EXECUTION
LEASE AGREEMENT
BETWEEN
XXXXXXX XXXXX ASSOCIATES, L.P., LANDLORD
AND
SILICON VALLEY INTERNET PARTNERS, TENANT
DATED: JULY 28, 1997
PREMISES: 000 XXXXXX XX XXX XXXXXXXX
XXX XXXX, XXX XXXX
LEASE: A PORTION OF THE THIRD (3RD) FLOOR
EXHIBITS: A - FLOOR PLAN
B - LANDLORD'S WORK
TABLE OF CONTENTS
PAGE
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Article 1 Rent
Article 2 Commencement of Term
Article 3 Adjustments of Rent
Article 4 Electricity
Article 5 Use
Article 6 Alterations and Installations
Article 7 Repairs
Article 8 Requirements of Law
Article 9 Insurance, Loss, Reimbursement,
Liability
Article 10 Damage by Fire or Other Cause
Article 11 Assignment, Mortgaging, Subletting,
Etc.
Article 12 Certificate of Occupancy
Article 13 Adjacent Excavation - Shoring
Article 14 Condemnation
Article 15 Access to Demised Premises; Changes
Article 16 Conditions of Limitation
Article 17 Re-entry by Landlord, Injunction
Article 18 Damages
Article 19 Landlord's Right to Perform Tenant's
Obligations
Article 20 Quiet Enjoyment
Article 21 Services and Equipment
Article 22 Definitions
Article 23 Invalidity of any Provision
Article 24 Brokerage
Article 25 Subordination
Article 26 Certificates
Article 27 Legal Proceedings, Waiver of Jury Trial.
Article 28 Surrender of Premises
Article 29 Rules and Regulations
Article 30 Consents and Approvals
Article 31 Notices
Article 32 No Waiver
Article 33 Captions
Article 34 Inability to Perform
Article 35 No Representations by Landlord
Article 36 Arbitration
Article 37 Indemnity
Article 38 Memorandum of Lease
Article 39 Signs
Article 40 Security Deposit
Article 41 Additional Space
Article 42 Renewal Option
Article 43 Miscellaneous
LEASE AGREEMENT made as of this 28th day of July, 1997, between XXXXXXX
XXXXX ASSOCIATES, L.P., having an office at 000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Landlord") and Silicon Valley
Internet Partners, having an office at 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx,
Xxxxxxxxxx 00000 (hereinafter referred to as "Tenant").
WITNESSETH:
WHEREAS, Landlord is the owner of the building (the "Building") and
premises known as 000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx (the
"Premises"); and
WHEREAS, Tenant desires to hire from Landlord and Landlord desires to lease
to Tenant a portion of the Premises;
NOW, THEREFORE, Landlord hereby leases and Tenant hereby rents from Landlord a
portion of the third (3rd) floor of the Premises which the parties hereto have
mutually agreed to consider as containing approximately 25,000 rentable square
feet, as shown on the plan annexed hereto as Exhibit A (the "demised premises")
for a term (the "Term") commencing on
---------
the "Commencement Date" and ending on the "Expiration Date" (as said terms are
defined in Article 2 hereof), unless the Term shall sooner cease and terminate
as hereinafter provided.
The parties hereby covenant and agree as follows:
ARTICLE 1
RENT
1.01. Tenant agrees to pay to Landlord a fixed annual rent (the "fixed
annual rent") as follows:
Year Fixed Annual Rent Monthly Installment
------------------------ ------------------------- -------------------------
Rent Commencement Date -
Month 12 $650,000.00 $54,166.67
Months 13 - 24 663,000.00 55,250.00
Months 25 - 36 676,000.00 56,333.33
Months 37 - 48 689,000.00 57,416.67
Months 49 - 60 702,000.00 58,500.00
Months 61 - 72 752,000.00 62,666.67
Months 73 - 84 766,000.00 63,833.33
Months 85 - 96 780,000.00 65,000.00
Months 97 - 108 794,000.00 66,166.67
Months 109 - 120 808,000.00 67,333.33
All monthly installments of fixed annual rent shall be paid in advance on
the first day of each calendar month during the Term, at the office of Landlord
or such other place as Landlord may designate, without any setoff or deduction
whatsoever, except such deductions as are specifically referred to in Articles
10 and 14 hereof. The payment of fixed annual rent shall commence on the day
which is four (4) months after the Commencement Date (the "Rent Commencement
Date"). Notwithstanding the previous sentence, the first full month's
installment of fixed annual rent (which shall be applied against the first full
month's payment of fixed annual rent) shall be paid by Tenant to Landlord upon
the execution of this Lease. Should the Rent Commencement Date fall on any day
other than the first of a month, then the fixed annual rent for such month shall
be prorated on a per diem basis, and Tenant agrees to pay the amount thereof for
such partial month on the Rent Commencement Date.
1.02. Tenant shall pay the fixed annual rent and all additional rent
payable hereunder in lawful money of the United States by check (subject to
collection) drawn to Landlord's order. All sums, other than fixed annual rent,
payable by Tenant hereunder shall be deemed additional rent and shall be payable
on ten (10) days' written notice demand unless other payment dates are
hereinafter provided. Landlord shall have the same rights and remedies
(including, without limitation, the right to commence a summary proceeding) for
a default in the payment of additional rent as for a default in the payment of
fixed annual rent notwithstanding the fact that Tenant may not then also be in
default in the payment of fixed annual rent.
1.03. If Tenant shall fail to pay when due any installment of fixed annual
rent or any payment of additional rent for a period of five (5) days after such
installment or payment shall have become due, Tenant shall pay interest thereon
at the Interest Rate (as such term is defined in Article 22 hereof), from the
date when such installment or payment shall have become due to the date of the
payment thereof, and such interest shall be deemed additional rent. The
provisions of this Section 1.03 are in addition to all other remedies available
to Landlord for nonpayment of fixed annual rent or additional rent.
1.04. If any of the fixed annual rent or additional rent payable under this
Lease shall be or become uncollectible, reduced or required to be refunded
because of any Legal Requirement (as such term is defined in Article 22 hereof),
Tenant shall enter into such agreement(s) and take such other legally
permissible steps as Landlord may reasonably request to permit Landlord to
collect the maximum rents which from time to time during the continuance of such
Legal Requirement may be legally permissible and not in excess of the amounts
reserved therefor
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under this Lease. Upon the termination of such Legal Requirement, (a) the rents
hereunder shall be payable in the amounts reserved herein for the periods
following such termination and (b) Tenant shall pay to Landlord, to the maximum
extent legally permissible, an amount equal to (i) the rents which would have
been paid pursuant to this Lease but for such Legal Requirement less (ii) the
rents paid by Tenant during the period such Legal Requirement was in effect.
ARTICLE 2
COMMENCEMENT OF TERM
2.01. (a) The "Commencement Date" shall be the execution date of the Lease.
(b) The "Expiration Date" shall be the last day of the month in which
occurs the tenth anniversary of the Rent Commencement Date.
2.02. Landlord shall deliver the demised premises to Tenant on the
Commencement Date, vacant, broom clean, and with the HVAC system in working
order. Landlord shall perform only the work set forth on EXHIBIT B annexed
hereto (hereinafter referred to as "Landlord's Work"). Landlord's Work shall be
performed in a good workmanlike manner in compliance with all Legal Requirements
and shall be completed no later than the completion of Tenant's Extra Work.
Except for the Landlord's Work, Landlord shall not be required to perform any
work or expend any services to prepare the demised premises or the Building for
Tenant's occupancy. All other installations, materials and work which may be
required by Tenant to prepare, equip, decorate and furnish the demised premises
for Tenant's occupancy shall be done by Tenant at Tenant's expense and are
hereinafter called "Tenant's Extra Work". All Tenant's Extra Work shall be
subject to, and conform with, the provisions of this Lease, including, but not
limited to, Article 6. Landlord shall reimburse Tenant for the cost of certain
of Tenant's Extra Work, as set forth in Section 6.09. Tenant's free rent period
shall be extended by one day for each day that Tenant is prevented or materially
hindered from performing Tenant's Extra Work solely due to the wrongful action,
wrongful inaction or gross negligence of Landlord, its agents or contractors.
ARTICLE 3
ADJUSTMENTS OF RENT
3.01. A. For purposes hereof, the following definitions shall apply:
(a) The term "Base Tax" shall mean the Taxes actually payable
with respect to the Premises for the 1998 Calendar Year.
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(b) The term "Tax Year" shall mean each period of twelve months
which includes any part of the Term which now or hereafter is or may be duly
adopted as the fiscal year for real estate tax purposes of the City of New York.
(c) The term "Taxes" shall mean (i) all real estate taxes,
assessments, governmental levies, municipal taxes, county taxes or any other
governmental charge, general or special, ordinary or extraordinary, unforeseen
as well as foreseen, of any kind or nature whatsoever, which are or may be
assessed, levied or imposed upon all or any part of the Premises and the
sidewalks, plazas or streets adjacent thereto, including any tax, excise or fee
measured by or payable with respect to any rent (other than any occupancy or
rent tax payable by Tenant pursuant to Section 3.03), and levied against
Landlord and/or the Premises under the laws of the United States, the City or
State of New York, or any political subdivision thereof, and (ii) any expenses
incurred by Landlord, including reasonable payments to attorneys and appraisers,
in contesting any of the items set forth in clause (i) of this sentence, or the
assessed valuations of all or any part of the Premises. There shall be excluded
from Taxes all income, estate, succession, inheritance, transfer and franchise
taxes imposed upon Landlord; provided, however, that if at any time during the
Lease Term the method of taxation of real estate shall be changed and as a
result any other tax or assessment shall be imposed upon Landlord or the
Premises in addition to or in substitution for, in whole or in part, any of the
taxes or assessments listed in the preceding sentence, such other tax or
assessment shall be included in and deemed part of Taxes, but only to the extent
that the same would be payable if the Premises were the only property of
Landlord. The amount of any special assessments for public improvements or
benefits to be included in Taxes for any year, in the case where the same may,
at the option of the taxpayer, be paid in installments, shall be limited to the
amount of the installment due in respect of such year, together with any
interest payable in connection therewith (other than interest and penalties
payable by reason of the delinquent payment of such installment).
(d) The term "Tenant's Tax Share" shall mean 18.116%.
(e) The term "Escalation Statement" shall mean a statement
setting forth the amount payable by Tenant for a specified Tax Year or calendar
year, as the case may be, or for some portion thereof pursuant to this Article
3, which shall be accompanied with a copy of the most recent available tax
xxxx(s).
B. Tenant shall pay to Landlord as additional rent for each Tax Year a
sum equal to Tenant's Tax Share of the amount by which the Taxes for such Tax
Year exceed the Base Tax (hereinafter referred to as "Tenant's Tax Payment").
Landlord shall furnish to Tenant an annual Escalation Statement (subject to
revision as hereinafter provided) for each Tax Year setting forth Tenant's Tax
Payment for such Tax Year. Tenant's Tax Payment shall be due and payable as
follows: two semi-annual installments, in advance, on the first day of each June
and December of each calendar year but in no event sooner than 15 days after
Tenant's receipt of the Escalation Statement. If an annual Escalation Statement
is furnished to Tenant after the commencement of the Tax Year to which it
relates, then (a) until such Escalation Statement is rendered, Tenant
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shall pay Tenant's Tax Payment for such Tax Year in installments based upon the
last Escalation Statement rendered to Tenant with respect to Taxes and (b)
Tenant shall, within 15 days after such annual Escalation Statement is furnished
to Tenant, pay to Landlord an amount equal to any underpayment of the
installments of Tenant's Tax Payment theretofore paid by Tenant for such Tax
Year and, in the event of an overpayment by Tenant, Landlord shall promptly
refund the amount of such overpayment to Tenant. If there shall be any increase
in Taxes for any Tax Year, whether during or after such Tax Year, Landlord shall
furnish a revised Escalation Statement for such Tax Year to Tenant, and Tenant's
Tax Payment for such Tax Year shall be adjusted and paid in the same manner as
provided in the preceding sentence. If during the Term, Taxes are required to be
paid (either to the appropriate taxing authorities or as tax escrow payments to
a superior mortgagee) in full or in monthly, quarterly, or other installments,
on any other date or dates than as presently required, then at Landlord's
option, Tenant's Tax Payments shall be correspondingly accelerated or revised so
that said Tenant's Tax Payments are due at least 30 days prior to the date
payments are due to the taxing authorities or the superior mortgagee. The
benefit of any discount for any early payment or prepayment of Taxes shall be
subtracted from Taxes, provided that Tenant has theretofore made all Tenant's
Tax Payments with respect to the tax period for which such prepayment was made.
C. If Landlord shall receive a refund of Taxes for any Tax Year,
Landlord shall permit Tenant to credit against subsequent payments under this
Section 3.01, Tenant's Tax Share of the refund, but not in excess of Tenant's
Tax Payment paid for such Tax Year.
3.02. Intentionally Omitted.
3.03. Tenant shall pay to Landlord upon demand, as additional rent, any
occupancy tax or rent tax now in effect or hereafter, which Landlord is required
to pay with respect to the demised premises or this Lease.
3.04. If the Commencement Date shall be other than the first day of a Tax
Year or if the date of the expiration or other termination of this Lease shall
be a day other than the last day of a Tax Year, then Tenant's Tax Payment for
such partial year shall be equitably adjusted taking into consideration the
portion of such Tax Year falling within the Term. Landlord shall, as soon as
reasonably practicable, cause an Escalation Statement with respect to Taxes for
the Tax Year in which the Term expires to be prepared and furnished to Tenant.
3.05. In no event shall the fixed annual rent ever be reduced by operation
of this Article 3. The rights and obligations of Landlord and Tenant under the
provisions of this Article 3 shall survive the termination of this Lease, and
payments shall be made pursuant to this Article 3 notwithstanding the fact that
an Escalation Statement is furnished to Tenant after the expiration or other
termination of the Term.
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3.06. Landlord's failure to render an Escalation Statement with respect to
any Tax Year shall not prejudice Landlord's right to thereafter render an
Escalation Statement with respect thereto or with respect to any subsequent Tax
Year.
