New York-New York-3 Park Avenue Lease - Three Park Avenue Co. and MJN Enterprises Inc.
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THREE PARK AVENUE CO.,
Landlord,
MJN ENTERPRISES, INC.,
Tenant.
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LEASE
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Premises: 3 Park Avenue
New York, New York 10022
Part of the 38th Floor
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TABLE OF CONTENTS
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ARTICLE PAGE
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1 Premises; Term........................................... 1
2 Commencement of Term..................................... 1
3 Rent..................................................... 2
4 Use...................................................... 3
5 Alterations, Fixtures.................................... 4
6 Repairs.................................................. 6
7 Floor Load; Noise........................................ 7
8 Laws, Ordinances, Requirements of Public Authorities..... 7
9 Insurance................................................ 8
10 Damage by Fire or Other Cause............................ 10
11 Assignment, Subletting, Mortgaging....................... 11
12 No Liability of Landlord and Indemnity by Tenant......... 17
13 Moving of Heavy Equipment................................ 18
14 Condemnation............................................. 18
15 Entry, Right to Change Public Portions of the Building... 19
16 Conditional Limitations, Etc............................. 20
17 Mechanic's Liens......................................... 24
18 Landlord's Right to Perform Obligations.................. 25
19 Covenant of Quiet Enjoyment.............................. 25
20 Excavation............................................... 25
21 Services and Equipment................................... 26
22 Escalation............................................... 27
23 Electric Inclusion....................................... 31
24 Broker................................................... 33
25 Subordination and Ground Lease........................... 33
26 Estoppel Certificate..................................... 36
27 Waiver of Jury Trial..................................... 36
28 Surrender of Premises.................................... 36
29 Rules-and Regulations.................................... 37
30 Successors and Assigns and Definitions................... 37
31 Notices.................................................. 38
32 No Waiver; Entire Agreement.............................. 38
33 Captions................................................. 39
34 Inability to Perform..................................... 40
35 No Representations by Landlord........................... 40
36 Rent Control............................................. 40
37 Security Deposit......................................... 41
38 Late Payment Charges..................................... 43
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Testimonium and Signatures
Acknowledgments
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INDENTURE OF LEASE ("Lease") made this 28th day of April, 1995, between
THREE PARK AVENUE CO., a New York limited partnership, having an office at 750
Lexington Avenue, New York, New York 10022 ("Landlord") and MJN ENTERPRISES,
INC., a New York corporation, having an office at 100 Park Avenue, New York, New
York 10017 ("Tenant").
W I T N E S S E T H :
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ARTICLE 1
Premises; Term
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
following space ("Demised Premises") : part of the 38th floor, as shown on the
floor plan (Schedule A) attached hereto, in the office building known as and by
the street number 3 Park Avenue, in the Borough of Manhattan, City and State of
New York ("Building"), located on the land more particularly described on
Schedule C attached hereto, upon and subject to the terms, covenants and
conditions hereafter set forth.
TO HAVE AND TO HOLD the Demised Premises unto Tenant for a term commencing
on the Commencement Date (as defined in Article 2 hereof) and ending on a date
(the "Expiration Date") which shall be five (5) years after the Commencement
Date, plus the number of days required, if any, to have such term expire on the
last day of the calendar month, or on such earlier date upon which said term may
expire or terminate pursuant to the conditions of this Lease or pursuant to law.
IT IS MUTUALLY COVENANTED AND AGREED between Landlord and Tenant as
follows:
ARTICLE 2
Commencement of Term
Section 2.01. The term of this Lease and the payment of minimum rent
hereunder shall commence on the date that Landlord's work set forth on Schedule
B shall be substantially completed and Landlord shall deliver possession of the
Demised Premises on the Commencement Date. Landlord shall give Tenant at least
fifteen (15) days' prior written notice of the anticipated date of substantial
completion, provided Landlord shall have no liability or responsibility to
Tenant: if the Demised Premises have not been substantially completed on the
date set forth in Landlord's notice. Except as set forth on Schedule B, Landlord
shall have no obligation to perform any other work in connection with preparing
the Demised Premises for Tenant's occupancy. Landlord's work shall be deemed to
be substantially completed even though minor details or adjustments, none of
which materially interfere with Tenant's use of the Demised Premises, may not
then have been completed, but Landlord agrees, at its sole cost and expense, to
promptly thereafter complete all unfinished work. However, if Tenant shall enter
into
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possession of the Demised Premises and commence the conduct of its business, the
Commencement Date shall be the date of such entry regardless of whether the
foregoing events shall have occurred. Upon Tenant obtaining the building permit
referred to in Schedule B, Landlord shall promptly thereafter commence its work
and diligently perform the same at Landlord's sole cost and expense. If Landlord
has not substantially completed its work within one hundred eighty (180) days
after such building permit has been obtained (subject, however, to the
provisions of Article 34), then Tenant shall be entitled to an abatement of the
minimum rent only, in addition to the abatement provided in Section 3.02, equal
to one (1) business day for each one (1) business day thereafter that the
Demised Premises have not been substantially completed to the date of
substantial completion; and if Landlord has not substantially completed its work
within two hundred seventy (270) days after such building permit has been
obtained (subject, however, to the provisions of Article 34), the Tenant shall
be entitled to an abatement of the minimum rent only, in addition to the
abatement provided in Section 3.02, equal to two (2) business days for each one
(1) business day thereafter that the Demised Premises have not been
substantially completed to the date of substantial completion; and if Landlord
has not substantially completed its work within three hundred sixty-five (365)
days after such building permit has been obtained, then Tenant, as its sole
remedy, shall thereafter have the right to terminate this Lease upon not less
than ten (10) days, prior written notice to Landlord in which event this Lease
shall terminate on the date set forth in such notice unless Landlord, prior to
such date, substantially completes its work. Upon such termination, Landlord
shall return to Tenant the moneys paid to Landlord upon the execution of this
Lease and neither party shall have any further rights or obligations hereunder.
Section 2.02. Tenant has fully inspected the Demised Premises, is familiar
with the condition thereof and agrees to accept possession of the same on the
Commencement Date in their present "As Is" condition, except for Landlord's work
as set forth in Schedule B.
Section 2.03. If, prior to the Commencement Date, Tenant shall enter the
Demised Premises to make any installations, Landlord shall have no liability or
obligation for the care or preservation of Tenant's property.
Section 2.04. Promptly after the Commencement Date, Landlord and Tenant
will execute a statement in recordable form confirming the Commencement and
Expiration Dates of this Lease, in accordance with the foregoing provisions.
ARTICLE 3
Rent
Section 3.01. Tenant shall pay, as rent for the Demised Premises, the
following:
(a) a fixed minimum rent (the "minimum rent") at the annual rate of
$114,000.00 per annum (or $9,500.00 per month), plus the period from the
Commencement Date to the end of the month in which the same occurs if the
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Commencement Date is other than the first day of a month calculated on a
pro rata basis; and
(b) all other sums and charges required to be paid by Tenant under
the terms of this Lease (including without limitation, the payments
required to be made under Article 22), which shall be deemed to be and are
sometimes referred to hereafter as additional rent.
Section 3.02. Notwithstanding the provisions of Section 3.01 hereof, and
provided Tenant is not then in default hereunder, Tenant shall be entitled to an
abatement of part of the minimum rent only in the amount of $8,400.00 per month
for each of the 1st, 2nd, 3rd, 16th and 17th months following the Commencement
Date; provided that the balance of minimum rent of $1,100.00 for each of said
months shall be due and payable. Tenant acknowledges that the consideration for
the aforesaid abatement of minimum rent is Tenant's agreement to perform all of
the terms, covenants and conditions of this Lease on its part to be performed.
Therefore, if Tenant shall default under any of such terms, covenants and
conditions, the aggregate amount of all minimum rent that was abated shall
immediately thereafter become due and payable by Tenant to Landlord. In the
event of Tenant's failure to pay such aggregate amount to Landlord, Landlord
shall be entitled to the same rights and remedies as in the event of Tenant's
default in the payment of minimum rent. Except as otherwise expressly set forth
herein, Tenant shall be required to pay additional rent and all other sums from
and after the Commencement Date.
Section 3.03. The minimum rent shall be payable in equal monthly
installments in advance on the first day of each and every month during the term
of this Lease, except that the first full month's rent installment shall be paid
upon the execution of this Lease and be credited against minimum rent becoming
due on the fourth (4th) month of the term hereof.
Section 3.04. Tenant shall pay the minimum rent and additional rent in
lawful money of the United States which shall be legal tender for the payment of
all debts, public and private, at the time of payment and such portion thereof
which is payable directly to Landlord shall be paid at the principal place of
business of Landlord, to wit: 750 Lexington Avenue, New York, New York 10022, or
at such other place as Landlord may designate by notice to Tenant.
Section 3.05. The minimum rent and additional rent shall be payable by
Tenant without any set-off, abatement or deduction whatsoever and without notice
or demand, except as otherwise expressly provided herein.
ARTICLE 4
Use
Section 4.01. Tenant shall use and occupy the Demised Premises only for
administrative, executive and general office purposes and for a computer-based
telecommunications business related thereto.
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Section 4.02. Notwithstanding the provisions of Section 4.01, Tenant shall
not use or allow the use of the Demised Premises or any part thereof (1) for the
cooking and/or sale of food; (2) for storage for sale of any alcoholic beverage
in the Demised Premises; (3) for storage for and/or sale of any product or
material from the Demised Premises; (4) for manufacturing or printing purposes
(other than such incidental printing as Tenant may perform in connection with
the conduct of its usual operations); (5) for the conduct of a school or
training facility or similar type of business which results in the presence of
the general public in the Demised Premises; (6) for the conduct of the business
of an employment agency or personnel agency; (7) for the conduct of any public
auction or exhibition; (8) for occupancy by a foreign, United States, state,
municipal or other governmental or quasi-governmental body, agency or department
or any authority or other entity which is affiliated therewith or controlled
thereby and which has diplomatic or sovereign immunity or the like with respect
to a commercial lease; (9) for messenger or delivery service (excluding Tenant's
own employees or outside services); (10) as a public stenographer or typist;
(11) as a telephone or telegraph agency; (12) as a company engaged in the
business of renting office(s) or desk space; (13) as medical offices or a
laboratory; (14) as a travel agency; (15) as a dating service; (16) as a
restaurant.
Section 4.03. If any governmental license or permit, other than a
Certificate of occupancy, shall be required for the proper and lawful conduct of
Tenant's business in the Demised Premises, or any part thereof, and if failure
to secure such license or permit would in any way affect Landlord, Tenant, at
its expense, shall duly procure and thereafter maintain such license or permit
and submit the same for inspection by Landlord. Tenant shall at all times comply
with the terms and conditions of each such license or permit.
Section 4.04. Tenant shall not at any time use or occupy, or suffer or
permit anyone to use or occupy, the Demised Premises, or do or permit anything
to be done in the Demised Premises, in violation of the Certificate of occupancy
for the Demised Premises or for the Building, and will not permit or cause any
act to be done or any condition to exist on the Demised Premises which may be
dangerous unless safeguarded as required by law, or which in law constitutes a
nuisance, public or private, or which may make void or voidable any insurance
then in force covering the Building and building equipment. Landlord represents
that Tenant's proposed uses set forth in Section 4.01 are permitted under the
current valid and subsistent Certificate of Occupancy.
ARTICLE 5
Alterations, Fixtures
Section 5.01. Tenant, without Landlord's prior consent, shall make no
alterations, installations, additions, or structural improvements affixed in or
to the Demised Premises ("work") including, but not limited to a water cooler,
an air-conditioning or cooling system, or any unit or part thereof or other
apparatus of like or other nature, paneling, partitions, railings, mezzanine
floors, galleries and the like. If any contractor, other than Landlord, shall
perform work, such contractor shall first be approved by Landlord, and as a
condition of such approval,
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Tenant shall pay to Landlord ten (10k) per cent of the cost of such work for
supervision, coordination and other expenses incurred by Landlord in connection
therewith. Notwithstanding the foregoing, such ten (10k) percent charge shall
not be applicable to the following work performed by Tenant: painting, floor
covering, wall covering, light fixtures and furnishings. Worker's Compensation
and public liability insurance and property damage insurance, all in amounts and
with companies and/or forms reasonably satisfactory to Landlord, shall be
provided and at all times maintained by Tenant's contractors engaged in the
performance of the work, and before proceeding with the work, certificates of
such insurance shall be furnished to Landlord. All such work shall be done at
Tenant's sole expense and at such times and in such manner as Landlord may from
time to time reasonably designate and in full compliance with all governmental
authorities having jurisdiction thereover. Upon completion of the work, Tenant
shall deliver to Landlord full scale "as built" plans for the same. All work
affixed to the realty or if not so affixed but for which Tenant shall have
received a credit (other than Tenant's trade fixtures), shall become the
property of Landlord and shall remain upon, and be surrendered with, the Demised
Premises as a part thereof at the end of the term or any renewal or extension
term, as the case may be, without allowance to Tenant or charge to Landlord,
unless Landlord elects otherwise on notice to Tenant given at any time prior to
or on any termination of this Lease. If Landlord shall elect otherwise, then all
such work or such portion thereof as Landlord shall elect, shall be removed by
Tenant and Tenant shall restore the Demised Premises, at Tenant's expense to
such condition that it shall blend in and harmonize with the surrounding area.
If any Building facilities or services, including but not limited to air-
conditioning and ventilating equipment installed by Landlord, are adversely
affected or damaged by reason of the work by Tenant, Tenant, at its expense,
shall repair such damage and shall correct the work so as to prevent any further
damage or adverse effect on such facilities or services.
Section 5.02. Prior to commencing any work pursuant to the provisions of
Section 5.01, Tenant shall furnish to Landlord:
(a) Copies of all governmental permits and authorizations which may
be required in connection with such work.
(b) A certificate evidencing that Tenant (or Tenant's contractor) has
procured worker's compensation insurance covering all persons employed in
connection with the work who might assert claims for death or bodily injury
against Overlandlord, as defined in Article 25, Landlord, Tenant or the
Building.
(c) Such additional personal injury and property damage insurance
(over and above the insurance required to be carried by Tenant pursuant to
the provisions of Section 9.03) as Landlord may reasonably require because
of the nature of the work to be done by Tenant.
Section 5.03. Where furnished by or at the expense of Tenant (except the
replacement of an item theretofore furnished and paid for by Landlord or for
which Tenant has received a credit), all movable property, furniture,
furnishings and trade fixtures ("personalty") other than those affixed to the
realty shall remain the property of and shall be removed by Tenant on or
<PAGE>
prior to any termination or expiration of this Lease, and, in the case of damage
by reason of such removal, Tenant, at Tenant's expense, promptly shall repair
the damage. If Tenant does not remove any such personalty, Landlord, at its
election, and upon notice to Tenant, (a) may cause the personalty to be removed
and placed in storage at Tenant's expense or (b) may treat the personalty as
abandoned and may dispose of the personalty as it sees fit without accounting to
Tenant for any proceeds realized upon such disposal.
Section 5.04. Tenant agrees that the exercise of its rights pursuant to
the provisions of this Article 5 shall not be done in a manner which would
create any work stoppage, picketing, labor disruption or dispute or violate
Landlord's union contracts affecting the Building or interfere with the business
of Landlord or any Tenant or occupant of the Building. In the event of the
occurrence of any condition described above arising from the exercise by Tenant
of its right pursuant to the provisions of this Article 5, Tenant shall,
immediately upon notice from Landlord, cease the manner of exercise of such
right giving rise to such condition. In the event Tenant fails to cease such
manner of exercise of its rights as aforesaid, Landlord, in addition to any
rights available to it under this Lease and pursuant to law, shall have the
right to injunction without notice. With respect to Tenant's work, Tenant shall
make all arrangements for, and pay all expenses incurred in connection with, use
of the freight elevators servicing the Demised Premises during those hours other
than as provided in Section 21.01 (a).
ARTICLE 6
Repairs
Section 6.01. Tenant shall take good care of the Demised Premises and the
fixtures and appurtenances therein and at its sole cost and expense make all
repairs thereto as and when needed to preserve them in good working order and
condition. All damage or injury to the Demised Premises or the Building or to
any building equipment caused by Tenant moving property in or out of the
Building or by installation or removal of personalty or resulting from
negligence or improper conduct of Tenant, its employees, agents, contractors,
customers, invitees and visitors, shall be repaired, promptly by Tenant at
Tenant's expense, and whether or not involving structural changes or
alterations, to the reasonable satisfaction of Landlord. All repairs shall
include replacements or substitutions where necessary and shall be at least
equal to the quality, class and value of the property repaired, replaced or
substituted and shall be done in a good and workmanlike manner.
Section 6.02. Landlord, at its expense, shall perform all maintenance,
repairs and replacements, structural and otherwise, to the exterior and public
portions of the Building, and the Building systems within the Demised Premises,
including but not limited to the HVAC, mechanical, plumbing and electrical
systems, unless Tenant is required to make them under the provisions of Section
6.01 or unless required as a result of the performance or existence of
alterations performed by Tenant or on Tenant's behalf, in which event Tenant at
its expense shall perform such maintenance, repairs and replacements. Tenant
shall notify Landlord of the necessity for any repairs for which Landlord may be
responsible under the provisions of this
<PAGE>
Section and, following such notice, Landlord, upon prior reasonable notice
(except no notice in an emergency) shall remedy the condition with reasonable
diligence. Landlord shall have no liability to Tenant by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord's making any repairs or changes which Landlord is required or permitted
by this Lease, or required by law, to make in or to any portion of the Building
or the Demised Premises, or in or to the fixtures, equipment or appurtenances of
the Building or the Demised Premises. However, Landlord shall use reasonable
efforts to perform such repairs or changes in a manner to minimize interference
with the conduct of Tenant's business, except Landlord shall not be obligated to
employ overtime or premium labor.
