10.71
STANDARD FORM LEASE BETWEEN REGISTRANT AND CLUB
AT 60TH STREET, INC. DATED MAY 4, 2001
1. STANDARD FORM LEASE
LANDLORD: THE SPORTS CLUB COMPANY, INC.,
a Delaware corporation
TENANT: CLUB AT 60TH ST., INC.,
a New York corporation
STANDARD FORM LEASE
1. DEFINITIONS; FUNDAMENTAL PROVISIONS.
1.1 "BUILDING:" 000 Xxxx 00xx Xxxxxx and 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx
1.2 "CLUB" or "CLUB FACILITY:" The Sports Club/L.A.-Upper East Side,
constituting a part of the Building and designated 000 Xxxx 00XX Xxxxxx, Xxx
Xxxx, Xxx Xxxx
1.3 "COMMENCEMENT DATE:" on delivery of possession to Tenant,
estimated to be October 1, 2001
1.4 "INITIAL TERM:" 10 years (subject to Paragraph 3.2)
1.5 "LANDLORD:" The Sports Club Company, Inc., a Delaware corporation
1.6 "LEASE DATE:" May 4, 2001
1.7 "MASTER LEASE:" That certain Amended and Restated Net Operating
Lease, dated as of March 26, 1985, by and between Xxxxxxxxxx Realty Club
Corporation and 328 E. 61 Corp. (collectively, "MASTER LESSOR"), and Landlord's
predecessor in interest, Vertical Fitness and Racquet Club, Ltd., as tenant
under the Master Lease, as now or hereafter amended. The Master Lease is for the
Building.
1.8 "MINIMUM RENT:" $125,000
1.9 "OPTION TERMS:" Two 5-year options; provided, however, that Tenant
acknowledges and agrees that the term of the Master Lease currently terminates
as of December 31, 2020, and therefore, in no event shall the second Option Term
extend beyond the expiration of the term of the Master Lease, including any
extension thereof (subject to Paragraph 3.3)
1.10 "PERMITTED USE(s):" Any lawful use, including, but not limited
to, a nightclub, cabaret, adult entertainment facility and restaurant (a
"SPECIFIC USE"); provided the use (other than a Specific Use) is commensurate
with, at least comparable in quality to, and harmonious with the uses made of
buildings and improvements in the vicinity of the Building
1.11 "PREMISES:" The ground floor space in the Building designated as
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, which is approximately shown on
Exhibit A
1.12 "RENT ADJUSTMENT:" See Exhibit B
1.13 "SECURITY DEPOSIT:" $500,000, payable as provided in Article 5
1.14 "TENANT:" Club at 60TH St., Inc., a New York corporation
1.15 ADVANCE RENT: None
1.16 TENANT'S ADDRESS: 0000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
1.17 LANDLORD'S ADDRESS: 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 and (000) 000-0000
Attn: Real Estate Department and Co-Chief
Executive Officers
1.18 SQUARE FOOTAGE: Approximately __________________
1.19 EXHIBITS: Exhibit A - Premises
Exhibit B - Rent Adjustment Provisions
Exhibit C - Rules and Regulations
Exhibit D - Alterations and Improvements
1.20 ADDITIONAL PROVISIONS: See attached addendum for additional
Paragraphs 24 through 28, which are incorporated into and made a part of this
Lease by this reference.
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1.21 STANDARD PROVISIONS. The foregoing provisions, on page 1 of this
Lease, are incorporated into and are considered part of this Lease. This Lease
is subject to the terms, covenants and conditions herein set forth on pages 2
through 12, inclusive, and on the Exhibits attached hereto, and Tenant
covenants, as a material part of the consideration for this Lease, to keep and
perform each and all of said terms, covenants and conditions.
2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord the Premises. Tenant agrees to accept the Premises in their
"AS-IS/WHERE IS" condition as of the date hereof. Tenant shall repair any damage
to the Premises caused by the existing tenant after the date hereof; provided,
however, if such damage is covered by insurance, Landlord shall provide Tenant
with the insurance proceeds and Tenant shall make such repairs in accordance
with Paragraph 8 hereof. If there shall be any shortage in proceeds as and when
required to complete such repairs, and Landlord fails to provide Tenant with
adequate assurance that payment will be made by Landlord upon terms reasonably
satisfactory to Tenant, within ten (10) days following receipt of written notice
of such shortage and request therefor, then Tenant may elect to terminate this
Lease within thirty (30) days thereafter. Neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the suitability
of the Premises for the conduct of Tenant's business therein. The taking of
possession of the Premises by Tenant shall conclusively establish that the
Premises were at such time in satisfactory condition to Tenant.
3. LEASE TERM.
3.1 TERM. The Initial Term shall commence on the Commencement Date and
shall terminate on the tenth anniversary of the last day of the calendar month
after the Commencement Date (the "EXPIRATION DATE"), or on such earlier date
upon which this Lease shall be terminated pursuant to any of the provisions of
this Lease, and subject to Tenant's right to extend the Initial Term as
described in Paragraph 3.3. The Initial Term, together will all exercised Option
Terms, are hereinafter referred to as the "TERM."
3.2 DELIVERY OF POSSESSION. Landlord and Tenant shall confirm the
Commencement Date by executing a lease confirmation notice, but Landlord's or
Tenant's failure to do so shall not affect the commencement of the Term except
as otherwise provided in the Lease. If Landlord is unable to deliver possession
of the Premises to Tenant by October 1, 2001, Landlord shall not be liable to
Tenant for damages of any kind. Any such delay in delivery shall not affect
Tenant's obligations hereunder; provided, however, the Commencement Date and
Tenant's obligation to pay rent shall not commence until possession is tendered
to Tenant. If Landlord has not tendered possession of the Premises to Tenant by
March 31, 2002, Tenant may terminate this Lease by giving Landlord ten (10)
days' prior written notice of such election to terminate by April 30, 2002. If
this Lease is terminated in accordance with this Paragraph 3.2, the Security
Deposit, shall be returned to Tenant and both parties shall be released from all
obligations under this Lease.
3.3 OPTIONS.
(a) Landlord hereby grants to Tenant two (2) consecutive Options of five
(5) years each (collectively, the "OPTIONS" and individually, an "OPTION") to
extend the Term (each such extension term, an "OPTION TERM") as set forth in
this Paragraph 3.3, on the same terms and conditions as set forth in this Lease.
The first Option Term shall commence (if at all) immediately following the tenth
(10th) anniversary of the Term Commencement Date, and the second Option Term
shall commence (if at all) immediately following the end of the first Option
Term.
(b) Notwithstanding the foregoing, in no event shall the second Option
Term extend beyond the expiration of the term of the Master Lease, including any
extension thereof.
(c) Each Option may be exercised only by notice delivered to Landlord at
least two hundred seventy (270) days but not more than three hundred sixty (360)
days prior to the date that the Term would otherwise expire; provided, however,
that if Tenant fails to exercise within such period, Landlord shall be required
to give Tenant written notice of the lapse of such option exercise period and
Tenant shall thereafter have a ten (10) day period following receipt of such
written notice from Landlord within which to so exercise an Option. If Tenant
fails to deliver to Landlord notice of the exercise of an Option within the
prescribed periods of time described in the preceding sentence, then such Option
and all succeeding Options shall immediately lapse, and there shall be no
further right to extend the Term. No consent given by Landlord to an assignment
or other transfer of this Lease shall be deemed to be consent or acquiescence to
an assignment or other transfer of an Option nor shall it be deemed to be a
waiver hereof. Each Option shall be exercisable by Tenant on the express
condition that, at the time of exercise, Tenant shall not be in default under
any of the provisions of this Lease and no condition which with the giving of
notice or passage of time or both would constitute such a default shall have
occurred. Further, if Tenant defaults in the performance of any of the terms,
covenants or conditions of this Lease during the period from the timely and
proper exercise of an Option to the date upon which said Option period would
commence, and such default shall be continuing after notice and expiration of
any applicable cure period, then Landlord shall have the option,
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without limitation, of declaring Tenant's exercise of said Option null and void,
and this Lease (and all Options) shall then terminate upon the date that the
Term would have expired had Tenant never exercised said Option (subject to such
earlier termination as may be effected by Landlord's pursuit of any remedy
available to it for said breach of lease by Tenant).
3.4 OBLIGATIONS AND DUTIES. Tenant and Landlord shall be bound, as of
the Commencement Date, by all obligations and duties under this Lease, except as
otherwise specifically provided herein.
4. RENT.
4.1 MINIMUM RENT. Commencing as of the Commencement Date, Tenant shall
pay Landlord the Minimum Rent, as set forth in Paragraphs 1.8 and 4.2, in
advance and without notice or demand except as may be otherwise provided herein,
on or before the first day of each and every calendar month and continuing
throughout the Term. If the Commencement Date is other than the first day of a
calendar month, then Minimum Rent shall be prorated for such partial month.
4.2 RENT ADJUSTMENT. The Minimum Rent shall be subject to the Rent
Adjustments set forth in Exhibit B.
4.3 PAYMENT. Tenant shall pay the Minimum Rent when due, without notice
or demand, and without any abatement, deduction or setoff, except as expressly
provided for in this Lease. Tenant shall pay the Minimum Rent, and all other
amounts owed by Tenant under this Lease, in lawful money of the United States,
to Landlord or to such other person or place as Landlord may designate from time
to time. If Tenant pays the Minimum Rent or any other amount owed pursuant to
the terms of this Lease, by check, the check must clear within five (5) business
days. The Minimum Rent, any additional rent and all other amounts due under this
Lease are sometimes hereinafter collectively described as the "RENTS," "RENT" or
"RENT."
4.4 PARTIAL PAYMENT. No payment by Tenant or receipt or acceptance by
Landlord of a lesser amount than the correct Rent due shall be deemed to be
other than a payment on account, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment, irrespective of any
such endorsement or statement, without prejudice to Landlord's right to recover
the balance, and treat such partial payment as a default or pursue any other
remedy provided in this Lease or at law.
4.5 DEFAULT INTEREST AND LATE CHARGE. Tenant hereby acknowledges that
the late payment of Rents will cause Landlord to incur damages, including
administrative costs, loss of use of the overdue funds and other costs, the
exact amount of which would be impractical and extremely difficult to ascertain.
Landlord and Tenant therefore agree that if Landlord does not receive a payment
of Rents within five (5) days after such payment is due, Tenant shall pay to
Landlord, as additional rent, a late charge of $0.05 for each $1.00 so overdue.
In addition to the late charge, Rents, additional rent or any other amount due
from Tenant to Landlord under any provision of this Lease which is not paid when
due shall bear interest at the maximum rate permitted by law but in no event
greater than 18% per annum (the "INTEREST RATE"). Acceptance of any late charge
or default interest by Landlord shall not cure or waive Tenant's default, nor
prevent Landlord from exercising, before or after such acceptance, any of the
rights and remedies for a default provided by this Lease or at law. Payment of
any late charge or default interest is not an alternative means of performance
of Tenant's obligation to pay Rents at the times specified in this Lease.
5. SECURITY DEPOSIT.
5.1 PAYMENT PROVISIONS. The Security Deposit shall be payable (a)
$250,000 upon the execution of this Lease and (b) the remaining balance of
$250,000 upon Tenant's occupancy and opening for business.
