Exhibit (10)(b)(3)
SECOND AMENDMENT TO LEASE
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SECOND AMENDMENT TO LEASE ("Second Amendment") dated as of the 23rd
day of April, 2003 between THE BEAR STEARNS COMPANIES, INC., a Delaware
corporation having an office at 383 Madison Avenue, New York, New York 10179
("Tenant") and FOREST CITY JAY STREET ASSOCIATES, L.P., a New York limited
partnership having an office at One Metrotech Center North, 11th Floor,
Brooklyn, New York 11201 ("Landlord").
W I T N E S S E T H:
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WHEREAS, Landlord and Tenant entered into a lease dated as of
November 1, 1991 (the "Lease"), demising the premises ("premises") described in
the Lease, in the building ("Building") known as One Metrotech Center North,
Brooklyn, New York;
WHEREAS, the Lease was amended by letter agreement dated as of
November 1, 1991 (the "1991 Letter Agreement");
WHEREAS, the Lease was amended by letter agreement dated as of
September 30, 1999 (the "1999 Letter Agreement");
WHEREAS, the Lease was amended by First Amendment to Lease ("First
Amendment") dated as of December 20, 1999;
WHEREAS, the Lease was amended by letter agreement dated as of July
30, 2001 (the "2001 Letter Agreement");
WHEREAS, except for the 1991 Letter Agreement, the 1999 Letter
Agreement, the First Amendment and the 2001 Letter Agreement, the Lease has not
previously been amended;
WHEREAS, the space presently demised under the Lease consists of (i)
the entire fourth (4th) through ninth (9th) floors of the Building and a portion
of the third (3rd) floor of the Building, or 275,244 rentable square feet of
Office Space in the aggregate, and (ii) the Below Grade Space (as described in
the Lease) and the Messenger Center (as described in the Lease), consisting of
15,800 rentable square feet in the aggregate;
WHEREAS, the Expiration Date of the Lease is June 30, 2004; and
WHEREAS, Tenant desires to extend the Term for twenty (20) years, to
and including June 30, 2024, and Landlord is willing to so extend the Term in
accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other
good and valuable consideration, the legal sufficiency and receipt of which is
hereby acknowledged, Landlord and Tenant agree as follows:
1. General. From and after the date when the Effective Date (as
hereinafter defined) shall have occurred, the "Lease" shall mean the Lease as
modified by the 1991 Letter
Agreement, the 1999 Letter Agreement, the First Amendment, the 2001 Letter
Agreement and this Second Amendment. All capitalized terms not defined in this
Second Amendment shall have the meanings ascribed to them in the Lease.
2. Effective Date. This Second Amendment shall be effective as of the date
hereof (the "Effective Date").
3. Extension of Term. As of the Effective Date, the Term is hereby
extended to, and the Expiration Date (sometimes hereinafter referred to as the
"Extension Term Expiration Date") shall hereinafter be, June 30, 2024. The
twenty (20) year period from July 1, 2004 (the "Extension Term Commencement
Date") through June 30, 2024 is sometimes hereinafter referred to as the
("Extension Term").
4. Fixed Rent For Extension Term.
(a) For the Extension Term, Tenant shall pay to Landlord Fixed Rent
for the Office Space of Six Million Seven Hundred Forty-Three Thousand Four
Hundred Seventy-Eight and 00/100 Dollars ($6,743,478.00) per annum, or Five
Hundred Sixty-One Thousand Nine Hundred Fifty-Six and 50/100 Dollars
($561,956.50) per month.
(b) For the Extension Term, Tenant shall pay to Landlord Fixed Rent
for the Below Grade Space and the Messenger Center of Two Hundred Five Thousand
Four Hundred and 00/100 Dollars ($205,400.00) per annum, or Seventeen Thousand
One Hundred Sixteen and 67/100 Dollars ($17,116.67) per month.
5. Abatement of Fixed Rent.
(a) Fixed Rent for the Office Space shall be abated commencing May
1, 2003 and continuing through and including January 31, 2004. In no event shall
the aggregate amount of such abatement exceed Four Million Five Hundred
Forty-One Thousand Five Hundred Twenty-Six and 00/100 Dollars ($4,541,526.00).
(b) Tenant and Landlord acknowledge that the provisions of Section
1.7 and 1.9 of the Lease shall be of no force and effect during the Extension
Term and (if applicable) the Second Extension Term.
6. Landlord Contribution to Tenant's Operating Expense Payment. Commencing
July 1, 2004 and continuing for the balance of the Extension Term, Landlord
shall contribute Two Hundred Seventy-Five Thousand Two Hundred Forty-Four and
00/100 Dollars ($275,244) per Operating Expense Year (prorated for any portion
of an Operating Expense Year) to the payment of Tenant's Operating Expense
Payment for such Operating Expense Year ("Landlord's Contribution"). For any
Operating Expense Year or portion thereof within the Term, Landlord, at
Landlord's election, shall either pay Landlord's Contribution allocable to such
Operating Expense Year or portion thereof to Tenant or shall credit Landlord's
Contribution allocable to such Operating Expense Year or portion thereof against
the next subsequent payments due under Section 3.2(b) of the Lease with respect
to such Operating Expense Year or portion thereof.
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7. Assignment, Subletting and Mortgaging. Article 7 is hereby deleted from
the Lease and the following is substituted in lieu thereof:
ARTICLE 7
Assignment, Subletting and Mortgaging
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7.1 (a) Tenant shall not, whether voluntarily, involuntarily,
or by operation of law or otherwise (i) assign or otherwise transfer
this Lease or any interest or estate herein, (ii) sublet the
premises or any part thereof or allow the premises or any part
thereof to be used or occupied by others in violation of Article 2,
or (iii)) mortgage, pledge, encumber or otherwise hypothecate this
Lease or the premises or any part thereof in any manner; without in
each instance obtaining the prior written consent of Landlord (which
consent shall not be unreasonably withheld, delayed or conditioned),
except as otherwise provided in this Article 7. For purposes of this
Article 7, (A) a transfer of control of Tenant or any subtenant at
any one time or over a period of time through a series of transfers
shall be deemed an assignment of this Lease or such sublease, as the
case may be, and (B) a material modification, amendment or extension
(but not a surrender, provided that Landlord shall have received
notice of the surrender, accompanied by a copy of the proposed
surrender agreement, prior to the effective date thereof) of a
sublease requiring Landlord's consent hereunder shall be deemed a
sublease requiring approval of the relevant provisions thereof in
accordance with the terms of this Article 7, and (C) any Person or
legal representative of Tenant to whom Tenant's interest under this
Lease passes by operation of law or otherwise shall be bound by the
provisions of this Article 7. For the purposes of this Section
7.1(a), "control" shall be deemed to mean either (1) ownership of
more than fifty percent (50%) of the issued and outstanding capital
stock of any corporate entity or more than fifty percent (50%) of
the legal and equitable interest in any other business entity or (2)
ownership of more than twenty-five percent (25%) of the issued and
outstanding capital stock of any corporate entity or more than
twenty-five percent (25%) of the legal and equitable interest in any
other business entity and the possession of the power directly or
indirectly to direct or cause the direction of management and policy
of such corporation, partnership or other business entity, whether
through the ownership of voting securities, by contract, common
directors or officers, the contractual right to manage the business
affairs of any such corporation, partnership or business entity or
otherwise. For purposes of the foregoing sentence, stock ownership
shall be determined in accordance with the principles set forth in
Section 544 of the Internal Revenue Code of 1986, as amended, and
the transfer of the stock of any corporate tenant or subtenant shall
be deemed not to include the sale of such stock by persons or
parties, through the "over-the-counter market" or through any
recognized stock exchange, other than those deemed "insiders" within
the meaning of the Securities Exchange Act of 1934, as amended.
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(b) Tenant shall have the right, upon prior notice to
Landlord (or simultaneous notice to Landlord if prior notice is
prohibited by applicable law or rules and regulations of applicable
governmental authorities or regulatory agencies thereof or is
otherwise reasonably impracticable), but without the consent of
Landlord to assign this Lease (i) to a corporation or other entity
into or with which Tenant is merged or consolidated or to an entity
to which substantially all of Tenant's assets are transferred, or
(ii) to a corporation or other entity arising, out of the
reorganization of Tenant from (A) a partnership to a corporation the
majority of shareholders of which were the partners of Tenant
immediately prior to such reorganization or (B) a corporation to a
partnership the majority of partners of which were the shareholders
of Tenant immediately prior to such reorganization, or (iii) in
connection with a transaction involving the sale, transfer or
exchange of stock of any corporate tenant or the sale or transfer of
all or any portion of the partnership interests in any partnership
tenant (any corporation, partnership or entity which is the
successor of Tenant following any of the transactions described in
(i),(ii) or (iii) above, a "successor corporation or partnership");
provided, in each such case, such merger, consolidation, sale,
transfer or exchange of stock or partnership interests or transfer
of assets shall be for a valid business purpose and not principally
for the purpose of transferring the leasehold estate created by this
Lease and, provided, further, such surviving or acquiring
corporation or entity shall use the premises in compliance with and
assume the terms and provisions of, this Lease from and after the
effective date of the assignment and shall have a net worth at least
equal to or in excess of the Rental Factor, as hereinafter defined
(each of the foregoing are hereinafter called a "Reorganization").
