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Exhibit 10.7.1
SECOND AMENDMENT OF LEASE
AGREEMENT made effective as of the 31st day of December, 1998, by and
between RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000,
(hereinafter called "Landlord"), and ENTEX INFORMATION SERVICES, INC., having
an office at 0 Xxxxxxxxxxxxx Xxxxx, Xxxxxxx (formerly "Royal") Xxxxxxxxx Xxxx,
Xxx Xxxxx, Xxx Xxxx 00000 (hereinafter called "Tenant").
RECITALS
WHEREAS, Royal Executive Park II, the predecessor-in-interest to Landlord,
and Tenant have entered into a Lease Agreement dated January 20, 1995 (the
"Original Lease") for the lease of certain premises (the "Leased Premises")
consisting of a portion of the ground floor in the building known as Reckson
Executive Park, Building 6, located in the Reckson (formerly "Royal") Executive
Park, Rye Brook, New York (the "Building"); and
WHEREAS, Royal Executive Park II, the predecessor-in-interest to Landlord,
and Tenant amended the Original Lease by entering into a First Amendment of
Lease dated October 18, 1995 (the "First Amendment" and, together with the
Original Lease, sometimes hereinafter collectively called the "Lease"),
whereby, among other things, the Expiration Date of the Original Lease was
extended to December 31, 1998; and
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WHEREAS, Landlord and Tenant desire to, among other things, amend the Lease
to further extend the term of the Lease for a period of three (3) years and five
(5) months to and including May 31, 2002.
NOW, THEREFORE, in consideration of the mutual premises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which being hereby acknowledged, the parties agree as follows:
ARTICLE I
Definitions
1.1 The recitals are specifically incorporated into the body of this
Agreement and shall be binding upon the parties hereto.
1.2 Unless expressly set forth to the contrary and except as modified by
this Agreement, all defined terms shall have the meanings as ascribed to them in
the Lease.
ARTICLE II
Lease Modifications
2.1 The Lease is hereby modified and amended as follows:
2.1.1 Lease of Premises. Landlord and Tenant hereby stipulate and agree
that the Leased Premises under the Lease contains 12,122 rentable square feet of
space.
2.1.2 Term. Article II, Section 2.01 of the Original Lease and Section 2
of the First Amendment are hereby modified and amended so as to further extend
the term of the Lease for a period
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of three (3) years and five (5) months to and including May 31, 2002. From and
after the date of this Agreement, all references to the term "Expiration Date"
under the Lease shall mean May 31, 2002.
2.1.3 Condition of Premises. Tenant hereby acknowledges that Landlord has
completed all work (if any) which it was obligated to perform under the Lease.
Tenant, therefore, also acknowledges that it is accepting the Leased Premises in
its "as is" condition and that Landlord shall have no obligation to perform any
work in or to the Leased Premises in order to prepare same for occupancy by
Tenant. Any alterations to be performed by Tenant in and to the Leased Premises
shall be subject to all of the terms, conditions and restrictions contained in
Article XI, Section 11.01 of the Original Lease.
2.1.4 Rental.
2.1.4.1 From the date of this Agreement through December 31, 1998,
the Annual Rental for the Leased Premises shall be payable in accordance with
Article IV of the Original Lease as modified by Section 3 of the First
Amendment.
