AGREEMENT OF LEASE
Made as of this 21st day of August, 2003, by and between XXXXXXXXXX XXXXXXXXXX
0, XXX, x Xxx Xxxx general partnership having its principal office at 000
Xxxxxxx Xxxxxxxxxx, Xxxxxxx, Xxx Xxxx 00000, hereinafter referred to as
"Landlord" and FALCONSTOR SOFTWARE INC., a Delaware corporation with offices
located at 000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxx Xxxx 00000, hereinafter
referred to as "Tenant".
WITNESSETH: Landlord and Tenant hereby covenant and agree as follows:
SPACE
1. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord
the space consisting of the entire second floor, known as Suite # 2S-01 and part
of the first floor (for UPS room and for storage for Tenant's exclusive use)
substantially as shown on the rental plan initialed by the parties and made part
hereof as Exhibit 1 in the building known as Two Huntington Quadrangle,
Melville, New York 11747 (the "Building"), hereinafter referred to as the
"Demised Premises". Additionally, Tenant shall be permitted to use portions of
the Building as are required in order to interconnect the equipment located in
the UPS room with the equipment located in the Demised Premises, including
cabling, wire and conduit now existing or installed in order to make such
connections and that portion of the common area located on the second (2nd)
floor and shown as the crosshatched portion of Exhibit 1 attached hereto and
made a part hereof. The parties agree that for all purposes of this lease the
total Demised Premises consist of a total of 45,343 of rentable square feet
inclusive of three separate spaces:
Space 1: 22,939 sq. ft. [22,405 on 2nd Floor and 534 sq. ft. on lst Floor]
("Space 1")
Space 2: 11,202 sq. ft. ("Space 2")
Space 3: 11,202 sq. ft. ("Space 3")
Tenant shall also be permitted to use, on a non-exclusive basis, in common with
other tenants at the Building, the common facilities of the Building. Such use
of such facilities shall be subject to such reasonable rules, regulations and
procedures governing the use thereof as Landlord shall from time to time
promulgate. Tenant shall also be permitted to use the easternmost mechanical
room on the 2nd floor (denoted "MR" on attached Exhibit 1) as it is currently
being utilized.
TERM
2. The term of this lease shall commence on November 1, 2003, hereinafter
referred to as the "Term Commencement Date", and shall terminate on February 28,
2012, hereinafter referred to as the "Expiration Date", unless earlier
terminated or extended as provided herein.
On the Term Commencement Date Tenant shall take possession and control of
Space 1 of the Demised Premises until the Expiration Date or earlier termination
of this lease. On November 1, 2004 (the "Second Space Commencement Date") Tenant
shall take possession and control of Space 2 of the Demised Premises until the
Expiration Date or earlier termination of this lease. On November 1, 2005 (the
"Third Space Commencement Date") Tenant shall take possession and control of
Space 3 of the Demised Premises until the Expiration Date or earlier termination
of this lease. In the event that the Demised Premises shall become vacant prior
to the Term Commencement Date, Tenant shall be permitted access for the sole
purpose of commencement of construction provided that Tenant has delivered all
required permits and certificates of insurance and Landlord has provided Tenant
written consent for the work to be performed.
If, on the foregoing dates specified for the Term Commencement Date,
"Landlord's Initial Construction" (as defined in Article 5 hereof) shall not be
"substantially completed", then the Term Commencement Date shall be postponed
until the date on which Landlord's Initial Construction shall be "substantially
completed" and the term of this lease (hereinafter referred to as the "Demised
Term") shall be extended so that the Expiration Date shall be 8 years and 4
months after the last day of the month in which the Term Commencement Date
occurs and the abatement of rent described in Article 3A below, shall be
adjusted accordinnly. "Substantially completed" as used herein is defined to
mean when the only items of Landlord's Initial Construction to be completed are
those which do not materially interfere with the Tenant's use and occupancy of
the demised Premises. Should the Term Commencement Date be a date other than the
first day of the month, the tenant shall pay a pro rata portion of the rent from
such date to the first day of the following month. Landlord shall make
commercially reasonable efforts to deliver possession of the Demised Premises to
tenant on the Term Commencement Date. If possession to the Demised Premises is
not delivered on or before January 1, 2004, Tenant shall have the right to
terminate this lease, shall have no further obligations hereunder and shall be
refunded any monies delivered to Landlord upon the signing of this lease.
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RENT
3. A. Provided that Tenant is not in monetary or other material default
with the terms of this lease, no monthly payments of base annual rental shall be
due during the second (2nd), third (3rd), fourth (4th) and fifth (5th) months of
the Demised Term. The base annual rental rate payable by Tenant is set forth on
the attached Exhibit 2, the ("rent") which Tenant agrees to pay in equal monthly
installments in advance, on the first day of each calendar month during the
Demised Term at the office of Landlord, except that Tenant shall pay the first
monthly installment on execution hereof. Tenant shall pay the rent as above and
as hereinafter provided, without any set off or deduction whatsoever. As used
herein, the term "Lease Year" shall mean each consecutive twelve (12) calendar
month period, the first such period commencing on the Term Commencement Date and
ending on the day immediately preceding the first anniversary of the Term
Commencement Date; provided, however, if the Term Commencement Date shall be a
date other than the first day of a calendar month, then the first Lease Year
shall commence on the Term Commencement Date and shall end on the last day of
the month in which the first anniversary of the Term Commencement Date shall
occur.
B. (intentionally omitted)
C. 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 on the
amount of such installment outstanding at the lesser rate of (i) four percent
(4%) per annum in excess of the prime interest rate of Citibank, N.A., as
publicly announced from time to time or, if Citibank, N.A. shall cease to exist
or 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 One Hundred Million and 00/100 Dollars
($100,000,000) ("Prime Rate"), or (ii) the maximum rate of interest, if any,
which Tenant may legally contract to pay, 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. In addition, Tenant shall pay to
Landlord a late fee in the amount of five percent (5%) of such overdue amount
("Late Fee") to compensate Landlord for its administrative costs associated with
such failure to timely pay. Such fee shall be deemed additional rent and shall
be payable immediately upon demand (the "Default Rate"). This provision is in
addition to all other rights or remedies available to Landlord for nonpayment of
fixed annual rent or additional rent under this lease and at law and in equity.
Notwithstanding the foregoing, Tenant shall be permitted one late payment (not
exceeding 10 days after written notice from Landlord) in each 12 month period
without obligation to pay the Late Fee.
USE
4. The Tenant shall use and occupy the Demised Premises for executive and
administrative offices, sales, marketing, training, research and development
(normally and customarily performed in similarly situated office buildings) and
for any other use consistent with the foregoing and permitted by the certificate
of occupancy and by law. In no event shall any research and development include
any hazardous activity or affect any other tenants in the Building. Neither
Tenant, its successors, subtenants or assigns shall utilize the Demised Premises
to conduct a "boiler room" operation as such term is understood in the
securities business or a financial services business that is not a member of the
New York Stock Exchange. The first floor UPS space shall be used exclusively by
Tenant and shall be maintained by Tenant at its sole cost and expense.
LANDLORD'S ALTERATIONS FOR TENANT
5. Landlord shall deliver the premises as-is inclusive of landscaping and
furniture presently owned and abandoned by the outgoing tenant, SPHERION,
computer room, HVAC, UPS, and fire suppression systems and all abandoned data
and telecommunication wiring. Landlord shall provide Tenant with any keys to the
door and to files cabinets, etc. within its possession, to the Demised Premises.
Landlord makes no representation or warranty with respect to the extent of, or
condition of, any improvements or assets which may be abandoned by SPHERION as
provided in Exhibit 4 ("Abandoned Items"). Any Abandoned Items so left by
SPHERION, however, shall not be removed by Landlord and remain for the use and
enjoyment of Tenant during the Demised Term. Landlord, at its expense, shall
provide metering for electrical and supplemental HVAC equipment for the Demised
Premises. Landlord shall at its sole cost and expense, deliver the Demised
Premises on the Term Commencement Date in broom clean condition, with all
building and/or mechanical systems in good working order. Landlord shall at its
sole cost and expense, configure the HVAC and electrical systems so that they
are properly separated from SPHERION's first floor HVAC, supplemental HVAC, UPS
and electrical system (hereinafter "Landlord's Work").
UTILITIES
6. Landlord, during the hours of 8:00 A.M. to 6:00 P.M. on weekdays and on
Saturdays from 9:00 A.M. to 1:00 P.M. (Working Hours), excluding legal holidays
(presently, New Year's Day, President's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day), shall furnish the Demised.
Premises with heat and air-conditioning (excluding supplemental air
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conditioning) in the respective seasons, furnish elevator service to the Demised
Premises and provide the Demised Premises with electricity for lighting and
usual office equipment pursuant to Article 8. During periods other than working
hours, Tenant shall pay in addition to electric used within its Demised
Premises, for the electric required by the supplemental roof chiller to provide
chilled water for after hours HVAC purposes. Landlord represents that there is a
back-up electrical generator for the Demised Premises and agrees to provide
supplemental air-conditioning to the Demised Premises twenty-four (24) hours a
day, seven days a week. Landlord, as a cost of operation, shall maintain,
repair, replace and operate the heating and air-conditioning systems and the
generator. Tenant shall be solely responsible for the installation, maintenance
and operation of any air-conditioning systems to service Tenant's computer room.
Landlord, at its sole cost and expense, will install in the Demised Premises a
submeter for the purpose of monitoring and measuring Tenant's electrical
consumption for lighting, convenience outlets, heating, ventilating and air
conditioning, and other electrical use within the Demised Premises. Tenant shall
pay to Landlord within thirty (30) days after written notice therefor by
Landlord, all charges for such electrical consumption. Such charges shall be
equal to the electricity consumed by Tenant multiplied by 105% of the rates
actually charged to Landlord by the applicable utility company for such usage as
determined in accordance with last sentence of paragraph 8 C. below.
LANDLORD'S REPAIRS AND MAINTENANCE
7. Landlord, at its expense, will make all repairs to and provide the
maintenance for the common areas and base systems, sidewalks, parking areas and
structure (including the roof and foundation) of the Building as set forth in
Schedule B, except such repairs (whether structural or otherwise) and
maintenance as may be necessitated by the negligence, improper care or use of
such premises and facilities by Tenant, its agents, employees, licensees or
invitees, which will be made by Tenant at Tenant's expense as provided in
Article 12 hereof. Tenant acknowledges that Landlord shall have no obligation to
perform its repair and maintenance obligations hereunder, except during
Landlord's regular working hours, except in the event of an emergency and except
for cleaning services, snow removal and other maintenance obligations which are
normally performed outside normal business hours. If Tenant desires Landlord to
perform any such repair and maintenance obligations at any hours other than
Landlord's regular working hours, Landlord shall use its reasonable efforts to
accommodate Tenant's request, provided, however, that Tenant shall pay to
Landlord, as additional rent, any reasonable overtime charges incurred by
Landlord as a result thereof.
Landlord shall maintain the base building fire suppression system serving
the Building and the Demised Premises and will complete and pay for any base
building fire suppression improvements as may be required by law. Tenant shall
be solely responsible for maintenance, repair and replacement of any
supplemental system(s) installed by Tenant or prior tenants including SPHERION.
Tenant shall also be responsible for maintenance and replacement of any required
fire extinguishers.
SERVICES
8. A. Landlord, at its expense, shall furnish hot and cold water for
lavatory purposes and chilled potable water for drinking purposes.
B. Tenant shall pay for all electric which is separately metered
including lighting, air conditioning, electrical outlets, fan coils, and air
handlers serving the Demised Premises in accordance with Article 6. The building
water and hot water for the fan coil units and air handlers are provided by a
central plant and the cost to operate this equipment is included in the base
rent. Landlord shall furnish an electrical panel for the Demised Premises,
together with a submeter therefore at its sole cost and expense.
C. Except as expressly otherwise provided herein, Landlord shall not be
obligated to furnish to Tenant or the Demised Premises any services or utilities
of any kind or nature whatsoever. Tenant shall make arrangements with, and pay
directly to, the public utilities servicing the building for the installation
and furnishing of any telephone or other services, which Tenant deems necessary
or desirable in connection with its use and occupancy of the Demised Premises.
Tenant agrees that electric current will be supplied by Landlord, and Tenant
will pay Landlord, as additional rent for the supplying of electric current to
the Demised Premises, the amount as calculated pursuant to the last sentence of
Article 6 above. The rates actually charged during any billing period pursuant
to which Landlord purchases electricity for the Building shall be determined by
dividing the total kw-hrs consumed in the Building during such period into the
total amount of Landlord's electric xxxx for the Building (including sales tax)
for such period.
