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EXHIBIT 10.1
LEASE made as of the 21st day of November, 1996, between 200 FIFTH AVENUE
ASSOCIATES, having an office c/o Helmsley-Spear, Inc., THE TOY CENTER, 200
Fifth Avenue, New York, New York 10010, hereinafter referred to as "Lessor" or
"Landlord", and
THIRD QUARTER CORPORATION
AN INDIANA CORPORATION
HEREINAFTER REFERRED TO AS "LESSEE" OR "TENANT"
WITNESSETH: Lessor hereby leases to Lessee and Lessee hereby hires from
Lessor ROOM 516 (said space is hereinafter called the "premises") in the
building known as THE TOY CENTER South Located at Block 825, Lot 31, with a
mailing address of THE TOY CENTER, 200 Fifth Avenue (the "building") in the
County of New York, City of New York, 10010, for a term of ten (10) years and
four (4) months, to commence on the 1st day of January, 1996, and to expire on
the 30th day of April 2006, or until such term shall sooner end as in Article
12 and elsewhere herein provided, both dates inclusive, at a fixed annual
rental (subject to Article 23 and 41) at the annual rate of
AS MORE PARTICULARLY DESCRIBED IN ARTICLE 42 HEREOF
payable in equal monthly installments in advance on the first day of each
month, except that the first installment of rent due under this lease shall be
paid by Lessee upon its execution of this lease, unless this lease be a
renewal.
Lessor and Lessee covenant and agree:
PURPOSE
1. Lessee shall use and occupy the premises only for office and wholesale
showrooms in the transaction of its business of toys and games, and for no
other purpose.
RENT AND ADDITIONAL RENT
2. Lessee agrees to pay rent as herein provided at the office of Lessor or
such other place as Lessor may designate, payable in United States legal tender
by cash, or by good and sufficient check drawn on a New York City Clearing
House Bank, and without any set off or deduction whatsoever. Any sum other
than fixed rent payable hereunder shall be deemed additional rent and due on
demand.
ASSIGNMENT
3. Neither Lessee nor Lessee's legal representatives or successors in
interest by operation of law or otherwise, shall assign, mortgage or otherwise
encumber this lease, or sublet or permit all or part of the premises to be used
by others, without the prior written consent of Lessor in each instance. The
transfer of a majority of the issued and outstanding capital stock of any
corporate lessee or sublessee of the lease or a majority of the total interest
in any partnership lessee or sublessee, however accomplished, and whether in a
single
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transaction or in a series of related or unrelated transactions shall be deemed
an assignment of this lease or of such sublease. The merger or consolidation
of a corporate lessee or sublessee where the net worth of the resulting or
surviving corporation is less than the net worth of the lessee or sublessee
immediately prior to such merger or consolidation shall be deemed an assignment
of this lease or of such sublease. If without Lessor's written consent this
lease is assigned, or the premises are sublet or occupied by anyone other than
Lessee, Lessor may accept the rent from such assignee, subtenant or occupant
and apply the net amount thereof to the rent herein reserved, but no such
assignment, subletting, occupancy or acceptance of rent shall be deemed a
waiver of this covenant. Consent by Lessor to an assignment or subletting
shall not relieve Lessee from the obligation to obtain Lessor's written consent
to any further assignment, subletting, occupancy or acceptance of rent shall be
deemed a waiver of this covenant. Consent by Lessor to an assignment or
subletting shall not relieve Lessee from the obligation to obtain Lessor's
written consent to any further assignment or subletting. In no event shall any
permitted sublessee assign or encumber its sublease or further sublet all or
any portion of its sublet space, or otherwise suffer or permit the sublet space
or any part thereof to be used or occupied by others, without Lessor's prior
written consent in each instance. A modification, amendment or extension of a
sublease shall be deemed a sublease.
DEFAULT
4. Lessor may terminate this lease on three (3) days' notice: (a) if rent
or additional rent is not paid within three (3) days after written notice from
Lessor; or (b) if Lessee shall have failed to cure a default in the performance
of any covenant of this lease (except the payment of ren)t, or any rule or
regulation hereinafter set forth, within five (5) days after written notice
thereof from Lessor, or if default cannot be completely cured in such time, if
Lessee shall not promptly proceed to cure such default within said five (5)
days, or shall not complete the curing of such default with due diligence; or
(c) when and to the extent permitted by law, if a petition in bankruptcy shall
be filed by or against Lessee or if Lessee shall make a general assignment for
the benefit of creditors, or receive the benefit of any insolvency or
reorganization act; or (d) if a receiver or trustee is appointed for any
portion of Lessee's property and such appointment is not vacated within twenty
(20) days; or (e) if any execution or attachment shall be issued under which
the premises shall be taken or occupied or attempted to be taken or occupied by
anyone other than Lessee; or (f) if the premises become and remain vacant or
deserted for a period of ten (10) days; or (g) if Lessee shall default beyond
any grace period under any other lease between Lessee and Lessor; or (h) if
Lessee shall fail to move into or take possession of the premises within
fifteen (15) days after commencement of the term of this lease.
At the expiration of the three (3) day notice period, this lease and any
rights of renewal or extension thereof shall terminate as completely as if that
were the date originally fixed for the expiration of the term of this lease,
but Lessee shall remain liable as hereinafter provided.
RELETTING, ETC.
5. If Lessor shall re-enter the premises on the default of Lessee, by
summary proceedings or otherwise: (a) Lessor may re-let the premises or any
part thereof as Lessee's agent, in the name of Lessor, or otherwise, for a term
shorter or longer than the balance of the term of this lease, and may grant
concessions or free rent; (b) Lessee shall pay Lessor any
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deficiency between the rent hereby reserved and the net amount of any rents
collected by Lessor for the remaining term of this lease, through such
re-letting. Such deficiency shall become due and payable monthly, as it is
determined. Lessor shall have no obligation to re-let the premises, and its
failure or refusal to do so, or failure to collect rent on re-letting, shall
not affect Lessee's ability hereunder. In computing the net amount of rents
collected through such re-letting, Lessor may deduct all expenses incurred in
obtaining possession or re-letting the premises, including legal expenses,
attorneys' fees, brokerage fees, the cost of restoring the premises to good
order, and the cost of all alterations and decorations deemed necessary by
Lessor to effect re-letting. In no event shall Lessee be entitled to a credit
or repayment for rerental income which exceeds the sums payable by Lessee
hereunder or which covers a period after the original term of this Lease; (c)
Lessee hereby expressly waives any right of redemption granted by any present
or future law. "Re-enter" and "re-entry" as used in this lease are not
restricted to their technical legal meaning. In the event of a breach or
threatened breach of any of the covenants or provisions hereof, Lessor shall
have the right of injunction. Mention herein of any particular remedy shall not
preclude Lessor from any other available remedy; (d) Lessor shall recover as
liquidated damages, in addition to accrued rent and other charges, if Lessor's
re-entry is the result of Lessee's bankruptcy, insolvency or reorganization,
the full rental for the maximum period allowed by any act relating to
bankruptcy, insolvency or reorganization.
If Lessor re-enters the premises for any cause, or if Lessee abandons or
vacates the premises, and after the expiration of this lease, any property left
in the premises by Lessee shall be deemed to have been abandoned by Lessee, and
Lessor shall have the right to retain or dispose of such property in any manner
without any obligation to account therefor to Lessee. If Lessee shall at any
time default hereunder, and if Lessor shall institute an action or summary
proceedings against Lessee based upon such default, then Lessee will reimburse
Lessor for the expense of reasonable attorneys' fees and disbursements thereby
incurred by Lessor.
LESSOR MAY CURE DEFAULTS
6. If Lessee shall default in performing any covenant or condition of this
lease, Lessor may perform the same for the account of Lessee, and Lessee shall
reimburse Lessor for any expense incurred therefor, which obligation shall
survive the expiration or sooner termination of the term of this lease.
ALTERATIONS
7. Lessee shall make no decoration, alteration, addition or improvement in
the premises, without the prior written consent of Lessor, and then only by
contractors or mechanics and in such manner and with such materials as shall be
approved by Lessor. All alterations, additions or improvements to the
premises, including window and central air conditioning equipment and duct
work, except movable office furniture and equipment installed at the expense of
the Lessee, shall, unless Lessor elects otherwise in writing, become the
property of Lessor upon the installation thereof, and shall be surrendered with
the premises at the expiration of this lease. Any such alterations, additions
and improvements which Lessor shall designate, shall be removed by Lessee and
any damage repaired, at Lessee's expense, prior to the expiration of this
lease.