5.2 TENANT DEFAULT. If Tenant defaults in the payment or performance of
any of Tenant's covenants and obligations under this Lease, then Landlord may
apply all or part of the Security Deposit to the payment of any sum which
Landlord may reasonably expend or may be required to expend by reason of
Tenant's default, and to otherwise compensate Landlord for any other loss or
damage to Landlord occasioned by Tenant's default, including, but not limited
to, any damage or deficiency in the reletting of the Premises, whether such
damages or deficiency accrues before or after summary proceedings or other
re-entry by Landlord.
5.3 ADDITIONAL DEPOSIT. If Landlord so uses all or part of the Security
Deposit, Tenant shall upon demand immediately deposit with Landlord the sum
necessary to replace the amount used.
5.4 RELEASE OF SECURITY DEPOSIT.
(a) If Tenant shall fully and faithfully comply with all of Tenant's
covenants and obligations under this Lease, the Security Deposit, or any balance
thereof, shall be returned to Tenant no later than sixty (60) days after
expiration of the Term or earlier termination of this Lease, and delivery to
Landlord of possession of the Premises. In the event of any assignment of this
Lease, Landlord shall either return the Security Deposit, or remaining balance
thereof, to Tenant, or deliver the Security Deposit or balance thereof, to the
assignee no later than sixty (60) days after expiration of the Term or
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earlier termination of this Lease and delivery to the Landlord of possession of
the Premises, and any such delivery shall release Landlord from all liability to
Tenant for the return of the Security Deposit. Tenant thereafter shall look
solely to such assignee for the return or payment of the Security Deposit.
5.5 TENANT ASSIGNMENT OF SECURITY DEPOSIT. Tenant shall not assign or
encumber or attempt to assign or encumber the Security Deposit or any interest
in it, and Landlord shall not be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
5.6 GENERAL PROVISIONS REGARDING THE SECURITY DEPOSIT. Unless required
by law, Landlord shall not be required to keep the Security Deposit separate
from its general funds, and shall not have any fiduciary or other duties
concerning the Security Deposit except as set forth in this Article 5. Unless
required by law, Tenant shall not be entitled to any interest on the Security
Deposit. Tenant hereby waives all provisions of law, now or hereafter in force,
regarding security deposits, which provide that Landlord may claim from a
security deposit only those sums reasonably necessary to remedy defaults in the
payment of Rents, to repair damage caused by Tenant or to clean the Premises, it
being agreed that Landlord may in addition claim those sums reasonably necessary
to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the act or omission of Tenant or any officer, employee,
agent or invitee of Tenant.
6. USE AND COMPLIANCE WITH LAW.
6.1 USE. Tenant shall use and occupy the Premises for the Permitted
Use(s) and for no other purpose whatsoever, except as permitted by Landlord's
prior written consent, which consent shall be at Landlord's sole and absolute
discretion. In addition, Tenant shall not be entitled to use of the Common Areas
(as defined below). Tenant shall not interfere with any other tenant's or
occupant's right to peacefully have, hold and enjoy their respective premises
and the Common Areas. Tenant shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Building. Tenant's use of the Premises
shall be subject to and consistent with the Rules and Regulations attached as
Exhibit C hereto and incorporated herein by this reference and shall further be
subject to such other conditions and limitations as are set forth elsewhere in
this Lease (including, without limitation, in Article 15). Tenant shall be
entitled to sell or offer for sale in the Premises only services, goods or
merchandise directly related to the Permitted Uses, unless otherwise agreed to
by Landlord in writing.
6.2 USE OF CLUB. Tenant, its employees and customers, shall not be
entitled to use any of the Club Facilities except if and to the extent any of
the same may become a member of the Club.
6.3 ZONING, LICENSES AND PERMITS.
(a) The Tenant shall have satisfied itself that the Premises is properly
zoned to allow the Permitted Use(s) in the Premises on or before the execution
hereof. If Landlord is unable to deliver the Premises to Tenant with either the
current zoning or entitlements or other zoning or entitlements which will allow
the Specific Uses, the Security Deposit, or any balance thereof, shall be
returned to Tenant and this Lease shall terminate.
(b) Tenant, at its sole cost and expense, shall duly procure and
thereafter maintain all other governmental licenses and permits, including full
bar liquor licensing, that are required for the proper and lawful conduct of
Tenant's business or the Permitted Use(s), and make the same available to
Landlord for inspection. Tenant at its sole cost and expense shall at all times
comply with the terms and conditions of each such license or permit. Tenant's
current President, Xxxxxxx Xxxxxxx, will maintain operational control of the
Premises for the Permitted Use(s) and at such time that he relinquishes such
operational responsibilities to a general manager, such person shall (i) have
operational experience in the food and beverage industry, (ii) submit to a
thorough criminal background investigation which results in a favorable
determination to the reasonable satisfaction of Landlord, and (iii) receive the
approval of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.
(c) If, as a result of any governmental authority disallowing or
materially affecting the Tenant's business or the Permitted Use(s) or Tenant's
manner of operation, for any reason including the re-zoning of the Premises,
except for any reason arising from or related to Tenant's acts or omissions
under this Lease, Tenant shall be released from its obligations hereunder, this
Lease shall terminate and the Security Deposit, or remaining balance thereof,
shall be returned to Tenant.
6.4 PROHIBITED USES. Tenant shall not at any time use or occupy or allow
any person to use or occupy the Premises, or do or permit anything to be done or
kept in the Premises, in any manner which (a) violates any certificate of
occupancy in force for the Premises; (b) causes or is likely to cause damage, to
the Premises or any equipment, facilities or other systems therein; (c)
constitutes a violation of law; (d) violates a requirement or condition of the
fire insurance policy issued for the Building; (e) constitutes a nuisance,
annoyance or inconvenience to other tenants or occupants of the Building, or
interferes with or disrupts the use or occupancy of any area of the Building
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(other than the Premises) by other lessees or occupants; or (f) constitutes an
unlawful, immoral, indecent or objectionable occurrence or condition; it being
agreed, however, that the immediately preceding clause (f) shall not prohibit
Tenant's lawful operation within the Premises of a so-called "strip club" or
other adult entertainment facility.
6.5 COMPLIANCE BY TENANT. Each party shall promptly forward to the other
party any notice it receives of the violation of any law involving the Premises
or the use and occupancy by Tenant. Tenant shall, at Tenant's expense, comply
with all laws that impose any obligation, order or duty on Landlord, except for
any matters which are the responsibility of Landlord pursuant to Paragraph 7.3,
or Tenant, arising from or related to (a) the Premises, Tenant's use of the
Premises, or anything done in or about the Premises; (b) the manner of conduct
of Tenant's business or operation of its installations, equipment or other
property therein; (c) any cause or condition created by or at the instance of
Tenant; or (d) breach of any of Tenant's obligations hereunder. Tenant shall pay
all the reasonable costs, expenses, fines, penalties and damages, including
reasonable attorneys' fees and costs, and court costs, which may be imposed upon
Landlord by reason of or arising out of Tenant's failure to fully and promptly
comply with and observe the provisions of this paragraph. Where Tenant's
compliance as required by this paragraph necessitates actions by Tenant for
which another provision of this Lease requires Landlord's consent, Tenant shall
obtain Landlord's consent pursuant to such other provision before taking such
actions. Any delay by Landlord in granting such consent shall extend Tenant's
time to comply. Any repairs or alterations of the Premises by Tenant pursuant to
this paragraph shall be subject to the provisions of Article 8.
6.6 LOADING AND DELIVERY. The delivery and shipping of merchandise,
supplies, fixtures and other materials or goods of whatsoever nature to or from
the Premises and all loading, unloading and handling thereof shall be done only
at such times, in such areas, by such means, and through such elevators,
entrances, lobbies and corridors, as are designated by Landlord, in its sole and
absolute discretion. Landlord accepts no liability and is hereby relieved and
released by Tenant in respect to any such loading and delivery, or of the acts
or omissions of any person or persons engaged in any loading and delivery.
7. MAINTENANCE AND REPAIRS.
7.1 TENANT'S OBLIGATIONS. Except for Landlord's obligations set forth in
Paragraph 7.3, Tenant shall be solely responsible for all repair and maintenance
of the Premises. Without limiting the generality of the foregoing, at Tenant's
sole cost and expense, Tenant shall (i) maintain the Premises and the sidewalks
in front of the Premises in good condition, (ii) regularly clean the Premises
and clean, sweep and keep clear of ice and snow the sidewalks in front of the
Premises and deposit all waste and trash from the Premises and the sidewalks in
front of the Premises into trash containers or a trash area designated by
Landlord, and (iii) maintain and repair the Premises and the sidewalks in front
of the Premises, including, but not limited to, the interior walls of the
Premises, Tenant's personal property, fixtures, signs, windows, mirrors, doors,
the interior ceiling, the floor coverings and all lighting, electrical, plumbing
and heating, ventilation and air-conditioning systems in or exclusively serving
the Premises. Pursuant and subject to Xxxxxxxxx 0.0, Xxxxxxxx may, at Landlord's
option, perform the work of maintenance and repair constituting Tenant's
obligations hereunder, at Tenant's sole cost and expense. Any work of repair and
maintenance performed for Tenant by persons other than Landlord shall be
performed by contractors approved in writing by Landlord, in accordance with a
repair and maintenance plan approved by Landlord and in compliance with all
federal, state and local laws and regulations having jurisdiction thereof and
shall comply with the standards of quality at least equal to those immediately
prior thereto.
7.2 DEFAULT BY TENANT. In the event Landlord reasonably determines, at
any time during the Term, that Tenant's repair and maintenance of the Premises
is not meeting the standards established by Landlord pursuant to the express
provisions of this Lease, then, after (i) giving Tenant no less than ten (10)
business days' notice specifying in detail the basis and (ii) thereafter,
Tenant's failure to commence and diligently pursue the remedying of the same,
Landlord may, but shall not be obligated to, undertake Tenant's repair and
maintenance obligations on behalf of Tenant, with an overhead surcharge of 15%
of such cost, together with interest at the Interest Rate calculated from the
date such costs and expenses are initially incurred by Landlord, and all
reasonable costs and expenses incurred by Landlord in the performance of
Tenant's repair and maintenance obligations shall constitute additional rent
under this Lease, and shall be payable by Tenant to Landlord within ten (10)
days after Tenant's receipt of Landlord's written demand therefor accompanied by
itemized receipts.
7.3 LANDLORD'S OBLIGATIONS. Landlord shall maintain in good condition
and repair only the foundation, exterior walls, roof and structural columns of
the Building. Landlord shall not be liable for any damages to person or
property, nor shall Landlord be deemed to have evicted Tenant, nor shall there
be any abatement of rent under this Lease by reason of the breakdown of
equipment or machinery, utilities, or other services to the Premises, or the
cessation of utilities or services due to causes beyond the reasonable control
of Landlord or by
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the making of repairs or improvements to the Premises or the Building, except if
and to the extent abatement is required pursuant to Paragraph 13.6. Tenant
expressly waives the benefit of any statute now or hereafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense,
or to terminate this Lease because of Landlord's failure to keep the Premises in
good order, condition and repair. Tenant waives the provisions of any statute
with respect to Landlord's obligations for tenantability of the Premises, and
Tenant's right to make repairs and deduct the expenses of such repairs from the
rent.