Bills therefor shall be rendered monthly, in arrears, and shall be
deemed to be, and shall be paid as, additional rent. Landlord shall not in any
way be liable or responsible to Tenant for any loss or damage or expense which
Tenant may sustain or incur if either the quantity or character of electric
service is changed or is no longer available for suitable for Tenant's
requirements. Upon request, Landlord shall provide Tenant with reasonable
back-up documentation supporting the charges.
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If any tax is imposed upon Landlord's receipt from the sale or resale
of electrical energy to Tenant by any Federal, State or Municipal Authority,
Tenant agrees that, where permitted by law, such taxes shall be passed on to,
and including in the xxxx of, and paid by, Tenant to Landlord. In no event
however shall the cost to Tenant for the supply of electric energy be less than
the cost to Landlord to supply electric energy to Tenant at the Demised Premises
(including any meter, company and other charges to which Landlord is subject).
D. Landlord, at its expense, shall furnish cleaning services as detailed
in Schedule B attached hereto and made a part hereof, to the Demised Premises
after business hours.
E. Landlord shall use commercially reasonable efforts to continue to
lease the cafeteria space in the Building. If the cafeteria ceases to operate,
Landlord shall use reasonable efforts to relet the space for similar use.
PARKING FIELD
9. Tenant shall have the right to use 214 parking spaces, for the parking
of automobiles of the Tenant, its employees and invitees, in the parking area
reserved for tenants of the Building (hereinafter sometimes referred to as
"Building Parking Area") subject to the Rules and Regulations now or hereafter
adopted by Landlord. Tenant shall not use nor permit any of its officers, agents
or employees to use any parking area other than the Building Parking Area, nor
use in excess of Tenant's allotted number of spaces therein. A violation of the
parking rules shall not constitute a material breach of this lease except where
such recurrent excessive use exceeds permissible use by 10% or more and
adversely affects other tenants at "HQ l" or the Building. Landlord agrees that
it shall not voluntarily reduce the size of the Parking Field. Tenant further
acknowledges that a violation of the provisions of this Article 9 shall
constitute a material breach of the lease.
DIRECTORY
10. Landlord will furnish in the lobby of the Building an electronic
directory which will contain listing(s) reasonably requested by Tenant. There
will be a charge of $25.00 for the replacement of listing(s). Tenant shall have
the right to install at its own cost and expense its corporate logo in the
elevator lobby of the Demised Premises subject to the prior written consent of
Landlord not to be unreasonably withheld conditioned or delayed. Landlord agrees
to arrange, at Tenant's request, for the installation of up to four (4) parking
banners in the parking area at Tenant's sole cost and expense.
TAXES
11. A. Taxes. If the Taxes which would be assessable to the Landlord in any
escalation year (without taking into consideration any reductions or abatements
granted to the Landlord by the taxing authorities by reason of vacancies or
other hardships or provisions of law) shall be increased above the Tax Base,
then the Tenant shall pay to the Landlord as additional rent for such escalation
year a sum equal to:
Year 1: 6.4875%
Year 2: 9.6555%
Year 3 and thereafter: 12.8236%
of such increases in Taxes (based on the ratio of the Demised Premises [22,939
square feet (Year One) 34,141 square feet (Year Two) or 45,343 square feet]
(Year Three and thereafter) premises area of square feet to the Building Area of
353,590 square feet) ("Tenant's Tax Payment" or "Tax Payment"). The tax base
shall be total Taxes due for the tax year 2003/2004. ("Base Year Taxes"). Any
refund due to Tenant shall be debited by Tenant's proportionate share of all
legal, experts, administrative and other reasonable costs, fees or expenses
incurred in connection with obtaining such reduction.
The Tax Base does not presently include any abatements and shall not be
deemed reduced by virtue of any future abatements for purposes of this Article
11.
B. Definitions: As used in and for the purposes of this Article 11, the
following definition shall apply:
i. The term "Taxes" shall be deemed to include all real estate taxes
and assessments, special or otherwise and sewer rents, upon or with respect to
the Building and the land allocated to it including all parking areas
(hereinafter called the "Real Property"). If, due to any change in the method of
taxation, any franchise, income, profit, sales, rental use and occupancy, or
FalconStor Page 4
other tax shall be substituted for, or levied against Landlord or any owner of
the Building or the Real Property in lieu of, any real estate taxes, assessments
or sewer rents upon or with respect to the Real Property, such tax shall be
included in the term Taxes for the purposes of this Article.
ii. "Taxes" shall not include (i) any succession, transfer,
inheritance, capital stock, excise, excess profits, occupancy or rent, gift,
estate, foreign ownership or control, payroll or stamp tax of Landlord (unless
to the extent that there shall be a governmental substitution of method of
taxation), (ii) taxes which are paid by individual tenants (including, by way of
example only, occupancy taxes), which shall be the obligation of such tenants as
applicable (other than taxes payable under escalation clauses similar to this
Article), (iii) any penalties or late charges or interest resulting from a late
payment imposed against Landlord with respect to real estate taxes, assessments
and the like or taxes of general application as opposed to those applicable only
to owners or lessees of real property (provided Tenant is current in its payment
of additional rent), or (iv) realty transfer taxes or real property transfer
gains taxes (if any) imposed in connection with the sale of or the lease of all
or substantially all of the Land or the Building. In the event that a tax is
instituted which is an income based or similar tax, Tenant's proportionate share
of taxes shall be computed on the basis of the income of the Landlord as if the
Building and assets related thereto were the Landlord's sole asset.
C. Procedure For Invoicing And Payment Of Additional Rent.
i. Landlord shall render to Tenant a statement containing a
computation of additional rent due under this Article ("Landlord's Statement")
at any time and from time to time as such becomes due. Within ten (10) days
after the rendition of the Landlord's Statement which shows additional rent to
be payable, Tenant shall pay to Landlord the amount of such additional rent. On
the first day of each month following rendition of each Landlord's Statement,
Tenant shall pay to Landlord, on account of the prospective additional rent, a
sum equal to one-twelfth (1/12th) of the annualized additional rent last paid by
Tenant.
ii. Following each Landlord's Statement, Tenant shall be debited with
any additional rent shown on such Landlord's Statement to be payable, and
credited with the aggregate amount paid by Tenant in accordance with the
provisions of subsection 11.C.i above on account of the potential additional
rent.
iii. The obligations of Landlord and Tenant under the provisions of
this Article 11 with respect to any additional rent for any Lease Year shall
survive the expiration or any sooner termination of the Demised Term.
iv. In the event that Tenant challenges the amount of additional rent
payable pursuant to this Article 11, then, as a condition precedent to the
submission of a dispute as to such amount to judicial review, and pending the
determination of any dispute, Tenant shall promptly pay the additional rent as
demanded by Landlord. After such determination, any adjustment in the disputed
amount shall be made within thirty (30) days.
D. In the event that Landlord shall fail to pay Taxes when due, Tenant
shall have the right to pay the Taxes after 30 days prior notice to Landlord. If
Landlord fails to pay the Taxes within thirty (30) days after written notice
from Tenant, and Landlord fails to provide Tenant with reasonable justification
therefore, Tenant may pay such Taxes on Landlord's behalf and be entitled to
reimbursement from Landlord within thirty (30) days of notice of, and
satisfactory evidence of, such payment.
TENANT'S REPAIRS
12. A. Except for replacements and repairs to the base Building systems,
Tenant shall be responsible for all non-structural replacements and repairs
within the Demised Premises. In furtherance thereof, Tenant shall, throughout
the Demised Term, take good care of the Demised Premises and the fixtures and
appurtenances therein and, at Tenant's sole cost and expense, make all
non-structural repairs thereto, and, as required, non-structural replacements
thereof, as and when needed to preserve the same in good working order and
condition, reasonable wear and tear, obsolescence and damage from the elements,
fire or other casualty, excepted. Notwithstanding the foregoing, all damage or
injury to any part of the Building, or to the fixtures, equipment and
appurtenances thereof, whether requiring structural or non-structural repairs,
caused by or resulting from carelessness, omission, neglect or improper conduct
of Tenant, Tenant's servants, employees, invitees or licensees, shall be
repaired promptly by Tenant at its sole cost and expense. Tenant shall also
repair all damage to the Building caused by the moving of Tenant's fixtures,
furniture or equipment. Any repairs or replacements to be made by Tenant shall
be made with commercially reasonable diligence, in a commercially good and
workmanlike manner and so as not to unreasonably interfere with other tenants'
use and occupancy of the Building. Tenant, at its expense, shall maintain
service contracts on its supplemental and computer room HVAC, fire alarm and
suppression systems, and UPS system.
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B. Except as provided in Article 25 hereof, 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 Landlord, Tenant or others making 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, and no liability upon
Landlord for failure of Landlord or others to make any repairs, alterations,
additions or improvements in or to any portion of the Building or of the Demised
Premises, or in or to the fixtures, appurtenances or equipment thereof. Any
repairs which Tenant may be required to carry out pursuant to the terms hereof
may, upon prior written notice and reasonable opportunity to cure (except in the
case of an emergency) at Landlord's option, may be made by Landlord at the
expense of Tenant, on the basis of cost plus ten (10%) percent of such cost and
expense for overhead and an additional eight (8%) percent of the resulting total
as a supervisory fee, which shall be collectible as additional rent after the
rendition of a xxxx or statement therefor. Landlord shall make reasonable
efforts, under the circumstances presented, to make any required repairs so as
not to unreasonably interfere with Tenant's business.
FLOOR LOADING
13. The emplacement of any equipment which will impose an evenly
distributed floor load in excess of 50 pounds per square foot shall be done only
after written permission is received from the Landlord which shall not be
unreasonably withheld, conditioned or delayed. Such permission will be granted
only after adequate proof is furnished by a professional engineer that such
floor loading will not endanger the structure. Landlord represents that the
installations, fixtures, furniture and computer and office equipment currently
operated and existing in the Demised Premises by IBM do not presently exceed
Landlord's maximum permitted floor load.
FIXTURES AND INSTALLATIONS
14. All appurtenances, fixtures, improvements, additions and other property
attached to or built into the Demised Premises, whether by Landlord or Tenant or
others, and whether at Landlord's expense, or Tenant's expense, or the joint
expense of Landlord and Tenant, shall become and remain the property of
Landlord, and shall remain upon and be surrendered with the Demised Premises
unless Landlord, within 30 days after written notice of such installation by
notice to Tenant prior to the installation of same notifies Tenant that it
requires Tenant, at Tenant's expense, to remove same at the termination of this
lease. Tenant shall not be required to remove any appurtenances, fixtures,
improvements or additions existing in the Demised Premises prior to the Term
Commencement Date. Nothing in this Article shall be construed to prevent
Tenant's removal of trade fixtures, furniture or any other personal property of
Tenant, but upon removal of any such trade fixtures from the Demised Premises or
upon removal of other installations as may be required by Landlord, Tenant shall
immediately and at its expense, repair and restore the Demised Premises to the
condition existing prior to installation and repair any damage to the Demised
Premises or the Building due to such removal. All property permitted or required
to be removed by Tenant at the end of the Demised Term remaining in the Demised
Premises after Tenant's removal shall be deemed abandoned and may, at the
election of Landlord, either be retained as Landlord's property or may be
removed from the Demised Premises at Tenant's expense. All the outside walls of
the Demised Premises including corridor walls and the outside entrance doors to
the Demised Premises, any balconies, terraces or roofs adjacent to the Demised
Premises, and any space in the Demised Premises used for shafts, stacks, pipes,
conduits, ducts or other building facilities, and the use thereof, as well as
access thereto in and through the Demised Premises for the purpose of operation,
maintenance, decoration and repair, are expressly reserved to Landlord, and
Landlord does not convey any rights to Tenant therein. Notwithstanding the
foregoing, Tenant shall enjoy full right of access to the Demised Premises
through the public entrances, public corridors and public areas within the
Building and the loading dock area, twenty-four hours a day, seven days a week
(except in the event of an emergency required maintenance work or other
condition not directly within control of Landlord).
