SECOND MODIFICATION OF SUBLEASE AGREEMENT (Exhibit 10.18a)
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This second Modification of Sublease Agreement (the "Second Modification")
dated as of the 30th day of June, 1999 by and among PEARL 30 ASSOCIATES LLC
("Overtenant"), FIRST ALBANY COMPANIES INC. ("Undertenant") and PS ASSOCIATES
("Landlord").
RECITALS
WHEREAS, KeyCorp (predecessor-in-interest to Overtenant) and Undertenant
entered into that certain Sublease Agreement dated October 13, 1995, and that
certain First Modification of Sublease Agreement dated October 13, 1995 (the
"Original Sublease" and together with this Second Modification, the "Sublease");
and
WHEREAS, Overtenant and Undertenant have agreed to modify certain provisions
of the Original Sublease;
NOW, THEREFORE, in furtherance of $10.00 and other good and valuable
consideration, Overtenant and Undertenant hereby agree as follows:
1. Except as otherwise defined herein, capitalized terms used herein shall
be defined as set forth in the Original Sublease or the Xxxxxxxxx (as
that term is defined in the Original Sublease).
2. All references to the "Expiration Date" in the Sublease are hereby
deemed to mean December 31, 2004 for all purposes thereunder.
3. Base rent in the amount of $98,380.42 per month shall by payable by
Undertenant to Overtenant in advance commencing on the date hereof
(pro-rated for a partial month if the date hereof is other than the
first day of a calendar month) and continuing on the fist day of each
and every calendar month during the Sublease Term.
4. (a) Undertenant shall have the option (the "Renewal Option") to extend
the term of this Sublease for an additional term of five (5) years
(the "Renewal Term"). The Renewal Term shall commence at midnight on
the Expiration Date and shall expire at midnight on the fifth (5th)
anniversary of the Expiration Date or such earlier date upon which the
Sublease may be terminated as provided elsewhere in the Sublease.
The Renewal Option may be exercised only by Undertenant's giving
Overtenant written notice (the "Renewal Notice") of Undertenant's
intention to renew the Sublease not later than eighteen (18) months
prior to the Expiration Date. Such Renewal Notice shall be deemed
properly given only if, on the date that Undertenant shall exercise
each Renewal Option (the "Exercise Date"): (i) the Sublease shall not
have been previously terminated or canceled and (ii) Undertenant shall
not be in default (after notice of such default shall have been given
to Undertenant and after the expiration of any applicable cure period)
under the Sublease. Time shall be of the essence with respect to the
giving of the Renewal Notice by Undertenant to Overtenant.
Notwithstanding anything to the contrary contained herein, if,
subsequent to the Exercise Date but prior to the commencement of the
Renewal Term, this Sublease shall have been terminated, then
Undertenant's exercise of the Renewal Option shall be of no force or
effect.
(b) If Undertenant shall exercise the Renewal Option in Accordance with
the provisions hereof, then this Sublease shall be extended for the
Renewal Term upon all of the terms, covenants and conditions contained
in this Sublease, except that (i) during the Renewal Term, the Rent
shall be the "Market Rent" (as defined in Section 1.04(b) of the
Xxxxxxxxx, and in connection therewith, the term "Landlord" as used
in said Section 1.04(b) shall be deemed to refer to "Landlord" under
the Xxxxxxxxx) of the Subpremises on the Expiration Date; and (ii) from
and after the Exercise Date (but subject to the provisions of the last
sentence of Paragraph (a) above), all references to the "Expiration
Date" shall be deemed to refer to the last day of the Renewal Term.
5. KeyCorp has assigned all of its right, title and interest in the
Xxxxxxxxx and the Sublease to the Overtenant, an affiliate of Landlord.
Overtenant has agreed to assume all of KeyCorp's rights and all of
KeyCorp's obligations pursuant to the Xxxxxxxxx and the Sublease
effective as of June 30, 1999. The Overtenant hereby represents and
warrants that it has full power and authority to carry out and perform
its obligations under the Xxxxxxxxx and the Sublease. The execution
and delivery of such documents have been duly authorized by Overtenant
and are enforceable against Overtenant in accordance with their
respective term and conditions. Any reference in the Xxxxxxxxx or the
Sublease to "sums paid by Overtenant" or the "sum Overtenant has been
billed" shall be deemed to refer to the amounts that would properly be
payable by an independent third party tenant calculated in accordance
with the provisions of the Xxxxxxxxx (as modified by the Sublease, and
all subsequent modifications to such Sublease). Except as otherwise
provided in the Sublease, Undertenant shall obtain rights of Overtenant
pursuant to the Xxxxxxxxx, including, but not limited to, the right to
audit Landlord's books and records to the extent provided in the
Xxxxxxxxx.
