating
organization, insurance rating organization or any other body exercising the
same or similar functions to the foregoing (collectively, "insurance rating
organizations") which have jurisdiction over, or otherwise make rates or
findings in respect of, all or any part of the Real Property.
"INTEREST RATE" shall mean an interest rate equal to two percent (2%)
above the so-called annual "Base Rate" of interest established and approved by
The Bank of New York, from time to time, as its interest rate charged for
unsecured loans to its corporate customers, but in no event greater than the
highest lawful rate from time to time in effect. In the event that the "Base
Rate" (or other term used for the rate currently called the "Base Rate") shall
cease to be established and approved by the Bank of New York, then Landlord
shall designate another nationally recognized banking organization that
establishes a "Base Rate".
"LANDLORD" shall mean only the owner, at the time in question, of the
Premises so that in the event of any transfer or transfers of title to the
Building, the transferor shall be and hereby is relieved and freed of all
obligations of Landlord under this Lease accruing after such transfer, and it
shall be deemed, without further agreement, that such transferee has assumed and
agreed to perform and observe all obligations of Landlord herein during the
period it is the holder of Landlord's interest under this Lease.
"LANDLORD PARTY" shall mean (1) any principal, partner, member,
officer, stockholder, director, employee or agent of Landlord or of any partner
or member of any partnership constituting Landlord, disclosed or undisclosed,
(2) any tenant of Landlord (other than Tenant) or any other party claiming by
through or under Landlord (including without limitation any concessionaire or
licensee and any subtenant or assignee of a tenant of Landlord other than Tenant
or a Tenant Party), and (3) any Fee Mortgagee or any principal, partner, member,
officer, stockholder, director, employee or agent thereof; and "LANDLORD
PARTIES" shall have the corresponding plural meaning.
"LAWS" shall mean all applicable laws, statutes and ordinances
(including codes, approvals, permits and zoning regulations and ordinances) and
the orders, rules, regulations, interpretations, directives and requirements of
all federal, state, county, city and borough departments, bureaus, boards,
agencies, offices, commissions and other subdivisions thereof, or of any
official thereof, or of any other governmental, public or quasipublic authority,
whether now or hereafter in force, including, but not limited to, NYC Local Laws
No. 5 of 1973, No. 16 of 1984 and No. 58 of 1988, each as amended from time to
time, and all laws, rules and regulations then in effect relating to asbestos
and to access for the handicapped and disabled.
"OCCUPANCY REQUIREMENT" shall mean the occupancy for its own use of
three (3) full floors of the Improvements; PROVIDED, that such floors may
include either (x) the portion of
the first floor of the Improvements (the "1ST FLOOR PORTION") shown by separate
shading on SCHEDULE F annexed hereto and made a part hereof (occupancy of which
area shall be deemed to be full occupancy of the full 1st floor) or (y) the 10th
floor of the Improvements; and FURTHER PROVIDED, that, at the applicable time of
determining the Occupancy Requirement, Tenant Named Herein has the present
intention of maintaining such occupancy and has no plans at such time to
relocate from any such occupied floors.
"PERSON" shall mean any natural person or persons, a partnership, a
corporation, and any other form of business or legal association or entity.
"PROHIBITED USE" shall mean any use or occupancy of the Premises in
violation of the then current certificate of occupancy issued for the
Improvements. Prohibited Use also includes the use of any part of the Premises
for: (A) the business of photocopying, multilith or offset printing; (B) a
school (it being understood that the ancillary use of portions of the Premises
for classroom and/or educational purposes relating to the type of business
conducted by a Tenant Party is expressly permitted); (C) lodging or sleeping
(except for any hospital use specifically permitted under the terms of this
Lease); (D) offices of any governmental authority, any foreign government, the
United Nations, or any agency or department of the foregoing; (E) any illegal
activity or any activity constituting a nuisance or (F) any obscene or
pornographic purposes (other than in connection with the first class art
business of Tenant Named Herein), any sort of commercial sex establishment, any
obscene, nude, or semi-nude live performances, as a so called rubber goods shop,
or as a sex club or any sort, or as a "massage parlor". Any dispute as to
whether a use is a Prohibited Use shall be resolved by arbitration in accordance
with SECTION 44 hereof.
"RECAPTURE OCCUPANCY REQUIREMENT" shall mean Tenant Named Herein's
occupancy for its own use of five (5) full floors of the Improvements (it being
understood that occupancy of the 1st Floor Portion shall be deemed to be full
occupancy of the full 1st FLOOR); PROVIDED, that, at the applicable time of
determining the Recapture Occupancy Requirement, Tenant Named Herein has the
present intention of maintaining such occupancy and has no plans at such time to
relocate from any such occupied floors.
"TENANT" shall mean the Tenant herein named or any assignee or other
successor in interest (immediate or remote) of Tenant Named Herein, which at the
time in question is the owner of Tenant's estate and interest granted by this
Lease; but the foregoing provisions of this definition shall not be construed to
permit any assignment of this Lease or to relieve Tenant herein named or any
assignee or other successor in interest (whether immediate or remote) of the
Tenant herein named from the full and prompt payment, performance and observance
of the covenants, obligations and conditions to be paid, performed and observed
by Tenant under this Lease.
"TENANT NAMED HEREIN" Sotheby's Inc. and any Affiliate of Guarantor.
"TENANT PARTY" shall mean (1) any principal, partner, member, officer,
stockholder, director, employee or agent of Tenant or of any partner or member
of any partnership constituting Tenant, disclosed or undisclosed, (2) any
subtenant of Tenant or any other party claiming by, through or under Tenant
(including without limitation any
concessionaire or licensee), or any principal, partner, member, officer,
stockholder, director, employee or agent of such subtenant or such other party,
or (3) any contractor, guest or invitee of any of the foregoing; and "TENANT
PARTIES" shall have the corresponding plural meaning.
"TENANT'S PROPERTY" shall mean the Excluded Property and Tenant's
movable fixtures and movable partitions, telephone and other equipment,
furniture, furnishings, decorations and other items of personal property,
expressly excluding Equipment (as such term is defined in SECTION 14 hereof).
"UNCOMMON CHANGE" shall mean (x) any Proposed Sotheby's Change that is
performed by Tenant and (y) any escalators or elevators installed after the date
hereof.
EXHIBIT B
EXISTING LEASES
1. Lease Agreement for Foodservice dated as of ________ __, ____, between
Sotheby's, Inc. and Tentation TPC Special Events Catering, Inc.
(Restaurant, cafe and other catering services.)
2. Agreement of Lease dated as of January _, 2002, between SIBS, LLC, as
Owner, and Sunrise Liquors & Wines, Inc., d/b/a Aulden Cellars, as Tenant.
(Wine store.)*
3. Lease Agreement dated as of October 2, 2000 by and between Omnipoint
Communications, Inc., as Tenant, and SIBS, LLC, as Landlord. (Antenna)
EXHIBIT C
AGREEMENTS
None