3.07. Each Escalation Statement shall be conclusive and binding upon Tenant
unless within 30 days after receipt of such Escalation Statement Tenant shall
notify Landlord that it disputes the correctness of such Escalation Statement,
specifying the particular respects in which such Escalation Statement is claimed
to be incorrect. Any dispute relating to any Escalation Statement, not resolved
within 45 days after the giving of such notice by Tenant, may be submitted to
arbitration by either party pursuant to Article 36 hereof. Pending the
determination of such dispute, Tenant shall pay additional rent in accordance
with the Escalation Statement that Tenant is disputing, without prejudice to
Tenant's position.
ARTICLE 4
ELECTRICITY
4.01. For the period commencing on the Commencement Date, Tenant covenants
and agrees to pay directly to the utility company supplying electric current for
the demised premises, the amounts due for electric current consumed, including
by use of the HVAC system, as indicated by meters measuring Tenant's consumption
thereof.
4.02. Any additional risers, feeders or other equipment or service proper
or necessary to supply Tenant's electrical requirements, upon written request of
Tenant, may be installed by Tenant at the sole cost and expense of Tenant, if in
Landlord's reasonable judgment the same are necessary and will not cause
permanent damage or injury to the Premises or the demised premises or cause or
create a dangerous or hazardous condition or entail excessive or unreasonable
alterations, repairs or expense or interfere with or disturb other tenants or
occupants.
4.03. INTENTIONALLY OMITTED.
4.04. Tenant's use of electric current in the demised premises shall not at
any time exceed the capacity of any of the electrical conductors and equipment
in or otherwise serving the demised premises which capacity shall satisfy the
provisions of Section 4.08 hereof. Tenant shall not make or perform or permit
the making or performing of, any alterations to wiring, installations or other
electrical facilities in or serving the demised premises without the prior
consent of Landlord in each instance which consent shall not be unreasonably
withheld or delayed. Should Landlord grant any such consent, all additional
risers or other equipment required therefor shall be installed by Tenant and the
cost thereof shall be paid by Tenant.
4.05. Landlord shall not be liable in any way to Tenant for any failure or
defect in the supply or character of electric energy furnished to the demised
premises by reason of any
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requirement, act or omission of the public utility providing the Premises with
electricity or for any other reason whatsoever, other than the gross negligence
of Landlord, its agents or contractors.
4.06. INTENTIONALLY OMITTED.
4.07. At Landlord's option, Tenant shall purchase from Landlord or
Landlord's agent all lighting tubes, lamps, bulbs and ballasts used in the
demised premises and Tenant shall pay Landlord's reasonable charges for
providing and installing same on demand as additional rent.
4.08. Tenant covenants and agrees that at no time will the connected
electrical load in the demised premises exceed six (6) xxxxx per rentable square
foot, unless otherwise specifically consented to by Landlord. Landlord
represents and warrants that the demised premises has an electrical capacity of
6 xxxxx per rentable square foot exclusive of electricity needed for HVAC.
ARTICLE 5
USE
5.01. The demised premises shall be used as and for executive and general
offices, software development, sales calls, periodic "workshops" (20-30 clients,
1 or 2 times per month), and for no other purpose except as aforesaid.
5.02. Tenant shall not use or permit the use of the demised premises or any
part thereof in any way which would violate any of the covenants, agreements,
terms, provisions and conditions of this Lease or for any unlawful purposes or
in any unlawful manner or in violation of the Certificate of Occupancy for the
demised premises of the Building; and Tenant shall not permit the demised
premises or any part thereof to be used in any manner or anything to be done,
brought into or kept therein which shall impair or interfere with (because of
noise level, traffic or otherwise) (i) the character, reputation or appearance
of the Building as a high quality office building, (ii) any of the Building
services or the proper and economic heating, cleaning, air conditioning or other
servicing of the Building or the demised premises, or (iii) the use of any of
the other areas of the Building by, or occasion discomfort, inconvenience or
annoyance to, any of the other tenants or occupants of the Building. Tenant
shall not install any electrical or other equipment of any kind which, in the
reasonable judgment of Landlord, might cause any such impairment, interference,
discomfort, inconvenience or annoyance or which might overload the risers or
feeders servicing the demised premises or other portions of the Building.
Landlord shall have the right to require Tenant, at Tenant's expense and to the
reasonable satisfaction of Landlord, to install curtains or blinds on the inside
of windows in the demised premises facing the atrium of the Building.
5.03 A. Tenant shall not use, play or operate or permit to be used, played
or operated any sound making or sound producing device in the demised premises
except in such manner
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and under such conditions as shall prevent any noise from emanating from the
demised premises to other areas in the Building or to street areas outside of
the Building;
B. Whenever necessary, Tenant at its expense, will cause such
exterminating procedures as may be necessary, including exterminating against
vermin, rodents, rats, insects, termites and otherwise, to be effected within
the demised premises. Tenant further agrees to prevent waste matter or refuse to
accumulate in or about the demised premises and shall keep same in a clean and
orderly fashion. Tenant shall arrange for the removal from the demised premises
and the Building of all of its refuse and rubbish, at Tenant's sole cost and
expense.
C. Tenant shall not suffer or permit any occupancy or use thereof for
any purpose which shall be unlawful, obscene or pornographic.
ARTICLE 6
ALTERATIONS AND INSTALLATIONS
6.01. Tenant shall make no alterations, installations, additions or
improvements in or to the demised premises, including but not limited to,
Tenant's Extra Work, without Landlord's prior written consent and then only by
contractors or mechanics first approved by Landlord, such consent and approval
not to be unreasonably withheld or delayed. All such work, alterations,
installations, additions and improvements shall be done at Tenant's sole expense
during business hours and at such other times as Landlord may from time to time
reasonably designate.
Tenant's Extra Work and any future work in the demised premises
shall be done solely in accordance with plans and specifications first approved
in writing by Landlord. Tenant shall reimburse Landlord promptly upon demand for
any reasonable and actual out of pocket costs and expenses incurred by Landlord
in connection with Landlord's review of such Tenant's plans and specifications.
Landlord will not unreasonably withhold or delay its consent to requests for
nonstructural alterations, additions and improvements (provided they will not
interfere with Landlord's work or the operation of the Building nor affect the
outside of the Building nor adversely affect its structure, electrical, HVAC,
plumbing or mechanical systems).
Any such approved alterations and improvements shall be performed
in accordance with the foregoing and the following provisions of this Article 6:
1. All work shall be done in a good and workmanlike manner.
2. (a) Any contractor employed by Tenant to perform any work
permitted by this Lease, and all of its subcontractors, shall
agree to employ only such labor as will not result in
jurisdictional disputes or strikes or cause disharmony with other
workers employed at the Building. Tenant will inform Landlord in
writing of the names of any contractors or subcontrac-
8
tors Tenant proposes to use in the demised premises at least ten
(10) days prior to the beginning of work by such contractors or
subcontractors, and Landlord shall not unreasonably withhold or
delay its consent to such contractors or subcontractors.
(b) Tenant covenants and agrees to pay to the contractor, as the
work progresses, the entire cost of supplying the materials and
performing the work shown on Tenant's approved plans and
specifications.
3. All such alterations shall be performed in compliance with all
Legal Requirements (as defined in Article 22 hereof) including,
without limitation, those imposed by the New York City Building
Department, the New York City Fire Department and O.S.H.A.
4. Tenant shall keep the Building and the demised premises free and
clear of all liens for any work or material claimed to have been
furnished to Tenant or to the demised premises on Tenant's
behalf, and all work to be performed by Tenant shall be done in a
manner which will not unreasonably interfere with or disturb
other tenants or occupants of the Building.
5. During the progress of the work to be done by Tenant, said work
shall be subject to inspection by representatives of Landlord who
shall be permitted access and the opportunity to inspect, at all
reasonable times, but this provision shall not in any way
whatsoever create any obligation on Landlord to conduct such an
inspection.
6. INTENTIONALLY OMITTED.
7. Prior to commencement of any work, Tenant shall furnish to
Landlord certificates evidencing the existence of:
(a) worker's compensation insurance covering all persons employed
for such work with statutorily required limits; and
(b) Employer's liability coverage including bodily injury caused
by disease with limits of not less than $100,000 per employee;
(c) Comprehensive general liability insurance including but not
limited to completed operations coverage, products liability
coverage, contractual coverage, broad from property damage,
independent contractor's coverage and personal injury coverage
naming Landlord, as well as such representatives and consultants
of them as Landlord shall reasonably specify (collectively
"Landlord's Consultants"), as well as Tenant, as additional
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insureds, with coverage of not less than $3,000,000 combined
single limit coverage (or such higher limits as Landlord may from
time to time impose in its reasonable judgment);
(d) Tenant shall require all contractors engaged or employed by
the Tenant to indemnify and hold Tenant. Landlord, and Landlord's
Consultants harmless in accordance with the following clauses
(with such modifications therein as may be required from time to
time by reason of a change in the parties constituting Landlord's
Consultants):
"The contractor hereby agrees to the fullest extent permitted by
law to assume the entire responsibility and liability for and
defense of and to pay and indemnify Landlord, Tenant, and
Landlord's Consultants against any loss, cost, expense, liability
or damage and will hold each of them harmless from and pay any
loss, cost, expense, liability or damage (including, without
limitation, judgments, attorney's fees, court costs, and the cost
of appellate proceedings), which any and each of them incur
because of injury to or death of any person or on account of
damage to property, including loss of use thereof, or any other
claim arising out of, in connection with, or as a consequence of
the performance of the work by the contractor and/or any acts or
omissions of the contractor or any of its officers, directors,
employees, agents or sub-contractors or anyone directly or
indirectly employed by the contractor or anyone for whose acts
the contractor may be liable as it relates to the scope of this
Contract, whether such injuries to person or damage to property
are due or claimed to be due to any negligence of the Landlord,
Landlord's Consultants, and/or Tenant, its or their employees or
agents or any other person."
The contractor's insurance shall specifically insure the
foregoing hold harmless provision verbatim.
(e) Such insurance shall be placed with solvent and responsible
companies reasonably satisfactory to the Landlord and licensed or
authorized to do business in the State of New York, with a
general policy holder's rating of not less than "A" and a
financial rating of not less than "Class X" as rated in the most
current available "Best's" Insurance Reports or such other
comparable publication as may be acceptable to Landlord in the
event that "Best's" Insurance Reports ceases to publish such
information, and the policies shall provide that they may not be
cancelled without 30 days' prior written notice in writing to
Landlord.
8. Movement of all men and materials shall only be done at the
direction, the times and in the manner reasonably designated by
Landlord.
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9. No improvements estimated to cost more than $50,000 (as estimated
by Landlord's architect or engineer or general contractor) shall
be undertaken (i) except under the supervision of a licensed
architect or licensed professional engineer reasonably
satisfactory to Landlord, and (ii) except after at least 10 days'
prior written notice to Landlord.
6.02. Notice is hereby given that Landlord shall not be liable for any
labor or materials furnished to or to be furnished to Tenant upon credit, and
that no mechanic's or other lien for any such labor or materials shall attach to
or affect the reversion or other estate or interest of Landlord in and to the
demised premises. Any mechanic's lien filed against the demised premises or the
Building for work claimed to have been done for or materials claimed to have
been furnished to Tenant shall be discharged by Tenant at its expense within
thirty (30) days after such filing, by payment, filing of the bond required by
law or otherwise. Failure to comply with the provisions of this Section 6.02
shall constitute a material default by Tenant under this Lease entitling
Landlord to exercise any or all of the remedies provided in this Lease in the
event of Tenant's default.
6.03. All alterations, installations, additions and improvements made and
installed by Landlord at its expense, including without limitation all work
referred to in Article 2 hereof and in EXHIBIT B hereto, shall be the property
of Landlord and shall remain upon and be surrendered with the demised premises
as a part thereof at the end of the Term.
6.04 .All Tenant's Extra Work and all alterations, installations, additions
and improvements made and installed by Tenant, or at Tenant's expense upon or in
the demised premises which are of a permanent nature and which cannot be removed
without damage to the demised premises or Building shall become the property of
the Landlord, and shall remain upon and be surrendered with the demised premises
as a part thereof at the end of the Term, except that (a) Landlord shall have
the right at the time Landlord approves plans for installation of same to serve
notice upon Tenant that any such alterations, installations, additions and
improvements shall be removed or (b) Tenant may elect to remove the same and, in
the event of service of such notice or such election by Tenant, Tenant will, at
Tenant's own cost and expense, remove the same in accordance with such request,
and restore the demised premises to a condition substantially the same as and
when delivered to Tenant. Tenant shall not be required to remove usual office
alterations. Tenant shall not be deemed to have surrendered the demised premises
until such work has been completed and until the provisions of Section 6.05 have
been complied with, whether by Tenant or by Landlord at Tenant's expense, and
Tenant shall continue to pay rent, after the expiration of the Term, at the then
fair rental value for the demised premises, and otherwise in accordance with the
provisions of this Lease until such completion and compliance.
6.05. Where furnished by or at the expense of Tenant, all non-structural
furniture, furnishings and trade fixtures, including without limitation, murals,
machines and equipment, counters, screens, grille work, special paneled doors,
cages, partitions, metal railings, closets, paneling, free standing lighting
fixtures and equipment, drinking fountains and air handling
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equipment, and any other movable property shall remain the property of Tenant
which may at its option remove all or any part thereof at any time prior to the
expiration of the Term. As to such property which Tenant does not remove, the
same shall be, if left by Tenant, deemed abandoned by Tenant and thereupon the
same shall become the property of Landlord.
6.06. If any alterations, installations, additions, improvements or other
property which Tenant shall have the right to remove or be requested by Landlord
to remove as provided in Sections 6.04 and 6.05 hereof (herein in this Section
6.06 called the "property") are not removed on or prior to the expiration of the
Term, Landlord shall have the right to remove the property and to dispose of the
same without accountability to Tenant and at the sole cost and expense of
Tenant. In case of any damage to the demised premises or the Building resulting
from the removal of the property, Tenant shall repair such damage or, in default
thereof, shall reimburse Landlord for Landlord's cost in repairing such damage.
This obligation shall survive any termination of this Lease.
6.07. INTENTIONALLY OMITTED.
6.08. Tenant shall keep records of each of Tenant's alterations,
installations, additions and improvements costing in excess of $25,000, and of
the cost thereof. Tenant shall, within thirty (30) days after demand by
Landlord, furnish to Landlord copies of such records if Landlord shall require
same in connection with any proceeding to reduce the assessed valuation of the
Building, or in connection with any proceeding instituted pursuant to Article 14
hereof.
