EIGHTH LEASE MODIFICATION AGREEMENT
Exhibit 10.13
EIGHTH LEASE MODIFICATION AGREEMENT
AGREEMENT made as of November 23, 2004, by and between 00 XXXX 00XX XX. ASSOCIATES L.L.C., a New York limited liability company having its office at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called “Landlord”), and LINCOLN BUILDING ASSOCIATES L.L.C., a New York limited liability company having its office at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called “Tenant”).
W I T N E S S E T H:
WHEREAS, the parties are respectively the current landlord and tenant under that certain lease dated October 1, 1958, as modified by agreements dated January 1, 1964, as of January 1, 1977, as of April 1, 1979, as of April 1, 1981, as of April 1, 1982 as of October 1, 1987, and as of March 1, 2000 (the “Lease”), covering premises known as and by the street numbers 00 Xxxx 00xx Xxxxxx and 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the “Building”); and
WHEREAS, a modernization program is necessary to maintain the competitive position of the Building; and
WHEREAS, a modernization program has been underway for which funds were borrowed by Landlord and made available to Tenant; and
WHEREAS, additional improvements are contemplated; and
WHEREAS, Landlord is willing to make additional funds available for improvements required by such program, and Tenant is willing to apply such funds, as agent for Landlord, to the making of such improvements, and to apply additional funds from the operation of the Building to pay for the balance of the costs of such improvements; and
WHEREAS, Landlord and Tenant desire to modify the Lease as hereinafter set forth.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the parties hereto, intending to be bound, hereby agree as follows:
1. Landlord and Tenant agree that improvements substantially as shown on Exhibit A attached to the March 1, 2000 Lease Modification Agreement have been undertaken program and the additional improvements referred to in the recitals above, are shown on Exhibit A hereto, which aggregate improvements constitute the “Improvement Program” referred to herein. All such improvements shall be substantially made to the demised premises. All work performed by Tenant in furtherance of the Improvement Program shall be done as agent for Landlord and for the account of Landlord, and when completed, shall become the property of Landlord.
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2.(a) Landlord agrees to obtain a loan in the amount of $84,000,000 secured by a first mortgage (the “ Mortgage”) on the demised premises. Pursuant to the terms of the Mortgage, loan proceeds shall be advanced in stages. Advances of loan proceeds shall be deposited by Landlord in an interest-bearing money market or similar account and disbursed to Tenant upon submission of documents reasonably required by Landlord. For purposes of determining Additional Rent and Further Additional Rent, all interest earned on amounts so held by Landlord and disbursed to Tenant shall be treated as income of Tenant. In the event that the Mortgage proceeds are insufficient to pay for the entire cost of the Improvement Program, Tenant agrees the pay for the balance of such costs.
(b) Tenant agrees to join in the Mortgage for the purpose of mortgaging its estate under the Lease to secure payment of the Mortgage indebtedness, provided that Tenant’s liability for such payment shall be limited to such estate.
3. Paragraph 2A(ii) of the Lease is hereby deleted in its entirety and replaced by the following:
“(ii) Commencing on November 29, 2004 (with payments to commence on December 1, 2004), Tenant covenants to pay, in advance, on the first day of each month during the term of this Lease and any renewal term of this Lease, a basic rent (hereinafter called “Basic Rent”) at an annual rate equal to (i) $24,000 plus (ii) the constant installment payments of interest and amortization (excluding any balloon principal payment due at maturity) payable during such year under all mortgages to which this Lease is subordinate pursuant to Paragraph 30 hereof. The Basic Rent shall be adjusted on a dollar-for-dollar basis by changes in the annual debt service on such mortgages. It is further understood and agreed that the amount of Basic Rent shall be adjusted upon a refinancing of any Mortgage (as defined in Paragraph 30), subject to and in accordance with the provisions of Paragraph 30.”