8. ALTERATIONS AND IMPROVEMENTS. Tenant shall not make any structural
alterations, additions or improvements to the Premises or the Building systems
(collectively, "ALTERATIONS") without Landlord's consent, which shall not be
unreasonably withheld, conditioned or delayed. Any such Alterations shall also
be subject to the general terms and conditions set forth on Exhibit D. Within
twenty-four (24) months of the Commencement Date, Tenant shall incur expenses in
an amount not less than Fifty Thousand Dollars ($50,000) to upgrade the exterior
of the Premises and the Building, adjacent sidewalk and outside landscaping,
subject to the general terms and conditions set forth on Exhibit D.
9. UTILITIES. Tenant shall timely pay for all water, sewer, gas, heat,
light, power, steam, telephone and other utilities and services supplied to the
Premises, together with any taxes thereon. Landlord reserves the right to
require Tenant to separately meter utilities usage, at Tenant's cost and
expense. Under no circumstances shall Landlord have any liability for, nor shall
Tenant be entitled to any abatement, reduction, or deferral of payment of Rents
whatsoever as a result of, any interruption, cessation, or interference with any
such utility service.
10. TAXES.
10.1 REAL PROPERTY TAXES. Landlord shall be obligated to pay for all
"REAL PROPERTY TAXES" (as defined herein) assessed against the land and the
Building during the Term. The term "REAL PROPERTY TAXES" shall include all real
estate taxes, assessment districts, taxing districts, housing fund assessments,
open space charges, and general and special assessments, levies, fees or charges
which are assessed, levied, charged, confirmed, or imposed by any public
authority upon the land and the Building, or its operation. Real Property Taxes
shall further be calculated as if the Building is the sole property of Landlord.
10.2 PERSONAL PROPERTY AND BUSINESS TAXES. Tenant shall pay, at least
thirty (30) days prior to delinquency, all taxes, if any, assessed against and
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises. When possible, Tenant shall use
best efforts to cause said trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of
Landlord. If any of Tenant's said personal property shall be assessed with
Landlord's real property, Landlord shall reasonably allocate such taxes between
Landlord and Tenant, and Tenant shall pay the taxes attributable to Tenant's
personal property at least thirty (30) days prior to the delinquency date for
such payment of taxes. Tenant shall pay, no less than five (5) days prior to
delinquency, all special taxes and assessments and license fees levied, assessed
or imposed by any governmental agency, by reason of Tenant's use of the Premises
including, without limitation, business or licensing taxes, local or municipal
business taxes and surcharges (including, by way of example and not limitation,
any city or other local taxes based on the Rent), service payments in lieu of
such taxes, annual or periodic license or use fees, transportation, transit or
plan charges, or other similar charges, and excluding Landlord's income,
transfer and franchise taxes.
11. INSURANCE.
11.1 LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and
keep in force, during the Term, a policy of combined single limit, bodily injury
and property damage insurance, insuring as additional insureds Landlord, and its
partners (either general or limited), if any, and their respective agents,
servants, employees, shareholders, officers, directors, and attorneys
(collectively, the "AFFILIATES"), its property manager, the Master Lessor, or
any of Landlord's senior or ground lessee or mortgagee whose name and address is
given to Tenant (collectively, with the Affiliates, the "INSURED LANDLORD
PARTIES") to the extent ordinarily permitted by recognized insurance carriers,
and Tenant, against liability arising out of the use, occupancy or maintenance
of the Premises and all areas appurtenant thereto which areas are, if
applicable, more specifically delineated on the site plan attached to this Lease
as Exhibit A. Such insurance shall be in an amount not less than $2,000,000.
Such policy shall contain a cross liability clause and shall, to the extent not
specifically excluded by the standard form policy, insure performance by Tenant
of the indemnity provisions of Article 12. The limits of said insurance shall
not, however, limit the liability of Tenant hereunder. If Tenant shall fail to
procure and maintain said insurance, Landlord may, but shall not be required to,
upon not less than ten (10) days prior written notice to Tenant, procure and
maintain the same, but at the expense of Tenant. Not more frequently than once
each two (2) years, if, in the reasonable opinion of Landlord, the amount of
liability insurance required hereunder is not adequate in comparison to that
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carried for comparable properties of similar usage as Tenant in the community in
which the Premises are located, Tenant shall increase said insurance coverage as
reasonably required by Landlord.
11.2 CASUALTY INSURANCE. During the Term, Tenant shall maintain, at
Tenant's expense, All Risk Coverage insurance covering all of Tenant's personal
property and fixtures, and insuring same in the amount of its full replacement
value.
11.3 RENTAL INTERRUPTION INSURANCE. During the Term of this Lease,
Tenant shall keep and maintain a policy of rental interruption insurance with
the Landlord as the insured, which policy shall provide for payment to Landlord
of a sum equal to 1.25 times the Minimum Rent, as described in Paragraphs 1.8,
4.1 and 4.2, for a term of not less than twelve (12) months after any casualty
or destruction which results in interference with Tenant's business operations.
11.4 OTHER INSURANCE. In addition to the policies of insurance required
to be obtained and maintained by Tenant, Tenant agrees to maintain in full force
and effect at all times during the Term, at Tenant's sole cost and expense, for
the protection of Tenant and Landlord as their respective interests may appear,
policies of insurance which afford the following coverages: (a) Worker's
Compensation: statutory limits; (b) Employer's Liability: not less than
$2,000,000 and (c) such other insurance as may reasonably be required by
Landlord or the Master Lessor, from time to time,
11.5 WAIVER OF SUBROGATION. Landlord and Tenant shall each secure an
appropriate clause in, or an endorsement upon, each insurance policy required by
the Master Lease and this Article 11, pursuant to which the insurance company
waives subrogation or permits the insured, prior to any loss, to agree with a
third party to waive any claim it might have against said third party without
invalidating the coverage under the insurance policy. On Tenant's policies, the
waiver of subrogation or permission for waiver of any claim shall extend to all
Insured Landlord Parties. Each party hereby releases the above-named persons
with respect to any claim (including a claim for negligence) which it might
otherwise have against them for injury, loss, damage or destruction occurring
during the Term and covered by the policies required of Tenant under this
Article 11 and by Landlord's policies. In the event that either party fails to
obtain and maintain the insurance required under this Article 11 (or elsewhere
in this Lease) for any reason whatsoever, such failures shall constitute
defaults under this Lease and such party shall be conclusively deemed to have
self-insured such insurance obligations with the full waiver of subrogation set
forth herein.
11.6 POLICY REQUIREMENTS. Tenant shall deliver to Landlord fully
paid-for policies or certificates of insurance for the insurance coverage
required by the Master Lease and/or this Article, in form reasonably
satisfactory to Landlord, issued by the insurance company or its authorized
agent, upon mutual execution and delivery of this Lease. Tenant shall procure
and pay for renewals of such insurance from time to time before the expiration
thereof, and Tenant shall deliver to Landlord such renewal policy or
certificates at least thirty (30) days before the expiration of any existing
policy. At Landlord's request, Tenant shall deliver certificates of insurance
with any additional required endorsements to additional insured parties. All
policies shall be primary and shall be issued by companies of recognized
responsibility, maintaining a rating of A-X or better in Best's Insurance
Reports - Property - Casualty (or an equivalent rating on any successor index
adopted by Best's), and licensed to do business in New York. All policies shall
provide that they cannot be canceled or modified unless Landlord, and any other
additional insured party, are given at least thirty (30) days' prior written
notice of such cancellation or modification.
11.7 PREMIUM INCREASE. If, by reason of any action or omission by Tenant
in default of any of its obligations under this Lease, including but not limited
to the provisions of Article 6, the premiums on Landlord's insurance on the Club
Facility are higher than they otherwise would be, Tenant shall reimburse
Landlord, on demand, as additional rent, for that part of the premiums
attributable to the default by Tenant provided a detailed xxxx and specification
is provided to Tenant.
12. INDEMNITY.
12.1 INDEMNITY OF LANDLORD. Except for the negligence or willful
misconduct of Landlord, or its Affiliates, Tenant shall indemnify and hold
harmless Landlord and its Affiliates, the Premises and/or the Club Facility,
from and against any and all claims arising from Tenant's use of the Premises,
or from the conduct of Tenant's business, or from any activity, work or things
done, permitted or suffered by Tenant in or about the Premises, and shall
further indemnify and hold Landlord and its Affiliates, the Premises and/or the
Club Facility, harmless from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act or negligence
of Tenant, or any of Tenant's agents, contractors, customers, licensees, or
employees, and from and against all reasonable costs, reasonable attorney's fees
and costs, and court costs, reasonable expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon; and in
case any action or proceeding be brought against Landlord by reason of any such
claim, Tenant, upon written notice from
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Landlord, shall defend the same, at Tenant's expense, by counsel selected by
Tenant and approved by Landlord. Tenant, as a material part of the consideration
to Landlord, hereby assumes all risk to property or injury to persons in, upon
or about the Premises, arising from any cause and Tenant hereby waives all
claims, in respect thereof against Landlord and its Affiliates. Counsel selected
or designated by an insurance carrier is deemed approved.
12.2 EXCULPATION OF LANDLORD. Except for the negligence or willful
misconduct of Landlord or its Affiliates, Tenant hereby agrees that neither
Landlord, nor its Affiliates, shall be liable for injury to Tenant's business,
or any loss of income therefrom, or for damage to the goods, wares, merchandise
or other property of Tenant, Tenant's employees, invitees, customers, or any
other person in or about the Premises and/or the Club Facility or any other
consequential damage, nor shall Landlord, or its Affiliates, be liable for
injury to the person of Tenant, Tenant's employees, agents or contractors,
whether the said damage or injury results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places where the resulting damage or injury
occurs on or about the Premises, or any part of the Club Facility and regardless
of whether the cause of such damage or injury, or the means of repairing the
same, is inaccessible to Tenant. Tenant agrees to give Landlord prompt notice of
any such damage or injury, including to the actual knowledge of Tenant,
reasonable details as to the persons involved, the nature and extent of any such
damage or injury, a statement of existing or potential claims relating thereto,
and other relevant information concerning any such damage or injury. Neither
Landlord, nor its Affiliates, shall be liable for any damages arising from any
act or neglect of any other tenant, if any, of the Club Facility, and Tenant
agrees to promptly report any such damages to Landlord; nor shall Landlord, or
its Affiliates, be liable for any damage to property entrusted to employees of
the Club Facility, nor for the loss of, or damage to, any property, by theft or
otherwise, nor for any injury or damage to person, property or Tenant's
business, resulting from construction, repair or alteration of the Premises,
improvements adjoining the Premises or any other portion of the Club Facility.
Neither Landlord, nor its Affiliates, shall be liable for any damage caused by
acts or omissions of other tenants, occupants, or visitors of the Club Facility.
12.3 LIMITATION ON LANDLORD'S LIABILITY. The obligations of Landlord,
and its Affiliates under this Lease do not constitute personal obligations.
Tenant, and Tenant's successors and assigns, hereby agree not to seek recourse
against the personal assets of Landlord, and its Affiliates, for satisfaction of
any actual or alleged liability of Landlord to Tenant under this Lease, but
Tenant shall look only to Landlord's interest in the Club Facility for the
satisfaction of any liability of Landlord to Tenant hereunder. If this Lease is
assigned by Landlord, Landlord shall be released from all obligations under this
Lease accruing from and after the date of such assignment.
