of said acts or events. If the premises are re-let together with any other space in the building, the rental collected and the expenses incurred in connection with such re-letting shall be apportioned as reasonably determined by the Landlord. In no event shall the Tenant be entitled to receive any rents collected or payable under any re-letting, whether or not such rents exceed the fixed rent reserved under this lease. Nothing contained in Articles TWENTY-FIVE or TWENTY-SIX shall be deemed to limit or preclude the recovery by the Landlord from the Tenant of the maximum amount allowed to be obtained as damages by any statute or rule of law, or of any sums or damages to which the Landlord may be entitled in addition to the damages set forth in paragraph (c) above.
Upon the expiration or any termination of the term of this lease, the Tenant shall quit and surrender the premises, together with any fixtures, equipment or appurtenances installed in the premises at the commencement of this lease, and any alterations, decorations, additions and improvements which are not to be removed in compliance with the provisions of Article FOUR hereof, to the Landlord, in good order and condition, ordinary wear and tear and casualty excepted. The Tenant shall remove all its furnishings, trade fixtures, stock in trade and like personal property in accord with the requirements of Article FOUR, so as to leave the premises broom-clean and in an orderly condition. If the last day of the term of this lease falls on Saturday or Sunday, this lease shall expire on the business day immediately preceding. The Tenant’s obligation to observe and perform this covenant shall survive the expiration or other termination of the term of this lease. The Tenant expressly waives, for itself and for any person claiming by, through or under the Tenant, any rights which the Tenant or any such person may have under the provisions of Section 2201 of the New York Civil Practice Law and Rules or any law of like import then in force in connection with any holdover summary proceedings that the Landlord may institute to enforce the provisions of this Article. The Tenant acknowledges that possession of the premises must be surrendered to the Landlord on the Expiration Date. The parties recognize that the damage to the Landlord resulting from any failure by the Tenant to timely surrender possession of the premises will be substantial, will exceed the amount of the monthly installments of the fixed rent and additional rent payable hereunder and will be impossible to accurately measure. The Tenant agrees that if possession of the premises is not delivered to the Landlord on the Expiration Date (or any sooner termination date), in addition to any other rights or remedies the Landlord may have hereunder or in equity or at law, and without in any manner limiting the Landlord’s right to demonstrate and collect any damages suffered by the Landlord, the Tenant shall pay to the Landlord on account of use and occupancy of the premises for each month and for each portion of any month during which the Tenant holds over in the premises after the Expiration Date, a sum equal to one and one-half (1½) times the aggregate of the fixed rent and additional rent which was payable under this lease during the last month of the term. In addition, and without in any manner limiting the Landlord’s right to demonstrate and collect any damages suffered by the Landlord and arising from the Tenant’s failure to surrender the premises as provided herein, the Tenant shall indemnify and hold the Landlord harmless from and against all cost, liability, damages and expenses (including, without limitation, reasonable attorneys’ fees and disbursements) resulting from delay by the Tenant in so surrendering the premises, including, without limitation, any claims made by any succeeding or prospective tenant as a result of such delay. Nothing herein contained shall be deemed to permit the Tenant to retain possession of the premises after the Expiration Date (or sooner termination) of this lease or to limit in any manner the Landlord’s right to regain possession of the premises through summary proceedings, or otherwise, and no acceptance by the Landlord of payments from the Tenant after the Expiration Date shall be deemed to be other than on account of the amount to be paid by the Tenant in accordance with the provisions of this Article. The provisions of this Article shall survive the expiration of the term of this lease.
The Landlord covenants that, if the Tenant shall duly keep and perform all the terms and conditions hereof, the Tenant shall peaceably and quietly have, hold and enjoy the premises for the term aforesaid, free from interference from the Landlord or anyone claiming by, through or under the Landlord, subject however to ground leases, underlying leases and mortgages as hereinbefore described, and to the lien, rights and estate by virtue of unpaid taxes of any government having jurisdiction of the premises of which the herein premises are a part. Landlord shall permit the Tenant to have access to the premises 24-hours-a-day, seven-days-a-week.
ARTICLE TWENTY-NINE
SECURITY DEPOSIT
(a) On or before October 15, 2004, the Tenant shall deposit with the Landlord the sum of Six Hundred Fifty Thousand Three Hundred Ninety and 00/100 Dollars ($650,390.00) to secure the faithful performance by the Tenant of all the terms, conditions, covenants and agreements of this lease, and to make good to the Landlord any damage which it may sustain by reason of any act or omission of the Tenant. Following the Landlord’s receipt of the installment of rent payable hereunder on October, 1, 2006, and provided that, as of such date, the Tenant is not in default in the payment of any amount due hereunder and no Event of Default is then outstanding under the Lease, the amount of Security Deposit held by Landlord pursuant to this Article shall be reduced to Two Hundred Fifty Thousand Dollars ($250,000.00), with Landlord refunding the balance ($400,290.00) to the Tenant. The Landlord shall segregate the said security deposit as a trust fund not to be mingled with other funds of the Landlord, and if, during the term of this lease, the Landlord shall sell, exchange or lease the entire building, subject to this lease, or, being the lessee thereof, shall assign its lease, the Landlord shall have the right to pay or transfer the said deposit to such grantee, lessee, or assignee, as the case may be, and, upon the transfer of the security to the grantee, lessee or assignee and the assumption by such party of the Landlord’s obligations hereunder (a copy of which shall be delivered to the Tenant), the Landlord shall be released from all responsibility and liability in connection therewith, and the Tenant will look solely to said grantee, lessee, or assignee for its return. If the aforesaid security deposit shall be deposited with a bank or trust company, savings bank or savings and loan association, the Landlord shall advise the Tenant of the name and address thereof. The Tenant shall not be entitled to the payment of any interest on the aforesaid security deposit except to the extent earned, and from which the Landlord shall deduct the amount equal to 1% of the deposit, to which the Landlord shall be entitled as administration expense. The net amount of interest shall be added to the amount of the deposit. The Tenant’s interest in said deposit shall not be assigned or encumbered without the written consent of the Landlord and neither the Landlord nor its successors or assigns shall be bound by any such attempted assignment or attempted encumbrance, and within sixty (60) days after the expiration of the term, the amount of said deposit shall be repaid to the Tenant, less any proper charges against the same, as hereinabove or hereinafter provided. If the Tenant shall at any time be in default with respect to any payment of rent or of additional rent or of any other payment due from the Tenant to the Landlord under this lease, or if the Landlord shall be damaged by any negligent or willful act or omission of the Tenant the Landlord may, at its option and after notice to the Tenant, apply such portion of said deposit as may be adequate to cure such default or to make good such damage, including, but not by way of limitation, interest, costs, fees and other expenses, paid or incurred by the Landlord, and thereafter such portion so applied shall be free from any claim by the Tenant for its return. If the Landlord shall re-enter, pursuant to the provisions of this lease (other than in the event of insolvency in which event the provisions of Article TWENTY-THREE of the lease shall apply), and shall re-let the premises for its own account, the entire said deposit shall immediately be and become the absolute property of the Landlord, as fixed, liquidated and agreed damages, and not as a penalty, it being impossible in such event to ascertain the exact amount of the damage which the Landlord may thus sustain, but unless the Landlord shall so re-let the premises for its own account, the Landlord shall continue to hold the said deposit, as security for the performance of the Tenant’s obligations, until the date herein expressly fixed for the expiration of the term, and apply the same from time to time to the unpaid obligations of the Tenant, under the same terms and conditions as if the said lease were still in full force and effect. No termination of this lease or re-entry by the Landlord for default of the Tenant shall entitle the Tenant to the return of any part of said deposit, nor shall the retention of such deposit, after such re-entry, impair or otherwise affect the Tenant’s liability to the Landlord during the balance of the term originally provided for. If, at any time, the said deposit shall be diminished, by reason of the Landlord’s having applied any part thereof in accordance with the provisions of this paragraph, the Tenant shall pay over to the Landlord upon demand, the equivalent of such decrease, to be added to said deposit and to be held and applied in accordance with the provisions of this paragraph.
(b) In lieu of delivering cash as the security deposit, the Tenant may deliver to the Landlord an unconditional, irrevocable and transferable letter of credit (such letter of credit or any extension or replacement thereof, being hereinafter referred to as the “L/C”) issued for the account of the Landlord by a New York Clearing House bank acceptable to the Landlord, in
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substance satisfactory to the Landlord, which L/C is to be held by Landlord in accordance with the terms of this Article TWENTY-NINE. The L/C shall designate an address in New York City for presentment. The L/C shall permit the Landlord or its duly authorized representative (1) to draw thereon up to the full amount of the credit evidenced thereby upon presentation of the L/C and a sight draft in the amount to be drawn, together with the Landlord’s written statement that the Tenant is in default beyond any applicable cure or grace period and the Landlord is entitled to draw thereon pursuant to the terms of the lease, and (2) to draw the full amount thereof to be held as cash security pursuant to this Article if the Landlord receives notice from the bank or the Tenant that (x) the L/C is not being renewed, or (y) that the L/C may no longer be presented for payment in New York City, and, in either case, the Tenant has not delivered to the Landlord a replacement cash security deposit or L/C which is presentable in New York City by thirty (30) days prior to the expiration date of the L/C, or the date when presentment may no longer be made in New York City, as the case may be. The L/C shall provide that the bank shall give the Landlord at least 60 days prior written notice (by means of receipted delivery) that the L/C is not being renewed or that the place of presentment is being changed from the address set forth in the L/C. The term of the L/C, as same may be extended, shall not expire prior to the date which is sixty (60) days after the Expiration Date (or sixty days after any subsequent date through which the term of this lease may be extended). The L/C shall be fully transferable by the Landlord and its successors and assigns without charge to the Landlord. If the Landlord presents the L/C for payment, the amount of the L/C shall become the Deposit hereunder and shall be held, applied and returned by the Landlord in accordance with the terms provided by the lease for the holding, application and return of the Deposit.
ARTICLE THIRTY
REAL ESTATE TAX AND PERCENTAGE ESCALATION
(a) Real Estate Tax Escalation. In order to adjust, during the term of this lease, for increases in the expenses of the Landlord for Real Estate Taxes, the Tenant shall pay to the Landlord, as additional rent, commencing on August 1, 2005 and on each August 1 thereafter, Tenant’s Proportionate Share of any increases in such Real Estate Taxes, computed in the manner set forth in this Article.
(b) Percentage Escalation. In order to adjust, during the term of this lease, for increases in the expenses of the Landlord in operating the building, the Tenant shall pay to the Landlord, as additional rent, commencing on August 1, 2005 and on each August 1 thereafter, the amount indicated in Exhibit D as the Percentage Escalation, such amount to be paid in twelve equal monthly installments together with the fixed rent.
(c) Definitions. As used in this Article, the following capitalized words or expressions shall have the meanings ascribed to them below:
“Real Estate Taxes” shall mean the aggregate amount of real estate taxes and any general or special assessments (exclusive of interest and penalties thereon) imposed upon the building and the land upon which it is located (collectively, the “Property”), by Federal, State or local government, including, without limitation, (i) assessments made upon or with respect to any “air” or “development” rights now or hereafter affecting the Property, (ii) any fee, tax or charge imposed by any governmental authority for any vaults or vault space within or outside the boundaries of the Property, (iii) any expenditures for fees and expenses incurred by the Landlord in connection with the review, reduction or challenge of any tentative, final or prospective assessed valuation of the Property, and (iv) any taxes or assessments levied after the date of this lease in whole or in part for public benefits to the Property, including, without limitation, any Business Improvement District taxes and assessments; without taking into account any discount that the Landlord may receive by virtue of any early payment of Real Estate Taxes. If because of any change in the taxation of real estate, any other tax or assessment, however denominated (including, without limitation, any franchise, income, profit, sales, use, occupancy, gross receipts or rental tax) is imposed upon the Landlord or owner of the Property, or the occupancy, rents or income therefrom, in substitution for any of the foregoing Real Estate Taxes, such other tax or assessment shall be deemed part of Real Estate Taxes computed as if the Landlord’s sole asset were the Property. Anything to the contrary notwithstanding, Real Estate Taxes shall not include (v) any transfer taxes applicable upon the sale or transfer of the building, (w) any taxes on the Landlord’s income, (x) franchise taxes, (y) estate or inheritance taxes or (z) any similar taxes, imposed on the Landlord, unless such taxes are levied, assessed or imposed in lieu of or as a substitute for the whole or any part of the taxes, assessments, levies or impositions which now constitute Real Estate Taxes.