ALTERATIONS
15. A. Tenant shall make no alterations, decorations, installations,
additions or improvements in or to the Demised Premises which would require the
filing of a building permit or otherwise require approval of a municipal agency
without Landlord's prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed), and then only by contractors or
mechanics approved by Landlord and at such times and in such manner as Landlord
may from time to time designate which approval shall not be unreasonably
withheld, conditioned or delayed. Tenant may make alterations during normal
business hours unless to do so would interfere with the quiet enjoyment of other
Tenants in the Building. Tenant shall notify Landlord as to when such work will
commence, such notice to be given at least five (5) business days prior to the
commencement thereof. Landlord shall have the right to make inspections of any
such work being carried out by Tenant or on Tenant's behalf at reasonable times
during business hours, upon reasonable notice (except in the case of an
emergency) during the progress of such work. Tenant shall be entitled to have a
representative present (except in the case of an emergency). Anything herein
contained to the contrary notwithstanding, the consent requirements and payment
of Landlord's Supervisory Fee set forth in this Article 15A shall not apply to
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non-structural alterations or other alteration, decorative alterations costing
less than $25,000 in the aggregate per project, or painting and carpeting.
B. All installations or work done by Tenant shall be done in a
commercially good and workmanlike manner and shall at all times comply with:
i. Laws, rules, orders and regulations of governmental authorities
having jurisdiction thereof.
ii. Rules and regulations of Landlord, as promulgated from time to
time.
iii. Plans and specifications prepared by and at the expense of
Tenant theretofore submitted to Landlord for its prior written approval which
shall not be unreasonably withheld, conditioned or delayed; no installations or
work shall be undertaken, started or begun by Tenant, its agents, servants or
employees, until Landlord has approved (which shall not be unreasonably
withheld, conditioned or delayed) such plans and specifications and shall be
subject to Landlord's supervisory fee charge of five (5%) percent of the total
value of the work to be performed; and no amendments or auditions to such plans
and specifications shall be made without the prior written consent of Landlord
(which shall not be unreasonably withheld, conditioned or delayed) and shall be
subject to Landlord's supervisory fee charge of five (5%) percent of the total
value of work to be performed . If Landlord performs the alterations for Tenant,
Tenant shall not be subject to any supervisory fee. Standard painting and/or
carpeting shall not be subject to the supervisory fee charge.
Tenant agrees that it will not, either directly or indirectly, use,
suffer or permit any contractors, sub-contractors and/or labor and/or materials
if the use of such contractors and/or labor and/or materials would or will
create any difficulty with other contractors and/or labor engaged by Tenant or
Landlord or others in the construction, maintenance and/or operation of the
Building or any part thereof. Tenant shall, before making any alterations,
additions, installations or improvements, at its expense, obtain all permits,
approvals and certificates required by any governmental or quasi-governmental
bodies and (upon completion) certificates of final approval thereof and shall
deliver promptly duplicates of all such permits, approvals and certificates to
Landlord and Tenant agrees to carry and will cause Tenant's contractors and
sub-contractors material persons to carry such workmen's compensation, general
liability, personal and property damage insurance as Landlord may require.
Tenant agrees to obtain and deliver to Landlord, after the construction and/or
alterations have been completed, written and unconditional waivers of mechanic's
liens upon the real property in which the Demised Premises are located, for all
property in which the Demised Premises are located, for all work, labor and
services performed and materials furnished in connection with such work after
payment therefor, signed by all contractors, sub-contractors, materialmen and
laborers involved in such work. Notwithstanding the foregoing, if any mechanic's
lien is filed against the Demised Premises, or the Building, for work claimed to
have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this Article the same shall be discharged or bonded (and removed as
a lien) by Tenant within thirty (30) days thereafter, at Tenant's expense, by
filing the bond required by law. Failure to so discharge or bond any mechanic's
lien shall be a material default under this lease.
C. Anything contained herein to the contrary notwithstanding, Tenant
shall make no alterations, decorations, installations, additions or improvements
in or to the Demised Premises which shall in any way affect utility services or
plumbing and electrical lines. Moreover, Landlord shall not be deemed to have
acted unreasonably for withholding consent to any alterations, decorations,
installations, additions or improvements which: (i) involve or might affect any
structural or exterior element of the Building outside the Demised Premises or
the Building, or (ii) will require unusual expense to readapt the Demised
Premises to normal office use on the expiration of the Demised Term or increase
the cost of construction or of insurance or taxes on the Building or of the
services called for hereunder unless Tenant first gives assurances acceptable to
Landlord for payment of such increased cost and that such re-adaptation will be
made prior to the Expiration Date without expense to Landlord.
REQUIREMENTS OF LAW
16. A. Tenant, at Tenant's cost, shall comply with all laws and
governmental rules and regulations arising out of or relating to Tenant's manner
of use and occupancy of the interior of Demised Premises. Notwithstanding the
foregoing, as it may relate to the base building only and the existing fire
suppression system servicing the Demised Premises, Tenant shall not be liable
with respect to the fire suppression system and the repair, replacement and
maintenance of such systems shall be performed by Landlord at its sole cost and
expense.
B. Tenant shall not permit any "Hazardous Materials" (as defined
below) in the Demised Premises. The term Hazardous Materials shall mean any
biologically or chemically active or other toxic or hazardous wastes, pollutants
or substances, including, without limitation, asbestos, PCBs, petroleum products
and by-products, and substances defined or listed as "hazardous substances" or
"toxic substances" or similarly identified in or pursuant to laws or
governmental rules and regulations including, but not limited to the
Comprehensive Environmental Response Compensation and Liability Act of 1980 as
amended, 42 U.S.C. ss.9601, et sec., the Hazardous Materials Transportation Act,
49 U.S.C. ss. 1802, et sec., the Resource Conservation and Recovery Act, 42
U.S.C. ss.6901, et sec., the Toxic Substance Control Act of 1976, as amended, 15
U.S.C. ss.2601, et sec., and the Clean Water Act, 33 U.S.C ss. 446 et sec., as
FalconStor Page 7
amended. Landlord represents that it has no knowledge of any Hazardous Materials
at the Demised Premises or the Building which are in violation of applicable
law.
C. Tenant shall indemnify, defend and hold harmless Landlord from or
against any and all claims, actions or proceedings arising from Tenant's failure
to comply with Article 16.A and/or 16.B and all costs, expenses and liabilities
incurred in connection with any such claim or action or proceeding brought
thereon. Tenant, upon notice from Landlord, agrees that Tenant, at Tenant's
expense, will resist or defend such action or proceeding and will employ counsel
therefor reasonably satisfactory to Landlord. Tenant's liability under this
lease extends to the acts and omissions of any subtenant, and any agent,
contractor, employee, invitee or licensee of Tenant or any subtenant.
D. Landlord shall indemnify, defend and hold Tenant harmless from or
against any and all claims, actions or proceedings arising from Landlord's
breach of its representation contained in the last sentence of Article 16.B and
all costs, expenses and liabilities incurred in connection with any such claim
or action or proceeding brought thereon. Landlord, upon notice from Tenant,
agrees that Landlord, at Landlord's expense, will resist or defend such action
or proceeding.
END OF TERM
17. A. Upon the expiration or other sooner termination of the Demised Term,
Tenant shall quit and surrender to Landlord the Demised Premises, broom clean,
in good order and condition, ordinary wear and tear excepted, and Tenant shall
remove all of its property (excluding such property stated to remain the
property of Landlord pursuant to Article 14), and shall repair all damage to the
Demised Premises or the Building occasioned by such removal. Any property not
removed from the Demised Premises shall be deemed abandoned by Tenant and may be
disposed of in any manner deemed appropriate by the Landlord at Tenant's
expense. Tenant expressly waives, for itself and for any person claiming through
or under Tenant, any rights which Tenant or any such person may have under the
provisions of Section 2201 of the New York Civil Practice Law and Rules and of
any successor law of like import then in force, in connection with any holdover
summary proceedings which Landlord may institute to enforce the foregoing
provisions of this Article. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other sooner termination of the Demised
Term. If the last day of the Demised Term or any renewal hereof falls on Sunday
or a legal holiday, this lease shall expire on the business day immediately
preceding.
B. Tenant acknowledges that possession of the Demised Premises, unless
otherwise agreed, must be surrendered to Landlord at the expiration or sooner
termination of the Demised Term. Tenant hereby agrees to indemnify and save
Landlord harmless against any and all costs, damages, claims, loss or liability
resulting from delay by Tenant in so surrendering the Demised Premises,
including, without limitation, any claims made by any succeeding tenant, founded
on such delay. The parties recognize and agree that the damage to Landlord
resulting from any failure by Tenant timely to surrender possession of the
Demised Premises as aforesaid will be extremely substantial, will exceed the
amount of monthly rent theretofore payable hereunder, and will be impossible of
accurate measurement. Tenant therefore agrees that if possession of the Demised
Premises is not surrendered to Landlord on or before the date of the expiration
or other sooner termination of the Demised Term, time being of the essence with
respect thereto, then, in addition to any other remedies and/or damages
otherwise available to Landlord hereunder or at law, Tenant agrees to pay
Landlord, for each month and for each portion of any month during which Tenant
holds over in the Demised Premises thirty (30) days after expiration or other
sooner termination of the Demised Term, a sum equal to two (2) times the rent
and additional rent (inclusive of escalations) that was payable per month under
this lease during the last month of the term thereof. Tenant shall be
responsible for the rent and additional rent payable under this Lease during the
first month Tenant holds over after the expiration or sooner termination of this
Lease. Nothing contained herein shall be construed to constitute Landlord's
consent to Tenant remaining in possession of the Demised Premises after the
expiration or other termination of the Demised Term. Landlord shall be entitled
to pursue any action necessary to recover immediate possession of the Demised
Premises notwithstanding Tenant's payment of the aforementioned sum. The
aforesaid provisions of this paragraph shall survive the expiration or sooner
termination of the Demised Term.
QUIET ENJOYMENT
18. Landlord covenants and agrees with Tenant that upon Tenant paying the
rent and additional rent and observing and performing all the terms, covenants
and conditions on Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the Demised Premises during the Demised Term without
hindrance or molestation by anyone claiming by or through Landlord, subject,
nevertheless, to the terms, covenants and conditions of this lease including,
but not limited to, Article 23. Tenant acknowledges that Landlord is granting
similar quiet enjoyment to other tenants in the Building. Tenant covenants and
agrees not to do, suffer or permit anything that would breach any such similar
covenant.
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SIGNS
19. No signs may be put on or in any window nor on the exterior of the
Building. Any signs or lettering in the public corridors or on the doors must be
submitted to Landlord for approval before installation, which approval shall not
be unreasonably withheld, conditioned or delayed.
RULES AND REGULATIONS
20. Tenant and Tenant's agents, employees, visitors, and licensees shall
faithfully comply with the Rules and Regulations set forth on Schedule D annexed
hereto and made part hereof, and with such further reasonable Rules and
Regulations as Landlord at any time may make and communicate in writing to
Tenant which, in the Landlord's judgment, shall be reasonably necessary for the
reputation, safety, care or appearance of the Building and land allocated to it
or the preservation of good order therein, or the operation or maintenance of
the Building, its equipment and such land, or the more useful occupancy or the
comfort of the tenants or others in the Building. Landlord shall not be liable
to Tenant for the violation of any of said Rules and Regulations, or the breach
of any covenant or condition of any lease by any other tenant (including their
agents, guests, employees and invitees) in the Building. Rules and Regulations
shall be uniformly applied to the tenants of the Building where possible.
Tenant's provisions for meals for its employees at times when the
cafeteria is closed will not violate the "no catering" provision of the Rules
and Regulations. Tenant shall pay for any incremental extermination costs or
other costs directly resulting from such provisions.
ASSIGNMENT AND SUBLETTING
21. A. Tenant, for itself, its successors, under-tenants and assigns (all of
the foregoing hereinafter referred to as the "Tenant"), expressly covenants that
it shall not assign, mortgage or encumber this lease, nor underlet the Demised
Premises or any part thereof, or license or permit the Demised Premises or any
part thereof to be used by others, without the prior written consent of the
Landlord in each instance and upon due compliance with the provisions of this
Article 21. Landlord shall not, unreasonably withhold, condition or delay
consent to a sublet request consistent with the terms hereof. Landlord shall
have 30 days after receipt of a written complete application to accept or reject
such application. If the application is not accepted or rejected within said 30
day period, it shall be deemed accepted.