Section 6.03. Tenant shall not store or place any materials or other
obstructions in the lobby or other public portions of the Building, or on the
sidewalk abutting the Building.
ARTICLE 7
Floor Load; Noise
Section 7.01. Tenant shall not place a load upon any floor of the Demised
Premises which exceeds the load per square foot which such floor was designed to
carry (50 lbs. per square foot) and which is allowed by law.
Section 7.02. Business machines and mechanical equipment belonging to
Tenant which cause noise, vibration or any other nuisance that may be
transmitted to the structure or other portions of the Building or to the Demised
Premises, to such a degree as to be objectionable to Landlord or which interfere
with the use or enjoyment by other tenants of their premises or the public
portions of the Building, shall be placed and maintained by Tenant, at Tenant's
expense, in settings of cork, rubber or spring type vibration eliminators
sufficient to eliminate such objectionable or interfering noise or vibration.
ARTICLE 8
Laws, Ordinances, Requirements of Public Authorities
Section 8.01.
(a) Tenant, at its expense, shall comply with all laws, orders,
ordinances, rules and regulations and directions of Federal, State, County
and Municipal authorities and departments thereof having applicability over
the Demised Premises and the Building ("Governmental Requirements")
referable to Tenant or the Demised Premises, whether or not arising by
reason of (i) Tenant's occupancy, use or manner of use of the Demised
Premises or any installations made therein by or at Tenant's request, or
(ii) any default by Tenant under this Lease. Notwithstanding the foregoing,
Tenant shall not be obligated to remove any violations affecting the
Demised Premises prior to the Commencement Date.
<PAGE>
(b) Landlord, at its expense, shall comply with all Governmental
Requirements relating to the public portions of the Building, that Tenant
is not obligated to comply with them under the provisions of subdivision
(a) of this Section. Landlord, at its expense, may contest the validity of
any Governmental Requirements and postpone compliance therewith pending
such contest, provided such contest will not subject Tenant to civil or
criminal liability.
Section 8.02. If Tenant receives written notice of any violation of any
Governmental Requirements applicable to the Demised Premises, it shall give
prompt notice thereof to Landlord.
Section 8.03. Tenant will not clean, nor allow any window in the Demised
Premises to be cleaned, from the outside in violation of Section 202 of the
Labor Law or the rules of the Board of Standards and Appeals or of any other
board or body having or asserting jurisdiction.
ARTICLE 9
Insurance
Section 9.01. Tenant shall not do or permit to be done any act or thing in
or upon the Demised Premises which will invalidate or be in conflict with the
Certificate of Occupancy for the Building or the terms of the insurance policies
covering the Building and the property and equipment therein; and Tenant, at its
expense, shall comply with all rules, orders, regulations and requirements of
the New York Board of Fire Underwriters or any other similar body having
jurisdiction, and of the insurance carriers, and shall not knowingly do or
permit anything to be done in or upon the Demised Premises in a manner which
increases the rate of insurance for the Building or any property or equipment
therein over the rate in effect on the Commencement Date.
Section 9.02. If, by reason of Tenant's failure to comply with the
provisions of Section 9.01 or any of the other provisions of this Lease, the
rate of insurance for the Building or the property and equipment of Landlord
shall be increased to an amount higher than on the Commencement Date, Tenant
shall pay to Landlord any additional or increased insurance premiums to the
extent resulting therefrom thereafter paid by Landlord, and Tenant shall make
such payment within ten (10) days after demand of Landlord. In any action or
proceeding wherein Landlord and Tenant are parties, a schedule or "make up" of
any insurance rate for the Building or Demised Premises issued by the New York
Fire Insurance Exchange, or other body establishing fire insurance rates for the
Building, shall be conclusive evidence of the facts therein stated and of the
several items and charges in the insurance rates then applicable to the Building
or Demised Premises.
Section 9.03
(a) Tenant covenants to provide on or before the Commencement Date
and to keep in force during the term hereof, the following insurance
coverage:
<PAGE>
(i) A comprehensive policy of liability insurance protecting
Landlord, Tenant and the Lessor (as defined in Article 25) against any and
all claims for personal injury, death or property damage occurring upon, in
or about the Demised Premises, and the public portions of the Building used
by Tenant, its employees, agents, contractors, customers, invitees and
visitors including, without limitation, personal injury, death or property
damage resulting from any work performed by or on behalf of Tenant, with
coverage of not less than $2,000,000.00 combined single limit for personal
injury, death and property damage arising out of one occurrence or
accident.
(ii) Fire and extended coverage in an amount adequate to cover
the cost of replacement of all personal property, fixtures, furnishings and
equipment, including Landlord's work pursuant to Schedule B and Tenant's
work (as referred to in Section 5.01), located in the Demised Premises.
(b) All such insurance shall (i) be effected under valid and
enforceable policies, (ii) be issued by insurers of recognized
responsibility authorized to do business in the State of New York, (iii)
contain a provision whereby the insurer agrees not to cancel the insurance
without at least thirty (30) days, prior written notice to Landlord, and
(iv) contain a provision that no act or omission of Tenant shall result in
forfeiture of the insurance as against Landlord.
On or before the Commencement Date, Tenant shall deliver to Landlord
duplicate originals of the aforesaid policies or certificates evidencing the
aforesaid insurance coverage, and renewal policies or certificates shall be
delivered to Landlord at least thirty (30) days prior to the expiration date of
each policy with proof of payment of the premiums therefor.
Section 9.04. Landlord and Tenant shall each secure an appropriate clause
in, or an endorsement upon, each fire and extended coverage policy obtained by
it and covering the Building, the Demised Premises or the personal property,
fixtures and equipment located therein or thereon, pursuant to which the
respective insurance companies waive subrogation or permit the insured, prior to
any loss, to agree with a third party to waive any claim it might have against
said third party. The waiver of subrogation or permission for waiver of any
claim herein before referred to shall extend to the agents of each party and its
employees and, in the case of Tenant, shall also extend to all other persons and
entities occupying or using the Demised Premises in accordance with the terms of
this lease. If and to the extent that such waiver or permission can be obtained
only upon payment of an additional charge, then, the party benefiting from the
waiver or permission shall pay such charge upon demand, or shall be deemed to
have agreed that the party obtaining the insurance coverage in question shall be
free of any further obligations under the provisions hereof relating to such
waiver or permission.
Subject to the foregoing provisions of this Section 9.04, and insofar as
may be permitted by the terms of the insurance policies carried by it, (i) each
party hereby releases the other with respect to any claim (including a claim for
negligence) which it might otherwise have against the other party for loss,
damages or destruction with respect to its property by fire or other casualty
(including rental value or business interruption, as the case may be) occurring
during the term of
<PAGE>
this Lease covered by insurance, and (ii) Tenant releases other tenants to the
extent that the policies of such other tenants permit a similar waiver for the
benefit of Tenant and such other tenant gives such a waiver.
ARTICLE 10
Damage by Fire or Other Cause
Section 10.01. If the Demised Premises or the Building shall be partially
damaged by fire (or other hazards included in extended coverage endorsements to
fire insurance policies covering property in the City of New York) the damage
shall be repaired by and at the expense of Landlord and the minimum rent until
such repairs shall be made, shall be apportioned according to the part of the
Demised Premises which is usable by Tenant; and if Tenant is unable to use all
of the Demised Premises although a part thereof remains undamaged, then all of
the minimum rent shall be abated until such repairs have been made. Landlord
shall have no responsibility to repair any damage to Landlord's work performed
pursuant to Schedule B or Tenant's work (as referred to in Section 5.01), the
same being the responsibility of Tenant. No penalty shall accrue for delays
which may arise by reason of adjustment of insurance by Landlord, unavoidable
delays (as hereinafter defined), or any other cause beyond Landlord's reasonable
control. Tenant shall give immediate notice to Landlord in case of fire or other
damage to the Demised Premises of which Tenant has knowledge. If the Demised
Premises are totally or substantially damaged or are rendered wholly or
substantially untenantable by fire or any such other casualty, and if Landlord
decides not to restore or rebuild the same, or if the Building shall be so
damaged that Landlord shall decide to demolish it or to rebuild it (whether or
not the Demised Premises shall have been damaged), Landlord at its election may,
within sixty (60) days after such fire or other casualty, notify Tenant of such
decision, and thereupon the term of this Lease shall expire by lapse of time
upon the third (3rd) day after such notice is given, and Tenant shall vacate and
surrender the Demised Premises to Landlord. Tenant hereby waives the provisions
of Section 227 of the Real Property Law, and the provisions of this Article
shall govern and control in lieu thereof. If the damage is due to the fault or
neglect of Tenant the debris shall be removed by, and at the expense of, Tenant.
Notwithstanding the foregoing, if Landlord does not substantially complete
such repairs within one hundred eighty (180) days following the date of such
casualty (subject to unavoidable delays as provided in Article 34), then Tenant
may elect to terminate this Lease by notice to Landlord within ten (10) days
following the expiration of such one hundred eighty (180) day period, and
thereupon the term of this Lease shall expire on the thirtieth (30th) day after
such notice is given, and Tenant shall vacate and surrender the Demised Premises
to Landlord, unless within such thirty (30) day period, Landlord substantially
completes such restoration or rebuilding in which event this Lease shall remain
in full force and effect.
Section 10.02. No damages or compensation shall be payable by Landlord nor
shall Tenant make any claim for inconvenience, loss of business or annoyance
arising from any repair or restoration of any portion of the Demised Premises or
of the Building. However, Landlord
<PAGE>
shall use reasonable efforts to restore the Demised Premises or the Building as
expeditiously as practicable and in a manner to minimize interference with
Tenant's business, provided Landlord shall not be obligated to employ overtime
or premium labor.
ARTICLE 11
Assignment, Subletting, Mortgaging
Section 11.01. Tenant will not, by operation of law or otherwise, assign,
mortgage or encumber this Lease or sublet or permit the Demised Premises or any
part thereof to be used by others, without Landlord's prior written consent in
each instance, which consent shall not be unreasonably withheld or delayed
subject to the provisions of Section 11.07. If this Lease be assigned, or if the
Demised Premises or any part thereof be underlet or occupied by anybody other
than Tenant, Landlord may, after default by Tenant, collect rent from the
assignee, undertenant or occupant, and apply the net amount collected to the
rent herein reserved, but no assignment, underletting, occupancy or collection
shall be deemed a waiver of the provisions hereof, the acceptance of the
assignee, undertenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Landlord to any assignment, subletting, mortgage or
encumbrance shall not in any manner be construed to relieve Tenant from
obtaining Landlord's express written consent to any other or further assignment,
subletting, mortgage or encumbrance. In no event shall any permitted sublessee
assign or encumber its sublease or further sublet all or any portion of its
sublet space, or otherwise suffer or permit the sublet space or any part thereof
to be used or occupied by others, without Landlord's prior written consent in
each instance.
Section 11.02. If Tenant shall at any time or times during the term of
this Lease desire to assign this Lease or sublet all or part of the Demised
Premises, Tenant shall give notice thereof to Landlord, which notice shall be
accompanied by (a) a conformed or photostatic copy of the proposed assignment or
sublease, the effective or commencement date of which shall be not less than 30
nor more than 180 days after the giving of such notice, (b) a statement setting
forth in reasonable detail the identity of the proposed assignee or subtenant,
the nature of its business and its proposed use of the Demised Premises, and (c)
current financial information with respect to the proposed assignee or
subtenant, including, without limitation, its most recent financial report. Such
notice shall be deemed an offer from Tenant to Landlord whereby Landlord (or
Landlord's designee) may, at its option, (i) sublease such space (hereinafter
called the "Leaseback Space") from Tenant upon the terms and conditions
hereinafter set forth (if the proposed transaction is a sublease of all or part
of the Demised Premises), (ii) terminate this Lease (if the proposed transaction
is an assignment or a sublease of all or substantially all of the Demised
Premises), or (iii) terminate this Lease with respect to the Leaseback Space (if
the proposed transaction is a sublease of part of the Demised Premises). Said
options may be exercised by Landlord by notice to Tenant at any time within
thirty (30) days after such notice has been given by Tenant to Landlord; and
during such thirty (30) day period Tenant shall not assign this Lease nor sublet
such space to any person.
<PAGE>
Section 11.03. If Landlord exercises its option to terminate this Lease in
the case where Tenant desires either to assign this Lease or sublet all or
substantially all of the Demised Premises, then, this Lease shall end and expire
on the date that such assignment or sublet was to be effective or commence, as
the case may be, and the minimum rent and additional rent shall be paid and
apportioned to such date and any payments with respect thereto made or to be
made by Tenant to such date shall be promptly returned to or paid by Tenant, as
the case may be.
Section 11.04. If Landlord exercises its option to terminate this Lease in
part in any case where Tenant desires to sublet part of the Demised Premises,
then, (a) this Lease shall end and expire with respect to such part of the
Demised Premises on the date that the proposed sublease was to commence; and (b)
from and after such date the minimum rent and additional rent shall be adjusted,
based upon the proportion that the rentable area of the Demised Premises
remaining bears to the total rentable area of the Demised Premises; and (c)
Tenant shall pay to Landlord, upon demand, the costs incurred by Landlord in
physically separating such part of the Demised Premises from the balance of the
Demised Premises and in complying with any laws and requirements of any public
authorities relating to such separation.
Section 11.05. If Landlord exercises its option to sublet the Leaseback
Space, such sublease to Landlord or its designee (as subtenant) shall be at the
lower of (i) the rental rate per rentable square foot of minimum rent and
additional rent then payable pursuant to this Lease or (ii) the rentals set
forth in the proposed sublease, and shall be for the same term as that of the
proposed subletting, and such sublease:
(a) shall be expressly subject to all of the covenants, agreements,
terms, provisions and conditions of this Lease except such as are
irrelevant or inapplicable, and except as otherwise expressly set forth to
the contrary in this Section;
(b) Such sublease shall be upon the same terms and conditions as
those contained in the proposed sublease, except such as are irrelevant or
inapplicable and except as otherwise expressly set forth to the contrary in
this Section;
(c) Such sublease shall give the sublessee the unqualified and
unrestricted right, without Tenant's permission, to assign such sublease or
any interest therein and/or to sublet the Leaseback Space or any part or
parts of the Leaseback Space and to make any and all changes, alterations,
and improvements in the space covered by such sublease at no cost or
liability to Tenant and if the proposed sublease will result in all or
substantially all of the Demised Premises being sublet, grant Landlord or
its designee the option to extend the term of such sublease for the balance
of the term of this Lease less one (1) day;
(d) Such sublease shall provide that any assignee or further
subtenant, of Landlord or its designee, may, at the election of Landlord,
be permitted to make alterations, decorations and installations in the
Leaseback Space or any part thereof and shall also provide in substance
that any such alterations, decorations and installations in the Leaseback
Space therein made by any assignee or subtenant of Landlord or its designee
may be removed, in whole or in part, by such assignee or subtenant, at its
<PAGE>
option, prior to or upon the expiration or other termination of such
sublease provided that such assignee or subtenant, at its expense, shall
repair any damage and injury to that portion of the Leaseback Space so
sublet caused by such removal; and
(e) Such sublease shall also provide that (i) the parties to such
sublease expressly negate any intention that any estate created under such
sublease be merged with any other estate held by either of said parties,
(ii) any assignment or subletting by Landlord or its designee (as the
subtenant) may be for any purpose or purposes that Landlord, in Landlord's
uncontrolled discretion, shall deem suitable or appropriate, (iii) Tenant,
at Tenant's expense, shall and will at all times provide and permit
reasonably appropriate means of ingress to and egress from the Leaseback
Space so sublet by Tenant to Landlord or its designee, (iv) Landlord, at
Tenant's expense, may make such alterations as may be required or deemed
necessary by Landlord to physically separate the Leaseback Space from the
balance of the Demised Premises and to comply with any laws and
requirements of public authorities relating to such separation, and (v)
that at the expiration of the term of such sublease, Tenant will accept the
space covered by such sublease in its then existing condition, subject to
the obligations of the sublessee to make such repairs thereto as may be
necessary to preserve the premises demised by such sublease in good order
and condition.
Section 11.06. (a) If Landlord exercises its option to sublet the
Leaseback Space, Landlord shall indemnify and save Tenant harmless from all
obligations under this Lease as to the Leaseback Space during the period of time
it is so sublet to Landlord.
b) Performance by Landlord, or its designee, under a sublease of the
Leaseback Space shall be deemed performance by Tenant of any similar
obligation under this Lease and any default under any such sublease shall
not give rise to a default under a similar obligation contained in this
Lease, nor shall Tenant be liable for any default under this Lease or
deemed to be in default hereunder if such default is occasioned by or
arises from any act or omission of the tenant under such sublease or is
occasioned by or arises from any act or omission of any occupant holding
under or pursuant to any such sublease.
(c) Tenant shall have no obligation, at the expiration or earlier
termination of the term of this Lease, to remove any alteration,
installation or improvement made in the Leaseback Space by Landlord.