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“Base Year” shall mean the fiscal year commencing July 1, 2004 and ending June 30, 2005.
“Base Taxes” shall mean the Real Estate Taxes payable during the Base Year.
“Tax Year” shall mean the twelve month period following the Base Year and each succeeding twelve month period thereafter, any portion of which occurs during the term of this lease.
“Tax Statement” shall mean a statement setting forth a comparison of the Real Estate Taxes for a Tax Year with the Base Taxes.
“Tenant’s Proportionate Share” shall mean 0.1035.
(d) Real Estate Taxes. (1) If the Real Estate Taxes for any Tax Year exceed the Base Taxes, the Tenant shall pay, as additional rent, an amount equal to Tenant’s Proportionate Share of such increase (the “Tax Payment”), which amount shall be payable as hereinafter set forth.
| (1) At any time during or after the term, the Landlord may render to the Tenant a Tax Statement showing the amount of the Tax Payment due from the Tenant. On the first day of the month following the delivery of a Tax Statement to the Tenant, the Tenant shall pay to the Landlord a sum equal to one-twelfth (1/12th) of the Tax Payment shown to be due for such Tax Year multiplied by the number of months (and any fraction thereof) of the term of the lease then elapsed since the commencement of such Tax Year. The Tenant shall continue to pay to the Landlord a sum equal to one-twelfth (1/12th) of the Tax Payment shown on such Tax Statement on the first day of each succeeding month until the first day of the month following the month in which the Landlord delivers a new Tax Statement to the Tenant. Promptly after delivery of a Tax Statement to the Tenant, the Landlord shall give notice to the Tenant stating whether the amount previously paid by the Tenant to the Landlord for the current Tax Year was greater or less than the installments of the Tax Payment to be paid for the current Tax Year in accordance with the Tax Statement. If there was a deficiency, the Tenant shall pay the amount of such deficiency as additional rent in accordance with the provisions of Article One hereof. If there shall have been an overpayment, the Landlord shall credit the amount thereof against the next monthly installments of additional rent payable in accordance with the provisions of this Article Thirty. Tax Payments shall be collectible by the Landlord in the same manner as fixed rent. The Landlord’s failure to render a Tax Statement shall not prejudice the Landlord’s right to render a Tax Statement during or with respect to any subsequent Tax Year, and shall not eliminate or reduce the Tenant’s obligation to make a Tax Payment for such Tax Year. |
(e) Statements. Every Tax Statement furnished by the Landlord pursuant to this Article shall be conclusive and binding upon the Tenant unless within 180 days following the receipt of the Statement in question, the Tenant shall notify the Landlord that it disputes the correctness thereof, specifying the particular respects in which the Statement is claimed to be incorrect. If such dispute shall not have been settled by agreement within one hundred twenty days after receipt of the disputed Statement, the dispute shall be submitted to arbitration in New York City in accordance with the rules then obtaining of the American Arbitration Association. Each party shall bear its own costs in connection with such arbitration. Pending the determination of such dispute by agreement or arbitration as aforesaid, the Tenant shall pay the additional rent in accordance with the disputed Tax Statement. If the dispute shall be settled in the Tenant’s favor, the Landlord shall, at its option, promptly refund to the Tenant the amount of the Tenant’s overpayment, or credit the amount of such overpayment against the installments of fixed and additional rent next becoming due and payable under this lease.
(f) Inspection of Books. If the Tenant timely notifies the Landlord that it disputes the correctness of a Tax Statement, the Landlord, upon written request of the Tenant, shall provide the Tenant and/or the Tenant’s independent certified accountants and/or the Tenant’s other professional advisors, reasonable access to review the Landlord’s books and records
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applicable to the building for the Tax Year in question, solely for the purpose of verifying the information contained in the Tax Statement. Such examination shall be made during the Landlord’s regular business hours at the office of the Landlord. The Tenant recognizes the confidential nature of such records and agrees to maintain the information obtained from such examination in strict confidence.
(g) Decreases in Real Estate Taxes. In no event shall any decrease in the Real Estate Taxes in any way reduce the fixed rent or additional rent payable by the Tenant under this lease, except to the extent to which any such decrease shall result in a decrease in the additional rent payable pursuant to this Article; provided, however, that no decrease in Real Estate Taxes shall in any way reduce the additional rent payable on account of the Percentage Escalation. Notwithstanding the above, if Landlord shall receive a refund or reduction of Real Estate Taxes on the premises or building for any period in respect of which Tenant shall have made a Tax Payment based on such Real Estate Taxes, Landlord shall either pay to Tenant, or permit Tenant to credit against subsequent fixed rent and additional rent hereunder Tenant’s share of such refund.
(h) Expiration or Termination of Lease. The expiration or termination of this lease during any Tax Year shall not affect the rights or obligations of the parties hereto respecting any payments of Tax Payments for such Tax Year. Any Tax Statement relating to such Tax Year may be sent to the Tenant subsequent to, and all such rights and obligations shall survive, any such expiration or termination. In determining the amount of the Tax Payment for the Tax Year in which the term of the lease shall expire, the payment of the relevant escalation shall be prorated based on the number of days of the term which fall within such Tax Year. Any payments due under such Tax Statement shall be payable within five (5) days after such Tax Statement is sent to the Tenant.
ARTICLE THIRTY-ONE
SERVICES
(a) For purposes of this lease, “Business Hours” shall mean normal building operation hours of eight a.m. to six p.m. and “Business Days” shall mean Monday through Friday, except for those days designated as legal holidays by the Federal or State government or by the unions now or hereafter representing the Landlord’s building personnel.
(b) During the term of this lease, the Landlord shall furnish during Business Hours on Business Days passenger and freight elevator service and sufficient heat during the cold season to heat the premises, and, if applicable, condenser water from the Landlord’s cooling tower equipment located on the roof of the building from April 15th through October 15th. The Landlord shall maintain in service and available for the non-exclusive use of the Tenant at least one passenger elevator at all times. The Landlord shall maintain in service and available for the non-exclusive use of the Tenant at least one freight elevator at all times, which elevator shall be located in the portion of the tenth floor in the building known as 160 Varick Street. If the Tenant requires freight elevator service, heat, or, if applicable, condenser water, on non-Business Days or during non-Business Hours on Business Days, the Landlord will furnish the additional requested service upon notice of the Tenant’s need therefor. Such notice may be written or oral and shall be given prior to 2 p.m. on the day upon which such service is requested or by 2 p.m. of the last preceding Business Day if service is requested on other than a Business Day. The Tenant will pay for any overtime freight elevator service, heat, and, if applicable, condenser water, at the respective prevailing rates per hour as established from time to time by the Landlord for such services at the building or in the buildings of the Landlord, generally, for each hour during which the additional service is supplied. Notwithstanding the preceding sentence, the Landlord agrees that during the period ending on the earlier of (i) December 31, 2004 or (ii) the completion of the construction and installation of the 11th Floor Initial Improvements, with respect to the overtime freight elevator service, the Landlord will charge the Tenant the Landlord’s actual cost for providing such service (rather than the Landlord’s then prevailing rate for supplying such service). All charges for such overtime service shall constitute additional rent and shall be payable within ten business days after presentation of a bill, and in the event of default of payment therefor, the Landlord may refuse further service and the Landlord shall have all remedies available to it for collection herein specified with respect to rent. The failure on the part of the Landlord to furnish elevator service, heat, or, if applicable, condenser water, if due to breakdowns, repairs, maintenance, strikes or other causes beyond the control of the Landlord, shall involve no liability on the part of the Landlord and shall not constitute an actual or constructive eviction, nor relieve the Tenant from any of its obligations under this lease nor entitle the Tenant to an abatement of rent.
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(c) The Tenant shall maintain, at its own cost and expense, all air-conditioning equipment now or hereafter serving the premises, using a contractor approved by the Landlord. If the Tenant fails to make any necessary repairs, the Landlord may perform the same for the account of the Tenant in accordance with the provisions of this lease. Landlord represents and warrants that the air-conditioning equipment shall be delivered in good working order as of the Commencement Date.
(d) Provided the Tenant shall keep the premises in order, the Landlord, at the Landlord’s expense, shall cause the premises, excluding any portions thereof used for the storage, preparation, service or consumption of food or beverages, to be cleaned on Business Days substantially in accordance with the Specifications set forth as Schedule B annexed hereto. The Tenant, at the Tenant’s sole cost and expense, shall cause all portions of the premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner satisfactory to the Landlord, and to be exterminated against infestation by vermin, rodents or roaches regularly and, in addition, whenever there shall be evidence of any infestation. Any such extermination shall be done at the Tenant’s sole cost and expense and by contractors reasonably approved by the Landlord. If the Tenant shall perform any additional cleaning services in addition to the services provided by the Landlord, the Tenant shall employ such cleaning contractor providing services to the building on behalf of the Landlord or such other cleaning contractor as shall be reasonably approved by the Landlord. The Tenant shall, at its sole cost and expense, comply with all present and future laws, ordinances, regulations and requirements of the City, State or Federal Government or any agency having jurisdiction over the building, or any reasonable rules which the Landlord may impose, with respect to the recycling or sorting of refuse and rubbish. The Landlord reserves the right to refuse to collect or accept from the Tenant any refuse or rubbish which is not separated and sorted as required and to require the Tenant to arrange for such collection, at the Tenant’s sole cost and expense, using a contractor reasonably satisfactory to the Landlord. The Tenant shall indemnify the Landlord from all liability arising from the Tenant’s failure to comply with the provisions of this Article. The Tenant shall pay to the Landlord the cost of removal of any of the Tenant’s refuse and rubbish from the building which exceeds normal office requirements.
(e) The Landlord shall provide to the premises hot and cold water for ordinary drinking, office pantry, cleaning and lavatory purposes. If the Tenant uses or consumes water for any other purposes or in unusual quantities (of which fact the Landlord shall be the sole judge), the Landlord may, at the Tenant’s expense, install a water meter or require the Tenant to install a meter. The Tenant shall thereafter maintain the meter in good working order at the Tenant’s expense and the Tenant shall pay for water consumed as shown on said meter as additional rent as and when bills are rendered at 110% of the Landlord’s cost therefor. In default in making such payment, the Landlord may pay such charges and collect the same from the Tenant. The Tenant shall pay the New York City sewer rents, charges or any other tax apportioned to the Tenant’s metered consumption of water at the premises. The apportionment of the sewer rent to the premises shall be made in accord with the measurement or apportionment of water consumed at the premises as provided herein. The sewer rents shall be billed with the water charges and shall constitute additional rent.
(f) The Landlord may suspend any service which it is required to provide hereunder, if it should become necessary or proper so to do, at any time. The Landlord shall restore such service within a reasonable time, making due allowance for labor troubles, acts of God, or any cause beyond the Landlord’s control. Should the Tenant be in default in the payment of any rent hereunder, after any applicable cure or grace period, the Landlord may, upon not less than three days’ notice, and without diminution of the liability of the Tenant hereunder, and without constituting an eviction, constructive or otherwise, suspend or refuse the Tenant freight and passenger elevator service and should the Tenant, after notice, violate the provisions of Rule 21, the Landlord may, without any diminution of such liability or constituting such eviction, suspend or refuse the Tenant freight elevator service until the conditions in violation of Rule 21 have been fully remedied.
(g) The Landlord shall be entitled to refuse to furnish passenger or freight elevator service in connection with any sale at auction of the Tenant’s fixtures, machinery, stock in trade and other property or a sale in any other manner of all or substantially all of such property unless
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the Landlord shall have been given not less than two days’ notice of the intention to hold the auction or other sale and unless the Landlord shall be given an undertaking by a person, firm or corporation of satisfactory financial resources wherein the Landlord shall be indemnified against (i) all expense incurred by the Landlord in connection with the removal by purchasers of any property sold to them at the auction or other sale, (ii) all expense for removal or storage of any property sold at the auction or other sale which is not removed by the purchaser within two days following the sale, and (iii) all expenses which the Landlord may incur for the removal of property not sold and waste and rubbish from the premises.