4. Paragraph 13 of the Lease is hereby deleted in its entirety and replaced by the following:
“13. Tenant agrees that its rights hereunder are subordinate to:
| (i) | the mortgage(s) presently encumbering the demised premises; and |
| (ii) | any future mortgages placed on the demised premises provided that (a) the aggregate principal balance of all mortgages now or hereafter placed on the demised premises does not exceed $84,000,000 plus refinancing costs, (b) such new mortgages are made by an institutional lender on a non-recourse basis and (c) the proceeds of the loan(s) secured by any new mortgage(s) are (i) used to refinance the then existing mortgage(s) on the demised premises, (ii) pay refinancing costs in connection therewith and/or (iii) building improvements in connection with the demised premises. |
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(Each mortgage to which Tenant’s rights hereunder are subordinate is hereinafter a “Permitted Mortgage”). Tenant agrees to execute, upon demand, any documents required to evidence such subordination. Tenant further agrees that it will not do or suffer to be done any act upon the demised premises which will violate any of the terms of any Permitted Mortgage or the obligations secured thereby.”
5. Subject to the provisions of Paragraph 2 hereof, any costs, fees and expenses incurred in connection with the execution of this Agreement or the completion of the transactions contemplated herein, shall be paid from proceeds advanced under the Mortgage. Any such costs, fees, and expenses paid by Tenant from sources other than the loan secured by the Mortgage may be deducted in the year expended in calculating Tenant’s net income for purposes of determining Additional Rent and Further Additional Rent under the Lease.
6. Paragraph 30 of the Lease is hereby deleted in its entirety and replaced by the following:
“30. For the purpose of this Paragraph 30, the term “Mortgage” shall mean any fee mortgage to which the Lease is subordinate under the provisions of Paragraph 13 of this Lease, and the term ‘refinancing’ shall include any consolidation, modification, renewal, extension or replacement thereof. In the event that there shall be one or more refinancings of any Mortgage or in the event that the monthly debt service payments under any Mortgage shall be adjusted pursuant to the terms thereof, the annual Basic Rent will be modified to equal to the sum of TWENTY-FOUR THOUSAND DOLLARS ($24,000.00) plus an amount equal to the constant installment payments for interest and amortization (not including any balloon principal payment due at maturity) required annually under all Mortgages.”
7. Landlord and Tenant agree to negotiate the terms of additional options to permit Tenant to extend the term of the Lease beyond its current expiration date, on the condition that such extension rights shall be in proportion to the net present benefit to Landlord of the increase in Basic Rent and the completed Improvement Program.
8. Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed thereto in the Lease.
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9. Except as herein modified and as otherwise agreed between Landlord and Tenant, the Lease shall remain in full force and effect, and the parties hereby ratify and confirm all of the other terms, covenants and conditions thereof.
10. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the day and year first above written.
| Landlord: | ||
| 00 XXXX 00XX XX. ASSOCIATES L.L.C. | ||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: Xxxx X. Xxxxxxx | ||
| Title: Member | ||
| Tenant: | ||
| LINCOLN BUILDING ASSOCIATES L.L.C. | ||
| By: | /s/ Xxxxx X. Xxxxxx | |
| Name: Xxxxx X. Xxxxxx | ||
| Title: Member | ||
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Exhibit A
Lincoln Building – Additional
Capital Expense Program
New Capital Projects
Main suction tank
55, 30 & 17 house tank valves and piping
Reline 55th floor tank
Reline 31st floor tank
Reline 17th floor tank
Hot Water Heaters (3)
Supply risers to house tanks 55th, 31st and
17th floors
Pumps and Motors (DC-AC)
New electrical supply to new Pumps and
Motors (DC-AC)
S4 Fan and Motor
S5 Fan and Motor
26th floor cooling tower
Emergency power
Service switch #2 maintenance
Riser switches (3) locations, breakers, copper
detail
ATS switches (3) locations
Main feeder riser replacements
Electric closet panel replacements
Class E battery back up (code requirement)
Radio System and Antenna Upgrade
301 Roof replacement
Local Law 11 Façade (estimated)
42nd St revolver replacement
Sprinklers throughout, code compliance
Space Improvement & Leasing Expense
Tenant Improvements
Leasing Commissions
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