B. Intentionally deleted.
C. Prior to requesting the approval of Landlord to an assignment or a
subletting as hereinafter provided, Tenant shall, by notice as provided in
Article 35, advise the Landlord of all the terms, covenants and conditions of
the Tenant's proposed sublease or assignment, including providing Landlord with
a true, accurate and complete copy of the agreement with the proposed
assignee/subtenant. In the event of a subleasing of 75% or more of the Demised
Premises, Tenant shall offer to the Landlord the option: (i) to terminate the
lease as of the last day of any calendar month of the term hereof, which day
shall be prior to the effective date of such proposed sublease or assignment,
and after Landlord's Acceptance Period (as such phrase is hereinafter defined),
and to vacate and surrender the Demised Premises to Landlord; or (ii) to execute
a sublease for the said space with the Landlord on the same terms and conditions
as are contained in the proposed sublease. Landlord shall have thirty (30) days
after the receipt of such offer to accept in writing either or neither of such
offers ("Landlord's Acceptance Period").
D. Upon Tenant's due compliance with the aforesaid provisions of this
Article 21, and if Landlord shall not accept either of Tenant's aforesaid
offers, Landlord agrees not to unreasonably withhold, condition or delay its
consent to an assignment or subletting, provided that the Tenant is not then in
default beyond any applicable notice and cure period under this lease and that
the proposed assignee or under-tenant is financially responsible, of good
reputation and engaged in a business compatible with the business generally
carried on in the Building and that the proposed assignment or sublease would
not be inconsistent with any agreement previously made with any other tenant or
mortgagee, and further provided that such assignee or under-tenant shall execute
and deliver to Landlord an assumption agreement wherein it agrees to perform all
the obligations of the Tenant under this lease in form appropriate for
recording, and provided, in the case of a sublease that the annual rental rate
under such sublease is not less than the prevailing rate per square foot at Two
Huntington Quadrangle, Melville, NY.
E. No assignment of this lease or underletting of the Demised Premises
shall release or discharge the Tenant hereunder from any of its obligations to
be performed under this lease. The consent by Landlord to an assignment or
underletting shall not in any way be construed to relieve Tenant from obtaining
the express consent in writing of Landlord to any further assignment or
underletting.
F. If Tenant is a corporation, Tenant may assign this lease without
Landlord's consent, to any successor by merger or consolidation, provided (i)
that a copy of said assignment, in recordable form, is delivered to the Landlord
containing a full assumption by the assignee of all the Tenant's obligations
hereunder and (ii) that such successor shall have had, for each of its prior two
FalconStor Page 9
(2) fiscal years, a net worth equal to or greater than Tenant's net worth. In
the event that such successor shall be unable to satisfy the provisions of
sub-clause (ii) above, as a condition to such assignment, such successor shall
post additional security equal to four (4) months of the then current total base
annual rent and additional rent.
G. Except as expressly otherwise provided in Section 21.F hereof, the
following shall be deemed an "assignment" of this lease for the purposes of
Article 21:
i. an assignment of a part interest in this lease;
ii. one or more sales or transfers, by operation of law or otherwise,
or creation of new stock or issuance of additional shares of stock, resulting in
a transfer of at least fifty-one (51%) percent of the outstanding stock of
Tenant, if Tenant is a corporation, or of any corporate subtenant, except that
the transfer of the outstanding capital stock of any corporate tenant, or
subtenant, shall be deemed not to include the sale of such stock by persons or
parties, through the "over-the-counter market" or through any recognized stock
exchange;
iii. Tenant's entering into a takeover agreement affecting this lease.
For the purposes of this Article 21, a modification, amendment or
extension of a sublease shall be deemed a sublease.
H. If Tenant assigns, sells, conveys, transfers, mortgages, pledges or
sublets this lease, the Demised Premises, or any portion thereof in violation of
this Article 21, or if the Demised Premises are occupied by anybody other than
Tenant, Landlord may collect rent from any assignee, sublessee or anyone who
claims a right to this Agreement or letting or who occupies the Demised
Premises, and Landlord shall apply the net amount collected to the annual rental
herein reserved; and no such collection shall be deemed a waiver by Landlord of
the covenants contained in this Article nor an acceptance by Landlord of any
such assignee, sublessee, claimant or occupant as Tenant, nor a release of
Tenant from the further performance by Tenant of the covenants contained herein.
I. Tenant shall pay to Landlord, as additional rent, the sum of $1,000 to
cover cost of Landlord's attorneys' fees and administration costs in connection
with any permitted subletting or assignment pursuant to this Article 21.
ACCESS TO PREMISES
22. A. Landlord or Landlord's agents shall have the right to enter and/or
pass through the Demised Premises at all times to examine the same, to show them
to mortgagees, ground lessors, prospective purchasers or lessees or mortgagees
of the Building, adjusters or any other persons, and to make such repairs,
improvements or additions as Landlord may deem necessary or desirable and
Landlord shall be allowed to take all material into and upon and/or through said
Demised Premises that may be required therefor. Landlord's access to the Demised
Premises shall be limited to once per month at reasonable times and upon
reasonable notice (except during the last 12 months of the term or in the event
of an emergency or necessary repairs). During the one (1) year prior to the
expiration of the Demised Term, or any renewal term, Landlord may exhibit the
Demised Premises to prospective tenants or purchasers at all reasonable hours
and without unreasonably interfering with Tenant's business. If Tenant shall not
be personally present to open and permit an entry into said premises, at any
time, when for any reason an entry therein shall be necessary or permissible,
Landlord or Landlord's agents may enter the same by a master key, without
rendering Landlord or such agent liable therefor (if during such entry Landlord
or Landlord's agents shall accord reasonable care to Tenant's property).
Landlord shall use reasonable efforts to comply with Tenant's security
procedures (except in the case of an emergency). If during the last month of the
Demised Term, Tenant shall have removed all or substantially all of Tenant's
property there from, Landlord may immediately enter, alter, renovate or
redecorate the Demised Premises without limitation or abatement of rent, or
incurring liability to Tenant for any compensation and such act shall have no
effect on this lease or Tenant's obligations hereunder. Landlord shall provide
Tenant with 194 building access cards. Landlord shall provide Tenant with
additional building access cards at a charge of $25.00 per card.
B. Landlord shall also have the right at any reasonable time to use,
maintain and replace pipes and conduits in and through the Demised Premises and
to erect new pipes and conduits therein provided they are placed within the
walls or above the ceilings, to change the arrangement and/or location of
entrances or passageways, doors and doorways, and corridors, elevators, stairs,
toilets or other public parts of the Building, provided, however, that Landlord
shall make no change in the arrangement and/or location of entrances or
passageways or other public parts of the Building which will adversely affect in
any material manner Tenant's use and enjoyment of the Demised Premises unless
required by law or governmental authority. Landlord shall also have the right,
at any time, to name the Building, to display appropriate signs and/or lettering
on any or all entrances to the Building, and to change the name, number or
FalconStor Page 10
designation by which the Building is commonly known, provided it is not the name
of any of Tenant's competitors.
C. Neither this lease nor any use by Tenant shall give Tenant any right
or easement to the use of any door or passage or concourse connecting with any
other building or to any public conveniences, and the use of such doors and
passages and concourse and of such conveniences may be regulated and/or
discontinued at any time and from time to time by Landlord without notice to
Tenant.
D. The exercise by Landlord or its agents of any right reserved to
Landlord in this Article shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of rent, or relieve Tenant from any of its obligations under this lease, or
impose any liability upon Landlord, or its agents, or upon any lessor under any
ground or underlying lease, by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business, or otherwise.
E. Tenant shall have the right of access to the Demised Premises at all
times except in the case of an emergency or other circumstances beyond the
control of Landlord.
F. During the initial move in at the inception of this Lease and
otherwise with the Landlord's prior written consent which shall not be
unreasonably withheld, conditioned or delayed, Tenant shall have the right to
utilize the 8 foot "pop-out" window for moving equipment in and out of the
Demised Premises provided that all such work is performed by Landlord's
contractors at Tenant's cost and expense.
SUBORDINATION
23. A. This lease is subject and subordinate in all respects to all ground
leases and/or underlying leases and to all mortgages which may now or hereafter
be placed on or affect such leases and/or the real property of which the Demised
Premises form a part, or any part or parts of such real property, and/or
Landlord's interest or estate therein, and to each advance made and/or hereafter
to be made under any such mortgages, and to all renewals, modifications,
consolidations, replacements and extensions thereof and all substitutions
therefor. This subsection a. shall be self-operative and no further instrument
of subordination shall be required. In confirmation of such subordination,
Tenant shall execute and deliver promptly any certificate reasonably
satisfactory to Landlord's lender from time to time that Landlord and/or any
mortgagee and/or the lessor under any ground or underlying lease and/or their
respective successors in interest may request.
B. Without limitation of any of the provisions of this lease, in the
event that any mortgagee or its assigns shall succeed to the interest of
Landlord or of any successor-Landlord and/or shall have become lessee under a
new ground or underlying lease, then, at the option of such mortgagee, this
lease shall nevertheless continue in full force and effect and Tenant shall and
does hereby agree to attorn to such mortgagee or its assigns and to recognize
such mortgagee or its respective assigns as its Landlord.
C. Tenant shall, at any time and from time to time upon not less than ten
(10) days' prior notice by Landlord, execute, acknowledge and deliver to
Landlord a statement in writing certifying that this lease is unmodified and in
full force and effect (or if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), and the dates
to which the rent, additional rent and other charges have been paid in advance,
if any, and stating whether or not to the best knowledge of the signer of such
certificate Landlord is in default in performance of any covenant, agreement,
term, provision or condition contained in this lease and, if so, specifying each
such default of which the signer may have knowledge, it being intended that any
such statement delivered pursuant hereto may be relied upon by any prospective
purchaser or lessee of said real property or any interest or estate therein, any
mortgagee or prospective mortgagee thereof or any prospective assignee of any
mortgage thereof. If, in connection with obtaining financing or refinancing for
the Building and the land allocated to it, a banking, insurance or other
recognized institutional lender shall request reasonable modifications in this
lease as a condition to such financing, Tenant will not unreasonably withhold,
delay or defer its consent thereto, provided that such modifications do not
increase the obligations of Tenant hereunder or materially adversely affect the
leasehold interest hereby created. Failure by Tenant to comply with this Article
23.C shall be a material default under this lease.
D. In the event that Landlord, or entities controlled by existing
principals of Landlord, cease to own title to the Building, this Lease shall not
be subordinate to any future mortgage unless the future owner/landlord of the
Building secures a Subordination, Non-Disturbance and Attornment Agreement
("SNDA") from any such lender holding a mortgage upon the Building in the form
annexed as Exhibit 6. Tenant agrees to countersign the form SNDA presented in
conformity with the foregoing.
PROPERTY LOSS, DAMAGE, REIMBURSEMENT
FalconStor Page 11
24. A. Loss or Damage. Landlord or its agents shall not be liable for any
damage to property of Tenant or of others entrusted to employees of the
Building, nor for the loss of or damage to any property of Tenant by theft or
otherwise. Landlord or its agents shall not be liable for any injury or damage
to persons or property resulting from fire, explosion, falling plaster, steam,
gas, electricity, electrical disturbance, 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 caused by or due to the negligence of
Landlord, its agents, servants or employees; nor shall Landlord or its agents be
liable for any such damage caused by other tenants or persons in the Building or
caused by operations in construction of any private, public or quasi public
work; nor shall Landlord be liable for any latent defect in the Demised Premises
or in the Building. If at any time any windows of the Demised Premises are
temporarily closed or darkened incident to or for the purpose of repairs,
replacements, maintenance and/or cleaning in, on, to or about the Building or
any part or parts thereof, Landlord shall not be liable for any damage Tenant
may sustain thereby and Tenant shall not be entitled to any compensation
therefor nor abatement of rent nor shall the same release Tenant from its
obligations hereunder nor constitute an eviction. Tenant shall reimburse and
compensate Landlord as additional rent for all expenditures made by, or damages
or fines sustained or incurred by Landlord due to non-performance or
non-compliance with or breach or failure to observe any term, covenant or
condition of this lease upon Tenant's part to be kept, observed, performed or
complied with provided notice such breach or failure is beyond any applicable
notice and cure period. Tenant shall give immediate notice to Landlord in case
of fire or accidents in the Demised Premises or in the Building or of defects
therein or in any fixtures or equipment.
In the event that Tenant requests permission to self-insure pursuant to
Article 39.E hereof, and Landlord consents thereto, then, in such an event, to
the fullest extent permitted by law, Tenant shall have the responsibility for
any and all losses or damages resulting therefrom. Tenant hereby expressly
agrees to indemnify, defend, and hold Landlord, its principals, directors,
officers, employees, agents, subsidiaries and other affiliated entities, free
and harmless from and against any loss, liability, expense, claim, cost, suit
and damage, directly or indirectly arising out of or relating to Tenant's
obligations or performance hereunder.