ARTICLE THIRTY-TWO
INSURANCE
(a) The Tenant shall obtain and keep in full force and effect during the term of this lease, at the Tenant’s sole cost and expense, (i) a policy of commercial general public liability and property damage insurance on an occurrence basis, with a broad form contractual liability endorsement and a completed operations endorsement with minimum limits with a combined single limit with respect to each occurrence in an amount of not less than $5,000,000 for injury (or death) to persons and damage to property; (ii) an “all risk” insurance policy, with extended coverage, covering all of Tenant’s personal property and alterations for 100% of the replacement cost thereof, as well as business interruption insurance adequate to cover the Tenant’s loss of income as a result of a loss sustained by a peril covered under the policy; (iii) Worker’s Compensation Insurance, as required by law; and (iv) such other insurance in such amounts as Landlord may reasonably require from time to time. Such policies shall provide that the Tenant is named as the insured. Landlord and any managing agent, lessors and mortgagees (whose names have been furnished to the Tenant) shall be named as additional insureds, as their respective interests may appear. The Tenant shall have the right to insure and maintain the insurance coverages required under this Article under blanket insurance policies covering other premises occupied by the Tenant so long as such blanket policies comply as to terms and amounts with the requirements set forth in this Article; provided that, upon request, the Tenant shall deliver to the Landlord a certificate from the Tenant’s insurer evidencing the portion of such blanket insurance allocable to the premises.
(b) All insurance required to be carried by Tenant hereunder shall be written in form and substance reasonably satisfactory to the Landlord and issued by a reputable and independent insurer permitted to do business in the State of New York, and rated in Best’s Insurance Guide (or any successor thereto) as having a general policyholder rating of not less than “A” and a financial rating of at least “XIII”. The policy required to be carried pursuant to paragraph (a) (i) above shall contain a provision that (1) the policy shall be non-cancelable with respect to the Landlord and such managing agents, lessors and mortgagees (whose names and addresses have been furnished to the Tenant) unless thirty (30) days’ prior written notice shall be given to the Landlord by certified mail, return receipt requested, which notice shall contain the policy number and the name of the insured and additional insureds, and (2) no act or omission of the Tenant shall affect or limit the obligation of the insurer to pay the amount of any loss sustained. Certificates of insurance (including endorsements and evidence of the waivers of subrogation required pursuant to Article SIXTEEN hereof), or evidence of renewal of such coverage, shall be delivered to the Landlord prior to the Commencement Date (or any earlier entry upon the premises by the Tenant or any of the Tenant’s employees, agents or contractors prior to the Commencement Date), and at least thirty (30) days prior to the expiration of such policy. If the Tenant fails to obtain or keep in force the insurance required by this Article, or to pay the premiums thereof, provided the Tenant is afforded written notice of the Landlord’s intention to pay such premium ten (10) days prior thereto, in addition to all other rights the Landlord may have under this lease, the Landlord may, from time to time, and as often as such failure shall occur, pay the premiums therefor, and any and all sums so paid for insurance by the Landlord shall be and become, and are hereby declared to be, additional rent under this lease and shall be due and payable on demand.
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ARTICLE THIRTY-THREE
DEFAULT UNDER OTHER LEASES
If the Tenant, before the Commencement Date shall default in any covenant of any other lease with the Landlord, beyond any applicable cure or grace period, then at the option of the Landlord this lease shall not go into effect and the Tenant shall have no right to possession of the premises; and the Tenant agrees to reimburse the Landlord upon demand for any expense or loss that may be suffered due to the Tenant’s default.
ARTICLE THIRTY-FOUR
WORK TO BE DONE BY LANDLORD
The Landlord shall not be required to furnish any work or materials to the premises, except as expressly provided in the Work Letter attached as EXHIBIT C to this lease, if any. In case the Landlord is prevented from making any repairs, improvements, decorations or alterations, installing any fixtures or articles of equipment, furnishing any services or performing any other covenant herein contained to be performed on the Landlord’s part, due to the Landlord’s inability to obtain, or difficulty in obtaining, labor or materials necessary therefor, or due to any governmental rules and regulations relating to the priority of national defense requirements or strikes, or due to labor troubles, accident or due to any other cause beyond the Landlord’s control, the Landlord shall not be liable to the Tenant for damages resulting therefrom, nor (except as expressly otherwise provided in Article SIXTEEN hereof in respect of damage to the premises due to fire), shall the Tenant be entitled to any abatement or reduction of rent by reason thereof, nor shall the same give rise to a claim in the Tenant’s favor that such failure constitutes actual or constructive, total or partial, eviction from the premises.
ARTICLE THIRTY-FIVE
CONSENT TO JURISDICTION
This lease shall be governed in all respects by the laws of the State of New York. The Tenant irrevocably consents and submits to the jurisdiction of any Federal, State, or county court sitting in the State of New York in any action or proceeding arising out of this lease and/or the use and occupation of the premises. The Tenant agrees that any action or proceeding brought by the Tenant against the Landlord in respect of any matters arising out of or relating to this lease may only be brought in the State of New York, County of New York. The Tenant hereby irrevocably designates its chief financial officer at 2315 Broadway, New York, NY 10024 to accept service of process on the Tenant’s behalf and agrees that such service shall be deemed sufficient. If the Tenant is not a New York partnership or corporation or a foreign corporation qualified to do business in the State of New York, it shall designate in writing, an agent in New York County for service under the laws of the State of New York.
ARTICLE THIRTY-SIX
TENANT LIABILITY
(a) If more than one tenant is named as the tenant under this lease, each of the named tenants shall be jointly and severally liable for the performance of all of the terms, covenants and agreements on the Tenant’s part to be performed under this lease.
(b) If the Tenant (or any permitted assignee of Tenant) is a partnership (or is comprised of two or more persons, individually or as co-partners of a partnership or shareholders of a professional corporation) the following provisions shall apply to each tenant: (i) the liability of each of the partners comprising the Tenant shall be joint and several; (ii) each of the parties comprising the Tenant hereby consents in advance to, and agrees to be bound by, any modification, termination, discharge or surrender of this lease which may hereafter be made and by any notices, or other communications which may hereafter be given by the Tenant or any of the parties comprising the Tenant; (iii) all statements, notices or other communications given to the Tenant or to any of the parties comprising the Tenant shall be deemed given to the Tenant and all parties; (iv) if the Tenant shall admit new partners, all such new partners shall, by their admission to the Tenant, be deemed to have assumed performance of all of the terms, covenants and conditions of this lease on Tenant’s part to be observed and performed, and (v) the Tenant shall give to the Landlord notice of the admission of any new partners, and upon demand of the Landlord, such new partners shall execute and deliver to the Landlord an agreement in form satisfactory to the Landlord, wherein each new partner shall assume performance of all of the terms, covenants and conditions of this lease on Tenant’s part to be performed (but the Landlord’s failure to request such an agreement nor the partners failure to deliver such an agreement shall relieve the partner of its liability hereunder).
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(c) If the Tenant is a partnership, it shall not convert to or become a corporation, limited liability company, registered limited liability partnership or any other form of business organization (such entity being referred to as a “Successor Entity”) , without the Landlord’s prior written consent. The Landlord shall not unreasonably withhold its consent to the Tenant’s conversion to a Successor Entity provided that (i) the Tenant shall cause each partner of the Tenant to execute and deliver to the Landlord an agreement, in a form reasonably satisfactory to the Landlord, pursuant to which each partner of the Tenant agrees to remain personally liable jointly and severally for all of the terms, covenants and conditions of the lease that are to be performed by the Successor Entity; (ii) the Successor Entity shall have a Net Worth (as hereinbefore defined) of not less than the Net Worth of the Tenant on the date of execution of the lease; (iii) no Event of Default has occurred and is continuing hereunder; (iv) the Successor Entity succeeds to all of the business and assets of the Tenant; (v) the Tenant shall deliver to the Landlord such documentation as may be reasonably required by the Landlord to evidence compliance with the requirements set forth above; and (vi) the Tenant shall reimburse the Landlord for all reasonable costs and expenses, including, without limitation, attorneys’ fees, that may be incurred by the Landlord in connection with the conversion of the Tenant to a Successor Entity.
ARTICLE THIRTY-SEVEN
ADJACENT EXCAVATION-SHORING
If an excavation shall be made upon land adjacent to the premises, or shall be authorized to be made, the Tenant shall afford to the person causing or authorized to cause such excavation, license to enter upon the premises for the purpose of doing such work as said person shall deem necessary to preserve the wall or the building from injury or damage and to support the same by proper foundations without any claim for damages or indemnity against the Landlord, or diminution or abatement of rent.
ARTICLE THIRTY-EIGHT
FAILURE TO GIVE POSSESSION
In the event the Landlord, for any reason, shall be unable to give possession of the premises by the date set forth in this lease for the commencement of the term, this lease shall nevertheless continue in full force and effect and the Landlord shall tender and the Tenant shall take possession of said premises under the terms of this lease as soon as the Landlord shall have tendered possession thereof to the Tenant; the rent, however, to begin on the date upon which such possession is tendered to the Tenant. This is intended to constitute an “express provision to the contrary” within the meaning of Section 223-a of the New York Real Property Law. No such failure to give possession on the date set forth in this lease for the commencement of this term shall affect the validity of this lease or give rise to any claim for damages by the Tenant or claim for rescission of this lease, nor shall the same be construed in any way to extend the term of this lease.
ARTICLE THIRTY-NINE
BROKER
The Tenant represents and warrants to the Landlord that all of the Tenant’s negotiations respecting this lease which were conducted with or through any person, firm or corporation, other than the officers of the Landlord, were conducted through USI Real Estate Brokerage Services, Inc., (the “Broker”). The Landlord agrees to pay the commission due to the Broker pursuant to the terms of a separate agreement. Landlord and Tenant agree to indemnify and hold one another harmless from and against all demands, liabilities, losses, causes of action, damages, costs and expenses (including, without limitation, attorneys’ fees and disbursements) suffered or incurred in connection with any claims for a brokerage commission, finder’s fee, consultation fees or other compensation arising out of any conversations or negotiations had by the party against whom indemnification is claimed with any broker or other party except for the Broker.
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ARTICLE FORTY
RENT RESTRICTIONS
If at the commencement of, or at any time or times during the term of this lease, the fixed rent or additional rent reserved in this lease shall be or become uncollectible by virtue of any law, governmental order or regulation, the Tenant shall enter into such agreements and take such other steps (without additional expense to the Tenant) as the Landlord may request and as may be legally permissible to permit the Landlord to collect the maximum amounts which may from time to time be legally collectible while such restrictions are in effect (and not in excess of the amounts reserved for under this lease). Upon the termination of such rent restrictions (a) the fixed rent and additional rent shall become and thereafter be payable in accordance with the terms of this lease, and (b) the Tenant shall pay to the Landlord, if legally permissible, an amount equal to (i) the rent which would have been paid during the period had such restrictions not been in effect, less (ii) the rents which were paid by the Tenant to the Landlord during the period such restrictions were in effect.
ARTICLE FORTY-ONE
CERTIFICATES BY TENANT
At any time and from time to time, the Tenant, for the benefit of the Landlord or any other entity specified by the Landlord, within ten business days after written request, shall deliver to the Landlord a duly executed and acknowledged certificate, certifying that this lease is not modified and is in full force and effect (or if there shall have been modifications that the same is in full force and effect as modified and stating the modifications); the commencement and expiration dates of the lease; the dates to which rent and additional rent have been paid; whether or not, to the best knowledge of the Tenant, there are any existing defaults on the part of either the Landlord or the Tenant in the performance of the terms, covenants and conditions of the lease to be performed by such party, and if so, specifying the default; and such other information as the Landlord may reasonably request with respect to this lease. The Landlord shall, upon fifteen business days’ request, deliver for the benefit of the Tenant, a duly executed and acknowledged certificate as to the matters to be certified by the Tenant hereunder.