Notwithstanding the foregoing, if as a result of any transaction
referred to in clause (iii) of this Section 7.1(b), there shall be
no adverse change in Tenant's net worth, the surviving corporation
or entity shall not be required to have a net worth equal to or in
excess of the Rental Factor. In addition, Tenant shall have the
right, upon ten (10) Business Days' prior notice to Landlord, but
without Landlord's consent, to assign this Lease to an Affiliate of
Tenant. The term "Affiliate" shall mean, with respect to Tenant, any
Person who or which directly or indirectly controls, is controlled
by or is under common control with Tenant and, with respect to
Landlord, any Person who or which directly or indirectly controls,
is controlled by or is under common control with Landlord. For
purposes of this Section 7.1(b), the term "control" shall mean, with
respect to any Person, the possession of the power directly or
indirectly to direct or cause the direction of management and policy
of such Person, whether through the ownership of voting securities,
by contract, common directors or officers, the contractual right to
manage the business affairs of any such Person or otherwise. The
term "Rental Factor" shall mean an amount equal to the product of
(A) the Fixed Rent and the Estimated Additional Rent (as hereinafter
defined) reserved under this Lease for the remainder of the Term
following the effective date of any of the transactions referred to
in clauses (i), (ii) or (iii) of this Section 7.1(b), multiplied by
(B) (1) ten (10) if such transaction shall occur during the period
from the Effective Date of the Second Amendment to Lease to the date
immediately prior to the Expiration Date of the initial Term of this
Lease, (2) five
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(5) if such transaction shall occur during the period from the
Extension Term Commencement Date to the date immediately prior to
the fifth (5th) anniversary of the Extension Term Commencement Date,
(3) seven (7) if such transaction shall occur during the period from
the fifth (5th) anniversary of the Extension Term Commencement Date
to the date immediately prior to the seventh (7th) anniversary of
the Extension Term Commencement Date, (4) ten (10) if such
transaction shall occur during the period from the seventh (7th)
anniversary of the Extension Term Commencement Date to the date
immediately prior to the Extension Term Expiration Date, (5) five
(5) if such transaction shall occur during the period from the
Second Extension Term Commencement Date to the fifth (5th)
anniversary of the Second Extension Term Commencement Date, (6)
seven (7) if such transaction shall occur during the period from the
fifth (5th) anniversary of the Second Extension Term Commencement
Date to the date immediately prior to the seventh (7th) anniversary
of the Second Extension Term Commencement Date, and (7) ten (10) if
such transaction shall occur during the period from the seventh
(7th) anniversary of the Second Extension Term Commencement Date to
the Second Extension Term Expiration Date. Notwithstanding the
foregoing, the Rental Factor shall in no event be less than an
amount equal to the sum of (y) all Fixed Rent payable hereunder
during the last five (5) years of the Term, and (z) the Estimated
Additional Rent payable hereunder during the last five (5) years of
the Term. As used herein, the term the "Estimated Additional Rent"
shall mean all Additional Rent for the period in question, as
estimated by increasing the actual Additional Rent for the most
recent calendar year of the lease for which Additional Rent has been
determined by three percent (3%) per annum, provided, however, if
the Additional Rent for any portion of such period shall have been
actually determined, then the Estimated Additional Rent shall mean
the sum of (1) the actual Additional Rent for such portion of the
period in question for which Additional Rent shall have been
actually determined plus (2) the Additional Rent for the remaining
portion of the period in question estimated as hereinbefore
provided.
(c) Tenant shall have the right, upon ten (10) Business
Days' prior notice to Landlord but without Landlord's consent, to
sublease all or any portion of the premises to an Affiliate of
Tenant (or to allow such Affiliate to occupy the same pursuant to an
occupancy agreement) and to sublease up to 75,000 square feet of the
premises in the aggregate to any Service Entities (or to allow such
Service Entities to occupy the same pursuant to an occupancy
agreement). For the purposes of this Lease, the term "Service
Entities" shall mean Persons who (i) receive or provide clearing
services from or to Tenant or its Affiliates in accordance with the
rules and regulations for the provisions of such services
promulgated by the New York Stock Exchange, the Securities and
Exchange Commission and/or any other governmental regulatory agency,
and their respective successors, or (ii) are engaged as a portion of
their business in providing services to Tenant or its Affiliates in
connection with the customary conduct of Tenant's or its Affiliates'
business. If any Affiliate entity shall cease to be an Affiliate of
Tenant, then such entity may continue to sublease or occupy any
portion(s) of the premises it has subleased or occupied as an
Affiliate of
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Tenant, as the case may be, provided and upon condition that (A) if
Landlord shall execute and deliver a Recognition Agreement to such
entity, then, from and after the date such Recognition Agreement
becomes effective following the termination of this Lease, the rent
and other occupancy charges payable by such entity shall be at least
equal to the Fixed Rent and the Additional Rent payable hereunder by
Tenant (on a per square foot basis) with respect to such portion(s)
of the premises, (B) the principal purpose of the transaction which
results in such entity no longer being an Affiliate of Tenant shall
not be the acquisition of such Affiliate's interest in its sublease
or other occupancy agreement, and (C) the sublease shall comply with
the provisions of this Article 7.
7.2 If this Lease shall be assigned, whether or not in
violation of the provisions of this Lease, Landlord may collect rent
from the assignee. If the premises or any part thereof are sublet or
used or occupied by anyone other than Tenant, whether or not in
violation of this Lease, Landlord may, after the occurrence of an
Event of Default (as hereinafter defined) by Tenant, collect the
Rent from the subtenant or occupant. In either event, Landlord shall
apply the net amount collected to the Rent herein reserved, but no
such assignment, subletting, occupancy or collection shall be deemed
a waiver of any provisions of Section 7.1, or the acceptance of the
assignee, subtenant or occupant as tenant. Nothing contained herein
shall be construed to relieve the Tenant named herein or any
assignee or other successor in interest (whether immediate or
remote) of the Tenant named herein from the full and prompt payment,
performance and observance of the covenants, obligations and
conditions to be paid, performed and observed by Tenant under this
Lease. The consent by Landlord to a particular assignment,
subletting or use or occupancy by others shall not in any way be
considered as a consent by Landlord to any other or further
assignment, or subletting or use or occupancy by others. Reference
in this Lease to use or occupancy by others (that is, anyone other
than Tenant) shall not be construed as limited to subtenants but
shall also include licensees and others claiming under or through
Tenant, immediately or remotely.
7.3 Any assignment or transfer (other than an assignment
effected by operation of law) shall be made only if, and shall not
be effective until, the assignee shall execute, acknowledge and
deliver to Landlord an agreement in recordable form and otherwise in
form reasonably satisfactory to Landlord, whereby the assignee shall
assume the obligations and performance of this Lease and agree to be
bound by and upon all of the covenants, agreements, terms,
provisions and conditions hereof on the part of Tenant to be
performed or observed from and after the effective date of such
assignment and whereby the assignee shall agree that the provisions
of Section 7.1 hereof shall, notwithstanding such an assignment or
transfer, continue to be binding upon it in the future.
Notwithstanding any assignment or transfer, whether or not in
violation of the provisions of this Lease, and notwithstanding the
acceptance of the Fixed Rent (or any other amounts required to be
paid by Tenant pursuant to this Lease) by Landlord from an assignee
or transferee or any other party, Tenant shall remain fully and
primarily liable for the payment of the Fixed Rent and the
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Additional Rent due and to become due under this Lease and for the
performance of all of the covenants, agreements, terms, provisions
and conditions of this Lease on the part of Tenant to be performed
or observed.