6. The following definitions are hereby deemed to be added to Section
6(b)(1) of the Sublease:
6(b)(1)(iv) "Tax Base Year" shall mean the 1999 Tax Year.
6(b)(1)(v) "School Tax Base Year" shall mean the 1998/1999
School Tax Year.
6(b)(1)(vi) "Operating Expenses" shall mean the total of all the
costs and expenses actually incurred or borne by Landlord in connection with the
operation and maintenance of the Building and Plaza, and the services provided
tenants in the Building, including all expenses incurred as a result of
Landlord's compliance with any of its obligations under the Xxxxxxxxx.
Operating Expenses shall include, without being limited thereto, the following:
(i) salaries, wages, medical, surgical and general welfare benefits (including
group life insurance) and pension payments of employees of the managing agent
for the Building and/or Plaza (or, in the event of a successor Landlord, the
employees of such managing agent or Landlord) engaged in the operation and
maintenance of the Building and/or Plaza; (ii) payroll taxes, worker's
compensation, uniforms and dry cleaning for the employees referred to in
subdivision (i); (iii) the cost of all charges for steam, heat, ventilation,
air-conditioning and water (including sewer rental) furnished to the Building
(including common areas thereof), together with any taxes on any such utilities;
(iv) the cost of all charges for rent, casualty, war risk (if obtainable from
the United States government) and liability insurance; (v) the cost of all
building and cleaning supplies and charges for telephone for the Building and
Plaza; (vi) the cost of all charges for cleaning any areas of the Building
and/or Plaza; (vii) the cost of all charges for management, window cleaning
and service contracts for any areas of the Building and/or Plaza; (viii) the
cost of all charges for electricity (including any taxes thereon) furnished to
the Building and/or Plaza (except electrical energy furnished to the demised
space of tenants at the Building); (ix) the cost relating to the elevators
and escalators; (x) the cost relating to the protection and security; (xi) the
cost relating to lobby decorations and interior and exterior landscape
maintenance; (xii) repairs, replacements and improvements which are appropriate
for the continued operation of the Building and Plaza as a first class office
building; (xiii) painting of non-tenanted areas; (xiv) professional and
consulting fees; (xv) association fees or dues; and (xvi) costs and expenses for
capital improvements, replacements and repairs amortized on a straight-line
basis over the useful life of such item (as determined in the accordance with
the Internal Revenue Code), with and interest factor equal to one percent over
the prime rate of Key Bank at the time of Landlord's having incurred said costs.
Notwithstanding anything to the contrary as may be contained in this Lease, the
following costs shall not be included in Operating Expenses: (A) leasing
commissions, free rent, lease takeover obligations, and other inducements,
costs, disbursements and expenses incurred in connection with leasing space
in the Building; (B) payments of principal, interest and other costs related
to mortgages or deeds of trust; (C) advertising and marketing costs and
expenses; (D) rent and other payments pursuant to any ground or underlying
leases (which shall not be deemed to include equipment leases); (E) depreciation
and amortization, except as expressly permitted herein; (F) legal fees, costs
and disbursements (x) relating to the enforcement of any lease provision except
for enforcing any lease provisions for the title to or interest in the Land or
Building, (y) relating to the defense of the Landlord's title to or interest in
the Land or Building, or (z) relating to the negotiation and preparation of
tenant leases and related documents; (G) reserves; (H) costs incurred to test,
survey, clean-up, contain, xxxxx, remove or otherwise remedy material which
constitutes Hazardous Substances (as hereinafter defined) as of the date hereof
or asbestos containing materials; (I) costs of items and resources for which a
tenant (including Undertenant and Overtenant) reimburses Landlord or pays third
parties other than through operating expense pass through clauses similar to
this provision; (J) salaries and other compensation and fringe benefits paid
to all persons above the level of building manager; (K) cost of repairs or
replacements covered by insurance (or required to be covered by insurance),
warranty, litigation, or settlement proceeds, except to the extent of any
insurance deductible permitted hereby; (L) costs incurred by Landlord to the
extent that Landlord is reimbursed by government agencies or entities; and (M)
Landlord's partnership overhead and administrative costs, including accounting
fees for the preparation of the partnership tax returns; and (N) costs, fines
and penalties incurred because Landlord violated a governmental law or rule
which law or rule is in effect as of the date hereof.
If Landlord shall purchase any item of capital equipment or make any capital
expenditure designed to result in savings or reductions in Operating Expenses,
then the cost thereof shall be included in Operating Expenses. The costs of
capital equipment or capital expenditures are so to be included in Operating
Expenses for the Operation Year in which the costs are incurred and subsequent
Operation Years, amortized on a straight line basis over the useful life of
such item (as determined in accordance with the Internal Revenue Code), with
an interest factor equal to one percent over the prime rate of the Key Bank
at the time of Landlord's having incurred said costs. If Landlord shall lease
any such item of capital equipment designed to result in savings or reductions
in Operating Expenses, then the rentals and other costs paid or incurred in
connection with such leasing shall be included in Operating Expenses for the
Operation Year in which they were incurred.