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LIENS
8. Prior to commencement of its work in the demised premises, Lessee shall
obtain and deliver to Lessor a written letter of authorization, in form
satisfactory to Lessor's counsel, signed by architects, engineers and designers
to become involved in such work, which shall confirm that any of their drawings
or plans are to be removed from any filing with governmental authorities, on
request of Lessor, in the event that said architect, engineer, surveyor or
designer thereafter no longer is providing services with respect to the demised
premises. With respect to contractors, subcontractors, materialmen and
laborers, and architects, engineers and designers, for all work to be furnished
to Lessee at the premises, Lessee agrees to obtain and deliver to Lessor
written and unconditional waiver of mechanics liens upon the premises or the
building, after payments to the contractors, etc., subject to any then
applicable provisions of the Lien Law. Notwithstanding the foregoing, Lessee
at its expense shall cause any lien filed against the premises or the building,
for work or materials claimed to have been furnished to Lessee, to be
discharged of record within ten (10) days after notice thereof.
REPAIRS
9. Lessee shall take good care of the premises and the fixtures and
appurtenances therein, and shall make all repairs necessary to keep them in
good working order and condition, including structural repair when those are
necessitated by the act, omission or negligence of Lessee or its agents,
employees or invitees. During the term of this Lease, Lessee may have the use
of any air-conditioning equipment located in the premises, and Lessee, at its
own cost and expense, shall maintain and repair such equipment and shall
reimburse Lessor, in accordance with Article 41 of this lease, for electricity
consumed by the equipment. The exterior walls of the building, the windows and
the portions of all window sills outside same are not part of the premises
demised by this lease, and Lessor hereby reserves all rights to such parts of
the building.
DESTRUCTION
10. If the premises shall be partially damaged by fire or other casualty,
the damage shall be repaired at the expense of Lessor but without prejudice to
the rights of subrogation, if any, of Lessor's insurer. Lessor shall not be
required to repair or restore any of Lessee's property or any alteration or
leasehold improvement made by or for Lessee at Lessee's expense. The rent
shall abate in proportion to the portion of the premises not usable by Lessee.
Lessor shall not be liable to Lessee for any delay in restoring the premises.
Lessee's sole remedy being the right to an abatement of rent, as above
provided. If the premises are rendered wholly untenantable by fire or other
casualty and if Lessor shall decide not to restore the premises, or if the
building shall be so damaged that Lessor shall decide to demolish it or to
rebuild it (whether or not the premises have been damaged), Lessor may within
ninety (90) days after such fire or other cause give notice to Lessee of its
election that the term of this lease shall automatically expire no less than
ten (10) days after such notice is given. Notwithstanding the foregoing, each
party shall look first to any insurance in its favor before making any claim
against the other party for recovery for loss or damage resulting from fire or
other casualty, and to the extent that such insurance is in force and
collectible and to the extent
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permitted by law, Lessor and Lessee each hereby releases and waives all right
of recovery against the other or any one claiming through or under each of them
by way of subrogation or otherwise. The foregoing release and waiver shall be
in force only if both releasors' insurance policies contain a clause providing
that such a release or waiver shall not invalidate the insurance and also,
provided that such a policy can be obtained without additional premiums.
Lessee hereby expressly waives the provisions of Section 227 of the Real
Property Law and agrees that the foregoing provisions of this Article shall
govern and control in lieu thereof.
END OF TERM
11. Lessee shall surrender the premises to Lessor at the expiration or
sooner termination of this lease in good order and condition, except for
reasonable wear and tear and damage by fire or other casualty, and Lessee shall
remove all of its property. Lessee agrees it shall indemnify and save Lessor
harmless against all costs, claims, loss or liability resulting from delay by
Lessee in so surrendering the premises, including, without limitation, any
claims made by any succeeding tenant founded on such delay. Accordingly, the
parties recognize and agree that other damage to Lessor resulting from any
failure by Lessee timely to surrender the premises will be substantial, will
exceed the amount of monthly rent theretofore payable hereunder, and will be
impossible of accurate measurement. Lessee therefore agrees that if possession
of the premises is not surrendered to Lessor within one (1) day after the date
of the expiration or sooner termination of the term of this lease, then Lessee
will pay Lessor as liquidated damages for each month and for each portion of
any month during which Lessee holds over in the premises after expiration or
termination of the term of this lease, a sum equal to three times the average
rent and additional rent which was payable per month under this lease during
the last six months of the term thereof. The aforesaid obligations shall
survive the expiration or sooner termination of the term of this lease. At any
time during the term of this lease, Lessor may exhibit the premises to
prospective purchasers or mortgagees of Lessor's interest therein, and may
place upon the premises the usual "For Sale" notices. During the last year of
the term of this lease, Lessor may exhibit the premises to prospective tenants
and may place and keep upon the premises the usual "To Let" notice.
SUBORDINATION AND ESTOPPEL
12. Lessee has been informed and understands that Lessor is the Lessee
under a lease of the land and entire building of which the premises form a part
(hereinafter called the "Master Lease"). This lease is and shall be subject
and subordinate to the Master Lease and all other ground or underlying leases
and to all mortgages which may now or hereafter affect such leases or the real
property of which the premises form a part, and to all renewals, modifications,
consolidations, replacements and extensions thereof. This Article shall be
self-operative and no further instrument of subordination shall be necessary.
In confirmation of such subordination, Lessee shall execute promptly any
certificate that Lessor may request. Lessee hereby appoints Lessor as Lessee's
irrevocable attorney-in-fact to execute any document of subordination on behalf
of Lessee. In the event that the Master Lease or any ether ground or underling
lease is terminated, or any mortgage foreclosed, this lease shall not terminate
or be terminable by Lessee unless Lessee was specifically named in any
termination or foreclosure judgment or final order. In the event that the
Master Lease or any other ground or underlying lease is terminated as
aforesaid, or if the interests of Lessor under this lease are
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transferred by reason of or assigned in lieu of foreclosure or other
proceedings for enforcement of any mortgage, or if the holder of any mortgage
acquires a lease in substitution therefor, then the Lessee will, at the option
to be exercised in writing by the lessor under the Master Lease or such
purchaser, assignee or lessee, as the case may be, (i) attorn to it and will
perform for its benefit all the terms, covenants and conditions of this lease
on the Lessee's part to be performed with the same force and effect as if said
lessor or such purchaser, assignee or lessee, were the landlord originally
named in this lease, or (ii) enter into a new lease with said lessor or such
purchaser, assignee or lessee, as landlord, for the remaining term of this
lease and otherwise on the same terms, conditions and rentals as herein
provided. If the current term of the Master Lease shall expire prior to the
date set forth herein for the expiration of this lease, then, unless Lessor, at
its sole option, shall have elected to extend or renew the term of the Master
Lease the term of this lease shall expire on the date of expiration of the
Master Lease, notwithstanding the later expiration date hereinabove set forth.
If the Master Lease is renewed, then the term of this lease shall expire as
hereinabove set forth. From time to time, Lessee, on at least ten (10) days'
prior written request by Lessor will deliver to Lessor a statement in writing
certifying that this lease is unmodified and 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) and the dates to which the rent and
other charges have been paid and stating whether or not the Lessor is in
default in performance of any covenant, agreement, or condition contained in
this lease and, if so, specifying each such default of which Lessee may have
knowledge.
CONDEMNATION
13. If the whole or any substantial part of the premises shall be
condemned by eminent domain or acquired by private purchase in lieu thereof,
for any public or quasi-public purpose, this lease shall terminate on the date
of the vesting of title through such proceeding or purchase, and Lessee shall
have no claim against Lessor for the value of any unexpired portion of the term
of this lease, nor shall Lessee be entitled to any part of the condemnation
award or private purchase price. If less than a substantial part of the
premises is condemned, this lease shall not terminate, but rent shall abate in
proportion to the portion of the premises condemned.