13. DAMAGE OR DESTRUCTION.
13.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Tenant's Owned Alterations and Utility
Installations, which can reasonably be repaired in three (3) months or less from
the date of the damage or destruction, and the cost thereof does not exceed a
sum equal to six (6) months' Minimum Rent subject to the Rent Adjustments set
forth in Exhibit B. Landlord shall notify Tenant in writing within thirty (30)
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to the
improvements on the Premises, other than Tenant's Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in three
(3) months or less from the date of the damage or destruction, and/or the cost
thereof exceeds a sum equal to six (6) months' Minimum Rent, subject to the Rent
Adjustments set forth in Exhibit B. Landlord shall notify Tenant in writing
within thirty (30) days from the date of the damage or destruction as to whether
or not the damage is Partial or Total.
(c) "INSURED LOSS" shall mean damage or destruction to improvements on
the Premises, other than Tenant Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Article 11, irrespective of any deductible amounts or
coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Landlord at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
(e) "TENANT'S OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" shall mean
Alterations and/or Utility Installations made by Tenant that are not yet owned
by Landlord pursuant to this Lease.
(f) "UTILITY INSTALLATIONS" shall mean all floor and window coverings,
air lines, power panels, electrical distribution, security and fire protection
systems, communication systems,
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lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
(g) "TRADE FIXTURES" shall mean Tenant's machinery and equipment that
can be removed without doing material damage to the Premises.
(h) "APPLICABLE REQUIREMENTS" shall mean all applicable laws, covenants
or restrictions of record, regulations, and ordinances in effect on the
Commencement Date.
13.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is
an Insured Loss occurs, then Landlord shall, at Landlord's expense, repair such
damage (but not Tenant's Trade Fixtures or Tenant Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Tenant shall, at Landlord's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Landlord shall make any
applicable insurance proceeds available to Tenant on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
insuring party shall promptly contribute the shortage in proceeds as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Landlord shall have no obligation to pay for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless
Tenant provides Landlord with the funds to cover same, or adequate assurance
thereof, within ten (10) days following receipt of written notice of such
shortage and request therefor. If Landlord receives said funds or adequate
assurance thereof within said ten (10) day period, the party responsible for
making the repairs shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If such funds or assurance are not
received, Landlord may nevertheless elect by written notice to Tenant within ten
(10) days thereafter to: (i) make such restoration and repair as is commercially
reasonable with Landlord paying any shortage in proceeds, in which case this
Lease shall remain in full force and effect, or (ii) have this Lease terminate
thirty (30) days thereafter. Tenant shall not be entitled to reimbursement of
any funds contributed by Tenant to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to Paragraph
13.3 notwithstanding that there may be some insurance coverage, but the net
proceeds of any such insurance shall be made available for the repairs if made
by either party.
13.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act of
Tenant (in which event Tenant shall make the repairs at Tenant's expense),
Landlord may either: (i) repair such damage as soon as reasonably possible at
Landlord's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Tenant within
thirty (30) days after receipt by Landlord of knowledge of the occurrence of
such damage. Such termination shall be effective sixty (60) days following the
date of such notice. In the event Landlord elects to terminate this Lease,
Tenant shall have the right within ten (10) days after receipt of the
termination notice to give written notice to Landlord of Tenant's commitment to
pay for the repair of such damage without reimbursement from Landlord. Tenant
shall provide Landlord with said funds or satisfactory assurance thereof within
thirty (30) days after making such commitment. In such event this Lease shall
continue in full force and effect, and Landlord shall proceed to make such
repairs as soon as reasonably possible after the required funds are available.
If Tenant does not make the required commitment, this Lease shall terminate as
of the date specified in the termination notice.
13.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate sixty (60) days
following such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Tenant, Landlord shall have the right to
recover Landlord's damages from Tenant, except as provided in this Lease.
13.5 DAMAGE NEAR END OF TERM. If at any time during the last two (2)
years of this Lease there is damage for which the cost to repair exceeds one
month's Minimum Rent, whether or not an Insured Loss, Landlord may terminate
this Lease effective sixty (60) days following the date of occurrence of such
damage by giving a written termination notice to Tenant within thirty (30) days
after the date of occurrence of such damage. Notwithstanding the foregoing, if
Tenant at that time has an exercisable Option to extend this Lease or to
purchase the Premises, then Tenant may preserve this Lease by, (a) exercising
such Option and (b) providing Landlord with any shortage in insurance proceeds
(or adequate assurance thereof) needed to make the repairs on or before the
earlier of (i) the date which is ten (10) days after Tenant's receipt of
Landlord's written notice purporting to terminate this Lease, or (ii) the day
prior to the date upon which such Option expires. If Tenant duly exercises such
Option during such period and provides Landlord with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Landlord shall,
at Landlord's commercially reasonable expense, repair such
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damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Tenant fails to exercise such Option and provide such funds
or assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Tenant's Options shall be extinguished.
13.6 ABATEMENT OF RENT; LANDLORD'S REMEDIES.
(a) ABATEMENT. In the event of Premises Partial Damage or Premises Total
Destruction for which Tenant is not responsible under this Lease, the Rent
payable by Tenant for the period required for the repair, remediation or
restoration of such damage shall be abated in proportion to the degree to which
Tenant's use of the Premises is impaired, but not to exceed the proceeds
received from any rental interruption insurance maintained by Landlord. All
other obligations of Tenant hereunder shall be performed by Tenant, and Landlord
shall have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
(b) REMEDIES. If Landlord shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within ninety (90) days after such obligation shall accrue,
Tenant may, at the time prior to the commencement of such repair or restoration,
give written notice to Landlord and to any lenders of which Tenant has actual
notice, of Tenant's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Tenant gives such notice
and such repair or restoration is not commenced within thirty (30) days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within such thirty (30) days, this
Lease shall continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.
13.7 TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to Paragraph 13, an equitable adjustment shall be made concerning
advance Rent and any other advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's Security Deposit as has
not been, or is not then required to be, used by Landlord.
13.8 WAIVE STATUTES. Landlord and Tenant agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.
13.9 ENVIRONMENTAL HAZARDS AND TOXIC MATERIALS. Tenant hereby agrees to
use the Premises in accordance with the following:
(a) "HAZARDOUS MATERIALS" shall mean any substance, material, waste, gas
or particulate matter which is regulated by any local, state or federal
authority including, but not limited to, petroleum; radioactive, nuclear or
toxic wastes or materials; asbestos; polychlorinated biphenyls (PCB's); urea
formaldehyde foam insulation; freon or freon-containing equipment, which is or
becomes regulated; any material or substance declared to be hazardous or toxic
by any law related to environmental conditions on, under, or about the Building
or the Premises, or arising from Tenant's use or occupancy of the Premises,
including soil, air and ground water conditions, or governing the use,
generation, storage transportation, or disposal of Hazardous Materials in, on,
at, to or from the Premises (hereinafter collectively referred to as the
"REGULATIONS"). "HAZARDOUS MATERIALS ACTIVITIES" shall mean the use, generation,
storage, disposal and/or transportation of Hazardous Materials by Tenant or
Tenant's employees, agents, contractors, licensees and/or invitees.
(b) Tenant shall not conduct or cause to be conducted any Hazardous
Materials Activities on, under or about the Premises, without receiving
Landlord's prior written consent (which consent Landlord may withhold in
Landlord's sole and absolute discretion or revoke at any time); provided,
however, and notwithstanding the foregoing prohibition, Tenant may, subject to
Tenant's compliance with all Regulations, store and use in, on, and about the
Premises, general business and office supplies, solvents, lubricants and
cleaning fluids (in normal and ordinary quantities and types). Tenant shall
conduct all Hazardous Materials Activities in strict compliance (at Tenant's
sole cost and expense) with all applicable Regulations using all necessary and
appropriate precautions.
(c) Tenant shall indemnify, protect, defend (with counsel reasonably
acceptable to Landlord) and hold harmless Landlord, and its Affiliates, any
senior lessor, the Premises and/or the Club Facility, from and against any and
all claims, damages, costs and liabilities (including actual attorneys' fees and
costs, and court costs) arising out of any Hazardous Materials Activities.
Landlord, and Landlord's representatives and employees, may enter during
daylight hours the Premises, at any time during the Term upon reasonable prior
notice to Tenant, in order to inspect Tenant's compliance herewith. The
indemnification of Landlord by Tenant set forth in this Article 13 shall survive
the expiration or any earlier termination of this Lease.
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14. ASSIGNMENT AND SUBLETTING.
14.1 NO ASSIGNMENT OR SUBLETTING. Without the prior written consent of
the Landlord, Tenant shall not, either voluntarily or by operation of law and
directly or indirectly, assign, sell, encumber, pledge or otherwise transfer all
or any part of Tenant's leasehold interest hereunder, or any interest herein,
and shall not sublet the Premises or any part thereof, nor permit any other
person or entity (the customers, contractors, invitees, agents, servants,
independent contractors and performers of Tenant excepted) to occupy or use the
Premises, or any portion thereof (a "TRANSFER"). Any Transfer shall be void and
of no force and effect without the prior written consent of the Landlord. For
purposes of this Article 14, a "TRANSFER" shall include (i) a transfer by any
means of legal or beneficial interests representing 49% or more of the interests
in either voting power, capital or profits in Tenant or in any corporation,
partnership, joint venture or other entity directly or indirectly comprising
Tenant or which "controls" Tenant (as defined below in this Article 14), or (ii)
the sale, mortgage, hypothecation or pledge of more than an aggregate of 49% of
Tenant's assets.
14.2 TERMINATION OF LEASE. Notwithstanding any other provision hereof,
in lieu of giving consent to a Transfer, Landlord may, at its election, elect to
(a) construe such proposed transfer as an offer to transfer the leasehold estate
created hereby to Landlord which may be accepted at any time within sixty (60)
days after receipt thereof, and if so accepted, such transfer to Landlord shall
automatically be deemed consummated on all the terms and provisions set forth in
such proposed transfer (except that Landlord may further assign or otherwise
transfer such interest without Tenant's review or consent) or (b) terminate this
Lease upon thirty (30) days advance written notice and release Tenant from any
liability under this Lease (as to that portion of the Premises involved)
accruing after the effective date of such termination (except as otherwise
provided in this Lease). In the event Landlord makes an election pursuant to
clause (a) or (b) of this Paragraph, Tenant may withdraw its request for
Landlord's consent to a Transfer, in which case such request and Landlord's
election shall each be null and void.
15. COMMON AREAS.
15.1 DEFINITION. All areas within the interior boundaries of the
Building, which are not now or hereafter held for use by Landlord or used by
other persons entitled to exclusively occupy floor space in the Building,
including, without limiting the generality of the foregoing, parking areas and
structures, driveways, truckways, delivery passages, elevators and escalators,
loading docks, sidewalks, ramps, open and enclosed courts and malls, landscaped
and planted areas, exterior stairways, bus stops, retaining walls, restrooms not
located within the premises of any tenant, and other areas and improvements
provided by Landlord for the common use of Landlord and tenants of the Building
and their respective employees and invitees, shall be deemed "COMMON AREAS."
15.2 USE. Tenant and its employees and invitees shall not be entitled to
the use of the Common Areas during the Term, except for those areas designated
by Landlord, in its sole and absolute discretion for the purposes set forth in
Paragraph 6.6.