ARTICLE FORTY-TWO
RESTRICTIONS ON TENANT’S USE
(a) The Tenant agrees that the value of the premises and the building of which the premises form a part and the reputation of the Landlord will be seriously injured if the premises are used for any obscene or pornographic purposes or any sort of commercial sex establishment. The Tenant covenants and agrees not to sell, display or post, or knowingly allow to be sold, displayed or posted any obscene or pornographic material on the premises. The Tenant agrees that if at any time the Tenant violates any of the provisions of this Article, such violation shall be deemed a breach of a substantial obligation of the terms of this lease.
(b) The Tenant covenants and agrees that during the term of this lease, it will not use the premises or any part thereof, or permit the premises or any part thereof to be used (1) for banking, trust company or safe deposit business; (2) as or by a commercial or savings bank, a trust company, a savings and loan association, a loan company, or a credit union; (3) for the sale or travelers checks, money orders and/or foreign exchange; (4) as a restaurant and/or bar and/or for the sale of soda and/or beverage and/or sandwiches and/or ice cream and/or baked goods; (5) by the United States Government, the City or State of New York, any foreign government, the United Nations or any agency or department of any of the foregoing, or any other person or entity having sovereign or diplomatic immunity; (6) as an employment agency, search firm or similar enterprise, school or vocational training center (except for the training of employees of the Tenant intended to be employed at the premises); (7) as a barber shop or beauty salon; or (8) as a diagnostic medical center and/or for the practice of medicine.
ARTICLE FORTY-THREE
HAZARDOUS MATERIALS
The Tenant shall not cause or permit any Hazardous Materials to be used, stored, transported, released, handled, produced or installed in, on or from the premises or the building. “Hazardous Materials” shall mean any flammable, explosives, radioactive materials, hazardous wastes, hazardous and toxic substances, asbestos or any material containing asbestos, or any
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other substance or material which would be defined as a hazardous or toxic substance, contaminant, or pollutant, or otherwise regulated by any Federal, state or local environmental law, rule or regulation, including without limitation, the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended. In the event of a violation of the foregoing provisions of this Article, the Landlord may, without notice and without regard to any grace period contained in this lease, take all remedial action deemed necessary by the Landlord to correct such condition and the Tenant shall reimburse the Landlord for the cost thereof, upon demand, as additional rent. Nothing contained herein shall prevent the Tenant from maintaining customary and normal cleaning supplies and office equipment and supplies, provided such items are used and stored in compliance with the requirements of all applicable laws.
ARTICLE FORTY-FOUR
MISCELLANEOUS
(a) This lease contains the entire agreement between the parties and all prior negotiations and agreements are merged into this lease.
(b) This lease may not be recorded.
(c) The covenants, conditions and agreements contained in this lease shall bind and inure to the benefit of the Landlord and the Tenant and their respective heirs, executors, administrators, successors and permitted assigns.
(d) If any term, covenant or provision of this lease, or the application thereof, shall be held invalid or unenforceable, the remainder of this lease, or the application thereof to situations other than that as to which it is invalid or unenforceable, shall not be affected thereby, and each term, covenant and provision shall be valid and enforceable to the fullest extent permitted by law.
(e) The submission of this lease for execution by the Tenant shall not be binding upon the Landlord or the Tenant unless and until both the Landlord and the Tenant have executed and unconditionally delivered a fully executed copy of this lease to each other.
(f) The captions in this lease are inserted for convenience only and shall not define, limit or describe the scope of the provisions to which any of them apply. The use of any pronoun referring to either of the parties to this lease shall be construed to include any or no gender and any number.
(g) If the Tenant is a corporation, the person executing this lease on behalf of the Tenant represents and warrants that the Tenant is duly incorporated and, if applicable, is duly qualified and authorized to conduct business in the State of New York, and the person executing this lease on behalf of the Tenant has been duly authorized to do so. The Tenant shall provide the Landlord with evidence of its due incorporation and qualification, if applicable, upon request of the Landlord.
ARTICLE FORTY-FIVE
CONSTRUCTION OF 11th OFFICE IMPROVEMENTS
It is agreed that the Tenant will modify and improve the premises on the 11th floor to prepare them for the Tenant’s initial occupancy (the “the 11th Floor Initial Improvements”), which Initial Improvements shall be performed in accordance with the terms of this lease. The Landlord will reimburse the Tenant for the Initial Improvements up to a maximum of $475,230.00 (the “Improvement Allowance”) over and above the items included in the Work Letter (and the Tenant will pay the cost of the Initial Improvements in excess of such amount), all in accordance with, and subject to the limitations set forth in subparagraphs (a) through (e) below:
(a) The 11th Floor Initial Improvements for which reimbursement may be sought are the costs of constructing the 11th Floor Initial Improvements. Such costs shall not include any telephone systems, computer systems, furniture and decorations, but may include carpeting, wall coverings, window blinds and telephone and data cabling.
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(b) The Landlord shall reimburse the Tenant from time-to-time (but not more often than semi- monthly) for work done in connection with the installation and construction of the Tenant’s 11th Floor Initial Improvements, up to an aggregate maximum reimbursement of $475,230.00, within fifteen (15) days following receipt of the following:
| (i) a request for payment of the Improvement Allowance signed by an officer of Tenant, specifying the work for which reimbursement is being sought, which shall be accompanied by a certificate signed by an officer of the Tenant certifying that the payment requested in the invoice has been paid in full and that the specific work for which the reimbursement is being sought have been completed substantially in conformance with the plans therefor which were approved by the Landlord and that such work has been completed in a good and workmanlike manner; |
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| (ii) copies of invoices from the vendors, supplier, or contractor, or, if applicable, the general contractor, evi-dencing the amount for which payment or reimbursement is sought, such invoices, if submitted for reimbursement, to be marked “paid in full” by such vendor, supplier or contractor (or, in lieu thereof, the Landlord shall be furnished other documentation satisfactory to the Landlord evidencing payment in full); |
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| (iii) a certificate from the Tenant’s architect stating that (x) such work for which reimbursement is being sought has been fully completed substantially in accordance with the final plans as approved by the Landlord, and (y) that such work has been completed in a good and workmanlike condition; |
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| (iv) lien waivers from each contractor(s) or subcontractor(s) to the extent of the amount to be paid to such parties, which waivers may contain a condition that the effectiveness of such waivers shall be subject to the payment to the applicable contractor(s) or subcontractor(s) of the amount of the invoice accompanying such waiver. The Landlord shall not be obligated to reimburse the Tenant for any invoice which is not accompanied by such a waiver; and |
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| (v) Notwithstanding the foregoing, the Landlord shall retain an amount equal to ten percent (10%) of the Improvement Allowance until the Tenant has submitted to the Landlord final permits required in connection with the construction of the 11th Floor Initial Improvements by any governmental department or agency having jurisdiction thereof, together with a final, unconditional sign-off from the New York City Department of Buildings for such work. |
(c) It is understood and agreed that the Landlord shall have no responsibility for the performance of the contrac-tor installing the 11th Floor Initial Improvements (including matters of quality or timeliness), and in the event that for any reason the 11th Floor Initial Improvements are not completed in a timely fashion and/or there is any delay in the date on which the premises are ready for occupancy by the Tenant for the purposes of conducting business, this lease shall nevertheless continue in full force and effect, and, except in the circumstances set forth below and to the extent set forth below, the Tenant shall have no right, remedy or claim (including any claim for actual, punitive or consequential damages) against the Landlord.
(d) The Landlord’s maximum liability under this Article shall not exceed $475,230.00. If the actual cost of the 11th Floor Initial Improvements shall exceed the amount of the Improvement Allowance, the entire amount of the excess cost shall be paid solely by the Tenant and the Landlord shall be under no obligation to pay such excess.
(e) Within thirty (30) days after completion of the 11th Floor Initial Improvements, the Tenant shall deliver to the Landlord general releases and waivers of lien from the general contractor and from all contractors, subcontractors and materialmen not working through the general contractor, if any, involved in the performance of the 11th Floor Initial Improvements and the materials furnished in connection therewith (unless the same were previously furnished pursuant to subparagraph (c)(iv) above), and a certificate from the Tenant’s independent licensed architect certifying that, in its opinion, the 11th Floor Initial Improvements have been performed in a good and workmanlike manner and substantially completed in accordance with the final plans, as approved by the Landlord.
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(f) The Tenant expects that the total cost of the 11th Floor Initial Improvements will exceed the amount of the Improvement Allowance. The Landlord is willing to lend the Tenant up to an additional $302,020.00 (the “Improvement Loan”) for the purpose of reimbursing the Tenant for the cost of the Initial Improvements in excess of the Improvement Allowance. The obligation of the Landlord to make the Improvement Loan to the Tenant shall be subject to the conditions set forth in paragraphs (a) through (e) of this Article. The Tenant shall not be required to pay interest on the Improvement Loan. The Tenant shall repay the principal of the Improvement Loan by paying the Landlord $6,292.09 on the first day of each month commencing with December, 2005 and ending with December, 2008. All such payments shall constitute additional rent, and in the event of the occurrence of an “Event of Default” under this lease, the unpaid balance for the Improvement Loan shall be immediately due and payable. In the event that the Tenant does not borrow the full amount of the Improvement Loan, then the amount to be repaid to the Landlord shall be similarly reduced, by first crediting such unborrowed amount against the last monthly payment to be made by the Tenant (December, 2008) and, to the extent necessary, against the immediately preceding monthly payments.
ARTICLE FORTY-SIX
COMBINED FLOORS
(a) The premises leased hereunder are located on the 11th and 12th floors in the buildings formerly known as 160 Varick Street and 170 Varick Street, New York, New York. Presently, the 11th and 12th floors in each of 160 Varick Street and 170 Varick Street are operated as though they are separate floors in each building. The Landlord expects to physically combine some or all of the floors of 160 Varick Street and 170 Varick Street into a single building. Until such time as the buildings are physically combined, all references herein to the “building” shall be deemed to refer to each of 160 Varick Street or 170 Varick Street, as the case may be, and as long as the Landlord receives a separate real estate tax bill for each building, the definition of “Real Estate Taxes” in Article THIRTY of the lease shall refer to the combined tax bills for both buildings, the parties acknowledging that “Tenant’s Proportionate Share” has been calculated on the basis of the combined building.
(b) In connection with the combination and renovation of the buildings, the Landlord reserves the right to combine the 11th and 12th floors of each of the buildings so as to constitute a single floor. In connection therewith, the Landlord reserves the right to do construction work on the floor on which the premises are located, such work to primarily be performed in the core area of the combined floor and the areas immediately adjacent thereto. The Landlord may, in the course of such work reconfigure the core area as it, in its sole discretion deems desirable, subject to the terms of this lease. As part of such work, the Landlord may remove freight elevators, so long as at least one freight elevator is operational and servicing the combined building and the premises during the term of the lease. The Landlord may also remove one of the fire staircases, provided that the Landlord shall provide sufficient access to fire stairs at all times during the term of the lease so as to comply with all Legal Requirements. If any freight elevator(s) or fires stairs are removed, the Landlord may, at its sole option, either (i) close up any or all of the openings for the elevator(s) or fire stairs to form a contiguous wall surface with the existing wall, (ii) use some or all of the additional space resulting from the removal of the elevators or fire stairs for the construction of bathrooms or mechanical equipment rooms, shaft space, or other space for other building systems or services, or (iii) if the additional space is located within the premises, allow the Tenant to incorporate some or all of such additional space into the premises for the remainder of the term at no additional rent. In addition, if the Landlord removes the fire stairs which are located adjacent to the bank of two passenger elevators, the Landlord may, on any combined floor which is not wholly occupied by a single occupant (including any floor which is partially sublet) use any or all such space for a common corridor, and recapture a portion of the premises to extend the then existing common corridors, so as to provide access to the two remaining sets of fire stairs by means of a common corridor around the core of the building, (the area where the common corridors may be extended are shown on Exhibit E).