Section 11.07. In the event Landlord does not exercise an option provided
to it pursuant to Section 11.02 and provided that Tenant is not in default of
any of Tenant's obligations under this Lease, Landlord's consent (which must be
in writing and in form reasonably satisfactory to Landlord) to the proposed
assignment or sublease shall not be unreasonably withheld or delayed, provided
and upon condition that:
(a) Tenant shall have complied with the provisions of Section 11.02
and Landlord shall not have exercised any of its options under said Section
11.02 within the time permitted therefor;
<PAGE>
(b) The proposed assignee or subtenant is engaged in a business and
the Demised Premises, or the relevant part thereof, will be used in a
manner which (i) is limited to the use expressly permitted under Sections
4.01 and 4.02 of this Lease, and (ii) is in keeping with the then standards
of the Building;
(c) The proposed assignee or subtenant is a reputable person or
entity with sufficient financial worth considering the responsibility
involved, and Landlord has been furnished with reasonable proof thereof;
(d) Neither (i) the proposed assignee or sublessee nor (ii) any
person which, directly or indirectly, controls, is controlled by or is
under common control with, the proposed assignee or sublessee, is then an
occupant of any part of the Building;
(e) The proposed assignee or sublessee is not a person with whom
Landlord is currently negotiating to lease space in the Building;
(f) The proposed sublease shall be in form reasonably satisfactory to
Landlord and shall comply with the provisions of this Article;
(g) At any one time there shall not be more than two (2) subtenants
(including Landlord or its designee) in the Demised Premises;
(h) Tenant shall reimburse Landlord on demand for any reasonable
costs that may be incurred by Landlord in connection with said assignment
or sublease, including costs incurred for obtaining financial and credit
reports of the proposed assignee or subtenant, and reasonable attorneys'
fees incurred in connection with the granting of any requested consent; and
(i) Tenant shall not have (i) advertised the Demised Premises for
subletting or assignment without prior notice to Landlord, nor (ii) listed
the same with a broker, agent or representative other than the then
managing agent of the Building or other agent designated by Landlord, or
otherwise, at a rental rate less than the minimum rent or additional rent
at which Landlord is then offering to lease other space in the Building.
Except for any subletting by Tenant to Landlord or its designee pursuant to
the provisions of this Article, each subletting pursuant to this Article shall
be subject to all of the covenants, agreements, terms, provisions and conditions
contained in this Lease. Notwithstanding any such subletting to Landlord or any
such subletting to any other subtenant and/or acceptance of rent or additional
rent by Landlord from any subtenant, Tenant shall and will remain fully liable
for the payment for the minimum rent and additional rent due and to become due
hereunder and for the performance of all the covenants, agreements, terms,
provisions and conditions contained in this Lease on the part of Tenant to be
performed and all acts and omissions of any subtenant or anyone claiming under
or through any subtenant which shall be in violation of any of the obligations
of this Lease, and any such violation shall be deemed to be a violation by
Tenant. Tenant further agrees that notwithstanding any such subletting, no other
and further subletting of the Demised Premises by Tenant or any person claiming
through or under Tenant (except as
<PAGE>
provided in Section 11.05) shall or will be made except upon compliance with and
subject to the provisions of this Article. If Landlord shall decline to give its
consent to any proposed assignment or sublease, unless such consent is
unreasonably withheld, or if Landlord shall exercise any of its options under
Section 11.02, Tenant shall indemnify, defend and hold harmless Landlord against
and from any and all losses, liability, damages, costs and expenses (including
reasonable counsel fees) resulting from any claims that may be made against
Landlord by the proposed assignee or sublessee or by any brokers or other
persons claiming a commission or similar compensation in connection with the
proposed assignment or sublease.
Section 11.08. In the event that (a) Landlord fails to exercise any of its
options under Section 11.02 and consents to a proposed assignment or sublease,
and (b) Tenant fails to execute and deliver the assignment or sublease to which
Landlord consented within ninety (90) days after the giving of such consent,
then, Tenant shall again comply with all of the provisions and conditions of
Section 11.02 before assigning this Lease or subletting all or part of the
Demised Premises.
Section 11.09. With respect to each and every sublease or subletting
authorized by Landlord under the provisions of this Lease, it is further agreed:
(a) No subletting shall be for a term ending later than one day prior
to the expiration date of this Lease;
(b) No sublease shall be valid, and no subtenant shall take
possession of the Premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Landlord;
(c) Each sublease shall provide that it is subject and subordinate to
this Lease and to the matters to which this Lease is or shall be
subordinate, and that in the event of termination, re-entry or dispossess
by Landlord under this Lease Landlord may, at its option, take over all of
the right, title and interest of Tenant, as sublessor, under such sublease,
and such subtenant shall, at Landlord's option, attorn to Landlord pursuant
to the then executory provisions of such sublease, except that Landlord
shall not (i) be liable for any previous act or omission of Tenant under
such sublease, (ii) be subject to any offset, not expressly provided in
such sublease, which thereto accrued to such subtenant against Tenant, or
(iii) be bound by any previous modification of such sublease or by any
previous prepayment of more than one month's rent.
Section 11.10. If Landlord gives its consent to any assignment of this
Lease or to any sublease, Tenant shall, in consideration therefor, pay to
Landlord, as additional rent:
(a) in the case of an assignment, an amount equal to all sums and
other considerations paid to Tenant from the assignee for such assignment
(including, but not limited to sums paid for the sale of Tenant's fixtures
to the extent the amount allocated to such fixtures exceeds its then fair
market value, leasehold improvements, less, in case of a sale thereof, the
then net unamortized or undepreciated cost thereof determined on the basis
of Tenant's federal income tax returns). The sums payable to Landlord under
this
<PAGE>
Section 11.10 (a) shall be paid to Landlord as and when paid by the
assignee to Tenant; and
(b) in the case of a sublease, an amount equal to one-half of the
rents and charges and other consideration payable under the sublease to
Tenant by the subtenant which is in excess of the minimum rent accruing
during the term of the sublease in respect of the subleased space (at the
rate per square foot payable by Tenant hereunder) pursuant to the terms of
this Lease (including, but not limited to, sums paid for the sale or rental
of Tenant's fixtures to the extent the amount allocated to such fixtures
exceeds its then fair market value, leasehold improvements, less, in the
case of the sale thereof, the then net unamortized or undepreciated cost
thereof determined on the basis of Tenant's federal income tax returns).
The sums payable to Landlord under this Section 11.10(b) shall be paid to
Landlord as and when paid by the subtenant to Tenant.
Section 11.11. If Tenant is a corporation, partnership, or other
entity, the provisions of Section 11.01 shall apply to a transfer (by one or
more transfers) of a majority of the stock or other ownership interests in
Tenant (but excluding a transfer of stock or partnership interest to the heirs,
executors, trustees or other legal representatives of any individual stockholder
or partner of Tenant), as the case may be, as if such transfer of a majority of
the stock or ownership interests of Tenant were an assignment of this Lease; but
said provisions and the provisions of Section 11.02 shall not apply to
transactions with a corporation or partnership into or with which Tenant is
merged or consolidated or to which substantially all of Tenant's assets are
transferred or to any corporation which controls or is controlled by Tenant or
is under common control with Tenant, provided that in any of such events, (i)
the successor to Tenant has a net worth computed in accordance with generally
accepted accounting principles at least equal to the greater of (1) the net
worth of Tenant immediately prior to such merger, consolidation or transfer, or
(2) the net worth of tenant herein named on the date of this Lease, and (ii)
proof satisfactory to Landlord of such net worth shall have been delivered to
Landlord at least ten (10) days prior to the effective date of any such
transaction.
Section 11.12. Any assignment or transfer, whether made with
Landlord's consent pursuant to Section 11.01 or without Landlord's consent
pursuant to Section 11.11, shall be made only if, and shall not be effective
until, the assignee shall execute, acknowledge and deliver to Landlord an
agreement in form and substance reasonably satisfactory to Landlord whereby the
assignee shall assume the obligations of this Lease on the part of Tenant to be
performed or observed and whereby the assignee shall agree that the provisions
in Section 11.01 shall, notwithstanding such assignment or transfer, continue to
be binding upon it in respect of all future assignments and transfers. The
original named Tenant covenants that, notwithstanding any assignment or
transfer, whether or not in violation of the provisions of this Lease, and
notwithstanding the acceptance of minimum rent and/or additional rent by
Landlord from an assignee, transferee, or any other party, the original named
Tenant shall remain fully liable for the payment of the minimum rent and
additional rent and for the other obligations of this Lease on the part of
Tenant to be performed or observed.
<PAGE>
Section 11.13. The joint and several liability of Tenant and any immediate
or remote successor in interest of Tenant and the due performance of the
obligations of this Lease on Tenant's part to be performed or observed shall not
be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time of, or modifying any of the
obligations of, this Lease, or by any waiver or failure of Landlord, to enforce
any of the obligations of this Lease.
Section 11.14. The listing of any name other than that of Tenant, whether
on the doors of the Demised Premises or the Building directory, or otherwise,
shall not operate to vest any right or interest in this Lease or in the Demised
Premises, nor shall it be deemed to be the consent of Landlord to any assignment
or transfer of this Lease or to any sublease of the Demised Premises or to the
use or occupancy thereof by others.
ARTICLE 12
No Liability of Landlord and Indemnity by Tenant
Section 12.01. Tenant shall indemnify Landlord, its agents, contractors
and employees against and save Landlord, its agents, contractors and employees
harmless from any liability to and claim by or on behalf of any person, firm,
governmental authority, corporation or entity for personal injury, death or
property damage, arising: (a) from the use by Tenant of the Demised Premises or
from any work whatsoever done or omitted to be done by Tenant, its employees,
agents, contractors, customers, invitees or visitors, or from any accident
thereat, unless due solely to the negligence or willful act of Landlord, its
agents, contractors or employees; and (b) from any breach or default by Tenant
of and under any of the terms, covenants and conditions of this Lease.
Tenant shall also indemnify Landlord, its agents, contractors and employees
against and save Landlord, its agents, contractors and employees harmless from
all costs, reasonable counsel fees, expenses and penalties incurred by Landlord,
its agents, contractors and employees in connection with any such liability or
claim.
If any action or proceeding shall be brought against Landlord in connection
with any such liability or claim, Tenant, on notice from Landlord, shall defend
such action or proceeding, at Tenant's expense, by counsel reasonably
satisfactory to the Landlord. Counsel for Tenant's insurance carrier is
satisfactory.
Section 12.02. Landlord 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, unless due to or
caused solely by the negligence or willful act of Landlord, its agents,
contractors or employees. Landlord and its agents shall not be liable for any
injury or damage to persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water, rain or snow or leaks from any part of
the Building or from the pipes, appliances or plumbing works or from the roof,
street or sub-surface or from any other place or by dampness or by any other
cause of whatsoever nature, unless due to or caused solely by the
<PAGE>
negligence or willful act of Landlord, its agents, contractors or employees; nor
shall Landlord be liable for any such damage caused by other tenants or persons
in the Building or caused by operations in construction of any 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 permanently closed, darkened or bricked up in accordance with the
requirements of law or are temporarily darkened or closed by reason of repairs,
alterations or maintenance by Landlord, 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. (Reference
hereinabove to Landlord shall for all purposes be deemed to include the Lessor
as defined in Article 25.)
Tenant shall reimburse and compensate Landlord, as additional rent, within
five (5) days after rendition of a statement for all expenditures made by or
damages or fines sustained or incurred by Landlord due to any default by Tenant
under this Lease.
Tenant shall give immediate notice to Landlord upon its discovery of
accidents in the Demised Premises, the Building or the building equipment.
Section 12.03. If in this Lease it is provided that Landlord's consent or
approval as to any matter will not be unreasonably withheld, and it is
established by a court or body having final jurisdiction thereover that Landlord
has been unreasonable, the only effect of such finding shall be that Landlord
shall be deemed to have given its consent or approval; but Landlord shall not be
liable to Tenant in any respect for money damages by reason of withholding its
consent.
ARTICLE 13
Moving of Heavy Equipment
Tenant shall not move any safe, heavy equipment or bulky matter in or out
of the Building without Landlord's written consent, which shall not be
unreasonably withheld or delayed. If the movement of such items requires special
handling, Tenant agrees to employ only persons holding a Master Rigger's License
to do said work and all such work shall be done in full compliance with the
Administrative Code of the City of New York and other municipal requirements.
All such movements shall be made during hours which will least interfere with
the normal operations of the Building, and all damage caused by such movement
shall be promptly repaired by Tenant at Tenant's expense.
ARTICLE 14
Condemnation
Section 14.01. In the event that the whole of the Demised Premises shall
be condemned or taken in any manner for any public or quasi-public use, this
Lease and the term and estate
<PAGE>
hereby granted shall forthwith cease and terminate as of the date of vesting of
title. In the event that only a part of the Demised Premises shall be so
condemned or taken, then, effective as of the date of vesting of title, the
minimum rent and all additional rent hereunder for such part shall be equitably
abated and this Lease shall continue as to such part not so taken. In the event
that only a part of the Building shall be so condemned or taken, then (a) if
substantial structural alteration or reconstruction of the Building shall, in
the reasonable opinion of Landlord, be necessary or appropriate as a result of
such condemnation or taking (whether or not the Demised Premises be affected),
Landlord 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 ninety (90) days of following the date on which
Landlord shall have received notice of vesting of title, or (b) if Landlord does
not elect to terminate this Lease, as aforesaid, this Lease shall be and remain
unaffected by such condemnation or taking, except that the minimum rent and
additional rent shall be abated to the extent, if any, hereinbefore provided. 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, out of the portion of the award allocated
for such purpose and to the extent such award is sufficient, will restore with
reasonable diligence the remaining portions of the Demised Premises as nearly as
practicable to the same condition as it was in prior to such condemnation or
taking.
Section 14.02. In the event of termination in any of the cases hereinabove
provided, this Lease and the term and estate hereby granted shall expire as of
the date of such termination with the same effect as if that were the Expiration
Date and the rent hereunder shall be apportioned as of such date.
Section 14.03. 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.
ARTICLE 15
Entry, Right to Change Public Portions of the Building
Section 15.01. Tenant shall permit Landlord, to erect, use and maintain
pipes and conduits in and through the walls, ceiling or below the floors of the
Demised Premises. Landlord, or its agents or designee, shall have the right to
enter the Demised Premises, for the purpose of making such repairs or
alterations as Landlord shall desire, shall be required or shall have the right
to make under the provisions of this Lease; and shall also have the right to
enter the Demised Premises at reasonable times upon prior reasonable notice to
Tenant (except no notice in an emergency), for the purpose of inspecting them or
exhibiting them to prospective purchasers or lessees of the Building or to
prospective mortgagees or to prospective assignees of any such mortgagees.
Landlord shall be allowed to take all material into and upon the Demised
<PAGE>
Premises that may be required for the repairs or alterations above mentioned
without the same constituting an eviction of Tenant in whole or in part and the
rent reserved shall in no wise abate, while said repairs or alterations are
being made. However, Landlord shall use reasonable efforts to perform such
repairs or alterations in a manner to cause minimum interference with the
conduct of Tenant's business, provided Landlord shall not be obligated to employ
overtime or premium labor.
Section 15.02. During the twelve (12) months prior to the expiration of
the term of this Lease, Landlord may exhibit the Demised Premises to prospective
tenants, at reasonable times upon reasonable notice.
Section 15.03. Landlord shall have the right at any time without thereby
creating an actual or constructive eviction or incurring any liability to Tenant
therefor, to change the arrangement or location of, but not limited to, such of
the following as are not contained within the Demised Premises: entrances,
passageways, doors and doorways, corridors, elevators, stairs, toilets, and
other like public service portions of the Building, provided the same shall not
materially interfere with Tenant's access to the Demised Premises.
Section 15.04. Landlord shall have the right at any time to name the
Building as it desires and to change any and all such names at any time
thereafter.
ARTICLE 16
Conditional Limitations, Etc.
Section 16.01. If at any time during the term of this Lease:
(a) Tenant shall file a petition in bankruptcy or insolvency or for
reorganization or arrangement or for the appointment of a receiver of all
or a portion of Tenant's property, and such petition shall not be vacated,
withdrawn or discharged within ninety (90) days after the date of filing
thereof; or
(b) Any petition of the kind referred to in subdivision (a) of this
Section shall be filed against Tenant and such petition shall not be
vacated or withdrawn or discharged within ninety (90) days after the date
of filing thereof, or
(c) Tenant shall be adjudicated a bankrupt by any court, or
(d) Tenant shall make an assignment for the benefit of creditors, or
(e) a permanent receiver shall be appointed for the property of
Tenant by order of a court of competent jurisdiction by reason of the
insolvency of Tenant (except where such receiver shall be appointed in an
involuntary proceeding, if he shall not be withdrawn within ninety (90)
days after the date of his appointment),
<PAGE>
then Landlord at Landlord's option, may terminate this Lease on five (5) days'
notice to Tenant, and upon such termination, Tenant shall quit and surrender the
Demised Premises to Landlord.
Section 16.02. (a) If Tenant assumes this Lease and proposes to assign the
same pursuant to the provisions of the Bankruptcy Code, 11 U.S.C. (S) 101 et
seq. (the "Bankruptcy Code") to any person or entity who shall have made a bona
fide offer to accept an assignment of this Lease on terms acceptable to Tenant,
then notice of such proposed assignment, setting forth (i) the name and address
of such person, (ii) all of the terms and conditions of such offer, and (iii)
the adequate assurance to be provided Landlord to assure such person's future
performance under the Lease, including, without limitation, the assurance
referred to in section 365(b)(3) of the Bankruptcy Code, shall be given to
Landlord by Tenant not later than twenty (20) days after receipt by Tenant but
in no event later than ten (10) days prior to the date that Tenant shall made
application to a court of competent jurisdiction for authority and approval to
enter into such assignment and assumption, and Landlord shall thereupon have the
prior right and option, to be exercised by notice to Tenant given at any time
prior to the effective date of such proposed assignment, to accept an assignment
of this Lease upon the same terms and conditions and for the same consideration,
if any, as the bona fide offer made by such person, less any brokerage,
commissions which may be payable out of the consideration to be paid by such
person for the assignment of this Lease.