6.09. (a) Landlord shall reimburse Tenant, from time to time, upon
completion of portions of Tenant's Extra Work, up to an aggregate amount equal
to $375,000. Reimbursement by Landlord to Tenant for Tenant's Extra Work shall
be made in installments within thirty (30) days of Tenant making a progress
payment to Tenant's contractors (but not more than once in each calendar month),
in accordance with the contract documents between Tenant and such contractor,
copies of which contract and checks evidencing payment by Tenant shall have been
furnished to Landlord, and each such installment shall be in an amount equal to
$375,000 multiplied by a fraction, the numerator of which shall be the amount of
Tenant's progress payment (without reduction for any Tenant's retainage, such
retainage not to exceed 10%), with respect to which Tenant is being reimbursed
and the denominator of which shall be the total completed cost of Tenant's Extra
Work. Up to 15% of the cost of Tenant's Extra Work may be for architectural fees
and disbursements and other "soft" costs. Tenant may direct Landlord to make
Landlord's payment otherwise due to Tenant directly to Tenant's contractor, in
which event copies of the checks evidencing payment by Tenant to Contractor for
the work for which Landlord is paying Contractor directly, shall not be
required. Landlord shall retain 10% of each such payment which retainage shall
be paid to Tenant only upon completion of Tenant's Extra Work in accordance with
the terms of this Lease and upon submission to landlord of documents reasonably
satisfactory to Landlord evidencing that such Tenant's Extra Work has been fully
and properly completed, that all amounts due for materials and labor have been
paid in full and that all other conditions reasonably imposed by Landlord as a
condition to such payment have been
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satisfied in full. To the extent that Tenant's Extra Work costs less than
$375,000, Landlord shall pay to Tenant, up to the aggregate amount of such
deficiency, at such time or times that Tenant does work in or to the demised
premises which would have constituted Tenant's Extra Work had it been done at
the commencement of this Lease. In such event, the computation for such
reimbursement shall be made in accordance with this Section 6.09 as if such work
was a continuation of Tenant's Extra Work.
(b) If Tenant's Extra Work costs in excess of $375,000, then Tenant
shall have the right to so notify Landlord of same at least 10 days prior to the
Rent Commencement Date, and Landlord shall increase the $375,000 reimbursement
amount to the actual cost of Tenant's Extra Work. Tenant shall provide Landlord
with copies of all contract documents between Tenant and its contractors and
such other documents as Landlord may reasonably request so as to verify the
actual cost of Tenant's Extra Work. If the reimbursement amount is increased
above $375,000, then the fixed annual rent for each lease year throughout the
Term shall be increased by $1.00 for each $6.00 of increase in the reimbursement
amount. For example, if Landlord reimburses Tenant for a total of $450,000 of
Tenant's Extra Work, the fixed annual rent for each lease year throughout the
Term shall be increased by $12,500.
ARTICLE 7
REPAIRS
7.01. Except as set forth in Section 7.05, Tenant shall, at its sole cost
and expense, make all repairs to the demised premises and the fixtures and
appurtenances therein, including but not limited to the HVAC system serving the
demised premises, including those necessitated by the use, act, omission,
occupancy or negligence of Tenant or by the use of the demised premises in a
manner contrary to the purposes for which same are leased to Tenant, as and when
needed to preserve them in good working order and condition. Except as otherwise
provided in Section 9.05 hereof, all damage or injury to the Building or
Premises, including demised premises, and to its fixtures, appurtenances and
equipment caused by Tenant moving property in or out of the Building or by
installation or removal of furniture, fixtures or other property, shall be
repaired, restored or replaced promptly by Tenant at its sole cost and expense,
which repairs, restorations and replacements shall be in quality and class
substantially equal to the original work or installations prior to such damage
or injury. If Tenant fails to make such repairs, restoration or replacements
within thirty (30) days after written notice thereof from Landlord, same may be
made by Landlord at the expense of Tenant and such expense shall be collectible
as additional rent and shall be paid by Tenant within thirty days after
rendition of a xxxx therefor.
The exterior walls of the Building, the portions of any window
xxxxx outside the windows and the windows are not part of the premises demised
by this Lease and Landlord reserves all rights to such parts of the Building,
but the foregoing shall not relieve Tenant of any obligation to restore, repair,
or replace same in accordance with the immediately preceding paragraph.
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7.02. Tenant shall not place a load upon any floor of the demised premises
exceeding the floor load per square foot area which such floor was designed to
carry and which is allowed by law. The floor of the demised premises will carry
100 pounds live load per square foot of floor space.
7.03. Business machines and mechanical equipment used by Tenant which cause
vibration, noise, cold or heat that may be transmitted to the Building structure
or to any leased space to such a degree as to be objectionable to Landlord or to
any other tenant in the Building shall be placed and maintained by Tenant at its
expense in settings of cork, rubber or spring type vibration eliminators
sufficient to absorb and prevent such vibration or noise, or prevent
transmission of such cold or heat. The parties hereto recognize that the
operation of elevators, air conditioning and heating equipment will cause some
vibration, noise, heat or cold which may be transmitted to other parts of the
Building and demised premises. Landlord shall be under no obligation to endeavor
to reduce such vibration, noise, heat or cold beyond what is customary in
current good building practice for buildings of the same type as the Building.
7.04. Except as otherwise specifically provided in this Lease, there shall
be no allowance to Tenant for a diminution of rental value and no liability on
the part of Landlord by reason of inconvenience, annoyance or injury to business
arising from the making of any repairs, alterations, additions or improvements
in or to any portion of the Building or the demised premises or in or to
fixtures, appurtenances or equipment thereof. Landlord shall exercise reasonable
diligence so as to minimize any interference with Tenant's business operations,
but shall not be required to perform the same on an overtime or premium pay
basis.
7.05 Landlord shall make all repairs (including replacements) to each of
the two (2) HVAC units serving the demised premises which (i) as to any single
item of repair to a particular unit will cost in excess of $10,000; and (ii) are
not caused by the act, omission, occupancy or negligence of Tenant or by the use
of the demised premises in a manner contrary to the purposes for which same are
leased to Tenant. Subject to the foregoing sentence, Landlord shall maintain the
structural, mechanical (other than mechanical located in and exclusively serving
the demised premises), exterior, roof and common areas of the Building and
Premises in good condition and in compliance with all Legal Requirements, except
for any repairs or replacements caused by the act, omission, occupancy or
negligence of Tenant or by the use of the demised premises in a manner contrary
to the purposes for which same are leased to Tenant.
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ARTICLE 8
REQUIREMENTS OF LAW
8.01. Tenant shall comply with all Legal Requirements which shall impose
any violation, order or duty upon Landlord or Tenant with respect to the demised
premises, or arising out of Tenant's use or occupation thereof.
8.02. Notwithstanding the provisions of Section 8.01 hereof, Tenant, at its
own cost and expense, in its name and/or (whenever necessary) Landlord's name,
may contest, in any manner permitted by law (including appeals to a court, or
governmental department or authority having jurisdiction in the matter), the
validity or the enforcement of any Legal Requirements with which Tenant is
required to comply pursuant to this Lease, and may defer compliance therewith
provided that:
(a) such non-compliance shall not subject Landlord to
criminal prosecution or subject the Premises to lien or sale;
(b) such non-compliance shall not be in violation of any
mortgage, or of any ground or underlying lease or any mortgage thereon;
(c) Tenant shall first deliver to Landlord a surety bond
issued by a surety company of recognized responsibility, or other security
satisfactory to Landlord, indemnifying and protecting Landlord against any loss
or injury by reason of such non-compliance; and
(d) Tenant shall promptly, diligently and continuously
prosecute such contest.
Landlord, without expense or liability to it, shall cooperate
with Tenant and execute any documents or pleadings required for such purpose,
provided that Landlord shall reasonably be satisfied that the facts set forth in
any such documents or pleadings are accurate.
ARTICLE 9
INSURANCE, LOSS, REIMBURSEMENT, LIABILITY
9.01. Tenant shall not do or permit to be done any act or thing upon or
about the demised premises, which will invalidate or be in conflict with New
York standard fire insurance policies covering the Building, and fixtures and
property therein, or which would increase the rate of fire insurance applicable
to the Building to an amount higher than it otherwise would be if the demised
premises were used for executive and general offices; and Tenant shall neither
do nor permit to be done any act or thing upon the demised premises which shall
or might subject
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Landlord to any liability or responsibility for injury to any person or persons
or to property by reason of any business or operation being carried on within
the demised premises; but nothing in this Section 9.01 shall prevent Tenant's
use of the demised premises for the purposes stated in Article 5 hereof.
9.02. If, as a result of any act or omission by Tenant or violation of this
Lease, the rate of fire insurance applicable to the Building shall be increased,
Tenant shall reimburse Landlord for all increases of Landlord's and other
tenants' fire insurance premiums so caused; such reimbursement to be additional
rent payable within five days after demand therefor by Landlord. Any disputes
under Section 9.02 shall be resolved in accordance with Article 36.
9.03. Landlord or its agent shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow or leaks from any part of the Building, or from
the pipes, appliances or plumbing works or from the roof, street or subsurface
or from any other place or by dampness or by any other cause of whatsoever
nature, unless any of the foregoing shall be caused by or due to the negligence,
of Landlord, its agents, servants or employees.
9.04. Landlord or its agents shall not be liable for any damage which
Tenant may sustain, if at any time any window of the demised premises is broken,
or temporarily or permanently closed, darkened or bricked upon for any reason
whatsoever, except only Landlord's negligent or arbitrary acts and Tenant shall
not be entitled to any compensation therefor or abatement of rent or to any
release from any of Tenant's obligations under this Lease, nor shall the same
constitute an eviction or constructive eviction.
9.05. Tenant shall reimburse Landlord for all reasonable expenses, damages
or fines incurred or suffered by Landlord, by reason of any act, breach,
violation or non-performance by Tenant, or its agents, servants or employees, of
any covenant or provision of this Lease, or by reason of damage to persons or
property caused by moving property of or for Tenant in or out of the Building,
or by the installation or removal of furniture or other property of or for
Tenant, or by reason of or arising out of any act of Tenant, or its agents,
servants or employees, in the use or occupancy of the demised premises. Subject
to compliance with the provisions of Section 8.02 hereof, where applicable,
Tenant shall have the right, at Tenant's own cost and expense, to participate in
the defense of any action or proceeding brought against Landlord, and in
negotiations for settlement thereof if, pursuant to this Section 9.05, Tenant
would be obligated to reimburse Landlord for expenses, damages or fines incurred
or suffered by Landlord.
9.06. Tenant shall give Landlord notice in case of fire or accidents in the
demised premises promptly after Tenant becomes aware of such event.
9.07. Tenant agrees to look solely to Landlord's interest in the Premises,
for the satisfaction of any right or remedy of Tenant for the collection of a
judgment (or other judicial process) requiring the payment of money by Landlord,
in the event of any liability by Landlord,
16
and no other property or assets of Landlord shall be subject to levy, execution,
attachment, or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder, or Tenant's use and occupancy of the demised premises, or any
other liability of Landlord to Tenant.
9.08. (a) Notwithstanding anything to the contrary contained in this Lease,
Tenant agrees that it will, at its sole cost and expense, include in its
property insurance policies appropriate clauses pursuant to which the insurance
companies (i) waive all right of subrogation against Landlord and any tenant of
space in the Building with respect to losses payable under such policies and
(ii) agree that such policies shall not be invalidated should the insured waive
in writing prior to a loss any or all right of recovery against any party for
losses covered by such policies. Tenant shall furnish Landlord, upon demand,
evidence satisfactory to Landlord evidencing the inclusion of said clauses in
Tenant's property insurance policies.
(b) Provided that Landlord's right of full recovery under its
property insurance policies is not adversely affected or prejudiced thereby,
Landlord hereby waives any and all right of recovery which it might otherwise
have against Tenant, its servants, agents and employees, for loss or damage
occurring to the Building and the fixtures, appurtenances and equipment therein,
to the extent the same is covered by Landlord's insurance, notwithstanding that
such loss or damage may result from the negligence or fault of Tenant, its
servants, agents or employees. Tenant hereby waives any and all right of
recovery which it might otherwise have against Landlord, its servants, and
employees, and against every other tenant in the Building who shall have
executed a similar waiver as set forth in this Section 9.08(b) for loss or
damage to Tenant's furniture, furnishings, fixtures and other property removable
by Tenant under the provisions hereof to the extent that same is covered by
Tenant's insurance, notwithstanding that such loss or damage may result from the
negligence or fault of Landlord, its servants, agents or employees, or such
other tenant and the servants, agents or employees thereof.
9.09. Tenant covenants and agrees to provide at its expense on or before
the Commencement Date and to keep in force during the Term naming Landlord and
Tenant as insured parties a comprehensive general liability insurance policy
including but not limited to premises operation blanket contractual insurance,
broad form property damage, independent contractor's coverage and personal
injury coverage protecting Landlord and Tenant against any liability whatsoever,
occasioned by any occurrence on or about the demised premises or any
appurtenances thereto. Such policy is to be written by good and solvent
insurance companies licensed to do business in the State of New York reasonably
satisfactory to Landlord, and shall be in such limits as Landlord may reasonably
require. As of the date of this Lease Landlord reasonably requires limits of
liability thereunder of not less than $3,000,000 per occurrence for bodily or
personal injury (including death) and in the amount of $1,000,000 per occurrence
in respect of property damage. Such insurance may be carried under a blanket
policy covering the demised premises and other locations of Tenant, if any,
provided that each such policy shall in all respects, comply with this Article
and shall specify that the portion of the total coverage of such policy that is
allocated to the demised premises is in the amount required pursuant to this
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Section 9.09. Prior to the time such insurance is first required to be carried
by Tenant and thereafter, at least 15 days prior to the effective date of any
such policy, Tenant agrees to deliver to Landlord a certificate evidencing the
aforesaid policy, and a copy of the actual policy upon request of Landlord. Said
policy shall contain an endorsement that such insurance may not be cancelled
except upon 30 days' prior notice to Landlord. Such policy shall also have the
indemnity clause referred to in Article 37 hereof typed on the policy evidencing
that the "hold harmless" clause has been insured. Tenant's failure to provide
and keep in force the aforementioned insurance shall be regarded as a material
default hereunder entitling Landlord to exercise any or all of the remedies
provided in this Lease in the event of Tenant's default. Notwithstanding
anything to the contrary contained in this Lease, the carrying of insurance by
Tenant in compliance with this Section shall not modify, reduce, limit or impair
Tenant's obligations and liability under Article 37 hereof.