B. Tenant's Indemnity. Tenant shall indemnify and save harmless Landlord
against and from any and all claims by and on behalf of any person or persons,
firm or firms, corporation or corporations arising from the conduct or
management of or from any work or thing whatsoever done (other than by Landlord
or its contractors or the agents or employees of either) in and on the Demised
Premises during the Demised Term and during the period of time, if any, prior to
the Term Commencement Date that Tenant may have been given access to the Demised
Premises for the purpose of making installations, and will further indemnify and
save harmless Landlord against and from any and all claims arising from any
condition of the Demised Premises due to or arising from any act or omission or
negligence of Tenant or any of its agents, contractors, servants, employees,
licensees or invitees, and against and from all reasonable costs, expenses and
liabilities incurred in connection with any such claim or claims or action or
proceeding brought thereon; and in case any action or proceeding be brought
against Landlord by reason of any such claim, Tenant, upon reasonable notice
from Landlord, agrees that Tenant, at Tenant's expense, will resist or defend
such action or proceeding and will employ counsel therefor reasonably
satisfactory to Landlord. Tenant's liability under this lease extends to the
acts and omissions of any subtenant, and any agent, contractor, employee,
invitee or licensee of any subtenant.
C. Landlord's Indemnity. Landlord shall indemnify and save harmless
Tenant against and from any and all claims by and on behalf of any person or
persons, firm or firms, corporation or corporations arising from the conduct or
management of or from any work or thing whatsoever done (other than by Tenant or
its contractors or the agents or employees of either) in and on the common areas
of the Building during the Demised Term due to or arising from any act or
omission or negligence of Landlord and against and from all costs, expenses and
liabilities incurred in connection with any such claim or claims or action or
proceeding brought thereon; and in case any action or proceeding be brought
against Tenant by reason of any such claim, Landlord, upon notice from Tenant,
agrees that Landlord, at Landlord's expense, will resist or defend such action
or proceeding and will employ counsel therefore.
DESTRUCTION-FIRE OR OTHER CASUALTY
25. A. If the Demised Premises shall be damaged by fire or other casualty and
if Tenant shall give prompt notice to Landlord of such damage, Landlord, at
Landlord's expense, shall repair such damage. However, Landlord shall have no
obligation to repair any damage to, or to replace, Tenant's personal property or
any other property or effects of Tenant, including (without limitation)
furnishings and equipment of Tenant or its employees, agents and clients. If the
Demised Premises shall be rendered untenantable, not due to Tenant's acts or
omissions, and by reason of any such damage, and Tenant no longer occupies the
Demised Premises, the rent shall xxxxx for the period from the date of such
damage to the date when such damage shall have been substantially completed; and
if only a portion of the Demised Premises (less than 50%) shall be so rendered
untenantable ("Insubstantial Casualty") and Tenant no longer occupies such
FalconStor Page 12
untenantable portion, the rent shall xxxxx for such period in the proportion
which the area of the part of the Demised Premises so rendered untenantable
bears to the total area of the Demised Premises. With respect to such
Insubstantial Casualty in the event that Landlord shall not substantially
complete the restoration of the Demised Premises required on account of such
casualty within 12 months from the casualty, Tenant shall have the right to
terminate the Leaase upon 30 days written notice to Landlord. Notwithstanding
the foregoing, if the raised floor area-server room or the telecommunication
room are damaged by fire or other casualty, Tenant shall have same rights as if
there was a Substantial Casualty to the Demised Premises were rendered
substantially untenantable. Within sixty (60) days of the date of such fire or
other casualty, Landlord shall furnish Tenant with the opinion of a reputable
independent architect or contractor reasonably satisfactory to Landlord and
Tenant specifying the time necessary to substantially restore the building
and/or the Demised Premises to its condition existing prior to the fire or other
casualty. If (i) (a) fifty (50%) percent or more of the Demised Premises are
damaged or rendered untenantable by fire or other casualty ("Substantial
Casualty"), and (b) in the opinion of the architect or contractor the building
and/or the Demised Premises cannot be restored to its condition existing prior
to the fire or other casualty within one hundred eighty (180) days of the fire
or other casualty (whether or not any specified percentage of the Demised
Premises are damaged or rendered untenantable) or (ii) the Demised Premises are
damaged or rendered untenantable by fire or other casualty at any time during
the last twelve (12) months of the term (whether or not any specified percentage
of the Demised Premises are damaged or rendered untenantable), then, provided
Tenant was not responsible for the casualty, Tenant shall have the right to
terminate this lease by notice given within sixty (60) days of the date of such
fire or other casualty or within thirty (30) days of the date the architect's
opinion was given or was required to have been given pursuant to the above, as
the case may be, such termination having the same force and effect as if the
date of such termination were the date set forth above for the expiration of the
term of this lease. In addition, if Tenant does not so elect to terminate this
lease and if the Demised Premises, the common areas of the building and the
systems serving the Demised Premises shall not be restored to their condition
existing prior to the fire or other casualty within one hundred eighty (180)
days of the date of the fire or other casualty, then Tenant may at any time
thereafter, until such restoration is completed, terminate this lease by written
notice to Landlord with the same force and effect as if the date of termination
were the date set forth above for the expiration of the term of this lease.
B. If the entire Demised Premises shall be rendered untenantable by
reason of any such damage, and Tenant shall have ceased to occupy the Demised
Premises, the rent shall xxxxx for the period from the date of such damage to
the date which is five (5) days following the date upon which Landlord shall
give notice to Tenant stating that such damage shall have been repaired, and if
only a part of the Demised Premises shall be so rendered untenantable, and
Tenant shall have ceased to occupy the Demised Premises, the rent shall xxxxx
for such period in the proportion which the area of the part of the Demised
Premises so rendered untenantable bears to the total area of the Demised
Premises. However, if prior to the date when all of such damage shall have been
repaired any part of the Demised Premises so damaged shall be rendered
tenantable and shall be used or occupied by Tenant or any person or persons
claiming through or under Tenant, then the amount by which the rent shall xxxxx
shall be equitably apportioned for the period from the date of any such use or
occupancy to the date when all such damage shall have been repaired. Tenant
hereby expressly waives the provisions of Section 227 of the New York Real
Property Law, and of any successor law of like import then in force, and Tenant
agrees that the provisions of this Article shall govern and control in lieu
thereof. Notwithstanding the foregoing provisions of this Article, if, prior to
or during the Demised Term, (i) the Demised Premises shall be totally damaged or
rendered wholly untenantable by fire or other casualty, and if Landlord shall
decide not to restore the Demised Premises, or (ii) the Building shall be so
damaged by fire or other casualty that, in Landlord's opinion, substantial
alteration, demolition, or reconstruction of the Building shall be required
(whether or not the Demised Premises shall be damaged or rendered untenantable),
then, in any of such events, Landlord at Landlord's option, may give to Tenant,
within sixty (60) days after such fire or other casualty, a thirty (30) days'
notice of termination of this lease and, in the event such notice is given, this
lease and the Demised Term shall come to an end and expire (whether or not said
term shall have commenced) upon the expiration of said thirty (30) days with the
same effect as if the date of expiration of said thirty (30) days were the
Expiration Date, the rent shall be apportioned as of such date and any prepaid
portion of rent for any period after such date shall be refunded by Landlord to
Tenant.
SUBROGATION
26. Each of the parties hereto and their successors or assigns hereby
waives any and all rights of action for negligence against the other party
hereto which may hereafter arise for damage to the Demised Premises or to
property therein resulting from any fire or other casualty of the kind covered
by standard fire insurance policies with extended coverage, regardless of
whether or not, or in what amounts, such insurance is now or hereafter carried
by the parties hereto, or either of them. The foregoing release and waiver shall
be in force only if both releasors' insurance policies contain a clause
providing that such a release or waiver shall not invalidate the insurance and
also provided that such a policy can be obtained without additional premiums.
FalconStor Page 13
Both parties agree to use their best efforts to obtain and maintain a waiver of
subrogation from their respective carriers if they are insured.
EMINENT DOMAIN
27. A. In the event that the whole or a substantial portion of the Demised
Premises or more than 25% of the parking area of the Building shall be lawfully
condemned or taken in any manner for any public or quasi-public use, this lease
and the Demised Term and estate hereby granted shall forthwith cease and
terminate as of the date of vesting of title. In the event that only one part of
the Demised Premises shall be so condemned or taken, then, effective as of the
date of vesting of title, the rent hereunder shall be abated in an amount
thereof apportioned according to the area of the Demised Premises so condemned
or taken. In the event that only a part of the Building shall be so condemned or
taken, then (i) Landlord (whether or not the Demised Premises be affected) may,
at its 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, and (ii) 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 shall have the right, by delivery of
notice in writing to Landlord within 60 days following the date on which Tenant
shall have received notice of vesting of title, to terminate this lease and the
term and estate hereby granted as of the date of vesting of title or (iii) if
neither Landlord nor Tenant elects to tenninate this lease, as aforesaid, this
lease shall be and remain unaffected by such condemnation or taking, except that
the rent shall be abated to the extent, if any, hereinabove provided in this
Article 27. In the event that only a part of the Demised Premises shall be so
condemned or taken and this lease and the term and estate hereby granted are not
terminated as hereinbefore provided, Landlord will, at its expense, restore the
remaining portion of the Demised Premises as nearly as practicable to the same
condition as it was in prior to such condemnation or taking.
B. In the event of a termination in any of the cases hereinabove
provided, this lease and the term and estate granted shall expire as of the date
of such termination with the same effect as if that were the date hereinbefore
set for the expiration of the Demised Term, and the rent hereunder shall be
apportioned as of such date.
C. In the event of any condemnation or taking hereinabove mentioned 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, and Tenant hereby expressly assigns
to Landlord any and all right, title and interest of Tenant now or hereafter
arising in or to any such award or any part thereof, and Tenant shall be
entitled to receive no part of such award, except that the Tenant may file a
claim for any taking of removable fixtures owned by Tenant and for moving
expenses incurred by Tenant.
It is expressly understood and agreed that the provisions of this Article
27 shall not be applicable to any condemnation or taking for governmental
occupancy for a limited period.
CERTIFICATE OF OCCUPANCY
28. Tenant will not at any time use or occupy the Demised Premises in
violation of the certificate of occupancy (temporary or permanent) issued for
the Building or portion thereof of which the Demised Premises form a part.
Landlord represents that the Tenant's use of the Demised Premises, pursuant to
Article 4, is not in violation of the certificate of occupancy. A copy of the
certificate of occupancy is attached hereto as Exhibit 5 and made a part hereof.
DEFAULT
29. A. Upon the occurrence at any time prior to or during the Demised Term,
of any one or more of the following events (referred to as "Events of Default"):
i. if Tenant shall default in the payment when due of any installment
of rent or in the payment when due of any additional rent, and such default
shall continue for a period of ten (10) days after notice by Landlord to Tenant
of such default; or
ii. if Tenant shall default in the observance or performance of any
term, covenant or condition of this lease on Tenant's part to be observed or
performed (other than the covenants for the payment of rent and additional rent)
and Tenant shall fail to remedy such default within ten (10) days after notice
by Landlord to Tenant of such default, or if such default is of such a nature
that it cannot be completely remedied within said period of ten (10) days and
Tenant shall not commence within said period of ten (10) days, or shall not
thereafter diligently prosecute to completion, all steps necessary to remedy
such default; or
iii. if Tenant or Tenant's guarantor hereunder (if any) shall file a
voluntary petition in bankruptcy or insolvency, or shall be adjudicated a
bankrupt or become insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal bankruptcy act or any
other present or future applicable federal, state or other statute or law, or
FalconStor Page 14
shall make an assignment for the benefit of creditors or shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any part of Tenant's property; or
iv. if, within thirty (30) days after the commencement of any
proceeding against Tenant, whether by the filing of a petition or otherwise,
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
act or other present or future applicable federal, state or other statute or
law, such proceeding shall not have been dismissed, or if, within thirty (30)
days after the appointment of any trustee, receiver or liquidator of Tenant, or
of all or any part of Tenant's property, without the consent or acquiescence of
Tenant, such appointment shall not have been vacated or otherwise discharged, or
if any execution or attachment shall be issued against Tenant or any of Tenant's
property pursuant to which the Demised Premises shall be taken or occupied or
attempted to be taken or occupied; or
v. if Tenant shall default in the observance or performance of any
term, covenant or condition on Tenant's part to be observed or performed under
any other lease with Landlord of space in the Building and such default shall
continue beyond any applicable notice and grace period set forth in such other
lease for the remedying of such default; or
vi. Intentionally Deleted; or
vii. if Tenant's interest in this lease shall devolve upon or pass to
any person, whether by operation of law or otherwise, except as expressly
permitted under Article 21; then, upon the occurrence, at any time prior to or
during the Demised Term, of any one or more of such Events of Default, Landlord,
at any time thereafter, at Landlord's option, may give to Tenant a ten (10)
days' notice of termination of this lease and, in the event such notice is
given, this lease and the Demised Term shall come to an end and expire (whether
or not said term shall have commenced) upon the expiration of said ten (10) days
with the same effect as if the date of expiration of said ten (10) days were the
Expiration Date, but Tenant shall remain liable for damages as provided in
Article 30.