REQUIREMENTS OF LAW
14. (a) Lessee at its expense shall comply with all laws, orders, and
regulations of any governmental authority having or asserting jurisdiction
over the premises, which shall impose any violation, order or duty upon
Lessor or Lessee with respect to the premises or the use or occupancy
thereof, including, without limitation, compliance in the premises with New
York City Local Law No. 5 or any similar or successor law. The foregoing
shall not require Lessee to do structural work.
(b) Lessee shall require every person engaged by him to clean any
window in the premises from the outside, to use the equipment and safety
devices required by Section 202 of the Labor Law and the rules of any
governmental authority having or asserting jurisdiction.
(c) Lessee at its expense shall comply with all requirements of the
New York Board of Fire Underwriters, or any other similar body affecting
the premises and shall
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not use the premises in a manner which shall increase the rate of fire
insurance of Lessor or of any other tenant, over that in effect prior to
this lease. If Lessee's use of the premises increases the fire insurance
rate, Lessee shall reimburse Lessor for all such increased costs. That
the premises are being used for the purposes set forth in Article 1
hereof shall not relieve Lessee from the foregoing duties, obligations
and expenses.
CERTIFICATE OF OCCUPANCY
15. Lessee will at no time use or occupy the premises in violation of the
certificate of occupancy issued for the building. The statement in this lease
of the nature of the business to be conducted by Lessee shall not be deemed to
constitute a representation or guaranty by Lessor that such use is lawful or
permissible in the premises under the certificate of occupancy for the
building.
POSSESSION
16. If Lessor shall be unable to give possession of the premises on the
commencement date of the term because of the retention of possession of any
occupant thereof, alteration or construction work, or for any other reason
except as hereinafter provided, Lessor shall not be subject to any liability
for such failure. In such event, this lease shall stay in full force and
effect, without extension of its term. However, the rent hereunder shall not
commence until the premises are available for occupancy by Lessee. If delay in
possession is due to work, changes or decorations being made by or for Lessee,
or is otherwise caused by Lessee, there shall be no rent abatement and the rent
shall commence on the date specified in this lease. If permission is given to
Lessee to occupy the demised premises or other premises prior to the date
specified as the commencement of the term, such occupancy shall be deemed to be
pursuant to the terms of this lease, except that the parties shall separately
agree as to the obligation of Lessee to pay rent for such occupancy. The
provisions of this Article are intended to constitute an "express provision to
the contrary" within the meaning of Section 223(a), New York Real Property Law.
QUIET ENJOYMENT
17. Lessor covenants that if Lessee pays the rent and performs all of
Lessee's other obligations under this lease, Lessee may peaceably and quietly
enjoy the demised premises, subject to the terms, covenants and conditions of
this lease and to the ground leases, underlying leases and mortgages
hereinbefore mentioned.
RIGHT OF ENTRY
18. Lessee shall permit Lessor to erect and maintain pipes and conduits in
and through the premises. Lessor or its agents shall have the right to enter
or pass through the premises at all times, by master key, by reasonable force
or otherwise, to examine the same, and to make such repairs, alterations or
additions as it may deem necessary or desirable to the premises or the building
and to take all material into and upon the premises that may be required
therefor. Such entry and work shall not constitute an eviction of Lessee in
whole or in
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part, shall not be ground for any abatement of rent, and shall impose no
liability on Lessor by reason of inconvenience or injury to Lessee's business.
Lessor shall have the right at any time, without the same constituting an
actual or constructive eviction, and without incurring any liability to Lessee,
to change the arrangement and/or location of entrances or passageways, windows,
corridors, elevators, stairs, toilets, or other public parts of the building,
and to change the name or number by which the building is known.
VAULT SPACE
19. Anything confined in any plan or blueprint to the contrary
notwithstanding, no vault or other space not within the building property line
is demised hereunder. Any use of such space by Lessee shall be deemed to be
pursuant to a license, revocable at will by Lessor, without diminution of the
rent payable hereunder. If Lessee shall use such vault space, any fees, taxes
or charges made by any governmental authority for such space shall be paid by
Lessee.
INDEMNITY
20. Lessee shall indemnify, defend and save Lessor harmless from and
against any liability or expense arising from the use or occupation of the
premises by Lessee, or anyone on the premises with Lessee's permission, or from
any branch of this lease.
LESSOR'S LIABILITY
21. This lease and the obligations of Lessee hereunder shall in no way be
affected because Lessor is unable to fulfill any of its obligations or to
supply any service, by reason of strike or other cause not within Lessor's
control. Lessor shall have the right, without incurring any liability to
Lessee, to stop any service because of accident or emergency, or for repairs,
alterations or improvements, necessary or desirable in the judgment of Lessor
until such repairs, alterations or improvements shall have been completed.
Lessor shall not be liable to Lessee or anyone else, for any loss or damage to
person, property or business, unless due to the negligence of Lessor; nor shall
Lessor be liable for any latent defect in the premises or the building. Lessee
agrees to look solely to Lessor's estate and interest in the land and building,
or the lease of the building or of the land and building, and the demised
premises, for the satisfaction of any right or remedy of Lessee for the
collection of a judgment (or other judicial process) requiring the payment of
money by Lessor, in the event of any liability by Lessor, and no other property
or assets of Lessor shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Lessee's remedies under or with respect to
this lease, the relationship of landlord and tenant hereunder, or Lessee's use
and occupancy of the demised premises or any other liability of Lessor to
Lessee (except for negligence).
CONDITION OF PREMISES
22. Lessee acknowledges that Lessor has made no representation or promise,
except as herein expressly set forth. Lessee agrees to accept the premises
"as is", except for any work which Lessor has expressly agreed in writing to
perform.
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COST OF LIVING ADJUSTMENTS
23. The fixed annual rent reserved in this lease and payable hereunder
shall be adjusted, as of the times and in the manner set forth in this Article:
(a) DEFINITIONS: For the purposes of this Article, the following
definitions shall apply:
(i) The term "Base Year" shall mean the full calendar year
during which the term of this lease commences.
(ii) The term "Price Index" shall mean the "Consumer Price
Index" published by the Bureau of Labor Statistics of the U.S.
Department of Labor, All Items, New York, N.Y.-Northeastern, N.J.,
all urban consumers (presently denominated "CPI-U"), or a successor
or substitute index appropriately adjusted.
(iii) The term "Price Index for the Base Year" shall mean the
average of the monthly All Items Price Indexes for each of the 12
months of the Base Year.
(b) Effective as of each January and July subsequent to the Base
Year, there shall be made a cost of living adjustment of the fixed annual
rental rate payable hereunder. The July adjustment shall be based on the
percentage difference between the Price Index for the preceding month of
June and the Price Index for the Base Year. The January adjustment shall
be based on such percentage difference between the Price Index for the
preceding month of December and the Price Index for the Base Year.
(i) In the event the Price Index for June in any calendar year
during the term of this lease reflects an increase over the Price
Index for the Base Year, then the fixed annual rent herein provided
to be paid as of the July 1st following such month of June
(unchanged by any adjustment under this Article) shall be
multiplied by the percentage difference between the Price Index for
June and the Price Index for the Base Year, and the resulting sum
shall be added to such fixed annual rent, effective as of such July
1st. Said adjusted fixed annual rent shall thereafter be payable
hereunder, in equal monthly installments, until it is readjusted
pursuant to the terms of this lease.
(ii) In the event the Price Index for December in any calendar
year during the term of this lease reflects an increase over the
Price Index for the Base Year, then the fixed annual rent herein
provided to be paid as of the January 1st following such month of
December (unchanged by any adjustment under this Article) shall be
multiplied by the percentage difference between the Price Index for
December and the Price Index for the Base Year, and the resulting
sum shall be added to such fixed annual rent effective as of such
January 1st. Said adjusted fixed annual rent shall thereafter be
payable hereunder, in equal monthly installments, until it is
readjusted pursuant to the terms of this lease.
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The following illustrates the intentions of the parties hereto as to
the computation of the aforementioned cost of living adjustment in the
annual rent payable hereunder:
Assuming that said fixed annual rent is $10,000, that the
Price Index for the Base Year was 102.0 and that the Price Index
for the month of June in a calendar year following the Base Year
was 105.0, then the percentage increase thus reflected, i.e.,
2.941% (3.0/102.0) would be multiplied by $10,000, and said fixed
annual rent would be increased by $294.10 effective as of July 1st
of said calendar year.