ARTICLE 10
DAMAGE BY FIRE OR OTHER CAUSE
10.01. If the Building or the demised premises shall be partially or
totally damaged or destroyed by fire or other cause (and if this Lease shall not
have been terminated as in this Article 10 hereinafter provided), Landlord shall
repair the damage and restore and rebuild the Building and/or the demised
premises, at its expense with reasonable dispatch after notice to it of the
damage or destruction.
10.02. If the Building or the demised premises shall be damaged or
destroyed by fire or other causes, then the rents payable hereunder shall be
abated to the extent that the demised premises shall have been rendered
untenantable for the period from the date of such damage or destruction to the
date the damage shall be repaired or restored; provided, however, that should
Tenant reoccupy a portion of the demised premises during the period the
restoration work is taking place and prior to the date that the whole of said
demised premises are made tenantable, fixed annual rent and additional rents
allocable to such portion shall be payable by Tenant from the date of such
reoccupancy.
10.03. If the Building shall be so damaged or destroyed by fire or other
cause (whether or not the demised premises are damaged or destroyed) as to
require a reasonably estimated expenditure made by Landlord or a reputable
contractor designated by Landlord of more than 25% of the full insurable value
of the Building immediately prior to the casualty, then Landlord may terminate
this Lease by giving Tenant notice to such effect within 120 days after the date
of the casualty. In case of any damage or destruction mentioned in this Article
10 which Landlord is required to repair and restore, Tenant may terminate this
Lease by notice to Landlord if Landlord has not completed the making of the
required repairs and restorations within 15 months after the date of such damage
or destruction, or within such period after such date (not exceeding 3 months)
as shall equal the aggregate period Landlord may have been delayed in
18
doing so by adjustment of insurance, labor trouble, governmental controls, act
of God, or any other cause beyond Landlord's reasonable control.
10.04. No damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the demised premises or of the Building pursuant
to this Article 10.
10.05. Notwithstanding any of the foregoing provisions of this Article 10,
if Landlord or the lessor of any superior lease or the holder of any superior
mortgage shall be unable to collect all of the insurance proceeds (including
rent insurance proceeds) applicable to damage or destruction of the demised
premises or the Building by fire or other cause, by reason of some action or
inaction on the part of Tenant or any of its employees, agents or contractors,
then, without prejudice to any other remedies which may be available against
Tenant, there shall be no abatement of Tenant's rents, but the total amount of
such rents not abated (which would otherwise have been abated) shall not exceed
the amount of uncollected insurance proceeds.
10.06. Landlord will not carry separate insurance of any kind on Tenant's
property and, except as provided by law, Landlord shall not be obligated to
repair any damage thereto or replace or clear the same. Tenant shall maintain
such fire and casualty insurance as it deems advisable.
10.07. The provisions of this Article 10 shall be considered an express
agreement governing any cause of damage or destruction of the demised premises
by fire or other casualty, and Section 227 of the Real Property Law of the State
of New York, providing for such a contingency in the absence of an express
agreement, and any other law of like import, now or hereafter in force, shall
have no application in such case.
ARTICLE 11
ASSIGNMENT, MORTGAGING, SUBLETTING, ETC.
11.01. Except as otherwise expressly provided in this Article 11, Tenant
shall not without, in each instance, obtaining the prior consent of Landlord,
which consent shall not be unreasonably withheld or delayed, (a) assign or
otherwise transfer this Lease or the term and estate hereby granted, (b) sublet
all or part of the demised premises or allow the same to be used or occupied by
others or in violation of Article 5, (c) mortgage, pledge or encumber this Lease
or all or part of the demised premises in any manner by reason of any act or
omission on the part of Tenant, or (d) advertise, or authorize a broker to
advertise, for a subtenant for all or part of the demised premises or for an
assignee of this Lease. For purposes of this Article 11, (i) the transfer of a
majority of the issued and outstanding capital stock of any corporate tenant or
subtenant, or the transfer of a majority of the total interest in any other
entity (partnership or otherwise) which is a tenant or subtenant, however
accomplished, whether in a single transaction or in a series of related or
unrelated transactions, shall be deemed an assignment of this Lease,
19
or such sublease, as the case may be, (ii) a takeover agreement shall be deemed
a transfer of this Lease, (iii) any person or legal representative of Tenant, to
whom Tenant's interest under this Lease passes by operation of law, or
otherwise, shall be bound by the provisions of this Article 11, and (iv) a
modification, amendment or extension without Landlord's prior written consent of
a sublease previously consented to by Landlord shall be deemed a new sublease.
Tenant agrees to furnish to Landlord upon demand at any time and from time to
time such information and assurances as Landlord may reasonably request that
neither Tenant, nor any subtenant, shall have violated the provisions of this
Section 11.01.
11.02. The provisions of clauses (a) and (b) of Section 11.01 hereof shall
not apply to transactions entered into by Tenant with a Tenant Affiliate.
"Tenant Affiliate" shall mean (i) an entity into which the Tenant is merged or
consolidated, or to which all or substantially all of the stock or assets of
Tenant are transferred, or to which all or substantially all of Tenant's
business at the Premises is transferred, provided such merger or consolidation
or transfer involves the transfer of the Tenant as an ongoing business entity
and the successor has a net worth at least equal to or in excess of the net
worth of Tenant as of the date hereof; (ii) a corporation which controls, is
controlled by or is under common control with Tenant (the term "control" meaning
ownership of not less than 51% of the outstanding voting stock of a
corporation); or (iii) a partnership in which and for so long as Tenant or a
Tenant Affiliate shall be a general partner and of which Tenant (or one or more
Tenant Affiliates) shall own not less than 51% of the legal equitable interest.
11.03. Any assignment or transfer, whether made with Landlord's consent as
required by Section 11.01 or without Landlord's consent pursuant to Section
11.02, shall not be effective unless and until (a) the assignee shall execute,
acknowledge and deliver to Landlord a recordable agreement, in form and
substance reasonably satisfactory to Landlord, whereby the assignee shall (i)
assume the obligations and performance of this Lease and agree to be personally
bound by all of the covenants, agreements, terms, provisions and conditions
hereof on the part of Tenant to be performed or observed on and after the
effective date of any such assignment and (ii) agree that the provisions of this
Article 11 shall, notwithstanding such assignment or transfer, continue to be
binding upon it in the future, and (b) in the case of an assignment or transfer
pursuant to Section 11.02, Tenant or its successor shall have delivered to
Landlord financial statements certified by a reputable firm of certified public
accountants evidencing satisfaction of the net worth requirements referred to in
Section 11.02. Tenant covenants that, notwithstanding any assignment or
transfer, whether or not in violation of the provisions of this Lease, and
notwithstanding the acceptance of fixed annual rent by Landlord from an assignee
or transferee or any other party, Tenant shall remain fully and primarily and
jointly and severally liable for the payment of the fixed annual rent and all
additional rent due and to become due under this Lease and for the performance
and observance of all of the covenants, agreements, terms, provisions and
conditions of this Lease on the part of Tenant to be performed or observed.
11.04. The liability of Tenant, and the due performance by Tenant of the
obligations on its part to be performed under this Lease, shall not be
discharged, released or
20
impaired in any respect by an agreement or stipulation made by the Landlord or
any grantee or assignee of Landlord, by way of mortgage, or otherwise, extending
the time of, or modifying any of the obligations contained in this Lease, or by
any waiver or failure of Landlord to enforce any of the obligations on Tenant's
part to be performed under this Lease, and Tenant shall continue to be liable
hereunder. If any such agreement or modification operates to increase the
obligations of a tenant under this Lease, the liability under this Section 11.04
of the tenant named in the Lease or any of its successors in interest (unless
such party shall have expressly consented in writing to such agreement or
modification) shall continue to be no greater than if such agreement or
modification had not been made.
11.05. Landlord shall not unreasonably withhold or delay its consent to an
assignment of this Lease or a subletting of the whole or a part of the demised
premises for substantially the remainder of the term of this Lease, provided:
(a) Tenant shall furnish Landlord with the name and business
address of the proposed subtenant or assignee, information with respect to the
nature and character of the proposed subtenant's or assignee's business, or
activities, such references and current financial information with respect to
net worth, credit and financial responsibility as are reasonably satisfactory to
Landlord, and an executed counterpart of the sublease or assignment agreement;
(b) The proposed subtenant or assignee is a reputable party whose
financial net worth, credit and financial responsibility is, considering the
responsibilities involved, reasonably satisfactory to Landlord; and in no event
less than the financial net worth, credit and financial responsibility of Tenant
at the Commencement Date;
(c) The nature and character of the proposed subtenant or
assignee, its business, activities and general business reputation and intended
use of the demised premises are, in Landlord's reasonable judgment, in keeping
with the standards of the Building;
(d) If, as of the effective date of the sublease or assignment or
up to ninety (90) days prior thereto, Landlord shall have or have had comparable
space available in the Building, the proposed subtenant or assignee is not then
an occupant of any part of the Building or a party who dealt with Landlord or
Landlord's agent (directly or through a broker) with respect to space in the
Building, during the twelve (12) months immediately preceding Tenant's request
for Landlord's consent;
(e) All costs incurred with respect to providing reasonably
appropriate means of ingress and egress from the sublet space or to separate the
sublet space from the remainder of the demised premises shall, subject to the
provisions of Article 6 with respect to alterations, installations, additions or
improvements, be borne by Tenant;
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(f) Each assignment or sublease shall specifically state that (i)
it is subject to all of the terms, covenants, agreements, provisions, and
conditions of this Lease, (ii) the subtenant or assignee, as the case may be,
will not have the right to further assign or sublet all or part of the demised
premises or to allow same to be used by others, without the consent of Landlord
in each instance, (iii) a consent by Landlord thereto shall not be deemed or
construed to modify, amend or affect the terms and provisions of this Lease, or
Tenant's obligations hereunder, which shall continue to apply to the premises
involved, and the occupants thereof, as if the sublease or assignment had not
been made, (iv) if Tenant defaults in the payment of any rent, Landlord is
authorized to collect any rents due or accruing from any assignee, subtenant or
other occupant of the demised premises and to apply the net amounts collected to
the fixed annual rent and additional rent due hereunder, (v) the receipt by
Landlord of any amounts from an assignee or subtenant, or other occupant of any
part of the demised premises shall not be deemed or construed as releasing
Tenant from Tenant's obligations hereunder or the acceptance of that party as a
direct tenant; and (vi) the subtenant shall be required to pay its proportionate
share of Tenant's Tax payment;
(g) Tenant, together with requesting Landlord's consent
hereunder, shall have paid Landlord any reasonable and actual out of pocket
costs incurred by Landlord to review the requested consent including any
reasonable attorneys' fees incurred by Landlord;
(h) In the case of a subletting of a portion of the demised
premises, the portion so sublet shall be regular in shape and suitable for
normal renting purposes;
(i) INTENTIONALLY OMITTED.
(j) The subletting or assignment shall not be at a lower
aggregate rental than that being charged by Landlord at the time for similar
space then available for rental in the Building;
(k) The proposed assignment or sublease shall provide that it is
subject to the Landlord's rights under Section 11.06 hereof. Tenant shall have
complied with the provisions of said Section 11.06 and Landlord shall not have
made any of the elections provided for therein; and
(l) The total number of tenants and subtenants occupying the
demised premises shall not exceed three (3).
11.06 (a) Should Tenant agree to assign this Lease or to sublet all or any
portion of the demised premises (other than by an assignment or sublease
permitted by Section 11.02 hereof), Tenant shall, as soon as any such agreement
is consummated but no later than 30 days prior to the effective date thereof
(the "Effective Date") deliver to Landlord executed counterparts of any such
agreement and of all ancillary agreements with the proposed assignee or
sublessee, as applicable, and Landlord shall then have the right to elect by
notice to Tenant
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given within 30 days after such delivery to (i) consent (which consent shall
have been deemed granted by Landlord if Landlord shall not have disapproved of
the transaction in writing, within 30 days of Landlord's actual receipt of
within notice from Tenant advising Landlord of Tenant's intention to assign or
sublet along with such other documents and information as is required under this
Article 11), or (ii) refuse to consent to such assignment or sublease in
accordance with the terms of this Lease.
(b) Intentionally Omitted.
(c) If the Landlord shall give its consent to any assignment of
this Lease or to any sublease, Tenant shall in consideration therefor, pay to
Landlord, as additional rent:
(i) in the case of an assignment, an amount equal to 50% of
all sums and other considerations paid to Tenant by the assignee for or by
reason of such assignment (including, but not limited to, sums paid for the
sale of Tenant's fixtures (other than trade fixtures) and leasehold
improvements, sums paid for the sale of Tenant's trade fixtures, equipment,
furniture, furnishings or other personal property in excess of the then
depreciated value of same as carried on the books of Tenant), less direct
and actual costs incurred by Tenant in connection with such assignment,
such as real estate commissions and alterations made at Tenant's expense
pursuant to an assignment agreement, but not including any alterations
which would be required to return the space to Building Standard, and not
including the unamortized cost of any of Tenant's fixtures, leasehold
improvements, equipment, fixtures, furnishings or other items, except as
set forth above, and
(ii) in the case of a sublease, 50% of any rents,
additional charges or other consideration payable under the sublease to
Tenant by the subtenant which is in excess of the fixed annual rent and
additional rent accruing during the term of the sublease in respect of the
subleased space pursuant to the terms hereof (including, but not limited
to, sums paid for the sale or rental of Tenant's fixtures (other than trade
fixtures) and lease-hold improvements, sums paid for the sale or rental of
Tenant's trade fixtures, equipment, furniture or furnishings or other
personal property in excess of the then depreciated value of same as
carried on the books of Tenant, less direct and actual costs incurred by
Tenant in connection with such sublease, such as real estate commissions
and alterations made at Tenant's expense pursuant to a sublease agreement,
but not including any alterations which would be required to return the
space to Building Standard, and not including the unamortized cost of any
of Tenant's fixtures, leasehold improvements, equipment fixtures,
furnishings or other items, except as set forth above.
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The sums payable under this Section 11.06(e) shall be paid to Landlord, within
fifteen (15) days after payment by the assignee or subtenant to Tenant. Nothing
contained in this Section shall restrict Tenant from selling any personal
property of Tenant to any person or entity, not an assignee or subtenant, as
described above, or retaining all of the proceeds of any such sale.