2.1.4.2 Commencing on January 1, 1999 and continuing through the end
of the Term of the Lease, Annual Rental for the Leased Premises shall be payable
as follows:
During the period January 1, 1999 through and including December 31,
1999, the Annual Rental shall be in an amount equal to Two Hundred
Sixty-Six Thousand Six Hundred Eighty-Four and 04/100 ($266,684.04) Dollars
per annum, payable in equal monthly installments of Twenty-
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Two Thousand Two Hundred Twenty-Three and 67/100 ($22,223.67) Dollars;
During the period January 1, 2000 through and including December 31,
2000, the Annual Rental shall be in an amount equal to Two Hundred Ninety
Thousand Nine Hundred Twenty-Eight and 00/100 ($290,928.00) Dollars per
annum, payable in equal monthly installments of Twenty-Four Thousand Two
Hundred Forty-Four and 00/100 ($24,244.00) Dollars;
During the period January 1, 2001 through and including December 31,
2001, the Annual Rental shall be in an amount equal to Three Hundred Three
Thousand Fifty and 04/100 ($303,050.04) Dollars per annum, payable in equal
monthly installments of Twenty-Five Thousand Two Hundred Fifty-Four and
17/100 ($25,254.17) Dollars; and
During the period January 1, 2002 through and including May 31, 2002,
the Annual Rental shall be in an amount equal to One Hundred Twenty-six
Thousand Two Hundred Seventy and 85/100 ($126,270.85) Dollars for such five
(5) month period, payable in equal monthly installments of Twenty-Five
Thousand Two Hundred Fifty-Four and 17/100 ($25,254.17) Dollars.
2.1.4.3 Tenant acknowledges that the aforementioned Annual Rental is
exclusive of charges for Tenant's use of electric power in the Leased Premises,
which charges shall continue to be separately payable by Tenant in accordance
with Article V, Section 5.03 of the Original Lease, as amended by Section 6 of
the First Amendment.
2.1.5 Tenant Parking. Effective as of January 1, 1999, Section 13 of the
First Amendment shall be deleted in its entirety and, thereafter, Landlord shall
again only be required to provide Tenant with access to not less than forty (40)
non-exclusive parking spaces.
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2.1.6. NOTICES. Article XXI, Section 21.01 of the Original Lease is
hereby modified and amended by deleting the existing address for notices to
Landlord and replacing it with:
"Reckson Operating Partnership, L.P.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Director
with a copy to:
Lazer, Aptheker, Xxxxxxx, Xxxxxxx & Xxxxx, LLP
000 Xxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, Esq."
2.1.7. INVESTOR'S APPROVAL. Section 25.02 of the Original Lease is
hereby deleted in its entirety.
2.1.8. RENEWAL OPTION. Section 20 of the First Amendment is hereby
deleted in its entirety. However, provided Tenant has complied with all the
terms, covenants and conditions of the Lease and is not then in default
thereof, Tenant shall have the option to renew the Lease, with respect to the
entire Leased Premises, for one (1) additional five (5) year period (the
"Renewal Term") to commence on June 1, 2002 and to expire on May 31, 2007, upon
the following terms and conditions:
(i) Tenant shall give notice to Landlord, in writing, no later than
June 1, 2001 that such option is being exercised. The parties agree to then
negotiate the minimum annual rent for the Renewal Term (the "Minimum Annual
Renewal Rent"). The Minimum Annual Renewal Rent is intended to be ninety-five
(95%) percent of
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the then current fair market annual rental rate per square foot per year for the
Leased Premises as of the commencement of the Renewal Term. Upon determination
of the Minimum Annual Renewal Rent, the Lease shall be renewed for the Renewal
Term on the same terms, covenants and conditions as contained in this Lease,
except that (A) the Minimum Annual Renewal Rent shall be fixed in accordance
with the provisions of this Section, (ii) the Leased Premises shall be delivered
in its "as is" condition as of the first day of the Renewal Term and (iii) there
shall be no further option to renew.
(ii) If Landlord and Tenant have not mutually agreed upon the Minimum
Annual Renewal Rent by December 1, 2001, they shall each select one real estate
appraiser each of whom shall conduct a real estate appraisal and furnish a
report to indicate their opinion of the fair market rental of the Leased
Premises.
(iii) If, after a review of the appraisal reports prepared and submitted in
accordance with Article 52(ii), above, Landlord and Tenant have not agreed on
the Minimum Annual Renewal Rent by February 1, 2002, the matter shall
immediately be submitted to arbitration before the American Arbitration
Association ("AAA"), and shall be determined by a single arbitrator in
accordance with the provisions of this lease and the then applicable rules of
the AAA within the County of Westchester, or of the closest office of the AAA.