(b) If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other
considerations payable or otherwise delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and remain the
exclusive property of Landlord and shall not constitute property of Tenant
or of the estate of Tenant within the meaning of the Bankruptcy Code. Any
and all monies or other considerations constituting Landlord's Property
under the preceding sentence not paid or delivered to Landlord shall be
held in trust for the benefit of Landlord and shall be promptly paid to
Landlord.
(c) Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code, shall be deemed without further act
or deed to have assumed all of the obligations arising under this Lease on
and after the date of such assignment. Any such assignee shall upon demand
execute and deliver to Landlord an instrument confirming such assumption.
(d) Nothing contained in this Section shall, in any way, constitute a
waiver of the provisions of this Lease relating to assignment. Tenant shall
not, by virtue of this Section, have any further rights relating to
assignment other than those granted in the Bankruptcy Code.
(e) Notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this Lease,
whether or not expressly denominated as rent, shall constitute rent for the
purposes of Section 502(b)(6) of the Bankruptcy Code.
<PAGE>
(f) The term "Tenant" as used in this Section includes any trustee,
debtor in possession, receiver, custodian or other similar officer.
Section 16.03. If this Lease shall terminate pursuant to the provisions
of Section 16.01:
(a) Landlord shall be entitled to recover from Tenant arrears in
minimum rent and additional rent and, in addition thereto as liquidated damages,
an amount equal to the difference between the minimum rent and additional rent
for the unexpired portion of the term of this Lease which had been in force
immediately prior to the termination effected under Section 16.01 of this
Article and the fair and the reasonable rental value of the Demised Premises, on
the date of termination, for the same period, both discounted at the rate of
eight (8%) percent per annum to the date of termination; or
(b) Landlord shall be entitled to recover from Tenant arrears in
minimum rent and additional rent and, in addition thereto as liquidated damages,
an amount equal to the maximum allowed by statute or rule of law in effect at
the time when and governing the proceedings in which such damages are to be
proved, whether or not such amount be greater or less than the amount referred
to in subdivision (a) of this Section.
Section 16.04.
(a) If Tenant shall fail to make any payment of any minimum rent or
additional rent when the same becomes due and payable, or if the Demised
Premises become vacant or deserted, or if Tenant shall fail to cancel or
discharge any mechanic's or other lien as provided in Section 17.02, and if any
such default shall continue uncured for a period of seven (7) business days
after written notice, or
(b) If Tenant shall be in default in the performance of any of the
other terms, covenants and conditions of this Lease and such default shall not
have been remedied within thirty (30) days after notice by Landlord to Tenant
specifying such default and requiring it to be remedied; or where such default
reasonably cannot be remedied within such period of thirty (30) days, if Tenant
shall not have commenced the remedying thereof within such period of time and
shall not be proceeding with reasonable diligence to remedy it,
then Landlord, at Landlord's election, may terminate this Lease on five (5)
days' notice to Tenant, and upon such termination Tenant shall quit and
surrender the Demised Premises to Landlord.
Section 16.05. If this Lease shall terminate as provided in this Article,
or if Tenant shall be in default in the payment of minimum rent or additional
rent when the same become due and payable and such default shall continue for a
period of seven (7) business days after written notice,
(a) Landlord may re-enter and resume possession of the Demised
Premises and remove all persons and property therefrom either by summary
dispossess proceedings
<PAGE>
or by a suitable action or proceeding, at law or in equity, by force or
otherwise, without being liable for any damages therefor, and
(b) Landlord may re-let the whole or any part of the Demised Premises
for a period equal to, greater or less than the remainder of the then term of
this Lease, at such rental and upon such terms and conditions as Landlord shall
deem reasonable to any tenant it may deem suitable and for any use and purpose
it may deem appropriate. Landlord shall not be liable in any respect for failure
to re-let the Demised Premises or, in the event of such re-letting, for failure
to collect the rent thereunder and any sums received by Landlord on a re-letting
in excess of the rent reserved in this Lease shall belong to Landlord.
Section 16.06. If this Lease shall terminate as provided in this Article
or by summary proceedings (except as to any termination under Section 16.01),
Landlord shall be entitled to recover from Tenant as damages, in addition to
arrears in minimum rent and additional rent,
(a) an amount equal to (i) all expenses incurred by Landlord in
recovering possession of the Demised Premises and in connection with the re-
letting of the Demised Premises, including, without limitation, the reasonable
cost of repairing, renovating or remodeling the Demised Premises, and (ii) all
reasonable brokers' commissions and legal fees incurred by Landlord in re-
letting the Demised Premises, which amounts set forth in this subdivision (a)
shall be due and payable by Tenant to Landlord at such time or times as they
shall have been incurred; and
(b) an amount equal to the deficiency between the minimum rent and
additional rent which would have become due and payable had this Lease not
terminated and the net amount, if any, of rent collected by Landlord on re-
letting the Demised Premises. The amounts specified in this subdivision shall be
due and payable by Tenant in monthly installments on the several days on which
such minimum rent and additional rent would have become due and payable had
this Lease not terminated. Tenant consents that Landlord shall be entitled to
institute separate suits or actions or proceedings for the recovery of such
amount or amounts, and Tenant hereby waives the right to enforce or assert the
rule against splitting a cause of action as a defense thereto.
Landlord, at its election, at any time after such termination of this
Lease, may collect from Tenant and Tenant shall pay, in lieu of the sums
becoming due, under the provisions of subdivision (b) of this Section, an amount
equal to the difference between the minimum rent and additional rent which would
have become due and payable had this Lease not terminated (from the date of the
service of such notice to the end of the term of this Lease which had been in
force immediately prior to any termination effected under this Article) and the
then fair and reasonable rental value of the Demised Premises for the same
period, both discounted to the date of the service of such notice at the rate of
eight (8%) percent per annum.
Section 16.07. Tenant, for itself and for all persons claiming through or
under it, hereby waives any and all rights which are or may be conferred upon
Tenant by any present or future
<PAGE>
law to redeem the Demised Premises after a warrant to dispossess shall have been
issued or after judgment in an action of ejectment shall have been made and
entered.
Section 16.08. The words "re-enter" and "re-entry", as used in this
Article, are not restricted to their technical legal meanings.
Section 16.09. Landlord shall not be required to give any notice of its
intention to re-enter, except as otherwise provided in this Lease.
Section 16.10. If this Lease shall terminate as provided in this Article
or by summary proceedings or otherwise, Landlord, in addition to any other
rights under this Article, shall be entitled to recover as damages, (a) the cost
of performing any work required to be done by Tenant under this Lease; and (b)
the cost of placing the Demised Premises in the same condition as that in which
Tenant is required to surrender them to Landlord under this Lease.
Section 16.11. In any action or proceeding brought by Landlord against
Tenant, predicated on a default in the payment of minimum rent or additional
rent, Tenant shall not have the right to and shall not interpose any set-off or
counterclaim of any kind whatsoever, except for mandatory counterclaims. Subject
to such exceptions, if Tenant has any claim, Tenant shall be entitled only to
bring an independent action therefor; and if such independent action is brought
by Tenant, Tenant shall not be entitled to and shall not consolidate it with any
pending action or proceeding brought by Landlord against Tenant for a default in
the payment of minimum rent or additional rent.
ARTICLE 17
Mechanic's Liens
Section 17.01. If, subject to and notwithstanding Landlord's consent as
required under this Lease, Tenant shall cause any changes, alterations,
additions, improvements, installations or repairs to be made to or at the
Demised Premises or shall cause any labor to be performed or material to be
furnished in connection therewith, neither Landlord nor the Demised Premises,
under any circumstances, shall be liable for the payment of any expense incurred
or for the value of any work done or material furnished, and all such changes,
alterations, additions, improvements, installations and repairs and labor and
material shall be made, furnished and performed upon Tenant's credit alone and
at Tenant's expense, and Tenant shall be solely and wholly responsible to
contractors, laborers, and materialmen furnishing and performing such labor and
material. Nothing contained in this Lease shall be deemed or construed in any
way as constituting the consent or request of Landlord, express or implied, to
any contractor, laborer or materialman to furnish to perform any such labor or
material.
Section 17.02. If, because of any act or omission (or alleged act or
omission) of Tenant, any mechanic's or other lien, charge or order for the
payment of money shall be filed against the Demised Premises or the Building or
Landlord's estate as tenant under any ground or underlying lease (whether or not
such lien, charge or order is valid or enforceable as such), Tenant, at
<PAGE>
Tenant's expense, shall cause it to be cancelled or discharged of record by
bonding or otherwise within twenty (20) days after such filing, and Tenant shall
indemnify Landlord against and save Landlord harmless from and shall pay all
costs, expenses, losses, fines and penalties, including, without limitation,
reasonable attorneys' fees, resulting therefrom.
ARTICLE 18
Landlord's Right to Perform Obligations
If Tenant shall default, after any applicable notice and expiration of any
applicable cure period, in the performance of any of the terms, covenants and
conditions of this Lease, Landlord, without being under any obligation to do so
and without hereby waiving such default, may remedy such default for the account
and at the expense of Tenant. Any reasonable payment made or reasonable expense
incurred by Landlord for such purpose (including, but not limited to, reasonable
attorneys' fees) with interest at the maximum legal rate, shall be deemed to be
additional rent hereunder and shall be paid by Tenant to Landlord on demand, or
at Landlord's election, added to any subsequent installment or installments of
minimum rent.
ARTICLE 19
Covenant of Quiet Enjoyment
Landlord covenants that upon Tenant paying the minimum rent and additional
rent and observing and performing all the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed, Tenant may peaceably
and quietly enjoy the Demised Premises, subject nevertheless to the terms and
conditions of this Lease, and provided, however, that no eviction of Tenant by
reason of the foreclosure of any mortgage now or hereafter affecting the Demised
Premises or by reason of any termination of any ground or underlying lease to
which this Lease is subject and subordinate, whether such determination is by
operation of law, by agreement or otherwise, shall be construed as a breach of
this covenant nor shall any action be brought against Landlord by reason
thereof.
ARTICLE 20
Excavation
In the event that construction is to be commenced or an excavation is made
or authorized for building or other purposes upon land adjacent to the Building,
Tenant shall, if necessary, afford to the person or persons causing or
authorized to commence construction or cause such excavation or to engage in
such other purpose, license to enter upon the Demised Premises, at reasonable
times and upon prior reasonable notice (except no notice in an emergency), for
the purpose of doing such work as shall reasonably be necessary to protect or
preserve the Building,
<PAGE>
from injury or damage and to support the Building and any new structure to be
built by proper foundations, pinning and/or underpinning, or otherwise.
ARTICLE 21
Services and Equipment
Section 21.01. So long as Tenant is in lawful possession of the Demised
Premises, Landlord shall, at its cost and expense:
(a) Provide operatorless passenger elevator service Mondays through
Fridays from 9:00 A.M. to 6:00 P.M., holidays excepted. A passenger elevator
will be available at all other times. A service elevator shall be available
Mondays through Fridays, holidays excepted, only from 8:00 A.M. to 12:00 P.M.
and 1:00 P.M. to 5:00 P.M.
(b) Maintain and keep in good order and repair the central heating,
ventilating and air-conditioning system installed by Landlord. The system will
be operated by Landlord on Mondays through Fridays, holidays excepted, from 9:00
A.M. to 6:00 P.M.
(c) Subject to the provisions of Article 23, furnish electric energy
to the Demised Premises.
(d) Provide Building standard cleaning services in the Demised
Premises and public portions of the Building, except no services shall be
performed Saturdays, Sundays and holidays, in accordance with Schedule "E"
annexed hereto and made part hereof.
(e) Furnish hot and cold water for lavatory and drinking purposes. If
Tenant requires, uses or consumes water for any other purposes, Landlord may
install a meter or meters or other means to measure Tenant's water consumption,
and Tenant shall reimburse Landlord for the cost of the meter or meters and the
installation thereof, and shall pay for the maintenance of said meter equipment
and/or pay Landlord's cost of other means of measuring such water consumption by
Tenant. Tenant shall pay to Landlord on demand the cost of all water consumed as
measured by said meter or meters or as otherwise measured, including sewer rents
in its proportionate share.
(f) If Tenant shall require and request any of the foregoing services
at times other than above provided, and if such request is made at least 48
hours prior to the time when such additional services are required, Landlord
will provide them and Tenant shall pay to Landlord promptly thereafter the
charges therefor at the then Building standard rate charged to other tenants in
the Building.
If Tenant shall request Landlord to furnish any services in addition to
those hereinabove provided or perform any work not required under this Lease,
and Landlord agrees to furnish and/or perform the same, Tenant shall pay to
Landlord promptly thereafter the charges therefor, which charges are deemed to
be additional rent and payable as such.
<PAGE>
Section 21.02. Holidays shall be deemed to mean all federal holidays,
state holidays, Building Service Employees Union Contract holidays and all other
applicable union contract holidays.
Section 21.03. Landlord reserves the right to interrupt, curtail or
suspend the services required to be furnished by Landlord under this Lease when
the necessity therefor arises by reason of accident, emergency, mechanical
breakdown, or when required by any law, order or regulation of any Federal,
State, County or Municipal authority, or for any other cause beyond the
reasonable control of Landlord. Landlord shall use due diligence to complete all
required repairs or other necessary work as quickly as possible so that Tenant's
inconvenience resulting therefrom may be for as short a period of time as
circumstances will reasonably permit. Tenant shall not be entitled to nor shall
Tenant make claim for any diminution or abatement of minimum rent or additional
rent or other compensation, nor shall this Lease or any of the obligations of
Tenant be affected or reduced by reason of such interruption, curtailment,
suspension, work or inconvenience.
Section 21.04. Tenant shall reimburse Landlord promptly upon demand for
the cost to Landlord of removal from the Demised Premises and the Building of
any refuse and rubbish of Tenant not covered by the Cleaning Specifications and
Tenant shall pay all bills therefor when rendered.
Section 21.05. If Tenant shall request Landlord to furnish any services
in addition to those hereinabove provided or perform any work not required under
this Lease, and Landlord agrees to furnish and/or perform the same, Tenant shall
pay to Landlord promptly thereafter the charges therefor, which charges are
deemed to be additional rent and payable as such.
Section 21.06. Tenant shall have access to the Building twenty-four (24)
hours per day, seven (7) days per week, subject to emergencies and requirements
of law.
ARTICLE 22
Escalation
Section 22.01. Taxes. Landlord advises Tenant that the Lessor under the
Net Lease referred to in Article 25 is exempt from real property taxes pursuant
to Section 46B of the Education Law. However, Landlord, as Lessee under the Net
Lease, is obligated to pay as additional rent in each lease year thereof a sum
equivalent to the amount of real property taxes which would have been payable in
each such lease year with respect to the premises covered by the Net Lease and
the Building if they were not exempt from such taxes. Such payments are
described in the Net Lease as "tax equivalency" and the amounts thereof are
established in accordance with a formula prescribed in the Net Lease. Tenant
shall pay to Landlord, as additional rent, tax escalation in accordance with
this Section:
(a) Definitions: For the purpose of this Section, the following
definitions shall apply:
<PAGE>
(i) The term "Tax Base Factor" shall mean the real estate taxes
for the Building Project for the period from July 1, 1995 to June 30, 1996.
(ii) The term "The Building Project" shall mean the premises
covered by the Net Lease and the entire Building thereon.
(iii) The term "comparative tax year" shall mean the New York
City real estate tax year commencing on July 1, 1996 and each subsequent
New York City real estate tax year. If the present use of July 1 - June 30
New York City real estate tax year shall hereafter be changed, then such
changed tax year shall be used with appropriate adjustment for the
transition.
(iv) The term "real estate taxes" shall mean the amount
established under the Net Lease as tax equivalency for the entire premises
covered by the Net Lease and the entire Building (including, without
limitation, the space in the Building heretofore sublet to United Medical
Service, Inc. now known as Blue Cross and Blue Shield of Greater New York
"Blue Cross"). If, due to a future change in the method of taxation or in
the taxing authority, or for any other reason, a franchise, income,
transit, profit or other tax or governmental imposition, however
designated, shall be levied against Landlord in substitution in whole or in
part for the real estate taxes, or in lieu of or additions to or increases
of said real estate taxes, then such franchise, income, transit, profit or
other tax or governmental imposition shall be deemed to be included within
the definition of "real estate taxes" for the purposes hereof.
(v) The term "the Percentage" for purposes of computing tax
escalation, shall mean 1.6%.
(b) (i) In the event that the real estate taxes payable for any
comparative tax year shall exceed the Tax Base Factor, Tenant shall pay to
Landlord, as additional rent for such comparative tax year, an amount for tax
escalation equal to the Percentage of the excess. Before or after the start of
each comparative year, Landlord shall furnish to Tenant a statement of the real
estate taxes payable for such comparative tax year together with a copy of the
tax bill. Tenant shall make its aforesaid tax escalation payment to Landlord, in
installments in the same manner that such taxes are payable by Landlord to the
governmental authority, within fifteen (15) days after rendition of such
statement. If a statement is furnished to Tenant after the commencement of the
comparative tax year in respect of which such statement is rendered, Tenant
shall, within fifteen (15) days thereafter, pay to Landlord an amount equal to
those installments of the total tax escalation payable as provided in the
preceding sentence, during the period prior to the first day of the month next
succeeding the month in which the applicable statement has been furnished. If,
during the term of this Lease, taxes are required to be paid, in full or in
monthly or other installments, on any other date or dates than as presently
required, or if Landlord shall be required to make monthly deposits of real
estate taxes to the holder of any first institutional mortgage then Tenant's tax
escalation payment(s) shall be correspondingly adjusted so that said payments
are due to Landlord in corresponding
<PAGE>
installments not later than thirty (30) days prior to the last date on which the
applicable installment of such real estate taxes shall be due and payable to the
governmental authority or such mortgagee.