In the event that the Price Index ceases to use 1982-84 = 100 as the
basis of calculation, or if a substantial change is made in the terms or
number of items contained in the Price Index, then the Price Index shall
be adjusted to the figure that would have been arrived at had the manner
of computing the Price Index in effect at the date of this lease not been
altered. In the event such Price Index (or a successor or substitute
index) is not available, a reliable governmental or other non-partisan
publication evaluating the information theretofore used in determining
the Price Index shall be used.
No adjustments or recomputations, retroactive or otherwise, shall be
made due to any revision which may later be made in the first published
figure of the Price index for any month.
(c) Lessor will cause statements of the cost of living adjustment
provided for in subdivision (b) to be prepared in reasonable detail and
delivered to Lessee.
(d) In no event shall the fixed annual rent originally provided to
be paid under this lease (exclusive of the adjustments under this
Article) be reduced by virtue of this Article.
(e) Any delay or failure of Lessor, beyond July or January of any
year, in computing or billing for the rent adjustments hereinabove
provided, shall not constitute a waiver of or in any way impair the
continuing obligation of Lessee to pay such rent adjustments hereunder.
(f) Notwithstanding any expiration or termination of this lease
prior to the lease expiration date (except in the case of a cancellation
by mutual agreement) Lessee's obligation to pay rent as adjusted under
this Article shall continue and shall cover all periods up to the lease
expiration date, and shall survive any expiration or termination of this
lease.
TAX ESCALATION
24. Lessee shall pay to Lessor, as additional rent, tax escalation in
accordance with this Article:
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(a) For purposes of this lease the rentable square foot area of the
presently demised premises shall be deemed to be 1,020 square feet.
(b) Definitions: For the purpose of this Article, the following
definitions shall apply:
(i) The term "base tax year" as hereinafter set forth for the
determination of real estate tax escalation, shall mean the New
York City real estate tax year commencing July 1, 1996 and ending
June 30, 1997.
(ii) The term "The Percentage", for purposes of computing tax
escalation, shall mean decimal one six nine percent (.16%). The
Percentage has been computed on the basis of a fraction, the
numerator of which is the rentable square foot area of the
presently demised premises and the denominator or which is the
total rentable square foot area of the office and commercial space
in the building project. The parties acknowledge and agree that
the total rentable square foot area of the office and commercial
space in the building project shall be deemed to be 602,419 sq. ft.
(iii) the term "the building project" shall mean the aggregate
combined parcel of land on a portion of which are the improvements
of which the demised premises form a part, with all the
improvements thereon, said improvements being a part of the block
and lot for tax purposes which are applicable to the aforesaid
land.
(iv) The term "comparative year" shall mean the twelve (12)
months following the base tax year, and each subsequent period of
twelve (12) months (or such other period of twelve (12) months
occurring during the term of this lease as hereafter may be duly
adopted as the fiscal year for real estate tax purposes by the City
of New York).
(v) The term "real estate taxes" shall mean the total of all
taxes and special or other assessments levied, assessed or imposed
at any time by any governmental authority upon or against the
building project, and also any tax or assessment levied, assessed
or imposed at any time by any governmental authority in connection
with the receipt of income or rents from said building project to
the extent that same shall be in lieu of all or a portion of any of
the aforesaid taxes or assessments, or additions or increases
thereof, upon or against said building project. If, due to a
future change in the method of taxation or in the taxing authority,
or for any other reason, a franchise, income, transit, profit or
other tax or governmental imposition, however designated, shall be
levied against Lessor in substitution in whole or in part for the
real estate taxes, or in lieu of additions to or increases of said
real estate taxes, then such franchise, income, transit, profit or
other tax or governmental imposition shall be deemed to be included
within the definition of "real estate taxes" for the purposes
hereof. As to special assessments which are payable over a period
of time extending beyond the term of this lease, only a pro rata
portion thereof, covering
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the portion of the term of this lease unexpired at the time of the
imposition of such assessment, shall be included in "real estate
taxes". If, by law, any assessment may be paid in installments,
then, for the purposes hereof (a) such assessment shall be deemed
to have been payable in the maximum number of installments
permitted by law and (b) there shall be included in real estate
taxes, for each comparative year in which such installments may be
paid, the installments of such assessment so becoming payable
during such comparative year, together with interest payable during
such comparative year.
(vi) Where a "transition assessment" is imposed by the City of
New York for any tax (fiscal) year, then the phrases "assessed
value" and "assessments" shall mean the transition assessment for
that tax (fiscal) year.
(vii) The phrase "real estate taxes payable during the base
tax year" shall mean that amount obtained by multiplying the
assessed value of the land and buildings of the building project
for the base tax year by the tax rate for the base tax year for
each $100 of such assessed value.
(c) 1. In the event that the real estate taxes payable for any
comparative year shall exceed the amount of the real estate taxes
payable during the base tax year, Lessee shall pay to Lessor, as
additional rent for such comparative year, an amount equal to the
percentage of the excess. Before or after the start of each
comparative year, Lessor shall furnish to Lessee a statement of the
real estate taxes payable for such comparative year, and a
statement of the real estate taxes payable during the base tax
year. If the real estate taxes payable for such comparative year
exceed the real estate taxes payable during the base tax year,
additional rent for such comparative year, in an amount equal to
The Percentage of the excess shall be due from Lessee to Lessor,
and such additional rent shall be payable by Lessee to Lessor
within ten (10) days after receipt of the aforesaid statement. The
benefit of any discount for any earlier payment or prepayment of
real estate taxes shall accrue solely to the benefit of Lessor, and
such discount shall not be subtracted from the real estate taxes
payable for any comparative year.
2. Should the real estate taxes payable during the base tax
year be reduced by final determination of legal proceedings,
settlement or otherwise, then, the real estate taxes payable during
the base tax year shall be correspondingly revised, the additional
rent theretofore paid or payable hereunder for all comparative years
shall be recomputed on the basis of such reduction, and Lessee shall
pay to Lessor as additional rent, within ten (10) days after being
billed therefor, any deficiency between the amount of such
additional rent as theretofore computed and the amount thereof due
as the result of such recomputations. Should the real estate taxes
payable during the base tax year be increased by such final
determination of legal proceedings, settlement or otherwise, then
appropriate recomputation and adjustment also shall be made.
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3. If, after Lessee shall have made a payment of additional
rent under this subdivision (c), Lessor shall receive a refund of
any portion of the real estate taxes payable for any comparative
year after the base tax year on which such payment of additional
rent shall have been based, as a result of a reduction of such real
estate taxes by final determination of legal proceedings,
settlement or otherwise, Lessor shall within ten (10) days after
receiving the refund pay to Lessee The Percentage of the refund
less The Percentage of expenses (including attorneys' and
appraisers' fees) incurred by Lessor in connection with any such
application or proceeding. If, prior to the payment of taxes for
any comparative year, Lessor shall have obtained a reduction of
that comparative year's assessed valuation of the building project,
and therefore of said taxes, then the term "real estate taxes" for
that comparative year shall be deemed to include the amount of
Lessor's expenses in obtaining such reduction in assessed
valuation, including attorneys' and appraisers' fees.
4. The statements of the real estate taxes to be furnished by
Lessor as provided above shall be certified by Lessor and shall
constitute a final determination as between Lessor and Lessee of
the real estate taxes for the periods represented thereby, unless
Lessee within thirty (30) days after they are furnished shall give
a written notice to Lessor that it disputes their accuracy or their
appropriateness, which notice shall specify the particular respects
in which the statement is inaccurate or inappropriate. If Lessee
shall so dispute said statement then, pending the resolution of
such dispute, Lessee shall pay the additional rent to Lessor in
accordance with the statement furnished by Lessor.
5. In no event shall the fixed annual rent under this lease
(exclusive of the additional rents under this Article) be reduced
by virtue of this Article.
6. If the commencement date of the term of this lease is not
the first day of the first comparative year, then the additional
rent due hereunder for such first comparative year shall be a
proportionate share of said additional rent for the entire
comparative year, said proportionate share to be based upon the
length of time that the base term will be in existence during such
first comparative year. Upon the date of any expiration or
termination of this lease (except termination because of Lessee's
default) whether the same be the date hereinabove set forth for the
expiration of the term or any prior or subsequent date, a
proportionate share of said additional rent for the comparative
year during which such expiration or termination occurs shall
immediately become due and payable by Lessee to Lessor, if it was
not theretofore already billed and paid. The said proportionate
share shall be based upon the length of time that this lease shall
have been in existence during such comparative year. Lessor shall
promptly cause statements of said additional rent for that
comparative year to be prepared and furnished to Lessee. Lessor and
Lessee shall thereupon make appropriate adjustments of amounts then
owing.
