AMENDMENT OF LEASE
This Amendment of Lease (this "Agreement"), dated as of the 30th
day of September, 1997, between XXXXXX TELEGRAPH ASSOCIATES, a New York
limited partnership, having an address x/x Xxxxxxxx Xxxx Xxxxxx Xx. Xxx., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Landlord") and STAR
TELECOMMUNICATIONS, INC., a Delaware corporation, having an address at 000
Xxxxx Xxxxxx, Xxxxx Xxxxxxx, XX 00000.
WITNESSETH:
WHEREAS:
A. Landlord and Star Vending, Inc., as Tenant was formerly known,
entered into a lease dated as of February 28, 1996 (the "Original Lease"), as
amended by amendment dated as of October 14, 1996 (the Original Lease, as so
amended, being referred to herein as the "Existing Lease") pursuant to which
Tenant leased portions of the 12th floor (the "Existing Premises") in the
building known as 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Building") for a
Term which is presently scheduled to expire on April 30, 2006.
B. On February 26, 1997, Star Vending, Inc. reincorporated in the
State of Delaware under the name Star Telecommunications, Inc. and
subsequently conducted an initial public offering of its common capital stock
(the "Offering").
C. Landlord and Tenant wish to increase the premises demised
under the Existing Lease by adding thereto the premises, located on the 13th
floor of the Building, shown hatched on Exhibit A annexed hereto (the "New
Premises"), to extend the Term of the Existing Lease, and to make certain
other changes in the Existing Lease.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter contained, Landlord and Tenant agree that the Existing
Lease is hereby amended as follows:
1. All terms contained in this Agreement shall, for the purposes
hereof, have the same meanings ascribed to them in the Original Lease unless
otherwise defined herein. As used herein, the term "Lease" shall mean the
Existing Lease as amended by this Agreement and as the same may be hereafter
amended.
2. Effective as of the "New Premises Date," as hereinafter
defined, the "premises" or "demised premises" shall be the Existing Premises
plus the New Premises. The New Premises Date is the date on which Landlord
delivers possession of the New
Premises to Tenant with all items of Landlord's Work (as hereinafter
defined), except the submeter installation and the window pane replacement,
substantially complete.
3. The Term of the Lease with respect to the entire demised premises
is extended to April 30, 2008.
4. Commencing on the New Premises Date, the annual Fixed Rent
payable under the Lease shall be increased to $578,179 per annum. On May 1,
2001, the annual Fixed Rent payable under the Lease shall be increased to
$600,277 per annum; on May 1, 2002, the annual Fixed Rent payable under the
Lease shall be increased to $630,377 per annum; and on May 1, 2006, the Fixed
Rent payable under the Lease shall be increased to $652,475 per annum.
Notwithstanding anything to the contrary contained herein, provided the Lease
is in full force and effect and Tenant is not in default thereunder beyond
any applicable notice and/or cure period, the Fixed Rent payable under the
Lease, as hereby increased, shall xxxxx by $28,845.83 per month from the New
Premises Date to but not including the later to occur of May 1, 1998 or the
date that is seven (7) months after the New Premises Date (such later date
being the "Rent Commencement Date"), as the same may be extended pursuant to
Paragraph 5(c) hereof.
5. (a) Landlord will, with reasonable diligence after the
execution and exchange of this Agreement, perform the Landlord's Work, all at
Landlord's expense except for the submeter and the installation thereof,
which will be at Tenant's expense. Upon substantial completion of such work
(except the submeter installation and the window pane replacement), Landlord
shall deliver to Tenant, and Tenant shall accept, the demised premises in
their then "as is" broom-clean condition. Tenant acknowledges that Landlord
shall not be required to perform any work to prepare the demised premises for
Tenant's occupancy except for the Landlord's Work. The taking of possession
of the demised premises by Tenant shall be conclusive evidence as against
Tenant that, at the time such possession was so taken, the demised premises
and the Building were in good and satisfactory condition and the Landlord's
Work was substantially complete, except for the submeter installation, the
window pane replacement and any punchlist items of which Tenant notifies
Landlord within thirty (30) days after the New Premises Date. Landlord will
install the submeter, replace the broken window panes and complete the
punchlist items with reasonable diligence after the New Premises Date (but
Landlord shall not be required to use overtime labor or incur other
additional expense to do so), and, in the case of the window pane
replacement, not later than the date on which Tenant's work is completed.