(ii) If in establishing the amount of the real estate taxes
payable for any comparative tax year, Landlord has incurred expenses for
legal and/or consulting services rendered in, applying for, negotiating or
obtaining a reduction of the assessment upon which the real estate taxes
are predicated, Tenant shall pay an amount equal to the Percentage of such
expenses.
(iii) The statements of the tax escalation to be furnished by
Landlord as provided above shall be certified by Landlord as correct and
shall constitute a final determination as between Landlord and Tenant of
the tax escalation for the periods represented thereby, except for manifest
error. Exception shall also be made for other error in calculating same,
provided Tenant gives Landlord notice, within ten (10) days after the
rendition of such statement, that Tenant disputes its accuracy or
appropriateness. However, notwithstanding and pending the resolution of any
dispute, Tenant agrees to pay the amount shown on such statement.
(iv) In no event shall the fixed minimum rent under this Lease
be reduced by virtue of this Section 22.01.
(v) Upon the date of any expiration or termination of this
Lease, whether the same be the date hereinabove set forth for the
expiration of the term or any prior or subsequent date, a proportionate
share of said additional rent for the comparative tax year during which
such expiration or termination occurs shall immediately become due and
payable by Tenant to Landlord, if it was not theretofore already billed and
paid. The said proportionate share shall be based upon the length of time
that this Lease shall have been in existence during such comparative tax
year. Prior to or promptly after said expiration or termination, Landlord
shall compute the additional rent due from Tenant, as aforesaid and Tenant
shall promptly pay Landlord any amount unpaid. If Landlord shall receive a
refund of any amount of real estate taxes for any comparative tax year for
which Tenant has made a payment pursuant to this Section 22.01, Landlord
shall promptly pay to Tenant the Percentage of any such refund, less the
Percentage of any legal fees and other expenses provided for in Section
22.01(b)(ii) to the extent the same has not theretofore been paid by Tenant
to Landlord.
(vi) Tenant's obligations to make the adjustments referred to
in subdivision (v) above shall survive any expiration or termination of
this Lease.
(vii) Any delay or failure of Landlord in billing any tax
escalation hereinabove provided shall not constitute a waiver of or in any
way impair the continuing obligation of Tenant to pay such tax escalation
hereunder.
Section 22.02. Porter's Wage Rate. Tenant shall pay to the Landlord, as
additional rent, a porter's wage rate escalation in accordance with this
Section:
<PAGE>
(a) For the purpose of this Section, the following definitions shall
apply;
(i) "Wage Rate" shall mean the minimum regular hourly rate of
wages in effect as of January lst of each year (whether paid by Landlord or
any contractor employed by Landlord) computed as paid over a forty hour
week to Porters in Class A office buildings pursuant to an Agreement
between Realty Advisory Board on Labor Relations, Incorporated, or any
successor thereto, and Local 32B-32J of the Building Service Employees
International Union, AFL-CIO, or any successor thereto; and provided,
however, that if there is no such agreement in effect prescribing a wage
rate for Porters, computations and payments shall thereupon be made upon
the basis of the regular hourly wage rate actually payable in effect as of
January lst of each year, and provided, however, that if in any year during
the term, the regular employment of Porters shall occur on days or during
the hours when overtime or other premium pay rates are in effect pursuant
to such Agreement, then the term "hourly rate of wages" as used herein
shall be deemed to mean the average hourly rate for the hours in a calendar
week during which Porters are regularly employed (e.g., if pursuant to an
agreement between Realty Advisory Board and the Local the regular
employment of Porters for forty hours during a calendar week is at a
regular hourly wage rate of $3.00 for the first thirty hours, and premium
or overtime hourly wage rate of $4.50 for the remaining ten hours, then the
hourly rate of wages under this Article during such period shall be the
total weekly rate of $135.00 divided by the total number of regular hours
of employment, forty or $3.375).
(ii) "Base Wage Rate" shall mean the average of the Wage Rates
in effect on January 1, 1995 and January 1, 1996.
(iii) The term "Porters" shall mean that classification of non-
supervisory employees employed in and about the Building who devote a major
portion of their time to general cleaning, maintenance and miscellaneous
services essentially of a non-technical and non-mechanical nature and are
the type of employees who are presently included in the classification of
"Class A-Others" in the Commercial Building Agreement between the Realty
Advisory Board and the aforesaid Union.
(iv) The term "minimum regular hourly rate of wages" shall not
include any payments for fringe benefits.
(v) The term "Multiplication Factor" shall mean 4,800.
(b) If the Wage Rate for any calendar year during the term shall be
increased above the Base Wage Rate, then Tenant shall pay, as additional rent,
an amount equal to the product obtained by multiplying the Multiplication Factor
by 100% of the number of cents (including any fraction of a cent) by which the
Wage Rate is greater than the Base Wage Rate, such payment to be made in equal
one-twelfth (1/12th) monthly installments commencing with the first monthly
installment of minimum rent falling due on or after the effective date of such
increase in Wage Rate (payable retroactive from said effective date) and
continuing thereafter until a new adjustment shall have become effective in
accordance with the provisions of this Article. Landlord shall give Tenant
notice of each
<PAGE>
change in Wage Rate which will be effective to create or change Tenant's
obligation to pay additional rent pursuant to the provisions of this Section
22.02 and such notice shall contain Landlord's calculation in reasonable detail
and certified as true by an authorized partner (or officer) of Landlord or of
its managing agent, of the annual rate of additional rent payable resulting from
such increase in Wage Rate. Such amounts shall be prorated for any partial
calendar years during the term.
(c) Every notice given by Landlord pursuant to Section 22(b) hereof
shall be conclusive and binding upon Tenant, except for manifest error.
(d) The "Wage Rate" is intended to be a substitute comparative index
of economic costs and does not necessarily reflect the actual costs of wages or
other expenses of operating the Building. The Wage Rate shall be used whether or
not the Building is a Class A office building and whether or not Porters are
employed in the Building and without regard to whether such employees are
members of the Union referred to in subsection (a) hereof.
ARTICLE 23
Electric Inclusion
Section 23.01. So long as Tenant is in lawful possession of the Demised
Premises, Landlord shall furnish electric energy on a rent inclusion basis to
the Demised Premises, the charges therefor being included in the minimum rent.
The amount included in the minimum rent is based upon the normal use of such
electric energy between the hours of 9:00 A.M. to 5:30 P.M. on Mondays through
Fridays, holidays excepted, for lighting and for the normal use of lamps,
typewriters, personal computers and similar customary office machines. Landlord
shall not be liable in any way to Tenant for any failure or defect in the supply
or character of electric energy furnished to the Demised Premises by reason of
any requirement, act or omission of the public utility serving the Building with
electricity or for any other reason not attributable to the negligence or
willful act of Landlord. Tenant shall furnish and install, at its sole cost and
expense, all lighting fixtures, tubes, lamps, bulbs, ballasts and outlets
relating to Tenant's electrical equipment.
Section 23.02. Tenant's connected electrical load in the Demised
Premises, including lighting, shall not at any time exceed the capacity of any
of the electrical conductors and equipment in or servicing the Demised Premises.
In order to insure that such capacity is not exceeded and to avert possible
adverse effect upon the Building electric service, Tenant shall not, without
Landlord's prior consent in each instance, connect any additional fixtures,
appliances or equipment (other than as set forth in Section 23.01) or make any
alteration or addition to the electric system of the Demised Premises existing
on the Commencement Date. Should Landlord grant such consent, all additional
risers or other equipment required therefor shall be provided by Landlord and
the cost thereof shall be paid by Tenant upon Landlord's demand. As a condition
to granting such consent, Landlord may require Tenant to agree to an increase in
the annual minimum rent by an amount which will reflect the value to Tenant of
the additional service to be
<PAGE>
furnished by Landlord, that is the potential additional electrical energy to be
made available to Tenant based upon the estimated additional capacity of such
additional risers or other equipment. If Landlord and Tenant cannot agree
thereon, the amount of such increase shall be determined by a reputable,
independent electrical engineer or consultant, to be selected by Landlord whose
reasonable fees or charges shall be paid by Tenant. When the amount of such
increase is so determined, Tenant shall pay to Landlord within thirty (30) days
following notification to Tenant of such determination the amount. thereof
retroactive to the date of such increased usage, unless within such thirty (30)
day period Tenant disputes such determination. If Tenant disputes such
determination, it shall, at its own expense, obtain from a reputable,
independent electrical engineer or consultant, its own survey of the additional
electrical energy consumed by Tenant. Tenant's consultant and Landlord's
consultant shall then seek to agree on a finding of such determination of such
change in the consumption of electrical energy. If they cannot agree, they shall
choose a third reputable, independent electrical engineer or consultant, whose
cost shall be shared equally by Landlord and Tenant, to make a similar survey,
and the determination of such third consultant shall be controlling. If they
cannot agree on such third consultant, within ten (10) days, then either party
may apply to the Supreme Court in the County of New York, for the appointment of
such third consultant. However, pending such determination, Tenant shall pay to
Landlord the amount as determined by Landlord's engineer or consultant. If the
amount determined as aforesaid is different from that determined by Landlord's
engineer or consultant, then Landlord and Tenant shall make adjustment for any
deficiency owed by Tenant or overage paid by Tenant. Following the final
determination, the parties shall execute an agreement supplementary hereto to
reflect such increase in the annual minimum rent and in the amount set forth in
Section 23.03; but such increase shall be effective even if such supplementary
agreement is not executed.
Section 23.03. If during the term of this Lease, the public utility rate
for the supply of electric current to the Building shall be increased or if
there shall be an increase in taxes or if additional taxes shall be imposed upon
the sale or furnishing of such electric energy (hereafter collectively as the
"cost") the annual minimum rent shall be increased by an amount arrived at by
multiplying $13,200 (or the sum to which said sum may have been increased
pursuant to the provisions of Section 23.02 or this Section 23.03 prior to the
effective date of the cost increases; such sum being referred to herein as the
"Rent Inclusion Factor") by the percentage of the increase of such cost. When
the amount of such increase is so determined, Landlord and Tenant shall execute
an agreement supplementary hereto to reflect such increase in the amount of the
minimum rent payable and effective from the effective date of such increase, but
such increase shall be effective from such date whether or not such a
supplementary agreement is executed.
Section 23.04. Landlord reserves the right to discontinue furnishing
electric energy at any time, whether or not Tenant is in default under this
Lease, upon not less than thirty (30) days' notice to Tenant. If Landlord
exercises such right of discontinuance, this Lease shall continue in full force
and effect and shall be unaffected thereby, except only that, from and after the
effective date of such discontinuance, Landlord shall not be obligated to
furnish electric energy to Tenant, and the minimum rent payable under this Lease
shall be reduced by an amount per annum equal to the then prevailing Rent
Inclusion Factor. If Landlord so elects to discontinue furnishing electric
energy to Tenant, Tenant shall arrange to obtain electric energy directly from
<PAGE>
the public utility company furnishing electric service to the Building.
Notwithstanding the foregoing, Landlord shall not discontinue furnishing
electric energy until Tenant is able to obtain such electric energy directly
from said public utility. Such electric energy may be furnished to Tenant by
means of the then existing Building system feeders, risers and wiring to the
extent that they are available, suitable and safe for such purposes. All meters
and additional panel boards, feeders, risers, wiring and other conductors and
equipment which may be required to obtain electric energy directly from such
public utility company, and which are to be located within the Demised Premises,
shall be installed and maintained by Tenant at its expense.
Section 23.05. If any additional charge or tax is imposed upon Landlord
with respect to electric energy furnished to Tenant by any federal, state or
municipal authority, Tenant, unless prohibited by law or by any governmental
authority having jurisdiction thereover, shall pay to Landlord, within ten (10)
days following Landlord's demand, accompanied by copies of all relevant bills or
back-up documentation, Tenant's pro rata share of such additional charge or tax,
without mark-up to Landlord.
ARTICLE 24
Broker
Landlord and Tenant covenant and represent that the sole brokers who
negotiated and brought about this transaction were The Lansco Corporation and
Cohen Brothers Realty Corporation and Landlord agrees to pay a commission
therefor as per separate agreement. Each of Landlord and Tenant agrees to hold
the other harmless against any claims for a brokerage commission brought or
asserted by any other broker claimed to have dealt with the indemnifying party,
in connection with this transaction.
ARTICLE 25
Subordination and Ground Lease
Section 25.01. This Lease is subject and subordinate to (a) the air
rights lease, dated as of February 3, 1972, between New York City Educational
Construction Fund, as Lessor, and Three Park Avenue Co., as Lessee, (the "Net
Lease") a memorandum of which was recorded in the Office of the City Register,
New York County, in Reel 230, Page 875 and to the rights of the Lessor
thereunder, (b) any other ground and underlying lease, and (c) to all mortgages
which are now or hereafter a lien covering the premises described in the Net
Lease, upon the Lessee's estate under the Net Lease or under any ground or
underlying lease or the Building and improvements now or hereafter erected
thereon, and to all renewals, modifications, amendments, consolidations,
replacements or extensions of any of the foregoing (hereinafter collectively
called the "Mortgages"). This clause shall be self-operative and no further
instrument of subordination shall be required. However, in confirmation of such
subordination, Tenant, at any time and from time to time, shall execute promptly
and within fifteen (15) days after such request any certificate and document
that Landlord may request, which reasonably evidences such subordination, and
<PAGE>
Tenant hereby irrevocably constitutes and appoints Landlord attorney-in-fact for
Tenant to execute any such instrument for and on behalf of Tenant, if not so
executed and delivered within 15 days after such request.
Section 25.02.
(a) The Tenant covenants and agrees that if by reason of a default
under any ground or underlying lease (including an underlying lease through
which the Landlord derives its leasehold estate in the Demised Premises), or any
such ground or underlying lease or under any of the Mortgages and the leasehold
estate of the Landlord in the premises demised hereby is terminated, the Tenant
will attorn to the then holder of the reversionary interest in the premises
demised by this Lease and will recognize such holder as the Tenant's Landlord
under this Lease, unless the lessor under such ground or underlying lease or the
holder of any such Mortgage shall, in any proceeding to terminate such ground or
underlying lease or foreclosure of such Mortgage, elects to terminate this Lease
and the rights of Tenant hereunder; provided, however, the holder of the
reversionary interest shall not be: (i) liable for any act or omission or
negligence of Landlord under this Lease; (ii) subject to any counterclaim,
defense or offset, not expressly provided for in this Lease and asserted with
reasonable promptness which theretofore shall have accrued to Tenant against
Landlord; (iii) obligated to perform any work; (iv) bound by any previous
modification or amendment of this Lease or by any previous prepayment of more
than one months' rent, unless such modification or prepayment shall have been
approved in writing by the holder of such Mortgage; (v) obligated to repair the
Demised Premises, or the Building, or any part thereof, in the event of any
damage beyond such repair as can reasonably be accomplished from the net
proceeds of insurance actually made available to the then holder of the
reversionary interest; or (vi) obligated to repair the Demised Premises or the
Building, or any part thereof, in the event of partial condemnation of the
Demised Premises or the Building. Nothing contained in this subparagraph shall
be construed to impair any right otherwise exercisable by any such holder.
Tenant agrees to execute and deliver, at any time and from time to time, upon
the request of the Landlord of or the lessor under any such ground or underlying
lease or the holder of any such Mortgage any instrument which may be reasonably
necessary or appropriate to evidence such attornment. The Tenant further waives
the provisions of any statute or rule or law now or hereafter in effect which
may give or purport to give Tenant any right of election to terminate this Lease
or to surrender possession of the premises demised hereby in the event any
proceeding is brought by the lessor under any such ground or underlying lease or
the holder of any such Mortgage to terminate the same, and agrees that unless
and until any such lessor or holder, in connection with any such proceeding,
shall elect to terminate this Lease and the rights of Tenant hereunder, this
Lease shall not be affected in any way whatsoever by any such proceeding.
(b) Upon its receipt of a written notice from the lessor under any
ground or underlying lease or the holder of any such Mortgage to the effect that
(i) the lessor of said ground or underlying lease or the holder of such Mortgage
is entitled to receive the
<PAGE>
minimum rent and additional rent payable hereunder on account of a default under
such ground or underlying lease or such Mortgage (as the case may be) by the
Landlord, and (ii) the Tenant should pay the minimum rent and additional rent
thereafter due and payable under this Lease to said lessor or the holder of such
Mortgage at a place designated in such notice, and Tenant shall pay such minimum
rent and additional rent to said lessor under said ground or underlying lease or
the holder of such Mortgage at such designated place until such time as said
lessor or holder shall notify Tenant that Landlord is no longer in default under
said ground or underlying lease or said Mortgage and that Tenant may resume
paying all minimum rent and additional rent thereafter due and payable under
this Lease to Landlord. Tenant shall have no liability to Landlord for paying
any minimum rent or additional rent to said lessor under the ground or
underlying lease or holder of such Mortgage or otherwise acting in accordance
with the provisions of any notice sent to it under this paragraph and shall be
relieved of its obligations to pay Landlord any minimum rent or additional rent
under this Lease to the extent such payments are made to said lessor under the
ground or underlying lease or said holder of such Mortgage.