7.4 If Tenant shall, at any time or from time to time, during
the Term desire to assign this Lease or sublet all or part of the
premises, other than with respect to an assignment or sublease
permitted on prior notice but without the consent of Landlord
pursuant to the provisions of Section 7.1(b) or Section 7.1(c)
hereof, Tenant shall give notice thereof to Landlord (the "Marketing
Notice"), which notice shall be accompanied by (a) in the case of a
sublease of less than the entire premises, a floor plan clearly
indicating the portion of the premises to be subleased and all means
of ingress and egress to such portion of the premises to be
subleased and to the remainder of the premises, and (b) a statement
of all of the material economic terms and conditions (other than the
identity of the proposed assignee or subtenant, if not yet known to
Tenant) of the proposed assignment or subletting, including: the
term of the proposed subletting and the proposed effective date
thereof; fixed rent, all regularly scheduled items of additional
rent, the base year for all escalations, any rental concession, and
the amount of any tenant installation allowance in connection with
the sublease; any work to be performed by Tenant to prepare the
premises for occupancy by the proposed subtenant or assignee; any
consideration to be paid for the acquisition of the premises by
reason of such assignment or subletting, leasehold improvements,
furniture, fixtures or equipment of Tenant; any takeover obligation;
any brokerage commissions which will be payable; and any options to
be granted to the proposed subtenant. Tenant shall also furnish to
Landlord such additional information related to the proposed
assignment or sublease as Landlord shall reasonably request and as
shall then be available to Tenant, provided, however, Landlord shall
be entitled to make only one (1) such request in connection with
each proposed assignment or sublease and any such request shall be
made within five (5) Business Days after Tenant's delivery of any
Marketing Notice.
7.5 (a) Concurrently with the delivery of the Marketing Notice
to Landlord, Tenant may (but shall not be obligated to) furnish to
Landlord a notice (a "Tenant Notice") that (i) identifies the
proposed assignee or subtenant, (ii) sets forth current financial
information with respect to the proposed assignee or subtenant
reasonably sufficient to enable Landlord to determine the financial
responsibility of the proposed assignee or subtenant, (iii)
identifies the material economic terms of the proposed transaction
(if different than as set forth in the Marketing Notice), and (iv)
requests Landlord's consent to the proposed assignment or sublease.
(b) (i) Subject to the terms of this Section 7.5(b), if
Tenant shall deliver a Marketing Notice to Landlord, Landlord shall
have the option (the "Recapture Sublease Option"), which may be
exercised only by notice (the "Recapture Sublease Notice") given to
Tenant within thirty (30) days after delivery of said Marketing
Notice to Landlord, to require Tenant to enter into a sublease with
Landlord or Landlord's designee (the "Recapture Sublease") of the
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entire premises, in the case of a proposed assignment, or of the
premises proposed to be sublet, in the case of a proposed sublease
(the "Recapture Sublease Premises").
(ii) If Landlord shall receive a Marketing Notice,
and Landlord shall not have timely exercised the Recapture
Sublease Option in accordance with Section 7.5(b)(i) above, or
shall have advised Tenant that Landlord does not desire to
exercise the Recapture Sublease Option, Landlord shall have no
further right to require Tenant to enter into a Recapture
Sublease with respect to the proposed assignment or proposed
subletting set forth in said Marketing Notice, but Tenant
shall have no right to assign this Lease or sublet all or any
portion of the premises unless (x) Tenant shall have obtained
Landlord's consent to the proposed assignment or subletting in
accordance with the provisions of Section 7.5(b)(iv) below,
and (y) Tenant shall have, at least twenty (20) days prior to
the effective date of any proposed assignment or sublease,
delivered to Landlord a Tenant Notice (if not previously
provided), and (z) Tenant shall have, at least five (5)
Business Days prior to the effective date of any proposed
assignment or sublease, delivered to Landlord a true and
correct copy of the proposed assignment or proposed sublease.
(iii) If Landlord shall receive a Marketing
Notice, and Landlord shall not have timely exercised the
Recapture Sublease Option in accordance with Section 7.5(b)(i)
above, or shall have advised Tenant that Landlord does not
desire to exercise the Recapture Sublease Option, and Tenant
shall thereafter deliver to Landlord a Tenant Notice (if the
Marketing Notice was not accompanied by a Tenant Notice) with
respect to a proposed assignment or subletting, and such
Tenant Notice shall disclose (x) in the case of an assignment
of this Lease, a reduction of more than ten percent (10%) of
the consideration (if any) to be paid to Tenant by the
assignee stated in the Marketing Notice, or (y) in the case of
a subletting, a reduction in the economic terms of more than
ten percent (10%) from those stated in the Marketing Notice,
Landlord shall once again have a right to exercise the
Recapture Sublease Option with respect thereto on the terms
set forth in the Tenant Notice. For the purposes of this
Section 7.5(b)(iii), a reduction in the economic terms shall
be calculated by determination of the effective rent, taking
into account all of the economic factors referred to in clause
(b) of Section 7.4 above and any other factors referred to in
the Marketing Notice and/or the Tenant Notice and materially
affecting the determination of effective rent.
(iv) If the Marketing Notice was not accompanied
by a Tenant Notice and Landlord has not timely exercised the
Recapture Sublease Option in accordance with Section 7.5(b)(i)
above, Tenant may, within two hundred seventy (270) days after
the earlier to occur of (x) the date that shall be the
thirtieth (30th) day after delivery to Landlord of such
Marketing Notice, and (y) the date that Landlord shall advise
Tenant that
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Landlord does not desire to exercise the Recapture Sublease
Option, give Landlord a Tenant Notice with respect to the
proposed assignment or subletting referred to in the Marketing
Notice. Such Tenant Notice shall be given to Landlord at least
thirty (30) prior to the effective date of the proposed
assignment or sublease. Landlord shall notify Tenant of
Landlord's approval or disapproval of such proposed assignment
or subletting within fifteen (15) Business Days after delivery
to Landlord of said Tenant Notice, or, if Landlord shall
request any additional information in accordance with Section
7.4(f) above, within fifteen (15) Business Days after Tenant
has delivered the requested information to Landlord. If
Landlord fails to approve or disapprove such proposed
assignment or subletting within said fifteen (15) Business Day
period, Landlord shall be deemed to have consented to the
proposed assignment or subletting pursuant to the Tenant
Notice. Landlord's approval or disapproval of a proposed
assignment or subletting shall be based upon the criteria set
forth in Section 7.6 hereof. Any election (or deemed election)
by Landlord not to exercise the Recapture Sublease Option in
connection with the proposed transaction identified in a
Marketing Notice shall not in any way be deemed to be or
considered as an election by Landlord not to exercise the
Recapture Sublease Option with respect to any other or further
assignment of this Lease or subletting of the premises.
(v) If Landlord shall exercise the Recapture
Sublease Option, the Recapture Sublease shall be subject to
all of the following terms, provisions and conditions (for
purposes of this Article 7.5(b)(v), Landlord is referred to as
the "Recapture Subtenant"):
(A) the rent payable by the Recapture
Subtenant to Tenant under the Recapture Sublease shall be equal to
the rent set forth in the Marketing Notice, and the Recapture
Sublease shall be upon such other terms and conditions as are
contained in the Marketing Notice, except those that are irrelevant
or inapplicable, and except as otherwise expressly set forth to the
contrary in this Section 7.5(b)(v);
(B) the term of the Recapture Sublease shall
be for the same term as that set forth in the Marketing Notice;
(C) the Recapture Sublease shall be
expressly subject to all of the covenants, agreements, terms,
provisions and conditions of this Lease, except such as are
irrelevant or inapplicable, and except as otherwise expressly set
forth to the contrary in this Section 7.5(b)(v);
(D) the Recapture Sublease shall give the
Recapture Subtenant the further rights to assign the Recapture
Sublease Premises and/or to sublet the Recapture Sublease Premises
or any part or parts thereof and to make alterations and
improvements in the Recapture Sublease Premises (provided only that:
(1) the same shall be limited to general office use, except to
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the extent that the Recapture Sublease premises includes Below Grade
Space, (2) the same shall not preclude or unreasonably interfere
with the use of the remainder of Tenant's premises for general
office use, (3) Tenant shall have no obligation to remove such
alterations and improvements, or to restore the Recapture Sublease
Premises in connection therewith, at the expiration of the Term, and
(4) the Recapture Subtenant shall indemnify Tenant and hold Tenant
harmless from and against any and all cost, expense, damage,
liability or claims attributable to such alterations or
improvements);
(E) the Recapture Sublease shall also
provide that: (1) the parties to the Recapture Sublease expressly
negate any intention that any estate created under the Recapture
Sublease be merged with any other estate held by either of said
parties, (2) any further assignment or subletting by Landlord or
Landlord's designee (as the Recapture Subtenant) may be only for a
use permitted under this Lease, (3) Tenant shall provide and permit
reasonably appropriate means of ingress to and egress from the
Recapture Sublease Premises (including with respect to such core
bathrooms or elevator lobbies on the same floor of the Building as
the Recapture Sublease Premises as may be located in the remaining
portion of Tenant's premises), (4) Tenant shall be responsible for
the cost of constructing any necessary demising walls and complying
with any and all Legal Requirements pertaining thereto, including
the construction of such corridors as are necessary to satisfy said
Legal Requirements, (5) the Recapture Subtenant shall have the right
to install signs and directional indicators in or about such
corridors indicating the name and location of the Recapture
Subtenant or other occupant of the Recapture Sublease Premises, and
(6) from and after the date that the Recapture Sublease shall become
effective, Tenant shall have no liability to Landlord with respect
to the Recapture Sublease Premises for any defaults under this Lease
caused by the act or failure to act of the Recapture Subtenant under
the Recapture Sublease, and said Recapture Subtenant shall indemnify
and hold Tenant harmless from and against all claims, liability,
costs and expenses (including reasonable attorney fees and
disbursements) arising from any such act or failure to act, and
Tenant shall have no further obligations under this Lease (with
respect to the Recapture Sublease Premises only), except for
Tenant's obligation to pay the Fixed Rent and any Additional Rent
payable by Tenant pursuant to Article 3 of this Lease that is
allocable to the Recapture Sublease Premises (provided that Tenant
shall be entitled to set off against such obligation the amount of
any rent which the Recapture Subtenant shall fail to pay to Tenant
when due under said Recapture Sublease).
