AGREEMENT OF LEASE
Between
LIGHTHOUSE 444 LIMITED PARTNERSHIP,
Owner
and
GTJ CO., INC.,
Tenant
Premises
Portion Third (3rd) Floor
444 Merrick Road
Lynbrook, New York
Dated as of: April ___, 2005
TABLE OF CONTENTS
ARTICLE 1 Demised Premises, Term, Rents
ARTICLE 2 Use and Occupancy
ARTICLE 3 Alterations
ARTICLE 4 Ownership of Improvements
ARTICLE 5 Repairs
ARTICLE 6 Compliance With Laws
ARTICLE 7 Subordination, Attornment, Etc.
ARTICLE 8 Property Loss, Etc.
ARTICLE 9 Destruction-Fire or Other Casualty
ARTICLE 10 Eminent Domain
ARTICLE 11 Assignment and Subletting
ARTICLE 12 As Is/ Owner's Initial Work
ARTICLE 13 Access to Demised Premises
ARTICLE 14 Vault Space
ARTICLE 15 Certificate of Occupancy
ARTICLE 16 Default
ARTICLE 17 Remedies
ARTICLE 18 Damages
ARTICLE 19 Fees and Expenses; Indemnity
ARTICLE 20 Entire Agreement
ARTICLE 21 End of Term
ARTICLE 22 Quiet Enjoyment
ARTICLE 23 Escalation
ARTICLE 24 No Waiver
ARTICLE 25 Mutual Waiver of Trial by Jury
ARTICLE 26 Inability to Perform
ARTICLE 27 Notices
ARTICLE 28 Partnership Tenant
ARTICLE 29 Utilities and Services
ARTICLE 30 Table of Contents, Etc.
ARTICLE 31 Miscellaneous Definitions, Severability and Interpretation
Provisions
ARTICLE 32 Adjacent Excavation
ARTICLE 33 Building Rules
ARTICLE 34 Broker
ARTICLE 35 Intentionally Omitted
ARTICLE 36 Arbitration, Etc.
ARTICLE 37 Parties Bound
ARTICLE 38 Substitute Space
ARTICLE 39 Tenant's Termination Option
ARTICLE 40 Tenant's Right of First Offer For Additional Space
ARTICLE 41 Renewal Options
EXHIBIT A Floor Plan of Demised Premises
EXHIBIT B Owner's Initial Work
SCHEDULE A Building Rules
SCHEDULE B Owner's Cleaning Services
-i-
LEASE dated as of the ___ day of April, 2005, between LIGHTHOUSE 444
LIMITED PARTNERSHIP, a Delaware limited partnership having its principal office
at c/o Lighthouse Real Estate Management, LLC, 444 Merrick Road, Lynbrook, New
York, 11563, as landlord (referred to as "Owner"), and GTJ CO., INC., a
______________ corporation, having its principal office at
____________________________, as tenant (referred to as "Tenant").
W I T N E S S E T H:
Owner and Tenant hereby covenant and agree as follows:
ARTICLE 1
DEMISED PREMISES, TERM, RENTS
Section 1.01. Demised Premises: Owner hereby leases to Tenant and Tenant
hereby hires from Owner a portion of the third (3rd) floor known as Suite 370
and a portion of the basement, each as more particularly shown by outlining and
diagonal markings on the floor plans annexed hereto and made a part hereof as
Exhibits "A-1" and "A-2" respectively, in the building known as 444 Merrick Road
in the Village of Lynbrook, Town of Hempstead, County of Nassau and State of New
York (said building is referred to as the "Building", and the Building together
with the land upon which it stands is referred to as the "Real Property"), at
the annual rental rate or rates set forth in Section 1.03, and upon and subject
to all of the terms, covenants and conditions contained in this Lease. The
premises leased to Tenant, together with all appurtenances, fixtures,
improvements, additions and other property attached thereto or installed therein
at the commencement of, or at any time during, the term of this Lease, other
than Tenant's Personal Property (as defined in Article 4), are referred to,
collectively, as the "Demised Premises".
Section 1.02. Demised Term: A.The Demised Premises are leased for a term
(referred to as the "Demised Term") to commence on a date fixed by Owner in a
notice to Tenant not sooner than five (5) days next following the giving of such
notice, which notice shall state that Owner has, or prior to the commencement
date fixed in such notice, will have, substantially completed Owner's Initial
Work (as defined in Article 12), and to end on the last day of the calendar
month in which the day immediately preceding the fifth (5th) anniversary of the
Rent Commencement Date (as hereinafter defined) shall occur, unless the Demised
Term shall sooner terminate pursuant to any of the terms, covenants or
conditions of this Lease or pursuant to law. For purposes hereof, Owner's
Initial Work shall be deemed substantially completed notwithstanding the fact
that details of construction, or decoration, if any, remain to be performed,
which such omissions do not materially interfere with Tenant's performance of
Tenant's work to prepare the Demised Premises for Tenant's initial occupancy, or
Tenant's occupancy of the Demised Premises for the conduct of its business.
B. Notwithstanding anything in Subsection A of this Section 1.02 to the
contrary, if, on or prior to the date set forth in said Subsection A for the
commencement of the Demised Term, Owner shall have failed substantially to
complete Owner's Initial Work, then: (a) the Demised Term shall not commence on
the date set forth in said Subsection A but shall, instead, commence on a date,
fixed by Owner in a notice to Tenant, not sooner than five (5) days next
following the date of the giving of such notice, which notice shall state that
Owner has, or prior to the commencement date fixed in said notice will have,
substantially completed Owner's Initial Work; and (b) the Demised Term shall end
on the last day of the calendar month in which the day immediately preceding the
fifth (5th) anniversary date of the Rent Commencement Date shall occur, unless
sooner terminated pursuant to any of the terms, covenants or conditions of this
Lease or pursuant to law; and (c) except as aforesaid, neither the validity of
this Lease nor the obligations of Tenant under this Lease shall be affected
thereby. The date upon which the Demised Term shall commence pursuant to
Subsection A of this Section or pursuant to this Subsection B is referred to as
the "Commencement Date", and the date fixed pursuant to said Subsection A or
this Subsection B as the date upon which the Demised Term shall end is referred
to as the "Expiration Date".
C. Tenant waives any right to rescind this Lease under Section 223-a of the
New York Real Property Law or any successor statute of similar import then in
force and further waives the right to recover any damages which may result from
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Owner's failure to deliver possession of the Demised Premises on the date set
forth in Subsection A of this Section, or in any notice given pursuant to
Subsection B of this Section, for the commencement of the Demised Term.
D. After the determination of the Commencement Date, Owner and Tenant each
agree, upon demand of the other party, to execute, acknowledge and deliver to
the requesting party, an instrument, in form reasonably satisfactory to Owner
and Tenant, setting forth said Commencement Date and the Expiration Date.
Section 1.03. The Lease is made at the following annual rental rates
(referred to as "Fixed Rent":
1. ONE HUNDRED TWENTY-THREE THOUSAND SEVEN HUNDRED TWENTY-FIVE AND
50/100 ($123,725.50) DOLLARS with respect to the period (referred to as the
"First Rent Period") from the Commencement Date to and including first
(1st) anniversary of the Commencement Date;
2. ONE HUNDRED TWENTY-SEVEN THOUSAND FOUR HUNDRED THIRTY-SEVEN AND
27/100 ($127,437.27) DOLLARS with respect to the next year of the Demised
Term (referred to as the "Second Rent Period");
3. ONE HUNDRED THIRTY-ONE THOUSAND TWO HUNDRED SIXTY AND 38/100
($131,260.38) DOLLARS with respect to the next year of the Demised Term
(referred to as the "Third Rent Period");
4. ONE HUNDRED THIRTY-FIVE THOUSAND ONE HUNDRED NINETY-EIGHT AND
19/100 ($135,198.19) DOLLARS with respect to the next year of the Demised
Term (referred to as the "Fourth Rent Period"); and
5. ONE HUNDRED THIRTY-NINE THOUSAND TWO HUNDRED FIFTY-FOUR AND 14/100
($139,254.14) DOLLARS with respect to the remainder of the Demised Term
(referred to as the "Fifth Rent Period").
The parties acknowledge that the Fixed Rent set forth in this Section
1.03(A) represents the Fixed Rent due and payable with respect to the entire
Demised Premises.
B. The Fixed Rent, any increases in the Fixed Rent and any additional rent
payable pursuant to the provisions of this Lease shall be payable by Tenant to
Owner at its office (or at such other place as Owner may designate in a notice
to Tenant) in lawful money of the United States which shall be legal tender in
payment of all debts and dues, public and private, at the time of payment or by
Tenant's good check drawn on a bank or trust company with a branch located in
Nassau County and which is a member of the New York Clearinghouse Association,
without prior demand therefor and without any offset or deduction whatsoever
except as otherwise specifically provided in this Lease. The Fixed Rent shall be
payable in equal monthly installments in advance, on the first (1st) day of each
month during the Demised Term (except as otherwise provided in C of this
Section), as follows:
1. TEN THOUSAND THREE HUNDRED TEN AND 46/100 ($10,310.46) DOLLARS with
respect to the First Rent Period;
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2. TEN THOUSAND SIX HUNDRED NINETEEN AND 77/100 ($10,619.77) DOLLARS
with respect to the Second Rent Period;
3. TEN THOUSAND NINE HUNDRED THIRTY-EIGHT AND 37/100 ($10,938.37)
DOLLARS with respect to the Third Rent Period;
4. ELEVEN THOUSAND TWO HUNDRED SIXTY-SIX AND 52/100 ($11,266.52)
DOLLARS with respect to the Fourth Rent Period; and
5. ELEVEN THOUSAND SIX HUNDRED FOUR AND 51/100 ($11,604.51) DOLLARS
with respect to the Fifth Rent Period.
C. The sum of TEN THOUSAND THREE HUNDRED TEN and 46/100 ($10,310.46)
DOLLARS, representing the installment of Fixed Rent for the first (1st) full
calendar month of the Demised Term after the expiration of the Rent Holiday
Period (as hereinafter defined), is due and payable at the time of the execution
and delivery of this Lease. In the event that the Rent Commencement Date (as
hereinafter defined) shall occur on a date other than the first (1st) day of any
calendar month, Tenant shall pay to Owner, on the first (1st) day of the month
next succeeding the month during which the Rent Commencement Date shall occur, a
sum equal to THREE HUNDRED FORTY-THREE and 68/100 ($343.68) DOLLARS, multiplied
by the number of calendar days in the period from the Rent Commencement Date to
the last day of the month in which the Rent Commencement Date shall occur, both
inclusive. Such payment, together with the sum paid by Tenant upon the execution
of this Lease, shall constitute payment of the Fixed Rent for the period from
the Rent Commencement Date to and including the last day of the next succeeding
calendar month.
D. If Tenant shall use or occupy all or any part of the Demised Premises
for the conduct of business prior to the Commencement Date, such use or
occupancy shall be deemed to be under all of the terms, covenants and conditions
of this Lease, including, without limitation, the covenant to pay Fixed Rent for
the period from the commencement of said use or occupancy to and including the
date immediately preceding the Commencement Date, without, however, affecting
the Expiration Date. The provisions of the foregoing sentence shall not be
deemed to give to Tenant any right to use or occupy all or any part of the
Demised Premises prior to the Commencement Date without the consent of Owner.
E. To reflect the fact that the portion of the Demised Premises located in
the basement of the Building (the "Storage Space") shall be used for storage
purposes and not for executive and general offices of Tenant, the parties agree
that:
(i) The Fixed Rent allocable to the Storage Space is as follows:
1. THIRTY-FOUR THOUSAND FIVE HUNDRED AND 00/100 ($34,500.00) DOLLARS
per annum with respect to the First Rent Period;
2. THIRTY-FIVE THOUSAND FIVE HUNDRED THIRTY-FIVE AND 00/100
($35,535.00) DOLLARS per annum with respect to the Second Rent Period;
3. THIRTY-SIX THOUSAND SIX HUNDRED ONE AND 05/100 ($36,601.05) DOLLARS
per annum with respect to the Third Rent Period;
4. THIRTY-SEVEN THOUSAND SIX HUNDRED NINETY-NINE AND 08/100
($37,699.08) DOLLARS per annum with respect to the Fourth Rent Period; and
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5. THIRTY-EIGHT THOUSAND EIGHT HUNDRED THIRTY AND 05/100 ($38,830.05)
DOLLARS per annum with respect to the Fifth Rent Period.
The remainder of the Fixed Rent is allocable to the remainder of the
Demised Premises.
(ii) Notwithstanding anything to the contrary contained in Section
2.01, Tenant shall only use the Storage Space portion of the Demised
Premises for storage purposes in connection with the use by Tenant of the
remainder of the Demised Premises.
(iii) Notwithstanding anything to the contrary contained in Articles
9, 10 and 11 of the Lease, any abatements and apportionments and reductions
of the Fixed Rent referred to in said Articles shall take into
consideration the allocation of Fixed Rent between the remainder of the
Demised Premises and the Storage Space, and Tenant shall not have any right
to sublet the Storage Space except in its entirety to a subtenant of all or
a portion of the remainder of the Demised Premises.
(iv) Notwithstanding anything to the contrary contained in Article 15
of the Lease, the Certificate of Occupancy covering the Storage Space shall
permit the Storage Space to be used only for storage.
(v) Notwithstanding anything to the contrary contained in Article 29
of the Lease, Owner shall not in any event be required to furnish any
services to the Storage Space except (1) elevator facilities pursuant to
the provisions of Section 29.01; and (2) (so long as Owner shall continue
to furnish or redistribute electrical energy pursuant to the provisions of
Section 29.04) electrical services for lighting purposes only, and no
representations set forth in Section 29.04 with respect to the amount of
electrical service available to the Demised Premises shall apply to the
Storage Space.
Section 1.04. Tenant's General Covenant: Tenant covenants (i) to pay the
Fixed Rent, any increases in the Fixed Rent, and any additional rent payable
pursuant to the provisions of this Lease, and (ii) to observe and perform, and
to permit no violation of, the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.
Section 1.05. Rent Holiday: Provided Tenant is not then in default in the
observance and performance of any of the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed, Tenant shall be entitled to
a conditional rent holiday and shall not be required to pay any portion of the
Fixed Rent with respect to the period (the "Rent Holiday Period") from the
Commencement Date to and including the day immediately preceding the day
forty-five (45) days next following the Commencement Date but during such period
Tenant shall otherwise be required to comply with all of the other terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed, including, but not limited to, the obligation to make all payments
pursuant to the provisions of Article 23 and Article 29. If at any time during
the Demised Term, Tenant shall be in default in the observance and performance
of any of the terms, covenants and conditions of this Lease on Tenant's part to
be observed and performed, then the total sum of the Fixed Rent and increases
therein so conditionally excused by operation of the foregoing provisions of
this Section shall become immediately due and payable by Tenant to Owner. If, as
of the Expiration Date, Tenant shall not then be in default in the observance
and performance of any of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed, Owner shall waive payment of all
such Fixed Rent and increases therein so conditionally excused. The day next
following the expiration of the Rent Holiday Period shall be referred to herein
as the "Rent Commencement Date".
Section 1.06. A. Tenant's Option to Cancel Due to Owner's Failure to
Deliver Demised Premises: Notwithstanding anything in this Lease to the
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contrary, in the event that the Commencement Date of this Lease shall not have
occurred on or prior to the date (said date, as same may be extended pursuant to
the following provisions of this Section 1.06, referred to as the "Final
Delivery Deadline") which is seven (7) months following the date on which Tenant
shall approve (in writing) Owner's Work Plans (as defined in Exhibit B of this
Lease), then Tenant shall have a single option ("Tenant's Single Cancellation
Option") to cancel this Lease and the Demised Term by giving notice ("Tenant's
Cancellation Notice") to Owner of such cancellation on or prior to the date
which is ten (10) days immediately following the Final Delivery Deadline. Time
is of the essence with respect to the exercise by Tenant of such Tenant's Single
Cancellation Option. Notwithstanding anything to the contrary contained in the
foregoing provisions of this Section, in the event that in the event that (x)
Owner shall substantially complete Owner's Initial Work prior to Tenant's
delivery of Tenant's Cancellation Notice or (y) Tenant shall use or occupy all
or any part of the Demised Premises for any purpose (including, without
limitation, the performance of any initial Alterations therein) prior to the
Commencement Date, then Tenant's Single Cancellation Option shall be of no
further force or effect and any Tenant's Cancellation Notice delivered after the
Commencement Date shall be of no force and effect.
B. Exercise of Tenant's Cancellation Option: Upon the giving of such
Tenant's Cancellation Notice described in subsection A above, this Lease and the
Demised Term shall expire and come to an end as of the date of the giving of
such Tenant's Cancellation Notice, and any prepaid rent and security deposited
by Tenant hereunder shall be promptly returned to Tenant, and Owner and Tenant
shall be released and discharged of and from any and all liability under the
provisions of this Lease. If Tenant shall fail to give timely Tenant's
Cancellation Notice exercising Tenant's Single Cancellation Option, then the
Demised Term shall commence and end in accordance with the provisions of Section
1.02 and Tenant's Single Cancellation Option shall be of no further force or
effect.
C. Owner's Right To Extend Date of Delivery of Demised Premises: Owner
shall have the right to extend the Final Delivery Deadline set forth above in
this Section by a period equal to the aggregate of: (i) the number of days, if
any, of delay or delays in the commencement or substantial completion of Owner's
Initial Work occasioned by reason of Tenant's delays in submitting any plans and
specifications or in supplying information, or in approving plans,
specifications or estimates, or in giving authorizations or by reason of any
similar acts or omissions of Tenant; plus (ii) the number of days, if any, of
delay or delays in the commencement or substantial completion of Owner's Initial
Work occasioned by reason of strikes or other labor disputes, fire or other
casualty (or reasonable delays in adjustment of insurance), accidents, Legal
Requirements, or by any other cause beyond Owner's reasonable control, whether
or not such other cause shall be similar in nature to those hereinbefore
enumerated. Owner shall give Tenant prompt notice of any events or delays which
shall trigger Owner's right to extend the Final Delivery Deadline; however,
failure to give such notice shall not prohibit the extension of said date by
Owner for the reasons set forth above.
ARTICLE 2
USE AND OCCUPANCY
Section 2.01. General Covenant of Use: Tenant shall use and occupy the
Demised Premises for the following purpose: General and executive offices and,
with respect to the Storage Space, for storage purposes in connection with
Tenant's use of the remainder of the Demised Premises, for no other purpose.
Section 2.02. No Adverse Use: Tenant shall not use or occupy, or permit the
use or occupancy of, the Demised Premises or any part thereof, for any purpose
other than the purpose specifically set forth in Section 2.01, or in any manner
which, in Owner's judgment, (a) shall adversely affect or interfere with (i) any
services required to be furnished by Owner to Tenant or to any other tenant or
occupant of the Building, or (ii) the proper and economical rendition of any
such service, or (iii) the use or enjoyment of any part of the Building by any
other tenant or occupant, or (b) shall tend to impair the character or dignity
of the Building.
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Section 2.03. Prohibited Uses: Without in any way limiting the generality
of Section 2.02, Tenant shall not use or occupy or permit the use or occupancy
of, the Demised Premises or any part thereof as (i) a restaurant, bar, cocktail
lounge or coffee shop, or (ii) a commercial bank, savings bank or savings and
loan association.
ARTICLE 3
ALTERATIONS
Section 3.01. General Alteration Covenants: Tenant shall not make or
perform, or permit the making or performance of, any alterations, installations,
decorations, improvements, additions or other physical changes in or about the
Demised Premises (referred to collectively, as "Alterations" and individually as
an "Alteration") without Owner's prior consent in each instance. Owner agrees
not unreasonably to withhold its consent to any non-structural Alterations
proposed to be made by Tenant to adapt the Demised Premises for Tenant's
business purposes; however, Owner may arbitrarily withhold such consent if, in
Owner's reasonable judgment, the estimated aggregate cost of any such
Alterations constituting a single project exceeds the sum of Fifty Thousand
($50,000) Dollars. Owner agrees that Tenant may, without Owner's prior consent,
make Alterations which are merely decorative or cosmetic changes or other
non-structural Alterations in the Demised Premises, provided that the estimated
cost of same constituting a single project shall not exceed the sum of
Twenty-Five Thousand and 00/100 ($25,000.00) Dollars and the same shall not
affect the electrical, plumbing, heating, ventilation, air-conditioning or any
other Building system or any portion of the Building outside of the Demised
Premises (any such merely decorative or cosmetic Alteration meeting the
aforesaid criteria is referred to as a "Decoration" and any such other
non-structural Alteration meeting the aforesaid criteria is referred to as a
"Qualified Non-Structural Alteration"). Although Owner's consent shall not be
required with respect to whether Tenant may perform any Qualified Non-Structural
Alteration, at least ten (10) days prior to the commencement of such work,
Tenant shall submit to Owner detailed plans and specifications as required under
Section I below to enable Owner to determine the nature and extent of such work
and to allow Owner to review the manner in which any such proposed Qualified
Non-Structural Alterations are to be performed. Notwithstanding the foregoing
provisions of this Section or Owner's consent to any Alterations, all
Alterations shall be made and performed in conformity with and subject to the
following provisions:
A. All Alterations shall be made and performed at Tenant's sole cost and
expense and at such time and in such manner as Owner may, from time to time,
designate;
B. No Alteration shall adversely affect the structural integrity of the
Building;
C. Alterations shall be made only by contractors or mechanics approved by
Owner, such approval not unreasonably to be withheld (notwithstanding the
foregoing, all Alterations requiring mechanics in trades with respect to which
Owner has adopted or may hereafter adopt a list or lists of approved contractors
shall be made only by contractors selected by Tenant from such list or lists and
Owner shall have sole discretion with respect to the contractor performing
connections to the Building Class E Fire Alarm and Communication System);
D. No Alteration shall affect any part of the Building other than the
Demised Premises or adversely affect any service required to be furnished by
Owner to Tenant or to any other tenant or occupant of the Building (including,
without limitation, the Building-wide standard systems required to provide
elevator, heat, ventilation, air-conditioning and electrical and plumbing
services in the Building);
E. No Alteration shall reduce the value or utility of the Building or any
portion thereof;
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F. No Alteration shall affect the Certificate of Occupancy for the Building
or the Demised Premises;
G. No Alteration shall affect the outside appearance of the Building or the
color or style of any venetian blinds (except that Tenant may remove any
venetian blinds provided that they are promptly replaced by Tenant with blinds
of a similar type, material and color);
H. All business machines and mechanical equipment shall be placed and
maintained by Tenant in settings sufficient, in Owner's judgment, to absorb and
prevent vibration, noise and annoyance to other tenants or occupants of the
Building;
I. Tenant shall submit to Owner detailed plans and specifications stamped
by Tenant's architect (including layout, architectural, mechanical and
structural drawings) for each proposed Alteration, subject to the terms and
conditions of Subsection X of this Section 3.01 and shall not commence any such
Alteration without first obtaining Owner's approval of such plans and
specifications, which approval shall not be unreasonably withheld with respect
to Alterations to which Owner's consent is not required or to which Owner has
agreed hereunder to not unreasonably withhold consent. If detailed plans and
specifications (i) would not, in accordance with good construction practice
typically be prepared for such proposed Qualified Non-Structural Alteration,
(ii) are not prepared by or on behalf of Tenant and (iii) are not required to be
filed with any Governmental Authority in connection with obtaining permits
required to perform the same, then in lieu of submitting detailed plans and
specifications, and notwithstanding the terms and conditions of this Subsection
I, Tenant shall submit detailed information (along with any existing more
general plans or drawings) to enable Owner to determine the nature and extent of
the work proposed to be performed. Following the completion of each Alteration,
Tenant shall submit to Owner a computerized "as built" drawing file for the
Demised Premises (or if the Demised Premises comprise more than one (1) floor,
for each floor of the Demised Premises being altered); such file will be in
Auto-Cad format and contain, on a separate layer, all ceiling-height partitions
and doors within the Demised Premises (or if the Demised Premises comprise more
than one (1) floor, within each floor of the Demised Premises being altered);
J. Prior to the commencement of each proposed Alteration, Tenant shall have
procured and paid for and exhibited to Owner, so far as the same may be required
from time to time, all permits, approvals and authorizations of all Governmental
Authorities (as defined in Section 6.01.) having or claiming jurisdiction;
K. Prior to the commencement of each proposed Alteration, Tenant shall
furnish to Owner duplicate original policies of workmen's compensation insurance
covering all persons to be employed in connection with such Alteration,
including those to be employed by all contractors and subcontractors, and of
comprehensive public liability insurance (including property damage coverage) in
which Owner, its agents, the holder of any Mortgage (as defined in Section
7.01.) and any lessor under any Superior Lease (as defined in Section 7.01.)
shall be named as parties insured, which policies shall be issued by companies,
and shall be in form and amounts, satisfactory to Owner and shall be maintained
by Tenant until the completion of such Alteration;
L. In the event Owner or its agents employ any independent architect or
engineer to examine any plans or specifications submitted by Tenant to Owner in
connection with any proposed Alteration, Tenant agrees to pay to Owner a sum
equal to any reasonable fees incurred by Owner in connection therewith.