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7. Lessor's and Lessee's obligations to make the adjustments
referred to in subdivision (6) above shall survive any expiration
or termination of this lease.
8. Any delay or failure of Lessor in billing any tax
escalation hereinabove provided shall not constitute a waiver of or
in any way impair the continuing obligation of Lessee to pay such
tax escalation hereunder.
SERVICES
25. Lessee acknowledges that it has been advised that the cleaning
contractor for the building may be the Lessor or a division or affiliate of
Lessor. Lessee agrees to employ Lessor or its division or affiliate, or such
other contractor as Lessor may from time to time designate, for any waxing,
polishing and other maintenance work of the demised premises and of the
Lessee's furniture, fixtures and equipment, provided that the prices charged by
said contractor are comparable to the prices charged by other contractors for
the same work. Lessee agrees that it shall not employ any other cleaning and
maintenance contractor, nor any individual, firm or organization for such
purpose without Lessor's prior written consent. If Lessor and Lessee cannot
agree on whether the prices being charged by Lessor or the contractor
designated by the Lessor are comparable to those charged by other contractors,
Lessor and Lessee shall each obtain two bona fide bids for such work from
reputable contractors, and the average of the four bids thus obtained shall be
the standard of comparison.
JURY WAIVER
26. Lessor and Lessee hereby waive trial by jury in any action, proceeding
or counterclaim involving any matter whosoever arising out of or in any way
connected with this lease, the relationship of landlord and tenant, Lessee's
use or occupancy of the premises (except for personal injury or property
damage) or involving the right to any statutory relief or remedy. Lessee will
not interpose any counterclaim of any nature in any summary proceeding.
NO WAIVER, ETC.
27. No act or omission of Lessor or its agents shall constitute an actual
or constructive eviction, unless Lessor shall have first received written
notice of Lessee's claim and shall have had a reasonable opportunity to meet
such claim. In the event that any payment herein provided for by Lessee to
Lessor shall become overdue for a period in excess of ten (10) days, then at
Lessor's option a "late charge" for such period and for each additional period
of twenty (20) days or any part thereof shall become immediately due and owing
to Lessor, as additional rent by reason of the failure of Lessee to make prompt
payment, at the following rates: for individual and partnership Lessees, said
late charge shall be computed at the maximum legal rate of interest; for
corporate or governmental entity Lessees the late charge shall be computed at
two percent (2%) per month unless there is an applicable maximum legal rate of
interest which then shall be used. No act or omission of Lessor or its agents
shall constitute an acceptance of a surrender of the premises, except a writing
signed by Lessor. The delivery of keys to Lessor or its agents shall not
constitute a termination of this lease or a surrender of the premises.
Acceptance by Lessor of less than the rent herein provided shall at
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Lessor's option be deemed on account of earliest rent remaining unpaid. No
endorsement on any check, or letter accompanying rent, shall be deemed an
accord and satisfaction, and such check may be cashed without prejudice to
Lessor. No waiver of any provision of this lease shall be effective, unless
such waiver be in writing signed by Lessor. This lease contains the entire
agreement between the parties, and no modification thereof shall be binding
unless in writing and signed by the party concerned. Lessee shall comply with
the rules and regulations printed in this lease, and any reasonable
modifications thereof or additions thereto. Lessor shall not be liable to
Lessee for the violation of such rules and regulations by any other tenant.
Failure of Lessor to enforce any provision of this lease, or any rule or
regulation, shall not be construed as the waiver of any subsequent violation of
a provision of this lease or any rule or regulation. This lease shall not be
affected by nor shall Lessor in any way be liable for the closing, darkening
or bricking up of windows in the premises, for any reason, including as the
result of construction on any property of which the premises are not a part or
by Lessor's own acts.
OCCUPANCY AND USE BY LESSEE
28. (A) Lessee acknowledges that its continued occupancy of the
demised premises, and the regular conduct of its business therein,
are of utmost importance to the Lessor in the renewal of other
leases in the building, in the renting of vacant space in the
building, in the providing of electricity, air conditioning, steam
and other services to the tenants in the building, and in the
maintenance of the character and quality of the tenants in the
building. Lessee therefore covenants and agrees that it will occupy
the entire demised premises, and will conduct its business therein
in the regular and usual manner, throughout the term of this lease.
Lessee acknowledges that Lessor is executing this lease in reliance
upon these covenants, and that these covenants are a material
element of consideration inducing the Lessor to execute this lease.
Lessee further agrees that if it vacates the demised premises or
fails to so conduct its business therein, at any time during the
term of this lease, without the prior written consent of the Lessor,
than all rent and additional rent reserved in this lease from the
date of such breach to the expiration date of this lease shall
become immediately due and payable to Lessor.
(B) The parties recognize and agree that the damage to Lessor
resulting from any breach of the covenants in subdivision (A)
hereof will be extremely substantial, will be far greater than the
rent payable for the balance of the term of this lease, and will be
impossible of accurate measurement. The parties therefore agree
that in the event of a breach or threatened breach of the said
covenants, in addition to all of Lessor's other rights and
remedies, at law or in equity or otherwise, Lessor shall have the
right of injunction to preserve Lessee's occupancy and use. The
words "become vacant or deserted" as used elsewhere in this lease
shall include Lessee's failure to occupy or use as by this Article
required.
(C) If Lessee breaches either of the covenants in subdivision
(A) above, and this lease be terminated because of such default,
then, in addition to Lessor's rights of re-entry, restoration,
preparation for and rerental, and anything
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elsewhere in this lease to the contrary notwithstanding, Lessor
shall retain its right to judgment on and collection of Lessee's
aforesaid obligation to make a single payment to Lessor of a sum
equal to the total of all rent and an additional rent reserved for
the remainder of the original term of this lease, subject to future
credit or repayment to Lessee in the event of any rerenting of the
premises by Lessor, after first deducting from rerental income all
expenses incurred by Lessor in reducing to judgment or otherwise
collecting Lessee's aforesaid obligation, and in obtaining
possession of, restoring, preparing for and re-letting the
premises. In no event shall Lessee be entitled to a credit or
repayment for rerental income which exceeds the sums payable by
Lessee hereunder or which covers a period after the original term
of this lease.
NOTICES
29. Any bill, notice or demand from Lessor to Lessee, may be delivered
personally at the premises or sent by registered or certified mail. Such bill,
notice or demand shall be deemed to have been given at the time of delivery or
mailing. Any notice from Lessee to Lessor must be sent by registered or
certified mail to the last address designated in writing by Lessor.
WATER
30. Lessee shall pay the amount of Lessor's cost for all water used by
Lessee for any purpose other than ordinary lavatory uses, and any sewer rent or
tax based thereon. Lessor may install a water meter to measure Lessee's water
consumption for all purposes and Lessee agrees to pay for the installation and
maintenance thereof and for water consumed as shown on said meter. If water is
made available to Lessee in the building or the demised premises though a meter
which also supplies other premises, or without a meter, then Lessee shall pay
to Lessor a reasonable amount per month for water.
SPRINKLER SYSTEM
31. If there shall be a "sprinkler system" in the demised premises for any
period during this lease, Lessee shall pay a reasonable amount per month, for
sprinkler supervisory service. If such sprinkler system is damaged by any act
or omission of lessee or its agents, employees, licensees or visitors, Lessee
shall restore the system to good working condition at its own expense. If the
New York Board of Fire Underwriters, the New York Fire Insurance Exchange, the
Insurance Services Office or any governmental authority requires the
installation or any alteration to a sprinkler system by reason of Lessee's
occupancy or use of the premises, including any alternation necessary to obtain
the full allowance for a sprinkler system in the fire insurance rate of Lessor,
or for any other reason, Lessee shall make such installation or alteration
promptly, and at its own expense.
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HEAT, ELEVATOR, ETC.