If during all or part of any Operation Year, Landlord shall not furnish any
particular item(s) of work or service (which would constitute an Operating
Expense under the Xxxxxxxxx) to portions of the Building (including without
limitation the Subpremises) due to the fact that such portions are not
occupied or leased, or because such item of work or service is not required
or desired by the tenant (including without limitation Undertenant) of such
portion, or such tenant is itself obtaining and providing such item of work or
service, or for any other reasons, then, for the purposes of computing the
additional rent payable pursuant to Section 5.03(a) and (b) of the Xxxxxxxxx,
the amount of the expenses for such item(s) for such period shall be deemed to
be increased by an amount equal to the additional operating and maintenance
expenses which would reasonably have been incurred during such period by
Landlord if it had at its own expense furnished such item(s) of work or services
to such portion of the Building.
6(b)(1)(vii) "Real Estate Taxes" shall mean the sum of (i) the
amount determined by multiplying (x) the Assessed Valuation of the Land and
the Building for any Tax Year by (y) the real property tax rate applicable to
the City and County of Albany for such Tax Year plus (ii) the amount determined
by multiplying (x) the Assessed Valuation of the Land and Building for any
School Tax Year by (y) the real property tax rate applicable to the School
District for such School Tax Year (amounts calculated pursuant to this clause
(ii) being hereinafter referred to as "School Taxes") plus (iii) any special or
extraordinary assessments and governmental levies imposed against the Land and
the Building. If, due to a future change in the method of taxation, any
franchise, income, profit or other tax, however designated, shall be levied
against Landlord in substitution, in whole or part, for or in lieu of any tax
which would otherwise constitute "Real Estate Taxes", such franchise, income,
profit or other tax shall be deemed to be Real Estate Taxes for the purposes
hereof and shall be deemed to be included in the term "Real Estate Taxes".
All Real Estate Taxes except School Taxes shall hereinafter be referred to as
"Taxes".
In no event shall the calculation of Real Estate Taxes exceed the sums
actually paid by Landlord as described in the foregoing Sections 6(b)(1)(vii).
6. Section 6(b)(2) of the Sublease is hereby amended by adding "(i)" after
"(2)" in the first line thereof.
7. The following shall be deemed to be added at the end of Section 6(b)(2)
of the Sublease:
"(ii) Commencing on the date hereof and continuing on the first day of
each month during the Sublease Term, additional rent equal to
Undertenant's Percentage of the amount (if any) obtained by
subtracting the amount obtained by dividing Taxes for the Tax
Base Year by twelve (12) from the sum which Overtenant has
been billed by Landlord for Taxes for the corresponding month
during each successive year of the Sublease Term.
Undertenant shall receive Undertenant's Percentage of any rebate
or credit or pay Undertenant's Percentage of any additional sums
due as a result of Landlord's reconciliation of the sums paid by
Overtenant on account of Taxes. If requested by Undertenant,
Overtenant shall submit to Undertenant documentation it receives
from Landlord in connection with Taxes billed by Landlord to
Overtenant.
(iii) Commencing on the date hereof and continuing on the first day of
each month during the Sublease Term, additional rent equal to
Undertenant's Percentage of the amount (if any) obtained by
subtracting the amount obtained by dividing School Taxes for
the School Tax Base Year by twelve (12) from the sum which the
Overtenant has been billed by Landlord for School Taxes for the
corresponding month during each successive year of the Sublease
Term.
Undertenant shall receive Undertenant's Percentage of any rebate
or credit or pay Undertenant's Percentage of any additional sums
due as a result of Landlord's reconciliation of the sums paid by
Overtenant on account of School Taxes. If requested by
Undertenant, Overtenant shall submit to Undertenant
documentation it receives from Landlord in connection with
School Taxes billed by Landlord to Overtenant."
8. Except as specifically modified herein, the terms, covenants and
conditions of the Sublease are hereby ratified and confirmed.
9. Landlord hereby waives any termination rights it may have as a result
of KeyCorp's assignment of the Xxxxxxxxx to Overtenant pursuant to that certain
Consent Agreement between Landlord, Overtenant and Undertenant dated
October 31, 1995.
IN WITNESS THEREOF, the parties hereto have duly executed this Second
Modification as of the day and year first above written.
OVERTENANT:
PEARL 30 ASSOCIATES LLC
By:
__________________________
Name: I. Xxxxx Swanite
Title: Member
UNDERTENANT:
FIRST ALBANY COMPANIES INC.
By:
__________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and CFO
LANDLORD:
PS ASSOCIATES
By: PS Pearl Corporation its
general partner
By:
________________________
Name: I. Xxxxx Swanite
Title: Vice President