M. All fireproof wood test reports, electrical and air conditioning
certificates, and all other permits, approvals and certificates required by all
Governmental Authorities shall be timely obtained by Tenant and submitted to
Owner;
N. All Alterations, once commenced, shall be made promptly and in a good
and workmanlike manner;
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O. Notwithstanding Owner's approval of plans and specifications for any
Alteration, all Alterations shall be made and performed in full compliance with
all Legal Requirements (as defined in Section 6.01.) and with all applicable
rules, orders, regulations and requirements of the New York Board of Fire
Underwriters and the New York Fire Insurance Rating Organization or any similar
body;
P. All Alterations shall be made and performed in such manner as Owner may
from time to time reasonably designate pursuant to the conditions for
Alterations prescribed by Owner for the Demised Premises;
Q. All materials and equipment to be installed, incorporated or located in
the Demised Premises as a result of all Alterations shall be new and first
quality;
R. No materials or equipment shall be subject to any lien, encumbrance,
chattel mortgage or title retention or security agreement of any kind;
S. Tenant, before commencement of any Alteration(s) which constituting a
single project shall exceed Twenty-Five Thousand and 00/100 ($25,000.00)
Dollars, shall furnish to Owner a performance bond or other security
satisfactory to Owner, in an amount at least equal to the estimated cost of such
Alteration, guaranteeing the performance and payment thereof;
T. No Alteration shall be commenced unless any preceding Alteration shall
have been fully paid for and proof of such payment furnished to Owner;
U. Intentionally Deleted;
V. Following the completion of each Alteration, Tenant, at Tenant's
expense, shall obtain certificates of final approval of such Alteration required
by any Governmental Authority and shall furnish Owner with copies thereof;
W. Tenant agrees that Tenant will not install, affix, add or paint in or
on, nor permit, any work of visual art (as defined in the Federal Visual
Artists' Rights Act of 1990 or any successor law of similar import) or other
Alteration to be installed in or on, or affixed, added to, or painted on, the
interior or exterior of the Demised Premises, or any part thereof, including,
but not limited to, the walls, floors, ceilings, doors, windows, fixtures and on
land included as part of the Demised Premises, which work of visual art or other
Alteration would, under the provisions of the Federal Visual Artists' Rights Act
of 1990, or any successor law of similar import, require the consent of the
author or artist of such work or Alteration before the same could be removed,
modified, destroyed or demolished; and
X. No Owner consent (as set forth above) and no submission or review of
plans referred to in Subsection I above shall be required for performance by
Tenant of any Decoration, provided that such work is performed in compliance
with the requirements of this Article (except for Subsection I above). Tenant
shall, however, within a reasonable period of time prior to the commencement of
the performance of the Decoration, provide Owner with reasonably detailed
information setting forth the nature of the Decoration to be done, the
anticipated scheduling of the same, the parties performing such work and any
other information with respect to the performance of such Decoration which may
be reasonably requested by Owner.
Section 3.02. No Consent to Contractor/No Mechanics Lien: Nothing in this
Lease shall be deemed or construed in any way as constituting the consent or
request of Owner, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialmen, for the performance of any
labor or the furnishing of any material for any specific Alteration to, or
repair of, the Demised Premises, the Building, or any part of either. Any
mechanic's or other lien filed against the Demised Premises or the Building or
the Real Property for work claimed to have been done for, or materials claimed
to have been furnished to, Tenant or any person claiming through or under Tenant
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or based upon any act or omission or alleged act or omission of Tenant or any
such person shall be discharged by Tenant, at Tenant's sole cost and expense,
within thirty (30) days after the filing of such lien.
Section 3.03. Labor Harmony: Tenant shall not, at any time prior to or
during the Demised Term, directly or indirectly employ, or permit the employment
of, any contractor, mechanic or laborer in the Demised Premises, whether in
connection with any Alteration or otherwise, if such employment will interfere
or cause any conflict with other contractors, mechanics, or laborers engaged in
the construction, maintenance or operation of the Building by Owner, Tenant or
others. In the event of any such interference or conflict, Tenant, upon demand
of Owner, shall cause all contractors, mechanics or laborers causing such
interference or conflict to leave the Building immediately.
Section 3.04. Compliance with Fire Safety: Without in any way limiting the
generality of the provisions of Section 3.01, all Alterations shall be made and
performed in full compliance with all standards and practices adopted by Owner
for fire safety in the Building. No Alteration shall affect all or any part of
any Class E Fire Alarm and Communication system installed in the Demised
Premises, except that in connection with any such Alteration Tenant may relocate
certain components of such system, provided (i) such relocation shall be
performed in a manner first approved by Owner, (ii) the new location of any such
component shall be first approved by Owner, (iii) prior to any such relocation
Tenant shall submit to Owner detailed plans and specifications therefor which
shall be first approved by Owner and (iv) Owner shall have the election of
relocating such components either by itself or by its contractors, in which
event all expenses incurred by Owner shall be reimbursed by Tenant upon demand
of Owner, as additional rent.
Section 3.05. Asbestos or Other Hazardous Material: A. Notwithstanding
anything to the contrary contained in this Lease, if any Legal Requirements
require that any asbestos or other hazardous material contained in or about the
Demised Premises be removed or dealt with in any particular manner, and provided
that Tenant is not obligated to so remove or deal with such asbestos or other
hazardous material as set forth in Subsection B of this Section 3.05, then it
shall be Owner's obligation, at Owner's expense, to remove or so deal with such
asbestos or other hazardous material in accordance with such Legal Requirements.
B. Notwithstanding the provisions of subsection A of this Section, in the
event that (i) any work performed by Owner in order to remove or otherwise deal
with any asbestos or other hazardous materials contained in or about the Demised
Premises pursuant to the provisions of subsection A of this Section is disturbed
or damaged by Tenant or any person claiming through or under Tenant (other than
disruption or damage caused in connection with Alterations to the Demised
Premises which have been approved by Owner), or (ii) any asbestos or other
hazardous material is installed in the Demised Premises by or on behalf of
Tenant, or any person claiming through or under Tenant, then Owner shall have no
responsibility in connection therewith and no obligation to perform any work
with respect thereto, but it shall be Tenant's obligation, at Tenant's expense,
to remove or so deal with such asbestos or other hazardous material in
accordance with all applicable Legal Requirements. Any work required to be
performed by Tenant pursuant to the provisions of the foregoing sentence is
referred to as the "Compliance Work". In the event Tenant is required to perform
any Compliance Work then, notwithstanding anything to the contrary contained in
this subsection B, Owner, at Owner's election, shall have the option to itself
perform any Compliance Work and, in such event, Tenant shall pay to Owner all of
Owner's costs in connection therewith within ten (10) days next following the
rendition of a written statement thereof by Owner to Tenant.
Section 3.06. Dispute Resolution: Any dispute with respect to the
reasonability of any failure or refusal of Owner to grant its consent or
approval to any request for such consent or approval pursuant to the provisions
of Section 3.01 with respect to which request Owner has agreed, in such Section
not unreasonably to withhold such consent or approval, shall be determined by
arbitration in accordance with the provisions of Article 36.
9
Section 3.07. Fire Alarm and Communication System Connection Fees: Tenant
acknowledges that on or about the Commencement Date, Tenant shall be required to
enter into and maintain a maintenance contract with the fire safety contractor
selected by Owner to provide service to and maintain the fire safety systems
installed throughout the Building (which, as of the date hereof, is Mutual
Alarm), which contract shall cover the fire safety system and equipment which
Tenant installs in the Demised Premises. As part of Owner's Initial Work, Owner
shall purchase and connect to the Building Class E Fire Alarm and Communication
system those fire alarm devices necessary to comply with all applicable Legal
Requirements in effect as of the date hereof (such work to be performed by Owner
is referred to as "Owner's Class E Work"). Notwithstanding anything contained in
this Lease to the contrary, in the event that Tenant, pursuant to the provisions
of this Lease, including, but not limited to, the provisions of this Article 3
and Article 6, at Tenant's election or as required by applicable Legal
Requirements or otherwise, connects any additional equipment to any Class E Fire
Alarm and Communication system installed in the Demised Premises (other than the
equipment initially installed by Owner as part of Owner's Class E Work), then
Tenant shall bear the full cost and expense of such installation and Owner shall
not be obligated to reimburse Tenant for any costs relating thereto, which costs
and expense shall include, without limitation, payment to Owner as a one (1)
time connection fee the following sums set forth opposite the equipment listed
below (which sums shall be subject to increases due to increases in the cost to
Owner of operating and maintaining such Class E Fire Alarm and Communication
system over such costs on the date of this Lease):
A. Speakers in excess of 4 per floor of the
Demised Premises (or if the Demised Premises
contain less than one (1) floor, in excess $500.00 per device
of four in the Demised Premises)
B. Strobe Lights (single unit) $100.00 per device
C. Combination Speaker/Strobe
light $250.00 per device
D. Duct Detectors (supplementary
air conditioning systems) $500.00 per point
E. Smoke Detectors (multi-purpose) $500.00 per point
F. Preaction Sprinkler System:
waterflow $500.00 per point
tamper $500.00 per point
G. Warden Phone (additional) $1,000.00 per unit
H. Fail Safe Door Release $250.00 per connection
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ARTICLE 4
OWNERSHIP OF IMPROVEMENTS
Section 4.01. General Rights of Owner and Tenant: All appurtenances,
fixtures, improvements, additions and other property attached to or installed in
the Demised Premises, whether by Owner or Tenant or others, and whether at
Owner's expense, or Tenant's expense, or the joint expense of Owner and Tenant,
shall be and remain the property of Owner, except that any such fixtures,
improvements, additions and other property installed at the sole expense of
Tenant with respect to which Tenant has not been granted any credit or allowance
by Owner, and which are removable without material damage to the Demised
Premises shall be and remain the property of Tenant and are referred to as
"Tenant's Personal Property". Any replacements of any property of Owner, whether
made at Tenant's expense or otherwise, shall be and remain the property of
Owner.
ARTICLE 5
REPAIRS
Section 5.01. Tenant's Repair Obligations: A. Tenant shall take good care
of the Demised Premises (including, but not limited to, any Class E Fire Alarm
and Communication system) and, at Tenant's sole cost and expense, shall make all
repairs and replacements, structural and otherwise, ordinary and extraordinary,
foreseen and unforeseen as and when needed to preserve the Demised Premises
(including, but not limited to, any Class E Fire Alarm and Communication system)
in good and safe working order and in first class repair and condition, except
that Tenant shall not be required to make any structural repairs or structural
replacements to the Demised Premises unless necessitated or occasioned by the
acts, omissions or negligence of Tenant or any person claiming through or under
Tenant or any of their servants, employees, contractors, agents, visitors or
licensees, or by the use or occupancy or manner of use or occupancy of the
Demised Premises by Tenant or any such person. For the purposes of this Article,
any repairs or work involving asbestos or other hazardous materials (except to
the extent the same is the obligation of owner pursuant to Section 3.05) and the
Americans With Disabilities Act and any successor laws of like import shall be
deemed to be non-structural repairs or replacements. Without affecting Tenant's
obligations set forth in the preceding sentence, Tenant, at Tenant's sole cost
and expense, shall also (i) make all repairs and replacements, and perform all
maintenance as and when necessary, to the lamps, tubes, ballasts, and starters
in the lighting fixtures installed in the Demised Premises, (ii) make all
repairs and replacements, as and when necessary, to Tenant's Personal Property
and to any Alterations made or performed by or on behalf of Tenant or any person
claiming through or under Tenant, and (iii) if the Demised Premises shall
include any space on any ground, street, mezzanine or basement floor in the
Building, make all replacements, as and when necessary, to all windows and plate
and other glass in, on or about such space, and obtain and maintain, throughout
the Demised Term, plate glass insurance policies issued by companies, and in
form and amounts, satisfactory to Owner, in which Owner, its agents and any
lessor under any ground or underlying lease shall be named as parties insured,
and (iv) perform all maintenance and make all repairs and replacements, as and
when necessary, to any air conditioning equipment, private elevators,
escalators, conveyors or mechanical systems (other than the Building's standard
equipment and systems) which may be installed in the Demised Premises by Owner,
Tenant or others. However, the provisions of the foregoing sentence shall not be
deemed to give to Tenant any right to install air conditioning equipment,
elevators, escalators, conveyors or mechanical systems. All repairs and
replacements made by or on behalf of Tenant or any person claiming through or
under Tenant shall be made and performed in conformity with, and subject to the
provisions of Article 3 and shall be at least equal in quality and class to the
original work or installation. The necessity for, and adequacy of, repairs and
replacements pursuant to this Article 5 shall be measured by the standard which
is appropriate for first class office buildings of similar construction and
class in Nassau County, State of New York.
B. Notwithstanding anything to the contrary contained in this Lease, the
Demised Premises initially leased on the Commencement Date shall contain a
sprinkler system. In addition, notwithstanding the terms and conditions of
Subsection A above, but subject to the terms and conditions of this Subsection
B, with respect to all periods prior to the date, if any, upon which Tenant
shall perform Alterations to, or Alterations which shall affect, the sprinkler
system in the Demised Premises (the "Pre-Alteration Period"), Owner, at Owner's
11
expense, shall perform routine maintenance of, and shall repair and replace if
necessary, said sprinkler system and Tenant shall not be required to do the
same; provided, however, that from and after the date upon which Tenant shall
make any Alterations to, or Alterations which shall affect, the sprinkler system
in the Demised Premises, the foregoing provisions of this sentence shall no
longer be applicable and Tenant shall have all of the obligations set forth in
Subsection A above. In the event, however, that during the Pre-Alteration
Period, any maintenance, repairs or replacements to the sprinkler system shall
be necessitated or occasioned by the acts, omissions or negligence of Tenant or
any person claiming through or under Tenant or any of their servants, employees,
contractors, agents, visitors or licensees, or by the use or occupancy or manner
of use or occupancy of the Demised Premises by Tenant or any such person, then
Owner shall perform the same at Tenant's sole cost and expense and Tenant shall
reimburse Owner for the costs of the same within thirty (30) days after demand
therefor, or, at Owner's election, Tenant shall perform such maintenance,
repairs or replacement at Tenant's sole cost and expense. Owner shall also
perform inspections of said sprinkler system as and when required by Legal
Requirements and Tenant shall give Owner reasonable access to perform such
repairs, replacements, maintenance and inspections. Any such sprinkler system,
and any replacements thereof, whether made at Tenant's expense or Owner's
expense, shall be deemed the property of Owner.
ARTICLE 6
COMPLIANCE WITH LAWS
Section 6.01. General Covenants: Tenant, at Tenant's sole cost and expense,
shall comply with all Legal Requirements (hereinafter defined) which shall
impose any duty upon Owner or Tenant with respect to the Demised Premises or the
use or occupation thereof, including, but not limited to, any requirement that
asbestos or other hazardous material be removed or dealt with in any particular
manner (except to the extent the same is the obligation of owner pursuant to
Section 3.05), except that Tenant shall not be required to make any structural
Alterations in order so to comply unless such Alterations shall be necessitated
or occasioned, in whole or in part, by the acts, omissions, or negligence of
Tenant or any person claiming through or under Tenant, or any of their servants,
employees, contractors, agents, visitors or licensees, or by the use or
occupancy or manner of use or occupancy of the Demised Premises by Tenant or by
any such person. For all purposes of this Lease the term "Legal Requirements"
shall mean all present and future laws, codes, ordinances, statutes,
requirements, orders and regulations, ordinary and extraordinary, foreseen and
unforeseen (including, but not limited to, the New York State Energy
Conservation Construction Code, and the Americans with Disabilities Act, and any
successor laws of like import) of any Governmental Authority (hereinafter
defined) and all directions, requirements, orders and notices of violations
thereof. For all purposes of this Lease, the term "Governmental Authority" shall
mean the United States of America, the State of New York, the County of Nassau,
the Town of Hempstead, the Village of Lynbrook, any political subdivision
thereof and any agency, department, commission, board, bureau or instrumentality
of any of the foregoing, now existing or hereafter created, having jurisdiction
over Owner, Tenant, this Lease or the Real Property or any portion thereof. Any
work or installations made or performed by or on behalf of Tenant or any person
claiming through or under Tenant pursuant to the provisions of this Article
shall be made in conformity with, and subject to the provisions of Article 3.
For the purposes of this Article, any requirement that any asbestos or other
hazardous material be removed or dealt with in any particular manner (except to
the extent the same is the obligation of owner pursuant to Section 3.05) or any
Alterations required to comply with the Americans With Disabilities Act and any
successor laws of like import shall be deemed to be a non-structural Alteration.
Compliance with any requirement regarding asbestos or other hazardous material
shall be made in conformity with the provisions of Section 3.05.
Section 6.02. Tenant's Compliance with Owner's Fire Insurance: Tenant shall
not do anything, or permit anything to be done, in or about the Demised Premises
which shall (i) invalidate or be in conflict with the provisions of any fire
and/or other insurance policies covering the Building or any property located
therein, or (ii) result in a refusal by fire insurance companies of good
standing to insure the Building or any such property in amounts reasonably
satisfactory to Owner, or (iii) subject Owner to any liability or responsibility
for injury to any person or property by reason of any business operation being
conducted in the Demised Premises, or (iv) cause any increase in the fire
insurance rates applicable to the Building or property located therein at the
beginning of the Demised Term or at any time thereafter. Tenant, at Tenant's
12
expense, shall comply with all present and future rules, orders, regulations
and/or requirements of the New York Board of Fire Underwriters and the New York
Fire Insurance Rating Organization or any similar body and the issuer of any
insurance obtained by Owner covering the Building and/or the Real Property,
whether ordinary or extraordinary, foreseen or unforeseen, including, but not
limited to, the installation and maintenance of a sprinkler system to serve the
Demised Premises or any part thereof, any requirement that asbestos or other
hazardous material be removed or dealt with in any particular manner and any
requirement of the Americans With Disabilities Act or any successor laws of like
import.
Section 6.03. Fire Insurance Rates: In any action or proceeding wherein
Owner and Tenant are parties, a schedule or "make up" of rates applicable to the
Building or property located therein issued by the New York Fire Insurance
Rating Organization, or other similar body fixing such fire insurance rates,
shall be conclusive evidence of the facts therein stated and of the several
items and charges in the fire insurance rates then applicable to the Building or
property located therein.
ARTICLE 7
SUBORDINATION, ATTORNMENT, ETC.
Section 7.01. Lease Subordination: This Lease and all rights of Tenant
under this Lease are, and shall remain, unconditionally subject and subordinate
in all respects to all ground and underlying leases now or hereafter in effect
affecting the Real Property or any portion thereof and to all mortgages which
may now or hereafter affect such leases or the Real Property, and to all
advances made or hereafter to be made under such mortgages, and to all renewals,
modifications, consolidations, correlations, replacements and extensions of, and
substitutions for, such leases and mortgages (such leases as above described are
referred to herein collectively as the "Superior Lease" and such mortgages as
above described are referred to herein collectively as the "Mortgage"). The
foregoing provisions of this Section shall be self-operative and no further
instrument of subordination shall be required. In confirmation of such
subordination, Tenant shall execute and deliver promptly any certificate or
other instrument which Owner, or any lessor under any Superior Lease, or any
holder of any Mortgage may request, and in the event Tenant fails to execute and
deliver any such certificate or other instrument within fifteen (15) days after
Owner's or such lessor's or holder's request therefor, Tenant hereby,
irrevocably constitutes and appoints Owner and all such lessors and holders,
acting jointly or severally, as Tenant's agent and attorney-in-fact to execute
any such certificate or other instrument for or on behalf of Tenant. If, in
connection with obtaining financing with respect to the Building, the Real
Property, or the interest of the lessee under any Superior Lease, any recognized
lending institution shall request reasonable modifications of this Lease as a
condition of such financing, Tenant covenants not unreasonably to withhold or
delay its agreement to such modifications, provided that such modifications do
not materially increase the obligations, or materially and adversely affect the
rights, of Tenant under this Lease. No act or failure to act on the part of
Owner which would entitle Tenant under the terms of this Lease, or by law, to be
relieved of Tenant's obligations hereunder or to terminate this Lease shall
result in a release or termination of such obligations or a termination of this
Lease unless (i) Tenant shall have first given written notice of Owner's act or
failure to act to the holder or holders of any Mortgage and/or the lessor under
any Superior Lease of whom Tenant has been given written notice, specifying the
act or failure to act on the part of Owner which could or would give basis to
Tenant's rights; and (ii) the holder or holders of such Mortgage and/or the
lessors under any Superior Lease, after receipt of such notice, have failed or
refused to correct or cure the condition complained of within a reasonable time
thereafter, but nothing contained in this sentence shall be deemed to impose any
obligation on any such holder or lessor to correct or cure any such condition.
"Reasonable time" as used above means and includes a reasonable time to obtain
possession of the Building if any such holder or lessor elects to do so
(provided such holder or lessor institutes proceedings to obtain possession
within a reasonable time after notice from Tenant pursuant to the foregoing
provisions and conducts such proceedings with reasonable diligence) and a
reasonable time after so obtaining possession to correct or cure the condition
if such condition is determined to exist (provided such holder or lessor
commences said cure within ten (10) days after obtaining possession and
prosecutes the work required to cure with reasonable diligence).
13
Section 7.02. Tenant Attornment: If, at any time prior to the expiration of
the Demised Term, any Superior Lease under which Owner then shall be the lessee
shall terminate or be terminated for any reason, or the holder of any Mortgage
comes into possession of the Real Property or the Building or the estate created
by any Superior Lease by a receiver or otherwise, Tenant agrees, at the election
and upon demand of any owner of the Real Property, or of the holder of any
Mortgage so in possession, or of any lessee under any Superior Lease covering
the premises which include the Demised Premises, to attorn, from time to time,
to any such owner, holder, or lessee, upon the then executory terms and
conditions of this Lease, for the remainder of the term originally demised in
this Lease, provided that such owner, holder or lessee, as the case may be,
shall then be entitled to possession of the Demised Premises. The provisions of
this Section shall inure to the benefit of any such owner, holder, or lessee,
shall apply notwithstanding that, as a matter of law, this Lease may terminate
upon the termination of any Superior Lease, shall be self-operative upon any
such demand, and no further instrument shall be required to give effect to said
provisions. Tenant, however, upon demand of any such owner, holder, or lessee,
agrees to execute, from time to time, instruments in confirmation of the
foregoing provisions of this Section, satisfactory to any such owner, holder, or
lessee, acknowledging such attornment and setting forth the terms and conditions
of its tenancy. Nothing contained in this Section shall be construed to impair
any right otherwise exercisable by any such owner, holder, or lessee.
Notwithstanding anything to the contrary set forth in this Article no such
owner, holder or lessee shall (i) be bound by any payment of any installment of
Fixed Rent or increases therein or any additional rent which may have been made
more than thirty (30) days before the due date of such installment, (ii) be
bound by any amendment or modification to this Lease which is made without its
consent, (iii) be required to account for any security deposit other than any
security deposit actually delivered to it, (iv) be liable for any previous act
or omission of Owner under this Lease, or (v) be subject to any credit or
offset, not expressly provided for in this Lease, which theretofore shall have
accrued to Tenant against Owner.
Section 7.03. Tenant Estoppel Certificate: From time to time, within
fifteen (15) days next following Owner's request, Tenant shall deliver to Owner
a written statement executed and acknowledged by Tenant, in form reasonably
satisfactory to Owner, (i) stating that this Lease is then in full force and
effect and has not been modified (or if modified, setting forth the specific
nature of all modifications), and (ii) setting forth the date to which the Fixed
Rent has been paid, and (iii) stating whether or not, to the best knowledge of
Tenant, Owner is in default under this Lease, and, if Owner is in default,
setting forth the specific nature of all such defaults and (iv) stating that
Tenant has accepted and occupied the Demised Premises and all improvements
required to be made by Owner pursuant to the provisions of this Lease, have been
made, if such be the case and (v) setting forth any additional information
reasonably requested by Owner. Tenant acknowledges that any statement delivered
pursuant to this Section may be relied upon by any purchaser or owner of the
Building, or of the Real Property, or any part thereof, or of Owner's interest
in the Building or the Real Property or any Superior Lease, or by the holder of
any Mortgage, or by any assignee of the holder of any Mortgage, or by any lessor
under any Superior Lease.
Section 7.04. Owner Assignment of Lease and Rents: If Owner assigns its
interest in this Lease, or the rents payable hereunder, to the holder of any
Mortgage or the lessor under any Superior Lease, whether the assignment shall be
conditional in nature or otherwise, Tenant agrees that (a) the execution thereof
by Owner and the acceptance by such holder or lessor shall not be deemed an
assumption by such holder or lessor of any of the obligations of the Owner under
this Lease unless such holder or lessor shall, by written notice sent to Tenant,
specifically otherwise elect; and (b) except as aforesaid, such holder or lessor
shall be treated as having assumed Owner's obligations hereunder only upon the
foreclosure of such holder's Mortgage or the termination of such lessor's
Superior Lease and the taking of possession of the Demised Premises by such
holder or lessor, as the case may be.