(c) If Landlord shall fail to respond to a Tenant Notice
within the periods provided above and Landlord shall be deemed to
have consented to the proposed assignment or sublease, as the case
may be, Landlord shall, upon Tenant's request, execute and deliver
to Tenant, a statement prepared by Tenant and in form reasonably
acceptable to Landlord confirming such deemed consent within ten
(10) days of the submission of such statement to Landlord. If
Landlord shall have or shall be deemed to have consented to such
assignment or subletting as provided herein, Tenant shall be free to
assign this Lease to such proposed
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assignee or sublet the premises or the portion thereof which is the
subject of such sublease to such proposed subtenant on the same
material terms and conditions set forth in the Tenant Statement or
the Tenant Notice, as the case may be, subject to the terms and
conditions of this Lease. Tenant acknowledges and agrees that
Landlord's approval (or deemed approval) of any assignment or
sublease in accordance with the terms of this Article 7 shall not
constitute Landlord's approval of any of the specific terms of such
assignment or sublease, as the case may be, and Tenant shall cause
any such assignment or sublease to comply with the terms and
provisions of this Lease in all respects.
(d) If Tenant shall (i) fail to give Landlord a Tenant
Notice within the 270-day period referred to in Section 7.5(b)(iv),
or (ii) fail to execute and deliver an assignment or sublease in
accordance with a Tenant Notice which has been consented or deemed
consented to by Landlord within two hundred seventy (270) days after
the date of Landlord's consent or deemed consent thereto, than any
election or deemed election or consent or deemed consent of Landlord
with respect to such proposed assignment or sublease shall be
withdrawn and of no further force and effect and any assignment or
sublease thereafter entered into must again comply with the terms of
this Article 7.
7.6 In the event Landlord does not exercise the Recapture
Sublease Option in accordance with Section 7.5(b)(i) above, and
provided that as of the date of Landlord's consent and as of the
effective date of the proposed assignment or the commencement date
of the proposed sublease, no Event of Default shall have occurred
and be continuing, Landlord's consent to the proposed assignment or
sublease shall not be withheld, provided, however, that:
(a) in Landlord's reasonable judgment (i) the proposed
assignee or subtenant is engaged in a business or activity, and the
premises, or the relevant part thereof, will be used in a manner,
which is in keeping with the then standards of the Building, and
(ii) with respect to a proposed assignment, the proposed assignee
has a sufficient net worth to perform the remaining obligations of
Tenant under this Lease;
(b) the form of the proposed sublease or assignment
shall be in compliance with the applicable provisions of this Lease
and which sublease shall otherwise be subject and subordinate to
this Lease in all respects;
(c) there shall not be more than (i) five (5) subtenants
or occupants (other than Tenant or any Affiliate of Tenant), or ten
(10) Service Entities, occupying space on one floor of the premises,
or (ii) more than two (2) occupants (including Tenant, any
Affiliates of Tenant and any Service Entities) in Unit A or Unit C,
provided, that any space to be used by a second occupant in either
Unit A or Unit C shall not have a separate entrance to a common
corridor on the 3rd floor and shall not be separately demised; and
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(d) Tenant shall not publicly list with any broker or
advertise (including any "flyers" or "set-ups") the space for a
rental in the case of a sublease, for an amount less than the rental
rate at which Landlord is then offering to lease comparable space in
the Building (the "Prevailing Rate") or at a rental rate at which
any Affiliate of Landlord which is an owner of any other building in
the Project is offering to lease comparable space in the Project;
(e) the term of any sublease shall expire no later than
the day preceding the Expiration Date;
(f) in the case of a subletting which includes less than
entire floor(s), all costs incurred with respect to providing
reasonably appropriate means of ingress and egress from the sublet
space shall, subject to the provisions of Article 15 with respect to
Tenant Changes, be borne by Tenant;
(g) Intentionally omitted;
(h) the proposed assignee or subtenant shall not be a
Protected Occupant (as hereinafter defined). Within fifteen (15)
days after receipt of either a Marketing Notice or a Tenant Notice,
together with a specific request therefor, Landlord shall provide
Tenant with a list of Protected Occupants. Tenant shall not contact
or negotiate with any of the Protected Occupants (or cause any of
the Protected Occupants to be contacted or negotiated with) in the
six (6) month period following Tenant's receipt of the list of
Protected Occupants, provided, however, such six (6) month period
shall be extended for an additional six (6) months with respect to
those Protected Occupants to whom Landlord (or any Affiliate of
Landlord which is an owner of a building in the Project) shall have
submitted a written proposed lease, sublease or occupancy agreement
and that negotiations with respect to such proposed lease, sublease
or occupancy agreement are continuing in the good faith judgment of
Landlord. As used in this Section 7.6(h), the term "Protected
Occupant" shall mean any tenant, subtenant, assignee or occupant of
space in the Building or the Project with whom Landlord (or any
Affiliate of Landlord which is an owner of a building in the
Project) is or has been negotiating. As used in this Section 7.6(h)
and Section 7.6(i) below, the terms "negotiating" or "negotiations"
shall mean that Landlord or such Affiliate of Landlord which is an
owner of a building in the Project shall have submitted or received
a written proposal to such Person for the leasing of space in the
Building or the Project, as applicable and, in the good faith
determination of Landlord, negotiations with respect to such
proposal are continuing;
(i) the proposed assignee or subtenant shall not be a
Person with whom Landlord or any Affiliate of Landlord which is an
owner of a building in the Project is then negotiating or has had
negotiations for the lease of space in the Building or the Project
during the preceding six (6) month period unless (i) such
negotiations with such proposed assignee or subtenant are abandoned
(i.e., either Landlord or such proposed assignee or subtenant shall
have ceased to engage in such negotiations for at least two (2)
months with no intent of resuming
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such negotiations) or terminated prior to the date on which Tenant
and such proposed assignee or subtenant (or their respective agents,
brokers or representatives) engage in any discussions with respect
to the proposed assignment or subletting, or (ii) such proposed
sublease or assignment is with respect to non-comparable space (as
hereinafter defined). Landlord shall notify Tenant whether or not
such proposed assignee or subtenant is a Person with whom Landlord
or any Affiliate of Landlord which is an owner of a building in the
Project is or has been negotiating during the preceding six (6)
month period within five (5) Business Days after receipt of a notice
from Tenant identifying the proposed assignee or subtenant, together
with a specific request therefor. As used in this Section 7.6(i),
the term "non-comparable space" shall mean space which contains more
than one hundred twenty (120%) percent of the number of rentable
square feet in the space with respect to which Landlord or any
Affiliate of Landlord is negotiating;
(j) Tenant shall not enter into any sublease for less
than five thousand (5,000) rentable square feet of the premises;
(k) The character of the business to be conducted or the
proposed use of the premises by the proposed assignee or subtenant
shall not in Landlord's reasonable opinion, (i) materially increase
Building Operating Expenses; (ii) materially increase the burden on
existing cleaning or other Building services or elevators over the
burden prior to such proposed subletting or assignment unless Tenant
shall agree to pay to Landlord any such increased costs; or (iii)
violate any provisions or restrictions contained in Article 2 or
elsewhere herein relating to the use or occupancy of the premises;
and
(l) Tenant shall not assign its rights with respect to
the Messenger Center except in connection with a permitted
assignment of this Lease or a permitted sublease of all or any
portion of the premises, provided, however, Tenant may sublease the
Messenger Center or allow the same to be used by an Affiliate of
Tenant or any Service Entity for uses ancillary to their respective
uses of the Office Space without the prior written consent of
Landlord.