(b) The "Landlord's Work" consists of the following:
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(1) Complete demolition of the existing improvements
in the premises, except for floor tile;
(2) installation of a submeter at Tenant's expense,
which expense shall be reimbursed to Landlord within fifteen (15) days after
Landlord bills Tenant therefor;
(3) construction of a Building standard demising
wall and entrance door; and
(4) replacement of broken window panes.
(c) If the New Premises Date has not occurred by October 15,
1997 for any reason other than force majeure or other events beyond
Landlord's reasonable control, the Rent Commencement Date shall be delayed by
one day for each day of delay, beyond October 15, 1997, in the occurrence of
the New Premises Date. (Thus, for example, if the New Premises Date were
delayed until October 18, 1997 by reason of events other than force majeure
or events beyond Landlord's reasonable control, the Rent Commencement Date
would be May 21, 1998.) In addition, if the New Premises Date has not
occurred by January 1, 1998 for whatever reason, Tenant shall have the right,
to be exercised by notice to Landlord given no later than January 15, 1998,
as to which date time shall be of the essence, but in any event not after the
occurrence of the New Premises Date, to cancel this Agreement ab initio, in
which event the Existing Lease shall continue as if this Agreement had never
been made and Landlord will return to Tenant any amounts paid to Landlord
hereunder (to the extent allocable to the New Premises).
6. If any friable asbestos (not including asbestos floor tile, as to
which Landlord shall have no responsibility) is discovered in the New
Premises that is not the responsibility of Tenant as provided in the Lease
and is required by applicable Law to be removed or encapsulated, then, as
Tenant's sole remedy, Landlord will at Landlord's expense and with reasonable
promptness remove or encapsulate such asbestos in accordance with Law.
Landlord will deliver to Tenant with reasonable promptness after the New
Premises Date a Form ACP-5 for the premises.
7. It is the intention of the parties that additional rent payable by
Tenant pursuant to the Lease be calculated separately for the Existing
Premises and the New Premises, with the calculations for the Existing
Premises being made pursuant to the provisions of Articles 37, 39 and 40 of
the Existing Lease as unmodified by this Agreement and the calculations for
the New Premises being made pursuant to the provisions of Articles 37, 39 and
40 of the Existing Lease with the following modifications:
(a) "Base Tax Year" for the New Premises shall mean the tax fiscal
year July 1, 1997 - June 30, 1998.
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(b) "Base Year Taxes" for the New Premises shall mean the Real
Estate Taxes as finally determined for the Base Tax Year for the New Premises.
(c) "Subsequent Tax Year" for the New Premises shall mean any
tax fiscal year commencing on or after July 1, 1998.
(d) "Tenant's Proportionate Share" for the New Premises shall
mean 1.79%.
(e) "Base Operating Year" for the New Premises shall mean the
Operating Expenses incurred for 1997.
(f) "Operational Year" for the New Premises shall mean each
calendar year all or any part of which occurs during the Term commencing with
1998.