ARTICLE 12
CERTIFICATE OF OCCUPANCY
12.01. Landlord does not represent that the Certificate of Occupancy issued
for the Building permits the use of the demised premises for the purposes
specified in this Lease.
ARTICLE 13
ADJACENT EXCAVATION - SHORING
13.01. If an excavation or other substructure work shall be made upon land
adjacent to the demised premises, or shall be authorized to be made, Tenant
shall afford to the person causing or authorized to cause such excavation,
license to enter upon the demised premises for the purpose of doing such work as
shall be necessary to preserve the wall of or the Building of which the demised
premises form a part from injury or damage and to support the same by proper
foundations without any claim for damages or indemnity against Landlord, or
diminution or abatement of rent.
ARTICLE 14
CONDEMNATION
14.01. In the event that the whole of the demised premises shall be
lawfully condemned or taken in any manner for any public or quasi-public use,
this Lease and the term and estate hereby granted shall forthwith cease and
terminate as of the date of vesting of title. In the event that only a part of
the demised premises shall be so condemned or taken, then, effective as of the
date of vesting of title, the fixed annual rent under Article 1 hereof and
additional rents under Article 3 hereof shall be abated proportionately
according to the reduction in the rentable area of the demised premises
resulting from such condemnation or taking. In the event that only a part of the
Building shall be so condemned or taken, then (a) Landlord (whether or not the
demised premises shall be affected) may, at Landlord's option, terminate this
Lease and the term and estate hereby granted as of the date of such vesting of
title by notifying Tenant in writing of such termination within 60 days
following the date on which Landlord shall have received notice of vesting of
title, or (b) if such condemnation or taking shall be of a substantial part of
the demised premises or of a substantial part of the means of access thereto,
Tenant may, at Tenant's option, by delivery of notice in writing to Landlord
within 30 days following the date
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on which Tenant shall have received notice of vesting of title, terminate this
Lease and the term and estate hereby granted as of the date of vesting of title,
or (c) if neither Landlord nor Tenant elects to terminate this Lease, as
aforesaid, this Lease shall be and remain unaffected by such condemnation or
taking, except that the fixed annual rent payable under Article 1 and additional
rents payable under Article 3 shall be abated to the extent hereinbefore
provided in this Article 14.
14.02. In the event of termination of this Lease in any of the cases
hereinbefore provided, this Lease and the term and estate hereby granted shall
expire as of the date of such termination with the same effect as if that were
the Expiration Date, and the fixed annual rent and additional rents payable
hereunder shall be apportioned as of such date.
14.03. In the event of any condemnation or taking of all or a part of the
Building, Landlord shall be entitled to receive the entire award in the
condemnation proceeding, including any award made for the value of the estate
vested by this Lease in Tenant. Tenant hereby expressly assigns to Landlord
(subject to the preceding sentence), any and all right, title and interest of
Tenant now or hereafter arising in or to any such award or any part thereof, and
agrees that it shall not be entitled to receive any part of such award.
Notwithstanding the foregoing, Tenant may make a separate claim for a
condemnation award provided such claim or award could not and does not in any
way diminish Landlord's claim or award.
14.04. In the event of any taking of less than the whole of the Building
which does not result in a termination of this Lease, Landlord, at its expense,
shall proceed with reasonable diligence to repair, alter and restore the
remaining parts of the Building and the demised premises to substantially their
former condition to the extent that the same may be feasible and so as to
constitute a complete and tenantable Building and demised premises.
14.05. In the event any part of the demised premises be taken to effect
compliance with any law or requirement of public authority other than in the
manner hereinabove provided in this Article 14, then (i) if such compliance is
the obligation of Tenant under this Lease, Tenant shall not be entitled to any
diminution or abatement of rent or other compensation from Landlord therefor,
but (ii) if such compliance is the obligation of Landlord under this Lease, the
fixed annual rent hereunder shall be reduced and additional rents under Article
3 shall be adjusted in the same manner as is provided in Section 14.01 according
to the reduction in rentable area of the demised premises resulting from such
taking.
ARTICLE 15
ACCESS TO DEMISED PREMISES; CHANGES
15.01. (a) Tenant shall permit Landlord to erect, use and maintain pipes,
ducts and conduits in and through the demised premises, provided the same are
installed adjacent to or concealed behind walls and ceilings of the demised
premises. Landlord shall to the extent
25
practicable install such pipes, ducts and conduits by such methods and at such
locations as will not materially interfere with or impair Tenant's layout or use
of the demised premises. Landlord or its agents or designees shall have the
right, but only upon five (5) days prior written notice to Tenant or any
authorized employee of Tenant at the demised premises, except no notice shall be
required for an emergency, to enter the demised premises (a) for the making of
such repairs or alterations as Landlord may deem necessary for the Building or
which Landlord shall be required to or shall have the right to make by the
provisions of this Lease or any other lease in the Building, and (b) for the
purpose of inspecting them or exhibiting them to existing or prospective
purchasers, mortgagees or, upon not less than twenty-four (24) hours notice,
within the last twelve (12) months only of the term, lessees of all or part of
the Building or the Premises or to prospective assignees, agents or designees of
any such parties. Landlord shall be allowed to take all material into and upon
the demised premises that may be required for the repairs or alterations above
mentioned without the same constituting an actual or constructive eviction of
Tenant in whole or in part, and the rent reserved hereunder shall not xxxxx
while said repairs or alterations are being made by reason of loss or
interruption of the business of Tenant because of the prosecution of any such
work. Landlord shall exercise reasonable diligence so as to minimize the
disturbance to Tenant but nothing contained herein shall be deemed to require
Landlord to perform any work on an overtime or premium pay basis.
(b) Notwithstanding anything to the contrary contained in the
preceding paragraph, it is specifically agreed that Landlord reserves the
absolute right for itself and its agents, employees or designees to enter upon
the demised premises at such times, and with such frequency, as Landlord shall
determine in its sole and absolute discretion, without notice in the case of an
emergency and upon at least forty-eight (48) hours notice in non-emergency
situations, for the purposes of installing, inspecting, adjusting, maintaining,
repairing or replacing all or any portion of the Building's structural,
electrical, plumbing, elevators and mechanical and HVAC systems as are or are to
be located in the demised premises and, in connection therewith, to take all
material into and upon the demised premises as Landlord deems necessary in its
sole and reasonable discretion to accomplish the foregoing purposes. The rights
herein reserved by Landlord shall include, without limitation and without the
exercise of such rights by Landlord or its agents, employees or designee as
herein permitted constituting an actual or constructive eviction, or giving rise
to any liability whatsoever on the part of Landlord, or any claim by Tenant for
damages or abatement of rents, the following:
(i) Access through the demised premises to stairways and elevators at
any time for any purpose set forth in or contemplated by this
Lease;
(ii)Access to all conduits, pipes, wires, ducts and valves located
in or accessible through, the demised premises, including,
without limitation, all water valves relating to the Building's
plumbing, mechanical and HVAC systems.
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Without limiting the rights of Landlord as expressly reserved above, Landlord
shall:
(x) Unless otherwise required by emergency or any other cause
beyond the control of Landlord, use reasonable efforts as are practical under
the circumstances to exercise its rights hereunder in such a manner as to
minimize the disturbance to Tenant, but nothing contained herein shall be deemed
to require Landlord to perform work on an overtime or premium pay basis; and
(y) Repair any damage done to any portion of the demised premises
which is damaged or destroyed as a result of Landlord's exercise of the rights
reserved in this paragraph 15.01(b).
15.02. Landlord reserves the right, without the same constituting an actual
or constructive eviction and without incurring liability to Tenant therefor, to
change the arrangement and/or location of public entrances, passageways, doors,
doorways, corridors, elevators, stairways, toilets and other public parts of the
Building; provided, however, that access to the Building shall not be cut off
and that there shall be no unreasonable obstruction of access to the demised
premises or unreasonable interference with the use or enjoyment thereof.
15.03. Landlord reserves the right to light from to time all or any portion
of the demised premises at night for display purposes without paying Tenant
therefor provided all contractors are instructed to turn off lights when
leaving.
15.04. If Tenant shall not be personally present to open and permit an
entry into the demised premises at any time when for any reason an entry therein
shall be urgently necessary by reason of fire or emergency, Landlord or
Landlord's agents may forcibly enter the same (upon such notice, if any, as may
be practicable under the circumstances) without rendering Landlord or such
agents liable therefor (if during such entry Landlord or Landlord's agents shall
accord reasonable care to Tenant's property) and without in any manner affecting
the obligations and covenants of this Lease.
ARTICLE 16
CONDITIONS OF LIMITATION
16.01. This Lease and the term and estate hereby granted are subject to the
limitation that whenever Tenant shall make an assignment of the property of
Tenant for the benefit of creditors, or if a petition shall be filed by or
against Tenant under any provisions of the United States Bankruptcy Code or
under the provisions of any other bankruptcy or insolvency law or any law of
like import, or whenever a permanent receiver of Tenant or of or for the
property of Tenant shall be appointed, then, Landlord may (a) at any time after
receipt of notice of the occurrence of any such event, or (b) if such event
occurs without the acquiescence of Tenant, at any time after the event continues
for thirty (30) days, give Tenant
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a notice of intention to end the Term of this Lease at the expiration of 5 days
from the date of service of such notice of intention, and upon the expiration of
said 5 day period this Lease and the Term and estate hereby granted, whether or
not the Term shall theretofore have commenced, shall terminate with the same
effect as if that day were the Expiration Date, but Tenant shall remain liable
for damages as provided in Article 18.
16.02. This Lease and the Term and estate hereby granted are subject to
further limitation as follows:
(a) whenever Tenant shall fail to pay any installment of fixed
annual rent or any additional rent or any other charge payable by Tenant to
Landlord within five (5) days after written notice that the same is due and
payable pursuant to the terms hereof, or
(b) whenever Tenant shall do or permit anything to be done,
whether by action or inaction, contrary to any of Tenant's obligations
hereunder, and if such situation shall continue and shall not be remedied by
Tenant within twenty (20) days after Landlord shall have given Tenant a notice
specifying the same or, in the case of a happening or default which cannot with
due diligence be cured within a period of twenty (20) days and the continuation
of the period required for cure will not subject Landlord to the risk of
criminal liability (as more particularly described in Article 8 hereof) or any
superior lease or foreclosure of any superior mortgage, if Tenant shall not (i)
within said twenty (20) day period advise Landlord of Tenant's intention to duly
institute all steps necessary to remedy such situation, (ii) duly institute
within said twenty (20) day period, and thereafter diligently and continuously
prosecute to completion all steps necessary to remedy the same, and (iii)
complete such remedy within such time after the date of the giving of said
notice of Landlord as shall reasonably be necessary, or
(c) whenever any event shall occur or any contingency shall
arise whereby this Lease or the estate hereby granted or the unexpired balance
of the Term hereof would, by operation of law or otherwise, devolve upon or pass
to any person, firm or corporation other than Tenant, except as expressly
permitted by Article 11, or
(d) whenever the demised premises shall be abandoned, then in
any of said cases set forth in the foregoing Subsections (a), (b), (c) or (d),
Landlord may give to Tenant a notice of intention to end the Term at the
expiration of 10 days from the date of the service of such notice of intention,
and upon the expiration of said 10 days this Lease and the Term and estate
hereby granted, whether or not the Term shall theretofore have commenced, shall
terminate with the same effect as if that day were the Expiration Date, but
Tenant shall remain liable for damages as provided in Article 18.
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ARTICLE 17
RE-ENTRY BY LANDLORD, INJUNCTION
17.01. If this Lease shall terminate as in Article 16 provided, Landlord or
Landlord's agents and employees may immediately or at any time thereafter
re-enter the demised premises, or any part thereof, either by summary dispossess
proceedings or by any suitable action or proceeding at law, without being liable
to indictment, prosecution or damages therefrom. The word re-enter, as herein
used, is not restricted to its technical legal meaning.
17.02. In the event of a breach or threatened breach by Tenant of any of
its obligations under this Lease, Landlord shall also have the right of
injunction. The special remedies to which Landlord may resort hereunder are
cumulative and are not intended to be exclusive of any other remedies or means
of redress to which Landlord may lawfully be entitled at any time and Landlord
may invoke any remedy allowed at law or in equity as if specific remedies were
not provided for herein.
17.03. If this Lease shall terminate under the provisions of Article 16, or
if Landlord shall re-enter the demised premises under the provisions of this
Article 17, or in the event of the termination of this Lease, or of re-entry by
or under any summary dispossess or other proceeding or action or any provision
of law by reason of default hereunder on the part of Tenant, then (a) Tenant
shall thereupon pay to Landlord the fixed annual rent and additional rent
payable by Tenant to Landlord up to the time of such termination of this Lease,
or of such recovery of possession of the demised premises by Landlord, as the
case may be, and shall also pay to Landlord damages as provided in Article 18,
and (b) Landlord shall be entitled to retain all moneys and to draw upon all
letters of credit, if any, paid or given by Tenant to Landlord, whether as
advance rent, security or otherwise, but such moneys shall be credited by
Landlord against any fixed annual rent or additional rent due from Tenant at the
time of such termination or re-entry or, at Landlord's option against any
damages payable by Tenant under Articles 16 and 18 or pursuant to law.
17.04. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord obtaining
possession of the demised premises by reason of the violation by Tenant of any
of the convenants and conditions of this Lease or otherwise.