Landlord's consent to any assignment or sublease shall be set forth
in an instrument prepared by Landlord in form reasonably satisfactory to
Landlord, provided however, that Landlord's consent shall be consistent with the
terms and provisions of this Lease and shall not impose any additional
requirements or obligations which materially and adversely affect Tenant, any
such assignee or subtenant, or which materially and adversely diminish Tenant's
rights under this Lease or subtenant's rights under the sublease; in the case of
any assignment, such instrument shall include an assumption by the proposed
assignee of the obligations of Tenant hereunder arising from and after the date
of such assignment. Landlord's consent shall not be effective until such
instrument is executed and delivered by Landlord, Tenant and the proposed
assignee or subtenant.
7.7 Any sublease permitted without the consent of Landlord
pursuant to the provisions of Section 7.1(b) or Section 7.1(c) shall
provide that it shall not
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be assigned and that the premises demised thereunder shall not be
further sublet except in accordance with the provisions of this
Article 7. Any sublease other than a sublease permitted without the
consent of Landlord pursuant to the provisions of Section 7.1(b) or
Section 7.1(c) shall provide that it shall not be assigned and that
the premises demised thereunder shall not be further sublet without
the prior written consent of Landlord in each instance, which
consent shall not be unreasonably withheld or delayed subject to the
terms of this Article 7, and shall also contain provisions
substantially the same as those contained in Sections 12.1, 40.4 and
40.10(a) and, if Tenant shall allow such subtenant to use or install
the Antenna (as hereinafter defined), 38.3. Except as otherwise
expressly set forth herein, if any such sublease or sub-sublease is
assigned or further sublet without the consent of Landlord in each
instance obtained or without compliance with the provisions of this
Article 7, Tenant shall immediately terminate such sublease or
arrange for the termination thereof, and proceed expeditiously to
have the occupant thereunder dispossessed. Landlord's consent to any
sublease or assignment shall not be deemed or construed to modify,
amend or affect the terms and provisions of this Lease, or Tenant's
obligations hereunder, which shall continue to apply to the
occupants thereof, as if the sublease or assignment had not been
made.
7.8 Intentionally omitted.
7.9 Tenant hereby indemnifies and holds harmless Landlord
against any cost, liability or claim asserted against Landlord or
any Landlord Party for any brokerage commission, finder's fee,
consultant's fee or other compensation with respect to any
assignment or sublease or proposed assignment or sublease or other
occupancy agreement (except if Landlord shall exercise the Recapture
Sublease Option and thereafter enter into an assignment of the
Recapture Sublease or enter into a sub-sublease with such proposed
assignee or subtenant procured by such broker, finder or
consultant); provided, however, (a) if it shall be finally
determined by a court of competent jurisdiction that Landlord or any
Landlord Party is liable for such brokerage commission, finder's
fee, consultant's fee or other compensation based upon a written or
oral agreement between such broker, finder or consultant, as the
case may be, and Landlord or any Landlord Party, as the case may be,
then Landlord shall reimburse Tenant for, and hold Tenant harmless
against, such loss, cost, liability or claim, including reasonable
attorneys' fees and disbursements incurred by Tenant in the
investigation or defense of such claim, action or proceeding, and
(b) if Landlord or any Landlord Party pays any sum to a party
asserting or prosecuting such a claim, action or proceeding in
connection with a settlement or compromise thereof releasing
Landlord or such Landlord Party from liability therefor (a
"Settlement Payment"), then Tenant shall not be responsible for
reimbursing Landlord or such Landlord Party for such Settlement
Payment pursuant to this Section 7.9 unless Tenant shall have
previously approved such settlement payment in writing, such
approval not to be unreasonably withheld, conditioned or delayed. If
this Lease is assigned, the assignor and all its predecessors as
tenant hereunder (collectively, the "predecessor tenants") shall be
and remain fully liable for the
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due performance and observance of all of the terms and conditions of
this Lease to be performed by Tenant throughout the Term and no
amendment of this Lease or waiver of, or consent to departure from,
any of the terms and conditions of this Lease shall constitute a
novation or otherwise release any of the predecessor tenants,
provided, however, if any such subsequent amendment made without any
such predecessor tenant's consent shall increase the obligations of
Tenant hereunder, such predecessor tenant, including, without
limitation, Tenant named herein, shall not be liable with respect to
such incremental increase. Tenant shall pay to Landlord, promptly
upon demand therefor, all reasonable out-of-pocket costs (including,
without limitation, reasonable attorneys' fees and disbursements
incurred by Landlord in connection with any assignment of this Lease
or sublease of the premises, if Landlord's consent is requested or
required therefor).
7.10 The joint and several liability of Tenant and any
immediate or remote successor in interest of Tenant and the due
performance of the obligations of this Lease on Tenant's part to be
performed or observed shall not be discharged, released or impaired
in any respect by any agreement or stipulation made by Landlord, or
any grantee or assignee of Landlord by way of mortgage or otherwise,
extending the time, or modifying any of the obligations, of this
Lease, or by any waiver or failure of Landlord or any grantee or
assignee of Landlord by way of mortgage or otherwise, to enforce any
of the obligations of this Lease.
7.11 The listing of any name other than that of Tenant,
whether on the door of the premises or the Building directory, if
any, or otherwise, shall not operate to vest any right or interest
in this Lease or in the premises, nor shall it be deemed to be the
consent of Landlord to any assignment or transfer of this Lease or
to any sublease of the premises or to the use or occupancy thereof
by others. Notwithstanding the foregoing, Landlord shall list the
name of Tenant and the names of permitted subtenants, assignees and
occupants of the premises on such Building directory, but only to
the extent that the listings requested by Tenant shall not exceed
Tenant's pro rata share of the available Building directory (unless
such directory shall be electronic or computerized, in which case
said pro rata share limitation shall not apply).
7.12 If requested by any subtenant, Landlord shall execute and
deliver an agreement (a "Recognition Agreement") in recordable form
to the effect that, if this Lease shall terminate or be terminated
for any reason, Landlord will recognize such subtenant as a direct
tenant of Landlord on the same terms and conditions as are contained
in its sublease, provided that (a) no event of default shall have
occurred under such sublease beyond any applicable grace period, (b)
such sublease complies with the terms of this Lease in all respects,
(c) such sublease is for at least 35,000 rentable square feet of
Office Space, (d) such sublease does not, in Landlord's reasonable
judgment, materially increase Landlord's obligations above those set
forth herein, materially diminish Landlord's rights hereunder or,
from and after the date such Recognition Agreement becomes effective
following the termination of this Lease, provide for rent or other
monetary obligations to Landlord which are less than those provided
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herein, (e) such subtenant shall have a net worth, at the time such
request is made by Tenant, at least equal to or in excess of the
Sublease Rental Factor (as hereinafter defined), (f) Landlord may,
at its option, and at Landlord's sole cost and expense, relocate
such subtenant to a comparable portion of the Building if such
portion of the Building shall be constructed (or if Landlord shall
agree to construct same, at its expense) in a manner substantially
similar to the space from which subtenant shall be relocated, and
(g) such agreement shall provide that Landlord shall not be (i)
liable for any accrued obligation of Tenant or for any act, omission
or default of Tenant, (ii) subject to any offsets, claims or
defenses which such subtenant might have against Tenant, or (iii)
bound by any rent or additional rent which such subtenant might have
paid to Tenant. As used herein, the term "Sublease Rental Factor"
shall mean an amount determined as follows:
(i) with respect to a sublease containing all or a
portion of the Office Space
(A) the product of
(1) the Rent reserved under this
Lease for the Office Space for
the term of the sublease,
multiplied by
(2) (z) ten (10) if such sublease
shall occur during the period
from the Effective Date of the
Second Amendment to Lease to the
date immediately prior to the
Expiration Date of the initial
Term of this Lease, (y) five (5)
if such sublease shall occur
during the period from the
Extension Term Commencement Date
to the date immediately prior to
the fifth (5th) anniversary of
the Extension Term Commencement
Date, (x) seven (7) if such
sublease shall occur during the
period from the fifth (5th)
anniversary of the Extension
Term Commencement Date to the
date immediately prior the
seventh (7th) anniversary of the
Extension Term Commencement
Date, (w) ten (10) if such
sublease shall occur during the
period from the seventh (7th)
anniversary of the Extension
Term Commencement Date to the
date immediately prior to the
Extension Term Expiration Date,
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(v) five (5) if such sublease
shall occur during the period
from the Second Extension Term
Commencement Date to the date
immediately prior to the fifth
(5th) anniversary of the Second
Extension Term Commencement
Date, (u) seven (7) if such
sublease shall occur during the
period from the fifth (5th)
anniversary of the Second
Extension Term Commencement Date
to the date immediately prior to
the seventh (7th) anniversary of
the Second Extension Term
Commencement Date, and (t) ten
(10) if such sublease shall
occur during the period from the
seventh (7th) anniversary of the
Second Extension Term
Commencement Date to the Second
Extension Term Expiration Date
(each of the foregoing, the
"Factor"),
(B) multiplied by a fraction, the numerator
of which is the number of rentable square feet contained in
the Office Space demised under the sublease and the
denominator of which is 275,244, and
(ii) with respect to a sublease containing all or
a portion of the Messenger Center or the Below Grade Space
(A) the product of
(1) the Rent reserved under this
Lease for the Messenger Center
and the Below Grade Space for
the term of the sublease,
multiplied by
(2) the appropriate Factor pursuant
to the terms of clause 1 of this
Section 7.12(i)(A),
(B) multiplied by a fraction, the numerator
of which is the number of rentable square feet contained in
the Messenger Center and the Below Grade Space demised under
the sublease and the denominator of which is 15,800.