Section 25.03. In the event of any act or omission by Landlord which
would give Tenant the right to terminate this Lease or to claim a partial or
total eviction, pursuant to the terms of this Lease, if any, Tenant will not
exercise any such right until:
(a) it has given written notice of such act or omission to the holder
of any Mortgage and to the Lessor under the Net Lease and the landlord of any
ground or underlying lease, whose names and addresses shall previously have been
furnished to Tenant in accordance with Article 31, addressed to such holder and
Lessor or landlord at the last addresses so furnished, and
(b) a reasonable period (not to exceed the period in this Lease or the
ground lease or the Mortgage, as the case may be) for remedying such act or
omission shall have elapsed following such giving of notice during which such
parties, or any of them, with reasonable diligence, following the giving of such
notice, shall not have commenced and is or are not continuing to remedy such act
or omission or to cause the same to be remedied.
Section 25.04. If, in connection with obtaining financing for the
Building, or of Landlord's interest in any ground or underlying lease, a
banking, insurance or other recognized institutional lender shall request
modifications in this Lease as a condition to such financing, Tenant will not
unreasonably withhold, delay or defer its consent thereto and its execution and
delivery of such modification agreement, provided that such modifications do not
increase the obligations of Tenant hereunder or materially adversely affect the
leasehold interest hereby created or Tenant's rights hereunder.
<PAGE>
ARTICLE 26
Estoppel Certificate
Tenant shall at any time, and from time to time, within ten (10) days after
so requested by Landlord execute, acknowledge and deliver to Landlord, a
statement addressed to Landlord stating (a) that this Lease is unmodified and in
full force and effect (or, if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), (b) stating
the dates to which the minimum rent and additional rent have been paid, (c)
stating whether or not, to the best of Tenant's knowledge, there exists any
default by Landlord under this Lease, and, if so, specifying each such default
and (d) such other information as may be required by Landlord or any mortgagee,
it being intended that any such statement may be relied upon by Landlord, by any
mortgagee or prospective mortgagee of any mortgage affecting the Building or the
Lessee's estate under the Net Lease or under any ground or underlying lease, or
may be relied upon by the Lessor under the Net Lease or under any other ground
or underlying lease covering the premises described in the Net Lease or a
purchaser of Lessee's estate under the Net Lease or under any other ground or
underlying lease covering the premises described in the Net Lease or any
interest therein.
ARTICLE 27
Waiver of Jury Trial
Landlord and Tenant hereby waive trial by jury in any proceeding, action or
counterclaim that may hereafter be instituted against it on any matter
whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord or Tenant, Tenant's use or occupancy of the Demised
Premises, including any claims for injury or damage, or any emergency or other
statutory remedy with respect thereto.
ARTICLE 28
Surrender of Premises
Section 28.01. Upon the expiration or other termination of the term of
this Lease, Tenant shall quit and surrender the Demised Premises in good order
and condition, ordinary wear and tear and damage by fire or other casualty
excepted, and shall remove all its property therefrom, except as otherwise
provided in this Lease. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of the term of this Lease.
Section 28.02. In the event Tenant shall remain in possession of the
Demised Premises after the expiration or other termination of the term of this
Lease, such holding over shall not constitute a renewal or extension of this
Lease. Landlord, may, at its option, elect to treat Tenant as one who is not
removed at the end of the term, and thereupon be entitled to all of the remedies
against Tenant provided by law in that situation or Landlord may elect to
construe such holding
<PAGE>
over as a tenancy from month-to month, subject to all of the terms and
conditions of this Lease, except as to the duration thereof, and the minimum
rent shall be due, in either of such events, at a monthly rental rate equal to
two (2) times the monthly installment of minimum rent which would otherwise be
payable for such month, together with any and all additional rent.
ARTICLE 29
Rules and Regulations
Section 29.01. Tenant, its servants, employees, agents, visitors and
licensees shall observe faithfully and comply with the rules and regulations set
forth in Schedule "D" attached hereto and made a part hereof and any reasonable
changes in and additions thereto, provided Tenant has received notice of such
changes and additions. Landlord shall have the right from time to time during
the term of this Lease to make reasonable changes in and additions to the rules
thus set forth provided such changes and additions are applicable to all other
office tenants in the Building.
Section 29.02. Any failure by Landlord to enforce any rules and
regulations now or hereafter in effect, either against Tenant or any other
tenant in the Building, shall not constitute a breach hereunder or waiver of any
such rules and regulations. However, Landlord agrees to enforce such rules and
regulations in a uniform and non-discriminatory manner.
ARTICLE 30
Successors and Assigns and Definitions
Section 30.01. The covenants, conditions and agreements contained in this
Lease shall bind and enure to the benefit of Landlord and Tenant and their
respective distributees, legal representatives, successors and, except as
otherwise provided herein, their assigns.
Section 30.02. The term "Landlord" as used in this Lease, so far as the
covenants and agreements on the part of Landlord are concerned shall be limited
to mean and include only the owner or owners at the time in question of the
Lessee's estate under the Net Lease or under any ground or underlying lease
covering the premises described in the Net Lease and/or the Building and
improvements thereon. In the event of any assignment or assignments of such
Lessee's estate, and regardless of whether the assignee is financially
responsible or solvent and notwithstanding that the assignor may be a
stockholder, officer or director of a corporate assignee or may be associated
directly or indirectly with the assignee, Landlord herein named (and in case of
any subsequent assignment, the then assignor) shall be automatically freed and
relieved from and after the date of such assignment and assumption, of all
personal liability as respects to performance of any of Landlord's covenants and
agreements thereafter to be performed, and such assignee shall be bound by all
of such covenants and agreements; it being intended that Landlord's covenants
and agreements shall be binding on Landlord, its successors and assigns only
during and in respect of their successive periods of such ownership.
<PAGE>
However, in any event, Landlord shall not have any personal liability or
obligation by reason of any default by Landlord under any of Landlord's
covenants and agreements in this Lease. In case of such default, Tenant will
look only to Landlord's estate, as Lessee, under the Net Lease or under any
other ground or underlying lease covering the premises described in the Net
Lease, to recover any loss or damage resulting therefrom; and Tenant shall have
no right to nor shall Tenant assert any claim against nor have recourse to
Landlord's other property or assets to recover such loss or damage.
Section 30.03. All pronouns or any variation thereof shall be deemed to
refer to masculine, feminine or neuter, singular or plural as the identity of
the person or persons may require; and if Tenant shall consist of more than one
(1) person, the obligations of such persons, as Tenant, under this Lease, shall
be joint and several.
Section 30.04. The definitions contained in Schedule F annexed hereto are
hereby made a part of this Lease.
ARTICLE 31
Notices
Any notice, statement, certificate, request, approval, consent or demand
required or permitted to be given under this Lease shall be in writing sent by
registered or certified mail (or reputable, commercial overnight courier
service), return receipt requested and postage prepaid, addressed, as the case
may be, to Landlord, at 750 Lexington Avenue, New York, New York 10022, and to
Tenant prior to the Commencement Date at 100 Park Avenue, Room 1650, New York,
New York 10017, and after the Commencement Date at the Demised Premises, or to
such other addresses as Landlord or Tenant respectively shall designate in the
manner herein provided. Such notice, statement, certificate, request, approval,
consent or demand shall be deemed to have been given on the second day after the
date when mailed, as aforesaid, or on the date of delivery by overnight courier.
ARTICLE 32
No Waiver; Entire Agreement
Section 32.01. The specific remedies to which Landlord may resort under
the provisions of this Lease are cumulative and are not intended to be exclusive
of any other remedies or means of redress to which Landlord may be lawfully
entitled in case of any breach or threatened breach by Tenant of any of the
terms, covenants and conditions of this Lease. The failure of Landlord to insist
upon the strict performance of any of the terms, covenants and conditions of
this Lease, or to exercise any right or remedy herein contained, shall not be
construed as a waiver or relinquishment for the future of such term, covenant,
condition, right or remedy. A receipt by Landlord of minimum rent or additional
rent with knowledge of the breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such breach. This Lease may not be
<PAGE>
changed or terminated orally. In addition to the other remedies in this Lease
provided, Landlord shall be entitled to restraint by injunction of the violation
or attempted or threatened violation of any of the terms, covenants and
conditions of this Lease or to a decree, any court having jurisdiction in the
matter, compelling performance of any such terms, covenants and conditions.
Section 32.02. No receipt of monies by Landlord from Tenant, after any
re-entry or after the cancellation or termination of this Lease in any lawful
manner, shall reinstate the Lease; and after the service of notice to terminate
this Lease, or after commencement of any action, proceeding or other remedy,
Landlord may demand, receive and collect any monies due, and apply them of
account of Tenant's obligations under this Lease but without in any respect
affecting such notice, action, proceeding or remedy, except that if a money
judgment is being sought in any such action or proceeding, the amount of such
judgment shall be reduced by such payment.
Section 32.03. If Tenant is in arrears in the payment of minimum rent or
additional rent, Tenant waives its right, if any, to designate the items in
arrears against which any payments made by Tenant are to be credited and
Landlord may apply any of such payments to any such items in arrears as
Landlord, in its sole discretion, shall determine, irrespective of any
designation or request by Tenant as to the items against which any such payments
shall be credited.
Section 32.04. No payment by Tenant nor receipt by Landlord of a lesser
amount than may be required to be paid hereunder shall be deemed to be other
than on account of any such payment, nor shall any endorsement or statement on
any check or any letter accompanying any check tendered as payment 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 payment due or
pursue any other remedy in this Lease provided.
Section 32.05. This Lease and the Schedules annexed hereto constitute the
entire agreement between Landlord and Tenant referable to the Demised Premises,
and all prior negotiations and agreements are merged herein.
Section 32.06. If any term or provision of this Lease or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such term or
provision to persons or circumstances, other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
ARTICLE 33
Captions
The captions of Articles in this Lease are inserted only as a matter of
convenience and for reference and they in no way define, limit or describe the
scope of this Lease or the intent of any provision thereof.
<PAGE>
ARTICLE 34
Inability to Perform
Tenant's obligation to pay minimum rent and additional rent and to perform
all of the other terms, covenants and conditions of this Lease shall not be
affected, diminished, or excused if, by reason of unavoidable delays (as
hereinafter defined), Landlord fails or is unable to supply any services or make
any repairs or perform any work which under this Lease Landlord has expressly
agreed to supply, make or perform, and the time for the performance or
observance thereof shall be extended for the period of time as Landlord shall
have been so delayed. However, Landlord shall use such reasonable efforts as
then may be practicable under the circumstances to resolve any unavoidable
delay, provided that Landlord shall have no liability to Tenant if Landlord is
unable to resolve the same.
The words "unavoidable delays", as used in this Lease shall mean (a) the
enactment of any law or issuance of any governmental order, rule or regulation
(i) prohibiting or restricting performance of work of the character required to
be performed by Landlord under this Lease, or (ii) establishing rationing or
priorities in the use of materials, or (iii) restricting the use of labor, and
(b) strikes, lockouts, acts of God, inability to obtain labor or materials,
enemy action, civil commotion, fire, unavoidable casualty or other similar types
of causes beyond the reasonable control of Landlord.
ARTICLE 35
No Representations by Landlord
Neither Landlord nor any agent or employee of Landlord has made any
representation whatsoever with respect to the Demised Premises except as
expressly set forth in this Lease.
ARTICLE 36
Rent Control
Section 36.01. In the event the minimum rent and/or additional rent or
any part thereof provided to be paid by Tenant under the provisions of this
Lease during the demised term shall become uncollectible or shall be reduced or
required to be reduced or refunded by virtue of any federal, state, county or
city law, order or regulation, or by any direction of a public officer or body
pursuant to law, or the orders, rules, code or regulations of any organization
or entity formed pursuant to law, Tenant shall enter into such agreement(s) and
take such other steps (without additional expense or liability to Tenant) as
Landlord may reasonably request and as may be legally permissible to permit
Landlord to collect the maximum rents which from time to time during the
continuance of such legal rent restriction may be legally permissible (and not
in excess of the amounts reserved therefor under this Lease). Upon the
termination of such legal rent restriction, (a) the minimum rent and/or
additional rent shall become and thereafter be
<PAGE>
payable in accordance with the amounts reserved herein for the periods following
such termination, and (b) Tenant shall pay to Landlord promptly upon being
billed, to the maximum extent legally permissible, an amount equal to (i)
minimum rent and/or additional rent which would have been paid pursuant to this
Lease but for such legal rent restriction less (ii) the rents paid by Tenant
during the period such legal rent restriction was in effect.
ARTICLE 37
Security Deposit
Section 37.01. Concurrently with the execution of this Lease, Tenant
shall deposit with Landlord the sum of $57,000.00, either in cash or by Letter
of Credit as provided in Section 37.02, as security for the faithful performance
and observance by Tenant of the terms, provisions and conditions of this Lease.
Tenant agrees that, in the event that Tenant defaults in respect of any of the
terms, provisions and conditions of this Lease (including the payment of minimum
rent and additional rent), after any applicable notice and expiration of any
applicable cure period, Landlord may use, apply, or retain the whole or any part
of the cash security so deposited or may notify the "Issuing Bank" (as such term
is defined in Section 37.02) and thereupon receive all of the monies represented
by the said Letter of Credit and use, apply, or retain the whole or any part of
such proceeds, as the case may be, to the extent required for the payment of any
rent, additional rent, or any other sum as to which Tenant is in default, or for
any sum that Landlord may expend or may be required to expend by reason of
Tenant's default, in respect of any of the terms, covenants and conditions of
this Lease (including any damages or deficiency accrued before or after summary
proceedings or other re-entry by Landlord). In the event that Landlord applies
or retains any portion or all of such cash security or proceeds of such Letter
of Credit, as the case may be, Tenant shall forthwith restore the amount so
applied or retained so that, at all times, the amount deposited shall be
$57,000.00. If Tenant shall fail or refuse to make such additional deposit,
Landlord shall have the same rights in law and in equity and under this Lease as
it has with respect to a default by Tenant in the payment of minimum rent,
except that Tenant shall have thirty (30) days to cure such default. In the
event that Tenant shall fully and faithfully comply with all of the terms,
provisions, covenants and conditions of this Lease, the cash security or Letter
of Credit, as the case may be, shall be returned to Tenant within twenty (20)
days after the expiration date and after delivery of possession of the entire
Demised Premises to Landlord in the condition provided in this Lease for such
delivery of possession.
Section 37.02. In lieu of a cash deposit, Tenant may at any time deliver
to Landlord a clean, irrevocable and unconditional Letter of Credit (the "Letter
of Credit") issued by and drawn upon any commercial bank (the "Issuing Bank")
with offices for banking purposes in the City of New York and having a net worth
of not less than $100,000,000.00, which Letter of Credit shall have an initial
term of not less than one year, be in form and content satisfactory to Landlord,
be for the account of Landlord and be in the amount of $57,000.00.
Notwithstanding the foregoing, if at any time the net worth of the Issuing Bank
is less than $100,000,000.00 or its rating is downgraded from its current
rating, and provided Tenant does not replace the existing Letter of Credit with
a Letter of Credit meeting the criteria of Section 37.02 within the sooner of
thirty
<PAGE>
(30) days following Tenant's receipt of Landlord's notice to Tenant of either of
the foregoing events or the number of days remaining until the expiration date
of the existing Letter of Credit, Landlord shall have the right, at any time
thereafter, to draw down the entire proceeds pursuant to the terms of Section
37.01 as cash security pending the replacement of such Letter of Credit. The
Letter of Credit shall provide that:
(a) the Issuing Bank shall pay to Landlord or its duly authorized
representative an amount up to the face amount of the Letter of Credit upon
presentation of the Letter of Credit and a sight draft, in the amount to be
drawn;
(b) it shall be deemed automatically renewed, without amendment, for
consecutive periods of one (1) year each thereafter during the term of this
Lease, unless Issuing Bank sends written notice (hereinafter referred to as the
Non-Renewal Notice) to Landlord by certified or registered mail, return receipt
requested, not less than sixty (60) days next preceding the expiration date of
the Letter of Credit that it elects not to have the Letter of Credit renewed,
and it being agreed that the giving of such Non-Renewal Notice shall for the
purpose of this Article 37 be deemed a default under this Lease, unless Tenant
replaces the Letter of Credit with a substitute Letter of Credit meeting the
criteria of this Section 37.02 or with a cash deposit at least thirty (30) days
prior to the expiration date of the Letter of Credit.
(c) Landlord, at any time after thirty (30) days following its receipt
of a Non-Renewal Notice, and prior to the expiration date of the Letter of
Credit, shall have the right, exercisable by means of sight draft, to receive
the monies represented by the Letter of Credit and hold such proceeds pursuant
to the terms of Section 37.01 as cash security pending the replacement of such
Letter of Credit; and
(d) upon Landlord's sale or assignment of its estate as Tenant under
any ground or underlying lease, the Letter of Credit shall be transferable by
Landlord, as provided in Section 37.03.
Section 37.03. In the event Landlord's estate as tenant under any ground
or underlying Lease is sold or assigned, Landlord shall have the right to
transfer the cash security or the Letter of Credit then held by Landlord to the
vendee or assignee, and Landlord shall thereupon be released by Tenant from all
liability for the return of such cash security or Letter of Credit. In such
event, Tenant agrees to look solely to the new Landlord for the return of said
cash security or Letter of Credit. It is agreed that the provisions hereof shall
apply to every transfer or assignment made of the cash security or Letter of
Credit to a new Landlord.
Section 37.04. Tenant covenants that it will not assign or encumber, or
attempt to assign or encumber, the monies or Letter of Credit deposited
hereunder as security, and that neither Landlord nor its successors or assigns
shall be bound by any such assignment, encumbrance, attempted assignment, or
attempted encumbrance.