ARTICLE 8
PROPERTY LOSS, ETC.
Section 8.01. Any Building employee to whom any property shall
be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Owner nor Owner's agents shall
be liable for any loss of or damage to any such property by theft or otherwise.
Neither (i) the performance by Owner, Tenant or others of any decorations,
14
repairs, alterations, additions or improvements in or to the Building or the
Demised Premises, nor (ii) the failure of Owner or others to make any such
decorations, repairs, alterations, additions or improvements, nor (iii) any
damage to the Demised Premises or to the property of Tenant, nor any injury to
any persons, caused by other tenants or persons in the Building, or by
operations in the construction of any private, public or quasi-public work, or
by any other cause, nor (iv) any latent defect in the Building or in the Demised
Premises, nor (v) any temporary or permanent closing, darkening or bricking up
of any windows of the Demised Premises for any reason whatsoever including, but
not limited to, Owner's own acts, nor (vi) any inconvenience or annoyance to
Tenant or injury to or interruption of Tenant's business by reason of any of the
events or occurrences referred to in the foregoing subdivisions (i) through (v),
shall constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Owner, or
its agents, or any lessor under any Superior Lease, other than such liability as
may be imposed upon Owner by law for Owner's negligence or the negligence of
Owner's agents, servants or employees in the operation or maintenance of the
Building or for the breach by Owner of any express covenant of this Lease on
Owner's part to be performed. Tenant's taking possession of the Demised Premises
shall be conclusive evidence, as against Tenant, that, at the time such
possession was so taken, the Demised Premises and the Building were in good and
satisfactory condition.
ARTICLE 9
DESTRUCTION-FIRE OR OTHER CASUALTY
Section 9.01. Owner's Repair Obligations: If the Demised Premises shall be
damaged by fire or other casualty and if Tenant shall give prompt notice to
Owner of such damage, Owner, at Owner's expense, shall repair such damage.
However, Owner shall have no obligation to repair any damage to, or to replace,
Tenant's Personal Property or any other property or effects of Tenant. Except as
otherwise provided in Section 9.03, if the entire Demised Premises shall be
rendered untenantable by reason of any such damage, the Fixed Rent shall abate
for the period from the date of such damage to the date when such damage shall
have been repaired, and if only a part of the Demised Premises shall be so
rendered untenantable, the Fixed Rent shall abate for such period in the
proportion which the area of the part of the Demised Premises so rendered
untenantable bears to the total area of the Demised Premises. However, if, prior
to the date when all of such damage shall have been repaired, any part of the
Demised Premises so damaged shall be rendered tenantable and shall be used or
occupied by Tenant or any person or persons claiming through or under Tenant,
then the amount by which the Fixed Rent shall abate shall be equitably
apportioned for the period from the date of any such use or occupancy to the
date when all such damage shall have been repaired. Further, should Owner, at
its sole option, make available to Tenant, during the period of such repair,
other space in the Building which is reasonably suitable for the temporary
carrying on of Tenant's business, the Fixed Rent (as equitably adjusted to
reflect any difference in the square footage of such space as compared to the
Demised Premises) shall be reinstated with respect to such temporarily occupied
space and shall be payable by Tenant from the date such space is occupied by
Tenant. Tenant hereby expressly waives the provisions of Section 227 of the New
York Real Property Law, and of any successor law of like import then in force,
and Tenant agrees that the provisions of this Article shall govern and control
in lieu thereof. Notwithstanding the foregoing provisions of this Section, if,
prior to or during the Demised Term, (i) the Demised Premises shall be totally
damaged or rendered wholly untenantable by fire or other casualty, and if Owner
shall decide not to restore the Demised Premises, or (ii) the Building shall be
so damaged by fire or other casualty that, in Owner's opinion, substantial
alteration, demolition, or reconstruction of the Building shall be required
(whether or not the Demised Premises shall have been damaged or rendered
untenantable), then, in any of such events, Owner, at Owner's option, may give
to Tenant, within ninety (90) days after such fire or other casualty, a five (5)
days' notice of termination of this Lease and, in the event such notice is
given, this Lease and the Demised Term shall come to an end and expire (whether
or not said term shall have commenced) upon the expiration of said five (5) days
with the same effect as if the date of expiration of said five (5) days were the
Expiration Date, the Fixed Rent shall be apportioned as of such date and any
prepaid portion of Fixed Rent for any period after such date shall be refunded
by Owner to Tenant.
Section 9.02. Owner's Subrogation Waiver Provisions: Owner shall attempt to
obtain and maintain, throughout the Demised Term, in Owner's fire insurance
policies covering the Building, provisions to the effect that such policies
15
shall not be invalidated should the insured waive, in writing, prior to a loss,
any or all right of recovery against any party for loss occurring to the
Building. In the event that at any time Owner's fire insurance carriers shall
exact an additional premium for the inclusion of such or similar provisions,
Owner shall give Tenant notice thereof. In such event, if Tenant agrees, in
writing, to reimburse Owner for such additional premium for the remainder of the
Demised Term, Owner shall require the inclusion of such or similar provisions by
Owner's fire insurance carriers. As long as such or similar provisions are
included in Owner's fire insurance policies then in force, Owner hereby waives
(i) any obligation on the part of Tenant to make repairs to the Demised Premises
necessitated or occasioned by fire or other casualty that is an insured risk
under such policies, and (ii) any right of recovery against Tenant, any other
permitted occupant of the Demised Premises, and any of their servants,
employees, agents or contractors, for any loss occasioned by fire or other
casualty which is an insured risk under such policies. In the event that at any
time Owner's fire insurance carriers shall not include such or similar
provisions in Owner's fire insurance policies, the waivers set forth in the
foregoing sentence shall, upon notice given by Owner to Tenant, be deemed of no
further force or effect.
Section 9.03. Tenant Negligence: Except to the extent expressly provided in
Section 9.02, nothing contained in this Lease shall relieve Tenant of any
liability to Owner or to its insurance carriers which Tenant may have under law
or the provisions of this Lease in connection with any damage to the Demised
Premises or the Building caused by fire or other casualty. Notwithstanding the
provisions of Section 9.01, if any such damage, occurring after any date when
the waivers set forth in Section 9.02 are no longer in force and effect, is due
to the fault or neglect of Tenant, any person claiming through or under Tenant,
or any of their servants, employees, agents, contractors, visitors or licensees,
then there shall be no abatement of Fixed Rent by reason of such damage.
Section 9.04. Tenant Subrogation Waiver Provisions: Tenant acknowledges
that it has been advised that Owner's insurance policies do not cover Tenant's
Personal Property or any other property of Tenant in the Demised Premises;
accordingly, it shall be Tenant's obligation to obtain and maintain insurance
covering its property in the Demised Premises and loss of profits including, but
not limited to, water damage coverage and business interruption insurance.
Tenant shall attempt to obtain and maintain, throughout the Demised Term, in
Tenant's fire and other insurance policies covering Tenant's Personal Property
and other property of Tenant in the Demised Premises, and Tenant's use and
occupancy of the Demised Premises, and/or Tenant's profits (and shall cause any
other permitted occupants of the Demised Premises to attempt to obtain and
maintain, in similar policies), provisions to the effect that such policies
shall not be invalidated should the insured waive, in writing, prior to a loss,
any or all right of recovery against any party for loss occasioned by fire or
other casualty which is an insured risk under such policies. In the event that
at any time the fire insurance carriers issuing such policies shall exact an
additional premium for the inclusion of such or similar provisions, Tenant shall
give Owner notice thereof. In such event, if Owner agrees, in writing, to
reimburse Tenant or any person claiming through or under Tenant, as the case may
be, for such additional premium for the remainder of the Demised Term, Tenant
shall require the inclusion of such or similar provisions by such insurance
carriers. As long as such or similar provisions are included in such insurance
policies then in force, Tenant hereby waives (and agrees to cause any other
permitted occupants of the Demised Premises to execute and deliver to Owner
written instruments waiving) any right of recovery against Owner, any lessors
under any Superior Leases, the holders of any Mortgage, and all other tenants or
occupants of the Building, and any servants, employees, agents or contractors of
Owner, or of any such lessor, or holder or any such other tenants or occupants,
for any loss occasioned by fire or other casualty which is an insured risk under
such policies. In the event that at any time such insurance carriers shall not
include such or similar provisions in any such insurance policy, the waiver set
forth in the foregoing sentence (or in any written instrument executed by any
other permitted occupant of the Demised Premises) shall, upon notice given by
Tenant to Owner, be deemed of no further force or effect with respect to any
insured risks under such policy from and after the giving of such notice. During
any period while any such waiver of right of recovery is in effect, Tenant, or
any other permitted occupant of the Demised Premises, as the case may be, shall
look solely to the proceeds of such policies to compensate Tenant or such other
permitted occupant for any loss occasioned by fire or other casualty which is an
insured risk under such policies.
Section 9.05. Tenant's Termination Right: A. Supplementing the provisions
of Section 9.01, in the event that (a) the Demised Premises or Building shall be
damaged by fire or other casualty and Tenant shall be unable to use all or a
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material portion of the Demised Premises as a result of such damage and (b)
Owner shall not exercise the right to terminate this Lease in accordance with
the provisions of Section 9.01 and shall, accordingly, be obligated to repair
any such damage, then, if such damage is not repaired within eighteen (18)
months immediately following the date of such fire or other casualty (such
eighteen (18) month period, as the same may be extended as provided in
Subsection B of this Section 9.05 to reflect the time frame set forth in the
Estimate Notice [as hereinafter defined], is referred to as the "Restoration
Period"), then Tenant shall have the following options:
(i) to give to Owner within ten (10) days next following the
expiration of the Restoration Period a thirty (30) days' notice of
termination of this Lease, or
(ii) to extend the Restoration Period for a further period of six (6)
months by notice given to Owner within ten (10) days after the expiration
of the initial Restoration Period. In the event Tenant shall have given
such notice to Owner extending the initial Restoration Period and if such
damage is not repaired by Owner within any extended Restoration Period,
Tenant shall have the options to (a) further extend the Restoration Period
for further successive periods of six (6) months, by notice given to Owner
within ten (10) days after the expiration of any extended Restoration
Period or (b) to give Owner, within ten (10) days after the expiration of
any such extended Restoration Period, a thirty (30) days' notice of
termination of this Lease.
B. Notwithstanding anything to the contrary contained in the provisions of
Subsection A of this Section 9.05, in the event (a) the Demised Premises or
Building shall be damaged by fire or other casualty and Tenant shall be unable
to use the Demised Premises as a result of such damage and (b) Owner shall not
exercise the right to terminate this Lease in accordance with the provisions of
Section 9.01, and (c) Owner, in Owner's opinion, shall determine that the repair
of such damage to the Demised Premises or Building will reasonably require a
period longer than eighteen (18) months, Owner may within one hundred twenty
(120) days after the date of such fire or casualty, give a notice to Tenant
extending the initial Casualty Restoration Period to the date upon which Owner
estimates that such repair to the Demised Premises or Building shall be
completed. In the event Owner shall give such a notice under this Subsection B,
then, the initial Casualty Restoration Period set forth in Paragraph A of this
Section 9.05, shall be so extended and (b) Tenant shall have the further option
to give to Owner a five (5) days' notice of termination of this Lease within ten
(10) days next following the giving of such notice under this Subsection B by
Owner to Tenant extending the initial Casualty Restoration Period.
C. In the event that Tenant shall fail to give any such notice of
termination within the time periods set forth in this Section 9.05, time being
of the essence with respect thereto, Tenant shall be deemed to have given Owner
a notice extending the Restoration Period. Any thirty (30) days' notice of
termination given by Tenant pursuant to the provisions of this Section 9.05
beyond the applicable period provided herein, time being of the essence, shall
be void and of no force and effect.
D. In the event that Tenant shall give to Owner within the applicable time
periods set forth in the foregoing provisions of this Section, a thirty (30)
days' notice of termination of this Lease, then this Lease and the Demised Term
shall come to an end and expire upon the expiration of said thirty (30) days
with the same effect as if the date of expiration of said thirty (30) days were
the Expiration Date of this Lease, the Fixed Rent and all increases thereof and
any additional rent shall be apportioned as of the casualty date, and any
prepaid portion of Fixed Rent and all increases thereof and any additional rent
for any period after such date shall be refunded by Owner to Tenant.
E. Nothing contained in the foregoing provisions of this Section 9.05 shall
be deemed to affect the rights of Owner to give to Tenant a five (5) days'
notice of termination of this Lease in accordance with the provisions of Section
9.01.
F. Notwithstanding anything to the contrary contained in this Section 9.05,
in the event that the damage caused by any such fire or other casualty shall
solely affect the Demised Premises and shall not affect any portion of the
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Building outside of the Demised Premises, then, in such case, the Restoration
Period shall be reduced to a period equal to nine (9) months next following the
date of such fire or other casualty.
ARTICLE 10
EMINENT DOMAIN
Section 10.01. Taking of the Demised Premises: If the whole of the Demised
Premises shall be acquired for any public or quasi-public use or purpose,
whether by condemnation or by deed in lieu of condemnation, this Lease and the
Demised Term shall end as of the date of the vesting of title with the same
effect as if said date were the Expiration Date. If only a part of the Demised
Premises shall be so acquired or condemned then, except as otherwise provided in
this Section, this Lease and the Demised Term shall continue in force and effect
but, from and after the date of the vesting of title, the Fixed Rent shall be
reduced in the proportion which the area of the part of the Demised Premises so
acquired or condemned bears to the total area of the Demised Premises
immediately prior to such acquisition or condemnation. If only a part of the
Real Property shall be so acquired or condemned, then (i) whether or not the
Demised Premises shall be affected thereby, Owner, at Owner's option, may give
to Tenant, within sixty (60) days next following the date upon which Owner shall
have received notice of vesting of title, a five (5) days' notice of termination
of this Lease, and (ii) if the part of the Real Property so acquired or
condemned shall contain more than ten (10%) percent of the total area of the
Demised Premises immediately prior to such acquisition or condemnation, or if,
by reason of such acquisition or condemnation, Tenant no longer has reasonable
means of access to the Demised Premises, Tenant, at Tenant's option, may give to
Owner, within sixty (60) days next following the date upon which Tenant shall
have received notice of vesting of title, a five (5) days' notice of termination
of this Lease. In the event any such five (5) days' notice of termination is
given, by Owner or Tenant, this Lease and the Demised Term shall come to an end
and expire upon the expiration of said five (5) days with the same effect as if
the date of expiration of said five (5) days were the Expiration Date. If a part
of the Demised Premises shall be so acquired or condemned and this Lease and the
Demised Term shall not be terminated pursuant to the foregoing provisions of
this Section, Owner, at Owner's expense, shall restore that part of the Demised
Premises not so acquired or condemned to a self-contained rental unit. In the
event of any termination of this Lease and the Demised Term pursuant to the
provisions of this Section, the Fixed Rent shall be apportioned as of the date
of such termination and any prepaid portion of Fixed Rent for any period after
such date shall be refunded by Owner to Tenant.
Section 10.02. Condemnation Award or Claims: In the event of any such
acquisition or condemnation of all or any part of the Real Property, Owner shall
be entitled to receive the entire award for any such acquisition or
condemnation, Tenant shall have no claim against Owner or the condemning
authority for the value of any unexpired portion of the Demised Term and Tenant
hereby expressly assigns to Owner all of its right in and to any such award.
Nothing contained in this Section shall be deemed to prevent Tenant from making
a claim in any condemnation proceedings for the value of any items of Tenant's
Personal Property which are compensable, in law, as trade fixtures.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
Section 11.01. General Covenant: Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors and
assigns, covenants that, without the prior consent of Owner in each instance, it
shall not (i) assign whether by merger, consolidation or otherwise, mortgage or
encumber its interest in this Lease, in whole or in part, or (ii) sublet, or
permit the subletting of, the Demised Premises or any part thereof, or (iii)
permit the Demised Premises or any part thereof to be occupied, or used for desk
space, mailing privileges or otherwise, by any person other than Tenant. The
sale, pledge, transfer or other alienation of (a) any of the issued and
outstanding capital stock of any corporate Tenant (unless such stock is publicly
traded on a recognized security exchange or over-the counter market) or (b) any
interest in any partnership, limited liability company or joint venture or other
business entity comprising Tenant, however accomplished, directly or indirectly,
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and whether in a single transaction or in a series of related and/or unrelated
transactions, shall be deemed for the purposes of this Section as an assignment
of this Lease which shall require the prior consent of Owner in each instance.
Section 11.02. Owner's Rights Upon Assignment: If Tenant's interest in this
Lease is assigned, whether or not in violation of the provisions of this
Article, Owner may collect rent from the assignee; if the Demised Premises or
any part thereof are sublet to, or occupied by, or used by, any person other
than Tenant, whether or not in violation of this Article, Owner, after default
by Tenant under this Lease, may collect rent from the subtenant, user or
occupant. In either case, Owner shall apply the net amount collected to the
rents reserved in this Lease, but neither any such assignment, subletting,
occupancy, or use, whether with or without Owner's prior consent, nor any such
collection or application, shall be deemed a waiver of any term, covenant or
condition of this Lease or the acceptance by Owner of such assignee, subtenant,
occupant or user as tenant. The consent by Owner to any assignment, subletting,
occupancy or use shall not relieve Tenant from its obligation to obtain the
express prior consent of Owner to any further assignment, subletting, occupancy
or use. If this Lease is assigned to any person or entity pursuant to any
proceeding of the type referred to in Subsections 16.01(c) and 16.01(d), any and
all monies or other consideration payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Owner, shall be
and remain the exclusive property of Owner and shall not constitute property of
Tenant or of the estate of Tenant within the meaning of any proceeding of the
type referred to in Subsections 16.01(c) and 16.01(d). Any and all monies or
other considerations constituting Owner's property under the preceding sentence
not paid or delivered to Owner shall be held in trust for the benefit of Owner
and shall be promptly paid to or turned over to Owner. Any person or entity to
which this Lease is assigned pursuant to any proceeding of the type referred to
in Subsections 16.01(c) and 16.01(d) shall be deemed without further act or deed
to have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall execute and deliver to Owner
upon demand an instrument confirming such assumption. The listing of any name
other than that of Tenant on any door of the Demised Premises or on any
directory or in any elevator in the Building, or otherwise, shall not operate to
vest in the person so named any right or interest in this Lease or in the
Demised Premises, or the Building, or be deemed to constitute, or serve as a
substitute for, any prior consent of Owner required under this Article, and it
is understood that any such listing shall constitute a privilege extended by
Owner which shall be revocable at Owner's will by notice to Tenant. Tenant
agrees to pay to Owner reasonable counsel fees incurred by Owner in connection
with any proposed assignment of Tenant's interest in this Lease or any proposed
subletting of the Demised Premises or any part thereof. Neither any assignment
of Tenant's interest in this Lease nor any subletting, occupancy or use of the
Demised Premises or any part thereof by any person other than Tenant, nor any
collection of rent by Owner from any person other than Tenant as provided in
this Section, nor any application of any such rent as provided in this Section
shall, in any circumstances, relieve Tenant of its obligation fully to observe
and perform the terms, covenants and conditions of this Lease on Tenant's part
to be observed or performed.
Section 11.03. Sublet Rights: A. (1) As long as Tenant is not in default
under any of the terms, covenants or conditions of this Lease on Tenant's part
to be observed or performed, Owner agrees not to unreasonably withhold Owner's
prior consent to a subletting by Tenant of the entire Demised Premises to one
(1) subtenant for undivided occupancy by such subtenant, for the use expressly
permitted in this Lease.
(2) Without Owner's prior consent, Tenant shall not (a) negotiate or enter
into a proposed subletting with any tenant, subtenant or occupant of any space
in the Building or (b) list or otherwise publicly advertise the Demised Premises
or any part thereof for subletting at a rental lower than the higher of (i) the
Fixed Rent then in effect under this Lease, or (ii) the rental at which the
Owner is then offering to rent comparable space in the Building.
(3) At least sixty (60) days prior to any proposed subletting, Tenant shall
submit to Owner a statement (the "Proposed Sublet Statement") containing the
name and address of the proposed subtenant, the nature of the proposed
subtenant's business and its current financial status, if such status is
obtained by Tenant, and all of the principal terms and conditions of the
proposed subletting including, but not limited to, the proposed commencement and
expiration dates of the term thereof.
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(4) Owner may arbitrarily withhold consent to a proposed subletting if, (a)
in Owner's reasonable judgment, the occupancy of the proposed subtenant will
tend to impair the character or dignity of the Building or impose any additional
burden upon Owner in the operation of the Building, or (b) the proposed
subtenant shall be a person or entity with whom Owner is then negotiating or
discussing to lease space in the Building or (c) the proposed sublet rent is
less than the fair rental value of the Demised Premises.
(5) In the event of any dispute between Owner and Tenant as to the
reasonableness of Owner's failure or refusal to consent to any subletting, such
dispute shall be submitted to arbitration in accordance with the provisions of
Article 36.
(6) Any Sublease consented to by Owner must conform to the information
contained in the Proposed Sublet Statement and shall expressly provide that (a)
the subtenant shall obtain the provisions in its insurance policies to the
effect that such policies shall not be invalidated should the insured waive, in
writing, prior to a loss, any or all right of recovery against any party for
loss occasioned by fire or other casualty which is an insured risk under such
policies, as set forth in Section 9.04, (b) in the event of the termination,
re-entry or dispossess of Tenant by Owner under this Lease, Owner may, at its
option, take over all of the right, title and interest of Tenant, as sublessor
under the sublease, and such subtenant shall, at Owner's option, attorn to Owner
pursuant to the then executory provisions of such sublease, except that Owner
shall not (i) be liable for any previous act or omission of Tenant under such
sublease, (ii) be subject to any offset which accrued to such subtenant against
Tenant, (iii) be bound by any previous modification of such sublease or by any
previous prepayment of more than one month's rent unless such modification or
prepayment was previously approved by Owner, (iv) be bound by any covenant to
undertake or complete any construction of the premises, or any portion thereof,
demised by such sublease and (v) be bound by any obligation to make any payment
to or on behalf of the subtenant, except for services, repairs, maintenance and
restoration provided for under the sublease to be performed after the date of
such termination, re-entry or dispossess by Owner under this Lease and to which
Owner is expressly required to perform under this Lease with respect to the
subleased space at Owner's expense, it being expressly understood, however, that
Owner shall not be bound by any obligation to make payment to or on behalf of a
subtenant with respect to construction performed by or on behalf of such
subtenant in the subleased premises. Tenant shall reimburse Owner on demand for
any costs or expense that may be incurred by Owner's review of any Proposed
Sublet Statement or in connection with any sublease consented to by Owner,
including, without limitation, any reasonable processing fee, reasonable
attorneys' fees and disbursements and the reasonable costs of making
investigations as to the acceptability of the proposed subtenant.