B. If, at any time, (i) Tenant shall be comprised of two (2) or more
persons, or (ii) Tenant's obligations under this lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
lease shall have been assigned, the word "Tenant", as used in subsection (iii)
and (iv) of Article 29.A, shall be, deemed to mean any one or more of the
persons primarily or secondarily liable for Tenant's obligations under this
lease. Any monies received by Landlord from or on behalf of Tenant during the
pendency of any proceeding of the types referred to in said subsections (iii)
and (iv) shall be deemed paid as compensation for the use and occupation of the
Demised Premises and the acceptance of any such compensation by Landlord shall
not be deemed an acceptance of rent or a waiver on the part of Landlord of any
rights under Article 29.A.
REMEDIES
30. A. If Tenant shall default in the payment when due of any installment of
rent or in the payment when due of any additional rent and such default shall
continue for a period of five (5) days after notice by Landlord to Tenant of
such default, or if this lease and the Demised Term shall expire and come to an
end as provided in Article 29:
i. Landlord and its agents and servants may immediately, or at any
time after such default or after the date upon which this lease and the Demised
Term shall expire and come to an end, re-enter the Demised Premises or any part
thereof, without notice, either by summary proceedings or by any other
applicable action or proceeding, and may repossess the Demised Premises and
dispossess Tenant and any other persons from the Demised Premises and remove any
and all of their property and effects from the Demised Premises; and
ii. Landlord, at Landlord's option, may relet the whole or any part or
parts of the Demised Premises from time to time, either in the name of Landlord
or otherwise, to such tenant or tenants, for such term or terms ending before,
on or after the Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord, in
its sole reasonable discretion, may determine. Landlord shall have no obligation
to relet the Demised Premises or any part thereof and shall in no event be
liable for refusal or failure to relet the Demised Premises or any part thereof,
or, in the event of any such reletting, for refusal or failure to collect any
rent due upon any such reletting, and no such refusal or failure shall operate
to relieve Tenant of any liability under this lease or otherwise to affect any
such liability. Landlord, at Landlord's option, may make such repairs,
replacements, alterations, additions, improvements, decorations and other
physical changes in and to the Demised Premises as Landlord, in its sole
reasonable discretion, considers commercially advisable or necessary in
connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this lease or otherwise affecting any such
liability.
B. Tenant, on its own behalf and on behalf of all persons claiming
through or under Tenant, including all creditors, does hereby waive any and all
rights which Tenant and all such persons might otherwise have under any present
or future law to redeem the Demised Premises, or to re-enter or repossess the
Demised Premises, or to restore the operation of this lease, after (i) Tenant
shall have been dispossessed by a judgment or by warrant of any court or judge,
FalconStor Page 15
or (ii) any re-entry by Landlord, or (iii) any expiration or termination of this
lease and the Demised Term, whether such dispossess, re-entry, expiration or
termination shall be by operation of law or pursuant to the provisions of this
lease. In the event of a breach or threatened breach by Tenant, or any persons
claiming through or under Tenant, of any term, covenant or condition of this
lease on Tenant's part to be observed or performed, Landlord shall have the
right to enjoin such breach and the right to invoke any other remedy allowed by
law or in equity as if re-entry, summary proceedings and other special remedies
were not provided in this lease for such breach. The rights to invoke the
remedies hereinbefore set forth are cumulative and shall not preclude Landlord
from invoking any other remedy allowed at law or in equity.
DAMAGES
31. A. If this lease and the Demised Term shall expire and come to an end as
provided in Article 29 or by or under any summary proceeding or any other action
or proceeding, or if Landlord shall re-enter the Demised Premises as provided in
Article 30 or by or under any summary proceeding or any other action or
proceeding, then, in any of said events:
i. Tenant shall pay to Landlord all rent, additional rent and other
charges payable under this lease by Tenant to Landlord to the date upon which
this lease and the Demised Term shall have expired and come to an end or to the
date of re-entry upon the Demised Premises by Landlord, as the case may be; and
ii. Tenant shall also be liable for and shall pay to Landlord, as
damages, any deficiency (referred to as "Deficiency") between the rent and
additional rent reserved in this lease for the period which otherwise would have
constituted the unexpired portion of the Demised Term and the net amount, if
any, of rents collected under any reletting effected pursuant to the provisions
of Section 30.A for any part of such period (first deducting from the rents
collected under any such reletting all of Landlord's expenses in connection with
the termination of this lease or Landlord's re-entry upon the Demised Premises
and such reletting including, but not limited to, all repossession costs,
brokerage commissions, legal expenses, attorney's fees, alteration costs and
other expenses of preparing the Demised Premises for such reletting). Any such
Deficiency shall be paid in monthly installments by Tenant on the days specified
in this lease for payment of installments of rent. Landlord shall be entitled to
recover from Tenant each monthly Deficiency as the same shall arise, and no suit
to collect the amount of the Deficiency for any month shall prejudice Landlord's
right to collect the Deficiency for any subsequent month by a similar
proceeding; and
iii. At any time after the Demised Term shall have expired and come to
an end or Landlord shall have re-entered upon the Demised Premises, as the case
may be, whether or not Landlord shall have collected any monthly Deficiencies as
aforesaid, Landlord shall be entitled to recover from Tenant, and Tenant shall
pay to Landlord, on demand, as and for liquidated and agreed final damages, a
sum equal to the amount by which the rent and additional rent reserved in this
lease for the period which otherwise would have constituted the unexpired
portion of the Demised Term exceeds the then fair and reasonable rental value of
the Demised Premises for the same period, both discounted to present worth at
the rate of the prime rate in effect at the time. If, before presentation of
proof of such liquidated damages to any court, commission or tribunal, the
Demised Premises, or any part thereof, shall have been relet by Landlord for the
period which otherwise would have constituted the unexpired portion of the
Demised Term, or any part thereof, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part or the whole of the Demised Premises so relet during the term
of the reletting.
B. If the Demised Premises, or any part thereof, shall be relet together
with other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this Article 31. Tenant shall in no event be entitled to any
rents collected or payable under any reletting, whether or not such rents shall
exceed the rent reserved in this lease. Solely for the purposes of this Article,
the term rent as used in Article 31.A shall mean the rent in effect immediately
prior to the date upon which this lease and the Demised Term shall have expired
and come to an end, or the date of re-entry upon the Demised Premises by
Landlord, as the case may be, plus any additional rent payable pursuant to the
provisions of Article 11 for the Lease Year immediately preceding such event.
Nothing contained in Articles 29 and 30 or this Article shall be deemed to limit
or preclude the recovery by Landlord from Tenant of the maximum amount allowed
to be obtained as damages by any statute or rule of law, or of any sums or
damages to which Landlord may be entitled in addition to the damages set forth
in Section 31.A.
FEES AND EXPENSES
32. If Tenant shall default in the performance of any covenant on Tenant's
part to be performed in this lease, Landlord may immediately, or at any time
thereafter, upon written notice (except in the event of an emergency), perform
the same for the account of Tenant. If Landlord at any time is compelled to pay
or elects to pay any sum of money, or do any act which will require the payment
FalconStor Page 16
of any sum of money, by reason of the failure of Tenant to comply with any
provision hereof, or, if Landlord is compelled to or does incur any expense
including reasonable attorneys' fees, instituting, prosecuting and/or defending
any action or proceeding instituted by reason of any default beyond any
applicable notice and cure period of Tenant hereunder, the sum or sums so paid
by Landlord with all interest, costs and damages, shall be deemed to be
additional rent hereunder and shall be due from Tenant to Landlord on the first
day of the month following the incurring of such respective expenses, or at
Landlord's option on the first day of any subsequent month. In the event that
Landlord shall institute any such action or proceeding by reason of a default by
Tenant hereunder, and Tenant shall thereafter cure such default before judgment
is entered in such action or proceeding, the sum of $500 shall immediately
become due and payable from Tenant to Landlord as and for liquidated damages on
account of Landlord's attorneys' fees and other costs and expenses in connection
therewith (said sum not to be deemed to be, or construed as, a limitation on
Landlord's right to obtain reasonable attorneys' fees in a greater amount where
such default is not so cured or where expenses were incurred prior to curing).
Any sum of money (other than rent) accruing from Tenant to Landlord pursuant to
any provision of this lease, whether prior to or after the Term Commencement
Date, may, at Landlord's option, be deemed additional rent, and Landlord shall
have the same remedies for Tenant's failure to pay any item of additional rent
when due as for Tenant's failure to pay any installment of rent when due.
Tenant's obligations under this Article shall survive the expiration or sooner
termination of the Demised Term.
NO WAIVER
33. A. No act or thing done by Landlord or Landlord's agents during the
Demised Term shall be deemed an acceptance of a surrender of said Demised
Premises, and no agreement to accept such surrender 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 said Demised Premises prior to the
termination of this lease. The delivery of keys to any employee of Landlord or
of Landlord's agents 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 underlet the Demised Premises for Tenant's account, Landlord or
Landlord's agents are authorized to receive said keys for such purposes without
releasing Tenant from any of the obligations under this lease, and Tenant hereby
relieves Landlord of any liability for loss of or damage to any of Tenant's
effects in connection with such underletting. 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 any of the Rules and Regulations annexed
hereto and made a part hereof, 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 annexed hereto and made a part hereof, 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 Landlord. 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 account of the earliest stipulated rent then owing nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as 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.
B. Landlord's failure to render a Landlord's Statement with respect to
any Lease Year per Article 11 or Schedule C shall not prejudice Landlord's right
to render a Landlord's Statement with respect to any subsequent Lease Year
provided it is not for any subsequent year extending beyond the prior Lease
Year. The obligations of Landlord and Tenant under the provisions of Article 11
or Schedule C with respect to any additional rent for any Lease Year shall
survive the expiration or any sooner termination of the Demised Term.
WAIVER OF TRIAL BY JURY
34. To the extent such waiver is permitted by law, Landlord and Tenant
hereby waive trial by jury in any action, proceeding or counterclaim brought by
Landlord or Tenant against the other on any matter whatsoever arising out of or
in any way connected with this lease, the relationship of landlord and tenant,
the use or occupancy of the Demised Premises by Tenant or any person claiming
through or under Tenant, any claim of injury or damage, and any emergency or
other statutory remedy. The provisions of the foregoing sentence shall survive
the expiration or any sooner termination of the Demised Term. If Landlord
commences any summary proceeding for nonpayment of rent or otherwise to recover
possession of the Demised Premises, Tenant agrees not to interpose any
counterclaim of any nature or description in any such proceeding.
BILLS AND NOTICES
35. Except as otherwise expressly provided in this lease, any bills,
statements, notices, demands, requests or other communications given or required
to be given under this lease shall be effective only if rendered or given in
FalconStor Page 17
writing, sent by registered or certified mail (return receipt requested
optional), or by Federal Express, UPS, or any similar national overnight
delivery service, addressed (A) to Tenant (i) at Tenant's address set forth in
this lease, or (ii) at any place where Tenant or any agent or employee of Tenant
may be found if mailed subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Demised Premises and (iii) with a copy to Xxxxxxxx X. Xxxxxxx,
Esq., Xxxxxxx Xxxxx, P.C., 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, or
(B) to Landlord at Landlord's address set forth in this lease, or (C) addressed
to such other address as either Landlord or Tenant may designate as its new
address for such purpose by notice given to the other in accordance with the
provisions of this Article. Any such xxxx, statement, notice, demand, request or
other communication shall be deemed to have been rendered or given on (i) the
next business day after sending it by overnight courier; or (ii) three calendar
days after mailing. Notices on behalf of Landlord may be signed and sent by
Landlord's attorneys.