Section 37.05. The use of the security, as provided in this Article,
shall not be deemed or construed as a waiver of Tenant's default or as a waiver
of any other rights and remedies to
<PAGE>
which Landlord may be entitled under the provisions of this Lease by reason of
such default, it being intended that Landlord's rights to use the whole or any
part of the security shall be in addition to but not in limitation of any such
other rights and remedies; and Landlord may exercise any of such other rights
and remedies independent of or in conjunction with its rights under this
Article.
Section 37.06. Provided Tenant is not then in default under any of the
terms, covenants and conditions of this Lease on its part to be performed, the
amount of the security deposit hereunder shall be reduced to $28,500 at the
commencement of the 36th month following the Commencement Date. In such event,
if (i) Tenant has deposited a Letter of Credit as security, Tenant shall either
deliver to Landlord a replacement Letter of Credit in the reduced amount and
Landlord will then return to Tenant the existing Letter of Credit, or Tenant
will deliver to Landlord an amendment to the existing Letter of Credit reducing
the amount thereof to the then required amount, and (ii) if Landlord holds cash
as security, then Landlord shall return to Tenant an amount sufficient to reduce
the security deposit to the then required amount.
Section 37.07. To the extent Landlord retains any cash security under
this Lease, the same shall be deposited by Landlord in a federally insured money
market account or in an interest bearing bank account, and the interest thereon,
less a one percent (1%) administrative charge, shall be paid to Tenant no less
often than annually, provided that Tenant is not then in default under the terms
of this Lease.
ARTICLE 38
Late Payment Charges
If Tenant shall fail to pay any minimum rent or additional rent within five
(5) days after its due date, Tenant shall pay a late charge of $.05 for each
$1.00 which remains unpaid after such period to compensate Landlord for
additional expense in processing such late payment. In addition, if Tenant fails
to pay any minimum rent or additional rent within ten (10) days after its due
date, Tenant shall pay interest thereon from the date due until the date paid at
the rate of one and one-half (1-1/2%) percent per month. If any check of Tenant
in payment of any sum due under this lease, including but not limited to minimum
rent and additional rent, fails to clear the bank, Tenant shall pay a charge of
$100.00.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of
the day and year first above written.
THREE PARK AVENUE CO.
By: /s/ Charles Steven Cohen
________________________________
Landlord
<PAGE>
MJN ENTERPRISES, INC.
By: /s/ Murray Hidary
-------------------------------
Tenant
<PAGE>
FIRST AMENDMENT OF LEASE
------------------------
AGREEMENT, dated this 29 day of April, 1996, between THREE PARK AVENUE
CO., a New York limited partnership having an office at 750 Lexington Avenue,
New York, New York 10022 ("Landlord"), and MJN ENTERPRISES, INC., a New York
corporation having an office at 3 Park Avenue, New York, New York 10016
("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant have heretofore entered into a lease dated
April 28, 1995 (the "Lease") for part of the 38th floor ("Existing Premises") in
the building known as 3 Park Avenue, New York, New York ("Building"), for the
term ending September 30, 2000; and
WHEREAS, Tenant wishes to rent additional space on the 33rd floor (the
"Additional Premises") and extend the term of the Lease, and Landlord is willing
to do so, upon the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter provided, Landlord and Tenant agree as follows:
1. Except as otherwise herein defined, all terms contained in this
Agreement shall for the purposes hereof have the same meaning ascribed to them
in the Lease.
2. Tenant has examined and agrees to accept the Additional Premises
in its present "as is" condition and state of repair, subject to and upon
substantial completion by Landlord, at Landlord's own expense, of all the work
set forth in Schedule B attached hereto.
<PAGE>
3. A. Landlord shall deliver the Additional Premises to Tenant on
the date that Landlord substantially completes its work (the "Effective Date"),
and following the Effective Date, wherever the term Demised Premises is referred
to in the Lease, the same shall mean, collectively, the Additional Premises,
more particularly delineated in the plan annexed hereto as Schedule A, and the
Existing Premises. Except as set forth on Schedule B, Landlord shall have no
obligation to perform any other work in connection with preparing the Additional
Premises for Tenant's occupancy. Landlord's work shall be deemed to be
substantially completed even though minor details or adjustments, none of which
materially interferes with Tenant's use of the Additional Premises, may not then
have been completed, but Landlord agrees, at its sole cost and expense, to
promptly thereafter complete all unfinished work. However, if Tenant shall enter
into possession of the Additional Premises and commence the regular conduct of
its business, the Effective Date shall be the date of such entry regardless of
whether any of the foregoing events shall have occurred. In such event, Landlord
agrees to promptly thereafter complete all unfinished work. Landlord shall give
Tenant at least fifteen (15) days' prior written notice of the anticipated date
of substantial completion, provided Landlord shall have no liability or
responsibility to Tenant if the Additional Premises have not been substantially
completed on the date set forth in Landlord's notice. Upon Tenant obtaining the
building permit referred to in Schedule B, Landlord shall promptly thereafter
commence its work and diligently perform the same at Landlord's sole cost and
expense. If Landlord has not substantially completed its work within one hundred
eighty (180) days after such building permit has been obtained (subject,
however, to the provisions' of Article 34 of the Lease), then Tenant shall
be entitled to an abatement of the minimum rent only, in addition to the
abatement provided in Section 3.02 (as amended), equal to one (1) business day
for each one (1) business day
<PAGE>
thereafter that the Additional Premises have not been substantially completed to
the date of substantial completion.
B. If, prior to the Effective Date, Tenant shall enter the
Additional Premises to make any installations, Landlord shall have no liability
or obligation for the care or preservation of Tenant's property, except for the
negligence of Landlord, its agents, contractors and employees.
C. Promptly after the Effective Date, Landlord and Tenant will
execute a statement in recordable form confirming the Effective Date in
accordance with the foregoing provisions.
4. Notwithstanding the provisions of Article 1, the term of the
Lease shall be extended for the period commencing on the Effective Date and
ending on a date which shall be five (5) years and five (5) months after the
Effective Date (the "Extended Expiration Date"), plus the number of days
required, if any, to have such term expire on the last day of the calendar
month, or on such earlier date upon which said term may expire or terminate
pursuant to any of the conditions or covenants of the Lease or pursuant to law.
5. Commencing from and after the Effective Date, with respect only
to the Additional Premises, the Lease is amended as follows:
(a) Section 3.01 (a) is amended to read as follows:
"(a) a fixed minimum rent ("minimum rent") at the rate of $151,940.00
per annum (or $12,661.67 per month), plus the period from the Effective
Date to the end of the month in which the same occurs if the
Commencement Date is other than the first day of a month calculated on
a pro rata basis; and"
<PAGE>
(b) Section 3.02 is amended to read as follows:
"Section 3.02. Notwithstanding the provisions of Section 3.01
hereof, and provided Tenant is not then in default under any of the
provisions of this Lease after any applicable notice and expiration of
any applicable cure period, Tenant shall be entitled to an abatement of
part of the minimum rent only in the amount of $11,360.00 for each of
the 1st, 2nd, 3rd, 4th and 5th months following the Effective Date;
provided that the balance of minimum rent of $1,301.67 for each of said
months shall be due and payable. Tenant acknowledges that the
consideration for the aforesaid abatement of minimum rent is Tenant's
agreement to perform all of the terms, covenants and conditions of this
Lease on its part to be performed. Therefore, if Tenant shall default
under any of the terms, covenants and conditions beyond any applicable
cure and grace period, the aggregate amount of all minimum rent that was
abated shall immediately thereafter become due and payable by Tenant to
Landlord. In the event of Tenant's failure to pay such aggregate amount
to Landlord, Landlord shall be entitled to the same rights and remedies
as in the event of Tenant's default in the payment of minimum rent.
Except as otherwise expressly set forth herein, Tenant shall be required
to pay additional rent and all other sums from and after the Effective
Date."
(c) In Section 22.01:
(i) in subdivision (i), the `Tax Base Factor" shall
mean the period from July 1, 1996 to June 30, 1997.
(ii) in subdivision (iii), the "comparative tax year"
shall mean the tax year commencing July 1, 1997.
(iii) in subdivision (v), "the Percentage" shall mean
"1.893%".
(d) In Section 22.02:
(i) in subdivision (ii), the "Base Wage Rate" shall
mean the Wage Rate for the calendar year 1996, without fringes.
(ii) in subdivision (v), the "Multiplication Factor"
shall mean 5,680.
(e) In Section 232.03, the "Rent Inclusion Facor" shall mean
$15,620.00.
<PAGE>
6. Section 37.06 of the Lease is hereby deleted in its entirety.
7. Landlord and Tenant represent and warrant that they had no
dealings or negotiations with any broker or agent, other than Cohen Brothers
Realty Corporation, in connection with this Agreement. Landlord will pay said
broker a commission pursuant to separate agreement. Landlord and Tenant agree to
indemnify and hold harmless the other from and against any cost, expense or
liability for any compensation, commissions or charges arising out of a breach
by the other of the representations contained in this paragraph.
8. Except as modified by this Agreement, the Lease and all the
terms, covenants and conditions thereof (except those which by their terms are
no longer applicable) shall remain in full force and effect and are hereby in
all respects ratified and confirmed.
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement
on the day and year first above written.
3 PARK AVENUE CO.,
Landlord
By: /s/ Charles Steven Cohen
------------------------------------------
MJN ENTERPRISES, INC.
Tenant
By: /s/ Murray Hidary
------------------------------------------
<PAGE>
EXHIBIT 10.8
SECOND AMENDMENT OF LEASE
-------------------------
AGREEMENT, dated this 4th day of October, 1997, between THREE PARK
AVENUE CO., a New York limited liability partnership, having an office at 750
Lexington Avenue, New York, New York 10022 ("Landlord"), and EARTHWEB, INC., a
Delaware corporation having an office at 3 Park Avenue, New York, New York 10016
("Tenant").
WITNESSETH:
WHEREAS, Landlord and MJN Enterprises, Inc., Tenant's predecessor-in-
interest, have heretofore entered into a lease dated April 28, 1995 for part of
the 38th floor (the "38th Floor Premises"), as amended by agreement dated April
29, 1996 for part of the 33rd floor (the "33rd Floor Premises"), said lease and
amendment hereinafter collectively called the "Lease" and said 38th Floor
Premises and said 33rd Floor Premises hereinafter collectively called the
"Existing Premises", in the building known as 3 Park Avenue, New York, New York
("Building"), for the term ending December 31, 2001; and
WHEREAS, Tenant wishes to rent additional space consisting of the
entire 32nd floor (the "Additional Premises") and, except for the 38th Floor
Premises, extend the term of the Lease, and Landlord is willing to do so, upon
the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter provided, Landlord and Tenant agree as follows:
1. Except as otherwise herein defined, all terms contained in this
Agreement shall for the purposes hereof have the same meaning ascribed to them
in the Lease.
<PAGE>
2. Tenant has examined and agrees to accept the Additional Premises in its
present "as is" condition and state of repair, subject to and upon substantial
completion by Landlord, at Landlord's own expense, of all the work set forth in
Schedule B attached hereto.
3. A. Landlord shall deliver the Additional Premises to Tenant on the date
that Landlord substantially completes its work (the "Effective Date"), and
following the Effective Date, wherever the term Demised Premises is referred to
in the Lease, the same shall mean, collectively, the Additional Premises, more
particularly delineated in the plan annexed hereto as Schedule A, and the
Existing Premises.
B. Except as set forth on Schedule B, Landlord shall have no
obligation to perform any other work in connection with preparing the Additional
Premises for Tenant's occupancy. Landlord's work shall be deemed to be
substantially completed even though minor details or adjustments, none of which
materially interferes with Tenant's use of the Additional Premises, may not then
have been completed, but Landlord agrees, at its sole cost and expense, to
promptly thereafter complete all unfinished work. However, if Tenant shall
enter into possession of the Additional Premises and commence the regular
conduct of its business, the Effective Date shall be the date of such entry
regardless of whether any of the foregoing events shall have occurred. In such
event, Landlord agrees to promptly thereafter complete all unfinished work.
Landlord shall give Tenant at least fifteen (15) days' prior written notice of
the anticipated date of substantial completion, provided Landlord shall have no
liability or responsibility to Tenant if the Additional Premises have not been
substantially completed on the date set forth in Landlord's notice. If Landlord
installs the additional risers referred to in Section 23.01, then the
installation of such risers shall be considered in determining whether Landlord
has substantially completed its work. Landlord shall, at the cost and expense of
Tenant, promptly
2
<PAGE>
obtain the building permit referred to in Schedule B, and promptly thereafter
commence its work and diligently perform the same at Landlord's sole cost and
expense. If Landlord has not substantially completed its work within one hundred
eighty (180) days after such building permit has been obtained (subject,
however, to the provisions of Article 34 of the Lease), then Tenant shall be
entitled to an abatement of the minimum rent only, in addition to the abatement
provided in Section 3.02 (as amended), equal to one (1) business day for each
one (1) business day thereafter that the Additional Premises have not been
substantially completed to the date of substantial completion.
C. If, prior to the Effective Date, Tenant shall enter the Additional
Premises to make any installations, Landlord shall have no liability or
obligation for the care or preservation of Tenant's property, except for the
negligence of Landlord, its agents, contractors and employees.
D. Promptly after the Effective Date, Landlord and Tenant will
execute a statement in recordable form confirming the Effective Date in
accordance with the foregoing provisions.
4. Notwithstanding the provisions of Article 1, the term of the Lease with
respect only to the 33rd Floor Premises and Additional Premises shall be
extended for the period commencing on the Effective Date and ending on the date
which shall be ten (10) years after the Effective Date (the "Extended Expiration
Date"), plus the number of days required, if any, to have such term expire on
the last day of the calendar month, or on such earlier date upon which said term
may expire or terminate pursuant to any of the conditions or covenants of the
Lease or pursuant to law. The term of the Lease with respect to the 38th Floor
Premises shall end on
3
<PAGE>
December 31, 2001, and Tenant shall vacate and surrender possession of the same
to Landlord on or before said date.
5. Commencing from and after the Effective Date, the Lease is amended as
follows:
A. With respect only to the 38th Floor Premises:
(i) Section 3.01(a) is amended to provide that, for the period
from the Effective Date to December 31, 2001, the minimum rent shall be at
the rate of $119,232.00 per annum (or $9,936.00 per month).
(ii) In Section 23.03, the "Rent Inclusion Factor" shall mean
$18,432.00.
B. With respect only to the 33rd Floor Premises:
(i) Section 3.01(a) is amended to read as follows:
(a) "a fixed minimum rent (the "minimum rent") at the
following annual rates:
(i) $163,811.20 per annum (or $13,650.93 per month) for the
period following the Effective Date to December 31, 2001; and
(ii) $169,491.20 per annum (or $14,124.27 per month) for the
period from January 1, 2002 to the end of the fifth (5th) year
following the Effective Date; and
(iii) $183,691.20 per annum (or $15,307.60 per month) for
the last five (5) years of the term of this Lease; and"
(ii) In Section 22.01, for the period commencing from and after
January 1, 2002:
4
<PAGE>
(a) in subdivision (i), the "Tax Base Factor" shall mean the
period from July 1, 1997 to June 30, 1998.
(b) in subdivision (iii), the "comparative tax year" shall
mean the New York City real estate tax year commencing July 1, 1998
and each subsequent New York City real estate tax year.
(iii) In subdivision (ii) of Section 22.02, for the period
commencing from and after January 1, 2002, the "Base Wage Rate" shall mean
the Wage Rate for calendar year 1997, without fringes.
(iv) In Section 23.03, for the period commencing from and after
the Effective Date, the "Rent Inclusion Factor" shall mean $27,491.20.
C. With respect only to the Additional Premises:
(i) Section 3.01(a) is amended to read as follows:
"(a) a fixed minimum rent (the "minimum rent") at the
following annual rates:
(i) $575,000.00 per annum (or $47,916.67 per month) for the
first five (5) years from the Effective Date, prorated to the end of the month
in which the same occurs if the Effective Date is other than the first day of a
month; and
(ii) $632,500.00 per annum (or $52,708.33 per month) for the
last five (5) years of the term of this Lease; and"
(ii) Section 3.02 is amended to read as follows: "Section 3.02.
Notwithstanding the provisions of Section 3.01 hereof, and provided
Tenant is not then in default under any of the monetary provisions of
this Lease after any applicable notice and expiration of any applicable
cure period,
5
<PAGE>
Tenant shall be entitled to an abatement of the minimum rent only in the
amount of $47,916.67 for each of the 1st, 2nd, 3rd, 4th, 17th, 18th and
19th and 20th months following the Effective Date. Tenant acknowledges
that the consideration for the aforesaid abatement of minimum rent is
Tenant's agreement to perform all of the terms, covenants and conditions
of this Lease on its part to be performed. Therefore, if Tenant shall
default under any of the monetary provisions of this Lease, Tenant shall
thereafter not be entitled to any further abatement and every installment
of minimum rent becoming due shall be payable without such abatement
until such monetary default has been cured, and Tenant shall thereafter
be entitled to any abatement remaining to be applied against minimum
rent. However, if by reason of Tenant's default under any of the
provisions of this Lease, this Lease shall be terminated, then the
aggregate amount of all minimum rent that was abated shall immediately
thereafter become due and payable by Tenant to Landlord in addition to
the damages referred to in Section 16.06. Except as otherwise expressly
set forth herein, Tenant shall be required to pay additional rent and all
other sums from and after the Effective Date."