B. Notwithstanding the foregoing provisions of this Section 11.03, Owner
shall have the following rights with respect to each proposed subletting by
Tenant:
(1) in the event Tenant proposes to sublet the Demised Premises, whether or
not such subletting is for all or substantially all of the remainder of the
Demised Term, Owner, at Owner's option, may give to Tenant, within sixty (60)
days after the submission by Tenant to Owner of the Proposed Sublet Statement, a
notice terminating this Lease on the date (referred to as the "Earlier
Termination Date") immediately prior to the proposed commencement date of the
term of the proposed subletting, as set forth in the Proposed Sublet Statement,
and, in the event such notice is given, this Lease and the Demised Term shall
come to an end and expire on the Earlier Termination Date with the same effect
as if it were the Expiration Date, the Fixed Rent shall be apportioned as of
said Earlier Termination Date and any prepaid portion of Fixed Rent for any
period after such date shall be refunded by Owner to Tenant; or
(2) In the event Tenant proposes to sublet the Demised Premises for less
than substantially all of the remainder of the Demised Term, Owner, at Owner's
option, may give to Tenant, within sixty (60) days after the submission by
Tenant to Owner, of the Proposed Sublet Statement required to be submitted in
connection with such proposed subletting, a notice electing to recapture the
Demised Premises during the period (referred to as the "Recapture Period")
commencing on the date (referred to as "Recapture Date") immediately prior to
the proposed commencement date of the term of the proposed subletting, as set
20
forth in the Proposed Sublet Statement, and ending on the proposed expiration
date of the term of the proposed subletting, as set forth in the Proposed Sublet
Statement, and in the event such notice is given the following shall apply:
(a) The Demised Premises shall be recaptured by Owner during the Recapture
Period;
(b) Tenant shall surrender the Demised Premises to Owner on or prior to the
Recapture Date in the same manner as if said Date were the Expiration Date;
(c) During the Recapture Period Tenant shall have no rights with respect to
the Demised Premises nor any obligations with respect to the Demised Premises,
including, but not limited to, any obligations to pay Fixed Rent or any
increases therein or any additional rent, and any prepaid portion of Fixed Rent
allocable to the Recapture Period shall be refunded by Owner to Tenant;
(d) There shall be an equitable apportionment of any increase in the Fixed
Rent pursuant to Article 23 for the Escalation Year and Tax Escalation Year (as
defined in Article 23) in which said Recapture Date shall occur;
(e) Upon the expiration of the Recapture Period, the Demised Premises, in
its then existing condition, shall be deemed restored to Tenant and Tenant shall
have all rights with respect to the Demised Premises which are set forth in this
Lease and all obligations with respect to the Demised Premises which are set
forth in this Lease, including, but not limited to, the obligations for the
payment of Fixed Rent and any increases therein and any additional rent (as they
would have been adjusted if Tenant occupied the Demised Premises during the
Recapture Period) during the period (referred to as the "Recapture Restoration
Period") commencing on the date next following the expiration of the Recapture
Period and ending on the Expiration Date, except in the event that Owner is
unable to give Tenant possession of the Demised Premises at the expiration of
the Recapture Period by reason of the holding over or retention of possession of
any tenant or other occupant, in which event (x) the Recapture Restoration
Period shall not commence and the Demised Premises shall not be deemed available
for Tenant's occupancy and Tenant shall not be required to comply with the
obligations of Tenant under this Lease until the date upon which Owner shall
give Tenant possession of the Demised Premises free of occupancies, (y) neither
the Expiration Date nor the validity of this Lease nor the obligations of Tenant
under this Lease shall be affected thereby, and (z) Tenant waives any rights to
rescind this Lease and to recover any damages which may result from the failure
by Owner to deliver possession of the Demised Premises at the end of the
Recapture Period; Owner agrees to institute, within thirty (30) days after the
expiration of the Recapture Period, possession proceedings against any tenants
and occupants who have not so vacated and surrendered all or any portions of the
Demised Premises and agrees to prosecute such proceedings with reasonable
diligence; and
(f) There shall be an equitable apportionment of any increase in the Fixed
Rent pursuant to Article 23 for the Escalation Year and Tax Escalation Year in
which the Recapture Restoration Period shall commence.
At the request of Owner, Tenant shall execute and deliver an instrument or
instruments, in form satisfactory to Owner, setting forth any modifications to
this Lease contemplated in or resulting from the operation of the foregoing
provisions of this Subsection 11.03; however, neither Owner's failure to request
any such instrument nor Tenant's failure to execute or deliver any such
instrument shall vitiate the effect of the foregoing provisions of this Section.
The failure by Owner to exercise any option under this Section 11.03 with
respect to any subletting shall not be deemed a waiver of such option with
21
respect to any extension of such subletting or any subsequent subletting of the
premises affected thereby or any other portion of the Demised Premises. Tenant
shall indemnify Owner from all loss, cost, liability, damage and expense,
including, but not limited to, reasonable counsel fees and disbursements,
arising from any claims against Owner by any broker or other person, for a
brokerage commission or other similar compensation in connection with any such
proposed subletting, in the event (a) Owner shall (i) fail or refuse to consent
to any proposed subletting, or (ii) exercise any of its options under this
Section 11.03, or (b) any proposed subletting shall fail to be consummated for
any reason whatsoever.
C. Tenant agrees that fifty (50%) percent of (1) any increase in the rental
value of the Demised Premises over and above the Fixed Rent payable pursuant to
the provisions of this Lease, as such Fixed Rent may be increased from time to
time pursuant to the provisions of this Lease, and (2) any consideration paid to
Tenant or any subtenant or other person claiming through or under Tenant in
connection with an assignment of Tenant's interest in this Lease or the interest
of any subtenant or other person claiming through or under Tenant under any
sublease whether or not such assignment shall be effected with court approval in
a proceeding of the types described in Subsection 16.01(c) or (d), or in any
similar proceeding, or otherwise, shall accrue to the benefit of Owner and not
to the benefit of Tenant, or of any subtenant or other person claiming through
or under Tenant, or of the creditors of Tenant or of any such subtenant or other
person claiming through or under Tenant. Accordingly, Tenant agrees that if
Owner shall fail to exercise its option to sooner terminate this Lease or its
option to recapture the Demised Premises in connection with any proposed
subletting by Tenant, or if any subtenant or other person claiming through or
under Tenant shall sublet all or any portion of the Demised Premises, Tenant
shall pay to Owner a sum equal to fifty (50%) percent of any Subletting Profit,
as such term is hereinafter defined. All rentals and other sums (including, but
not limited to, sums payable for the sale or rental of any fixtures, leasehold
improvements, equipment, furniture or other personal property, less, in the case
of the sale thereof, the then net unamortized [on a straight-line basis over the
term of this Lease or, in the event of a further subletting, over the term of
the initial sublease, as the case may be] cost thereof, which were provided and
installed in the sublet premises at the sole cost and expense of Tenant or such
subtenant or other person claiming through or under Tenant and for which no
allowance or other credit has been given by Owner) payable by any subtenant to
Tenant or to any subtenant or other person claiming through or under Tenant in
connection with any subletting in excess of the Fixed Rent then payable by
Tenant to Owner under this Lease are referred to, in the aggregate, as
"Subletting Profit"; in computing any Subletting Profit it shall be deemed that
the rental reserved under any such subletting shall commence to accrue as of the
commencement of the term of such subletting even if such rental actually
commences to accrue as of a date subsequent to such commencement and there shall
be deducted a reasonable single brokerage commission, if any such commission
shall be paid by Tenant or any such subtenant or other person claiming through
or under Tenant in connection with such subletting which deduction for such
reasonable single brokerage commission shall be amortized on a straight line
basis over the entire term of such subletting. Owner and Tenant agree that if
Tenant, or any subtenant or other person claiming through or under Tenant, shall
assign or have assigned its interest as Tenant under this Lease or its interest
as subtenant under any sublease as the case may be, whether or not such
assignment shall be effected with court approval in a proceeding of the types
described in Subsections 16.01(c) or (d), or in any similar proceeding, or
otherwise, Tenant shall pay to Owner a sum equal to any consideration paid to
Tenant or any subtenant or other person claiming through or under Tenant for
such assignment. All sums payable hereunder to Tenant shall be paid to Owner as
additional rent immediately upon such sums becoming payable to Tenant or to any
subtenant or other person claiming through or under Tenant and, if requested by
Owner, Tenant shall promptly enter into a written agreement with Owner setting
forth the amount of such sums to be paid to Owner, however, neither Owner's
failure to request the execution of such agreement nor Tenant's failure to
execute such agreement shall vitiate the provisions of this Section. For the
purposes of this Section, a trustee, receiver or other representative of the
Tenant's or any subtenant's estate under any federal or state bankruptcy act
shall be deemed a person claiming through or under Tenant.
D. Neither Owner's consent to any subletting nor anything contained in this
Section shall be deemed to grant to any subtenant or other person claiming
through or under Tenant the right to sublet all or any portion of the Demised
Premises or to permit the occupancy of all or any portion of the Demised
Premises by others. Neither any subtenant referred to in this Section nor its
heirs, distributees, executors, administrators, legal representatives,
successors nor assigns, without the prior consent of Owner in each instance,
22
shall (i) assign, whether by merger, consolidation or otherwise, mortgage or
encumber its interest in any sublease, in whole or in part, or (ii) sublet, or
permit the subletting of, that part of the Demised Premises affected by such
subletting or any portion thereof, or (iii) permit such part of the Demised
Premises affected by such subletting or any part thereof to be occupied or used
for desk space, mailing privileges or otherwise, by any person other than such
subtenant and any sublease shall provide that any violation of the foregoing
provisions of this sentence shall be an event of default thereunder. The sale,
pledge, transfer or other alienation of (a) any of the issued and outstanding
capital stock of any corporate subtenant (unless such stock is publicly traded
on any recognized security exchange or over-the-counter market) or (b) any
interest in any partnership or joint venture subtenant, however accomplished,
and whether in a single transaction or in a series of related or unrelated
transactions, shall be deemed for the purposes of this Section to be an
assignment of such sublease which shall require the prior consent of Owner in
each instance and any sublease shall so provide.
Section 11.04. Owner's Rights Upon Lease Disaffirmance: A. In the event
that, at any time after Tenant may have assigned Tenant's interest in this
Lease, this Lease shall be disaffirmed or rejected in any proceeding of the
types described in Subsections 16.01(c) and (d), or in any similar proceeding,
or in the event of termination of this Lease by reason of any such proceeding or
by reason of lapse of time following notice of termination given pursuant to
Section 16.01 based upon any of the Events of Default set forth in said
Subsections, Tenant, upon request of Owner given within thirty (30) days next
following any such disaffirmance, rejection or termination (and actual notice
thereof to Owner in the event of a disaffirmance or rejection or in the event of
termination other than by act of Owner), shall (i) pay to Owner all Fixed Rent,
additional rent and other charges due and owing by the assignee to Owner under
this Lease to and including the date of such disaffirmance, rejection or
termination, and (ii) as "tenant", enter into a new lease with Owner of the
Demised Premises for a term commencing on the effective date of such
disaffirmance, rejection or termination and ending on the Expiration Date unless
sooner terminated as in such lease provided, at the same Fixed Rent and then
executory terms, covenants and conditions as are contained in this Lease, except
that (a) Tenant's rights under the new lease shall be subject to the possessory
rights of the assignee under this Lease and the possessory rights of any person
claiming through or under such assignee or by virtue of any statute or of any
order of any court, and (b) such new lease shall require all defaults existing
under this Lease to be cured by Tenant with due diligence, and (c) such new
lease shall require Tenant to pay all increases in the Fixed Rent reserved in
this Lease which, had this Lease not been so disaffirmed, rejected or
terminated, would have accrued under the provisions of Article 23 of this Lease
after the date of such disaffirmance, rejection or termination with respect to
any period prior thereto. In the event Tenant shall default in its obligation to
enter into said new lease for a period of ten (10) days next following Owner's
request therefor, then, in addition to all other rights and remedies by reason
of such default, either at law or in equity, Owner shall have the same rights
and remedies against Tenant as if Tenant had entered into such new lease and
such new lease had thereafter been terminated as at the commencement date
thereof by reason of Tenant's default thereunder. Nothing contained in this
Section shall be deemed to grant to Tenant any right to assign Tenant's interest
in this Lease.
B. If Tenant assumes this Lease in any proceeding of the types described in
Subsections 16.01(c) and (d), or in any similar proceeding and proposes to
assign the same pursuant to said proceeding to any person or entity who shall
have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to the Tenant, then notice of such proposed assignment shall be given
to Owner by Tenant no later than twenty (20) days after receipt by Tenant of
such offer, but in any event no later than ten (10) days prior to the date that
Tenant shall make application to a court of competent jurisdiction for authority
and approval to enter into such assignment and assumption. Such notice shall set
forth (a) the name and address of such person, (b) all of the terms and
conditions of such offer, and (c) adequate assurance of future performance by
such person under the Lease, including, without limitation, the assurance
referred to in Section 365(b)(3) of the United States Bankruptcy Code or any
provisions in substitution thereof. Owner shall have the prior right and option,
to be exercised by notice to Tenant given at any time prior to the effective
date of such proposed assignment, to accept an assignment of this Lease upon the
same terms and conditions and for the same consideration, if any, as the bona
fide offer made by such person, less any brokerage commissions which would
otherwise be payable by Tenant out of the consideration to be paid by such
person in connection with the assignment of this Lease.
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C. The term "adequate assurance of future performance" as used in this
Lease shall mean that any proposed assignee shall, among other things, (a)
deposit with Owner on the assumption of this Lease the sum of nine (9) months of
the then Fixed Rent and increases therein pursuant to Article 23 as security for
the faithful performance and observance by such assignee of the terms and
obligations of this Lease, (b) furnish Owner with financial statements of such
assignee for the prior three (3) fiscal years, as finally determined after an
audit and certified as correct by a certified public accountant, which financial
statements shall show a net worth of at least six (6) times the Fixed Rent and
increases therein pursuant to Article 23 then payable for each of such three (3)
years, (c) grant to Owner a security interest in such property of the proposed
assigned as Owner shall deem necessary to provide adequate assurance of the
performance by such assignee of its obligations under the Lease.
Section 11.05. Tenant's Subsidiaries & Affiliates: A. Supplementing the
provisions of Article 11, as long as Tenant is not in default under any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed and
performed, GTJ Co., Inc., Tenant named herein, shall have the right, without the
prior consent of Owner, to assign its interest in this Lease, for the use
permitted in this Lease, to any subsidiary or affiliate of Tenant named herein,
which is in the same general line of business as Tenant named herein and only
for such period as it shall remain such subsidiary or affiliate. For the
purposes of this Article: (a) a "subsidiary" of Tenant named herein shall mean
any corporation not less than fifty-one (51%) percent of whose outstanding
voting stock at the time shall be owned by Tenant named herein, and (b) an
"affiliate" of Tenant named herein shall mean any corporation, partnership or
other business entity which controls or is controlled by, or is under common
control with Tenant. For the purpose of the definition of "affiliate" the word
"control" (including, "controlled by" and "under common control with") as used
with respect to any corporation, partnership or other business entity, shall
mean the possession of the power to direct or cause the direction of the
management and policies of such corporation, partnership or other business
entity, whether through the ownership of voting securities or contract. No such
assignment shall be valid or effective unless, within ten (10) days after the
execution thereof, Tenant shall deliver to Owner all of the following: (I) a
duplicate original instrument of assignment, in form and substance satisfactory
to Owner, duly executed by Tenant, in which Tenant shall (a) waive all notices
of default given to the assignee, and all other notices of every kind or
description now or hereafter provided in this Lease, by statute or rule of law,
and (b) acknowledge that Tenant's obligations with respect to this Lease shall
not be discharged, released or impaired by (i) such assignment, (ii) any
amendment or modification of this Lease, whether or not the obligations of
Tenant are increased thereby, (iii) any further assignment or transfer of
Tenant's interest in this Lease, (iv) any exercise, non-exercise or waiver by
Owner of any right, remedy, power or privilege under or with respect to this
Lease, (v) any waiver, consent, extension, indulgence or other act or omission
with respect to any other obligations of Tenant under this Lease, (vi) any act
or thing which, but for the provisions of such assignment, might be deemed a
legal or equitable discharge of a surety or assignor, to all of which Tenant
shall consent in advance, and (c) expressly waive and surrender any then
existing defense to its liability hereunder it being the purpose and intent of
Owner and Tenant that the obligations of Tenant hereunder as assignor shall be
absolute and unconditional under any and all circumstances, and (II) an
instrument, in form and substance reasonably satisfactory to Owner, duly
executed by the assignee, in which such assignee shall assume the observance and
performance of, and agree to be personally bound by, all of the terms, covenants
and conditions of this Lease on Tenant's part to be observed and performed. The
provisions of Section 11.03 relating to Owner's option to terminate this Lease
and the provisions of Section 11.03 C. relating to profits payable to Owner upon
an assignment of this Lease shall not be applicable to any proposed assignment
of this Lease to any such subsidiary or affiliate of Tenant pursuant to the
provisions of this Section.
B. Further supplementing the provisions of Article 11, as long as Tenant is
not in default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed and performed, GTJ Co., Inc., Tenant named herein,
shall have the right without the prior consent of Owner, to sublet to, or permit
the use or occupancy of, all or any part of the Demised Premises by any
subsidiary or affiliate (as said terms are defined in Section 11.05 A.) of
Tenant named herein for the use permitted in this Lease provided that such
subsidiary or affiliate is in the same general line of business as the Tenant
named herein and only for such period as it shall remain such subsidiary or
affiliate and in the same general line of business as the Tenant named herein.
However, no such subletting shall be valid unless, prior to the execution
thereof, Tenant shall give notice to Owner of the proposed subletting, and
within ten (10) days prior the commencement of said subletting, Tenant shall
deliver to Owner an agreement, in form and substance satisfactory to Owner, duly
24
executed by Tenant and said subtenant, in which said subtenant shall assume
performance of and agree to be personally bound by, all of the terms, covenants
and conditions of this Lease which are applicable to said subtenant and such
subletting. Tenant shall give prompt notice to Owner of any such use or
occupancy of all or any part of the Demised Premises and such use or occupancy
shall be subject and subordinate to all of the terms, covenants and conditions
of this Lease. No such use or occupancy shall operate to vest in the user or
occupant any right or interest in this Lease or the Demised Premises. For the
purposes of determining the number of subtenants or occupants in the Demised
Premises, the occupancy of any such permitted subsidiary or affiliate of Tenant
shall be deemed the occupancy of Tenant and such subsidiary or affiliate shall
not be counted as a subtenant or occupant for the purposes of Section 11.03 and
the provisions of Section 11.03 relating to Owner's option to terminate this
Lease or recapture such portion of the Demised Premises and the provisions of
Section 11.03 C. relating to Subletting Profits shall not be applicable to any
proposed subletting to any such subsidiary or affiliate of Tenant pursuant to
the provisions of this Section.
Section 11.06. Permitted Occupants: Supplementing the provisions of this
Article 11 and notwithstanding anything contained herein to the contrary, Tenant
shall have the right, without prior consent of Owner to permit undivided
occupancy of a portion of the Demised Premises by The Transit Alliance (the
"Permitted Occupant"). The occupancy by the Permitted Occupant shall be
conditioned upon the agreement that such arrangement will terminate
automatically upon the termination of this Lease. No such use or occupancy by
any such persons shall operate to give any such persons any right or interest in
this Lease or the Demised Premises other than the right to occupy such portion
of the Demised Premises during the Demised Term, and such use or occupancy shall
be subject and subordinate to all of the terms, covenants and condition of this
Lease. Upon Owner's request, Tenant shall provide Owner with a copy of any
executed license or use agreement with the Permitted Occupant with respect to
the Demised Premises.
Section 11.07. Supplementing the provisions of Section 11.02, (i) so long
as Owner shall maintain a directory in the lobby of the Building, Owner shall
make available to Tenant space for the listing of Tenant's name and the names of
any of the officers or employees of Tenant and any permitted occupants of the
Demised Premises provided that the names so listed shall not require more than
Tenant's Proportionate Share of the space of said directory.
ARTICLE 12
EXISTING CONDITIONS/OWNER'S INITIAL WORK
Section 12.01. "As Is" but for Owner's Initial Work: Tenant acknowledges
that Owner has made no representations to Tenant with respect to the condition
of the Demised Premises and Tenant agrees to accept possession of the Demised
Premises in the condition which shall exist on the Commencement Date "as is" and
further agrees that Owner shall have no obligation to perform any work or make
any installations in order to prepare the Demised Premises for Tenant's
occupancy except as otherwise provided on Exhibit B annexed hereto and made a
part hereof (such work and installations are referred to as "Owner's Initial
Work"). The terms, covenants and conditions of Exhibit B are incorporated in
this Lease by reference and shall be deemed a part of this Lease as through
fully set forth in the body of this Lease.
ARTICLE 13
ACCESS TO DEMISED PREMISES
Section 13.01. Owner's Right to Enter: Owner and its agents shall have the
following rights in and about the Demised Premises: (i) to enter the Demised
Premises at all times to examine the Demised Premises or for any of the purposes
set forth in this Article or for the purpose of performing any obligation of
Owner under this Lease or exercising any right or remedy reserved to Owner in
this Lease, or complying with any Legal Requirement which Owner is obligated to
comply with hereunder, and if Tenant, its officers, partners, agents or
employees shall not be personally present or shall not open and permit an entry
into the Demised Premises at any time when such entry shall be necessary or
25
permissible, to use a master key or to forcibly enter the Demised Premises; (ii)
to erect, install, use and maintain pipes, ducts and conduits in and through the
Demised Premises; (iii) to exhibit the Demised Premises to others; (iv) to make
such decorations, repairs, alterations, improvements or additions, or to perform
such maintenance, including, but not limited to, the maintenance of all heating,
air conditioning, ventilating, elevator, plumbing, electrical, telecommunication
and other mechanical facilities, as Owner may deem necessary or desirable; (v)
to take all materials into and upon the Demised Premises that may be required in
connection with any such decorations, repairs, alterations, improvements,
additions or maintenance; and (vi) to alter, renovate and decorate the Demised
Premises at any time during the Demised Term if Tenant shall have removed all or
substantially all of Tenant's property from the Demised Premises. The lessors
under any Superior Lease and the holders of any Mortgage shall have the right to
enter the Demised Premises from time to time through their respective employees,
agents, representatives and architects to inspect the same or to cure any
default of Owner or Tenant relating thereto. Owner shall have the right, from
time to time, to change the name, number or designation by which the Building is
commonly known which right shall include, without limitation, the right to name
the Building after any tenant of the Building.
Section 13.02. Owner's Reservation of Rights to Portions of the Building:
All parts (except surfaces facing the interior of the Demised Premises) of all
walls, windows and doors bounding the Demised Premises (including exterior
Building walls, core corridor walls, doors and entrances), all balconies,
terraces and roofs adjacent to the Demised Premises, all space in or adjacent to
the Demised Premises used for shafts, stacks, stairways, chutes, pipes,
conduits, ducts, fan rooms, heating, air conditioning, ventilating, plumbing,
electrical, telecommunication and other mechanical facilities, closets, service
closets and other Building facilities, and the use thereof, as well as access
thereto through the Demised Premises for the purposes of operation, maintenance,
alteration and repair, are hereby reserved to Owner. Owner also reserves the
right at any time to change the arrangement or location of entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets and other
public parts of the Building, provided any such change does not permanently and
unreasonably obstruct Tenant's access to the Demised Premises. Nothing contained
in this Article shall impose any obligation upon Owner with respect to the
operation, maintenance, alteration or repair of the Demised Premises or the
Building.
Section 13.03. Access to Third Parties: Owner and its agents shall have the
right to permit access to the Demised Premises, whether or not Tenant shall be
present, to any receiver, trustee, assignee for the benefit of creditors,
sheriff, marshal or court officer entitled to, or reasonably purporting to be
entitled to, such access for the purpose of taking possession of, or removing,
any property of Tenant or any other occupant of the Demised Premises, or for any
other lawful purpose, or by any representative of the fire, police, building,
sanitation or other department of the Town, County, Village, State or Federal
Governments. Neither anything contained in this Section, nor any action taken by
Owner under this Section, shall be deemed to constitute recognition by Owner
that any person other than Tenant has any right or interest in this Lease or the
Demised Premises.
Section 13.04. No Actual or Constructive Eviction: The exercise by Owner or
its agents or by the lessor under any Superior Lease or by the holder of any
Mortgage of any right reserved to Owner in this Article shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Owner, or its agents, or upon any
lessor under any Superior Lease or upon the holder of any such Mortgage, by
reason of inconvenience or annoyance to Tenant, or injury to or interruption of
Tenant's business, or otherwise.
Section 13.05. Security: Owner shall be the sole determinant of the type
and amount of security services to be provided in the Building. In all events
and notwithstanding any provision of this Lease to the contrary, Owner and
Owner's Indemnitees (as defined in Article 19)shall not be liable to Tenant and
Tenant hereby waives any claim against Owner and Owner's Indemnitees for (a) any
unauthorized or criminal entry of third parties into the Demised Premises or the
Building, or (b) any damage to persons or property in or about the Demised
Premises or the Building by or from any unauthorized or criminal acts of third
parties, regardless of any action, inaction, failure, breakdown, malfunction of
the security services provided or any negligence on the part of Landlord or
Owner's Indemnitees.
26
Section 13.06. Owner's Reasonable Notice and Times of Entry: Supplementing
the provisions of Sections 13.01 and 13.02, Owner agrees that, except in cases
of emergency, any entry upon the Demised Premises pursuant to the provisions of
said Sections shall be made at reasonable times, and only after reasonable
advance notice to Tenant (which may be mailed, delivered or left at the Demised
Premises, notwithstanding any contrary provisions of Article 27). Any work
performed or installations made pursuant to said Sections shall be made with
reasonable diligence and any such entry, work or installations shall be made in
a manner designed to minimize interference with Tenant's normal business
operations (however, nothing contained in this Section shall be deemed to impose
upon Owner any obligation to employ contractors or labor at so-called overtime
or other premium pay rates).
ARTICLE 14
VAULT SPACE
Section 14.01. The Demised Premises do not contain any vaults, vault space
or other space outside the boundaries of the Real Property, notwithstanding
anything contained in this Lease or indicated on any sketch, blueprint or plan.
Owner makes no representation as to the location of the boundaries of the Real
Property. All vaults and vault space and all other space outside the boundaries
of the Real Property which Tenant may be permitted to use or occupy are to be
used or occupied under a revocable license, and if any such license shall be
revoked, or if the amount of such space shall be diminished or required by any
Federal, State or Municipal Authority or by any public utility company, such
revocation, diminution or requisition shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Owner. Any fee, tax or charge imposed by any
governmental authority for any such vault, vault space or other space shall be
paid by Tenant.