ARTICLE 18
DAMAGES
18.01. If this Lease is terminated under the provisions of Article 16, or
if Landlord shall re-enter the demised premises under the provisions of Article
17, or in the event of the termination of this Lease or of re-entry by or under
any summary dispossess or other proceeding
29
or action or any provision of law by reason of default hereunder on the part of
Tenant, Tenant shall pay to Landlord as damages (i) the amount required to
restore the demised premises to Building Standard; plus (ii) all additional rent
accrued but unpaid to such date; plus (iii) the unamortized portion of any real
estate brokerage commission paid by Landlord in connection with this Lease (to
be amortized on a straight line basis over the Term); plus (iv) the unamortized
portion of any rent abatement granted by Landlord to Tenant amortized over the
term; plus (v) at the election of Landlord, either:
(a) a sum which at the time of such termination of this Lease or
at the time of any such re-entry by Landlord, as the case may be, is the excess,
if any, of the present value (determined using a discount rate equal to the
prime rate then announced by Citibank, N.A.), of
(1) the aggregate of the fixed annual rent and the additional rent
payable hereunder which would have been payable by Tenant
(conclusively presuming the additional rent to be the same as was
payable for the year immediately preceding such termination
except that additional rent on account of increases in Real
Estate Taxes shall be presumed to increase at the average of the
rates of increase thereof previously experienced by Landlord
during the period (not to exceed 3 years) prior to such
termination) for the period commencing with such earlier
termination of this Lease or the date of any such re-entry, as
the case may be, and ending with the Expiration Date, had this
Lease not so terminated or had Landlord not so re-entered the
demised premises, over
(2) the aggregate rental value of the demised premises for the same
period, or
(b) sums equal to the fixed annual rent and the additional rent
payable hereunder which would have been payable by Tenant had this Lease not so
terminated, or had Landlord not so re-entered the demised premises, payable upon
the due dates therefor specified herein following such termination or such
re-entry and until the Expiration Date, provided, however, that if Landlord
shall re-let the demised premises during said period, Landlord shall credit
Tenant with the net rents received by Landlord from such re-letting, such net
rents to be determined by first deducting from the gross rents as and when
received by Landlord from such re-letting, the expenses incurred or paid by
Landlord in terminating this Lease or in re-entering the demised premises and in
securing possession thereof, as well as the expenses of re-letting, including
altering and preparing the demised premises for new tenants (including tenant
work letters), brokers' commissions, legal fees, and all other expenses properly
chargeable against the demised premises and the rental thereof; it being
understood that any such re-letting may be for a period shorter or longer than
the remaining term of this Lease. In no event shall Tenant be entitled to
receive any excess of such net rents over the sums payable by Tenant to Landlord
hereunder for the period of such re-letting, nor shall Tenant be entitled in any
suit for collection of damages pursuant to this subsection to a credit in
respect of any net rents
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from re-letting, except to the extent that such net rents are actually received
by Landlord. If the demised premises or any part thereof should be re-let in
combination with other space, then proper apportionment on a square foot basis
shall be made of the rent received from such re-letting and of the expenses of
re-letting. If the demised premises or any part thereof be re-let by Landlord
for the unexpired portion of the term of this Lease, or any part thereof, before
presentation of proof of such damages to any court, commission or tribunal, the
amount of rent payable pursuant to such re-letting shall, prima facie, be the
fair and reasonable rental value for the demised premises, or part thereof, so
re-let during the term of the re-letting.
18.02 Suit or suits for the recovery of such damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained herein shall be deemed to require Landlord to postpone suit
until the date when the Term would have expired if it had not been so terminated
under the provisions of Article 16, or under any provision of law, or had
Landlord not re-entered the demised premises. Nothing herein contained shall be
construed to limit or preclude recovery by Landlord against Tenant of any sums
or damages to which, in addition to the damages particularly provided above,
Landlord may lawfully be entitled by reason of any default hereunder on the part
of Tenant.
ARTICLE 19
LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
19.01 If Tenant shall default in the observance or performance of any term
or covenant on Tenant's part to be observed or performed under any of the terms
or provisions of this Lease, (a) Landlord may remedy such default for the
account of Tenant, immediately and without notice in case of emergency, or in
any other case if Tenant shall fail to remedy such default with all reasonable
dispatch after Landlord shall have notified Tenant in writing of such default
and the applicable grace period for curing such default shall have expired; and
(b) if Landlord makes any expenditures or incurs any obligations for the payment
of money in connection with such default including, but not limited to,
reasonable attorneys' fees in instituting, prosecuting or defending any action
or proceeding, such sums paid or obligations incurred, with interest at the
Interest Rate, shall be deemed to be additional rent hereunder and shall be paid
by Tenant to Landlord upon rendition of a xxxx to Tenant therefor.
The provisions of this Article 19 shall survive the expiration or other
termination of this Lease.
ARTICLE 20
QUIET ENJOYMENT
20.01 Landlord covenants and agrees that subject to the terms and
provisions of this Lease, if, and so long as, Tenant is not in default hereunder
beyond any applicable notice and/or cure period and keeps and performs each and
every covenant, agreement, term, provision and condition herein contained on the
part or on behalf of Tenant to be kept or performed, then
31
Tenant shall be entitled to the quiet enjoyment of the demised premises and
Tenant's rights under this Lease shall not be cut off or ended before the
expiration of the term of this Lease, subject however, to: (i) the obligations
of this Lease, and (ii) the provisions of Article 25 hereof with respect to
Superior Instruments (as defined in Article 25 hereof) which affect this Lease.
ARTICLE 21
SERVICES AND EQUIPMENT
21.01. So long as Tenant is not in default under any of the covenants of
this Lease, Landlord shall:
(a) Provide two passenger elevators 24 hours per day, and use (when
not in use by others), of one freight elevator from 9:00 a.m. to 5:00 p.m. on
Business Days.
(b) Furnish hot and cold water for lavatory and drinking and office
cleaning purposes. If Tenant requires, uses or consumes water for any other
purposes, Tenant agrees that Landlord may install a meter or meters or other
means to measure Tenant's water consumption, and Tenant further agrees to
reimburse Landlord for the cost of the meter or meters and the installation
thereof, and to pay for the maintenance of said meter equipment and/or to pay
Landlord's cost of other means of measuring such water consumption by Tenant.
Tenant shall reimburse Landlord for the cost of all water consumed other than
for lavatory and drinking and office cleaning purposes, as measured by said
meter or meters or as otherwise measured, including sewer rents imposed as a
result of use other than for lavatory, drinking and office cleaning purposes.
(c) Furnish heat to the demised premises from 8 A.M. to 6 P.M. on
Business Days sufficient to maintain temperatures at all times of the year,
substantially in the range set forth on Exhibit B. Tenant shall control the HVAC
systems located at the demised premises, subject to Landlord's right to install,
inspect, adjust, maintain, repair or replace such systems pursuant to Section
15.1 hereof.
21.02 Landlord reserves the right without any liability whatsoever, or
abatement of fixed annual rent, or additional rent, to stop the heating, air
conditioning, elevator, plumbing, electric and other systems when necessary by
reason of accident or emergency or for repairs, alterations, replacements or
improvements, provided that except in case of emergency, Landlord will notify
Tenant in advance, if possible, of any such stoppage and, if ascertainable, its
estimated duration, and will proceed diligently with the work necessary to
resume such service as promptly as possible and in a manner so as to minimize
interference with the Tenant's use and enjoyment of the demised premises, but
Landlord shall not be obligated to employ overtime or premium labor therefor.
32
21.03. Tenant shall arrange for the cleaning of the demised premises and
the removal of its own refuse and rubbish.
21.04. Landlord shall provide one person in the lobby for security
purposes, from 8:00 a.m. to 6:00 p.m. Business Days who shall provide such
security services as are generally provided in similar office buildings (i.e.,
sign-in-book). Tenant shall have access to the demised premises twenty-four (24)
hours a day, seven (7) days a week.
21.05. Landlord will not be required to furnish any other services, except
as otherwise provided in this Lease.
ARTICLE 22
DEFINITIONS
22.01. The term "Landlord" as used in this Lease means only the owner, or
the mortgagee in possession, at any time, of the Building (or the owner of a
lease of the Building or of the Premises and Building), so that in the event of
any transfer of title to said Premises and Building or said lease, or in the
event of a lease of the Building, or of the Premises and Building, upon
notification to Tenant of such transfer or lease the said transferor Landlord
shall be and hereby is entirely freed and relieved of all existing or future
covenants, obligations and liabilities of Landlord hereunder, and it shall be
deemed and construed as a covenant running with the land without further
agreement between the parties or their successors in interest, or between the
parties and the transferee of title to said Premises and Building or said lease,
or the said lessee of the Building or of the Premises and Building, that the
transferee or the lessee, as applicable, has assumed and agreed in writing to
carry out any and all such covenants, obligations and liabilities of Landlord
hereunder.
22.02. The term "Business Days" as used in this Lease shall exclude
Saturdays, Sundays and all days observed as legal holidays and defined as Public
Holidays in the Official Directory of the City of New York as well as all other
days recognized as holidays under applicable union contracts.
22.03. The term "Interest Rate" shall mean a rate per annum equal to the
lesser of (a) 2% above the "base rate" of Citibank, N.A., as publicly announced
from time to time or if Citibank, N.A. shall cease to exist or cease to announce
such rate, any similar rate designated by Landlord which is publicly announced
from time to time by any other bank in the City of New York having combined
capital and surplus in excess of $100,000,000 or (b) the maximum rate of
interest, if any, which Tenant may legally contract to pay.
22.04. The term "Legal Requirements" shall mean laws, statutes and
ordinances including building codes and zoning regulations and ordinances and
the orders, rules,
33
regulations, directives and requirements of all federal, state, county, city and
borough departments, bureaus, boards, agencies, offices, commissions and other
subdivisions thereof, or of any official thereof, or of any other governmental,
public or quasi-public authority, whether now or hereafter in force, which may
be applicable to the Premises or Building or the demised premises or any part
thereof, or the sidewalks, curbs or areas adjacent thereto and all requirements,
obligations and conditions of all instruments of record on the date of this
Lease.
ARTICLE 23
INVALIDITY OF ANY PROVISION
23.01. If any term, covenant, condition or provision of this Lease or the
application thereof to any circumstance or to any person, firm or corporation
shall be invalid or unenforceable to any extent, the remaining terms, covenants,
conditions and provisions of this Lease shall not be affected thereby and each
remaining term, covenant, condition and provision of this Lease shall be valid
and shall be enforceable to the fullest extent permitted by law.
ARTICLE 24
BROKERAGE
24.01. Tenant and Landlord covenant, represent and warrant to each other
that each has had no dealings or negotiations with any broker or agent other
than Insignia/ESG in connection with the consummation of this Lease, and each
party hereto covenants and agrees to pay, hold harmless and indemnify the other
from and against any and all cost, expense (including reasonable attorney's fees
and court costs), loss and liability for any compensation, commissions or
charges claimed by any broker or agent, other than the broker set forth in this
Section 24.01, with respect to this Lease or the negotiation thereof if such
claim or claims by any such broker or agent are based in whole or in part on
dealing with the party from which such indemnification is sought. Landlord
agrees to pay to the broker specified in this Section 24.01 such compensation,
commissions or charges to which it is entitled pursuant to a separate agreement
between said broker and Landlord.
ARTICLE 25
SUBORDINATION
25.01. This Lease is and shall be subject and subordinate to all ground or
underlying leases which may now or hereafter affect the Premises or the Building
and to all mortgages which may now or hereafter affect such leases, the Premises
or the Building, and to all renewals, refinancings, modifications, replacements
and extensions thereof (hereinafter called "Superior Instruments"). Upon
execution of this Lease, Landlord shall request and use its reasonable
commercial efforts to obtain prior to the date which is thirty (30) days after
the date
34
hereof, for the benefit of Tenant, a "non-disturbance agreement" in the form
then utilized by the holder of the Superior Instrument. In confirmation of such
subordination and non-disturbance, Tenant shall promptly execute and deliver at
its own cost and expense any instrument, in recordable form if required, that
Landlord, the holder of any Superior Instrument or any of their respective
successors in interest may reasonably request to evidence such subordination and
non-disturbance. If such non-disturbance agreement is not obtained by Landlord
within thirty (30) days from the Commencement Date, Tenant shall have the right,
within thirty-five (35) days of the Commencement Date to terminate this Lease
upon notice to Landlord, and all parties shall thereupon be released form all
obligations to each other under this Lease.
25.02. In the event of a termination of any ground or underlying lease, or
if the interests of Landlord under this Lease are transferred by reason of, or
assigned in lieu of, foreclosure or other proceedings for enforcement of any
mortgage, or if the holder of any mortgage acquires a lease in substitution
therefor, then Tenant under this Lease may be requested to, at the option to be
exercised in writing by the holder of any such Superior Instrument or any
purchaser, assignee or lessee, as the case may be, and if so requested shall,
either (i) attorn to it and perform for its benefit all the terms, covenants and
conditions of this Lease on Tenant's part to be performed with the same force
and effect as if it were the landlord originally named in this Lease, or (ii)
enter into a new lease with it for the remaining term of this Lease and
otherwise on the same terms and conditions and with the same options, if any,
then remaining. The foregoing provisions of clause (i) of this Section 25.02
shall enure to the benefit of such holder of a Superior Instrument, purchaser,
assignee or lessee, shall be self-operative upon the exercise of such option,
and no further instrument shall be required to give effect to said provisions.
Tenant, however, upon demand of any such holder of a Superior Instrument,
purchaser, assignee or lessee agrees to execute, from time to time, reasonable
instruments in confirmation of the foregoing provisions of this Section 25.02,
satisfactory to any such holder of a Superior Instrument, purchaser, assignee or
lessee, acknowledging such attornment and setting forth the terms and conditions
of its tenancy.
25.03. Anything herein contained to the contrary notwithstanding, under no
circumstances shall any such holder of a Superior Instrument, purchaser,
assignee or lessee, as the case may be, whether or not it shall have succeeded
to the interests of Landlord under this Lease, be
(a) liable for any act, omission or default of any prior
landlord; or
(b) subject to any offsets, claims or defenses which the Tenant
might have against any prior landlord; or
(c) bound by any rent or additional rent which Tenant might have
paid to any prior landlord for more than one month in advance or for more than
three months in advance where such rent payments are payable at intervals of
more than one month; or
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(d) bound by any modification, amendment or abridgment of this
Lease, or any cancellation or surrender of the same, made without its prior
written approval.
25.04. If, in connection with the financing of the Building, the holder of
any mortgage shall request reasonable modifications in this Lease as a condition
of approval thereof, Tenant will not unreasonably withhold, delay or defer
making such modifications provided the same do not (i) increase the fixed annual
rent or additional rents payable by Tenant (ii) reduce the Term hereof (iii)
extend the Term hereof except as otherwise provided in Article 41 or (iv)
materially reduce Tenant's rights.
ARTICLE 26
CERTIFICATES
26.01. Each party shall, without charge, at any time and from time to time,
within ten (10) days after request by the other party, execute, acknowledge and
deliver to the requesting party, the holder of a Superior Instrument or any
other person, firm or corporation, a written instrument (an "Estoppel
Certificate") in such form as may be reasonably required by the requesting party
or the holder of any Superior Instrument. Prior to taking occupancy of the
demised premises, and as a condition precedent thereto, Tenant shall execute,
acknowledge and deliver an estoppel certificate to Landlord.