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7.13 Landlord shall afford reasonable, good faith cooperation
to Tenant in connection with Tenant's efforts, in connection with a
proposed assignment or sublease which Landlord has consented in
accordance with the provisions of this Article 7 or which is
permitted pursuant to the provisions of Section 7.1(b) or 7.1(c), to
secure the maximum amount of governmental benefits under any
as-of-right or discretionary incentive programs that may be
available to the proposed assignee or subtenant, provided, that
Landlord shall not be required to incur any expense or subject
itself to potential liability thereby. Without limiting anything
contained in the preceding sentence, Landlord's reasonable, good
faith cooperation shall extend to the execution of applications and
other documents which have been prepared by Tenant and which are
necessary in Tenant's reasonable judgment in order for Tenant to
secure such governmental benefits.
8. Name of Building. The first sentence of Section 10.6 is hereby deleted
and the following is substituted in lieu thereof:
For so long as the BUG Lease is in effect, Landlord shall not change
the name of the Building from The Brooklyn Union Gas Company
Building other than to conform to a change in the name of The
Brooklyn Union Gas Company or to any assignee or subtenant thereof
as provided in the BUG Lease or change the address of the Building
at any time unless required by Legal Requirements without the prior
consent of Tenant.
9. Signage. (a) The words "at least 200,000 rentable square feet of the
Office Space" are hereby deleted from the first sentence of Section 10.8(c) and
the words "at least 100,000 rentable square feet of the Office Space" are
substituted in lieu thereof.
(b) Notwithstanding anything to the contrary in Section 10.8, if and
when the BUG Lease is no longer in effect, then any tenant which (a) occupies
all or any part of the space presently occupied by the tenant under the BUG
Lease, and (b) occupies more space than Tenant and its Affiliates, may, at
Landlord's election, be given the signage rights presently enjoyed by the tenant
under the BUG Lease.
10. Alterations. (a) Section 15.7(a) is hereby deleted from the Lease.
(b) The second sentence of Section 15.9 of the Lease is hereby
deleted and the following is substituted in lieu thereof:
In addition, if any tenant or occupant of all or any part of the
premises other than The Bear Stearns Companies Inc. (or any
successor corporation or partnership thereto), its Affiliates and
the Service Entities shall perform any Tenant Changes (other than
painting, carpeting, wall covering and similar minor decorative
changes) such tenant or occupant shall be required to pay Landlord's
reasonable, actual, third party costs (if any) of supervision of
such Tenant Changes, which costs shall be paid to Landlord by Tenant
within ten (10) days of Landlord's demand therefor.
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11. Insurance. The provisions of Section 17.2(b)(ii) are hereby deleted
from the Lease.
12. Repairs. The last sentence of Section 19.1(b) is hereby deleted from
the Lease.
13. Damage or Destruction. Effective on the Extension Term Commencement
Date, Section 30.4 is hereby deleted and the following is substituted in lieu
thereof:
Notwithstanding anything to the contrary contained herein, if the
Building or the premises shall be substantially damaged or destroyed
by fire or other cause at any time during the last two(2) years of
the Extension Term or the Second Extension Term, then either
Landlord or Tenant may cancel this Lease upon notice to the other
party given within sixty (60) days after such damage or destruction.
14. Notices.
(a) The notice parties and addresses for Landlord set forth in
Section 33.1 of the Lease are hereby deleted, and the following is substituted
in lieu thereof:
If to Landlord:
Forest City Jay Street Associates, L.P.
c/o Forest City Ratner Companies
One Metrotech Center North, 11th Floor
Brooklyn, New York 11201
With copies to:
Forest City Ratner Companies
One Metrotech Center North, 11th Floor
Brooklyn, New York 11202
Attention: General Counsel
Forest City Enterprises, Inc.
1100 Terminal Tower
50 Public Square
Cleveland, Ohio 44113
Attention: Geralyn Presti, Esq.
Arent Fox Kintner Plotkin & Kahn, PLLC
1675 Broadway
New York, New York 10019
Attention: Marc Rauch, Esq.
(b) The notice parties and addresses for Tenant set forth in Section
33.1 of the Lease are hereby deleted, and the following is substituted in lieu
thereof:
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If to Tenant:
The Bear Stearns Companies Inc.
One MetroTech Center North
Brooklyn, New York 11201
Attn: Mr. James K. Lang
With a copy to:
The Bear Stearns Companies Inc.
383 Madison Avenue
New York, New York 10179
Attn: James E. Raved, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Attention: Jacob Bart, Esq.
15. Extension of Term. Article 34 is hereby deleted from the Lease and the
following substituted in lieu thereof:
ARTICLE 34
EXTENSION OF TERM
34.1 (a) Tenant shall have the right to extend the Term for an
additional period (the "Second Extension Term") of ten (10) years
commencing on July 1, 2024 (the "Second Extension Term Commencement
Date") and ending on June 30, 2034 (the "Second Extension Term
Expiration Date") upon the same terms and conditions as provided in
this Lease for the Extension Term, except that the Fixed Rent shall
be adjusted as provided in Section 34.2, the provisions of Paragraph
5(a) of the Second Amendment shall be deleted, the provisions of
Paragraph 6 of this Second Amendment shall be deleted, Landlord
shall have no obligation to perform any work in the premises or the
Building to prepare the premises for Tenant's occupancy during the
Second Extension Term, Tenant shall not be entitled to any work
allowance, and Tenant shall have no further right to extend the
Term. The right to extend the Term for the Second Extension Term may
be exercised with respect to a. the entire premises, or b. less than
the entire premises provided that i. such extension shall include at
least fifty percent (50%) of the Office Space and shall be for full
floors which are contiguous (the "Extension Floors"), ii. with
respect to the Below Grade Space and the Messenger Center, Tenant
may include all of each such space but may not take portions of any
such space, and iii. with respect to any portion of the premises for
which the Term is not extended, this Lease shall on the expiration
of the Extension Term terminate and all provisions hereof with
respect to the termination of this Lease and the expiration of the
Term shall apply thereto, including any restoration requirements
with respect to such space.
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(b) The right to extend the term is subject to the
following:
(i) Tenant shall give Landlord notice (the
"Extension Notice") of its election to extend the Term for the
Second Extension Term at least eighteen (18) months prior to
the Expiration Date of the Extension Term, which notice shall
specify whether Tenant has elected to extend the Term with
respect to the entire premises or less than the entire
premises, and if Tenant desires to exercise the right to
extend with respect to less than the entire premises, a
description of the space desired;
(ii) Tenant shall not be in default (beyond any
applicable grace or cure periods) under this Lease as of the
time of the giving of the Extension Notice; and
(iii) Tenant and its Affiliates shall be in actual
occupancy of not less than fifty percent (50%) of the Office
Space (or if Tenant desires to exercise the right to extend
with respect to less than the entire premises, fifty percent
(50%) of the premises desired) as of the time of the giving of
the Extension Notice and the Second Extension Term
Commencement Date; or if Tenant and its Affiliates shall not
be in actual occupancy of at least fifty percent (50%) of the
Office Space (or the desired space) as of the time of the
giving of the Extension Notice, an officer of Tenant at or
above the level of Senior Managing Director and with
responsibility for financial matters or real estate shall
certify to Landlord that Tenant and its Affiliates shall, upon
the Second Extension Term Commencement Date, occupy at least
fifty percent (50%) of the Office Space (or the desired
space).