32. Lessor shall provide elevator service during all usual business hours
including Saturdays until 1 P.M., except on Sundays, State holidays, Federal
holidays or Building Service Employees Union Contract holidays. Lessor shall
furnish heat to the premises during the same hours on the same days in the cold
season in each year. Lessor shall cause the premises to be kept clean in
accordance with Lessor's customary standards for the building, provided they
are kept in order by Lessee. Lessor, its cleaning contractor and their
employees shall have after-hours access to the demised premises and the use of
Lessee's light, power and water in the demised premises as may be reasonably
required for the purpose of cleaning the demised premises. Lessor may remove
Lessee's extraordinary refuse from the building and Lessee shall pay the cost
thereof. If the elevators in the building are manually operated, Lessor may
convert to automatic elevators at any time, without in any way affecting
Lessee's obligations hereunder.
SECURITY DEPOSIT
33. Lessee has deposited with Lessor the sum of $ none as security for
the performance by Lessee of the terms of this lease. Lessor may use any part
of the security to satisfy any default of Lessee and any expenses arising from
such default, including but not limited to any damages or rent deficiency
before or after re-entry by Lessor. Lessee shall, upon demand, deposit with
Lessor the full amount so used, in order that Lessor shall have the full
security deposit on hand at all times during the term of this lease. If Lessee
shall comply fully with the terms of this lease, the security shall be returned
to Lessee after the date fixed as the end of the lease. In the event of a sale
or lease of the building containing the premises, Lessor may transfer the
security to the purchaser or lessee, and Lessor shall thereupon be released
from all liability for the return of the security. This provision shall apply
to every transfer or assignment of the security to a new Lessor. Lessee shall
have no legal power to assign or encumber the security herein described.
ELECTRICITY
34. Terms and conditions with respect to electricity rent inclusion, or
with respect to sub-metering, as the case may be, and general conditions with
respect to either, are set forth in Article 41 in the Rider annexed to and made
part of this lease.
RENT CONTROL
35. In the event the fixed annual rent or additional rent or any part
thereof provided to be paid by Lessee under the provisions of this lease during
the demised term shall become uncollectible or shall be reduced or required to
be reduced or refunded by virtue of any Federal, State, County or City law,
order or regulation, or by any direction of a public officer or body pursuant
to law, or the orders, rules, code or regulations of any organization or entity
formed pursuant to law, whether such organization or entity be public or
private, then Lessor, at its option, may at any time thereafter terminate this
lease, by not less than thirty (30) days' written notice to Lessee, on a date
set forth in said notice, in which event this lease and the term hereof shall
terminate and come to an end on the date fixed in said notice as if the said
date
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were the date originally fixed herein for the termination of the demised term.
Lessor shall not have the right so to terminate this lease if Lessee within
such period of thirty (30) days shall in writing lawfully agree that the
rentals herein reserved are a reasonable rental and agree to continue to pay
said rentals, and if such agreement by Lessee shall then be legally enforceable
by Lessor.
SHORING
36. Lessee shall permit any person authorized to make an excavation on
land adjacent to the building containing the premises to do any work within the
premises necessary to preserve the wall of the building from injury or damage,
and Lessee shall have no claim against Lessor for damages or abatement of rent
by reason thereof.
EFFECT OF CONVEYANCE, ETC.
37. If the building containing the premises shall be sold, transferred or
leased. or the lease thereof transferred or sold, Lessor shall be relieved of
all future obligations and liabilities hereunder and the purchaser, transferee
or lessee of the building shall be deemed to have assumed and agreed to perform
all such obligations and liabilities of Lessor hereunder. In the event of such
sale, transfer or lease, Lessor shall also be relieved of all existing
obligations and liabilities hereunder, provided that the purchaser, transferee
or lessee of the building assumes in writing such obligations and liabilities.
RIGHTS OF SUCCESSORS AND ASSIGNS
38. This lease shall bind and inure to the benefit of the heirs,
executors, administrators, successors, and, except as otherwise provided
herein, the assigns of the parties hereto. If any provision of any Article of
this lease or the application thereof to any person or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of that Article, or the
application of such provision to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby,
and each provision of said Article and of this lease be valid and be enforced
to the fullest extent permitted by law.
CAPTIONS
39. The captions herein are inserted only for convenience, and are in no
way to be construed as a part of this lease or as a limitation of the scope of
any provision of this lease.
LEASE SUBMISSION
40. Lessor and Lessee agree that this lease is submitted to Lessee on the
understanding that it shall not be considered an offer and shall not bind
Lessor in any way unless and until (i) Lessee has duly executed and delivered
duplicate originals thereof to Lessor and (ii) Lessor has executed and
delivered one of said originals to Lessee.
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SEE RIDER(S) ANNEXED HERETO AND MADE A PART HEREOF
IN WITNESS WHEREOF, Lessor and Lessee have executed this lease as of the
day and year first above written.
200 FIFTH AVENUE ASSOCIATES,
By: Helmsley-Spear, Inc., Agent
_________________________________ By: /s/ Thomas S. Arbuckle (L.S.)
--------------------------------
Witness for Lessor Thomas S. Arbuckle,
Vice President
_________________________________ Third Quarter Corporation (L.S.)
Witness for Lessee
By: /s/ Carl E. Voigt, IV
--------------------------------
Carl E. Voigt, IV
President
ACKNOWLEDGEMENTS
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GUARANTY
For Value Received and in consideration of the letting of the premises
within mentioned to the within named lessee, the undersigned do hereby covenant
and agree, to and with the Lessor and the Lessor's legal representatives, that
if default shall at any time be made by the said Lessee in the payment of the
rent and the performance of the covenants contained in the within lease, on the
Lessee's part to be paid and performed, that the undersigned will well and
truly pay the said rent, or any arrears thereof, that may remain due unto said
Lessor, and also pay all damages that may arise in consequence of the
non-performance of said covenants, or either of them, without requiring notice
of any such default from the Lessor. The undersigned hereby waives all right
to trial by jury in any action or proceeding hereinafter instituted by the
Lessor, to which the undersigned may be a party.
IN WITNESS WHEREOF, the undersigned has set hand and seal this ____ day of
___________________ 19__.
_________________________________ ____________________________ (L.S.)
_________________________________ ____________________________ (L.S.)
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RIDER ANNEXED TO AND MADE A PART OF LEASE BETWEEN
200 FIFTH AVENUE ASSOCIATES, LESSOR
AND THIRD QUARTER CORPORATION, LESSEE
ELECTRICITY
41. Lessee agrees that Lessor may furnish electricity to Lessee on a
"submetering" basis or on a "rent inclusion" basis.
(A) SUBMETERING: If and so long as Lessor provides electricity to the
demised premises on a submetering basis, Lessee covenants and agrees to
purchase the same from Lessor or Lessor's designated agent at charges, terms
and rates set, from to time, during the term of this lease by Lessor but not
more than those specified in the service classification in effect on January 1,
1970 pursuant to which Lessor then purchased electric current from the public
utility corporation serving the part of the city where the building is located;
provided, however, said charges shall be increased in the same percentage as
any percentage increase in the billing to Lessor for electricity for the entire
building, by reason of increase in Lessor's electric rates or service
classifications, subsequent to January 1, 1970, and so as to reflect any
increase in Lessor's electric charges, fuel adjustment, or by taxes or charges
of any kind imposed on Lessor's electricity purchases, or for any other such
reason, subsequent to said date. Any such percentage increase in Lessor's
billing for electricity due to changes in rates or service classifications
shall be computed by the application of the average consumption (energy and
demand) of electricity for the entire building for the twelve (12) full months
immediately prior to the rate and/or service classification change, or any
changed methods of or rules on billing for same, on a consistent basis to the
new rate and/or service classification and to the service classification in
effect on January 1, 1970. If the average consumption of electricity for the
entire building for said prior twelve (12) months cannot reasonably be applied
and used with respect to changed methods of or rules on billing, then the
percentage increase shall be computed by the use of the average consumption
(energy and demand) for the entire building for the first three (3) months
after such change, projected to a full twelve (12) months; and that same
consumption, so projected, shall be applied to the service classification in
effect on January 1, 1970. Where more than one meter measures the service of
Lessee in the building, the service rendered through each meter may be computed
and billed separately in accordance with the rates herein. Bills therefore
shall be rendered at such times as Lessor may elect and the amount, as computed
from a meter, shall be deemed to be, and be paid as, additional rent. In the
event that such bills are not paid within five (5) days after the same are
rendered, Lessor may, without further notice, discontinue the service of
electric current to the demised premises without releasing Lessee from any
liability under this lease and without Lessor or Lessor's agent incurring any
liability for any damage or loss sustained by Lessee by such discontinuance of
service. If any tax is imposed upon Lessor's receipt from the sale or resale of
electrical energy or gas or telephone service to Lessee by any Federal, State
or Municipal Authority, Lessee covenants and agrees that where permitted by
law, Lessee's pro rata share of such taxes shall be passed on to, and included
in the bill of, and paid by, Lessee to Lessor.