(c) If the Landlord combines the 11th and 12th floors in both buildings so as to create single floors, it reserves the right to convert the passenger elevators currently serving both portions of the 11th and 12th floors into two different elevator banks, so that, in the future, not all of the passenger elevators currently serving each of the two portions of the 11th and 12th floors may serve the combined floor. The Landlord shall give the Tenant ninety days prior notice of the creation of separate elevator banks and, if applicable, of its election to create a common corridor so as to provide access to the passenger elevators to all occupants on the combined floor, as more
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particularly described herein. If the Landlord has given the Tenant notice of its election to create a common corridor, it shall be entitled to commence such work immediately upon the expiration of the ninety day notice period. The Tenant agrees to design its premises in such a manner as to accommodate the potential recapture of space to create the common corridors as indicated on Exhibit E. If the Landlord creates different passenger elevator banks, it reserves the right, on any multi-tenanted floor (which, for purposes of this Article shall include any floor which is leased wholly to the Tenant, any portion of which is separately demised to a subtenant or an assignee), to recapture a portion of the premises to create such common corridors, as shown more particularly on Exhibit E annexed hereto. The Landlord shall, at its expense, bear the expense of constructing the demising walls for such common corridor, as well as painting or replacing wall coverings inside the premises, and restoring Tenant’s floor coverings and fixtures in the area adjacent to the demising wall if such restoration is necessary as a result of such construction. The Landlord shall also paint the surface of the demising wall which faces the common corridor. The Tenant shall otherwise bear the expense of relocating its furnishings or any other alterations which may be necessary in the premises as the result of the creation of the common corridor. In the event that the Landlord recaptures all or a portion of the Tenant’s premises to create common corridors, the rent payable by the Tenant and the Tenant’s Proportionate Share shall be proportionately reduced to reflect the reduction in the area of the leased premises. If any elevator bank located within the premises is closed due to the creation of different elevator banks, the Tenant shall not permanently obstruct the openings, so as to prevent the Landlord from restoring service to that floor if deemed necessary or desirable.
(d) The Landlord may elect, at its sole option, to construct new restrooms on the floor, either prior to or following combination of the floors. In connection with such construction, the Landlord reserves the right to recapture a portion of the premises in order to construct the new restrooms or to provide access thereto, as shown on Exhibit E annexed hereto. The Landlord shall provide handicapped accessible facilities in compliance with the requirements of New York City Local Law #58 and the renovated restrooms on any combined floor shall contain no less than the minimum number of toilets needed in order to comply with the New York City Building Code. The restrooms shall be constructed in accordance with Landlord’s building standard specifications. If there is any interruption in use of the restrooms as a result of such renovation, the Landlord shall use reasonable efforts to provide the Tenant with access to temporary bathroom facilities. Prior to renovation of the restrooms, the Landlord shall not reduce the number of toilets in the restrooms currently located on the 11th and 12th floor of the building in which the premises are located.
(e) The Tenant agrees to provide the Landlord with access to the premises in order to perform the work described in this Article and to store such materials in connection therewith. The Landlord agrees to use commercially reasonable efforts to minimize interference with the Tenant’s business in the course of such work, but shall be under no obligation to perform any of this work on an overtime or other premium labor basis. Any work performed by the Landlord pursuant to this Article shall be performed in accordance with all Legal Requirements.
(f) The Landlord agrees that in exercising its rights under this Article, it will consult with the Tenant to obtain the Tenant’s views as to how the changes proposed by the Landlord on the 11th and 12th floors of the building may be made in a way that reduces their possible adverse effect on the Tenant. The Landlord agrees to accommodate the Tenant’s requests to the extent that the Landlord deems them (i) commercially reasonable and (ii) not inconsistent with the Landlord’s objective of combining the two buildings.
ARTICLE FORTY-SEVEN
RENEWAL OPTION
(a) Provided the Tenant is then occupying at least 75% of the premises then being leased hereunder, the Tenant is granted a one-time option to extend the term of this lease for an additional five year period (the “Renewal Term”), which Renewal Term shall commence on the date immediately succeeding the Expiration Date and end on the fifth anniversary of the Expiration Date, provided, however, that (a) this lease shall not have been previously terminated, and (b) no Event of Default shall have occurred and be continuing on either the date the Tenant gives the Landlord written notice of its election to exercise its renewal option or on the commencement of the Renewal Term. The renewal option may be exercised by the Tenant with respect to the entire premises only by giving the Landlord written notice (the “Renewal Notice”) of the Tenant’s election to do so not later than twelve (12) months prior to the Expiration Date,
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TIME BEING OF THE ESSENCE with respect to the giving of such notice. Upon the giving of the Renewal Notice, the Tenant shall have no further right or option to extend or renew the term. The Renewal Term shall be on all of the terms, covenants and conditions contained in this lease, except that the fixed rent shall be determined as set forth in this Article FORTY-SEVEN, and the Landlord shall have no obligation to perform any work in the premises.
(b) In the event the Tenant shall exercise its option to extend the lease for an additional five years, then commencing on the first day of the Renewal Term, the fixed rent payable hereunder shall be equal to the greater of (x) the sum of (i) the fixed rent payable pursuant to Article ONE of this lease, plus (ii) the aggregate amount of additional rent payable pursuant to Article THIRTY of this lease during the twelve-month period immediately prior to the Expiration Date (the “Escalated Rent”), or (y) 95% of the annual fair market rental value for the premises as of nine months prior to the Expiration Date (the “FMRV Rent”). The initial determination of the FMRV shall be made by the Landlord. If the Landlord determines that the Escalated Rent exceeds the FMRV Rent, the fixed rent for the Renewal Term shall be the Escalated Rent. If Landlord determines that the FMRV Rent is greater than the Escalated Rent, the Landlord shall give notice of the Tenant of the proposed FMRV at least ten (10) months prior to the Expiration Date. The parties shall have until eight (8) months prior to the Expiration Date to agree in writing on the FMRV Rent. If the parties are unable to agree on the FMRV Rent on or before such date, each party, at its cost and by giving notice to the other party, shall appoint a real estate appraiser with at least ten years’ continuous full time commercial rental appraisal or leasing experience in the New York City rental market to appraise and set forth the FMRV Rent of the premises. If a party does not appoint an appraiser within ten (10) days after the other party has given notice of the name of its appraiser, the single appraiser appointed shall be the sole appraiser and shall determine the FMRV Rent. If the two appraisers are appointed by the parties as stated in this paragraph, they shall meet promptly and shall be instructed to set the FMRV Rent within thirty (30) days after the second appraiser has been appointed, and if their two appraisals are within ten (10%) percent of each other, the fair market rental value shall be the average of the two appraisals. If the two appraisals are not within ten percent of each other, the appraisers shall attempt to agree upon a third appraiser meeting the qualifications stated in this paragraph within five (5) days after the last day the two appraisers are given to set the FMRV Rent. If they are unable to agree on the third appraiser, either of the parties to this lease, by giving three (3) days’ notice to the other party, can file a petition with the American Arbitration Association, solely for the purpose of selecting a third appraiser who meets the qualifications stated in this paragraph. Each party shall bear half the cost of the American Arbitration Association appointing the third appraiser and of paying the third appraiser and of paying the third appraiser’s fee. None of the appraisers appointed pursuant to this Article shall have represented either party in any capacity within the five year period preceding such appointment.
Within ten (10) days after the selection of the third appraiser, the Landlord’s and the Tenant’s appraiser shall each submit to the third appraiser its estimate of the FMRV Rent. The third appraiser shall conduct such hearings and investigations as he may deem appropriate and shall, not less than two (2) months prior to the Expiration Date choose one of the determinations of the FMRV Rent of the two arbitrators originally selected by the parties and that choice by the third arbitrator shall be binding upon the Landlord and the Tenant. The third appraiser may not select any other rental value for the premises. The determination of the two appraisers, or the third appraiser, as the case may be, shall be in writing and shall be binding upon the Landlord and the Tenant. The appraisers shall not have the power to add to, modify or change any of the provisions of this lease.
(c) In the event that by the commencement of the Renewal Term there has been no agreement between the Landlord and the Tenant and no determination as set forth herein, then until such agreement or determination as set forth herein, the Tenant shall pay fixed rent equal to Landlord’s determination of the FMRV Rent. Within thirty (30) days following the determination of the FMRV Rent, the Tenant shall pay any amount owing to Landlord for such period, or the Landlord shall refund or credit any excess amount paid by Tenant against the installments of fixed rent next becoming due hereunder, as the case may be.
(d) If the Tenant exercises its option to extend the term of this lease for the Renewal Term, then in addition to the fixed rent payable during the Renewal Term (as determined in paragraph (b) above), the Tenant shall also, commencing as of the commencement of the Renewal Term, continue to pay to the Landlord all additional rent payable pursuant to Article THIRTY of the Lease, except that:
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| (i) the term “Base Year” shall mean the fiscal year commencing July 1, 2014 and ending July 30, 2015; |
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| (ii) the term “Subsequent Year” shall mean each 12-month period commencing July 1, 2015 and the anniversaries of such date; |
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| (iii) the date appearing in paragraph (e) of such Article on which the first Comparative Statement is to be sent to the Tenant shall be August 1, 2015; and |
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| (iv) the Percentage Escalation as shown on Exhibit D shall be modified so that, effective as of the first anniversary of the commencement date of the Renewal Term, the Percentage Escalation for such calendar year shall be two and one-half percent (2½%) of the fixed rent payable as of such date (as determined pursuant to paragraph (b) of this Article). As of the anniversary of such date in each succeeding year, the Percentage Escalation shall be cumulatively increased so that the sum of the fixed rent and Percentage Escalation for each succeeding year shall equal one hundred two and one-half percent (102.5%) of the sum of the fixed rent and Percentage Escalation payable during the immediately preceding calendar year. |
ARTICLE FORTY-EIGHT
CANCELLATION OF TENANT’S EXISTING LEASE
The Tenant currently leases the portion of the entire 12th floor of the building pursuant to a lease dated as of July 20, 2000 (the “Existing Lease”). Effective as of July 31, 2004, the Existing Lease is cancelled.
ARTICLE FORTY-NINE
TEMPORARY SPACE
For the period commencing August 1, 2004, and ending October 31, 2004, the Landlord leases to the Tenant the portion of the 7th floor of the Landlord’s building at 304 Hudson Street shown as the cross-hatched area on Exhibit F hereto (the “Temporary Space”) at a fixed rental of $5,203.75 per month. The Tenant’s tenancy in the Temporary Space shall be subject to all of the other terms and conditions set forth in this lease, except that the Tenant shall not be required to pay any amount pursuant to Articles Three, Five, Ten or Thirty hereof with respect to its tenancy in the Temporary Space. In the event that the Landlord fails to complete the work specified in Items Nos. 1,2,3,4,5 or 7 of the Work Letter (Exhibit C) by August 1, 2004, the Tenant may, by written noticed delivered to the Landlord prior to October 1, 2004, elect to continue to occupy the Temporary Space, at the rent and subject to the other conditions set forth herein, for a period extending through the date by which all such Work Letter Items are completed. In the event that the Tenant has not completed the construction and installation of the 11th Floor Initial Improvements (as defined in Article Forty-Five) by September 30, 2004, then the Tenant may, by notice delivered to the Landlord by October 10, 2004, elect to continue to occupy the Temporary Space, at the rent and subject to the other conditions set forth herein, for an additional 30 days.
ARTICLE FIFTY
MUNICIPAL INCENTIVES
Landlord agrees to cooperate with Tenant in Tenant’s effort to negotiate and implement an incentive package with New York City and/or other municipal governmental entities (the “Tenant’s Incentive Package”). The Landlord agrees to execute and deliver any estoppel and other certificates or documentation reasonably and customarily required by such entities and not to unreasonably withhold its consent to any reasonably required modifications to this lease, provided that no such cooperation, certificate, documentation or lease modification shall (a) increase any obligation of Landlord under this lease, (b) adversely affect any right of or benefit to Landlord under this lease, (c) relieve Tenant of any obligations under this lease or (d) change the manner or terms upon which electricity is supplied to the premises. Any and all fees, costs and expenses imposed by any such governmental entity shall be borne solely by Tenant, and Tenant shall reimburse Landlord within twenty (20) days of Landlord’s demand therefor, for any and all reasonable out-of-pocket fees, costs and expenses actually incurred by Landlord in connection with Tenant’s requests and in cooperating with Tenant as provided in this Article including, without limitation, the reasonable cost and expenses of Landlord’s counsel, consultants and professionals.