INABILITY TO PERFORM
36. A. Inability. If, by reason of strikes or other labor disputes, fires or
other casualty (or reasonable delays in adjustment of insurance), accidents,
orders or regulations of any Federal, State, County or Municipal authority, or
any other cause beyond Landlord's reasonable control, whether or not such other
cause shall be similar in nature to those hereinbefore enumerated, Landlord is
unable to furnish or is delayed in furnishing any utility or service required to
be furnished by Landlord under the provisions of this lease or any collateral
instrument, or is unable to perform or make or is delayed in performing or
making any installations, decorations, repairs, alterations, additions or
improvements, whether or not required to be performed or made under this lease
or under any collateral instrument, or is unable to fulfill or is delayed in
fulfilling any of Landlord's other obligations under this lease or any
collateral instrument, no such inability or delay shall constitute an actual or
constructive eviction, in whole or in part, or impose any liability upon
Landlord or its agents by reason of inconvenience or annoyance to Tenant, or
injury to or interruption of Tenant's business, or otherwise, nor shall any such
delay or inability to perform on the part of Landlord in any way affect this
lease and the obligation of Tenant to pay rent hereunder and to perform all of
the other covenants and agreements to be performed by Tenant hereunder.
B. Interruption of Service. Landlord reserves the right to stop the
services of the air conditioning, elevator, escalator, plumbing, electrical or
other mechanical systems or facilities in the Building upon prior notice to
Tenant (if reasonably feasible) when necessary by reason of accident or
emergency, or upon prior written notice for repairs, alterations, replacements
or improvements which in the reasonable judgment of Landlord are desirable or
necessary, until such repairs, alterations, replacements or improvements shall
have been completed. Landlord shall use commercially reasonable efforts to
restore service as soon as possible. The exercise of such rights by Landlord
shall not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this lease, or impose any liability upon Landlord
or its agents by reason of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business, or otherwise.
CONDITIONS OF LANDLORD'S LIABILITY
37. A. Tenant shall not be entitled to claim a constructive eviction from the
Demised Premises unless Tenant shall have first notified Landlord of the
condition or conditions giving rise thereto, and if the complaints be justified,
unless Landlord shall have failed to remedy such conditions within a reasonable
time after receipt of such notice.
B. If Landlord shall be unable to give possession of the Demised Premises
the Term Commencement Date, by reason of the fact that the Demised Premises have
not been substantially completed, as defined in Article 2 hereof, to make same
ready for occupancy, or for any other reason, Landlord shall not be subject to
any liability for the failure to give possession on said date, nor shall such
failure in any way affect the validity of this lease or the obligations of
Tenant hereunder. The provisions of this Article are intended to constitute "an
express provision to the contrary" within the meaning of Section 223-a of the
New York Real Property Law. However, if Landlord does not deliver possession of
the Demised Premises by January 1, 2004, Tenant shall have the right to
terminate this lease and shall have no other obligations hereunder and shall be
refunded all payments made by Tenant upon the lease signing.
TENANT'S TAKING POSSESSION
38. Tenant by entering into occupancy of the Demised Premises shall be
conclusively deemed to have agreed that Landlord up to the time of such
occupancy has performed all of its obligations hereunder and that the Demised
Premises were in satisfactory condition as of the date of such occupancy
(excepting latent defects), unless within twenty (20) days after such date
Tenant shall give written notice to Landlord specifying the respects in which
the same were not in such condition.
FalconStor Page 18
LIABILITY INSURANCE
39. A. Tenant will keep in force, at Tenant's expense at all times during the
Demised Term and during such other times as Tenant occupies the Demised Premises
or any part thereof:
(i) commercial general liability insurance or comprehensive general
liability insurance with broad form endorsement with respect to the Demised
Premises and the operations of Tenant and any persons under Tenant's control in,
on or about the Demised Premises in which the limits of coverage shall be not
less than Five Million Dollars ($5,000,000) combined single limit per
occurrence;
(ii) statutory workers' compensation coverage and employers' liability
as required by state law;
(iii) business interruption insurance for a period of not less than
one year and such other insurance as Tenant deems necessary to protect its
property and its business against all perils commonly insured against by prudent
tenants;
(iv) such other insurance with respect to the Demised Premises and in
such amounts as Landlord may from time to time reasonably require against such
other insurable hazards or risks which at the time are commonly insured against
in the case of property similar to the Demised Premises and used as provided
herein.
B. All policies required by this lease shall be written on an occurrence
basis. Such policies are to be written by a company having a general policy
holder's rating of not less than A and a rating in financial size of not less
than XI, as rated in the most current "Best's" insurance reports, and authorized
and licensed to issue such policies in the State of New York. Any such insurance
required of Tenant hereunder may be furnished by Tenant under any blanket policy
carried by it, providing the policy properly allocates the required limits to
the Demised Premises, or under a separate policy thereof. Each policy evidencing
insurance as required to be carried by Tenant pursuant to this Article shall
contain the following provisions and/or clauses: (i) a crossliability clause;
(ii) a provision in such policy that the coverage carried by Landlord shall be
excess insurance; (iii) a provision including Landlord, Landlord's managing
agent and other parties (including mortgagees) designated by Landlord as
additional insureds (except with respect to workers' compensation insurance);
(iv) a waiver by the insurer of any right of subrogation against Landlord, its
agents, employees and representatives which arises or might arise by reason of
any payment under such policy or by reasons of any act or omission of Landlord,
its agents, employees, or representatives; (v) a severability clause; and (vi) a
provision that the insurer will not cancel, materially change, reduce aggregates
or coverage or fail to renew the coverage provided by such policy without first
giving Landlord and all additional insureds thirty (30) days' prior written
notice.
C. A copy of each paid-up policy or certificate of insurance accompanied
by original endorsements signed by the insurance company evidencing the policies
required hereunder, along with evidence of payment and appropriately
authenticated by the insurer or its authorized agent certifying that such policy
has been issued providing the coverage required by this Article, and containing
provisions specified herein, shall be delivered to Landlord not less than
fifteen (15) days prior to the earlier of (x) the Term Commencement Date, or (y)
the date Tenant shall first take possession of the Demised Premises for any
purpose, and, upon renewals, not less than thirty (30) days prior to the
expiration of such coverage.
D. If Tenant fails to deliver to Landlord on time any required evidence
of insurance coverage, or fails to carry any insurance required hereunder, or by
law or governmental regulations, then Landlord may (but is not obligated to)
purchase the required coverage on behalf of Tenant, as provided above, in which
event Tenant shall pay to Landlord on demand the cost of such insurance coverage
plus ten percent (10%) of the amount of such cost as a service charge to
Landlord. No such purchase by Landlord shall be deemed a waiver of Tenant's
default and Landlord may pursue its full rights and remedies on account of such
default.
E. Landlord will not unreasonably withhold or delay Landlord's consent to
a commercially reasonable and viable and financially sound plan whereby Tenant
self-insures the risks enumerated in this Article 39 A(iii) (business
interruption insurance); provided that such plan establishes an actual,
non-attachable and non-lienable segregated reserve for such purpose; provided
further that such plan provides comparable protection against risks and loss to
the insurance required by this Article 39A (iii) and provided finally that the
holder of any mortgage encumbering the Building consents thereto (which consent
Landlord does not warrant). In such case, Tenant shall not seek any recourse
from Landlord on account of any liability that would normally have been covered
under business interruption insurance.
FalconStor Page 19
ENTIRE AGREEMENT
40. This lease contains the entire agreement between the parties and all
prior negotiations and agreements are merged herein. Neither Landlord nor
Landlord's agent or representative has made any representation, or statement, or
promise, upon which Tenant has relied regarding any matter or thing relating to
the Building, the land allocated to it, (including the Building Parking Area) or
the Demised Premises, or any other matter whatsoever, except as is expressly set
forth in this lease, including, but without limiting the generality of the
foregoing, any statement, representation or promise as to the fitness of the
Demised Premises for any particular use, the services to be rendered to the
Demised Premises or the prospective amount of any item of additional rent. No
oral or written statement, representation or promise whatsoever with respect to
the foregoing or any other matter made by Landlord, its agents or any broker,
whether contained in an affidavit, information circular, or otherwise shall be
binding upon the Landlord unless expressly set forth in this lease. No rights,
easements or licenses are or shall be acquired by Tenant by implication or
otherwise unless expressly set forth in this lease. This lease may not be
changed, modified or discharged, in whole or in part, orally, and no executory
agreement shall be effective to change, modify or discharge, in whole or in
part, this lease or any obligations under this lease, unless such agreement is
set forth in a written instrument executed by the party against whom enforcement
of the change, modification or discharge is sought. All references in this lease
to the consent or approval of Landlord shall be deemed to mean the written
consent of Landlord, or the written approval of Landlord, as the case may be,
and no consent or approval of Landlord shall be effective for any purpose unless
such consent or approval is set forth in a written instrument executed by
Landlord. Landlord and Tenant understand, agree, and acknowledge that (i) this
lease has been freely negotiated by both parties; (ii) Tenant is sophisticated
in real estate matters or has employed professionals to assist Tenant in the
negotiation of this lease; and (iii) that, in any controversy, dispute, or
contest over the meaning, interpretation, validity, or enforceability of this
lease or any of its terms or conditions, there shall be no inference,
presumption, or conclusion drawn whatsoever against either party by reason of
that party having drafted this lease or any portion thereof.
DEFINITIONS
41. The term "Landlord" as used in this lease means only the owner, or the
mortgagee in possession, for the time being of the land and Building (or the
owner of a lease of the Building or of the land and Building) of which the
Demised Premises form a part, so that in the event of any sale or other transfer
of said land and Building or of said lease, or in the event of a lease of the
Building, or of the land and Building, the said Landlord shall be and hereby is
entirely freed and relieved of all covenants and obligations 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 purchaser or other transferee at any
such sale, or the said lessee of the Building, or of the land and Building,
provided that the purchaser, transferee or the lessee of the Building assumes
and agrees to carry out any and all covenants and obligations of Landlord
hereunder. The words "re-enter", "re-entry" and "re-entered" as used in this
lease are not restricted to their technical legal meanings. The term "business
days" as used in this lease shall exclude Saturdays, (except such portion
thereof as is covered by specific hours in Article 6 hereof), Sundays and all
days observed by the State and Federal Government as legal holidays.
The terms "person" and "persons" as used in this lease shall be deemed
to include natural persons, firms, corporations, associations and any other
private or public entities, whether any of the foregoing are acting on their own
behalf or in a representative capacity.
42. INTENTIONALLY OMITTED.
SUCCESSORS, ASSIGNS, ETC.
43. 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 respective assigns.
APPLICATION OF INSURANCE PROCEEDS, WAIVER OF SUBROGATION
44. In any case in which Tenant shall be obligated under any provisions of
this lease to pay to Landlord any loss, cost, damage, liability or expense
suffered or incurred by Landlord, Landlord shall allow to Tenant as an offset
against the amount thereof the net proceeds of any insurance collected by
Landlord for or on account of such loss, cost, damage, liability or expense,
provided that the allowance of such offset does not invalidate or prejudice the
policy or policies under which such proceeds were payable. In any case in which
Landlord shall be obligated under any provisions of this lease to pay to Tenant
any loss, cost, damage, liability or expense suffered or incurred by Tenant,
Tenant shall allow to Landlord as an offset against the amount thereof the net
proceeds of any insurance collected by Tenant for or on account of such loss,
cost, damage, liability or expense, provided that the allowance of such offset
does not invalidate or prejudice the policy or policies under which such
proceeds were payable.
FalconStor Page 20
CAPTIONS AND INDEX
45. The captions and the index at the beginning of the lease, if any, are
included 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
provisions thereof.
RECOVERY FROM LANDLORD
46. A. Tenant shall look solely to the estate and property, the sale
proceeds and the insurance proceeds and condemnation proceeds of Landlord in the
land and Building of which the Demised Premises are a part, for the satisfaction
of Tenant's remedies for the collection of a judgment (or other judicial
process) requiring the payment of money by Landlord in the event of any default
or breach by Landlord with respect to any of the terms, covenants and/or
conditions of the lease to be observed and/or performed by Landlord, and no
other property or assets of such Landlord shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies.
Notwithstanding the foregoing, if Landlord encumbers the Building with financing
representing more than 75% of the appraised value of the Building at the time of
financing, Tenant shall not be so limited to seek recovery against Landlord's
interest in the land and Building only but may pursue other assets of the
Landlrod including proceeds of any financing.
B. With respect to any provision of this lease which provides for
Landlord's approval and/or consent, 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 has unreasonably withheld or unreasonably delayed any such consent or
approval.