26.02. Tenant agrees that, except for the first month's rent hereunder, it
will pay no rent under this Lease more than thirty (30) days in advance of its
due date, if so restricted by any existing or future Superior Instrument or by
an assignment of this Lease to the holder of such Superior Instrument, and, in
the event of any act or omission by Landlord which would give Tenant the right
to terminate this Lease, Tenant will not exercise such right until Tenant shall
have first given written notice of such act or omission to the holder of any
Superior Instrument who shall have furnished such holder's last address to
Tenant, and until a reasonable period, for remedying such act or omission shall
have elapsed following the giving of such notices, during which time such holder
shall have the right, but shall not be obligated, to remedy or cause to be
remedied such act or omission. Tenant further agrees not to exercise any such
right if the holder of any such Superior Instrument commences to cure such act
or omission within a reasonable time after having received notice thereof and
diligently prosecutes such cure thereafter.
26.03. Tenant shall, without charge, at any time and from time to time
deliver to Landlord within ten (10) days alter request therefor (a) copies of
the most current financial statements of Tenant and of any guarantor of Tenant's
obligations under the Lease certified by an independent certified public
accountant and (b) such further detailed financial information with respect to
Tenant and any such guarantors as Landlord or the holder of any Superior
Instrument may request.
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ARTICLE 27
LEGAL PROCEEDINGS, WAIVER OF JURY TRIAL
27.01. Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matters whatsoever arising out of or in any way in connection with
this Lease, the relationship of Landlord and Tenant arising out of this Lease,
Tenant's use or occupancy of the demised premises, and/or any other claims
(except claims for personal injury or property damages), and any statutory
emergency or any other statutory remedy. It is further mutually agreed that in
the event Landlord commences any summary proceeding for non-payment of rent,
Tenant will not interpose and does hereby waive the right to interpose any
non-compulsory counterclaim of whatever nature or description in any such
proceeding. Tenant shall reimburse Landlord upon demand for all costs and
expenses (including reasonable attorney's fees and disbursements and court
costs) incurred by Landlord in connection with enforcing Tenant's obligations
hereunder or in protecting Landlord's rights hereunder whether incurred in
connection with an action or proceeding commenced by Landlord, by Tenant, by a
third party or otherwise. All such amounts shall be deemed to be additional rent
and shall be collectible in the same manner as provided in Section 1.02 hereof.
ARTICLE 28
SURRENDER OF PREMISES
28.01. Upon the expiration or other termination of the Term, Tenant shall
quit and surrender to Landlord the demised premises, broom clean, in good order
and in the condition required by the Lease, ordinary wear and tear and damage by
fire, the elements or other casualty excepted, other than such damage caused by
Tenant, and Tenant shall remove all of its property as herein provided. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of the Term.
28.02. If Tenant shall, without the written consent of Landlord, hold over
the expiration of the Term such tenancy shall be deemed a month-to-month
tenancy, which tenancy may be terminated as provided by applicable law. During
such tenancy, Tenant agrees to (a) pay to Landlord, each month, the greater of
the fair market rental value for the demised premises or one hundred twenty
(120) percent of the fixed annual rent and all additional rent payable by Tenant
for the last month of the Term and (b) be bound by all of the terms, covenants
and conditions herein specified except those pertaining to the Term. Nothing
contained in this Section 28.02 shall be deemed in limitation of Landlord's
rights and remedies against Tenant for Tenant's failure to have surrendered the
demised premises prior to the expiration of the Term.
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ARTICLE 29
RULES AND REGULATIONS
29.01. Tenant and Tenant's servants, employees, agents, licensees,
invitees, visitors and patrons shall observe faithfully and comply with such
reasonable Rules and Regulations as Landlord or Landlord's agents may from time
to time adopt and uniformly enforce, provided, however, that in case of any
conflict or inconsistency between the provisions of this Lease and of any of the
Rules and Regulations as originally or as hereafter adopted, the provisions of
this Lease shall control. Reasonable written notice of any additional Rules and
Regulations shall be given to Tenant.
Nothing in this Lease contained shall be construed to impose upon
Landlord any duty or obligation to enforce the Rules and Regulations or the
terms, covenants or conditions in any other lease, against any other tenant of
the Building, and Landlord shall not be liable to Tenant for violation of the
same by any other tenant, its servants, employees, agents, visitors or
licensees.
Tenant shall be entitled to have its name placed in the directory of
the Building located in the lobby, with the number of listings to be in
proportion with the other tenants in the Building.
ARTICLE 30
CONSENTS AND APPROVALS
30.01. Wherever in this Lease Landlord's consent or approval is required,
if Landlord shall delay or refuse such consent or approval, then unless Landlord
is acting with malice or manifest bad faith, Tenant in no event shall be
entitled to make, nor shall Tenant make, any claim, and Tenant hereby waives any
claim, for money damages (nor shall Tenant claim any money damages by way of
set-off, counterclaim or defense) based upon any claim or assertion by Tenant
that Landlord unreasonably withheld or unreasonably delayed its consent or
approval. Tenant's sole remedy shall be an action or proceeding to enforce any
such provision, for specific performance, injunction or declaratory judgment.
ARTICLE 31
NOTICES
31.01. Any notice or demand, consent, approval or disapproval, or statement
(collectively called "Notices") required or permitted to be given by the terms
and provisions of this Lease, or by any law or governmental regulation, either
by Landlord to Tenant or by Tenant to Landlord, shall be in writing and unless
otherwise required by such law or regulation, shall
38
be sent by United States mail postage prepaid as registered or certified mail,
return receipt requested. Any Notice shall be addressed to Landlord at its
address set forth on page 1 of this Lease with a copy to Xxxxx X. Xxxxxx, Esq.,
Xxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxx, P.C., 0000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 and any notice to Tenant shall be sent to Tenant at
000 Xxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx
Xxxxxxx with a copy to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention Xxxxxx X. Xxxxxx, Esq. After
Tenant shall occupy the demised premises, the address of Tenant for Notices
shall be the Building. By giving the other party at least ten days prior written
notice, either party may, by Notice given as above provided, designate a
different address or addresses for Notices.
31.02 Any Notice shall be deemed given as of the date of delivery as
indicated on the return receipt; and in the case of failure to delivery by
reason of changed address of which no Notice was given or refusal to accept
delivery, as of the date of such failure as indicated on the return receipt or
by notice of the postal department.
31.03. In addition to the foregoing, either Landlord or Tenant may, from
time to time, request in writing that the other party serve a copy of any Notice
on one other person or entity designated in such request, such service to be
effected as provided in Section 31.01 hereof.
ARTICLE 32
NO WAIVER
32.01. No agreement to accept a surrender of this Lease shall be valid
unless in writing signed by Landlord. No employee of Landlord or of Landlord's
agents shall have any power to accept the keys of the demised premises prior to
the termination of this Lease. The delivery of keys to any employee of Landlord
or of Landlord's agent shall not operate as a termination of this Lease or a
surrender of the demised premises. In the event of Tenant at any time desiring
to have Landlord sublet the premises for Tenant's account, Landlord or
Landlord's agents are authorized to receive said keys for such purpose without
releasing Tenant from any of the obligations under this Lease. The failure of
Landlord to seek redress for violation of, or to insist upon the strict
performance of, any covenant or condition of this Lease or, as to Landlord, any
of the Rules and Regulations set forth herein or hereafter adopted by Landlord,
shall not prevent a subsequent act, which would have originally constituted a
violation, from having all the force and effect of an original violation. The
receipt by Landlord of rent with knowledge of the breach of any covenant of this
Lease shall not be deemed a waiver of such breach. The failure of Landlord to
enforce any of the Rules and Regulations set forth herein, or hereafter adopted,
against Tenant and/or any other tenant in the Building shall not be deemed a
waiver of any such Rules and Regulations. No provision of this Lease shall be
deemed to have been waived by Landlord, unless such waiver be in writing signed
by such party. No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly rent herein stipulated shall be deemed to be other than on the
account of the earliest stipulated rent, nor shall any endorsement or
39
statement on any check or any letter accompanying any check or payment of rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy in this Lease provided and Tenant may deliver
such check without prejudice to Tenant's right to pursue any other remedy.
32.02. This Lease contains the entire agreement between the parties, and
any executory agreement hereafter made shall be ineffective to change, modify,
discharge or effect an abandonment of it in whole or in part unless such
executory agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is sought.
ARTICLE 33
CAPTIONS
33.01. The captions are inserted only as a matter of convenience and for
reference, and in no way define, limit or describe the scope of this Lease nor
the intent of any provision hereof.
ARTICLE 34
INABILITY TO PERFORM
34.01. If, by reason of (1) strike, (2) labor troubles, (3) governmental
preemption in connection with a national emergency, (4) any rule, order or
regulation of any governmental agency, (5) conditions of supply or demand which
are affected by war or other national, state or municipal emergency, or any
other cause or (6) any cause beyond Landlord's reasonable control, Landlord
shall be unable to fulfill its obligations under this Lease or shall be unable
to supply any service which Landlord is obligated to supply, this Lease and
Tenant's obligation to pay rent hereunder shall in no wise be affected, impaired
or excused.
ARTICLE 35
NO REPRESENTATIONS
35.01. Landlord or Landlord's agents have made no representations or
promises with respect to the Building or demised premises except as herein
expressly set forth. Landlord represents that there is no asbestos in the
demised premises.
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ARTICLE 36
ARBITRATION
36.01. In each case specified in this Lease in which resort to arbitration
shall be required, such arbitration (unless otherwise specifically provided in
other Sections of this Lease) shall be in New York City in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and the
provisions of this Lease. The decision and award of the arbitrators shall be in
writing, shall be final and conclusive on the parties, and counterpart copies
thereof shall be delivered to each of the parties. In rendering such decision
and awards, the arbitrators shall not add to, subtract from or otherwise modify
the provisions of this Lease. Judgment may be had on the decision and award of
the arbitrators so rendered in any court of competent jurisdiction.
ARTICLE 37
INDEMNITY
37.01. Tenant shall indemnify Landlord and save it harmless from and
against any and all liability, damages, costs or expenses, including attorneys'
fees, arising from any wrongful act, omission, or negligence of Tenant or its
officers, contractors, licensees, agents, employees, guests, invitees, or
visitors in or about the Building or arising from any breach or default under
this Lease by Tenant, or arising from any accident, injury, or damage, howsoever
and by whomsoever caused, to any person or property, occurring in or about the
Building or the Premises. This provision shall not be construed to make Tenant
responsible for loss, damage, liability or expense resulting from injuries to
third parties caused by the negligence of Landlord, or its officers,
contractors, licensees, agents, employees or invitees.
ARTICLE 38
MEMORANDUM OF LEASE
38.01. Either party shall, at the request of the other, execute and deliver
a statutory form of memorandum of this Lease for the purpose of recording, but
said memorandum of this Lease shall not in any circumstances be deemed to modify
or to change any of the provisions of this Lease.
41
ARTICLE 39
SIGNS
39.01. Tenant shall not erect or install any signs in the Building, on the
Premises or in the third floor lobby, or any signs visible from the exterior of
the Building, unless such signs have been approved in writing by Landlord. It is
understood and agreed that Landlord will not approve any sign if, in Landlord's
sole judgment, such sign does not conform to the decor and character of the
Building. Landlord hereby approves Tenant's signage as set forth on Exhibit D
hereto.
ARTICLE 40
SECURITY DEPOSIT
40.01. Tenant shall deposit with Landlord upon execution hereof an
irrevocable and unconditional sight-draft Letter of Credit in form and substance
reasonably acceptable to Landlord, issued by a banking institution reasonably
acceptable to Landlord in an initial amount equal to $537,500, with an
expiration date of the first anniversary of the Rent Commencement Date, as
security for the full and faithful performance and observance by Tenant of
Tenant's covenants and obligations under this Lease (the "Security"). Such
Letter of Credit shall be renewed annually by Tenant not less than 30 days prior
to its expiration, in such amount as shall be required for the next twelve month
period in the following amount:
Anniversary of Rent Commencement Date Amount
------------------------------------- ------
1 $375,500
2 322,000
3 268,500
4 161,000
5 117,000
6 and thereafter an amount
equal to two (2) months
fixed annual rent, as in
effect from time to time
In the event Tenant fails to timely renew such Letter of Credit, notwithstanding
any other provision contained in this Lease to the contrary, Landlord may
immediately draw upon the existing Letter of Credit without notice to Tenant.
Should Tenant default beyond any applicable notice and grace period in respect
of any of the terms, provisions and conditions of this Lease, including, but not
limited to, the payment of fixed annual rent and additional rent, Landlord may
use, apply or retain the whole or any part of the Security to the extent
required for the payment
42
of any fixed annual rent and additional rent or any other sum as to which Tenant
is in default or for any sum which Landlord may expend or may be required to
expend by reason of Tenant's default in respect of any of the terms, covenants
and conditions of this Lease, including but not limited to, any damages or
deficiency accrued before or after summary proceedings or other reentry by
Landlord. In the event of a sale of the demised premises and Building, Landlord
has the right to transfer the Security to the vendee and Landlord shall
thereupon be released by Tenant from all liability for the return of such
Security, and Tenant agrees to look to the new Landlord solely for the return of
said Security; and it is agreed that the provisions hereof shall apply to every
transfer or assignment made of the Security to a new landlord.
40.02 If Landlord shall so use, apply or retain the whole or any part of
the Security, Tenant shall, upon demand, immediately deposit a replacement
irrevocable and unconditional Letter of Credit in the full amount required
hereunder or increase the Security held by Landlord to the amount then required
hereunder.
40.03 If Landlord's reimbursement for Tenant's Extra Work shall exceed
$375,000, as provided in Section 6.09, then the amount of the Letter of Credit
as set forth in the Schedule set forth in Section 40.01 hereof (the "Scheduled
L/C Amount"), shall be increased, prior to the Rent Commencement Date, by the
amount in excess of $375,000 (the "Excess Amount"), and the Scheduled L/C
Amount, as increased by the Excess Amount shall be reduced (in addition to the
reductions to the Scheduled L/C Amount already provided for in Section 40.01),
on each anniversary of the Rent Commencement Date by 14.28% of the Excess
Amount, but in no event to less than two (2) months fixed annual rent. For
example, if the Excess Amount is $75,000, the Scheduled L/C Amount shall reduce
by $10,714.28 on each anniversary of the Rent Commencement Date, but in no event
to less than two (2) months fixed annual rent.