16. HOLDING OVER. Should Tenant, with Landlord's written consent, which
Landlord may withhold or revoke in its sole and absolute discretion, hold over
after the termination of this Lease, Tenant shall become a Tenant from month to
month, only upon each and all of the terms herein provided as may be applicable
to such month to month tenancy and any such holding over shall not constitute an
extension of this Lease. During such holding over, Tenant's Minimum Rent as set
forth in Paragraphs 1.8 and 4.1 of this Lease shall be 125% of the sum of the
Minimum Rent then being paid for the first sixty (60) days of any such holding
over and thereafter 200% thereof. The foregoing provisions are in addition to
and do not affect Landlord's right of re-entry or any other rights or remedies
of Landlord hereunder or as otherwise provided at law or in equity, or both.
Tenant shall indemnify, defend and hold Landlord harmless from and against any
and all losses, costs, damages and liabilities (including attorneys' fees and
costs, and court costs) which Landlord may suffer as a result of Tenant's
failure to surrender the Premises.
17. DEFAULT BY TENANT.
17.1 DEFAULT. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:
(a) Any failure by Tenant to pay any Rent for a period of five (5) days
after such payment is due;
(b) The failure of Tenant to take possession of the Premises within
fifteen (15) days after tendered by Landlord, or the abandonment or vacation of
the Premises by Tenant for fifteen (15) consecutive days or thirty (30) days or
more in the aggregate in any consecutive three hundred sixty-five (365) days
period;
(c) The failure by Tenant to observe and perform any other provision of
this Lease to be observed or performed by Tenant, where such failure continues
for thirty (30) days after written notice thereof by Landlord to Tenant;
provided, however, if the nature of such default is such that it cannot
reasonably be cured within such thirty-day period, Tenant shall not be deemed to
be in default under this Paragraph
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17.1(c) if Tenant within that period commences to cure the default and
thereafter diligently proceeds to completion within a reasonable period of time;
provided, however, Tenant shall not have more time than permitted by the
provisions of the Master Lease or any mortgage debt on the Building or
Landlord's interest in the Master Lease or this Lease;
(d) The making by Tenant or any guarantor of Tenant of any general
assignment for the benefit of creditors; the filing by or against Tenant or any
guarantor of Tenant of a petition to have Tenant or any guarantor of Tenant
adjudged a bankrupt or of a petition for reorganization or arrangement under any
law relating to bankruptcy which is not discharged within one hundred twenty
(120) days; the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within ninety
(90) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within ninety (90)
days;
(e) The failure by Tenant to deliver an estoppel certificate or
subordination document or any other documentation required under this Lease upon
five (5) business days' notice that the same has not reasonably been timely
delivered as required by, as applicable, Paragraphs 27 and 28 or any other
provision of this Lease;
(f) The committing of waste on the Premises; or
(g) The hypothecation or assignment of this Lease or subletting of the
Premises, or attempt at such action, in violation of Article 14.
17.2 TERMINATION OF LEASE. In the event of any such default after
required notice and expiration of any applicable cure period by Tenant, then in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder by giving Tenant a notice of termination. In the event that
Landlord so terminates this Lease, then Landlord may recover from Tenant:
(a) The worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss Tenant proves could have been reasonably
avoided; plus
(c) The worth at the time of award of the amount by which the unpaid
rent for the balance of the Term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus
(d) Any other amount necessary to compensate Landlord for the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom; plus
(e) Such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable New York law.
As used in subparagraphs (a) and (b) above, the "worth at the time of award" is
computed by allowing interest from the date of termination until the time of
award at the maximum rate allowable under state or federal law, or, if no such
maximum rate applies, at the rate of 15% per annum. As used in subparagraph (c)
above, the "worth at the time of award" is computed by discounting such amount
at the discount rate of the Federal Reserve Bank of New York at the time of
award plus 1%.
17.3 REENTRY BY LANDLORD. In the event of any such default by Tenant,
Landlord shall also have the right, with or without terminating this Lease, to
reenter the Premises and remove all persons and property; the removed property
may be stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.
17.4 ELECTION TO TERMINATE. No reentry or taking possession of the
Premises by Landlord pursuant to Paragraph 17.3 shall be construed as an
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction.
17.5 REDEMPTION RIGHTS. Tenant, on behalf of itself and any and all
persons claiming through or under Tenant, hereby waives and surrenders all right
and privilege which it might have, under any law, to redeem the Premises or to
have a continuance of this Lease after being dispossessed or ejected from the
Premises by process of law or under the terms of this Lease or after the
termination of this Lease.
17.6 APPLICATION OF RENT PAYMENTS. Tenant waives all rights that it may
have under present or future law to designate the items to which any payments
made by Tenant are to be credited. Tenant agrees that Landlord may apply any
payments made by Tenant to such items then due and payable under this Lease as
Landlord sees fit, irrespective of any designation or request by Tenant as to
the items to which such payments should be credited.
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17.7 COUNTERCLAIMS. Tenant shall not interpose any counterclaim of any
kind in any action or proceeding commenced by Landlord to recover possession of
the Premises except those that would be waived by law due to Tenant's failure to
so interpose. Tenant may assert any counterclaim in a separate action or
proceeding.
17.8 PERFORMANCE BY LANDLORD. If Tenant shall default in the performance
of any of Tenant's obligations under this Lease, and the default continues for
thirty (30) days after Landlord gives Tenant notice of the default, and Tenant
has not commenced diligently to cure such default, such that it could reasonably
be completed within the time period required hereunder, Landlord, without
thereby waiving or curing such default, may (but shall not be obligated to)
perform the defaulted obligation for the account and at the expense of Tenant.
Landlord may perform Tenant's defaulted obligation without prior notice in a
case of emergency, also at Tenant's sole but reasonable cost and expense,
provided Landlord gives Tenant notice as soon as reasonably possible.
17.9 PAYMENT OF LANDLORD'S EXPENSE. Any reasonable expenses incurred by
Landlord in connection with any performance by it for the account of Tenant
under Paragraph 17.8, and, subject to Paragraph 21, all reasonable costs and
expenses, including reasonable attorneys' fees and costs, and court costs
(whether or not legal proceedings are instituted), involved in collecting Rents
or enforcing the obligations of Tenant under this Lease, including the
reasonable cost and expense of instituting and prosecuting legal proceedings
after default by Landlord or upon expiration or sooner termination of this Lease
plus all interest at the Interest Rate and all late charges, shall be due and
payable by Tenant, on demand.
17.10 POST-JUDGMENT INTEREST. The amount of any judgment obtained by
Landlord against Tenant in any legal proceeding arising out of a default by
Tenant under this Lease shall bear interest until paid at the maximum rate
allowed by law, or, if no such maximum rate prevails, at the rate of 15% per
annum. Notwithstanding anything to the contrary contained in any applicable
statute, in the case of any damages that were certain or ascertainable by
calculation, such interest shall accrue from the day that the right to such
damages vested in Landlord and in the case of any unliquidated claim, such
interest shall accrue from the day such claim arose.
17.11 NO WAIVERS. The failure of either party to insist, in any one or
more instances, upon the strict performance by the other of any of the other's
obligations under this Lease, or to exercise any right or remedy given by either
party upon a default by the other, shall not be construed as a waiver or
relinquishment for the future, and the obligations and rights and remedies upon
a default shall continue and remain in full force and effect with respect to any
subsequent breach, act or omission. The receipt by Landlord of Rents or payment
by Tenant with knowledge of a breach by the other party of any obligation of
this Lease shall not be deemed a waiver of such breach, and Landlord may treat
such payment as a partial payment under Paragraph 4.4.
17.12 REMEDIES NOT EXCLUSIVE. The rights and remedies of either party
provided in this Lease for a default by either party are not exclusive, and
either party may exercise any other right or remedy it may have pursuant to this
Lease, at law or in equity.
18. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event later than thirty (30) days after written notice by Tenant to
Landlord and to Landlord's ground or senior lessor, including the Master Lessor,
or lessee or mortgagee whose name and address is given to Tenant shall have at
any time been furnished to Tenant in writing, specifying therein such
obligations Landlord has failed to perform; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty-day period and thereafter diligently
prosecutes same to completion.
19. CONDEMNATION.
19.1 ELECTION TO TERMINATE. If there is any taking of all or part of the
Premises, or any interest therein in excess of 10% because of the exercise of
the power of eminent domain or inverse condemnation, whether by condemnation
proceedings, or otherwise, or any transfer or any part thereof or any interest
therein made in avoidance thereof (all of the foregoing being hereinafter
referred to as "taking") before or during the Term, Landlord or Tenant shall be
entitled to elect to terminate this Lease; Landlord shall give Tenant written
notice of such election not later than thirty (30) days after the date Landlord
delivers notice to Tenant that possession or title to the portion of the
Premises taken has vested in the condemnor.
19.2 AWARD. The total and entire award or compensation in such
proceedings, whether for a total or partial taking, or for diminution in the
value of the leasehold or for the fee or for any other reason shall belong to,
and be the property of, Landlord, provided, however, Tenant shall be entitled to
claim Tenant's relocation and other moving expenses.
20. NOTICES. Any notice required or permitted to be given hereunder must be
in writing and may be given by personal delivery (including without limitation
by Federal Express or other recognized overnight courier or delivery
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service), facsimile transmission followed by mail, or by mail, and if given by
mail shall be deemed sufficiently given if sent by registered or certified mail
return receipt requested to the address of the party to receive such notice.
Notices shall be deemed received upon actual receipt for notices given by
personal delivery and upon the date occurring three days after deposit of any
notice in the United States mail for addresses located in the greater Los
Angeles area or five business days after the date of such deposit in the United
States mail for notices to addresses outside of the greater Los Angeles area.
Either party, by notice to the other, may specify a different address for notice
purposes than those set forth in Paragraphs 1.16 or 1.17.
21. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to its reasonable attorneys' fees
and costs to be paid by the losing party.
22. BROKERS. Tenant covenants, warrants and represents that no broker was
instrumental in bringing about OR consummating this Lease and that Tenant has
had no conversations or negotiations with any broker concerning the leasing of
the Premises or this Lease. Tenant agrees to indemnify, defend and hold Landlord
harmless against and from any claims based on the acts of Tenant for any
brokerage commissions or finder's fees by any parties making claims through
Tenant, and all costs, expenses and liabilities incurred in connection with such
claims, including all reasonable attorneys' fees and costs, and court costs.
23. MISCELLANEOUS.
23.1 MEMORANDUM OF LEASE. Tenant shall not record this Lease; however,
at the request of Landlord, Tenant shall promptly execute, acknowledge and
deliver to Landlord a memorandum of lease with respect to this Lease sufficient
for recording.
23.2 ENTIRE AGREEMENT. This Lease contains all of the agreements and
understandings related to the leasing of the Premises and the respective
obligations of Landlord and Tenant in connection therewith. Landlord has not
made and is not making, and Tenant, in executing and delivering this Lease, is
not relying upon, any warranties, representations, promises or statements,
except those that are expressly set forth in this Lease, including any riders
and all exhibits hereto. All prior agreements and understandings between the
parties have merged into this Lease, which alone fully and completely expresses
the agreement of the parties.
23.3 AMENDMENTS. No agreement shall be effective to amend, change,
modify, waive, release, discharge, terminate or effect an abandonment of this
Lease, in whole or in part, unless such agreement is in writing, refers
expressly to this Lease and is signed by Landlord and Tenant. Modifications to
this Lease must also be approved by any mortgagee or lender of Landlord who has
such right under its mortgage, deed of trust or other encumbrance.