ARTICLE 15
CERTIFICATE OF OCCUPANCY
Section 15.01. Tenant will not at any time use or occupy, or permit the use
or occupancy of, the Demised Premises in violation of any Certificate(s) of
Occupancy covering the Demised Premises.
ARTICLE 16
DEFAULT
Section 16.01. Events of Default: Upon the occurrence, at any time prior to
or during the Demised Term, of any one or more of the following events (referred
to herein, singly, as an "Event of Default" and collectively as "Events of
Default"):
(a) if Tenant shall default in the payment when due of any installment
of Fixed Rent or any increase in the Fixed Rent or in the payment when due
of any additional rent and such default shall continue for a period of five
(5) days after notice by Owner to Tenant of such default; or
(b) if Tenant shall default in the observance or performance of any
term, covenant or condition of this Lease on Tenant's part to be observed
or performed (other than the covenants for the payment of Fixed Rent, any
increase in the Fixed Rent and additional rent) and Tenant shall fail to
remedy such default within thirty (30) days after notice by Owner to Tenant
of such default, or if such default is of such a nature that it cannot be
completely remedied within said period of thirty (30) days and Tenant shall
not commence, promptly after receipt of such notice, or shall not
thereafter diligently prosecute to completion, all steps necessary to
remedy such default; or
27
(c) if Tenant shall file a voluntary petition in bankruptcy or
insolvency, or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
the present or any future federal bankruptcy act or any other present or
future applicable federal, state or other statute or law, or shall make an
assignment for the benefit of creditors, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any part of Tenant's property; or
(d) if, within thirty (30) days after the commencement of any
proceeding against Tenant, whether by the filing of a petition or
otherwise, seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present
or any future federal bankruptcy act or any other present or future
applicable federal, state or other statute or law, such proceeding shall
not have been dismissed, or if, within thirty (30) days after the
appointment of any trustee, receiver or liquidator of Tenant, or of all or
any part of Tenant's property, without the consent or acquiescence of
Tenant, such appointment shall not have been vacated or otherwise
discharged, or if any execution or attachment shall be issued against
Tenant or any of Tenant's property pursuant to which the Demised Premises
shall be taken or occupied or attempted to be taken or occupied; or
(e) if Tenant shall default in the observance or performance of any
term, covenant or condition on Tenant's part to be observed or performed
under any other lease with Owner of space in the Building and such default
shall continue beyond any grace period set forth in such other lease for
the remedying of such default; or
(f) if the Demised Premises shall become vacant, deserted or abandoned
or if Tenant shall fail to take occupancy of the Demised Premises and
commence the operation of its business within the Demised Premises within
three (3) months of the Commencement Date; or
(g) if (i) Tenant's interest in this Lease shall devolve upon or pass
to any person, whether by operation of law or otherwise, or (ii) there
shall be any sale, pledge, transfer or other alienation described in
Section 11.01 of this Lease which is deemed an assignment of this Lease for
purposes of said Section 11.01, except as expressly permitted under Article
11;
then, during such time as such Event(s) of Default is/are continuing, Owner may
at any time, at Owner's option, give to Tenant a five (5) days' notice of
termination of this Lease and, in the event such notice is given, this Lease and
the Demised Term shall come to an end and expire (whether or not said term shall
have commenced) upon the expiration of said five (5) days with the same effect
as if the date of expiration of said five (5) days were the Expiration Date, but
Tenant shall remain liable for damages and all other sums payable pursuant to
the provisions of Article 18.
Section 16.02. "Tenant"/Moneys Received: If, at any time (i) Tenant shall
be comprised of two (2) or more persons, or (ii) Tenant's obligations under this
Lease shall have been guaranteed by any person other than Tenant, or (iii)
Tenant's interest in this Lease shall have been assigned, the word "Tenant", as
used in Subsections (c) and (d) of Section 16.01, shall be deemed to mean any
one or more of the persons primarily or secondarily liable for Tenant's
obligations under this Lease. Any monies received by Owner from or on behalf of
Tenant during the pendency of any proceeding of the types referred to in said
Subsections (c) and (d) shall be deemed paid as compensation for the use and
occupation of the Demised Premises and the acceptance of any such compensation
by Owner shall not be deemed an acceptance of rent or a waiver on the part of
Owner of any rights under Section 16.01.
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ARTICLE 17
REMEDIES
Section 17.01. Owner's Right of Re-Entry and Right to Relet: If Tenant
shall default in the payment when due of any installment of Fixed Rent or in the
payment when due of any increase in the Fixed Rent or any additional rent, or if
this Lease and the Demised Term shall expire and come to an end as provided in
Article 16:
(a) Owner and its agents and servants may immediately, or at any time
after such default or after the date upon which this Lease and the Demised
Term shall expire and come to an end, re-enter the Demised Premises or any
part thereof, without notice, either by summary proceedings or by any other
applicable action or proceeding, or by force or otherwise (without being
liable to indictment, prosecution or damages therefor), and may repossess
the Demised Premises and dispossess Tenant and any other persons from the
Demised Premises and remove any and all of their property and effects from
the Demised Premises; and
(b) Owner, at Owner's option, may relet the whole or any part or parts
of the Demised Premises, from time to time, either in the name of Owner or
otherwise, to such tenant or tenants, for such term or terms ending before,
on or after the Expiration Date, at such rental or rentals and upon such
other conditions, which may include concessions and free rent periods, as
Owner, in its sole discretion, may determine. Owner shall have no
obligation to relet the Demised Premises or any part thereof and shall in
no event be liable for refusal or failure to relet the Demised Premises or
any part thereof, or, in the event of any such reletting, for refusal or
failure to collect any rent due upon any such reletting, and no such
refusal or failure shall operate to relieve Tenant of any liability under
this Lease or otherwise to affect any such liability; Owner, at Owner's
option, may make such repairs, replacements, alterations, additions,
improvements, decorations and other physical changes in and to the Demised
Premises as Owner, in its sole discretion, considers advisable or necessary
in connection with any such reletting or proposed reletting, without
relieving Tenant of any liability under this Lease or otherwise affecting
any such liability.
Section 17.02. Waiver of Right to Redeem, etc.: Tenant hereby waives the
service of any notice of intention to re-enter or to institute legal proceedings
to that end which may otherwise be required to be given under any present or
future law. Tenant, on its own behalf and on behalf of all persons claiming
through or under Tenant, including all creditors, does further hereby waive any
and all rights which Tenant and all such persons might otherwise have under any
present or future law to redeem the Demised Premises, or to re-enter or
repossess the Demised Premises, or to restore the operation of this Lease, after
(i) Tenant shall have been dispossessed by a judgment or by warrant of any court
or judge, or (ii) any re-entry by Owner, or (iii) any expiration or termination
of this Lease and the Demised Term, whether such dispossess, re-entry,
expiration or termination shall be by operation of law or pursuant to the
provisions of this Lease. The words "re-enter", "re-entry" and "re-entered" as
used in this Lease shall not be deemed to be restricted to their technical legal
meanings. In the event of a breach or threatened breach by Tenant, or any
persons claiming through or under Tenant, of any term, covenant or condition of
this Lease on Tenant's part to be observed or performed, Owner shall have the
right to enjoin such breach and the right to invoke any other remedy allowed by
law or in equity as if re-entry, summary proceedings and other special remedies
were not provided in this Lease for such breach. The right to invoke the
remedies hereinbefore set forth in this Lease is cumulative and shall not
preclude Owner from invoking any other remedy allowed by law or in equity.
ARTICLE 18
DAMAGES
Section 18.01. Amount of Owner's Damages: If this Lease and the Demised
Term shall expire and come to an end as provided in Article 16, or by or under
any summary proceeding or any other action or proceeding, or if Owner shall
re-enter the Demised Premises as provided in Article 17, or by or under any
29
summary proceeding or any other action or proceeding, then, in any of said
events:
(a) Tenant shall pay to Owner all Fixed Rent, additional rent and
other charges payable under this Lease by Tenant to Owner to the date upon
which this Lease and the Demised Term shall have expired and come to an end
or to the date of re-entry upon the Demised Premises by Owner, as the case
may be; and
(b) Tenant shall also be liable for and shall pay to Owner, as
damages, any deficiency (referred to as a "Deficiency") between the Fixed
Rent reserved in this Lease for the period which otherwise would have
constituted the unexpired portion of the Demised Term and the net amount,
if any, of rents collected under any reletting effected pursuant to the
provisions of Section 17.01 for any part of such period (first deducting
from the rents collected under any such reletting all of Owner's expenses
in connection with the termination of this Lease or Owner's re-entry upon
the Demised Premises and with such reletting including, but not limited to,
all repossession costs, brokerage commissions, legal expenses, attorneys'
fees, alteration costs and other expenses of preparing the Demised Premises
for such reletting). Any such Deficiency shall be paid in monthly
installments by Tenant on the days specified in this Lease for payment of
installments of Fixed Rent, Owner shall be entitled to recover from Tenant
each monthly Deficiency as the same shall arise, and no suit to collect the
amount of the Deficiency for any month shall prejudice Owner's right to
collect the Deficiency for any subsequent month by a similar proceeding.
Solely for the purposes of this Subsection (b), the term "Fixed Rent" shall
mean the Fixed Rent in effect immediately prior to the date upon which this
Lease and the Demised Term shall have expired and come to an end, or the
date of re-entry upon the Demised Premises by Owner, as the case may be,
adjusted, from time to time, to reflect any increases which would have been
payable pursuant to any of the provisions of this Lease including, but not
limited to, the provisions of Article 23 of this Lease if the term hereof
had not been terminated; and
(c) At any time after the Demised Term shall have expired and come to
an end or Owner shall have re-entered upon the Demised Premises, as the
case may be, whether or not Owner shall have collected any monthly
Deficiencies as aforesaid, Owner shall be entitled to recover from Tenant,
and Tenant shall pay to Owner, on demand, as and for liquidated and agreed
final damages, a sum equal to the amount by which the Fixed Rent reserved
in this Lease for the period which otherwise would have constituted the
unexpired portion of the Demised Term exceeds the then fair and reasonable
rental value of the Demised Premises for the same period, both discounted
to present worth at the rate of four (4%) percent per annum. If, before
presentation of proof of such liquidated damages to any court, commission
or tribunal, the Demised Premises, or any part thereof, shall have been
relet by Owner for the period which otherwise would have constituted the
unexpired portion of the Demised Term, or any part thereof, the amount of
rent reserved upon such reletting shall be deemed, prima facie, to be the
fair and reasonable rental value for the part or the whole of the Demised
Premises so relet during the term of the reletting. Solely for the purposes
of this Subsection (c), the term "Fixed Rent" shall mean the Fixed Rent in
effect immediately prior to the date upon which this Lease and the Demised
Term shall have expired and come to an end, or the date of re-entry upon
the Demised Premises by Owner, as the case may be, adjusted to reflect any
increases pursuant to the provisions of Article 23 for the Escalation Year
and Tax Escalation Year immediately preceding such event.
Section 18.02. Rents Under Reletting: If the Demised Premises, or any part
thereof, shall be relet together with other space in the Building, the rents
collected or reserved under any such reletting and the expenses of any such
reletting shall be equitably apportioned for the purposes of this Article 18.
Tenant shall in no event be entitled to any rents collected or payable under any
reletting, whether or not such rents shall exceed the Fixed Rent reserved in
this Lease. Nothing contained in Articles 16, 17 or this Article shall be deemed
to limit or preclude the recovery by Owner from Tenant of the maximum amount
allowed to be obtained as damages by any statute or rule of law, or of any sums
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or damages to which Owner may be entitled in addition to the damages set forth
in Section 18.01.
ARTICLE 19
FEES AND EXPENSES; INDEMNITY
Section 19.01. Owner's Right to Cure Tenant's Default: If Tenant shall
default in the observance or performance of any term, covenant or condition of
this Lease on Tenant's part to be observed or performed, Owner, at any time
thereafter and without notice in cases of emergency, and in other cases, after
the expiration of any applicable notice and cure period set forth in this Lease,
may remedy such default for Tenant's account and at Tenant's expense, without
thereby waiving any other rights or remedies of Owner with respect to such
default.
Section 19.02. Tenant's Indemnity and Liability Insurance Obligations: A.
Except to the extent caused by the gross negligence or willful misconduct of
Owner or Owner's Indemnitees (as hereinafter defined), Tenant agrees to
indemnify and save Owner and Owner's Indemnitees harmless of and from all loss,
cost, liability, damage and expense including, but not limited to, reasonable
counsel fees, penalties and fines, incurred in connection with or arising from
(i) any default by Tenant in the observance or performance of any of the terms,
covenants or conditions of this Lease on Tenant's part to be observed or
performed, or (ii) the breach or failure of any representation or warranty made
by Tenant in this Lease, or (iii) the use or occupancy or manner of use or
occupancy of the Demised Premises by Tenant or any person claiming through or
under Tenant, or (iv) any acts, omissions or negligence of Tenant or any such
person, or the contractors, agents, servants, employees, visitors or licensees
of Tenant or any such person, in or about the Demised Premises or the Building
either prior to, during, or after the expiration of, the Demised Term,
including, but not limited to, any acts omissions or negligence in the making or
performing of any Alterations. Tenant further agrees to indemnify and save
harmless Owner and Owner's Indemnitees of and from all loss, cost, liability,
damage and expense, including, but not limited to, reasonable counsel fees and
disbursements, incurred in connection with or arising from any claims by any
persons by reason of injury to persons or damage to property occasioned by any
use, occupancy, act, omission or negligence referred to in the preceding
sentence. "Owner's Indemnitees" shall mean the Owner, the shareholders or the
partners comprising Owner and its and their partners and shareholders, officers,
directors, employees, agents (including without limitation, any leasing and
managing agents) and contractors together with the lessor under any Superior
Lease and the holder of any Mortgage. If any action or proceeding shall be
brought against Owner or Owner's Indemnitees based upon any such claim and if
Tenant, upon notice from Owner, shall cause such action or proceeding to be
defended at Tenant's expense by counsel acting for Tenant's insurance carriers
in connection with such defense or by other counsel reasonably satisfactory to
Owner, without any disclaimer of liability by Tenant or such insurance carriers
in connection with such claim, Tenant shall not be required to indemnify Owner
and Owner's Indemnitees for counsel fees in connection with such action or
proceeding.
B. Throughout the Demised Term Tenant shall maintain commercial general
liability insurance against any claims by reason of personal injury, death and
property damage occurring in or about the Demised Premises covering, without
limitation, the operation of any private air conditioning equipment and any
private elevators, escalators or conveyors in or serving the Demised Premises or
any part thereof, whether installed by Owner, Tenant or others, and shall
furnish to Owner duplicate original policies of such insurance or certificates
evidencing the same at least ten (10) days prior to the Commencement Date and at
least ten (10) days prior to the expiration of the term of any such policy
previously furnished by Tenant, in which policies or certificates Owner, and
Owner's Indemnitees shall be named as parties insured, which policies or
certificates shall be issued by companies, and shall be in form and amounts,
satisfactory to Owner. The minimum limits of liability shall be a combined
single limit with respect to each occurrence in an amount of not less than
$5,000,000 for injury (or death) and damage to property or such greater amount
as Owner may, from time to time, reasonably require.
Section 19.03. Payments: Tenant shall pay to Owner, within five (5) days
next following rendition by Owner to Tenant of bills or statements therefor: (i)
sums equal to all expenditures made and monetary obligations incurred by Owner
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including, but not limited to, expenditures made and obligations incurred for
reasonable counsel fees and disbursements, in connection with the remedying by
Owner, for Tenant's account pursuant to the provisions of Section 19.01, of any
default of Tenant, and (ii) sums equal to all losses, costs, liabilities,
damages and expenses referred to in Section 19.02, and (iii) sums equal to all
expenditures made and monetary obligations incurred by Owner including, but not
limited to, expenditures made and obligations incurred for reasonable counsel
fees and disbursements, in collecting or attempting to collect the Fixed Rent,
any additional rent or any other sum of money accruing under this Lease or in
enforcing or attempting to enforce any rights of Owner under this Lease or
pursuant to law, whether by the institution and prosecution of summary
proceedings or otherwise; and (iv) all other sums of money (other than Fixed
Rent) accruing from Tenant to Owner under the provisions of this Lease. Any sum
of money (other than Fixed Rent) accruing from Tenant to Owner pursuant to any
provision of this Lease, whether prior to or after the Commencement Date, may,
at Owner's option, be deemed additional rent, and Owner shall have the same
remedies for Tenant's failure to pay any item of additional rent when due as for
Tenant's failure to pay any installment of Fixed Rent when due. Tenant's
obligations under this Article shall survive the expiration or sooner
termination of the Demised Term.
Section 19.04. Tenant's Late Payments - Late Charges: If Tenant shall fail
to make payment of any installment of Fixed Rent or any increase in the Fixed
Rent or any additional rent within ten (10) days after the date when such
payment is due, Tenant shall pay to Owner, in addition to such installment of
Fixed Rent or such increase in the Fixed Rent or such additional rent, as the
case may be, as a late charge and as additional rent, a sum equal to seven (7%)
percent per annum above the then current prime rate (as the term "prime rate" is
defined in Section 31.03) charged by JPMorgan Chase Bank or its successor of the
amount unpaid computed from the date such payment was due to and including the
date of payment.
ARTICLE 20
ENTIRE AGREEMENT
Section 20.01. Entire Agreement: This Lease contains the entire agreement
between the parties and all prior negotiations and agreements are merged in this
Lease. Neither Owner nor Owner's agents have made any representations or
warranties with respect to the Demised Premises, the Building, the Real Property
or this Lease except as expressly set forth in this Lease and no rights,
easements or licenses are or shall be acquired by Tenant by implication or
otherwise unless expressly set forth in this Lease. This Lease may not be
changed, modified or discharged, in whole or in part, orally and no executory
agreement shall be effective to change, modify or discharge, in whole or in
part, this Lease or any provisions of this Lease, unless such agreement is set
forth in a written instrument executed by the party against whom enforcement of
the change, modification or discharge is sought. All references in this Lease to
the consent or approval of Owner shall be deemed to mean the written consent of
Owner, or the written approval of Owner, as the case may be, and no consent or
approval of Owner shall be effective for any purpose unless such consent or
approval is set forth in a written instrument executed by Owner.
ARTICLE 21
END OF TERM
Section 21.01. End of Term: On the date upon which the Demised Term shall
expire and come to an end, whether pursuant to any of the provisions of this
Lease or by operation of law, and whether on or prior to the Expiration Date,
Tenant, at Tenant's sole cost and expense, (i) shall quit and surrender the
Demised Premises to Owner, broom clean and in good order and condition, ordinary
wear excepted, and (ii) shall remove all of Tenant's Personal Property and all
other property and effects of Tenant and all persons claiming through or under
Tenant from the Demised Premises and the Building, and (iii) shall repair all
damage to the Demised Premises occasioned by such removal and (iv) shall, at
Owner's election, exercisable within six (6) months following the expiration or
earlier termination of the Demised Term, remove any private interior staircases
in the Demised Premises or connecting the Demised Premises or any part thereof
with any other space (referred to herein as the "Other Space") in the Building
occupied by Tenant, and restore those portions of the Demised Premises, the
Other Space and the Building affected by any such staircases (including, but not
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limited to, the slabbing over of any openings) to the condition of each which
existed prior to the installation of any such staircases, and repair any damage
to the Demised Premises, Other Space and the Building occasioned by such
removal. Notwithstanding the provisions of subdivision (iv) of the foregoing
sentence, in the event Owner does not elect to have removed any such staircase
referred to therein, any such staircase shall be and remain the property of
Owner at no cost or expense to Owner. Owner shall have the right to retain any
property and effects which shall remain in the Demised Premises after the
expiration or sooner termination of the Demised Term, and any net proceeds from
the sale thereof, without waiving Owner's rights with respect to any default by
Tenant under the foregoing provisions of this Section. Tenant expressly waives,
for itself and for any person claiming through or under Tenant, any rights which
Tenant or any such person may have under the provisions of Section 2201 of the
New York Civil Practice Law and Rules and of any successor law of like import
then in force, in connection with any holdover summary proceedings which Owner
may institute to enforce the foregoing provisions of this Article. If said date
upon which the Demised Term shall expire and come to an end shall fall on a
Sunday or holiday, then Tenant's obligations under the first sentence of this
Section shall be performed on or prior to the Saturday or business day
immediately preceding such Sunday or holiday. There shall be no holding over by
Tenant after the expiration or earlier termination of this Lease and the failure
by Tenant to deliver possession of the Demised Premises to Owner shall be an
unlawful holdover. During any period in which Tenant so holds over, at Owner's
option, the rental value of the Demised Premises, payable from the date
immediately following the date on which Tenant was to deliver the Demised
Premises to Owner, through and including the last day of the calendar month in
which Tenant so delivers the Demised Premises, shall be deemed to be equal to
the greater of 150% of (a) the Fixed Rent payable immediately preceding the
expiration or earlier termination of this Lease, or (b) the then fair market
rental value of the Demised Premises. Tenant's obligations under this Section
shall survive the expiration or sooner termination of the Demised Term.
ARTICLE 22
QUIET ENJOYMENT
Section 22.01. Quiet Enjoyment: Owner covenants and agrees with Tenant that
upon Tenant paying the Fixed Rent and additional rent reserved in this Lease and
observing and performing all of the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed, Tenant may peaceably and
quietly enjoy the Demised Premises during the Demised Term, subject, however, to
the terms, covenants and conditions of this Lease including, but not limited to,
the provisions of Section 37.01, and subject to the Superior Lease and the
Mortgage referred to in Section 7.01.
ARTICLE 23
ESCALATION
Section 23.01. Definitions: In the determination of any increase in the
Fixed Rent under the provisions of this Article, Owner and Tenant agree that the
following terms shall have the following meanings:
A. The term "Tax Escalation Year" shall mean each fiscal year commencing
January 1st and ending on the following December 31st which shall include any
part of the Demised Term. With respect to any Taxes (as defined in Section
23.01(C)) which are payable based on a period other than a Tax Escalation Year
of January 1st through December 31st, the portion of such Taxes which will be
included in any Tax Escalation Year shall be the portion thereof allocable and
attributable to such Tax Escalation Year (e.g. with respect to the levying of
school taxes for the period commencing on July 1, 2003 and ending on June 30,
2004 and for the period commencing on July 1, 2004 and ending on June 30, 2005,
such school taxes levied against the Building for such periods shall be included
in and allocable to the Tax Escalation Year commencing on January 1, 2004 and
ending on December 31, 2005 as follows: one-half (1/2) of the total amount of
such school tax levied for the school tax year commencing on July 1, 2003 and
ending on June 30, 2004 and one-half (1/2) of the total amount of such school
tax levied for the school tax year commencing on July 1, 2004 and ending on June
30, 2005).
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B. Intentionally Deleted.
C. The term "Taxes" shall be deemed to mean a sum equal to all real estate
taxes and assessments, special or otherwise (including without limitation
General, School, State County, Village or Town Tax), upon or with respect to the
Real Property imposed by the Town of Hempstead, County of Nassau or any other
taxing authority to create a source of revenue through taxation of real estate
as such. If, due to any change in the method of taxation, any franchise, income,
profit, sales, rental, use and occupancy or other tax or payments in lieu of any
such taxes shall be substituted for, or levied against Owner or any owner of the
Building or the Real Property, in lieu of any real estate taxes or assessments
upon or with respect to the Real Property, such tax or payments in lieu of any
such taxes shall be included in the term Taxes for the purposes of this Article.
The amounts required to be paid by Owner or any tenant or occupant of the
Building or the Real Property pursuant to any Payment in Lieu of Tax Agreement
entered into with a taxing authority having jurisdiction over the Real Property
shall be included in the term Taxes for the purposes of this Article.
D. The term "Owner's Basic Tax Liability" shall mean a sum equal to General
Taxes payable for calendar year 2005 and School Taxes payable for the tax year
commencing on July 1, 2005 and ending on June 30, 2006.
E. The term "Demised Premises Area" shall mean 3,367 rentable square feet.
F. The term "Building Area" shall mean 103,528 rentable square feet.
G. The term "Tenant's Proportionate Share" shall mean the fraction, the
denominator of which is the Building Area and the numerator of which is the
Demised Premises Area (3.2523%).
H. The term "Owner's Tax Statement" shall mean an instrument containing a
computation of any increase in the Fixed Rent pursuant to the provisions of
Section 23.02A of this Article.
Section 23.02. Taxes: A. If Taxes payable in any Tax Escalation Year shall
be in such amount as shall constitute an increase above Owner's Basic Tax
Liability, the Fixed Rent for such Tax Escalation Year shall be increased by a
sum equal to Tenant's Proportionate Share of any such increase in Taxes.