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ARTICLE FIFTY-ONE
ANTENNA INSTALLATION
(a) The Tenant shall have the right to use a portion of the roof of the building to be mutually agreed upon by the parties (such area to be designated to be referred to as the “Tenant’s Roof Area”), for the installation, operation, maintenance and removal of one dish antenna, not exceeding 12 inches in diameter. There shall be no cost for the maintenance of the dish antenna. The installation of the dish antenna shall be subject to the reasonable approval of the Landlord’s engineers as to the exact location and manner of affixation. All equipment, including all supporting structures, shall fit entirely within Tenant’s Roof Area.
(b) The Tenant shall not install any equipment on the Tenant’s Roof Area or make any alteration, additions or improvement to the Tenant’s Roof Area, nor incur any expense therefor, without having first obtained the written consent of the Landlord therefor, including with respect to the location and placement of any such equipment. The Landlord agrees not to withhold, delay or condition its consent with respect to any equipment necessary for the operation of the antenna. If the Tenant shall desire to install any equipment on the Tenant’s Roof Area or make any alterations, additions or improvements to the Tenant’s Roof Area, the Tenant shall furnish the Landlord with the Tenant’s plans and specifications for the proposed installation, alteration, addition or improvement in reasonably satisfactory detail. Whenever any installations, additions or improvements on or of the Tenant’s Roof Area are made by the Tenant, the Tenant shall not employ or permit to be employed therein any labor which will cause strikes or labor troubles with other employees in the building employed by the Landlord or its contractors. All installations, alterations, additions or improvements shall be made and installed in a good and workmanlike manner and shall comply with all Legal Requirements, and shall conform to any reasonable requirements of the Landlord expressed in its consent for the making of any such installations, alterations, additions, and improvements. The installation shall be done at the sole cost of the Tenant. Any such work once begun shall be completed with all reasonable dispatch, but shall be done at such time and in such manner as not to interfere with the occupancy of any other tenant or the progress of any work being performed by or on account of the Landlord. The Landlord may require that its personnel or contractor be present during the installation and removal of the Tenant’s equipment and the Tenant shall reimburse the Landlord for the reasonable charges actually incurred by the Landlord in connection therewith. Additionally, the Landlord may, at its option, either require that the Landlord’s contractor physically connect the wiring required for the operation of Tenant’s equipment to the building’s electrical system, or require its personnel or contractor to be present when such work is done, and, in either case, the Tenant shall reimburse the Landlord for the reasonable out-of-pocket costs incurred by the Landlord in connection therewith. The Tenant shall have access to Tenant’s Roof Area in order to maintain and repair the equipment 24 hours a day, 7 days a week, and need not be accompanied by a representative or employee of the Landlord for such purposes.
(c) All installations, alterations, additions or improvements, which may be made or installed on or upon the Tenant’s Roof Area shall be removed at the cost and expense of the Tenant upon the expiration or sooner termination of the term of the Lease. The Tenant shall restore and repair, at its own cost and expense, any damage or disfigurement of the Tenant’s roof Area or any other portion of the roof of the building occasioned by any such removals or remaining after such removals, so as to leave the roof of the building in good order and condition. If the Tenant fails to perform any repair or restoration work within twenty days after notice from the Landlord of the need therefor, the Landlord, at its option, may do such restoration and repair and the Tenant will pay the cost thereof upon demand. If any equipment installed by the Tenant on the Tenant’s Roof Area shall not be removed at the expiration or any termination of this lease, the Landlord, at the Landlord’s option, may treat the same as having been irrevocably abandoned, in which case the Tenant shall have no further right, title or interest therein and the Landlord may remove the same, disposing of it in any way which the Landlord sees fit to do, and the Tenant shall, on demand, pay to the Landlord the reasonable expense incurred by the Landlord for the removal thereof, as well as the reasonable cost of any restoration above provided. The Tenant’s obligations under this subparagraph (c) of this Article shall survive for a period of one year following the date of the expiration or sooner termination of the term of this lease.
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(d) The Tenant shall take good care of the Tenant’s Roof Area and shall make, as and when needed, all repairs in or about the roof of the building (including, without limitation, the Tenant’s Roof Area) which are required as a result of (i) Tenant’s installation and operation of its equipment on the Tenant’s Roof Area, and (ii) Tenant’s utilization of the Tenant’s Roof Area and the wear and tear resulting therefrom. All repairs shall be equal in quality to the original roof work. Tenant’s access to the roof for the purposes of making repairs to Tenant’s Roof Area and the roof of the building (as opposed to ordinary maintenance and repair of the antennas) during Non-Business Hours on Business Days or on Non-Business Days shall be subject to the availability of building personnel to accompany Tenant or Tenant’s representative to the roof. Should the Tenant fail to repair any condition in or about the roof of the building which Tenant is required to repair pursuant hereto, within ten days after notice from the Landlord of the condition requiring such repairs, the Landlord may immediately make the required repairs at the expense of the Tenant. The Tenant acknowledges that the Landlord will make Tenant’s Roof Area available to the Tenant in its then “as is” condition. The Landlord reserves the right to require the Tenant to relocate its equipment, if the Landlord deem such relocation reasonably necessary, such relocation to be performed at the Tenant’s cost and expense, provided that any such relocation shall not adversely affect the efficiency and/or utility of the antennas.
(e) The Tenant agrees that its installation of equipment on the Tenant’s Roof Area and its use and operations of such equipment will comply with all Legal Requirements, as well as any requirements imposed by the Landlord’s insurance carrier, including, without limitation, all the laws, regulations and requirements relating to the safety, health and welfare of employees, agents, invitees and others who may from time to time be on the roof of the building in connection with the installation, service, operation and repair of the Tenant’s equipment or its other obligations under the Lease. The Tenant shall be responsible for the payment of any fees and taxes which may be imposed by any governmental agency in connection with the installation and use of such dish antenna. The Tenant has been advised that the Landlord may permit third parties to, and may itself utilize various portions of the building’s roof area (which shall not be within the Roof Top Option Space or the Tenant’s Roof Area) for the installation of microwave dishes, satellite communications equipment, antennae, TV, radio and other communications equipment. The Tenant represents and warrants to the Landlord that use and operation of any dish antenna installed by the Tenant will not interfere with or in any way affect any communications or other equipment previously installed by any other tenant in the building, and the Tenant hereby agrees to indemnify and hold harmless the Landlord from and against any losses, liabilities (including reasonable attorney’s fees), claims, suits or causes of action relating to or arising out of the Tenant’s use of the Roof Area or its use or operation of any antenna. The Landlord shall not be liable to the Tenant for any interference caused by any other communications equipment on the building’s roof.
(f) The dish antenna shall be used by the Tenant in connection with the Tenant’s business operations in the premises and no rights to use the same shall be granted by the Tenant to third parties except as provided in the next sentence. The Tenant shall not have any right or ability to transfer or assign or sublet any right or interest it may have hereunder with respect to the Tenant’s Roof Area or the roof of the building except in connection with the assignment of this lease or the subletting of the premises, in either case, in accordance with the provisions of Article SEVENTEEN.
(g) The Tenant shall pay for all electricity used in connection with the operation of the antennas in accordance with Article TEN of the lease.
(h) In addition to the right to install an antenna, the Tenant shall also have the right to use, and the Landlord shall provide to the Tenant, at no additional cost, such shaft and/or conduit space as may be necessary for connections from the premises to Tenant’s Roof Area.
ARTICLE FIFTY-TWO
TENANT’S RIGHT OF FIRST OFFER
(a) The 10th floor of the 160 Varick Street side of the building is currently vacant, but the Tenant does not wish to lease such space at this time, but wishes to have certain rights to lease all or a portion of such space in the future. Accordingly, if (x) the Landlord leases all or any portion of the 10th floor for a term expiring prior to July 31, 2009 (such space being
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hereinafter referred to as a “First Offer Space”), the Landlord will notify the Tenant of such lease, including the date of expiration of such lease. Subject to the right of the Landlord to extend or renew (with modifications, if the Landlord so chooses) the lease with the lessee (or any successor or assignee) of any First Offer Space, and provided that the Tenant is actually occupying the not less than 75% of the premises in the building leased hereunder, the Tenant shall have the right to lease the any First Offer Space in accordance with the provisions set forth in this Article. Notwithstanding the foregoing, unless the Tenant has delivered to the Landlord a First Notice (referred to in paragraph (b) below), the option rights described in the preceding sentence shall cease and terminate on December 31, 2008.
(b) If the Tenant wishes to lease any First Offer Space, it shall give written notice to the Landlord (the “First Notice”) not later than nine months prior to the expiration date of the term of the lease relating to the First Offer Space in question. Following delivery of the First Notice, the Landlord and the Tenant shall attempt to agree upon the annual fixed rent for the First Offer Space within (30) days after the delivery of the First Notice, and if they are unable to do so, the Tenant shall have the right, at any time during the five-day period immediately following the expiration of such 30-day period, to give the Landlord written notice (the “Second Notice”) that the Tenant irrevocably agrees to lease the First Offer Space in question, under the terms contemplated in this Article, except that the annual fixed rent for such First Offer Space shall be equal to 100% of the annual fair market rental value for such First Offer Space, determined by arbitration, in accordance with the procedures set forth in paragraph (b) of Article FORTY-SEVEN of this lease.
(c) If the lease relating to any of the First Offer Space is terminated prior to the expiration date for such lease, the Landlord will notify the Tenant of the date any such First Offer Space will be available for lease (a “Notice of Early Termination”). The Tenant shall notify the Landlord within thirty (30) days after receipt of the Notice of Early Termination as to whether it wishes to lease such First Offer Space (an “Acceptance Notice”). Following delivery of the Acceptance Notice, the Landlord and the Tenant shall attempt to agree upon the annual fixed rent for the First Offer Space within (30) days after the delivery of the Acceptance Notice, and if they are unable to do so, the Tenant shall have the right at any time during the ten-day period immediately following the expiration of such 30-day period, to give the Landlord written notice (the “Second Notice”) that the Tenant irrevocably agrees to lease the First Offer Space in question, under the terms contemplated in this article, except that the annual fixed rent for such First Offer Space shall be equal to 100% of the annual fair market rental value for such First Offer Space, determined by arbitration, in accordance with the procedures set forth in paragraph (b) of Article FORTY-SEVEN of this lease.
(d) Unless otherwise agreed to by the Landlord and the Tenant, the commencement of the term of this lease with respect to any First Offer Space shall be the later of (i) the 45th day following the date on which such First Offer Space is vacated and surrendered by the prior tenant thereof, or (ii) 10th day after the date on which the Landlord delivers the lease amendment to the Tenant for execution. In the event that by such commencement date term there has been no determination of the annual fixed rent for such Option Space, then until such determination as set forth herein, the Tenant shall pay fixed rent equal to Landlord’s estimate of the fair market rental value. Within thirty (30) days following the determination of the fair market rental value, the Tenant shall pay any amount owing to the Landlord for such period, or the Landlord shall refund or credit any excess amount paid by Tenant against the installments of fixed rent next becoming due hereunder, as the case may be.
(e) TIME SHALL BE OF THE ESSENCE WITH RESPECT TO THE DELIVERY OF ANY FIRST NOTICE, ACCEPTANCE NOTICE OR SECOND NOTICE. If the Tenant fails to timely deliver the First Notice, Acceptance Notice or Second Notice for any First Offer Space, or if the Tenant fails to execute and return, within ten (10) days of receipt thereof, an amendment to this lease providing for the leasing of the First Offer Space in question, the Landlord shall be free to lease such First Offer Space to any third party free of the rights of the Tenant hereunder, and the Landlord shall have no further obligation under this Article FIFTY-TWO, with respect to the First Offer Space in question.