23.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the obligations of this Lease shall bind and benefit the successors and
assigns of the parties hereto; provided, however, that no assignment, sublease
or other transfer in violation of the provisions of Article 14 shall operate to
vest any rights in any putative assignee, sublessee or transferee of Tenant.
23.5 FORCE MAJEURE. Neither Landlord nor Tenant shall have any liability
whatsoever to the other on account of (a) the inability to fulfill, or delay in
fulfilling, any of its obligations under this Lease by reason of war, civil
disobedience, strike, other labor trouble, governmental preemption of priorities
or other controls in connection with a national or other public emergency, or
shortages of fuel, supplies or labor resulting therefrom, or any other cause,
whether similar or dissimilar to the above, beyond its reasonable control; or
(b) any failure or defect in the supply, quantity or character of electricity or
water furnished to the Premises, by reason of any requirement, act or omission
of the public utility or others furnishing the Building with electricity or
water, or for any other reason, whether similar or dissimilar to the above,
beyond Landlord's or Tenant's reasonable control. If this Lease specifies a time
period for performance of an obligation, that time period shall be extended by
the period of any delay in such performance caused by any of the events of force
majeure described above. Notwithstanding the foregoing, the occurrence of the
events set forth in clauses (a) and (b) of this paragraph shall not diminish
Tenant's obligation to timely pay Rents without abatement, reduction or set-off
except as may be set forth in this Lease.
23.6 POST-TERMINATION OBLIGATIONS. Upon the expiration of the Term or
earlier termination of this Lease, neither party shall have any further
obligation or liability to the other except as otherwise expressly provided in
this Lease, and except for such obligations as by their nature or under the
circumstances can only be, or by the provisions of this Lease, may be, performed
after such expiration or earlier termination. However, any liability for a
payment or repayment of Rents shall survive the expiration of the Term or
earlier termination of this Lease.
23.7 GOVERNING LAW. Irrespective of the place of execution or
performance, this Lease shall be governed by and construed in accordance with
the laws of the state of New York.
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23.8 INVALIDITY. If any provision of this Lease or the application
thereof to any person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Lease and the application of
that provision to other persons or circumstances shall not be affected but
rather shall be enforced to the fullest extent permitted by law.
23.9 CAPTIONS. The captions, headings and title of this Lease, along
with tables of contents or indexes of defined terms, if any, are solely for
convenience of reference and shall not affect the interpretation of this Lease.
23.10 PRESUMPTIONS. This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party drafting a
document. It shall be construed neither for nor against Landlord or Tenant, but
shall be given a reasonable interpretation in accordance with the plain meaning
of its terms and the intent of the parties.
23.11 INDEPENDENT COVENANTS. Each covenant, agreement, obligation or
other provision of this Lease on either party's part to be performed shall be
deemed and construed as a separate and independent covenant of such party, not
dependent on any other provision of this Lease.
23.12 NUMBER AND GENDER. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.
23.13 TIME IS OF THE ESSENCE. Time is of the essence of this Lease and
of each provision hereof in which a time of performance is established.
23.14 JOINT AND SEVERAL LIABILITY. If, at any time during the Term,
Tenant comprises more than one person, all such persons shall be jointly and
severally liable for payment of Rents, additional rent and all other amounts,
and for the performance of every obligation of Tenant under this Lease.
23.15 EXHIBITS. All exhibits and any riders attached to this Lease are
incorporated herein and by this reference made a part hereof.
23.16 SUBMISSION OF LEASE. The submission of this Lease to Tenant or its
broker, agent or attorney for review or signature does not constitute an offer
to Tenant to lease or purchase the Premises or the granting of an option to do
so. This Lease shall have no binding force or effect until its execution and
delivery by both Landlord and Tenant.
23.17 RULES AND REGULATIONS. Tenant shall observe and comply with the
Rules and Regulations for the Building set forth in Exhibit C hereto, and any
reasonable amendments and additions thereto as Landlord may reasonably adopt
from time to time for the management, care, cleanliness and good order of the
Building written notice of which are given to Tenant (the "RULES AND
REGULATIONS"). Landlord shall not be responsible or liable to Tenant for
violations of the Rules and Regulations by other tenants and occupants of the
Building other than Landlord and its Affiliates. No rule or regulation will
mutually detract or mutually reduce Tenant's rights or materially increase
Tenant's obligations under this Lease and the provisions of this Lease will
supercede any rule or regulation.
23.18 AUTHORITY OF TENANT. If any Tenant is a corporation, each
individual executing this Lease, on behalf of said corporation, represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation, in accordance with the articles, bylaws and resolution of
the Board of Directors of said corporation that this Lease is binding and
obligatory upon said corporate tenant, and shall deliver to Landlord,
concurrently with Tenant's execution hereof, a corporate resolution and other
necessary documentation authorizing the execution of this Lease. Tenant hereby
warrants and represents that, as a corporate tenant, if applicable, it is now,
and will continue during the Term hereof to be, a corporation in good standing
under the laws of the state of incorporation of Tenant, qualified to do business
in the state in which the Premises are located. If Tenant is a partnership, each
individual executing this Lease on behalf of said partnership represents and
warrants that he, she or it is duly authorized to execute and deliver this Lease
on behalf of said partnership in accordance with the terms and conditions of the
partnership agreement.
23.19 WAIVER. Tenant expressly acknowledges that in the event of a
default by Landlord under this Lease, a monetary award shall fully compensate
Tenant for any damages incurred by Tenant as a result thereof (subject to
Paragraph 12.3), and Tenant waives the right to seek specific performance of the
terms of this Lease, and, without limiting the generality of the foregoing,
Tenant shall not record a lis pendens against all or any part of the Premises,
the Club Facility or the Building or otherwise encumber Landlord's title
thereto.
23.20 SUBLEASE. This Lease is a sublease and is subject to the terms of
the Master Lease.
(a) Each of the terms and conditions of the Master Lease are
incorporated herein by this reference, and the terms, conditions and respective
obligations of Landlord and Tenant to each other under this Lease shall be the
terms and conditions of the Master Lease, except for those provisions that are
directly contradicted by this Lease, in which event the terms of this Lease
shall control over the Master Lease. Except as may be otherwise provided in this
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Lease Tenant shall and hereby agrees to be subject to and bound by and to
conform to the Master Lease with respect to the Premises and to satisfy all
applicable terms and conditions of the Master Lease with respect to the Premises
for the benefit of the Master Lessor, and that upon the breach of any of such
terms, covenants or conditions of the Master Lease by Tenant or upon the failure
of Tenant to pay rent or to comply with any provisions of this Lease, Landlord
may exercise any and all rights and remedies granted to Master Lessor by the
Master Lease, as well as any and all rights granted to Landlord by this Lease.
It is further understood that Landlord shall not have any duty or obligations to
Tenant under the Master Lease other than to maintain the Master Lease in full
force and effect during the term of this Lease; provided, however, that Landlord
shall not be liable to Tenant for any earlier termination of the Master Lease
which is not due to Landlord's default, and Tenant agrees that any termination
of the Master Lease shall likewise terminate this Lease. The parties expressly
agree that Landlord assumes none of the Master Lessor's obligations as provided
in the Master Lease. Tenant agrees to look solely to Master Lessor for
performance of those obligations and to further hold Landlord harmless from any
claim arising from Master Lessor's failure to perform its obligations, unless
its failure is due to Landlord's breach of the Master Lease.
(b) Except as otherwise expressly provided in this Lease, (i) Tenant
expressly assumes and agrees to conform and comply with all of the terms,
covenants and conditions of the Master Lease that are to be observed and
performed thereunder by Landlord for the benefit of Master Lessor with respect
to the Premises (other than payment of rent and other monetary amounts under the
Master Lease which shall be paid by Landlord), and (ii) Tenant shall indemnify,
defend and save Landlord harmless from and against any loss, damage, cost and
expense (including attorneys' fees) which Landlord may sustain or incur by
reason of any failure on the part of Tenant to so observe and perform the same.
(c) In the event that during the term of this Lease the Master Lease
shall be terminated or come to an end for any reason, this Lease and any
subleases of all or a part of the Premises, or any assignments of this Lease,
shall terminate and come to an end on the effective date of the termination of
said Master Lease. Except with respect to a termination caused by a default by
Landlord under the Master Lease, Landlord shall not be liable to Tenant in any
respect or to any extent for the cancellation or termination thereof except
that, if Tenant is not then in default in the payment of any sums due under this
Lease, beyond the expiration of any applicable cure period, any sum paid by
Tenant in advance shall be refunded by Landlord; the amount of such refund shall
be computed on a per diem basis as of the date of termination. Notwithstanding
the foregoing provisions of this Paragraph 23.20 if the reason for such
termination of the Master Lease shall be a default on the sole part of Tenant
with respect to any of the terms and conditions of this Lease or the Master
Lease, Landlord shall be entitled to recover from Tenant as liquidated damages
at least an amount equal to the damages which Master Lessor shall be entitled to
recover from Landlord in connection with such termination of the Master Lease.
23.21 QUIET ENJOYMENT. Except in the event of a termination of the
Master Lease, an event of default under any superior mortgage, and subject to
any matter of public record and all applicable laws, Landlord covenants and
agrees with Tenant that upon Tenant paying the rent and additional rent and
observing and performing all the terms, covenants and conditions on Tenant's
part to be observed and performed, Tenant may peaceably and quietly enjoy the
Premises.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the dates set forth below.
TENANT: CLUB AT 60TH ST., INC.,
a New York corporation
By /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Its President
--------------------------------------
DATED: 5-4 ,2001
------------------------
LANDLORD: THE SPORTS CLUB COMPANY, INC.,
a Delaware corporation
By /s/ Xxx Xxxxxxxxx
----------------------------------------
Its Co-Ceo
--------------------------------------
DATED: 5-4 ,2001
------------------------
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ADDENDUM TO STANDARD FORM LEASE BETWEEN
THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.
--------------------------------------------------------------------------------
24. SECURITY MEASURES. Tenant hereby acknowledges that the Rent payable
to Landlord hereunder does not include the cost of guard services or other
security measures, and that Landlord shall have no obligation whatsoever to
provide or cause or permit to be provided same. Tenant shall be obligated to
obtain security for the Premises and all entrances and exits and control access
to the Premises, all at its sole cost and expense, and shall be solely
responsible for, and Landlord shall not be responsible for, the sufficiency or
adequacy of such security measures. Tenant shall employ a security team at the
Premises to be directed by a retired member of the New York Police Department,
with the rank of not less than Captain, a former agent of the Federal Bureau of
Investigation, or any similarly qualified former law enforcement official.
Tenant also assumes all responsibility for the protection of Tenant's property
and property under Tenant's control, and for the protection of Tenant and its
principals, employees, agents, contractors, licensees, invitees and permitted
subtenants (and their respective principals, employees, agents, contractors,
licensees and invitees) from any acts of third parties except for Landlord and
Landlord's principals, employees or agents, regardless of whether Landlord, from
time to time in its sole discretion, may elect to provide or cause or permit to
be provided any guard services or other security measures.