(B) RENT INCLUSION: If and so long as Lessor provides electricity to the
demised premises on a rent inclusion basis, Lessee agrees that the fixed annual
rent shall be increased by the amount of the Electricity Rent Inclusion Factor
("ERIF"), as hereinafter defined. Lessee acknowledges and agrees (i) that the
fixed annual rent hereinabove set forth in this lease does not yet, but is to
include an ERIF of $2.75 per rentable square foot to compensate Lessor for
electrical wiring and other installations necessary for, and for its obtaining
and making available to Lessee the redistribution of,
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electric current as an additional service; and (ii) that said ERIF, which shall
be subject to periodic adjustments as hereinafter provided, has been partially
based upon an estimate of the Lessee's connected electrical load, which shall
be deemed to be the demand (KW), and hours of use thereof, which shall be
deemed to be the energy (KWH), for ordinary lighting and light office equipment
and the operation of the usual small business machines, including Xerox or
other copying machines (such lighting and equipment are hereinafter called
"Ordinary Equipment") during ordinary business hours ("ordinary business hours"
shall be deemed to mean 50 hours per week), with Lessor providing an average
connected load of 4-1/2 watts of electricity for all purposes per rentable
square foot. Any installation and use of equipment other than Ordinary,
Equipment and/or any connected load and/or any energy usage by Lessee in excess
of the foregoing shall result in adjustment of the ERIF as hereinafter
provided. For purposes of this lease the rentable square foot area of the
presently demised premises shall be deemed to be 1,020 square feet.
If the cost to Lessor of electricity shall have been, or shall be,
increased or decreased subsequent to November 1, 1990 (whether such change
occurs prior to or during the term of this lease), by change in Lessor's
electric rates or service classifications, or by any increase, subsequent to
the last such electric rate or service classification change, in fuel
adjustments or charges of any kind, or by taxes, imposed on Lessor's
electricity purchases, or for any other such reason, then the ERIF, which is a
portion of the fixed annual rent, shall be changed in the same percentage as
any such change in cost due to changes in electric rates or service
classifications, and, also, Lessee's payment of obligation, for electricity
redistribution, shall change from time to time so as to reflect any such
increase in fuel adjustments or charges, and taxes. Any such percentage change
in Lessor's cost due to changes in electric rates or service classifications
shall be computed by the application of the average consumption (energy' and
demand) of electricity for the entire building for the twelve (12) full months
immediately prior to the rate and/or service classification change, or any
changed methods of or rules on billing for same, on a consistent basis to the
new rate and/or service classification and to the immediately prior existing
rate and/or service classification. If the average consumption of electricity
for the entire building for said prior twelve (12) months cannot reasonably be
applied and used with respect to changed methods of or rules on billing, then
the percentage increase shall be computed by the use of the average consumption
(energy and demand) for the entire building for the first three (3) months
after such change, projected to a full twelve (12) months, so as to reflect the
different seasons; and that same consumption, so projected, shall be applied to
the rate and/or service classification which existed immediately prior to the
change. The parties agree that a reputable, independent electrical consultant
selected by Lessor ("Lessor's electrical consultant"), shall determine the
percentage change for the changes in the ERIF due to Lessor's changed costs,
and that Lessor's electrical consultant may from time to time make surveys in
the demised premises of the electrical equipment and fixtures and the use of
current. (i) If any such survey shall reflect a connected load in the demised
premises in excess of 4-1/2 watts of electricity for all purposes per rentable
square foot and/or energy usage in excess of ordinary business hours (each such
excess is hereinafter called "excess electricity") then the connected load
and/or the hours of use portion(s) of the then existing ERIF shall each be
increased by an amount which is equal to a fraction of the then existing ERIF,
the numerator of which is the excess electricity (i.e., excess connected load
and/or excess usage) and the denominator of which is the connected load and/or
the energy usage which was the basis for the computation of the then existing
ERIF. Such fractions shall be determined by Lessor's electrical consultant. The
fixed annual rent shall be appropriately adjusted, effective as of the date of
any such change in connected load and/or usage, as disclosed by said survey.
(ii) If such survey shall disclose installation and use of other than Ordinary
Equipment, then effective as of the date of said survey, there shall be added
to the ERIF portion of the fixed annual rent (computed and fixed as
hereinbefore described) an additional amount equal to what would be paid under
the SC-4 Rate I Service Classification in effect on November 1, 1990 (and not
the time-of-
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day rate schedule) for such load and usage of electricity, with the connected
electrical load deemed to be the demand (KW) and the hours of use thereof
deemed to be the energy (KWH), as hereinbefore provided (which addition to the
ERIF shall be increased or decreased by all electricity cost changes of Lessor,
as hereinabove provided, from November 1, 1990 through the date of billing).
In no event. whether because of surveys of for any other reason, is the
originally specified $2.75 per rentable square foot ERIF portion of the fixed
annual rent (plus any net increase thereof, but not decrease, by virtue of all
electric rate or service classification changes subsequent to November 1, 1990)
to be reduced.
(C) GENERAL CONDITIONS: The determinations by Lessor's electrical
consultant shall be binding and conclusive on Lessor and on Lessee from and
after the delivery of copies of such determinations to Lessor and Lessee,
unless, within fifteen (15) days after delivery thereof Lessee disputes such
determination. If Lessee so disputes the determination, it shall, at its own
expense, obtain from a reputable, independent electrical consultant its own
determinations in accordance with the provisions or this Article. Lessee's
consultant and Lessor's consultant then shall seek to agree. If they cannot
agree within thirty (30) days they shall choose a third reputable electrical
consultant, whose cost shall be shared equally by the parties, to make similar
determinations which shall be controlling. (If they cannot agree on such third
consultant within ten (10) days, then either party may apply to the Supreme
Court of New York for such appointment.) However, pending such controlling
determinations, Lessee shall pay to Lessor the amount of additional rent or
ERIF in accordance with the determinations of Lessors electrical consultant. If
the controlling determinations differ from Lessor's electrical consultant, then
the parties shall promptly make adjustment for any deficiency owed by Lessee or
overage paid by Lessee.