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(f) Any First Offer Space leased by the Tenant pursuant to the First Offer set forth in this Article shall be leased for a term expiring on the Expiration Date, and otherwise on the terms and conditions set forth in this lease, including the payment of Real Estate Tax Escalation and Percentage Escalation on the terms reflected in Article THIRTY of this lease, except that (i) the Tenant will lease the First Offer Space in “as is” condition (and the Landlord will not be required to any work to alter or improve any First Offer Space) and (ii) the Tenant will not have the right to occupy any First Offer Space for any period free of the payment of rent. In calculating the timing of the Percentage Escalation Payments and the amount and timing of the Real Estate Tax Escalation payable by the Tenant with respect to a particular First Offer Space, as contemplated by Article THIRTY of this lease, if the Tenant commences to lease the First Offer Space in question between January 1, and June 30 of any calendar year, (i) the Percentage Escalation Payments and Real Estate Tax Escalation Payments will commence on the January 1st of the first calendar year following the calendar year in which the Tenant first leases the First Offer Space; and (ii) the “Base Year” shall be the calendar year in which the Tenant first leases the First Offer Space; and if the Tenant commences to lease the First Offer Space in question between July 1 and December 31 of any calendar year, (i) the Percentage Escalation Payments and Real Estate Tax Escalation Payments will commence on January 1st of the second calendar year following the year in which the Tenant first leases the First Offer Space, and (ii) the “Base Year” shall be the first calendar year following the calendar year in which the Tenant first leases the First Offer Space.
(g) Notwithstanding anything to the contrary in this Article, if the Landlord enters into a lease for premises located on the 10th floor of the building, which lease has an expiration date on or after July 31, 2009, such premises will not constitute a “First Offer Space” and the Tenant will not have any rights under this Article Fifty-Second, or otherwise, to lease or offer to lease such premises.
IN WITNESS WHEREOF, this agreement has been signed and sealed by the parties hereto as of the date set forth above.
| | THE RECTOR, CHURCH-WARDENS AND
VESTRYMEN OF TRINITY CHURCH IN THE
CITY OF NEW YORK |
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| | By: | /s/ JASON D. PIZER |
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| | | Director of Leasing |
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| | By: | /s/ SIGNATORY |
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| | | Executive Vice President of Real Estate |
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| | By: | /s/ SIGNATORY |
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| | | Chief Financial Officer |
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| | By: | /s/ JAMES H. COOPER |
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| | | James H. Cooper, Rector |
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Attest: | | THE PRINCETON REVIEW, INC. |
As to the Tenant: | | | | |
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/s/ JACZUELINE CRUZ | | | | |
| | By: | /s/ MARK CHERNIS | (L.S.) |
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| | | An Authorized Officer | |
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SCHEDULE A
RULES AND REGULATIONS
1. | The Tenant shall not clean, nor require, permit or allow any window in the premises to be cleaned from the outside in violation of Section 202 of the New York State Labor Law or of the Rules of the Board of Standards and Appeals, or of any other board or body having or asserting jurisdiction. |
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2. | All machinery shall be kept in approved settings sufficient, in the Landlord’s judgment, to absorb any shock and prevent any noise, vibration or annoyance in the building of which the premises are a part and, if necessary, shall be provided with oil pans between such machinery and the floor beneath it, sufficient to prevent the seepage of oil on or into the floors. |
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3. | During the cold season, the windows shall be kept closed to maintain the temperature of the premises and to prevent any freezing thereof, or of any equipment or appliance therein. If the building contains central air-conditioning and ventilation, the Tenant agrees to keep all windows closed at all times and to abide by all rules and regulations issued by the Landlord with respect to such services. The Tenant shall draw and close the draperies or blinds for the windows of the premises whenever the air-conditioning system is in operation and the position of the sun so requires. |
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4. | All trucks, vehicles or conveyances used by the Tenant or others in the delivery or receipt of material in the premises or any other area in the building shall have rubber tires and sideguards. The Tenant shall be responsible for removing any oil deposited on the premises from such trucks, vehicles or conveyances. |
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5. | The Tenant shall not alter any lock or install a new or additional lock or bolt on any doors or windows. On termination or expiration of this lease, all keys must be surrendered to the Landlord and in the event of the loss of any keys furnished at the Landlord’s expense, the Tenant shall pay to the Landlord the cost thereof. If the building has a central security system, the Tenant shall provide the Landlord with all access codes to the premises. If the Tenant fails to provide the Landlord with a means of access to the premises, the Landlord shall be relieved of all obligation, if any, to provide cleaning services to the premises. |
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6. | The Landlord may exclude any persons visiting or attempting to visit the premises between 7 P.M. and 7 A.M. on Business Days or on non-Business Days unless such person shall be equipped with a pass signed or approved by the Landlord and unless such person shall sign his name and the premises which he is to visit on the night report. Each Tenant shall be responsible for all persons for whom a pass shall be issued at the request of the Tenant and shall be liable to the Landlord for all acts of such persons. The Tenant shall not have a claim against the Landlord by reason of the Landlord excluding from the building any person who does not present a pass. At all times, the Landlord retains the right to prevent access to the building to all persons whose presence, in the judgment of the Landlord, would be prejudicial to the safety, character or reputation of the building. |
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7. | All sanitary facilities, wash closets and plumbing fixtures shall be used only for the purposes for which they were constructed, and no sweepings, rubbish, rags, acids or other substances shall be deposited therein, and the expense of any stoppage or damage resulting from the violation of this rule shall be borne by the Tenant whose employees, agents or visitors caused it. |
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8. | No sign or lettering shall be exhibited, inscribed, painted or affixed outside of the premises or on the inside of the premises if the same can be seen from the outside of the premises except as may be approved in writing by the Landlord, except that the name of the Tenant may appear on the entrance door of the premises. If the Tenant violates this rule, the Landlord may remove the same without liability and the expenses so incurred by the Landlord shall be paid by the Tenant as additional rent. The Tenant shall not allow noise to emanate from the premises to the street or other portions of the building. Any sign or display which may be installed by the Tenant shall be kept in good order and repair and in a neat and attractive condition. The Landlord reserves the right to use the roof and outside walls surrounding the premises for sign purposes. The Landlord may remove any sign or signs or displays in order to paint the premises or any part of the building, or make any repairs, alterations or improvements in or upon the premises or building, or any part thereof, provided it causes the |
| same to be removed and replaced at the Landlord’s expense, whenever the painting, repairs, alterations or improvement shall have been completed. Interior signs on doors shall be of a size, color and style reasonably acceptable to the Landlord. The Landlord reserves the right to approve the appearance and design of the elevator lobby on each floor of the building. |
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9. | The Landlord shall have the right to prohibit any advertising by the Tenant which, in its reasonable judgment, tends to impair the reputation of the building or its desirability as an office building, and upon written notice from the Landlord, the Tenant shall refrain from or discontinue such advertising. |
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10. | No awnings, antennae, aerials, ventilating and air-conditioning apparatus or other projections shall be attached to the outside walls of the building. No air-conditioning apparatus may be installed in windows of the premises. |
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11. | The lights, skylights, entrances, passages, courts, elevators, vestibules, stairways, loading platforms, corridors, halls or any part of the building intended for use in common by the Tenant with other occupants of the building shall not be obstructed or encumbered by the Tenant or used for any other purpose than for ingress or egress from the premises and for delivery of equipment in a prompt and efficient manner using elevators and passageways designated for such delivery by the Landlord. In the event of any encumbrance or obstruction, the Landlord may remove the material causing such encumbrance or obstruction and cause it to be stored and charge the cost of doing so to the Tenant. No courtyard or yard appurtenant to the premises or the building shall be used for parking vehicles of any kind. If the premises are on the ground floor of the building, the Tenant shall, at its expense, keep the sidewalk and curb in front of the premises clean and free from rubbish. |
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12. | Subject to the provisions of Article FOUR of this lease, no part of the premises or the building shall be marked, painted, bored, drilled into, or in any way defaced. Any drilling which is permitted by the Landlord shall be done in accordance with the provisions of Article FOUR and shall be done during non-Business Hours unless otherwise authorized by the Landlord in writing. No boring, cutting or stringing of wires shall be permitted, except with the prior written consent of the Landlord. No linoleum or other similar floor covering shall be laid so that the same shall come in direct contact with the floor of the premises; and if such flooring is used, an interlining of builder’s deadening felt or other sound-attenuating materials shall be first affixed to the floor, by a paste or other material, soluble in water. Cements and other similar adhesive material shall not be used. Removal of any alterations, decorations or improvements in compliance with Article FOUR of this lease shall include the removal of all linoleum, lining and adhesive material. |
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13. | No part of the premises shall be used in a manner or for a purpose that is substantially objectionable to the Landlord or to another tenant, by reason of noise, odors, vibrations or otherwise, or which in the reasonable judgment of the Landlord might cause structural injury to the building or interfere in any way with other tenants or those having business in the building or create a nuisance. Tenant shall not make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or premises or those having business with them whether by the use of any musical instrument, radio, television set, unmusical noise, singing or in any other way. |
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14. | The Tenant’s employees, guests and visitors shall not stand or loiter around the lobby, hallways, stairways, elevators, front, roof or any other part of the building used in common by the occupants thereof. |
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15. | No load shall be placed upon any floor of the building exceeding the floor load per square foot area which such floor was designed to carry, and all loads shall be evenly distributed. The Landlord reserves the right to prescribe the weight and placement of all safes, machinery and other personal property in the premises so as to distribute their weight. |
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16. | Nothing shall be hung, shaken, thrown out of any window or doors, or down any passages, stairways, elevators, or skylights of the building, nor shall any of them be covered, obstructed or encumbered. The Tenant shall not use, keep or permit to be used any foul or noxious gas or substance in the premises. No bicycles, vehicles or animals (other than seeing-eye dogs), fish or birds shall be kept in the building. Smoking or carrying lighted cigars or cigarettes in the elevators of the building is prohibited. |
17. | Building employees shall not perform any work or do anything outside of their regular duties, unless under special instructions from the office of the Landlord. |
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18. | No peddling, soliciting or canvassing shall be permitted in the premises or by the Tenant’s employees elsewhere in the building. |
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19. | All deliveries to or from the premises shall be made by means of the freight elevators. The Landlord may prescribe, and from time to time vary, the time for any removals or deliveries from or to the premises. Removals or deliveries of safes, machinery, business equipment, furniture, freight, and any other heavy or bulky matter shall be done only on the freight elevators and through the service entrances and corridors and shall only be done upon written authorization of the Landlord and only in such manner and by such persons as may be acceptable to the Landlord, and the Landlord may require any further assurances or agreements or indemnity from the Tenant to the movers to that effect. If any safe, machinery, equipment, bulky matter or fixtures requires special handling, all work in connection therewith shall comply with the Administrative Code of the City of New York and all other laws and regulations applicable thereto. The Landlord reserves the right to inspect all freight to be brought into the building and to exclude from the building all freight which violates any of these Rules and Regulations or the lease of which these Rules and Regulations are a part. |
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20. | The Tenant shall not permit its servants, employees, agents, visitors or licensees, at any time to bring or keep upon the premises any inflammable, combustible, explosive or hazardous fluid, material, chemical or substance or cause or permit any unusual or objectionable odors (from cooking or otherwise) to be produced upon or emanate from the premises. |
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21. | No Tenant shall operate any elevator in the building, except for automatic self-service elevators. |
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22. | The Tenant shall not use any method of heating or air-conditioning other than that supplied or approved by the Landlord. |
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23. | If the premises consist of basement space, or if any property of the Tenant is stored in the basement portion of the building, all such property shall, at the Tenant’s own cost and expense, be placed entirely on skids or platforms, which will raise such property at least six inches from the floor. The Landlord shall have no liability for any materials stored in the basement. |