25. INSURANCE. Notwithstanding anything to the contrary in the Lease and
in addition to the Minimum Rent, Tenant shall pay, throughout the Term and as
additional rent, 13% of the cost of Landlord's casualty insurance for the
Building. Landlord may invoice Tenant monthly and on an estimated basis, which
estimate may change from time to time. If Landlord invoices on an estimated
basis, then Landlord shall provide Tenant with a yearly reconciliation on or
before each April 30 for the preceding calendar year. If such reconciliation
shall show that Tenant overpaid, then such overpayment shall be applied as a
credit against the succeeding months' invoices. If there shall be insufficient
months remaining in the Term against which to make such credit, then such
reconciliation shall be accompanied by Landlord's check to Tenant in the amount
of such overpayment. If such reconciliation shall show that Tenant underpaid,
then such reconciliation shall constitute Landlord's invoice to Tenant for such
underpayment, which Tenant shall pay within five (5) business days of receipt.
26. SIGNS. Subject to Tenant's compliance with any applicable
governmental requirements, Tenant shall not place any sign upon the Premises
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned; it being agreed, without
limitation, that it would be reasonable for Landlord to withhold its consent to
any proposed exterior signage of Tenant that (a) would account for more than 13%
of the total exterior signage allowed by law for the entire Building, (b) would
not be consistent with any already existing exterior signage at the Building or
(c) would be located anywhere other than at street level near the entrance of
the Premises. Notwithstanding the foregoing, Landlord hereby consents to the
placement of Tenant's signage at the location of the existing signage for the
Premises. Tenant shall, at its own expense, maintain, keep in good repair and
pay all charges relating to any such signage permitted under this Lease. In
addition and notwithstanding anything to the contrary contained in this Lease,
Tenant shall, at its sole cost and expense, maintain and repair that portion of
the exterior of the Building where any such signage is attached and any
surrounding area affected by such signage. Tenant's exterior signage shall be
deemed real property once installed. Landlord may require that Tenant remove any
or all of its exterior signage at the expiration of the Term and restore any
damage resulting from such removal.
27. SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.
(a) Subject to the provisions of this paragraph, this Lease and
the leasehold estate created hereby shall be, at the option and upon written
declaration of Landlord, subject, subordinate, and inferior to the lien and
estate of any ground lease (including, without limitation, the Master Lease),
mortgage, deed of trust, hypothecation or other lien or security arising upon
such leasehold placed upon the leasehold held by Landlord under the Master Lease
or upon the real property of which the Premises are a part, and to any and all
advances made on the security thereof and to all renewals, extensions, or
replacements thereof, now or hereafter imposed by Landlord upon the Premises.
The Landlord shall use commercial reasonable efforts to obtain an agreement
("NON-DISTURBANCE AGREEMENT"), from the holders of any such ground lease
(including, without limitation, the Master Lease), mortgage, deed of trust,
hypothecation or other lien or security arising upon such leasehold after the
date of this Lease and to any and all advances made on the security thereof or
to any renewal, extension, or replacement thereof, setting forth that, so long
as Tenant is not in default hereunder, Landlord's and Tenant's rights and
obligations hereunder shall remain in force and Tenant's right to possession
shall be upheld. If the holder of any such interest shall elect to subordinate
the lien of its interest to this Lease, and shall give written notice thereof to
Tenant, then this Lease shall be deemed prior to such interest whether this
Lease is dated prior or subsequent to the date of said mortgage, deed of trust
or ground lease or the date of recording thereof. The Non-Disturbance Agreement
may contain such additional provisions regarding nondisturbance, subordination
and attornment as are customarily requested by secured lenders with liens
encumbering real property security similar to such leasehold or the Premises.
Tenant shall, within ten (10)
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days following a request by Landlord, execute, acknowledge and deliver the
Non-Disturbance Agreement, and any other subordination agreement or other
documents required to establish of record the priority of any such encumbrance
over this Lease. If Tenant fails to execute such documents within ten (10) days
after a written request by Landlord, then, following expiration of any
applicable notice and cure period, (i) such failure shall be a material default
entitling Landlord to exercise its remedies under Article 17, (ii) Tenant shall
be liable to Landlord for all foreseeable and unforeseeable losses, costs and
expenses incurred by Landlord arising from or relating to such failure by
Tenant, including, but not limited to, losses suffered by Landlord due to the
cancellation of any prospective sale, financing, refinancing or master leasing
of all or any part of the Building and (iii) Tenant shall pay, as additional
rent, to Landlord, upon demand and without thereby limiting any other remedies
of Landlord and not as liquidated damages, a charge of $500 per day for each day
after the expiration of such ten-day period that such documents have not been so
executed and delivered. In addition, as long as they do not materially increase
Tenant's monetary obligations or materially diminish Tenant's rights under this
Lease, Tenant agrees that it will make such modifications to this Lease as may
be reasonably required by a lender or an investor not affiliated with Landlord
in connection with the obtaining, from time to time, of any equity, financing or
refinancing of the Building, including, without limitation, the Premises. In
addition, even if any such modification did materially increase Tenant's
monetary obligations or materially diminish Tenant's rights under this Lease,
Tenant and Landlord nonetheless each still shall make any such modification, as
applicable, if (i) it is a reasonable modification for such lender or investor
to require under the circumstances and (ii) Landlord, in its sole discretion,
elects, as between Landlord and Tenant, to bear any increased costs resulting
from such modification that otherwise would be borne by Tenant.
(b) In the event of foreclosure of any deed of trust or mortgage,
whether superior or subordinate to this Lease, then (i) Tenant shall attorn to
and recognize the beneficiary, mortgagee or purchaser at foreclosure sale
("SUCCESSOR LANDLORD") as Tenant's landlord for the remaining term of this Lease
provided the Successor Landlord assumes the obligations of the Landlord from and
after the taking of possession by Successor Landlord; and (ii) the Successor
Landlord shall not be bound by (a) any payment of rent for more than one month
in advance; (b) any amendment, modification, or ending of this Lease without the
Successor Landlord's consent after the Successor Landlord's name is given to
Tenant pursuant to the notice requirements set forth in Paragraph 20, unless the
amendment, modification, or ending is specifically authorized by the original
Lease and does not require Landlord's prior agreement or consent; (c) any
liability for or obligation to cure any act or omission of a prior Landlord and
regardless of whether in the nature of a continuing default; and (d) any
construction obligation, or related funding obligation, of a prior Landlord.
(c) If Landlord, or an affiliate of Landlord, shall acquire the
interest of Master Lessor under the Master Lease, then Landlord shall enter
into, or cause such affiliate to enter into, a Non-Disturbance Agreement with
Tenant, the terms and conditions of which shall be as set forth in Paragraph
27(a).
28. ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS. Within ten (10) days
after a request therefor by Landlord or Tenant, the other party shall execute an
estoppel certificate, in form reasonably satisfactory to the requesting party,
and shall deliver such certificate to whom the requesting party shall direct,
which (a) certifies 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); (b) states the expiration date of
the Term and that there are no agreements to extend or renew the Term or to
permit any holding over (or, if there are any such agreements, describes them
and specifies the periods of extension or renewal); (c) certifies the dates
through which rents have been paid, and the then-current amounts of Minimum
Rent; (d) states whether or not, to the actual knowledge and belief of the
certifying party, the requesting party is in default in performance of any of
its obligations under this Lease, and specifies each default of which it has
actual knowledge; (e) states whether or not, to the actual knowledge and belief
of the certifying party, any event has occurred which, with the giving of notice
or passage of time, or both, would constitute a default by the requesting party
and, if such an event has occurred, specifies each such event; and (f) states
whether Tenant is entitled to any credits, offsets, defenses or deductions
against payment of rents, and, if so, describes them. Tenant shall also, upon
request of Landlord, certify and agree for the benefit of any lender against the
Premises, whether in an estoppel certificate or in a Non-Disturbance Agreement,
that Tenant will not look to such lender: as being liable for any act or
omission of Landlord and regardless of whether in the nature of a continuing
default; as being obligated to cure any defaults of Landlord under the Lease
which occurred prior to the time such lender, its successors or assigns,
acquired Landlord's interest in the Premises by foreclosure or otherwise; as
being bound by any payment of rent by Tenant to Landlord for more than one (1)
month in advance; as being bound by Landlord to any amendment or modification of
the Lease without such lender's written consent; or as being bound by any
construction obligation or related funding obligation. An estoppel certificate
issued pursuant hereto shall be a representation and warranty which may be
relied upon by the requesting party and by others with whom the requesting party
may be dealing, regardless of independent investigation. Tenant also shall
include in any estoppel certificate requested by Landlord such other information
concerning this Lease as Landlord and/or an existing or proposed lender of
Landlord may reasonably request. If either party fails to execute and deliver an
estoppel certificate within ten (10) days after a written request by the other
party, then, following expiration of any applicable notice and cure period, such
failure shall be a material default entitling Landlord to exercise its remedies
under Article 17, (i) Tenant shall be liable to Landlord for all foreseeable and
unforeseeable losses, costs and expenses
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incurred by Landlord arising from or relating to such failure by Tenant,
including, but not limited to, losses suffered by Landlord due to the
cancellation of any prospective sale, financing, refinancing or master leasing
of all or any part of the Building and (ii) Tenant shall pay, as additional
rent, to Landlord, upon demand and without thereby limiting any other remedies
of Landlord and not as liquidated damages, a charge of $500 per day for each day
after the expiration of such ten-day period that such estoppel certificate has
not been so executed and delivered. Also within ten (10) days after a request
therefor by Landlord, Tenant shall deliver a copy of the then-most current
financial statements of Tenant and/or any guarantor of Tenant, either audited or
certified by Tenant or such guarantor, as appropriate, to be true and accurate,
to Landlord or such other person or entity as Landlord shall direct. Except for
disclosing the same to Landlord's professional representatives and any potential
purchaser, lender, ground lessor, equity investor or the like, and their
respective professional representatives, and as may otherwise be required by
law, Landlord shall endeavor to keep confidential any financial information
provided to Landlord by Tenant and cause all of the foregoing parties to agree
to keep the same confidential upon the same terms and conditions and customary
exclusions.
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EXHIBIT A TO STANDARD FORM LEASE BETWEEN
THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.
SITE PLAN OF PREMISES
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EXHIBIT B TO STANDARD FORM LEASE BETWEEN
THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.
RENT ADJUSTMENT
Increases in Minimum Rent shall be payable as follows:
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MINIMUM RENT
MONTHS OF TERM PER MONTH
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Month 1 through Month 60 $125,000.00
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Month 61 through Month 120 $137,500.00
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Month 121 through Month 180 $151,250.00
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Month 181 through 240 $166,375.00
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EXHIBIT C TO STANDARD FORM LEASE BETWEEN
THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.
RULES AND REGULATIONS
Tenant agrees to conform to the following rules and regulations and all
other reasonable rules and regulations which Landlord may, from time to time,
establish for tenants of the Building without discrimination against Tenant.
Landlord shall not be responsible to Tenant for the violation or nonperformance
by any other tenant or occupant in the Building with regard to such rules and
regulations. Landlord agrees to use reasonable efforts to apply the provisions
of this Exhibit C to other tenants in a non-discriminatory fashion subject to
arbitration if Tenant deems such rules and/or regulations unreasonable.