34.2 If Tenant shall elect to extend the Term for the Second
Extension Term, the Fixed Rent payable during the Second Extension
Term shall be an amount per annum equal to ninety-five (95%) percent
of the fair market rent nine (9) months prior to the Second
Extension Term Commencement Date, which fair market rent shall be
determined for the entire premises or for the Extension Floors, the
Below Grade Space and the Messenger Center, as applicable, but in no
event shall be less than Thirty Dollars ($30) per rentable square
foot for the Office Space or Thirteen Dollars ($13) per rentable
square foot for the Below Grade Space or the Messenger Center, it
being understood and agreed that separate determinations of the fair
market rent will be made for the Office Space, the Below Grade Space
and the Messenger Center.
(a) The "fair market rent" shall mean the going rate of
fixed annual rent for comparable office space, below grade space or
messenger center space, giving due consideration to location, size
and the interior construction and fittings in the premises, any
brokerage commissions which may or may not be payable, the fact that
Taxes and Operating Expenses are paid on a net basis, that Landlord
shall not be obligated to perform work to prepare the premises for
Tenant's occupancy, that Tenant shall not be entitled to any work
allowance and
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that Tenant shall not be entitled to any credit against the Fixed
Rent. Landlord and Tenant shall in good faith attempt to arrive at
an agreement as to the fair market rent as soon as possible after
Tenant gives the Extension Notice. In the event that the fair market
rent has not been agreed upon by Landlord and Tenant nine (9) months
prior to the Second Extension Term Commencement Date, then upon the
written request of either Landlord or Tenant the determination shall
be submitted to arbitration in accordance with the provisions of
Article 35 hereof. In the event that such arbitration shall not have
been finally determined prior to the Second Extension Term
Commencement Date, Tenant shall pay Thirty Dollars ($30.00) per
rentable square foot for the Office Space and Thirteen Dollars
($13.00) per rentable square foot for the Below Grade Space until
such determination is made. If the Fixed Rent determined by the
arbitrators to be payable shall be greater than that paid by Tenant
prior to the final determination of such arbitration, Tenant shall
within thirty (30) days after such final determination pay to
Landlord the amount of the deficiency plus interest on the
deficiency at the Interest Rate. If the Fixed Rent determined by the
arbitrators to be payable shall be less than that paid by Tenant
prior to the final determination of such arbitration, Landlord shall
credit any overpayment against the next installments of Fixed Rent,
with interest on the overpayment at the Interest Rate.
34.3 If this Lease is extended for the Second Extension Term,
Landlord or Tenant may request that the other party hereto execute a
certificate in form reasonably satisfactory to the parties setting
forth the exercise of Tenant's right to extend the term of this
Lease, the Second Extension Term Expiration Date and the Fixed Rent.
34.4 If Tenant exercises its right to extend the Term for the
Second Extension Term pursuant to this Article 34, the phrases "the
Term", "the term of this Lease" or "the term hereof" as used in this
Lease, shall be construed to include, when practicable, the Second
Extension Term.
16. Definitions. Section 36.1(b) and Section 36.1(h) are hereby deleted
from the Lease and the following is substituted in lieu thereof:
(b) "Interest Rate" shall refer to two percent (2%) plus the prime
commercial lending rate of J.P. Morgan Chase (or any successor thereto) from
time to time in effect for ninety (90) day unsecured loans.
(h) "Project" shall mean (i) the project known as "Metrotech,", a
commercial, academic and high technology office complex covering approximately
sixteen (16) acres in Downtown Brooklyn as shown on Exhibit R annexed hereto and
made a part hereof, and (ii) 340 Jay Street (also known as 12 Metrotech Center).
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17. Miscellaneous Clauses.
(a) Tenant and Landlord acknowledge that the provisions of Section
40.10 of the Lease shall be of no force and effect during the Extension Term and
(if applicable) the Second Extension Term.
(b) Section 40.12 is hereby deleted from the Lease.
18. Elevator Renovations.
(a) Landlord, at Landlord's election , at Landlord's expense and
upon not less than ninety (90) days prior notice to Tenant, shall have the right
to perform mechanical and/or decorative renovations to any or all of the
passenger elevators serving the premises. Landlord's notice shall be accompanied
by (i) copies of the most detailed plans and specifications then available for
the elevator renovation work to be undertaken by Landlord, and (ii) a projected
schedule for the elevator renovations. Landlord shall perform and complete any
such elevator renovations with reasonable diligence and using reasonable efforts
not to interfere with the conduct of business of Tenant or its Affiliates, or
the conduct of business of any Service Entities or any permitted subtenants.
(b) Tenant acknowledges that during performance of the elevator
renovations referred to in Paragraph 18(a), passenger elevators will be taken
out of service from time to time and that from time to time normal elevator
service will be disrupted; provided, however, that (i) no passenger elevators
will be taken out of service permanently, (ii) no more than one (1) passenger
elevator will be taken out of service at any one time during Business Hours,
(iii) no more than three (3) passenger elevators will be taken out of service at
any one time during any time other than Business Hours, and (iv) upon the
completion of such elevator renovation work, the quality of service provided by
the passenger elevators serving the premises (as determined by industry standard
traffic study methodology) shall be equal to or better than the quality of
service provided by such elevators on the date hereof. Notwithstanding anything
to the contrary in Sections 8.3, 10.1, 10.2, 10.5, 19.3 or any other applicable
provision of the Lease, Landlord shall not, in connection with the elevator
renovations, be subject to exercise of self-help rights by Tenant or to
liability to Tenant of any kind, whether in the form of rent abatements,
offsets, damages or otherwise.
19. City Incentives.
(a) Landlord and Tenant acknowledge and agree that Tenant is
presently negotiating certain agreements (which agreements shall be acceptable
to Tenant in its sole discretion) with the Deputy Mayor for Economic Development
and Rebuilding and/or the New York City Economic Development Corporation (and/or
other agencies or instrumentalities of New York City) which are necessary in
order to implement the conversion of certain New York State and/or New York City
sales tax exemptions which Tenant or an Affiliate of Tenant is presently
eligible for into real estate tax abatements or tax exemptions (or other
benefits) benefiting Tenant or an Affiliate of Tenant at the Premises and/or at
the building known as 383 Madison Avenue, New York, New York (such real estate
tax abatements or tax exemptions or other benefits are hereinafter referred to
as the "City Incentives" and such agreements are
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hereinafter referred to as the "Incentives Agreements"). Tenant shall use good
faith diligent efforts to complete the Incentives Agreements and to file and
prosecute any applications which are necessary in connection therewith.
(b) Landlord shall afford reasonable, good faith cooperation to
Tenant in connection with Tenant's efforts to fulfill its obligations pursuant
to the last sentence of Paragraph 19(a) and Tenant's efforts otherwise to secure
implementation of the City Incentives, provided, that Landlord shall not be
obligated to incur any costs (including without limitation reasonable attorneys
fees and disbursements), incur any losses or subject itself to potential
liability thereby. Landlord's reasonable, good faith cooperation shall extend to
(i) the execution of applications and related documents which have been prepared
by Tenant and which are necessary in Tenant's reasonable judgment in order for
Tenant to obtain and secure implementation of the City Incentives, (ii) the
passing through to Tenant of any reductions in PILOT or Taxes (as such terms are
defined in the Ground Lease) that are being granted to Landlord solely in order
to implement the City Incentives on Tenant's behalf, (iii) the execution of any
amendments to the Ground Lease, amendments to the Lease and supplemental
agreements with agencies or instrumentalities of New York City which are
necessary in order to implement the City Incentives on Tenant's behalf, (iv) the
exercise by Landlord of commercially reasonable, diligent efforts to obtain
amendments to space leases in the Building which are necessary in order to
implement the City Incentives on Tenant's behalf, (v) if it is impractical to
implement the City Incentives on Tenant's behalf by means of one or more of the
methods described in the foregoing subsections (i) through (iv), the exercise by
Landlord of commercially reasonable, diligent efforts to convert the Building to
condominium (or similar) form of ownership sufficient to implement the City
Incentives on Tenant's behalf, and (vi) the exercise by Landlord of commercially
reasonable, diligent efforts to obtain any third party (e.g. lender) consents or
approvals which may be necessary in connection with any of the foregoing. Tenant
shall pay Landlord's reasonable costs of affording Tenant any or all of the
foregoing reasonable, good faith cooperation (which costs shall include, without
limitation, reasonable attorneys fees and disbursements) within thirty (30) days
after receipt of Landlord's invoices therefor.