8. Effective as of the New Premises Date, Landlord shall furnish,
for Tenant's use in the New Premises, fifteen (15) xxxxx per rentable square
foot of electric current at 120/208 volts, three phase, at a panel box in the
New Premises, upon and subject to the terms and conditions provided in
Article 42 of the Lease. If at any time during the Term, whether before or
after Tenant's power for the New Premises is increased or decreased, Landlord
reasonably determines that Tenant is not using any portion of the electric
capacity then servicing the New Premises, then Landlord shall have the right
to recapture any such power not then being used by Tenant without
compensation to Tenant. (If, with respect to the New Premises, Landlord
recaptures a portion of Tenant's original fifteen (15) xxxxx per rentable
square foot, and at a later date Landlord provides Tenant with additional
current, Tenant shall only be required to pay the per amp charge set forth in
the Original Lease for total current in excess of fifteen (15) xxxxx per
rentable square foot. As set forth in the Existing Lease, if, with respect
to the Existing Premises, Landlord recaptures a portion of Tenant's original
ten (10) xxxxx per rentable square foot, and at a later date Landlord
provides Tenant with additional current, Tenant shall only be required to pay
the per amp charge set forth in the Original Lease for total current in
excess of ten (10) xxxxx per rentable square foot.) Tenant's consumption of
energy in the New Premises will be measured by one or more submeters to be
installed by Landlord at Tenant's expense. Anything in the Lease to the
contrary notwithstanding, if the New Premises Date occurs prior to the
installation and proper calibration of the submeter(s), then (i) Tenant shall
pay Landlord for Tenant's consumption of electricity in the New Premises at
the rate of $1,881.25 per month during any period when construction is taking
place in the New Premises; and (ii) from and after the date on which Tenant
occupies all or a portion of the demised premises for the conduct of business
and until the installation and proper calibration of the submeter(s), Tenant
shall pay Landlord $3,762.50 per month on
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account, such payments to be retroactively adjusted based on the average
kilowatts and kilowatt hours consumed over the first three (3) months after
installation and proper calibration of the submeter(s).
9. Simultaneously with the execution of this Agreement, Tenant has
delivered to Landlord a check subject to collection in the amount of $86,537.00,
increasing the amount of the Security Deposit to $172,935.00. Provided that
Tenant is not then in default, Tenant will be permitted to reduce the amount of
the Security Deposit by $57,691.00 on the third (3rd) anniversary of the Rent
Commencement Date. If the Security Deposit is in cash, Landlord will pay to
Tenant the amount of any applicable reduction within fifteen (15) business days
after Tenant's request therefor accompanied by the required certification. If
the Security Deposit is a Letter of Credit, Landlord will accept a Letter of
Credit in the proper reduced amount in exchange for the existing Letter of
Credit, or will enter into an amendment of the Letter of Credit reducing the
amount thereof to the proper reduced amount.
10. The covenants, agreements, terms and conditions contained in this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors, and, except as otherwise provided in the Lease, their
respective assigns.
11. Except as amended by this Agreement, the Existing Lease and all
covenants, agreements, terms and conditions thereof shall remain in full force
and effect and the Existing Lease, as so amended, is hereby in all respects
ratified and confirmed.
12. Landlord and Tenant each covenants, represents and warrants to
the other that it has had no dealings or communications with any broker or
agent in connection with the consummation of this Agreement other than
Xxxxxxxx Real Estate Co. Inc. (representing Landlord) and Xxxxxxx &
Xxxxxxxxx, Inc. (representing Tenant) (collectively, the "Broker") and each
party covenants and agrees to indemnify the other from and against all costs,
expenses (including reasonable attorneys' fees and disbursements) and
liability for any commission or other compensation claimed by any broker or
agent with whom the indemnifying party dealt (other than the Broker, whose
commission will be paid by Landlord pursuant to a separate agreement) with
respect to this Agreement.
13. Landlord acknowledges that neither the reincorporation nor the
Offering referred to in Recital B constitutes an assignment or subletting under
Articles 11 and 44 of the Lease.
14. Clause (iii) in the second sentence of Section 44(M) of the Lease
is amended to read as follows:
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"(iii) any license shall be for equipment (and the monitoring,
repair, and maintenance thereof) only and shall not grant to the licensee the
right to occupy any portion of the Building or the demised premises except to
the extent that such occupancy is necessary or appropriate for such monitoring,
repair, and/or maintenance."
15. This Agreement may not be changed orally, but only by a writing
signed by the party against whom enforcement thereof is sought.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXX TELEGRAPH ASSOCIATES
By: PMFWH NEWCORP., INC.,
general partner
By: /s/ Xxxxxxxx Xxxxxxx
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Xxxxxxxx Xxxxxxx
Vice President
STAR TELECOMMUNICATIONS, INC.
By: /s/ Xxxxx Ewos
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Name: Xxxxx Ewos
Title: CFO
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