A. USE OF THE PREMISES.
(i) Tenant shall use the Premises solely for the purposes
specified in Article 6. Tenant further covenants and agrees that it will not use
or suffer or permit any person or persons to use the Premises or any part
thereof for conducting therein a second-hand store, auction, distress or fire
sale, or bankruptcy or going-out-of-business sale, or for the sale of
prescription drugs, or for any use or purpose in violation of the laws of the
United States of America, or the laws, ordinances, regulations and requirements
of the state and the county and city where the Club Facility is situated, or of
other lawful authorities, and that during said Term, the Premises, and every
part thereof, shall be kept by Tenant in a clean and wholesome condition, free
from any objectionable noises, odors or nuisances if and to the extent
detectable from outside the Premises, and that all health and police regulations
with respect to the Premises shall, in all respects and at all times, be fully
complied with by Tenant.
Except as provided in this Lease and the obligations of Landlord, Tenant
shall, at its sole cost and expense, faithfully observe in the use, occupation
and possession of the Premises all municipal and county ordinances, and all
state and federal statutes now in force and which may hereafter be in force, and
shall fully comply at its sole expense with all regulations, orders and other
requirements issued or made pursuant to any such ordinances and statutes.
Tenant shall not use or occupy the Premises, in any manner which (a)
impairs the proper and economic maintenance, operation and repair of the
Building or its equipment, facilities or systems; (c) unreasonably interferes
with or unreasonably disrupts the use or occupancy of any area of the Building
(other than the Premises) by other lessees or occupants; (d) interferes with the
transmission or reception of microwave, television, radio or other
communications signals by antennae located on the roof of the Building or
elsewhere in the Building; (e) constitutes or promotes "drive-through" uses, or
similar types of operation, or (f) constitutes an unlawful condition; it being
agreed, however, that this paragraph shall not prohibit Tenant's lawful
operation within the Premises of a so-called "strip club" or other adult
entertainment facility.
(ii) Tenant shall operate a first-class business operation in the
Premises, and protect the rights, health and safety of all persons using the
Premises. Therefore, Tenant, its employees, agents, licensees and customers
shall observe the following rules of conduct when present in or about the
Premises and in connection therewith Tenant and its employees shall:
1. Conduct themselves at all times in a professional
manner;
2. Not solicit members of the Club Facility as customers
for Tenant's business;
3. Not consume or be under the influence of drugs,
narcotics, or controlled substances, except as may be medically prescribed;
4. Not willfully take, destroy or damage another person's
property;
5. Not post notices or literature in or about the Building
(other than within the Premises) without the prior written consent of Landlord,
and not post any handbills on cars in the Common Areas;
6. Not possess or use any kind of weapon in or about the
Building;
7. Not xxxxxx in or about the Building;
8. Not park improperly or without authorization in or
about the Building; or
9. Not engage in horseplay, dangerous practical jokes, or
the throwing of any object in or about the Building.
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B. SIGNAGE AND ADVERTISING MEDIA. Tenant shall not affix any signs,
advertising placards, names, insignia, trademarks, descriptive material or any
other such like item or items anywhere outside the Premises, inside the Premises
or to the Premises which would be visible from outside the Premises, except in
compliance with Article 26 of the Lease.
C. MODIFICATION OF RULES. Landlord may add to or modify any of the
foregoing Rules and Regulations from time to time in accordance with the Lease.
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EXHIBIT D TO STANDARD FORM LEASE BETWEEN
THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.
ALTERATIONS AND IMPROVEMENTS
If Landlord has consented to any alterations, additions or improvements
(collectively, "ALTERATIONS") to be made by Tenant in, on, to or about the
Premises pursuant to Article 8 of the Lease or otherwise pursuant to the Lease,
the following shall apply; it being agreed, however, that carpeting, painting
and any other purely decorative work shall not constitute Alterations:
1. CONDITIONS. Such Alterations shall be subject to Landlord's prior
written consent, which shall not be unreasonably withheld, conditioned or
delayed, of Tenant's plans, as well as all of the terms, covenants and
conditions of this Lease, provided and upon the conditions that: (a) the
Alterations are not visible from the outside of the Premises; (b) the
Alterations are non-structural and do not impair the strength of the building in
which the Premises are located; (c) before proceeding with any Alterations,
Tenant shall submit to Landlord, for Landlord's approval, plans and
specifications for the work to be done, and Tenant shall not proceed with such
work until it obtains Landlord's approval, which shall not be unreasonably
withheld, conditioned or delayed; (d) Tenant shall pay to Landlord upon demand
the reasonable direct, out-of-pocket costs and expenses actually incurred by
Landlord for independent third parties in reviewing Tenant's plans and
specifications and inspecting the Alterations to determine whether they are
being performed in accordance with the approved plans and specifications and in
compliance with law, including, without limitation, the fees of any architect,
engineer employed by Landlord for such purpose; (e) before proceeding with any
Alterations which are reasonably estimated to cost more than $25,000 Tenant
shall comply with the requirements of Article 6 hereof; (f) not less than
fifteen (15) days, nor more than twenty (20) days prior to commencement of the
Alterations, Tenant shall notify Landlord of the work commencement date, in
order that Landlord may post notices of nonresponsibility about the Premises;
(g) Tenant shall deliver to Landlord one (1) set of "as-built" plans; (h) all
such Alterations shall be compatible with existing structures, including without
limitation, with all lighting, electrical, plumbing, heating and HVAC systems in
the Club Facility; and (i) Tenant shall fully and promptly comply with and
observe the reasonable rules and regulations of Landlord then in force with
respect to the making of Alterations.
2. PERFORMANCE. Tenant shall obtain all necessary governmental permits
and certificates, at Tenant's sole cost and expense, for the commencement and
prosecution of Alterations and for final approval of the Alterations upon
completion. Tenant shall retain at its sole expense a reputable contractor which
has been approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, to perform the Alterations in compliance with
the permits and certificates and applicable law. Alterations shall be diligently
performed in a good and workmanlike manner, using new materials and equipment at
least equal in quality and class to those currently in existence at the
Premises. Alterations shall be performed in a manner that does not unreasonably
interfere with, delay, or impose additional expense on Landlord in the
construction, maintenance, repair or operation of the Club Facility; and if any
additional expense is incurred by Landlord as a result of Alterations, Tenant
shall reimburse Landlord for the additional expense fifteen (15) days after
demand, as additional rent. Throughout the performance of the Alterations,
Tenant, at its expense, shall carry, or cause to be carried, workers'
compensation insurance as required by law and general liability insurance, with
completed operations endorsements, for any occurrence in or about the Club
Facility, in such coverage limits as Landlord may reasonably require in
accordance with Article 11 of the Lease. Tenant shall furnish Landlord with
evidence satisfactory to Landlord that such insurance is in effect before the
commencement of Alterations and on request of Landlord during construction,
Tenant shall provide evidence satisfactory to Landlord that the insurance
remains in effect.
3. LIENS AND VIOLATIONS. Tenant, at its expense, and with diligence and
dispatch, shall procure the cancellation or discharge of all notices of
violation arising from or otherwise connected with the Alterations, or any other
work, labor, services or materials done for or supplied to Tenant in connection
with the Alterations, or any person claiming through or under Tenant, which
shall be issued by any other public authority. Tenant shall not utilize
materials in the Alterations that are subject to security interests or liens.
Tenant shall defend, indemnify and hold Landlord and its Affiliates harmless
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from and against any and all mechanics' liens, stop notices and other liens and
encumbrances or claims of liens or encumbrances filed in connection with
Alterations, or any other work, labor, services or materials done for or
supplied to Tenant, or any person claiming through or under Tenant in connection
with the Alterations, including, without limitation, security interests in any
materials, fixtures or articles installed in the Premises; and against all
costs, expenses and liabilities incurred in connection with any such lien or
encumbrance, or claim of lien or encumbrance, its removal or any related action
or proceeding (including, but not limited to, reasonable attorneys' fees and
costs and court costs). Tenant, at its expense, shall satisfy or discharge of
record each stop notice, lien or encumbrance within thirty (30) days after it is
filed and notice is given to Tenant but in any event before any enforcement
action is commenced. If Tenant fails to do so, Landlord shall have the right to
satisfy or discharge the stop notice, lien or encumbrance by payment to the
claimant on whose behalf it was filed. Tenant shall reimburse Landlord on demand
for the reasonable costs and expenses so incurred by Landlord, as additional
rent, and without regard for any defense or offset that Tenant may have had
against the claimant, but neither Landlord's curative action nor the
reimbursement of Landlord by Tenant shall cure Tenant's default in failing to
satisfy or discharge of record the stop notice, lien or encumbrance. If Tenant
fails to reimburse Landlord for such expenses within five (5) days, interest at
the Interest Rate (calculated from the date of the filing of such lien) and late
charges shall be added to such delinquent payments.
4. SECURITY FOR PAYMENT AND PERFORMANCE. If the Alteration costs in
excess of $100,000, Landlord may request and Tenant shall obtain and deliver to
Landlord such security for payment and performance as shall be reasonably
satisfactory to Landlord.
5. SURRENDER. Any Alterations (including without limitation, all
Tenant's Owned Alterations and Utility Installations) made, and all fixtures and
other equipment attached to the Premises shall, unless Landlord elects
otherwise, remain on, become part of, and be surrendered with the Premises on
the expiration or termination of the Term, except that Landlord can elect within
thirty (30) days before the expiration of the Term, or within thirty (30) days
after termination of the Term, to require Tenant to remove all or some of the
Alterations, fixtures and other equipment that Tenant has made or attached to
the Premises but only if Landlord notified Tenant, when approving such
Alteration(s), fixtures or equipment, that Landlord reserved such right to elect
to have Tenant remove the same. If Landlord so elects, Tenant at its cost, shall
restore the Premises to the condition designated by Landlord in its election
before the last day of the Term, or within thirty (30) days after notice of
election is given, whichever is later. Notwithstanding the foregoing, by the
expiration or sooner termination of the Lease, Tenant shall have the right to
remove any Trade Fixtures or personal property installed by Tenant or any
subtenant which are capable of being removed by Tenant, or any subtenant,
without substantial and unrepairable damage to the Premises, provided that
Tenant or any subtenant promptly repairs (but in no event to take more than
thirty (30) days), at its sole cost and expense, all damage to the remaining
improvements on the Premises caused by such removal, provided further that
Tenant's right to remove such Trade Fixtures and personal property installed by
Tenant shall be suspended at any time Tenant is in default under this Lease.
Upon the expiration or sooner termination of this Lease, if Tenant shall fail to
remove any of Tenant's personal property from the Premises prior to the date of
such termination, Landlord may, at its option, remove the same in any legally
permissible manner that Landlord shall choose, and Landlord may store said
personal property without liability to Tenant for loss thereof. Tenant agrees to
pay Landlord immediately upon demand any and all reasonable expenses incurred by
Landlord in connection with such removal, including court costs, and reasonable
attorney's fees and costs, as well as all storage charges for such personal
property for any length of time that the same shall be so stored whether or not
in Landlord's possession, or alternatively, Landlord may at its option, without
notice, sell such personal property, or any portion thereof, at a private sale
and without legal process, for such price as Landlord may obtain, and apply the
proceeds of such sale to any amounts due under this Lease from Tenant to
Landlord and to the reasonable expenses incident to the removal and sale of such
property. Tenant shall surrender the Premises, by the expiration or sooner
termination of this Lease, clean and free of debris and in good order, condition
and state of repair, ordinary wear and tear excepted.
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