(c) Tenant shall notify Landlord that Tenant has completed the
Incentives Agreements with reasonable promptness after the completion thereof.
20. Brokerage. Landlord and Tenant each represents and warrants to the
other that it has not dealt with any real estate broker, finder or like agent
other than Insignia/ESG, Inc. and Ascot Brokerage, Ltd. (the "Brokers") in
connection with this Second Amendment and the transactions contemplated hereby,
and each agrees to indemnify, defend and hold the other harmless from and
against any and all loss, costs, damage and expense, including, without
limitation, reasonable attorneys' fees and disbursements, incurred by the other
by reason of any claims of, or liability to, any broker other than the Brokers
who shall claim to have dealt with it in connection with this Second Amendment
or the transactions contemplated hereby. Landlord shall pay the Brokers pursuant
to separate agreements. This Paragraph 20 shall survive the expiration or
earlier termination of the Lease.
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21. Certain Tax and Other Benefits; Participation in Net Proceeds of Sale
or Refinancing
(a) Without limiting anything contained in the 2001 Letter Agreement
or that certain Tenant Estoppel Certificate dated as of November 8, 1991, Tenant
and Landlord acknowledge and agree that effective July 30, 2001 the provisions
of Paragraph 6 of the 1991 Letter Agreement relating to admission of Tenant as a
limited partner of Landlord in order to provide certain tax and other benefits
to Tenant were deleted from the Lease, and that thereafter the same have had,
and will continue to have, no further force or effect.
(b) Notwithstanding anything to the contrary in the Lease,
commencing on the Effective Date of this Second Amendment, the Lease shall be
deemed amended to include a new Article 41 (presently annexed to the 1991 Letter
Agreement as Schedule 3), provided that said Article 41 shall be deemed amended
as follows:
(i) The final two sentences of Section 41.1 shall be deemed
deleted and the following shall be substituted in lieu thereof:
Tenant's Participation shall be effective only during
the period commencing on the Effective Date of the Second
Amendment and ending on June 30, 2014 (the "Participation
Period").
(ii) Section 41.2 shall be deemed deleted and the following
shall be substituted in lieu thereof:
Tenant's Participation shall be effective only with
respect to a Disposition effectuated during the Participation
Period and, subject to the provisions of this Section 41.2,
this right shall terminate and be of no further force and
effect after a sale of all of the Building or Landlord's
interest in the Ground Lease or the ownership interest in
Landlord to any third party by Forest City Jay Street
Associates other than to any of Landlord's Participation
Parties or, if a sale is for only a portion of the Building or
such interests, then Tenant's Participation shall terminate
with respect to the portion of the Building or the interest
which is the subject of such Disposition. If a contract for a
Disposition which is a sale or transfer or a commitment letter
or loan agreement with respect to a Disposition which is a
financing shall be executed and delivered during the
Participation Period then, notwithstanding the fact that the
closing of said Disposition shall occur after the expiration
of the Participation Period, Tenant shall nevertheless be
entitled to, and Landlord shall pay, Tenant's Participation
and Tenant's right to receive payment for Tenant's
Participation with respect to such Disposition shall survive
the Participation Period. Notwithstanding anything to the
contrary contained in this Article 41, if there is a
Disposition to any Landlord's Participation Party, Tenant
shall be entitled to Tenant's Participation with respect to
such Disposition (an "Affiliate Participation"), and the
transferee with respect to such Disposition (the "Transferee
Party") shall be bound by the
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provisions of this Article, and with respect to any subsequent
Disposition by such Transferee Party, Tenant shall be entitled
to Tenant's Participation with respect thereto and Landlord's
Costs and Landlord's Equity shall be determined as if such
Affiliate Participation had not occurred.
(iii) Section 41.4 shall be deleted and the following shall be
substituted in lieu thereof:
As soon as practicable after the end of each fiscal year
of Landlord occurring in whole or in part during the
Participation Period, and, in any event, within one hundred
fifty (150) days after the end of such fiscal year, Landlord
shall deliver to Tenant annual financial statements of the
operations of Landlord certified by the chief operating
officer or managing general partner of Landlord or the
designee of such chief operating officer or managing general
partner or, to the extent audited financial statements have
been prepared, the audited financial statements.
(iv) The first sentence of Section 41.5 shall be deleted and
the following shall be substituted in lieu thereof:
As soon as practicable after the end of each fiscal year
of Landlord occurring in whole or in part during the
Participation Period, and, in any event, within one hundred
fifty (150) days after the end of such fiscal year, Landlord
shall deliver to Tenant a statement in reasonable detail
setting forth Landlord's Equity which statement shall include
a determination of Landlord's Costs and shall be certified by
the chief operating officer or managing general partner of
Landlord or the designee of such chief operating officer or
managing general partner.
22. Miscellaneous.
(a) Tenant hereby confirms (i) that the Lease is in full force and
effect and has not been modified or amended except as herein provided, (ii) that
to the best of Tenant's knowledge, Landlord is not now in default under the
Lease beyond applicable notice and grace periods, and that Tenant knows of no
event which, with notice or the passage of time or both would constitute such a
default, and (iii) that Tenant has made no demand against Landlord and has no
present right to make such a demand with respect to charges, liens, defenses,
counterclaims, offsets, claims or credits against the payment of Rent or the
performance of Tenant's obligations under the Lease, except as permitted by the
terms and provisions of this Lease.
(b) As modified by this Second Amendment, the Lease and all
covenants, agreements, terms, provisions and conditions thereof shall continue
in full force and effect and Landlord and Tenant hereby ratify and confirm the
covenants, agreements, terms, provisions and conditions thereof.
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(c) Landlord and Tenant, each upon request of the other, at any time
and from time to time hereafter and without further consideration, shall
execute, acknowledge and deliver to the other any instruments or documents, or
take such further actions, as shall be reasonably required or as may be
necessary to assure each party the full benefits of this Second Amendment.
(d) This Second Amendment shall not be binding upon or enforceable
against either party unless and until a fully executed counterpart of this
Second Amendment shall have been unconditionally delivered to Tenant.
(e) This Second Amendment supersedes all prior discussions and
correspondence between the parties and supersedes any and all prior
understandings between the parties concerning the subject matter of this Second
Amendment. All prior and contemporaneous agreements, if any, between Landlord
and Tenant with respect to the subject matter of this Second Amendment are
merged into this Second Amendment, which shall constitute the complete, final
and entire agreement of the parties with respect the subject matter. Neither
party shall be bound by any terms, covenants, conditions or representations not
expressly contained herein.
(f) This Second Amendment may not be waived or changed orally, and
may be amended only by an agreement in writing signed by the party against whom
enforcement of any such change is sought.
(g) Landlord and Tenant acknowledge and agree that this Second
Amendment has been drafted jointly by the parties and that this Second Amendment
shall be construed without regard to any presumption or other rule requiring
construction against the party causing this Second Amendment to be drafted.
(h) This Second Amendment shall be binding upon and inure to the
benefit of (i) Landlord, and the officers, employees, agents, directors
partners, successors and assigns of Landlord, and (ii) Tenant, and the officers,
employees, agents, directors, partners, successors stockholders, successors and
permitted assigns of Tenant.
(i) This Second Amendment shall be interpreted and enforced in
accordance with the laws of the State of New York applicable to negotiated
agreements executed and to be performed fully therein.
(j) This Second Amendment may be executed in counterparts.
[signature page follows]
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IN WITNESS WHEREOF, the parties to this Second Amendment have caused
this Second Amendment to be executed as of the day and year first above written.
LANDLORD:
FOREST CITY JAY STREET ASSOCIATES, L.P.
By: RRG B.U.G. Associates, L.P.
General Partner
By: RRG B.U.G. Inc.,
General Partner
By:
-------------------------------
Bruce C. Ratner, President
TENANT:
THE BEAR STEARNS COMPANIES, INC.
By:
---------------------------------------
Samuel L. Molinaro, Jr.
Executive Vice President/CFO
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