B. Unless the Commencement Date shall occur on a January 1st, any increase
in the Fixed Rent pursuant to the provisions of Subsection A of this Section
23.02 for the Tax Escalation Year in which the Commencement Date shall occur
shall be apportioned in that percentage which the number of days in the period
from the Commencement Date to December 31st of such Tax Escalation Year, both
inclusive, bears to the total number of days in such Tax Escalation Year. Unless
the Demised Term shall expire on a December 31st, any increase in the Fixed Rent
pursuant to the provisions of said Subsection A for the Tax Escalation Year in
which the date of the expiration of the Demised Term shall occur shall be
apportioned in that percentage which the number of days in the period from
January 1st of such Tax Escalation Year to such date of expiration, both
inclusive, bears to the total number of days in such Tax Escalation Year.
Section 23.03. Calculation and Payment of Taxes: A. Owner shall render to
Tenant, either in accordance with the provisions of Article 27 or by personal
delivery at the Demised Premises or by regular mail to the same address as Fixed
Rent bills are sent by Owner, an Owner's Tax Statement with respect to each Tax
Escalation Year, either prior to or during such Tax Escalation Year. Owner's
failure to render an Owner's Tax Statement with respect to any Tax Escalation
Year shall not prejudice Owner's right to recover any sums due to Owner
hereunder with respect to such Tax Escalation Year, nor shall it deprive Tenant
of any credit to which it otherwise might be entitled with respect to such Tax
Escalation Year pursuant to the provisions of Subsection B of this Section
23.03. The obligations of Owner and Tenant under the provisions of Section 23.02
and this Section 23.03 with respect to any increase in the Fixed Rent or any
34
credit to which Tenant may be entitled shall survive the expiration or any
sooner termination of the Demised Term. Within ten (10) days next following
rendition of the first Owner's Tax Statement which shows an increase in the
Fixed Rent for any Tax Escalation Year, Tenant shall pay to Owner a sum equal to
one-twelfth (1/12th) of the amount of the increase shown upon such Owner's Tax
Statement for such Tax Escalation Year (before any apportionment pursuant to the
provisions of Subsection B of Section 23.02). If any such Owner's Tax Statement
shall be rendered after the commencement of any Tax Escalation Year, Tenant
shall pay to Owner on the first day of the calendar month next following the
rendition of such Owner's Tax Statement (in addition to the payment required by
the immediately preceding sentence) a sum equal to one-twelfth (1/12) of the
increase in the Fixed Rent payable pursuant to the provisions of Subsection A of
Section 23.02 for such Tax Escalation Year shown on such statement (before any
apportionment pursuant to the provisions of Subsection B of Section 23.02)
multiplied by the number of months which may have elapsed between January 1st of
such Tax Escalation Year and the month in which such payment is made.
B. If, as a result of any application or proceeding brought by or on behalf
of Owner, Owner's Basic Tax Liability shall be decreased, Owner's Tax Statement
next following such decrease shall include any adjustment of the Fixed Rent for
all prior Tax Escalation Years reflecting a debit to Tenant equal to the amount
by which (a) the aggregate Fixed Rent payable with respect to all such prior Tax
Escalation Years (as increased pursuant to the operation of the provisions of
Subsection A of Section 23.02) based upon such reduction of Owner's Basic Tax
Liability shall exceed (b) the aggregate Fixed Rent actually paid by Tenant with
respect to all such prior Tax Escalation Years. If, as a result of any
application or proceeding brought by or on behalf of Owner for reduction of the
assessed valuation of the Real Property for any fiscal tax year subsequent to
the fiscal tax year commencing January 1st, 2005, and expiring December 31st,
2005 with respect to General and Village Taxes, or the tax year commencing July
1, 2005 and expiring June 30, 2006 with respect to School Taxes, there shall be
a decrease in Taxes for any Tax Escalation Year with respect to which Owner
shall have previously rendered an Owner's Tax Statement, Owner's Tax Statement
next following such decrease shall include an adjustment of the Fixed Rent for
such Tax Escalation Year reflecting a credit to Tenant equal to the amount by
which (i) the Fixed Rent actually paid by Tenant with respect to such Tax
Escalation Year (as increased pursuant to the operation of the provisions of
Subsection A of Section 23.02), shall exceed (ii) the Fixed Rent payable with
respect to such Tax Escalation Year (as increased pursuant to the operation of
the provisions of Subsection A of Section 23.02) based upon such reduction of
the assessed valuation. Tenant shall not bring or cause to be brought any
application or proceeding for reduction of the assessed valuation of the Real
Property. Tenant shall pay to Owner within thirty (30) days after demand, as
additional rent under this Lease, a sum equal to Tenant's Proportionate Share of
all costs and expenses, including, without limitation, counsel fees, paid or
incurred by Owner in connection with any application or proceeding brought for
reduction of the assessed valuation of the Real Property or any other contest of
Taxes upon the Real Property for any Tax Escalation Year, whether or not such
application, proceeding or other contest was commenced and/or settled and/or
determined prior to the Tax Escalation Year in question.
Section 23.04. Collection of Increases in Fixed Rent: The obligations of
Owner and Tenant under the provisions of this Article 23 with respect to any
increase in the Fixed Rent, or any credit to which Tenant may be entitled shall
survive the expiration or sooner termination of the Demised Term. All sums
payable by Tenant to Owner pursuant to the provisions of this Article 23 shall
be collectible by Owner in the same manner as Fixed Rent.
ARTICLE 24
NO WAIVER
Section 24.01. Owner's Termination Not Prevented: Neither any option
granted to Tenant in this Lease or in any collateral instrument to renew or
extend the Demised Term, nor the exercise of any such option by Tenant, shall
prevent Owner from exercising any option or right granted or reserved to Owner
in this Lease or in any collateral instrument or which Owner may have by virtue
of any law, to terminate this Lease and the Demised Term or any renewal or
extension of the Demised Term either during the original Demised Term or during
the renewed or extended term. Any termination of this Lease and the Demised Term
shall serve to terminate any such renewal or extension of the Demised Term and
35
any right of Tenant to any such renewal or extension, whether or not Tenant
shall have exercised any such option to renew or extend the Demised Term. Any
such option or right on the part of Owner to terminate this Lease shall continue
during any extension or renewal of the Demised Term. No option granted to Tenant
to renew or extend the Demised Term shall be deemed to give Tenant any further
option to renew or extend.
Section 24.02. No Termination by Tenant/No Waiver: No act or thing done by
Owner or Owner's agents during the Demised Term shall constitute a valid
acceptance of a surrender of the Demised Premises or any remaining portion of
the Demised Term except a written instrument accepting such surrender, executed
by Owner. No employee of Owner or of Owner's agents shall have any authority to
accept the keys of the Demised Premises prior to the termination of this Lease
and the Demised Term, and the delivery of such keys to any such employee shall
not operate as a termination of this Lease or a surrender of the Demised
Premises; however, if Tenant desires to have Owner sublet the Demised Premises
for Tenant's account, Owner or Owner's agents are authorized to receive said
keys for such purposes without releasing Tenant from any of its obligations
under this Lease, and Tenant hereby relieves Owner of any liability for loss of,
or damage to, any of Tenant's property or other effects in connection with such
subletting. The failure by Owner to seek redress for breach or violation of, or
to insist upon the strict performance of, any term, covenant or condition of
this Lease on Tenant's part to be observed or performed, shall not prevent a
subsequent act or omission which would have originally constituted a breach or
violation of any such term, covenant or condition from having all the force and
effect of an original breach or violation. The receipt by Owner of rent with
knowledge of the breach or violation by Tenant of any term, covenant or
condition of this Lease on Tenant's part to be observed or performed shall not
be deemed a waiver of such breach or violation. Owner's failure to enforce any
Building Rule against Tenant or against any other tenant or occupant of the
Building shall not be deemed a waiver of any such Building Rule. No provision of
this Lease shall be deemed to have been waived by Owner unless such waiver shall
be set forth in a written instrument executed by Owner. No payment by Tenant or
receipt by Owner of a lesser amount than the aggregate of all Fixed Rent and
additional rent then due under this Lease shall be deemed to be other than on
account of the first accruing of all such items of Fixed Rent and additional
rent then due, no endorsement or statement on any check and no letter
accompanying any check or other rent payment in any such lesser amount and no
acceptance of any such check or other such payment by Owner shall constitute an
accord and satisfaction, and Owner may accept any such check or payment without
prejudice to Owner's right to recover the balance of such rent or to pursue any
other legal remedy.
ARTICLE 25
MUTUAL WAIVER OF TRIAL BY JURY
Section 25.01. A. Owner and Tenant hereby waive trial by jury in any
action, proceeding or counterclaim brought by Owner or Tenant against the other
on any matter whatsoever arising out of or in any way connected with this Lease,
the relationship of landlord and tenant, the use or occupancy of the Demised
Premises by Tenant or any person claiming through or under Tenant, any claim of
injury or damage, and any emergency or other statutory remedy; however, the
foregoing waiver shall not apply to any action for personal injury or property
damage. The provisions of the foregoing sentence shall survive the expiration or
any sooner termination of the Demised Term. If Owner commences any summary
proceeding, or any other proceeding of like import, Tenant agrees: (i) not to
interpose any counterclaim of whatever nature or description in any such summary
proceeding, or any other proceeding of like import, unless failure to interpose
such counterclaim would preclude Tenant from asserting such claim in a separate
action or proceeding; and (ii) not to seek to remove to another court or
jurisdiction or consolidate any such summary proceeding, or other proceeding of
like import, with any action or proceeding which may have been, or will be,
brought by Tenant. In the event that Tenant shall breach any of its obligations
set forth in the immediately preceding sentence, Tenant agrees (a) to pay all of
Owner's attorneys' fees and disbursements in connection with Owner's enforcement
of such obligations of Tenant and (b) in all events, to pay all accrued, present
and future Fixed Rent and increases therein and additional rent payable pursuant
to the provisions of this Lease.
36
B. All judicial actions, suits or proceedings brought against Owner or
Tenant with respect to its respective obligations, liabilities or any other
matter under or arising out of or in connection with this Lease or for
recognition or enforcement of any judgment rendered in any such proceedings may
be brought in any state or federal court of competent jurisdiction in Nassau
County. By execution and delivery of this Lease, Owner and Tenant each accept,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and irrevocably agree to be bound by any final judgment rendered thereby
in connection with this Lease from which no appeal has been taken or is
available. Owner and Tenant each hereby irrevocably waives any objection to the
laying of venue or based on the grounds of forum non conveniens which it may now
or hereafter have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall limit the right of Owner or Tenant to bring
any action, suit or proceeding against the other party in any other court of
competent jurisdiction. Owner and Tenant acknowledge that final judgment against
it in any action, suit or proceeding referred to in this Article shall be
conclusive and may be enforced in any other jurisdiction, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of any such judgment against such party.
ARTICLE 26
INABILITY TO PERFORM
Section 26.01. If, by reason of strikes or other labor disputes, fire or
other casualty (or reasonable delays in adjustment of insurance), accidents, any
Legal Requirements, any orders of any Governmental Authority or any other cause
beyond Owner's reasonable control, whether or not such other cause shall be
similar in nature to those hereinbefore enumerated (any of the aforementioned
events, a "Force Majeure Event"), Owner is unable to furnish or is delayed in
furnishing any utility or service required to be furnished by Owner under the
provisions of Article 29 or any other Article of this Lease or any collateral
instrument, or is unable to perform or make or is delayed in performing or
making any installations, decorations, repairs, alterations, additions or
improvements, whether or not required to be performed or made under this Lease
or under any collateral instrument, or is unable to fulfill or is delayed in
fulfilling any of Owner's other obligations under this Lease or any collateral
instrument, no such inability or delay shall constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent (except as expressly set forth in Section 29.10), or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Owner or its agents by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise.
ARTICLE 27
NOTICES
Section 27.01. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be effective only if rendered or
given in writing, sent by a nationally recognized courier service or by
registered or certified mail (return receipt requested optional), addressed as
follows:
(a) To Tenant (i) at Tenant's address set forth in this Lease if mailed
prior to Tenant's taking possession of the Demised Premises, or (ii) at the
Building if mailed subsequent to Tenant's taking possession of the Demised
Premises, or (iii) at any place where Tenant or any agent or employee of Tenant
may be found if mailed subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Demised Premises, or
(b) To Owner at Owner's address set forth in this Lease, with a copy to
Goldfarb & Fleece, 345 Park Avenue, New York, New York 10154, Attention: Marc J.
Becker, Esq., or
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(c) addressed to such other address as either Owner or Tenant may designate
as its new address for such purpose by notice given to the other in accordance
with the provisions of this Section. Any such bill, statement, notice, demand,
request or other communication shall be deemed to have been rendered or given on
the date when it shall have been mailed as provided in this Section.
Nothing contained in this Section 27.01 shall preclude, limit or modify Owner's
service of any notice, statement, demand or other communication in the manner
required by law, including, but not limited to, any demand for rent under
Article 7 of the New York Real Property Actions and Proceedings Law or any
successor laws of like import.
ARTICLE 28
PARTNERSHIP TENANT
Section 28.01. If Tenant is a partnership or professional corporation or
limited liability company (or is comprised of two (2) or more persons,
individually and as co-partners of a partnership or shareholders of a
professional corporation or members of a limited liability company) or if
Tenant's interest in this Lease shall be assigned to a partnership or
professional corporation or limited liability company (or to two (2) or more
persons, individually and as co-partners of a partnership or shareholders of a
professional corporation or members of a limited liability company) pursuant to
Article 11 (any such partnership, professional corporation, limited liability
company and such persons are referred to in this Section as "Partnership
Tenant"), the following provisions of this Section shall apply to such
Partnership Tenant: (i) each of the persons comprising Partnership Tenant,
whether or not such person shall be one of the persons comprising Tenant at the
time in question, hereby consents in advance to, and agrees to be bound by, any
written instrument which may hereafter be executed, changing, modifying or
discharging this Lease, in whole or in part, or surrendering all or any part of
the Demised Premises to Owner, and by any notices, demands, requests or other
communications which may hereafter be given by Partnership Tenant or by any of
the persons comprising Partnership Tenant, and (ii) any bills, statements,
notices, demands, requests or other communications given or rendered to
Partnership Tenant or to any of the persons comprising Partnership Tenant shall
be deemed given or rendered to Partnership Tenant and to all such persons and
shall be binding upon Partnership Tenant and all such persons.
ARTICLE 29
UTILITIES AND SERVICES
Section 29.01. Elevators: As long as Tenant is not in default under any of
the terms, covenants or conditions of this Lease on Tenant's part to be observed
or performed, Owner, at Owner's expense, shall furnish necessary passenger
elevator facilities on business days (as defined in Section 31.01) from 8:00
A.M. to 6:00 P.M. and shall have a passenger elevator subject to call at all
other times. Tenant shall be entitled to the non-exclusive use of the freight
elevator in common with other tenants and occupants of the Building from 8:00
A.M. to 6:00 P.M. on business days, subject to such reasonable rules as Owner
may adopt for the use of the freight elevator. At any time or times all or any
of the elevators in the Building may, at Owner's option, be automatic elevators,
and Owner shall not be required to furnish any operator service for automatic
elevators. If Owner shall, at any time, elect to furnish operator service for
any automatic elevators, Owner shall have the right to discontinue furnishing
such service with the same effect as if Owner had never elected to furnish such
service.
Section 29.02. Heat: A. Owner, at Owner's expense, shall furnish and
distribute to the Demised Premises through the Building heating system, when
required for the comfortable occupancy of the Premises, heated air, at
reasonable temperatures, pressures and degrees of humidity and in reasonable
volumes and velocities on a year-round basis, on business days from 8:00 A.M. to
6:00 P.M.
B. Air Conditioning: On or about the Commencement Date, Owner shall install
an air conditioning unit and related equipment (collectively, the "Dedicated AC
Unit"), as more particularly described on Exhibit B, to provide conditioned air
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to the Demised Premises, the operation of which shall be controlled by Tenant.
Tenant shall be responsible for the payment of the entire cost of electricity
required to operate the Dedicated AC Unit charged by the corporation(s) and/or
other entity(ies) selected by Owner to furnish electricity to the Building,
which electric consumption shall be measured a submeter installed by Owner. In
addition to the payment required to be made by Tenant to Owner for the
electricity required to operate the Dedicated Unit as aforesaid, Tenant shall
also pay to Owner as an administrative fee a sum equal to seven (7%) percent of
such actual cost to Owner of purchasing electricity for the operation of the
Dedicated AC Unit. In the event that Tenant requires additional utilities in
order to operate the Dedicated AC Unit (for example, steam or condenser water),
Tenant shall be responsible for the payment of the entire cost of such utilities
and in the event Owner shall be required to install a meter to measure Tenant's
consumption of any such additional utilities, Tenant shall pay, as an
administrative fee, a sum equal to seven (7%) percent of such actual cost to
Owner of purchasing such utility for the operation of the Dedicated AC Unit.
Owner shall, at Owner's sole cost and expense, maintain the Dedicated AC Unit
and make all repairs and replacements to the Dedicated AC Unit and any
replacements thereof as and when needed during the Demised Term except that
Owner, at Tenant's sole cost and expense, shall make any and all repairs to such
Dedicated AC Unit occasioned by any acts, omissions or negligence of Tenant or
any person claiming through or under Tenant. The Dedicated AC Unit and any
replacements thereof shall be and remain Owner's property.
C. HVAC Rules and Regulations: Tenant shall cooperate fully with Owner at
all times and abide by all regulations and requirements which Owner may
reasonably prescribe for the proper functioning and protection of the Building
heating system and the Dedicated AC Unit. In addition to any and all other
rights and remedies which Owner may invoke for a violation or breach of any of
the foregoing provisions of this Section 29.02, Owner may discontinue furnishing
services under this Section during the period of such violation or breach, and
such discontinuance shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any abatement or diminution of rent, or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Owner, or its agents, by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise.
Section 29.03. Cleaning: A. As long as Tenant is not in default under any
of the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, and provided Tenant shall keep the Demised Premises in
order, Owner, at Owner's expense, shall cause the office areas of the Demised
Premises to be cleaned substantially in accordance with the standards set forth
in Schedule B, all of the terms, covenants and conditions of which are
incorporated in this Lease by reference and shall be deemed a part of this
Lease, as though fully set forth in the body of this Lease and shall cause
Tenant's ordinary office waste paper refuse to be removed. Tenant shall
cooperate with any waste and garbage recycling program of the Building and shall
comply with all reasonable rules and regulations of Owner with respect thereto.
Tenant acknowledges that Owner's obligation to cause the office areas of the
Demised Premises to be cleaned excludes any portion of the Demised Premises not
used as office areas (e.g., storage, mail and computer areas, private lavatories
and areas used for the storage, preparation, service or consumption of food or
beverages). Tenant shall pay Owner at Building standard rates or, if there are
no such rates, at reasonable rates, for the removal of any of Tenant's refuse or
rubbish, other than ordinary office waste paper refuse, from the Building, and
Tenant, at Tenant's expense, shall cause all portions of the Demised Premises
used for the storage, preparation, service or consumption of food or beverages
to be cleaned daily in a manner satisfactory to Owner, and to be exterminated
against infestation by vermin, roaches or rodents regularly and, in addition,
whenever there shall be evidence of any infestation.
B. Tenant acknowledges and is aware that the cleaning services required to
be furnished by Owner pursuant to this Section may be furnished by a contractor
or contractors employed by Owner and agrees that Owner shall not be deemed in
default of any of its obligations under this Section 29.03 unless such default
shall continue for an unreasonable period of time after notice from Tenant to
Owner setting forth the specific nature of such default.
C. Notwithstanding the provisions of Subsection A of this Section, Tenant
shall have the option to contract independently for the removal of such other
refuse and rubbish and for office cleaning services in addition to those
furnished by Owner. In the event Tenant exercises such option, the removal of
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such other refuse and rubbish and the furnishing of office cleaning services to
Tenant by persons other than Owner and its contractors shall be performed in
accordance with such regulations and requirements as, in Owner's judgment, are
necessary for the proper operation of the Building, and Tenant agrees that
Tenant will not permit any person to enter the Demised Premises or the Building
for such purposes, or for the purpose of providing extermination services
required to be performed by Tenant pursuant to Subsection A of this Section,
other than persons first approved by Owner, such approval not unreasonably to be
withheld.
Section 29.04. Electricity: A. As long as Tenant is not in default under
any of the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, Owner shall redistribute or furnish electrical energy to
or for the use of Tenant in the Demised Premises for the operation of the
lighting fixtures and the electrical receptacles installed in the Demised
Premises on the Commencement Date. If either the quantity or character of
electrical service is changed by the corporation(s) and/or other entity(ies)
selected by Owner to supply electrical service to the Building or is no longer
available or suitable for Tenant's requirements, no such change, unavailability
or unsuitability shall constitute an actual or constructive eviction, in whole
or in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Owner, or its agents, by reason of inconvenience or annoyance to Tenant, or
injury to or interruption of Tenant's business or otherwise.
B. Owner represents that the electrical feeder or riser capacity serving
the Demised Premises on the Commencement Date shall be adequate to serve the
lighting fixtures and electrical receptacles installed in the Demised Premises
on the Commencement Date. Any additional feeders or risers to supply Tenant's
additional electrical requirements, and all other equipment proper and necessary
in connection with such feeders or risers shall be installed by Owner or, at
Owner's election, by Tenant upon Tenant's request, at the sole cost and expense
of Tenant, provided, that, in Owner's judgment, such additional feeders or
risers are necessary and are permissible under applicable laws and insurance
regulations and the installation of such feeders or riders will not cause
permanent damage or injury to the Building or the Demised Premises or cause or
create a dangerous or hazardous condition or entail excessive or unreasonable
alterations or repairs to or interfere with or disturb other tenants or
occupants of the Building. Tenant covenants that at no time shall the use of
electrical energy in the Demised Premises exceed the capacity of the existing
feeders or risers or wiring installations then serving the Demised Premises.
C. Prior to the Commencement Date Owner, at Owner's expense, shall have
installed a submeter or submeters in the Demised Premises to measure Tenant's
actual consumption of electricity in the entire Demised Premises. Tenant shall
pay to Owner, from time to time, upon demand, for the electricity consumed in
the Demised Premises, as determined by such submeter or submeters, the actual
cost to Owner of purchasing electricity for the Demised Premises (as such actual
cost is hereinafter defined) plus all applicable taxes thereon. In addition to
the payment required to be made by Tenant to Owner for the electricity consumed
in the Demised Premises as aforesaid, Tenant shall also pay to Owner as an
administrative fee a sum equal to seven (7%) percent of such actual cost to
Owner of purchasing electricity for the Demised Premises. Owner's actual cost
for Tenant's KW and KWH shall be determined by the application of the Building's
electric rate schedule per month from the corporation(s) and/or other
entity(ies) selected by Owner to supply electrical service to the Building to
Tenant's usage. With respect to any period when any such submeter is not in good
working order, Tenant shall pay Owner for electricity consumed in the portion of
the Demised Premises served by such submeter at the rate paid by Tenant to Owner
during the most recent comparable period when such submeter was in good working
order plus such seven (7%) percent administrative fee. Tenant shall take good
care of any such submeter and all submetering installation equipment, at
Tenant's sole cost and expense, and make all repairs thereto occasioned by any
acts, omissions or negligence of Tenant or any person claiming through or under
Tenant as and when necessary to insure that any such submeter is, at all times
during the Demised Term, in good working order. With respect to the period
(referred to as the "Interim Period"), if any, from the Commencement Date
through the date immediately prior to the date upon which the submeter or
submeters shall be operable, Tenant shall pay to Owner monthly on demand of
Owner, for the electricity consumed in the Demised Premises, a sum equal to
one-twelfth (1/12th) of the product of (x) $2.75 multiplied by (y) the Demised
Premises Area. With respect to any period during the Interim Period constituting
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less than a full calendar month, the monthly payment referred to in the
preceding sentence shall be appropriately prorated.
D. Owner may, at any time, elect to discontinue the redistribution or
furnishing of electrical energy. In the event of any such election by Owner, (i)
Owner agrees to give reasonable advance notice of any such discontinuance to
Tenant, (ii) Owner agrees to permit Tenant to receive electrical service
directly from the corporation(s) and/or other entity(ies) Owner selects to
supply electrical service to the Building and to permit the existing feeders,
risers, wiring and other electrical facilities serving the Demised Premises to
be used by Tenant for such purpose to the extent they are suitable and safely
capable, (iii) Owner agrees to pay such charges and costs, if any, as such
corporation(s) and/or other entity(ies) may impose in connection with the
installation of Tenant's meters, (iv) the provisions of Subsection C of this
Section 29.04 shall be deemed deleted from this Lease, and (v) this Lease shall
remain in full force and effect and such discontinuance shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Owner or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise.