(iii) In Section 22.01:
(a) in subdivision (i), the "Tax Base Factor" shall mean the
period from July 1, 1997 to June 30, 1998.
(b) in subdivision (iii), the "comparative tax year" shall
mean the New York City real estate tax year commencing July 1, 1998
and each subsequent New York City real estate tax year.
(c) in subdivision (v), "the Percentage" shall mean "4.3396%".
6
<PAGE>
(iv) In Section 22.02:
(a) in subdivision (ii), the "Base Wage Rate" shall mean the
Wage Rate for the calendar year 1997, without fringes.
(b) in subdivision (vi), the "Multiplication Factor" shall
mean 23,000.
6. With respect only to the Additional Premises, Article 23 of the Lease is
deleted in its entirety, and the following Article is substituted in its place:
"ARTICLE 23
Electricity
Section 23.01. Landlord shall provide electricity to the Demised
Premises on a submetering basis, through one or more independent time of day (or
use) submeters and risers, feeders and similar electrical equipment. Such
submetering equipment and any additional riser to accommodate the service
capacity required by Tenant, exceeding the existing capacity of six (6) watts
per usable square foot, to be installed by Landlord, at the sole expense of
Tenant. Any riser(s) shall terminate at a disconnect switch to be located at a
point designated by Landlord in electrical closet(s) on the floor of the
Additional Premises. Such disconnect switch shall be the sole source from which
Tenant is to obtain electricity. Such submeter(s) shall at all times be
maintained by Tenant, at its expense unless damaged due to the negligence by
Landlord, its agents, employees or contractors. Tenant covenants and agrees to
purchase the same from Landlord or Landlord's designated agent at charges, terms
and rates set, from time to time, during the term of this Lease by Landlord but
not more than those specified in the service classification in effect from time
to time pursuant to which Landlord then purchases electric current from the
public utility corporation serving the part of the City where the Building is
7
<PAGE>
located plus a fee equal to twelve (12%) percent of such charges, representing
agreed upon administrative and overhead costs to Landlord. Where more than one
meter measures the service of Tenant in the Building, the service rendered
through each meter may be computed and billed separately in accordance with the
rates herein. Bills therefore shall be rendered monthly or at such other times
as Landlord may elect and the amount, as computed from a meter, shall be deemed
to be, and be paid as, additional rent, within ten (10) days thereafter, without
any set-off or deduction. If any tax is imposed upon Landlord's receipt from the
sale or resale of electric energy to Tenant by any Federal, State or Municipal
Authority, Tenant covenants and agrees that, where permitted by law, Tenant's
pro rata share of such taxes shall be passed on to, and included in the bill of,
and paid by, Tenant to Landlord.
Section 23.02 Tenant agrees not to connect any electrical equipment
of any type to the Building electric distribution system, beyond that on
Tenant's approved plans for initial occupancy, other than lamps, typewriters,
personal computers, network servers and other office equipment which is used in
Tenant's business as presently conducted on the date hereof and set forth on the
electrical survey attached hereto as Schedule C, and other small office machines
which consume comparable amounts of electricity, without the Landlord's prior
written consent, which consent shall not be unreasonably withheld or delayed. In
no event shall Tenant use or install any fixtures, equipment or machines in the
Demised Premises which would result in an overload of the electrical circuits
servicing the Demised Premises.
Section 23.03. Landlord shall not be liable in any way to Tenant for
any failure or defect in the supply or character of electric energy furnished to
the Demised Premises by reason of any requirement, act or omission of the public
utility serving the Building with electricity or for any other reason not
attributable to the negligence of Landlord. Tenant shall
8
<PAGE>
furnish and install, at its sole cost and expense, all lighting fixtures, tubes,
lamps, bulbs, ballasts and outlets relating to Tenant's electrical equipment,
except in connection with the initial work as set forth in Schedule B.
Section 23.04. Tenant's connected electrical load in the Demised
Premises, including lighting, shall not at any time exceed the service capacity
initially required by Tenant as provided in Section 23.01. In order to insure
that such capacity is not exceeded and to avert possible adverse effect upon the
Building electrical service, Tenant shall not, without Landlord's prior consent
in each instance, which consent shall not be unreasonably withheld, make any
alteration or addition to the electric system of the Demised Premises existing
on the Commencement Date. Should Landlord grant such consent, all additional
risers or other equipment required therefor shall be provided by Landlord and
the cost thereof shall be paid by Tenant upon Landlord's demand.
Section 23.05. Landlord reserves the right to discontinue furnishing
electric energy at any time, whether or not Tenant is in default under this
Lease, upon not less than thirty (30) days' notice to Tenant. If Landlord
exercises such right of discontinuance, this Lease shall continue in full force
and effect and shall be unaffected thereby, except only that, from and after
the effective date of such discontinuance, Landlord shall not be obligated to
furnish electric energy to Tenant. If Landlord so elects to discontinue
furnishing electric energy to tenant, Tenant shall arrange to obtain electric
energy directly from the public utility company furnishing electric service to
the Building. Notwithstanding the foregoing, Landlord shall not discontinue
furnishing electric energy until Tenant is able to obtain such electric energy
directly from said public utility. Such electric energy may be furnished to
Tenant by means of the then existing Building system feeders, risers and wiring
to the extent that they are available, suitable and safe for such purposes.
9
<PAGE>
All meters and additional panel boards, feeders, risers, wiring and other
conductors and equipment which may be required to obtain electric energy
directly from such public utility company, and which are to be located within
the Demised Premises, shall be installed and maintained by Tenant at its
expense."
7. Provided Tenant has agreed upon the cost of the Systems (as hereinafter
defined), Landlord shall furnish and install in the Additional Premises, at the
sole cost and expense of Tenant, air-cooled supplemental air conditioning
systems (the "Systems"), as more particularly shown on Tenant's plans and
specifications referred to in Schedule B annexed hereto. Tenant, at its own
cost, shall maintain such Systems in good condition and repair and shall make
any replacements thereof as may be required. Tenant may hook said Systems on to
the existing duct work in the Additional Premises. However, in no event shall
Landlord have any liability or responsibility if the HVAC system in the
Additional Premises does not perform pursuant to its design specifications.
Landlord represents that the design CFM for the 32nd floor for both the north
and south main interior trunk takeoff is 5,500 CFM's each, with the capability
of maintaining, within tolerances normal in first-class office buildings, inside
space conditions of 78 degrees Fahrenheit dry bulb and fifty (50%) percent
relative humidity when outside conditions are 95 degrees Fahrenheit dry bulb and
75 degrees Fahrenheit wet bulb. The foregoing design conditions shall be based
on an occupancy of not more than one person per 100 square feet, and upon a
combined lighting and standard electrical load not to exceed four (4) watts per
usable square foot (excluding the Building HVAC), unless energy and or water
conservation laws or requirements of public authorities, shall mandate for any
reduction in operation below said design criteria, in which case such equipment
shall be operated in accordance therewith. Tenant, at its own expense, shall
obtain in its own name the use permits for such Systems and
10
<PAGE>
provide Landlord with copies of same. Tenant shall also obtain and pay for all
annual renewal fees in connection therewith, and provided Landlord with a copy
of such annual renewals. Tenant shall indemnify and hold Landlord harmless from
and against any loss, claims, costs and expenses (including reasonable
attorneys' fees) in connection with the repair and maintenance of said Systems.
Upon the expiration of the term of this Lease, Tenant, at its own cost, shall
remove such Systems, shall restore the Demised Premises to the extent of any
damages caused by such removal to its condition existing prior to the
installation of the Systems and repair any damage to the Demised Premises caused
by the removal of the Systems.
Landlord, following its review of Tenant's plans and specifications
for the Systems, shall notify Tenant of the proposed cost of same. Upon Tenant's
approval of such cost, Tenant shall pay the same in installments in the
percentage amounts as more particularly set forth on the Payment Completion
Schedule annexed hereto as Exhibit D.
8. Pursuant to the provisions of Article 37 of the Lease, Landlord is
holding as security under the Lease a Letter of Credit in the amount of $57,000.
The parties hereto agree that the amount of the security deposit referred to in
said Article 37 shall be increased to $287,000, and wherever the amount of
$57,000 is referred to in said Article 37, the same shall now mean $287,000.
Concurrently with the execution of this Agreement, Tenant shall either deliver
to Landlord a replacement Letter of Credit meeting the criteria set forth in
Section 37.02 in the amount of $287,000 and Landlord will then return to Tenant
the existing Letter of Credit, or Tenant will deliver to Landlord an amendment
to the existing Letter of Credit increasing the amount thereof to $287,000.
9. The Lease is hereby further amended as follows:
11
<PAGE>
A. In Section 4.01, the words "and for a computerbased
telecommunications business related thereto" are deleted.
B. In Section 4.02, in clause (1), after the word "food", the words
"except the warming of food through a microwave" are inserted; and in clause (3)
after the word "Premises", the words "except for the sale of software systems
other than to the general public;" are inserted.
C. Section 5.01 is amended as follows:
(i) The following is inserted at the end of the last sentence:
"Notwithstanding the foregoing, subject to Landlord's prior
written consent which shall not be unreasonably withheld or
delayed, Tenant may make non-structural interior alterations,
provided the same do not adversely affect the structural
integrity of the Building or the building systems, do not
adversely affect the tenants and do not violate the provisions of
any mortgage covering the Building. Tenant shall also have the
right, at its own expense, without Landlord's consent but subject
to Landlord's approval of contractors, to furnish and install
fiber optic cable."
(ii) Tenant shall not be obligated to remove any of the initial
improvements made by Landlord in both the Existing Premises and in the
Additional Premises. Tenant shall also not be obligated to remove any
improvements thereafter made by Tenant, unless at the time that Landlord
consents to such improvements, Landlord notifies Tenant that such
improvements must be removed at the end of the term of the Lease.
(iii) Upon the request of Tenant, Landlord at Landlord's expense,
shall furnish and install a solar type film on the exterior of the windows
of the Demised Premises.
D. Section 5.02 is amended by adding at the end thereof, subdivision
(e) to read as follows:
"(e) Plans and specifications for the work. "
E. Section 8.01(a), in clause (i), the word "occupancy" is deleted
and the word "particular" is substituted in its place.
12
<PAGE>
F. In Section 9.03(a)(i), the amount of insurance therein provided
shall be increased to $3,000,000.00.
G. In Section 10.01, in the event of the abatement of minimum rent,
there shall also concurrently be an abatement of additional rent set forth in
Article 22 in the same proportion as the abatement of minimum rent.
H. In Section 11.07(d), the following words are added at the end
thereof: "provided other space in the Building is available."
I. In Section 11.10(b), on the 4th line after the word "rent" the
words "and additional rent" are inserted.
J. In Section 11.10, the following subdivision (c) is added at the
end thereof, to read as follows:
"(c) For the purposes of computing the sums payable by Tenant to
Landlord under subparagraphs (a) and M hereof, there shall be deducted
from the consideration payable to Tenant by any assignee or sublessee
any transfer taxes, reasonable attorneys' fees, brokerage commissions,
advertising costs and fix-up costs paid by Tenant with respect to such
assignment or subletting, but only to the extent any such sums are
allocable to the period of this Lease (in the case of any assignment),
or the term of any sublease, assuming the same are amortized over the
term of this Lease or sublease, as may be applicable."
K. In Section 11.11, on the 12th line, after the word "assets", the
words "or stock or other ownership interests" are added; and clause (i) is
deleted in its entirety and the following is substituted in its place:
"(i) any successor to Tenant has a net worth computed in
accordance with generally accepted accounting principles at least
equal to the net worth of Tenant herein named as of the date of this
Lease, and"
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L. Section 11.14 is amended to provide that Tenant shall be entitled
to 35 lines on the Building directory.
M. In Section 21.06, the words "police power and the provisions of
Article 34." are added at the end thereof.
N. Section 21.07 is hereby added at the end of Article 21, to read as
follows:
"Section 21.07. Landlord agrees to maintain the Building as a first-
class office building in a manner similar to other first-class office
buildings in the vicinity of the Building."
O. The following is added at the end of Section 22.02(a)(i), to read
as follows:
"Notwithstanding the foregoing, if at any time such hourly wage rate
is different for new hire and old hire Porters, then thereafter such hourly
rate shall be based on the weighted average of the wage rates for the
different classifications of Porters."
P. With respect to the Existing Premises only:
(i) Section 23.01 is deleted in its entirety and the following is
substituted in its place:
"ARTICLE 23
Electric Inclusion
Section 23.01.
(a) Landlord shall furnish electric energy on a rent inclusion
basis to the Demised Premises, the charges therefor being included in the
minimum rent. The amount included in the minimum rent is based upon the
normal use of such electric energy for lighting and for the normal use of
lamps, typewriters, personal computers, network servers and other office
equipment as presently installed in the Demised the 38th Floor Premises
and/or the 33rd Floor Premises. Tenant may, at its own
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expense, cause a survey to be made by an independent electrical consultant
selected by Tenant of the amount of the reduction in electrical energy
consumed therein by Tenant, and the minimum rent and Rent Inclusion Factor
for the applicable floor shall be reduced by the amount of such reduction
determined by such consultant. Landlord shall have the right to dispute
such determination in the manner as provided in Section 23.02 and if the
parties are unable to agree on the determination of such reduction, then
the same shall be finally determined in the manner provided in Section
23.02.
(iii) Tenant shall have the one-time right, at any time, to elect to
have Landlord provide electricity on a submetering basis to either one or
both of the 38th Floor Premises and 33rd Floor Premises, upon at least
thirty (30) days' prior written notice to Landlord. Landlord shall then
arrange for the supply of electricity on such submetering basis as promptly
as practical subject to and in accordance with the provisions of Article 23
as more particularly set forth in paragraph 6 of this Agreement, except
that submeters may be placed on the respective floors. In such event, with
respect to either or both of the 38th Floor Premises and 33rd Floor
Premises for which Tenant shall have elected submetering, (a) Article 23 of
the Lease shall be deleted and Article 23 as set forth in paragraph 6 of
this Agreement shall be substituted in its place, and (b) the minimum rent
shall be reduced by the amount of the Rent Inclusion Factor applicable
thereto.
Q. Article 26 is deleted in its entirety and the following is
substituted in its place:
"ARTICLE 26
Estoppel Certificate
Each party shall at any time, and from time to time, within ten (10)
days after so requested by the other party execute, acknowledge and deliver
to the other party, a statement addressed to the other party stating (a)
that this Lease is unmodified and in full force and effect (or, if there
have been modifications, that the same is in full force and effect as
modified and stating the modifications), (b) stating the dates to which the
minimum rent and additional rent have been paid, (c) stating whether or
not, to the best knowledge of such party, there exists any default by the
other party under this Lease, and, if so, specifying each such default, and
(d) with respect to Tenant, such other information as may be reasonably
required by Landlord or any mortgagee, it being intended that any such
statement may be relied upon by the other party, by any mortgagee or
prospective mortgagee of any mortgage affecting the Building or the
Lessee's
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estate under the Net Lease or under any ground or other underlying lease,
or may be relied upon by the Lessor under the Net Lease or under any other
ground or other underlying lease covering the premises described in the Net
Lease or a purchaser of Lessee's estate under the Net Lease or under any
other ground or underlying lease covering the premises described in the Net
Lease or any interest therein, or any permitted assignee or sublessee of
Tenant."
R. In connection with Article 38, on the second line "five (5) days"
shall be changed to "ten (10) days"; on the third line "$.05" shall be changed
to "$.03"; and on the sixth line "ten (10) days" shall be changed to "fifteen
(15) days."
S. In Schedule F, paragraph (j), on the 5th line, after the word
"question", the remainder of this paragraph is deleted and the words "the term
of the Lease has not expired or been terminated." is substituted in its place.
10. Notwithstanding the provisions of Section 25.01, within forty-five (45)
days from the date hereof, Landlord shall obtain from the holder of any mortgage
which is a lien on the Lessee's estate under the Net Lease, an agreement ("non-
disturbance and attornment agreement"), providing in substance that Tenant's
possession of and rights in the Demised Premises shall remain undisturbed, so
long as Tenant is not in default under the provisions of this Lease, after any
applicable notice and the expiration of any periods of grace, and providing that
Tenant agrees in said instrument to attorn to such mortgagee as its landlord
under this Lease. Concurrently with the execution of this Lease, Tenant has
executed a non-disturbance and attornment agreement with respect to the existing
mortgagees. Landlord further agrees that this Lease shall not be subject or
subordinate to any hereafter placed mortgage, unless and until (in all such
instances, as applicable) Landlord shall have obtained the appropriate
nondisturbance and attornment agreement for the benefit of Tenant (subject to
Tenant's obligations to execute said agreements.)
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11. Landlord represents that on the Effective Date the Additional Premises
will be in compliance with all Governmental Requirements.
12. Landlord and Tenant represent and warrant that they had no dealings or
negotiations with any broker or agent, other than Cohen Brothers Realty
Corporation, in connection with this Agreement. Landlord will pay said broker a
commission pursuant to separate agreement. Landlord and Tenant agree to
indemnify and hold harmless the other from and against any cost, expense or
liability for any compensation, commissions or charges arising out of a breach
by the other of the representations contained in this paragraph.
13. Except as modified by this Agreement, the Lease and all the terms,
covenants and conditions thereof (except those which by their terms are no
longer applicable) shall remain in full force and effect and are hereby in all
respects ratified and confirmed.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement
on the day and year first above written.
THREE PARK AVENUE CO.
By: /s/ Charles Steven Cohen
---------------------------
Charles Steven Cohen, Agent
Landlord
EARTHWEB, INC.
Tenant
By: /s/ Murray Hidary
---------------------------
Tenant
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