At the option of Lessor, Lessee agrees to purchase from Lessor or its
agents all lamps and bulbs used in the demised premises and to pay for the cost
of installation thereof. Lessor shall not be liable to Lessee for any loss or
damage or expense which Lessee may sustain or incur if either the quantity or
character of electric service is changed or is no longer available or suitable
for Lessee's requirements. Lessee covenants and agrees that at all times its
use of electric current shall never exceed the capacity of existing feeders to
the building or the risers or wiring installation. Lessee agrees not to connect
any additional electrical equipment to the building electric distribution
system, other than lamps, typewriters and other small office machines which
consume comparable amounts of electricity, without Lessor's prior written
consent, which consent shall not be unreasonably withheld. Any riser or risers
to supply Lessee's electrical requirements, upon written request of Lessee,
will be installed by Lessor, at the sole cost and expense of Lessee, if, in
Lessor's sole judgment, the same are necessary and will not cause permanent
damage or injury, to the building or demised premises or cause or create a
dangerous or hazardous condition or entail excessive or unreasonable
alterations, repairs or expense or interfere with or disturb other tenants or
occupants. In addition to the installation of such riser or risers, Lessor will
also at the sole cost and expense of Lessee, install all other equipment proper
and necessary, in connection therewith subject to the aforesaid terms and
conditions. The parties acknowledge that they understand that it is anticipated
that electric rates, charges, etc. may be changed by virtue of time-of-day
rates or other methods of billing, and that the references in the foregoing two
paragraphs to changes in methods of or rules on billing are intended to include
any such changes. Supplementing Article 35 hereof, if all or part of the
submetering additional rent or the ERIF payable in accordance with Subdivision
(A) or (B) of this Article becomes uncollectible or reduced or refunded by
virtue of any law, order or regulation, the parties agree that, at Lessor's
option, in lieu of submetering additional rent or ERIF, and in consideration of
Lessee's use of the building's electrical distribution system and receipt of
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redistributed electricity and payment by Lessor of consultants' fees and other
redistribution costs, the fixed annual rental rate(s) to be paid under this
Lease shall be increased by an "alternative charge" which shall be a sum equal
to $2.75 per year per rentable sq. ft. of the demised premises, changed in the
same percentage as any changes in the cost to Lessor for electricity for the
entire building subsequent to November 1, 1990, because of electric rate or
service classification changes, such percentage change to be computed as in
Subdivision (B) provided. Anything hereinabove to the contrary,
notwithstanding, in no event is the ERIF or any "alternative charge" to be less
than an amount equal to the total of Lessor's payment to the public utility for
the electricity consumed by Lessee (and any taxes thereon or on redistribution
of same) plus 5% thereof for transmission line loss, plus 15% thereof for other
redistribution costs. The Lessor reserves the right, at any time upon thirty
(30) days' written notice, to change its furnishing of electricity to Lessee
from a rent inclusion basis to a submetering basis, or vice versa. The Lessor
reserves the right to terminate the furnishing of electricity on a
rent-inclusion, submetering, or any other basis at any time, upon thirty (30)
days' written notice to the Lessee, in which event the Lessee may make
application directly to the public utility for the Lessee's entire separate
supply of electric current and Lessor shall permit its wires and conduits, to
the extent available and safely capable, to be used for such purpose, but only
to the extent of Lessee's then authorized load. Any meters, risers or other
equipment or connections necessary to furnish electricity on a submetering
basis or to enable Lessee to obtain electric current directly from such utility
shall be installed at Lessee's sole cost and expense. Only rigid conduit or
electricity metal tubing (EMT) will be allowed. The Lessor, upon the expiration
of the aforesaid thirty (30) days' written notice to the Lessee may discontinue
furnishing the electric current but this lease shall otherwise remain in full
force and effect. If Lessee was provided electricity on a rent inclusion basis
when it was so discontinued, then commencing when Lessee receives such direct
service and as long as Lessee shall continue to receive such service, the fixed
annual rental rate payable under this lease shall be reduced by the amount of
the ERIF which was payable immediately prior to such discontinuance of
electricity on a rent inclusion basis.
42. Lessee shall pay to Lessor fixed rentals at the following annual rates:
(a) From January 1, 1996, through December 31, 1999, the annual
rent shall be $24,480 payable in equal monthly installments of $2,040
except January, February, March, April, May, and June 1996; and
(b) From January 1, 2000, through April 30, 2006, the annual rent
shall be $35,700 payable in equal monthly installments of $2,975.
43. Lessee acknowledges that the fixed annual rental rates, hereinabove set
forth, are intended to create an average rental rate over the term of the
lease of $31,356.77. Lessee therefore agrees that if, for any reason
whatever, including termination because of default, condemnation or
casualty, or cancellation by mutual agreement, the term of this lease is
ended prior to April 30, 2006, then and in such event, in addition to any
other liability to Lessor from Lessee, and remedies of Lessor under this
lease and under the law, Lessee shall be obligated forthwith to pay to
Lessor, as additional rent, a sum equal to the difference between the
average rental rate of $31,356.77 a year (as adjusted under Article 23)
and the fixed annual rents (as adjusted under Article 23) theretofore paid
by Lessee to Lessor.
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RULES AND REGULATIONS REFERRED
TO IN THIS LEASE
1. No animals, birds, bicycles or vehicles shall be brought into or kept
in the premises. The premises shall not be used for manufacturing or commercial
repairing or for sale or display of merchandise or as a lodging place, or for
any immoral or illegal purpose, nor shall the premises be used for a public
stenographer or typist, barber or beauty shop; telephone, secretarial or
messenger service; employment, travel or tourist agency, school or classroom,
commercial document reproduction; or for any business other than specifically
provided for in the tenant's lease. Lessee shall not cause or permit in the
premises any disturbing noises which may interfere with occupants of this or
neighboring buildings, any cooking or objectionable odors, or any nuisance of
any kind, or any inflammable or explosive fluid, chemical or substance.
Canvassing, soliciting and peddling in the building are prohibited, and each
Lessee shall cooperate so as to prevent the same.
2. The toilet rooms and other water apparatus shall not be used for any
purposes other than those for which they were constructed, and no sweepings,
rags, ink, chemicals or any unsuitable substances shall be thrown therein.
Lessee shall not throw anything out of doors, windows or skylights, or into
hallways, stairways or elevators, nor place food or objects on outside window
sills. Lessee shall not obstruct or cover the hails, stairways and elevators,
or use them for any purpose other than ingress and egress to or from Lessee's
premises, nor shall skylights, windows, doors and transoms that reflect or
admit light into the building be covered or obstructed in any way.
3. Lessee shall not place a load upon any floor of the premises in excess
of the load per square foot which such floor was designed to carry and which is
allowed by law. Lessor reserves the right to prescribe the weight and position
of all safes in the premises. Business machines and mechanical equipment shall
be placed and maintained by Lessee, at Lessee's expense, only with Lessor's
consent and in settings approved by Lessor to control weigh,.vibration, noise
and annoyance. Smoking or carrying lighted cigars, pipes or cigarettes in the
elevators of the building is prohibited. If the premises are on the ground
floor of the building the tenant thereof at its expense shall keep the
sidewalks and curb in front of the premises clean and free from ice, snow, dirt
and rubbish.
4. Lessee shall not move any heavy or bulky materials into or out of the
building without Lessor's prior written consent, and then only during such
hours and in such manner as Lessor shall approve. If any material or equipment
requires special handling, Lessee shall employ only persons holding a Master
Rigger's License to do such work, and all such work shall comply with all legal
requirements. Lessor reserves the right to inspect all freight to be brought
into the building, and to exclude any freight which violates any rule,
regulation or other provision of this lease.
5. No sign, advertisement, notice or thing shall be inscribed, painted or
affixed on any part of the building, without the prior written consent of
Lessor. Lessor may remove anything installed in violation of this provision,
and Lessee shall pay the cost of such removal. Interior signs on doors and
directories shall be inscribed or affixed by Lessor at Lessee's expense. Lessor
shall control the color, size, style and location of all signs, advertisements
and notices. No advertising of any kind by Lessee shall refer to the building,
unless first approved in writing by Lessor.
6. No article shall be fastened to, or holes drilled or nails or screws
driven into, the ceilings, walls, doors or other portions of the premises, nor
shall any part of the premises be painted, papered or otherwise covered, or in
any way marked or broken, without the prior written consent of Lessor.
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7. No existing locks shall be changed, nor shall any additional locks or
bolts of any kind be placed upon any door or window by Lessee, without the
prior written consent of Lessor. At the termination of this lease, Lessee shall
deliver to Lessor all keys for any portion of the premises or building. Before
leaving the premises at any time, Lessee shall close all windows and close and
lock all doors.
8. No Lessee shall purchase or obtain for use in the premises any spring
water, ice, towels, food, boothlacking, barbering or other such service
furnished by any company or person not approved by Lessor. Any necessary
exterminating work in the premises shall be done at Lessee's expense, at such
times, in such manner and by such company as Lessor shall require. Lessor
reserves the right to exclude from the building, from 6:00 p.m. to 8:00 a.m.,
and at all hours on Sunday and legal holidays, all persons who do not present a
pass to the building signed by Lessor. Lessor will furnish passes to all
persons reasonably designated by Lessee. Lessee shall be responsible for the
acts of all persons to whom passes are issued at Lessee's request.
9. Whenever Lessee shall submit to Lessor any plan, agreement or other
document for Lessor's consent or approval, Lessee agrees to pay Lessor as
additional rent, on demand, an administrative fee equal to the sum of the
reasonable fees of any architect, engineer or attorney employed by Lessor to
review said plan, agreement or document and Lessor's administrative costs for
same.
10. The use in the demised premises of auxiliary heating devices, such as
portable electric heaters, heat lamps or other devices whose principal function
at the time of operation is to produce space heating, is prohibited.
In case of any conflict or inconsistency between provisions of this lease
and any of the rules and regulations as originally or as hereafter adopted, the
provisions of this lease shall control.
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