E. Notwithstanding anything to the contrary set forth in this Lease, any
sums payable or granted in any way by the corporation(s) and/or other
entity(ies) Owner has selected to supply electricity to the Building resulting
from the installation in the Demised Premises of energy efficient lighting
fixtures, lamps, special supplemental heating, ventilation and air conditioning
systems or any other Alterations, which sums are paid or given by way of rebate,
direct payment, credit or otherwise, shall be and remain the property of Owner,
and Tenant shall not be entitled to any portion thereof, unless such lighting
fixtures, lamps, supplemental heating, ventilation and air conditioning systems
or other Alterations were installed by Tenant, solely at Tenant's expense,
without any contribution, credit or allowance by Owner, in accordance with all
of the provisions of this Lease. Nothing contained in the foregoing sentence,
however, shall be deemed to obligate Owner to supply or install in the Demised
Premises any such lighting fixtures, lamps, supplemental heating, ventilation
and air conditioning systems or other Alterations.
Section 29.05. Water: If Tenant requires, uses or consumes water for any
purpose in addition to ordinary lavatory and drinking purposes, Owner may
install a hot water meter and a cold water meter and thereby measure Tenant's
consumption of water for all purposes. Tenant shall pay to Owner the cost of any
such meters and their installation, and Tenant shall keep any such meters and
any such installation equipment in good working order and repair, at Tenant's
cost and expense. Tenant agrees to pay for water consumed as shown on said
meters, and sewer charges, taxes and any other governmental charges thereon, as
and when bills are rendered. For the purposes of determining the amount of any
sums required to be paid by Tenant under this Section, all hot and cold water
consumed during any period when said meters are not in good working order shall
be deemed to have been consumed at the rate of consumption of such water during
the most comparable period when such meters were in good working order.
Section 29.06. Overtime Periods: The Fixed Rent does not reflect or include
any charge to Tenant for the furnishing or distributing of any necessary
elevator facilities, heat, conditioned air or mechanical ventilation to the
Demised Premises during periods (referred to as "Overtime Periods") other than
the hours and days set forth above in this Article for the furnishing and
distributing of such services. Accordingly, if Owner shall furnish any such
elevator facilities, heat, conditioned air or mechanical ventilation to the
Demised Premises at the request of Tenant during Overtime Periods, Tenant shall
pay Owner for such services at the standard rates then fixed by Owner for the
Building or, if no such rates are then fixed, at reasonable rates. Owner shall
not be required to furnish any such services during Overtime Periods, unless
Owner has received reasonable advance notice from Tenant requesting such
services. If Tenant fails to give Owner reasonable advance notice requesting
such services during any Overtime Periods, then, whether or not the Demised
Premises are habitable during such Overtime Periods, failure by Owner to furnish
or distribute any such services during such Overtime Periods shall not
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or its agents
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business or otherwise.
41
Section 29.07. Owner's Right to Stop Service: Owner reserves the right to
stop the service of the heating, air conditioning, ventilating, elevator,
plumbing, electrical or other mechanical systems or facilities in the Building
when necessary by reason of accident or emergency, or for repairs, alterations,
replacements or improvements, which, in the judgment of Owner are desirable or
necessary, until said repairs, alterations, replacements or improvements shall
have been completed. The exercise of such right by Owner shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Owner or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise. Owner agrees to use reasonable efforts to restore any
interrupted services, without any obligation, however, to employ labor at
overtime or other premium pay rates, except that Owner shall employ labor at
such overtime or other premium pay rates in cases where the health or safety of
any occupants of the Demised Premises is adversely affected. If practicable,
Owner shall attempt to advise Tenant as to the estimated length of time of any
such interruption of services.
Section 29.08. Parking: Tenant shall be entitled to the exclusive use of
ten (10) parking spaces in the parking lot adjoining the Building (the "Parking
Lot"), which spaces shall be designated, and reserved on behalf of Tenant, by
Owner. Otherwise, Tenant shall be permitted to use (non-exclusively) the
unreserved spaces in the Parking Lot in common with other tenants and occupants
of the Building and their business visitors. Owner shall have the right to
reconfigure the Parking Lot and add additional buildings in the Parking Lot and
may increase or reduce the number of spaces in the Parking Lot, provided that
Tenant shall continue to be entitled to the exclusive use of ten (10) parking
spaces in the Parking Lot. No such reconfiguration, additional buildings or
reduction in the number of spaces in the Parking Lot for any reason, including,
but not limited to, the construction of additional buildings therein or any
acquisition or condemnation set forth in Article 10, shall constitute an actual
or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent or relieve Tenant from any of its obligations
under this Lease or impose any liability upon Owner, or its agents, or upon any
Senior holder of any mortgage or superior interest. Tenant shall have no rights
in and to the Parking Lot other than the exclusive use of the parking spaces
designated by Owner and the nonexclusive use of the unreserved spaces in the
remainder of the Parking Lot in common with other tenants and occupants and
their business visitors as set forth herein. Tenant, its employees and business
visitors shall not at any time park any trucks or delivery vehicles in the
Parking Lot. All parking spaces used by Tenant, its employees and business
visitors will be at their own risk, and Owner shall not be liable for any injury
to person or property, or for loss or damage to any automobile or its contents,
resulting from theft, collision, vandalism or any other cause whatsoever. There
shall be no overnight parking, and Tenant shall, and shall cause its employees
and business visitors to, remove their automobiles from the Parking Lot at the
end of the working day. If any automobiles owned by Tenant or by its employees
or business visitors remains in the Parking Lot overnight and the same
interferes with the cleaning or maintenance of the Parking Lot (snow or
otherwise), any costs or liabilities incurred by Owner in removing said
automobile to effectuate cleaning or maintenance, or any damages resulting to
said automobile or to Owner's equipment or equipment owned by others by reason
of the presence of or removal of said automobile during such cleaning or
maintenance shall be paid by Tenant to Owner upon demand of Owner, as additional
rent.
Section 29.09. Maintenance and Operation of the Building: Throughout the
Demised Term, Owner shall maintain and operate the Building in a manner which is
appropriate for first class office buildings of similar construction, size and
class on the south shore of Nassau County, State of New York.
Section 29.10. Rent Abatement for Interruption of Services: If, for any
reason whatsoever other than (w) the result of an act or omission by Tenant, its
officers, employees, agents and invitees, (x) a fire or other casualty (for
which the provisions of Article 9 shall govern), (y) a taking or an eminent
domain (for which the provisions of Article 10 shall govern) or (z) because of
any Force Majeure Event (as defined in Section 26.01), (i) all or part of the
Demised Premises are rendered untenantable by reason of the fact that the
elevator, plumbing, electrical, air conditioning and heating and ventilation
services which Owner is obligated to provide to the Demised Premises pursuant to
the terms of this Lease are unavailable or inoperative, (ii) Tenant shall give
to Owner notice of the fact that such services are unavailable or inoperative
42
and of such resulting untenantability, (iii) Owner shall fail within the
Applicable Period (as defined herein) from the date Owner receives Tenant's
notice of such failure of the aforesaid services and resulting untenantably to
cause such matter to be resolved or cured or perform such maintenance or repair
to the extent necessary to again render tenantable the Demised Premises or a
portion thereof so previously rendered untenantable as hereinabove provided and
such failure is not due to a Force Majuere Event, and (iv) the Demised Premises
or the applicable portion thereof shall continue to be untenantable for the
purposes for which the Demised Premises are leased by reason of such services
being unavailable or inoperative, and (v) Tenant shall have vacated and shall
not then using or occupying all or such portion of the Demised Premises so
rendered untenantable, then, upon the occurrence of all the aforesaid events, as
Tenant's sole remedy therefor, commencing on the day after the expiration of
such Applicable Period, the Fixed Rent under Article 1 and increases thereof
under Article 23 shall abate until the Demised Premises, or such portion thereof
so previously rendered untenantable are rendered tenantable; with it understood
that if less than substantially all of the Demised Premises are untenantable,
then Tenant shall continue to pay Fixed Rent under Article 1 and increases
thereof under Article 23 with respect to the tenantable portion of the Demised
Premises based on the proportion that the rentable square feet of the tenantable
portion of the Demised Premises bears to the total rentable square feet of the
Demised Premises. The term "Applicable Period" as used in this Section 29.10
shall mean sixty (60) consecutive business days.
ARTICLE 30
TABLE OF CONTENTS, ETC.
Section 30.01. Table of Contents/Captions: The Table of Contents and the
captions following the Articles and Sections of this Lease have been inserted
solely as a matter of convenience and in no way define or limit the scope or
intent of any provision of this Lease.
ARTICLE 31
MISCELLANEOUS DEFINITIONS, SEVERABILITY AND INTERPRETATION PROVISIONS
Section 31.01. The term "business days" as used in this Lease shall exclude
Saturdays, Sundays and holidays, the term "Saturdays" as used in this Lease
shall exclude holidays and the term "holidays" as used in this Lease shall mean
all days observed as legal holidays by either the New York State Government or
the Federal Government.
Section 31.02. The terms "Person" and "persons" as used in this Lease shall
be deemed to include natural persons, firms, corporations, associations and any
other private or public entities, whether any of the foregoing are acting on
their own behalf or in a representative capacity.
Section 31.03. The term "prime rate" shall mean the rate of interest
announced publicly by JPMorgan Chase Bank, or its successor, from time to time,
as JPMorgan Chase Bank or such successor's base rate, or if there is no such
base rate, then the rate of interest charged by JPMorgan Chase Bank or its
successor to its most credit worthy customers on commercial loans having a
ninety (90) day duration.
Section 31.04. If any term, covenant or condition of this Lease or any
application thereof shall be invalid or unenforceable, the remainder of this
Lease and any other application of such term, covenant or condition shall not be
affected thereby.
Section 31.05. This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Lease to be drafted. In the event of any action, suit, dispute or proceeding
affecting the terms of this Lease, no weight shall be given to any deletions or
striking out of any of the terms of this Lease contained in any draft of this
Lease and no such deletion or strike out shall be entered into evidence in any
such action, suit or dispute or proceeding given any weight therein.
43
ARTICLE 32
ADJACENT EXCAVATION
Section 32.01. If an excavation shall be made upon land adjacent to the
Real Property, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation license to enter upon the
Demised Premises for the purpose of doing such work as said person shall deem
necessary to preserve the walls and other portions of the Building from injury
or damage and to support the same by proper foundations and no such entry shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or said person.
ARTICLE 33
BUILDING RULES
Section 33.01. Tenant shall observe faithfully, and comply strictly with,
and shall not permit the violation of, the Building Rules set forth in Schedule
A annexed to and made a part of this Lease and such additional reasonable
Building Rules as Owner may, from time to time, adopt. All of the terms,
covenants and conditions of Schedule A are incorporated in this Lease by
reference and shall be deemed part of this Lease as though fully set forth in
the body of this Lease. The term "Building Rules" as used in this Lease shall
include those set forth in Schedule A and those hereafter made or adopted as
provided in this Section. In case Tenant disputes the reasonableness of any
additional Building Rule hereafter adopted by Owner, the parties hereto agree to
submit the question of the reasonableness of such Building Rule for decision to
the Chairman of the Board of Directors of the Management Division of the Real
Estate Board of New York, Inc., or its successor (the "Chairman"), or to such
impartial person or persons as the Chairman may designate, whose determination
shall be final and conclusive upon Owner and Tenant. Tenant's right to dispute
the reasonableness of any additional Building Rule shall be deemed waived unless
asserted by service of a notice upon Owner within ten (10) days after the date
upon which Owner shall give notice to Tenant of the adoption of any such
additional Building Rule. Owner shall have no duty or obligation to enforce any
Building Rule, or any term, covenant or condition of any other lease, against
any other tenant or occupant of the Building, and Owner's failure or refusal to
enforce any Building Rule or any term, covenant or condition of any other lease
against any other tenant or occupant of the Building shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Owner or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise.
ARTICLE 34
BROKER
Section 34.01. Tenant represents and warrants to Owner that Lighthouse Real
Estate Management, LLC is the sole broker with whom Tenant has negotiated or
otherwise dealt with in connection with the Demised Premises or in bringing
about this Lease. Tenant shall indemnify Owner from all loss, cost, liability,
damage and expenses, including, but not limited to, reasonable counsel fees and
disbursements, arising from any breach of the foregoing representation and
warranty.
ARTICLE 35
INTENTIONALLY OMITTED
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ARTICLE 36
ARBITRATION, ETC.
Section 36.01. Any dispute with respect to the reasonability of any failure
or refusal of Owner to grant its consent or approval to any request for such
consent or approval pursuant to the provisions of Sections 3.01 or 11.03 with
respect to which request Owner has agreed, in such Sections, not unreasonably to
withhold such consent or approval, which is submitted to arbitration shall be
finally determined by arbitration in the County of Nassau in accordance with the
rules and regulations then obtaining of the American Arbitration Association or
its successor. Any such determination shall be final and binding upon the
parties, whether or not a judgment shall be entered in any court. In making
their determination, the arbitrators shall not subtract from, add to, or
otherwise modify any of the provisions of this Lease. Owner and Tenant may, at
their own expense, be represented by counsel and employ expert witnesses in any
such arbitration. Any dispute with respect to the reasonability of any failure
or refusal of Owner to grant its consent or approval to any request for such
consent or approval pursuant to any of the provisions of this Lease (other than
Sections 3.01 and 11.03) with respect to which Owner has covenanted not
unreasonably to withhold such consent or approval, and any dispute arising with
respect to the increases in Fixed Rent due to the provisions of Section 23.02
shall be determined by applicable legal proceedings. If the determination of any
such legal proceedings, or of any arbitration held pursuant to the provisions of
this Section with respect to disputes arising under Sections 3.01 and 11.03,
shall be adverse to Owner, Owner shall be deemed to have granted the requested
consent or approval, or be bound by any determination as to Taxes and Labor
Rates and the increases in Fixed Rent relating thereto, but that shall be
Tenant's sole remedy in such event and Owner shall not be liable to Tenant for a
breach of Owner's covenant not unreasonably to withhold such consent or
approval, or otherwise. Each party shall pay its own counsel and expert witness
fees and expenses, if any, in connection with any arbitration held pursuant to
the provisions of this Section and the parties will share all other expenses and
fees of any such arbitration.
ARTICLE 37
PARTIES BOUND
Section 37.01. The terms, covenants and conditions contained in this Lease
shall bind and inure to the benefit of Owner and Tenant and, except as otherwise
provided in this Lease, their respective heirs, distributees, executors,
administrators, successors and assigns. However, the obligations of Owner under
this Lease shall no longer be binding upon Owner named herein after the sale,
assignment or transfer by Owner named herein (or upon any subsequent Owner after
the sale, assignment or transfer by such subsequent Owner) of its interest in
the Building as owner or lessee, and in the event of any such sale, assignment
or transfer, such obligations shall thereafter be binding upon the grantee,
assignee or other transferee of such interest, and any such grantee, assignee or
transferee, by accepting such interest, shall be deemed to have assumed such
obligations. A lease of the entire Building shall be deemed a transfer within
the meaning of the foregoing sentence. Neither the partners (direct or indirect)
comprising Owner, nor the shareholders (nor any of the partners comprising
same), partners, directors or officers of any of the foregoing (collectively,
the "Owner's Parties") shall be liable for the performance of Owner's
obligations under this Lease. Tenant shall look solely to Owner to enforce
Owner's obligations hereunder and shall not seek any damages against any of the
Owner's Parties. Notwithstanding anything contained in this Lease to the
contrary, Tenant shall look solely to the estate and interest of Owner, its
successors and assigns, in the Real Property and Building for the collection or
satisfaction of any judgment recovered against Owner based upon the breach by
Owner of any of the terms, conditions or covenants of this Lease on the part of
Owner to be performed, and no other property or assets of Owner or any of
Owner's Parties shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies under or with respect to
either this Lease, the relationship of landlord and tenant hereunder, or
Tenant's use and occupancy of the Demised Premises.
ARTICLE 38
SUBSTITUTE SPACE
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Section 38.01. Tenant agrees that Owner may elect, at any time, by notice
(referred to as "Owner's Notice") to Tenant to substitute for all or any portion
of the original Demised Premises any other portion of the Building which shall
have approximately the same number of rentable square feet of space as the
portion of the original Demised Premises being substituted (measured by Owner in
the same manner as Owner has measured the original Demised Premises) and in the
event of such election by Owner, Owner's Notice shall contain such number of
rentable square feet and shall be accompanied by a floor plan delineating the
additional portion of the Building so substituted. Said additional portion of
the Building so substituted shall be usable for storage in the event the portion
of the Demised Premises being substituted is the Storage Space and as general
offices if the remainder of the Demised Premises is being substituted. Owner's
Notice shall contain a date (referred to as the "Surrender Date") upon which
Tenant shall be required to vacate and surrender to Owner the portion of the
original Demised Premises being substituted which Surrender Date shall be at
least sixty (60) days next following the date of the giving of Owner's Notice.
Upon the giving of Owner's Notice, Tenant shall vacate and surrender to Owner
the portion of the original Demised Premises in question on or prior to the
Surrender Date in accordance with the provisions of Article 21 and relocate into
such substituted space (which, together with all appurtenances, fixtures,
improvements, additions and other property attached thereto or installed therein
is referred to as the "Substituted Space") as of the earlier of the following
two (2) dates [referred to as the "Substituted Space Commencement Date"]: (i)
the date Tenant shall relocate therein; or (ii) the date next following the
Surrender Date, or at any time thereafter, other than Tenant's Personal
Property. Tenant agrees to accept possession of the Substituted Space in the
condition existing as of the Substituted Space Commencement Date provided it is
usable for storage or as general offices, as the case may be, and further
provided that Owner shall build-out and paint and/or finish the Substituted
Space in a manner substantially similar to the original Demised Premises. Owner
agrees, at Owner's sole cost and expense on or prior to the Surrender Date, to
(i) build-out and finish the Substituted Space as provided in the immediately
preceding sentence, (ii) move all of Tenant's Personal Property from the Demised
Premises to the Substituted Space and (iii) run all telecommunications cabling
and electric wiring servicing the Original Demised Premises to the Substituted
Space so that Tenant shall be able to obtain services substantially similar to
those services used by Tenant in the original Demised Premises, all of which
items (i), (ii) and (iii) shall be performed in a manner so as to insure the
continuous operation of Tenant's business. As of the Substituted Space
Commencement Date, the Substituted Space shall hereby be deemed to be included
in the Demised Premises for all purposes of this Lease as though the Substituted
Space were initially leased by Owner to Tenant without in any way affecting any
of the terms, covenants or conditions of this Lease unless the Substituted Space
contains more or less rentable square feet than the portion of the original
Demised Premises for which such space was substituted, in which event this Lease
shall be modified as provided in Section 38.02.
Section 38.02. Owner and Tenant agrees that the rentable square footage of
the Storage Space is 2,300 square feet and the rentable square footage of the
remainder of the Demised Premises is 3,367 square feet. In the event the
Substituted Space contains more or less rentable square feet than the portion of
the original Demised Premises for which such space was substituted (the
difference in square footage from the original Demised Premises is referred to
as the "Square Footage Differential"), then, on the Substituted Space
Commencement Date:
A. The Fixed Rent shall be increased or decreased, as the case may be, by a
sum equal to the product of (i) the Fixed Rent per rentable square foot as of
the Substituted Space Commencement Date multiplied by (ii) the Square Footage
Differential, and the monthly installments of the Fixed Rent shall be adjusted
accordingly to conform with the foregoing. In the event that the Substituted
Space Commencement Date shall be other than the first (1st) day of any calendar
month, the monthly installment of Fixed Rent for the calendar month during which
the Substituted Space Commencement Date shall occur shall be adjusted pro-rata
to reflect such adjustment in the Fixed Rent.
B. The Demised Premises Area set forth in Section 23.01 shall be increased
or decreased, as the case may be, by the Square Footage Differential.
Section 38.03. Upon demand of Owner, Tenant will execute, acknowledge and
deliver to Owner an instrument, in form reasonably satisfactory to Owner,
setting forth the modifications to this Lease resulting from any Square Footage
Differential. However, neither the failure of Owner to demand the execution and
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delivery of such instrument nor the failure of Tenant to execute and deliver
such instrument shall vitiate the provisions of this Article.
ARTICLE 39
TENANT'S TERMINATION OPTION
Section 39.01. Definitions: For the purposes of this Article, (i) the term
"Owner's Repayment Expenses" shall be deemed to be a sum equal to the aggregate
of (a) any brokerage commissions paid or payable by Owner in connection with
this Lease plus (b) the total cost expended by Owner in the performance of
Owner's Initial Work, plus (c) the total amount of Fixed Rent excused during the
Rent Holiday Period, (ii) the term "Termination Percentage" shall mean the
percentage obtained by dividing the total number of months which would have
remained in the Demised Term from and after the Earlier Termination Date (as
hereinafter defined) if the termination option set forth in this Article were
not exercised by one hundred twenty-one (121) months and (iii) the term
"Termination Consideration" shall be deemed to be a sum equal to the product of
(x) Owner's Repayment Expenses, multiplied by (y) the Termination Percentage.
Section 39.02. Exercise of Termination Option: Provided (i) this Lease has
not been terminated previously pursuant to the provisions of this Lease or
pursuant to law; and (ii) Tenant is not then in default (x) under any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed or
performed (other than the covenant to pay Fixed Rent) beyond the applicable
notice and cure periods set forth in this Lease or (y) of the covenant to pay
Fixed Rent, Tenant shall have the right to terminate this Lease and the Demised
Term as of the last day of any calendar month (which day is referred to as the
"Earlier Termination Date") by notice to Owner exercising such right at least
sixty (60) days prior to the Earlier Termination Date, together with a certified
or bank check to the order of Owner in a sum equal to the Termination
Consideration, which sum shall be in addition to the Fixed Rent and additional
rent payable by Tenant under the provisions of this Lease through the Earlier
Termination Date. Time is of the essence with respect to the giving of such
notice and any notice given after the Termination Option Notice Date purporting
to exercise such option shall be void and of no force or effect. Such notice of
termination shall be given in accordance with the provisions of Article 27. In
the event Tenant shall give any such notice of termination pursuant to the
provisions of this Section and shall otherwise comply with the conditions of the
exercise of Tenant's right to terminate this Lease, including, but not limited
to, the payment of the Termination Consideration, this Lease and the Demised
Term shall come to an end and expire on the Tenant's Earlier Termination Date
with the same force and effect as though said date were the Expiration Date,
unless sooner terminated pursuant to any other term, covenant or condition of
this Lease or pursuant to law.
Section 39.03. Instrument Confirming Exercise of Termination Option: Upon
request of Owner, from time to time, Tenant will execute and deliver to Owner an
instrument, in form reasonably satisfactory to Owner, stating whether or not
Tenant has exercised the right of termination contained in Section 39.01.
Failure of Owner to request the execution and delivery of such instrument or
failure of Tenant to execute such instrument, however, shall not vitiate the
foregoing provisions of this Article.
ARTICLE 40
TENANT'S RIGHT OF FIRST OFFER FOR ADDITIONAL SPACE
Section 40.01. Tenant's First Offer Right: Provided that (a) Tenant is not
then in default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed and (b) Tenant, in contradistinction
to any subtenants or other occupants, shall then be in occupancy of the entire
Demised Premises (for the purposes of this Article 40 any space leased to Tenant
under this Lease which has been eliminated from the Demised Premises pursuant to
Section 11.03 shall be deemed space leased to Tenant under this Lease) then
Tenant shall have the right (sometimes referred to herein as "Tenant's First
Offer Right"), subject to the provisions of this Article, exercisable in
accordance with the provisions of Section 40.02, to lease and add to the Demised
Premises any space in the Building on the third (3rd) floor which space is
contiguous to the portions of the Demised Premises located on the third (3rd)
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floor of the Building (each such space is referred to herein as an "Additional
Space"), if after the initial leasing by Owner of such Additional Space after
the date hereof] it becomes "available for leasing" during the Demised Term.
Tenant acknowledges that Owner may initially lease any Additional Space which is
vacant as of the date hereof for whatever term, and upon all other terms,
covenants and conditions, and to whomever it desires in Owner's sole judgment.
No Additional Space shall be deemed "available for leasing" if (a) the then
tenant of the Additional Space or any assignee, successor, subtenant or other
occupant holding through or under such tenant, shall enter into (i) any
agreement with Owner extending the letting agreement affecting the Additional
Space or (ii) any new lease with Owner affecting the Additional Space, or (b)
any other tenant in the Building or any assignee or successor of such other
tenant shall exercise any contractual option or right which it or has to lease
the Additional Space (whether the Additional Space in question is specifically
referred to in any such contractual option or right or Owner must utilize such
Additional Space in question in order to satisfy such contractual option or
right). Notwithstanding the foregoing provisions of this Section 40.01, Tenant
shall not have the right to lease and add to the Demised Premises the Additional
Space pursuant to Tenant's First Offer Right which becomes available for leasing
if, at the time of the exercise of such Tenant's First Offer Right by Tenant,
there are less than two (2) years remaining of the Demised Term of this Lease,
unless Tenant has unconditionally exercised the applicable Tenant's renewal
option set forth in Article 41 so as to extend the Demised Term for more than
two (2) years.