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24. | [Intentionally Omitted] |
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25. | The Tenant shall not attach or install curtains, draperies, blinds, shades or screens on any window in the premises without the Landlord’s prior written consent. |
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26. | The Tenant shall keep the entrance door to the premises closed at all times. |
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27. | No space in the building shall be used for manufacturing, for the storage of merchandise, or for the sale or merchandise, goods or property of any kind at auction or otherwise. |
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28. | The Tenant shall have the right to its proportionate share of listings in the building’s directory, but in no event less than three listings. |
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29. | The Landlord and its agents reserve the right to inspect all packages, boxes, bags, handbags, attache, cases, suitcases, and other items carried into the building, and to refuse entry into the building to any person who either refuses to cooperate with such inspection or who is carrying any object which may be dangerous to persons or property. In addition, the Landlord reserves the right to implement such further measures designed to ensure safety of the building and the persons and property located therein as the Landlord shall deem necessary or desirable. |
SCHEDULE B
CLEANING SPECIFICATIONS
A. | TENANT SUITES |
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| 1. | Nightly |
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| | a) | Carpeted floors: All carpeted floors will be swept nightly and vacuumed weekly using a high quality vacuum, moving all light furniture such as chairs and stands. All furniture will be replaced to its original position. Vacuum under all desks and large furniture where possible. |
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| | b) | Uncarpeted floors: All hard-surfaced floors will be dust-mopped nightly, using a treated dust mop, moving all light furniture. All furniture will be replaced to its original position. Dust-mop under all desks and large furniture where possible. |
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| | c) | Dusting and cleaning: Wipe all furniture tops, legs, rungs and sides within hands’ reach; wipe and disinfect telephones. Wipe all horizontal surfaces within reach, including window ledges, baseboards, ledges, molding and sills on glass and partitions. No feather dusters will be allowed. Papers or other personal items (i.e., pictures, keys, wallets, etc.) left on desk tops will not be moved. |
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| | d) | Furniture and Accessories: Dust, wipe clean and remove finger marks, if necessary, from all furniture, file cabinets, mapboards, and telephones using treated cloth. |
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| | e) | Trash Removal: Collect and remove wastepaper, waste material and cardboard boxes to designated area in or adjacent to the premises. |
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| | f) | Miscellaneous: |
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| | | i. | Scour, wash clean and disinfect all water fountains and coolers, emptying waste water as needed. |
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| | | ii. | Once entering a suite, the door is to be locked. |
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| | | iii. | Upon completion of all nightly chores, all lights shall be turned off, windows closed, doors locked and offices left in a neat and orderly condition. |
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| 2. | Quarterly |
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| | a) | High Dusting: Perform all high dusting throughout on a quarterly basis unless otherwise specified, including the following: |
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| | | i. | Vacuum and dust all pictures, frames, charts, graphs and similar wall hangings not reached in nightly cleaning. |
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| | | ii. | Dust all overhead pipes, sprinklers, ventilating and air-conditioning louvers and adjacent ceiling areas, ducts and other equipment items not reached in nightly cleaning. |
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| | | iii. | Dust all venetian blinds and window frames. |
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| | | iv. | Wash all furniture glass. |
B. | RESTROOMS (Including Tenant Suites) |
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| 1) | All lavatories shall be thoroughly cleaned with an approved disinfectant. |
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| 2) | Air fresheners shall not be used to cover-up unpleasant odors. Should there be an unpleasant odor, proper disinfecting procedures shall be used to abate the odors. An odorless disinfectant shall be used. |
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| 3) | Remove all wastepaper and refuse, including sanitary napkins, to a designated area in the building and dispose of same. All wastepaper and sanitary napkin receptacles are to be thoroughly cleaned and washed, and new liners installed; liners to be installed so as to ensure maximum usage of receptacles. |
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| 4) | Fill toilet tissue holders, seat cover containers, soap dispensers, towel dispensers, and sanitary napkin dispensers. |
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| 5) | All tasks detailed above are to be done on a nightly basis. |
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| 1. | Nightly Cleaning |
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| | a) | Walls and Metal Partitions: Damp wipe all metal toilet partitions and tiled walls, removing graffiti with care taken not to damage surfaces. All surfaces are to be wiped dry so that all wipe marks are removed and surface has a uniformly bright appearance. Dust the top edges of all partitions, ledges and mirror tops. |
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| | b) | Floors and Tile: Floors will be swept clean and wet-mopped with a germicidal detergent approved by the Landlord using spray tank method. The floors will then be mopped dry and all watermarks and stains wiped from wall and metal partition bases, paying particular attention to corners. Scuff marks and footmarks are to be removed throughout. |
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| | c) | Metal Fixtures: Wash and polish all mirrors, powder shelves, bright work (including flushometers and exposes piping below wash basins and behind toilet fixtures), towel dispensers, receptacles and any other metal accessories. |
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| | d) | Ceramic Fixtures: Scour, wash and disinfect all basins, including faucet handles, bowls, urinals and tile walls near urinals with approved germicidal detergent solution. Wash both sides of all toilet seats with approved germicidal solution and wipe dry. Toilet seats are to be left in an upright position. |
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| | e) | Powder Rooms: If applicable, should be thoroughly cleaned and floors should be washed or vacuumed, as applicable. |
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| 2. | Weekly |
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| | a) | Floor Drains: Clean, disinfect, and fill with water to avoid the escape of sewer gases. Use of acids is prohibited. |
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| 3. | Monthly |
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| | a) | Walls and Metal Partitions and Washable Ceiling: Wash with water and germicidal solution. Wipe dry and polish to a uniformly bright, clean condition. |
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| | b) | High Dusting and Cleaning: Perform all high dusting, inclusive of grilles and diffusers, vacuum and wash all ceiling diffusers. |
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| | c) | Floors: All floors will be machine-scrubbed, using a germicidal solution, detergent and water. After scrubbing, floors will be rinsed with clean water and dried. All water marks will be removed from walls, partitions, and fixtures. |
EXHIBIT A-1
FLOOR PLANS OF 11TH FLOOR PREMISES
EXHIBIT A-2
FLOOR PLANS OF 12TH FLOOR PREMISES
EXHIBIT B
CERTIFICATE OF OCCUPANCY
EXHIBIT C
WORK LETTER
A. It is agreed that the following work is to be done by the Landlord, at the Landlord’s sole cost and expense (the “Landlord’s Work”): |
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1. | Landlord shall deliver the premises vacant, demolished, broom clean and with the walls white washed. |
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2. | Landlord shall provide an ACP-5 certificate relative to asbestos compliance within the premises. |
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3. | With respect to the 11th floor premises, the Landlord shall provide the Tenant with connection points and all fire safety lines brought to the premises to allow the Tenant to install additional speakers and equipment necessitated by Tenant’s partitioning, as well as strobe devices required by Local Law #5. The Tenant shall be required to install all devices within the premises and to connect all to the Landlord’s system, all at the Tenant’s cost and expense. |
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4. | The Landlord will supply 600 amperes of electricity to the premises. The Landlord shall deliver the existing electric system within the premises in “as is” condition. |
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5. | The Landlord shall deliver the existing perimeter radiation and sprinkler systems in good working order. |
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6. | With respect to the 11th floor premises only, not later than October 1, 2004 the Landlord will install new double hung thermopane windows. The Tenant will provide the Landlord unrestricted access to the premises and its full and complete cooperation to facilitate such installation. |
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7. | The Landlord will deliver to the premises new air-cooled air conditioning units, with an aggregate capacity of 45 tons, to cool premises. Tenant, at its own cost and expense, to be responsible for power and control wiring, ductwork distribution and temperature controls within Tenant’s premises. |
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8. | With respect to the public elevator lobby on the 12th floor, the Landlord shall (i) repaint the walls and ceiling and (ii) install new carpeting. |
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9. | In lieu of renovating the bathrooms on the 11th floor, the Landlord agrees to reimburse the Tenant in an amount up to $100,000.00 for the cost of such renovations; such reimbursement to be subject to the conditions set forth in paragraph (b) of Article Forty-Five of the lease. |
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10. | In lieu of repairing or improving the bathrooms on the 12th floor, the Landlord agrees to reimburse the Tenant in an amount up to $15,000.00 for the cost of such repairs or improvements; such reimbursement to be subject to the conditions set forth in paragraph (b) of Article Forty-Five of the lease. |
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It is stipulated and agreed that the foregoing constitutes the work to be done by the Landlord referred to in the lease to which this Work Letter is attached and all the work to be done by the Landlord in the premises, except as otherwise expressly provided in such lease.
It is further stipulated and agreed that the aforesaid work shall be commenced by the Landlord as soon as possible after full execution of the lease and the payment by the Tenant of the first installment of rent and the performance by the Tenant of any other obligations to be performed by the Tenant at the time of the signing of the lease and shall be completed with reasonable diligence, subject to delays of the sort in Article THIRTY-FOUR, provided that the Landlord shall not be required to do the work on days or hours other than usual working days and hours in the trades in question. The Landlord agrees that the aforesaid work to be performed
by the Landlord will be done in a workmanlike manner. Notwithstanding anything to the contrary in the lease, Trinity agrees that, except with respect to the work referred to in Item Nos. 6, 7, 8, 9 and 10 all of the Landlord’s work will be completed by August 1, 2004. In the case of Item No. 7, the Landlord will deliver the new air conditioning units to the premises within 30 days of the date on which the Tenant has executed and delivered the lease. If such work is not completed by the applicable date, then if and to the extent that (but only if and to the extent that) either (i) the Tenant is actually prevented from altering or improving the premises in question, or (ii) the Tenant is actually prevented from occupying and utilizing the premises, and the Tenant does not, in fact, occupy or utilize the premises, the Tenant will not be required to pay fixed rent with respect to the 11th floor premises until such work has actually been completed and the expiration date of the free-rent period described in clause (i) of paragraph (g) of Article One (December 31, 2004) will be correspondingly extended, so that such free-rent period will remain 153 days (which period will (in the circumstances described in this sentence) commence on the date on which such work is completed). The Landlord shall not be subject to a “day-for-day” penalty (as set forth in this paragraph) or any other penalty if the work contemplated by Item Nos. 8 or 10 is not completed by a given date.
Subject to the foregoing provisions the Landlord reserves the right, after according reasonable consideration to the Tenant’s wishes in the matter, to make all decisions as to the time or times when, the order and style in which, said work is to be done, and the labor or materials to be employed therefor. The work shall be done, unless the Landlord otherwise directs, during the usual working hours observed by the trades in question. It is stipulated and agreed that in case the Landlord is prevented from commencing, prosecuting or completing said work, due to the Landlord’s inability to obtain or difficulty in obtaining the labor or materials necessary therefor, or due to any governmental requirements or regulations relating to the priority or national defense requirements, or due to any other cause beyond the Landlord’s control, the Landlord shall not be liable to the Tenant for damages resulting therefrom, nor shall the Tenant be entitled to any abatement or reduction of rent by reason thereof, nor shall the same give rise to a claim in the Tenant’s favor that such failure constitutes actual, constructive, total or partial eviction from the premises.
EXHIBIT D
PERCENTAGE ESCALATION
12-Month Period
Commencing August 1, | | Annual
Fixed Rate | | Percentage
Escalation Payment | | Escalated Rent 1 | |
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|
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|
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|
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2004 | | $ | 959,202 | | $ | 0 | | $ | 959,202 | |
2005 | | | 959,202 | | | 23,980 | | | 983,182 | |
2006 | | | 959,202 | | | 48,560 | | | 1,007,762 | |
2007 | | | 959,202 | | | 73,754 | | | 1,032,956 | |
2008 | | | 959,202 | | | 99,578 | | | 1,058,780 | |
2009 | | | 959,202 | | | 126,047 | | | 1,085,249 | |
2010 | | | 959,202 | | | 153,178 | | | 1,112,380 | |
2011 | | | 959,202 | | | 180,988 | | | 1,140,190 | |
2012 | | | 959,202 | | | 209,492 | | | 1,168,694 | |
2013 | | | 959,202 | | | 238,710 | | | 1,197,912 | |
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1 This figure does not include any real estate tax escalation amount attributable to increases in the real estate taxes related to the building. |
EXHIBIT E
COMMON CORRIDORS
EXHIBIT F
TEMPORARY SPACE IN 304 HUDSON STREET