ARTICLE 41
ADDITIONAL SPACE
41.01. Subject to the rights of any other tenant in the Building who shall
have executed a Lease with Landlord prior to the date of this Lease, and
provided Tenant is then a tenant in the Building and is not in default under
this Lease, and if Landlord shall have available for rental any space on the
third floor of the Building or on the second or fourth floor which can be
directly connected to the demised premises by an internal stairway, or if
Landlord shall be aware that such space in the Building is becoming available to
be put on the market, Landlord shall give notice (the "Notice") to Tenant, which
Notice shall set forth the terms and conditions on which Landlord intends to
offer such space for rental to the public. Tenant shall then have 10 days to
enter into a lease with Landlord for such space, which shall be on the same
terms and conditions as this Lease, except as otherwise set forth in the Notice.
If Tenant shall not enter into such Lease with Landlord within said 10 day
period, time being of the essence, Tenant's rights under this Article 41 shall
terminate. Tenant's right hereunder shall not apply to any renewal, extension or
new lease with a tenant in the building relating to space then occupied by said
tenant.
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ARTICLE 42
RENEWAL OPTION
42.01. If Tenant is not in default under this Lease, Tenant shall have an
option (the "Option") to extend the term of this Lease for one (1) additional
term of ten (10) years (the "Renewal Term") commencing on the first day next
succeeding the Expiration Date upon the same terms, conditions and provisions as
are provided for in this Lease other than the provisions of this Article 42 (and
further provided that there shall be no rent abatement or continuation by
Landlord for any work to be performed by Tenant), except that the fixed annual
rent payable pursuant to Article 1 hereof for the Renewal Term shall be the
greater of (i) the fixed annual rent payable thereunder immediately prior to the
Expiration Date or (ii) the fair market rent for the demised premises as of such
Expiration Date determined in the manner hereinafter provided.
42.02. The Option shall be exercised by Tenant giving written notice to
Landlord of Tenant's exercise of said Option by certified mail, return receipt
requested, not less than twelve (12) months prior to the Expiration Date of the
Term (the "Exercise Notice"). Upon Tenant's giving of the Exercise Notice, the
term of this Lease shall be extended automatically upon the terms and conditions
herein specified, including, without limitation, the same Base Tax set forth in
Article 3 hereof, without the execution of an extension agreement or other
instrument. If Tenant shall not give Landlord the Exercise Notice at the time
and in the manner set forth above, the Option shall terminate and be deemed
waived by Tenant. Time is of the essence as to the date for the giving of the
Exercise Notice.
42.03. After Landlord receives the Exercise Notice, and if in Landlord's
opinion an increase in the fixed annual rent for the Renewal Term is warranted
because the fair market rent for the demised premises has increased, Landlord
shall send Tenant a notice (the "Revised Rent Notice") stating the amount which,
in Landlord's opinion, shall constitute the fair market rent for the demised
premises as of the Expiration Date. The increased fixed annual rent set forth in
the Revised Rent Notice shall be effective as of the first day of the Renewal
Term.
42.04. (a) If Landlord gives a Revised Rent Notice, then at any time within
30 days after the giving of such Revised Rent Notice, Tenant may dispute the
fair market rent for the demised premises as determined by Landlord by giving
notice to Landlord that it is initiating the appraisal process provided for
herein and specifying in such Notice the name and address of the appraiser
designated by Tenant to act on its behalf. Within 15 days after the designation
of Tenant's appraiser, Landlord shall give notice to Tenant specifying the name
and address of Landlord's appraiser. The two appraisers so chosen shall meet
within 10 days after the second appraiser is appointed and if, within 20 days
after the second appraiser is appointed, the two appraisers shall not agree upon
a determination in accordance with Paragraph (c) of this Section 42.04 they
shall together appoint a third appraiser. If said two appraisers cannot agree
upon the appointment of a third appraiser within 10 days after the expiration of
such 20 day period, then
44
either party, on behalf of both, and on notice to the other may request such
appointment by the President of the Real Estate Board of New York, Inc. (or any
successor organization) in accordance with its then-prevailing rules. If said
President shall fail to appoint said third appraiser within 10 days after such
request is made, then either party, on behalf of both, and on notice to the
other may request such appointment by the American Arbitration Association (or
any successor organization) in accordance with its then prevailing rules. If the
American Arbitration Association shall fail to appoint said third appraiser
within 10 days after such request is made, then either party may apply, on
notice to the other, to the Supreme Court, New York County, New York (or any
other court having jurisdiction and exercising functions similar to those now
exercised by the foregoing court) for the appointment of such third appraiser.
(b) Each of the appraisers selected as herein provided shall have at
least five years experience in the leasing or management of space in the Borough
of Manhattan. Each party shall pay the fees and expenses of the appraiser
selected by it. The fees and expenses of the third appraiser and all other
expenses (not including the attorney's fees, witness fees and similar expenses
of the parties which shall be borne separately by each of the parties) of the
arbitration shall be borne equally by the parties hereto.
(c) The majority of the appraisers shall determine the fair market
rent of the demised premises as of the Expiration Date and render a decision and
award as to their determination to both Landlord and Tenant within 20 days after
the appointment of the third appraiser. In rendering such decision and award,
the appraisers shall assume or take into consideration as appropriate all of the
following: (i) the Landlord and prospective tenant are typically motivated; (ii)
the Landlord and prospective tenant are well informed and well advised and each
is acting in what it considers its own best interest; (iii) a reasonable time
under then-existing market conditions is allowed for exposure of the demised
premises on the open market; (iv) the rent is unaffected by concessions, special
financing amounts and/or terms, or unusual services, fees, costs or credits in
connection with the leasing transaction; (v) the demised premises are fit for
immediate occupancy and use "as is" and require no additional work by Landlord
and that no work has been carried out thereon by the Tenant, its subtenant, or
their predecessors in interest during the Term which has diminished the rental
value of the demised premises; (vi) in the event the demised premises have been
destroyed or damaged by fire or other casualty, they have been fully restored;
(vii) the demised premises are to be let with vacant possession and subject to
the provisions of this Lease for a 10 year term; and (viii) market rents then
being charged for comparable space in other similar office buildings in the same
area. In rendering such decision and award, the appraisers shall not modify the
provisions of this Lease. The decision and award of the appraisers shall be in
writing and be final and conclusive on all parties and counterpart copies
thereof shall be delivered to each of said parties. Judgment may be had on the
decision and award of the appraisers so rendered in any court of competent
jurisdiction.
(d) Prior to the determination of the appraisers, Tenant shall pay as
the fixed annual rent it is obligated to pay under this Lease the amount set
forth in the Revised Rent
45
Notice and in the event the appraisers determine that the fixed annual rent
payable pursuant to this Article 42 is greater than that set forth in the
Revised Rent Notice, then Tenant shall promptly pay to Landlord the amount of
its underpayment of fixed annual rent for the period commencing on the first day
of the Renewal Term, or if the appraisers determine that the fixed annual rent
payable pursuant to this Article 42 is less than that set forth in the Revised
Rent Notice, then Tenant shall be entitled to a credit in the amount of its
overpayment for the period commencing on the first day of the Renewal Term
against subsequent payments of fixed annual rent due hereunder.
(e) Nothing contained in this Article 42 shall be deemed in any way
to alter or modify the provisions of Article 3 hereof.
(f) In no event shall the fixed annual rent (as the same may have
been increased from time to time in accordance with this Lease) be reduced
pursuant to this Article 42.
42.05. Notwithstanding the foregoing provisions of this Article 42, if on
the date that Tenant exercises the Option, or if on any subsequent date up to
and including the date upon which the extension of the term commences, Tenant is
in default, beyond any applicable notice and grace periods, in the payment of
fixed annual rent or additional rent hereunder, or is in default in the
performance of any of the other terms, conditions or provisions of this Lease,
Tenant's exercise of such Option and the extension of the Term covered by this
Lease contemplated thereby shall, at the option of Landlord exercised by written
notice to Tenant, be rendered null and void and shall be of no further force and
effect and Tenant shall have no other additional right to exercise such option,
which shall be deemed waived by Tenant.
42.06. If Tenant exercises the Option, then, at Landlord's request, Tenant
agrees within ten (10) days after such request is made to execute, acknowledge
and deliver to Landlord an instrument in form and substance satisfactory to
Landlord, confirming (i) the fixed annual rent payable under this Lease pursuant
to Article 42, unless Tenant is then, in good faith, disputing same in
accordance with the provision of this Article 42, in which case Tenant agrees to
execute, acknowledge and deliver a separate instrument satisfactory to Landlord
confirming the fixed annual rent as finally determined, (ii) the expiration date
of the Term, and (iii) the other modifications provided for in this Article 42,
but no such instrument shall be required in order to make the provisions hereof
effective.
42.07. Notwithstanding anything contained in this Article 42, the fixed
annual rent as determined by the appraisers, shall be increased by Fifty
Thousand and 00/100 ($50,000.00) Dollars commencing on the fifth anniversary of
the commencement of the Renewal Term, consistent with the similar increase
applicable during the Initial Term, as provided in Section 1.01 hereof. In
making the determination of fixed annual rent, the appraisers shall deem that
this Section 42.02 is not contained in the Lease, and shall not consider the
increase provided for in this Section 42.07.
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ARTICLE 43
MISCELLANEOUS
43.01. 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.
43.02. This Lease shall be construed without regard to any presumption or
other rule requiring construction against the party causing this Lease to be
drafted.
43.03. Except as otherwise expressly provided in this Lease, each covenant,
agreement, obligation or other provision of this Lease on Tenant's part to be
performed shall be deemed and construed as a separate and independent covenant
of Tenant, not dependent on any other provision of this Lease.
43.04. 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.
43.05. Time shall be of the essence with respect to the exercise of any
Option on the part of Tenant to extend the term of this Lease.
43.06. Except as otherwise provided herein, whenever payment of interest is
required by the terms hereof it shall be at the Interest Rate.
43.07. Subject to the provisions of Article 2, if the demised premises or
any additional space to be included within the demised premises shall not be
available for occupancy by Tenant on the specific date hereinbefore designated
for the commencement of the Term of this Lease or for the inclusion of such
space for any reason whatsoever, then this Lease shall not be affected thereby
but, in such case, said specific date shall be deemed to be postponed until the
date when the demised premises or such additional space shall be available for
occupancy by Tenant, and Tenant shall not be entitled to possession of the
demised premises or such additional space until the same are available for
occupancy by Tenant; provided, however, that Tenant shall have no claim against
Landlord, and Landlord shall have no liability to Tenant by reason of any such
postponement of said specific date, and the parties hereto further agree that
any failure to have the demised premises or such additional space available for
occupancy by Tenant on said specific date or on the Commencement Date shall in
no wise affect the obligations of Tenant hereunder nor shall the same be
construed in any wise to extend the Term. This Section 43.07 shall be deemed to
be an express provision to the contrary of Section 223-a of the Real Property
Law of the State of New York and any other law of like import now or hereinafter
in force.
43.08. In the event that Tenant is in arrears in payment of fixed annual
rent or additional rent hereunder, Tenant waives Tenant's right, if any, to
designate the items against which any payments made by Tenant are to be
credited, and Tenant agrees that Landlord may apply any payments made by Tenant
to any items it sees fit, irrespective of and notwithstanding
47
any designation or request by Tenant as to the items against which any such
payments shall be credited.
43.09. All Exhibits referred to in this Lease are hereby incorporated in
this Lease by reference.
43.10. The covenants, conditions and agreements contained in this Lease
shall bind and inure to the benefit of Landlord and Tenant and their respective
heirs, distributees, executors, administrators, successors, and except as
otherwise provided in this Lease, their assigns.
43.11. No remedy or election hereunder shall be deemed exclusive but shall,
whenever possible, be cumulative with all other remedies at law or in equity.
43.12. This Lease supersedes all prior agreements, whether oral or written,
between Landlord and Tenant, which prior agreements are null and void.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.
XXXXXXX XXXXX ASSOCIATES, L.P., Landlord
By: /s/ Xxxxxx Xxxx
Xxxxxx Xxxx, President
SILICON VALLEY INTERNET PARTNERS, Tenant
By: /s/ Signature Illegible
48
[EXHIBIT OMITTED]
EXHIBIT B
----------
1. Landlord shall arrange for the electric meters currently measuring
electric consumption for the entire 3rd floor to measure the electric
consumption only at the demised premises. Landlord shall also remove one or two
switch boxes from the demised premises to another location so as to provide
separate electric service to such balance of the 3rd floor.
2. Landlord shall place the HVAC system in good working order so that it
will sufficiently heat and/or cool the demised premises throughout the term of
this Lease substantially least in accordance with the following design criteria:
Summer: Inside 78/F.D.B,
50% RH
Outside 95/F.D.B.,
75/F.D.B.
Winter: Inside 65/F.D.B,
Outside 5/F.D.B.
based on total connected continuous electrical load of 6 xxxxx per square foot
and one person per 100 square feet of rentable area.
3. Landlord shall remove the carpeting from the demised premises. Landlord
shall repair any area of the wood floors as is reasonably necessary to make such
floors carpetable, or if not intended to be carpeted, shall repair any areas of
the wood floor which have been materially damaged.
4. Tenant acknowledges that the windows are over 100 years old, have not
been used in many years, and are subject to Landmark Commission rules and
regulations. Landlord shall endeavor to render the windows as operable as
practicable, given their age and lack of use. However, Landlord will have no
obligation for windows which may break or become inoperable after Landlord
renders them operable.
5. If required by any Legal Requirement in effect at the execution of this
Lease, Landlord shall (i) install a water fountain in the demised premises; and
(ii) widen the small hallway and doors leading to the men's and women's
restrooms.
6. Landlord shall use reasonable efforts to obtain from J. Crew, the prior
tenant of the demised premises, any plumbing, electrical and mechanical plans
for the demised premises.
7. Landlord shall construct and install the demising walls as shown on the
floor plan annexed hereto as Exhibit A.
8. Landlord represents that, to the best of its knowledge, the demised
premises comply, as of the execution of this Lease, with fire, life and safety
codes as imposed by any Legal Requirements.
9. Landlord shall cause, within sixty (60) days from the date of this
Lease, for any extraneous wiring to be removed from the telephone closets,
including the wiring belonging to or utilized by J. Crew, the prior tenant of
the demised premises.