BROKER
47. Tenant and Landlord represent and warrant to each other that Xxxxxx &
Xxxxxxx, Inc. is the sole broker who brought the Demised Premises to Tenant's
attention and with whom Tenant has negotiated in bringing about this lease. Each
party agrees to indemnify, defend and save the other harmless of, from and
against any and all claims (and all expenses and fees, including attorneys fees,
related thereto) for commissions or compensation made by any other broker or
entity, arising out of or relating to the breach of the foregoing
representation. As, if and when this lease shall be fully executed and
unconditionally delivered by both Landlord and Tenant, Landlord agrees to pay
any commission that may be due the above-named broker in connection with this
lease in accordance with a separate agreement between Landlord and said broker.
SECURITY DEPOSIT
48. Tenant has deposited with Landlord the sum of $500,000.00 (the
"security deposit"), as security for the faithful performance and observance by
Tenant of the terms, provisions and conditions of this lease; it is agreed that
in the event Tenant defaults beyond any applicable notice and grace period in
respect of any of the terms, provisions and conditions of this Lease, Landlord
may use, apply or retain the whole or any part of the security so deposited to
the extent required for the payment of any sum as to which Tenant is in default
beyond any applicable notice and grace period. Landlord shall hold Tenant's
security deposit in a separate interest bearing account (of which Tenant shall
receive the interest) less a 1% administrative fee and shall not commingle said
deposit with any of Landlord's other monies. In the event that Tenant shall
fully and faithfully comply with all of the terms, provisions, covenants and
conditions of this lease, the security shall be returned to Tenant after the
date fixed as the end of this lease and after delivery of entire possession of
the Demised Premises to Landlord. In the event of a sale of the land and
Building or leasing of the Building, Landlord shall have the right to transfer
the security to the vendee or lessee and Landlord shall thereupon be released by
Tenant from all liability for the return of such security. If, as a result of
any application of all or any part of the security deposit, the amount of the
security deposit being held by Landlord shall be less than the amount required
to be held hereunder, Tenant shall forthwith provide Landlord with additional
funds in an amount equal to the deficiency. Notwithstanding the foregoing,
Tenant shall have the right during the Demised Term to substitute the security
deposit with an irrevocable letter of credit for the same amount in form
satisfactory to Landlord.
SEVERABILITY OF PROVISIONS
49. If any provision or any portion of any provision of this lease or the
application of any such provision or any portion thereof to any person or
circumstance, shall be held invalid or unenforceable, the remaining portion of
such provision and the remaining provisions of this lease, or the application of
such provision or portion of such provision as is held invalid or unenforceable
to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and such provision or portion of
any provision as shall have been held invalid or unenforceable shall be deemed
limited or modified to the extent necessary to make it valid and enforceable; in
no event shall this lease be rendered void or unenforceable.
FalconStor Page 21
RENEWAL OPTION
50. A. The Tenant shall have the option, to be exercised as hereinafter
provided, to extend the Demised Term for a period of five (5) years upon the
following terms and conditions:
B. That at the time of the exercise of such option the Tenant shall
not be in default beyond any applicable notice and cure period in the
performance of any of the terms, covenants or conditions herein contained with
respect to a matter as to which notice of default has been given hereunder and
which has not been remedied within the time limited in this lease.
C. That at the time of the exercise of such option and at the time of
the commencement of such extended period the Tenant shall not have assigned this
lease or sublet any portion of the Demised Premises (except per subsection 21. F
hereof).
D. That such extension shall be upon the same terms, covenants and
conditions as in this lease provided, except that (i) there will be no further
privilege of extension for the Demised Term beyond the period referred to above;
(ii) during the renewal period, the annual rental payable by Tenant to Landlord
shall be the greater of: (a) the fixed annual rent as calculated pursuant to
Article 3 hereof (including the provisions of Section 3. B hereof) and (b) the
Fair Market Rent (as defined below); and (iii) during the extension period, the
base year for determining additional rent under the escalation clause, Article
11, shall remain unchanged and continue to be the base year established at the
commencement of the Demised Term.
E. Notwithstanding anything in this Article contained to the contrary,
the Tenant shall not be entitled to an extension, if at the time of the
commencement of the extended period the Tenant shall be in default under any of
the terms, covenants or conditions of this lease with respect to a matter as to
which notice of default has been given hereunder and which has not been remedied
within the time limited in this lease, or if this lease shall have terminated
prior to the commencement of said period.
F. The Tenant shall exercise its option to the extension of the
Demised Term by notifying the Landlord of the Tenant's election to exercise such
option at least twelve (12) months (but not sooner than 24 months) prior to the
expiration of the initial Demised Term. Upon the giving of this notice, this
lease shall be deemed extended for the specified period, subject to the
provisions of this Article, without execution of any further instrument.
G. Fair Market Rental Rate. The term "Fair Market Rental Rate" shall
mean the annual amount per rentable square foot that a willing, comparable,
non-equity, non-renewal, non-expansion new tenant would pay and a willing,
comparable landlord of a similar quality office building in the area of
Huntington, New York would accept at arm's length, giving appropriate
consideration to annual rental rates per rentable square foot, the type of
escalation clauses, the extent of liability under the escalation clauses, and
other generally applicable terms and conditions of tenancy for a single floor or
the space in question, if smaller.
H. In the event Tenant disputes Landlord's determination of the Fair
Market Rental Rate, Tenant, by written demand served upon Landlord within ten
(10) business days after Landlord notifies Tenant of Landlord's determination of
Fair Market Rental Rate, may commence arbitration strictly in accordance with
the terms and conditions of this Subparagraph. If Tenant shall fail to demand
arbitration as set forth above within said ten (10) business day period, Tenant
shall be deemed to have accepted Landlord's determination of Fair Market Rental
Rate. The sole issue to be determined by such arbitration shall be the Fair
Market Rental Rate in accordance with this Subparagraph. Such written demand
shall contain the name and address of the arbitrator appointed by the demandant.
Within thirty (30) days after its receipt of the written demand, the other party
will give the demandant written notice of the name and address of its
arbitrator. Within ten (10) days after the date of the appointment of the second
arbitrator, the two (2) arbitrators will meet. If the two (2) arbitrators are
unable to agree on the fair market annual minimum rent as provided herein within
ten (10) days after their first meeting, they will select a third arbitrator.
The third arbitrator will be designated as chairman and will immediately give
Landlord and Tenant written notice of its appointment. The three (3) arbitrators
will meet within ten (10) days after the appointment of the third arbitrator. If
they are unable to agree on the fair market annual minimum rent within ten (10)
days after their first meeting, the third arbitrator will select a time, date
and place for a hearing and will give Landlord and Tenant thirty (30) days prior
written notice of it. The date of the hearing will not be more than sixty (60)
days after the date of appointment of the third arbitrator. The arbitrators must
be licensed real estate appraisers with at least five (5) years experience in
the Long Island, New York real estate market. No arbitrator may be an active
real estate broker. The arbitration will be governed by the laws of the State of
New York and, when not in conflict with such law, by the general procedures in
the commercial arbitration rules of the American Arbitration Association. The
arbitrators will not have the power to add to, modify, detract from or alter in
FalconStor Page 22
any way the provisions of this lease or any amendments or supplements to this
lease. The arbitrators will not have any power to decide or consider anything
other than the specific issue of the fair market annual minimum rent in
accordance with the terms of this lease. The written decision of at least two
(2) arbitrators conclusive and binding upon Landlord and Tenant. No arbitrator
is authorized to make an award for damages of any kind including, without
limitation, an award for punitive, exemplary, consequential or incidental
damages. Landlord and Tenant will pay for the services of its appointees,
attorneys and witnesses plus one-half of all other proper costs relating to the
arbitration. The decision of the arbitrators will be final and non-appealable
and may be enforced according to the laws of the State of New York.
Notwithstanding anything to the contrary contained herein, in the event Tenant
disputes Landlord's determination of the Fair Market Rental Rate, Tenant shall
nevertheless continue to pay rent at the rate determined by Landlord as the Fair
Market Rental Rate. In the event the rent as determined hereunder is at variance
with the rent being paid by Tenant, Tenant shall within 10 days thereafter
either pay the difference in a lump sum or receive a credit against future rent,
as the case may be. In the event that Landlord is sustained in its determination
of Fair Market Value, Tenant shall pay all Landlord's (as well as its own) costs
and attorneys fess incurred in connection with the arbitration.
ASSUMPTION OF TENANT'S EXISTING LEASE/ADDITIONAL RENT
51. Tenant is presently occupying approximately 11,771 square feet at 000
Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx ("Former Space") with a term expiring on July 1,
2007 at a present annual rent of $286,206.72 (exclusive of future escalations
and additional rent) (the "Former Space Lease"). As of the Term Commencement
Date, subject to the consent of the Former Space landlord ("Former Space
Landlord"), Tenant shall assign the Former Space Lease (a true copy of which is
attached hereto as Exhibit 3) and any security deposit thereunder to Landlord's
nominee, and Landlord's nominee shall assume all obligations thereunder subject
to the terms hereof. Landlord and Tenant agree to execute any and all documents
reasonably necessary for the assignment and assumption of the Former Space
Lease. Upon the assignment and assumption of the Former Space Lease, Landlord's
nominee shall engage a broker (Xxxxxx & Xxxxxxx, Inc. or other commercial
broker) to make commercially reasonable efforts to sublet the Former Space at
commercial rates and terms. The subtenant and the terms of the sublease and the
costs incurred in connection therewith must be reasonably approved by Tenant.
Landlord's nominee will instruct its appointed broker to present all ready,
willing and able subtenants to Tenant for its approval. Any rent, brokerage
commissions, fees or other charges of any kind incurred by Landlord's nominee
under the Former Lease shall be paid by Tenant hereunder as additional rent upon
demand (notwithstanding and exclusive of any "free rent period" enjoyed by
Tenant). Any rent or other monies attributable to the Former Space received by
Landlord's nominee from any subtenant of the Former Space, (after credit to
Landlord's nominee for any unpaid, or un-reimbursed, reasonable expenses,
charges or amounts incurred by Landlord's nominee, such as insurance premiums
and deductibles, brokerage commissions, improvements, tenant allowances, Former
Space Landlord charges, attorneys fees and expenses, fees or costs for the early
termination of the Former Space Lease or otherwise), shall be credited against
Tenant's obligations hereunder. Tenant shall indemnify and hold Landlord's
nominee harmless from any harm, claim or loss (including but not limited to
reimbursement of any costs or attorneys fees incurred) incurred in connection
with the Former Space Lease or the Former Space. Failure of Tenant to pay
Additional Rent shall constitute a default hereunder in the same fashion as
failure to pay fixed rent. Any monies received by Tenant on account of the
Former Space Lease shall be delivered to Landlord's nominee. Nothing herein
shall be construed so as to obligate the Landlord's nominee to incur any costs,
fees or charges in excess of rent charges due under the Former Lease. The
assignment of the Former Lease to Landlord's nominee shall not serve to release
Tenant from any obligations thereunder.
Tenant acknowledges and agrees that Landlord is a commercial landlord
of various properties in the area and shall have no duty or obligation by virtue
of this lease to first offer the Former Space to its prospective tenants.
ATTORNEY'S FEES
52. In the event of a dispute hereunder, and an action or proceeding shall
be commenced against the Tenant by Landlord, or by Landlord against Tenant, as
the case may be, the prevailing party, after final court determination with
appeals exhausted, shall be entitled to the reimbursement of reasonable
attorney's fees incurred by it from the non-prevailing party upon demand.
FalconStor Page 23
IN WITNESS WHEREOF, Landlord and Tenant have executed this lease as of the date
first above written.
LANDLORD:
XXXXXXXXXX XXXXXXXXXX 0, LLC
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Operating Partner
TENANT: FALCONSTOR SOFTWARE, INC.
TENANT
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: VP, Corporate Counsel & Secretary
FalconStor Page 24
State of NY )
) ss.:
County of Nassau )
On the 21 day of August, 2003, before me, the undersigned, a Notary Public
in and for said State, personally appeared Xxxxxxx Xxxxxx, personally known to
me or proved to me on the basis of satisfactory evidence to be the individual(s)
whose name(s) is (are) subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity(ies), and that
by his/her/their signature(s) on the instrument, the individual(s), or the
person on behalf of which the individual(s) acted, executed the instrument.
State of NY )
) ss.:
County of Nassau )
On the 21 day of August, 2003, before me, the undersigned, a Notary Public
in and for said State, personally appeared August, Xxxx Xxxxxxxx personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
FalconStor Page 25