The arbitrator shall, in determining the Minimum Annual Renewal Rent, take into
consideration the then existing current
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fair market rental value of similar premises in the vicinity. The arbitrator
shall then, on an expedited basis, choose one of the determinations of the two
appraisers originally selected by the parties. The parties agree that the
decision and determination to be made by the arbitrator with respect to the
Minimum Annual Renewal Rent shall be final and binding upon Landlord and Tenant.
(iv) Notwithstanding anything to the contrary contained in this Section,
in no event shall the Minimum Annual Renewal Rent be less than the minimum
annual rental rate applicable to the last twelve (12) months of the current term
of the Lease.
(v) Landlord and Tenant shall each separately pay their respective
designated appraisers. The expenses, fees and charges in connection with the
arbitration process set forth in clause (iii), above, shall be borne equally
between Landlord and Tenant.
(vi) Upon agreement as to the Minimum Annual Renewal Rent by the parties
hereto or upon the Minimum Annual Renewal Rent being fixed by the arbitrator, as
the case may be, the parties hereto shall enter into a supplementary agreement
extending the term of the Lease as hereinabove provided. In the event of no
agreement between the parties or no decision by arbitration prior to May 31,
2002, Tenant shall pay an interim fixed rental at the minimum annual rental
rate last in effect until the arbitration shall have been completed after which
Landlord and Tenant shall make
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appropriate adjustment of such interim rent, such adjustment to be as of the
commencement date of the Renewal Term.
This option to renew shall be personal to Entex Information Services, Inc. and
shall not be transferrable by operation of law or otherwise.
2.1.9 Cross-Defaults. Supplementing the provisions of Article XIII,
Section 13.01 of the Original Lease and Section 24 if the First Amendment, any
monetary default (beyond applicable notice and cure periods) by Tenant under any
other lease or license agreement for premises in the Building or any other
building within the Reckson Executive Park shall constitute a default under the
Lease.
ARTICLE III
Broker
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3.1 Landlord and Tenant each represent to the other that this Second
Amendment of Lease was brought about by CB Xxxxxxx Xxxxx, Inc., as broker, and
all negotiations with respect to this Second Amendment of Lease were conducted
exclusively among Landlord, Tenant and said broker. Landlord and Tenant each
agrees that if any claim is made for commissions by any other broker through or
on account of any acts of the representing party, such party will hold the other
free and harmless from any and all liabilities and expenses in connection
therewith, including reasonable attorney's fees. Specifically, Landlord shall
indemnify
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and hold Tenant harmless from and against any claim for commissions made by The
Xxxxxxxxx Company or CB Xxxxxxx Xxxxx, Inc. Landlord shall pay to CB Xxxxxxx
Xxxxx, Inc. a renewal rate brokerage commission pursuant to a separate
agreement.
ARTICLE IV
RATIFICATION
4.1 Tenant represents and warrants that, to the best of its knowledge, the
Lease is presently in full force and effect, that no event of default has
occurred on the part of Landlord and that the Tenant has no defense or right of
offset in connection with Landlord's performance under the Lease to this date.
4.2 The parties hereby ratify and confirm all of the terms, covenants and
conditions of the Lease, except to the extent that those terms, covenants,
conditions are amended, modified or varied by this Agreement. If there is a
conflict between the provisions of the Lease, and the provisions of this
Agreement, the provisions of this Agreement shall control.
4.3 Landlord represents to Tenant that, as of the date of this Agreement,
there is no mortgage encumbering the Building in which the Leased Premises are
located.
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IN WITNESS WHEREOF, the parties have executed this Second Amendment to
Lease effective as of the day and year first above written.
RECKSON OPERATING PARTNERSHIP, L.P.
By: RECKSON ASSOCIATES REALTY CORP.,
its General Partner
Execution Date:
February , 1999 By: /s/
_______________________________
Execution Date: ENTEX INFORMATION SERVICES, INC.
February , 1999
By: /s/ Xxxx Xxxxxxxxxxx
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