Section 40.02. Notice of Availability and Tenant's Exercise of Option.
A. In the event that the Additional Space shall become or about to become
available for leasing in accordance with the provisions of Section 40.01, Owner
shall give notice thereof to Tenant (any such notice is referred to as an
"Owner's Availability Notice"), which Owner's Availability Notice shall contain
the date such Additional Space is expected to be vacant or available for leasing
and which Notice shall be accompanied by a floor plan of the Additional Space
unless it is a full floor. Owner's Availability Notice may be given not more
than twenty-four (24) months prior to the date set forth in such Notice upon
which such Additional Space is expected to become vacant and available for
leasing (the date set forth in Owner's Availability Notice on which such
Additional Space is expected to become available for leasing is sometimes
referred to as an "Expected Vacancy Date"). Upon Owner giving Tenant an Owner's
Availability Notice, Tenant may exercise Tenant's First Offer Right only by
notice given to Owner within ten (10) days next following the date of the giving
of such Owner's Availability Notice, and by giving such notice Tenant shall
thereby lease and add such Additional Space to the Demised Premises for a term
to begin, subject to Section 40.03, on the Expected Vacancy Date; any notice
given by Tenant to Owner exercising such Tenant's First Offer Right is referred
to as "Tenant's First Offer Notice".
B. It is understood and agreed that "time is of the essence" with respect
to Tenant's exercise of its Tenant's First Offer Right pursuant to this Article
and that if Tenant does not exercise such Tenant's First Offer Right within the
ten (10) day time limitation set forth in Subsection A above, any notice
purporting to exercise such Tenant's First Offer Right given after the
expiration of such time limitation shall be void and of no force and effect and
Tenant shall have no further right to lease and add any Additional Space to the
Demised Premises.
C. If Tenant exercises Tenant's First Offer Right in accordance with the
provisions of this Article 40, then the Additional Space shall be leased by
Tenant and added to the Demised Premises upon all of the then executory terms,
covenants and conditions as are contained in this Lease, except as otherwise set
forth herein, adjusted to reflect (x) the number of rentable square feet
contained in the applicable Additional Space, and (y) that the term applicable
to the Additional Space in question shall, commence on the Expected Vacancy
Date, as the same may be accelerated or delayed pursuant to the provisions of
Section 40.03.
Section 40.03. A. Acceleration of First Offer Vacancy Date: In the event
that the Additional Space shall become available for leasing sooner than the
Expected Vacancy Date because of the termination of the term of the lease or
occupancy affecting such Additional Space, Owner shall have the right to
accelerate the Expected Vacancy Date to such sooner date upon not less than ten
(10) days notice to Tenant.
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B. Holdover Occupant: Owner and Tenant acknowledge the possibility that all
or any of the tenants or occupants of the Additional Space may not have vacated
and surrendered the Additional Space to Owner by the Expected Vacancy Date.
Accordingly, notwithstanding anything to the contrary contained in Sections
40.01 or 40.02 or in any Owner's Availability Notice, if such tenants or
occupants shall not have vacated and surrendered the Additional Space to Owner
by the Expected Vacancy Date, then (a) the term applicable to the Additional
Space shall commence (i) on the Expected Vacancy Date with respect to those
portions, if any, of the Additional Space which are vacant on the applicable
Expected Vacancy Date, and (ii) with respect to those portions, if any, of the
Additional Space which are not vacant on the Expected Vacancy Date, on the
respective later date or dates upon which such portions of the Additional Space
become vacant and Owner gives notice to Tenant of such vacancy, and (b) the
increases in Fixed Rent, the Demised Premises Area and all other modifications
of this Lease resulting from the application of the provisions of this Article
40 shall be equitably adjusted to reflect the fact that all or any portions of
the Additional Space have not been leased and added to the Demised Premises on
the Expected Vacancy Date but are leased and added to the Demised Premises on a
date or dates after the Expected Vacancy Date.
C. Lease Not Affected: In the event that the provisions of this Section
40.03 shall apply, then, the parties agree that (a) the Expiration Date shall
not be affected by operation of the provisions of this Section 40.03; (b) except
as expressly set forth in this Section 40.03, neither the validity of this Lease
nor the obligations of Tenant under this Article 40 shall be affected by
operation of the provisions of this Section 40.03; (c) Tenant waives any rights
under Section 223-a of the Real Property Law of New York or any successor
statute of similar import to rescind this Lease or such Tenant's exercise of
Tenant's First Offer Right and further waives the right to recover any damages
against Owner which may result from the failure of Owner to deliver possession
of the Additional Space on the Expected Vacancy Date; and (d) Owner shall
institute, within thirty (30) days after the Expected Vacancy Date set forth in
Owner's Availability Notice, appropriate proceedings against any such Additional
Space tenants or occupants who have not vacated and surrendered all or any
portion of the Additional Space in order to obtain possession thereof, and shall
prosecute such proceedings to completion with reasonable diligence.
Section 40.04. Modification of Lease - Inclusion of the Additional Space:
In the event that Tenant shall timely exercise Tenant's First Offer Right in
accordance with the provisions of this Article then, on the effective
commencement date of the term applicable to the Additional Space, this Lease
shall be deemed modified as follows:
A. The Demised Premises shall include the Additional Space (together with
all appurtenances, fixtures, improvements, additions and other property attached
thereto or installed therein at the commencement of the term applicable to the
Additional Space or at any time during said term, other than Tenant's Personal
Property) for all purposes of this Lease;
B. The Fixed Rent reserved in this Lease shall be increased by the fair
market annual rental value of the Additional Space as of the commencement date
of the demised term applicable thereto, as determined by agreement between Owner
and Tenant or by arbitration as provided in Section 40.06, but in no event shall
such increase in the Fixed Rent per rentable square foot, from time to time, be
less than the Fixed Rent per rentable square foot in effect from time to time
applicable to the original portion of the Demised Premises (before giving effect
to any abatement or apportionment of such Fixed Rent), and the monthly
installments of the Fixed Rent shall each be increased accordingly to conform
with the foregoing. In the event that the term applicable to the Additional
Space shall commence on a date other than the first day of any month, the
monthly installment of the Fixed Rent for the month during which the term
applicable to the Additional Space shall occur shall be increased pro rata to
reflect such increase in the Fixed Rent; and
C. The Demised Premises Area set forth in Section 23.01 shall be increased
by the number of rentable square feet contained in the Additional Space,
determined in the same manner as the original Demised Premises
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Section 40.05. Condition of Additional Space: Tenant agrees to accept the
Additional Space in the condition which shall exist on the commencement date of
the term applicable thereto "as is" and further agrees that Owner shall have no
obligation to perform any work or make any installations in order to prepare the
Additional Space for Tenant's occupancy.
Section 40.06. Determination of Fair Market Rental Value: In the event
Owner and Tenant are unable to agree as to the fair market annual rental value
of the Additional Space, then, upon the demand of either Owner or Tenant, such
fair market annual rental value shall be determined by arbitration as follows:
(a) Owner and Tenant shall each appoint an arbitrator within thirty (30)
days after notice by either party requesting arbitration of the issue. If either
Owner or Tenant shall have failed to appoint an arbitrator within such period of
time, then such arbitrator shall be appointed by the American Arbitration
Association, or its successor, or if at such time such association is not in
existence and has no successor, then by the presiding Justice of the Appellate
Division, Second Department, of the Supreme Court of the State of New York, or
any successor court, upon request of either Owner or Tenant, as the case may be.
(b) The two arbitrators appointed, as above provided, shall select a third
arbitrator and if they fail to do so within thirty (30) days after their
appointment, such third arbitrator shall be appointed as above provided for the
appointment of an arbitrator in the event either party fails to do so.
(c) All of such arbitrators shall be real estate appraisers or brokers
having at least fifteen (15) years of experience in such field in the County of
Nassau, State of New York.
(d) The three arbitrators, selected as aforesaid, forthwith shall convene
and render their decision as promptly as practicable after the appointment of
the third arbitrator. The decision of such arbitrators shall be in writing and
the vote of the majority of them (or, if there be no majority decision, then the
decision of the last appointed arbitrator) shall be the decision of all and
binding upon Owner and Tenant whether or not a judgment shall be entered in any
court. Duplicate original counterparts of such decision shall be sent by the
arbitrators to both Owner and Tenant.
(e) The arbitrators, in arriving at their decision, shall be entitled to
consider all testimony and documentary evidence which may be presented at any
hearing as well as facts and data which the arbitrators may discover by
investigation and inquiry outside of such hearings. The arbitrators shall be
bound by the provisions of this Lease, and shall not add to, subtract from, or
otherwise modify such provisions. The cost and expense of such arbitration shall
be borne equally by Owner and Tenant, except that each party shall pay its own
counsel fees and expenses.
(f) Notwithstanding any findings of the arbitrators, as to such fair market
annual rental rate per rentable square foot, the Fixed Rent applicable to the
Additional Space from time to time per rentable square foot shall not be less
than the Fixed Rent per rentable square foot in effect from time to time
applicable to the original Demised Premises (before giving effect to any
abatement or apportionment of Fixed Rent).
(g) If the determination of the Fixed Rent payable with respect to the
Additional Space has not been made by the commencement of the term applicable to
the Additional Space, Tenant, until such determination, shall continue to pay
for the Additional Space as the same scheduled Fixed Rent per square foot then
allocable to the original portion of the Demised Premises (as the same may have
been escalated pursuant to the provisions of this Lease) before any abatement or
apportionment thereof, and following such determination Tenant shall pay to
Owner, upon demand, any additional sums due to Owner as a result of such
determination.
Section 40.07. Confirmation of Tenant's Exercise of Option: Upon demand of
Owner, Tenant will execute and deliver to Owner an instrument in form
satisfactory to Owner stating whether or not Tenant has exercised any option
contained in this Article and if Tenant has exercised such option setting forth
the effective commencement date of the term applicable to the Additional Space
in question and the Fixed Rent applicable to the Additional Space in question.
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However, neither the failure of Owner to demand the execution and delivery of
such instrument nor the failure of Tenant to execute and deliver such instrument
shall vitiate the provisions of this Article.
ARTICLE 41
RENEWAL OPTIONS
Section 41.01. Tenant's Renewal Options: A. Provided (i) Tenant is not then
in default under any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed; and (ii) Tenant, in contradistinction
to any subtenants or occupants, shall then be in occupancy of the entire Demised
Premises (with it understood that any space leased under this Lease which has
been removed or eliminated from the Demised Premises pursuant to the provisions
of Section 11.03 shall be deemed leased to Tenant under this Lease for the
purposes of this Section 41.01), Tenant shall have the option to renew this
Lease and the Demised Term for the first renewal term (referred to as the "First
Renewal Term") of five (5) years commencing on the date immediately following
the Expiration Date (such date, the "First Renewal Commencement Date") and
ending, unless sooner terminated pursuant to the terms, covenants and conditions
of this Lease or pursuant to law, on the last day of the calendar month in which
the day immediately preceding the fifth (5th) anniversary of the first day of
the First Renewal Term shall occur (such last day, the "First Extended
Expiration Date"). If Tenant exercises such option in accordance with the
provisions and limitations of this Article, this Lease and the Demised Term
shall be renewed for the First Renewal Term upon the same then executory terms,
covenants and conditions as the original Demised Term, including the definitions
of Owner's Basic Tax Liability set forth in Section 23.01D, except that the
Fixed Rent due and payable during the First Renewal Term shall be:
1. One Hundred Forty-Three Thousand Four Hundred Thirty-One and 76/100
($143,431.76) Dollars per annum ($11,952.65 per month) for the period from the
First Renewal Commencement Date to and including the last day of the calendar
month in which the day immediately preceding the first (1st) anniversary of the
First Renewal Commencement Date shall occur;
2. One Hundred Forty-Seven Thousand Seven Hundred Thirty-Four and 72/100
($147,734.72) Dollars per annum ($12,311.23 per month) for the next year of the
First Renewal Term;
3. One Hundred Fifty-Two Thousand One Hundred Sixty-Six and 76/100
($152,166.76) Dollars per annum ($12,680.56 per month) for the next year of the
First Renewal Term;
4. One Hundred Fifty-Six Thousand Seven Hundred Thirty-One and 76/100
($156,731.76) Dollars per annum ($13,060.98 per month) for the next year of the
First Renewal Term; and
5. One Hundred Sixty-One Thousand Four Hundred Thirty-Three and 71/100
($161,433.71) Dollars per annum ($13,452.81 per month) for the remainder of the
First Renewal Term.
The parties acknowledge that during the First Renewal Term, the Fixed Rent
allocable to the Storage Space is as follows:
a. Thirty-Nine Thousand Nine Hundred Ninety-Four and 95/100 ($39,994.95)
Dollars per annum for the period from the First Renewal Commencement Date to and
including the last day of the calendar month in which the day immediately
preceding the first (1st) anniversary of the First Renewal Commencement Date
shall occur;
b. Forty-One Thousand One Hundred Ninety-Four and 80/100 ($41,194.80)
Dollars per annum for the next year of the First Renewal Term;
c. Forty-Two Thousand Four Hundred Thirty and 64/100 ($42,430.64) Dollars
51
per annum for the next year of the First Renewal Term;
d. Forty-Three Thousand Seven Hundred Three and 56/100 ($43,703.56) Dollars
per annum for the next year of the First Renewal Term; and
e. Forty-Five Thousand Fourteen and 67/100 ($45,014.67) Dollars per annum
for the remainder of the First Renewal Term.
B. Provided (i) Tenant is not then in default under any of the terms,
covenants or conditions of this Lease on Tenant's part to be observed or
performed, (ii) Tenant, in contradistinction to any subtenants or occupants,
shall then be in occupancy of the entire Demised Premises (with it understood
that any space leased under this Lease which has been removed or eliminated from
the Demised Premises pursuant to the provisions of Section 11.03 shall be deemed
leased to Tenant under this Lease for the purposes of this Section 41.01), and
(iii) Tenant shall have exercised the option to lease the Demised Premises
during the First Renewal Term pursuant to the provisions of Subsection A of this
Section 41.01, Tenant shall have the option to renew this Lease and the Demised
Term for a second and final renewal term (referred to as the "Final Renewal
Term") of five (5) years commencing on the date immediately following the First
Extended Expiration Date (referred to as the "Final Renewal Commencement Date")
and ending, unless sooner terminated pursuant to the terms, covenants and
conditions of this Lease or pursuant to law, on the last day of the calendar
month in which the day immediately preceding the fifth (5th) anniversary of the
first day of the Final Renewal Term shall occur. If Tenant exercises such option
in accordance with the provisions and limitations of this Article, this Lease
and the Demised Term shall be renewed for the Final Renewal Term upon the same
then executory terms, covenants and conditions as the First Renewal Term,
including the definitions of Owner's Basic Tax Liability set forth in Section
23.01D, except that the Fixed Rent due and payable during the Final Renewal Term
shall be:
1. One Hundred Sixty-Six Thousand Two Hundred Seventy-Six and 73/100
($166,276.73) Dollars per annum ($13,856.39 per month) for the period from the
Final Renewal Commencement Date to and including the last day of the calendar
month in which the day immediately preceding the first (1st) anniversary of the
Final Renewal Commencement Date shall occur;
2. One Hundred Seventy-One Thousand Two Hundred Sixty-Five and 03/100
($171,265.03) Dollars per annum ($14,272.09 per month) for the next year of the
Final Renewal Term;
3. One Hundred Seventy-Six Thousand Four Hundred Two and 98/100
($176,402.98) Dollars per annum ($14,700.25 per month) for the next year of the
Final Renewal Term;
4. One Hundred Eighty-One Thousand Six Hundred Ninety-Five and 07/100
($181,695.07) Dollars per annum ($15,141.26 per month) for the next year of the
Final Renewal Term; and
5. One Hundred Eighty-Seven Thousand One Hundred Forty-Five and 92/100
($187,145.92) Dollars per annum ($15,595.49 per month) for the remainder of the
Final Renewal Term.
The parties acknowledge that during the Final Renewal Term, the Fixed Rent
allocable to the Storage Space shall be as follows:
a. Forty-Six Thousand Three Hundred Sixty-Five and 11/100 ($46,365.11)
Dollars per annum for the period from the Final Renewal Commencement Date to and
including the last day of the calendar month in which the day immediately
preceding the first (1st) anniversary of the Final Renewal Commencement Date
shall occur;
b. Forty-Seven Thousand Seven Hundred Fifty-Six and 06/100 ($47,756.06)
Dollars per annum for the next year of the Final Renewal Term;
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c. Forty-Nine Thousand One Hundred Eighty-Eight and 69/100 ($49,188.69)
Dollars per annum for the next year of the Final Renewal Term;
d. Fifty Thousand Six Hundred Sixty-Four and 35/100 ($50,664.35) Dollars
per annum for the next year of the Final Renewal Term; and
e. Fifty-Two Thousand One Hundred Eighty-Four and 28/100 ($52,184.28)
Dollars per annum for the remainder of the Final Renewal Term.
The First Renewal Term and the Final Renewal Term are each individually referred
to as a "Renewal Term."
Section 41.02. Tenant's Exercise of Option: Each of the options set forth
in Section 41.01 may only be exercised by notice given by Tenant to Owner on or
prior to the date which is twelve (12) months immediately preceding the
commencement date of the applicable Renewal Term in question. Time is of the
essence with respect to the exercise of each option. Tenant shall not have the
right to give any such notice after the date which is twelve (12) months
immediately preceding the commencement date of the applicable Renewal Term, and
any notice given after said applicable date purporting to exercise such option
shall be void and of no force or effect.
Section 41.03. Confirmation of Exercise of Tenant's Renewal Right: Tenant,
upon request of Owner, from time to time, will execute and deliver to Owner an
instrument in form reasonably satisfactory to Owner stating whether or not
Tenant has exercised any right to renew pursuant to the provisions of Section
41.01 and, if Tenant has exercised any such right, setting forth the Fixed Rent
for the applicable Renewal Term. However, failure of Owner to request the
execution and delivery of any such instrument or failure of Tenant to execute
and deliver such instrument shall not vitiate the foregoing provisions of this
Article.
IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed
this Lease as of the day and year first above written.
OWNER:
LIGHTHOUSE 444 LIMITED PARTNERSHIP,
By: LIGHTHOUSE 444 OPERATING, LLC, its managing member
By: /s/ Louis Sheinker
-----------------------------------------------
Name: Louis Sheinker
Title: Member
TENANT:
GTJ CO., INC.
By: /s Jerome Cooper
----------------------------------------------------
Name: Jerome Cooper
Title: President
53
UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT
(Within New York State)
State of New York )
:ss.:
County of Nassau )
On the 21 day of April, in the year 2005, before me, the undersigned,
personally appeared Jerome Cooper, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual(s) whose name(s)
is (are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.
/s/ Suzanne Mikos David
---------------------------------------------------------
(Signature and Office of individual taking acknowledgment)
UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT
(Outside of New York State)
State, District of Columbia, Territory,
Possession or Foreign Country
___________________):ss.:
On the ___day of _________in the year ____, before me, the undersigned,
personally appeared ___________, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), that by his/her/their
signature(s) on the instrument, the individual(s), or the person upon behalf of
which the individual(s) acted, executed the instrument, and that such individual
made such appearance before the undersigned in the __________. (Insert the city
or other political subdivision and the state or country or other place the
acknowledgment was taken.)
---------------------------------------------------------
(Signature and office of individual taking acknowledgment)
54
EXHIBIT A-1
This floor plan of a portion of the third (3rd) floor in the building known as
444 Merrick Road, Lynbrook, New York, is annexed to this Agreement of Lease and
made a part hereof solely to delineate by outlining and diagonal markings that
portion of the third (3rd) floor demised to Tenant under this Agreement of
Lease. All areas, dimensions, conditions and locations are approximate.
1
EXHIBIT B
OWNER'S INITIAL WORK
I. Owner agrees to supply and install in the Demised Premises all of the items
set forth on Owner's Work Plans referred to in Paragraph IV of this Exhibit B,
as it may be modified to reflect any Change Work (as defined in Paragraph IV),
unless prevented by job conditions or other circumstances beyond the reasonable
control of Owner or unless variations thereto are necessary to comply with Legal
Requirements (such work and installations are referred to herein as "Owner's
Initial Work").
II. Owner's Initial Work shall be equal to standards adopted by Owner for the
Building. Owner's Initial Work shall constitute a single non-recurring
obligation on the part of Owner. In the event the Lease is renewed or extended
for a further term by agreement or operation of law, Owner's obligation to
perform Owner's Initial Work shall not apply to any such renewal or extension.
III. Subject to the provisions of Paragraphs IV(4) and VI of this Exhibit B,
Owner's Initial Work shall be substantially completed prior to the Commencement
Date. At any time after such substantial completion, Owner may enter the Demised
Premises to complete unfinished details of Owner's Initial Work and entry by
Owner, its agents, servants, employees or contractors for such purpose shall not
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or its agents
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business, or otherwise.
IV. (1) Owner shall submit to Tenant a complete set of plans and specifications
(referred to herein as "Owner's Work Plans") for those Alterations to the
Demised Premises comprising Owner's Initial Work. In the event that Tenant shall
have any comments or concerns with respect to Owner's Work Plans (or any
revisions thereof), Tenant shall deliver a notice to Owner, within five (5) days
immediately following Tenant's receipt of Owner's Work Plans (or any revisions
thereof), setting forth such comments or concerns. Time is of the essence with
respect to the delivery of any such notice from Tenant to Owner. Any notice
setting forth comments or concerns with respect to Owner's Work Plans delivered
to Owner after such five (5) day period shall be of no force or effect. In the
event that Tenant delivers any such notice to Owner after said five (5) day
period or if Tenant fails to deliver any such notice to Owner, then in such
event, Owner's Work Plans (and any revisions thereof) shall be deemed approved.
(2) A. Owner shall deliver to Tenant, along with the complete set of
Owner's Work Plans pursuant to subdivision (1) above, a notice identifying which
items contained in Owner's Work Plans, if any, will or might be subject to
certain delays in delivery and which might affect the date of substantial
completion of Owner's Initial Work. Tenant may, within five (5) days after such
notice from Owner, designate, subject to the limitations (i) through (vi) set
forth in subparagraph (4)(A) of Paragraph IV, other available items which will
not be subject to delays in delivery. If Tenant fails to timely make such
designations, Owner will have no obligation to supply or install the items set
forth in such Owner's notice or, at Owner's election, Owner shall have the right
to perform the work relating to such items and for the purpose of determining
whether or not Owner's Initial Work shall have been substantially completed and
for the purpose of fixing the Commencement Date pursuant to Section 1.02 of this
Lease, said items set forth in such notice and all other related work and
installations shall be deemed unfinished details of Owner's Initial Work which
may be performed by Owner after the substantial completion of Owner's Initial
Work in accordance with the provisions of Paragraph III of this Exhibit B and,
accordingly, shall not affect the Commencement Date.
B. As part of Owner's Initial Work and pursuant to the provisions of
Section 29.02 of the Lease, Owner shall install the Dedicated AC Unit to provide
conditioned air to the Demised Premises. Owner has advised Tenant that the air
conditioning unit to be installed by Owner as part of the Dedicated AC Unit
(which air-conditioning unit shall be installed on the rooftop of the Building)
is a so-called "long lead item" and that the delivery of such air-conditioning
unit may be subject to certain delays in delivery which may affect the date of
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the substantial completion of Owner's Initial Work. However, notwithstanding any
delay in the delivery of said air-conditioning unit, Owner shall install all
piping, conduits and related equipment in and to the Demised Premises which
shall be necessary to operate the Dedicated AC Unit and run (as necessary) such
piping, conduit and related equipment to the rooftop of the Building, such that,
upon the completion of the installation of such equipment, Owner shall be able
to connect the air-conditioning unit to such equipment at the roof top access
points. Accordingly, the parties hereby agree that, for the purpose of
determining whether or not Owner's Initial Work shall have been substantially
completed and for the purpose of fixing the Commencement Date pursuant to
Section 1.02 of this Lease, provided Owner has so installed the piping, conduit
and related equipment described above, the installation of said air-conditioning
unit shall be deemed an unfinished detail of Owner's Initial Work which may be
performed by Owner after the substantial completion of Owner's Initial Work in
accordance with the provisions of Paragraph III of this Exhibit B and,
accordingly, shall not affect the Commencement Date.
(3) In the event substantial completion of Owner's Initial Work shall be
delayed by reason of Tenant's delays in submitting any plans or specifications,
or in supplying information, or in approving plans or specifications or
estimates, or in giving authorizations or by reason of any Change Work (as
hereinafter defined) or by reason of any other similar acts or omissions of
Tenant, then, in such event, Tenant agrees to pay to Owner, as agreed liquidated
damages for such delays occasioned by Tenant's acts or omissions, as the case
may be, sums equal to one (1) day's Fixed Rent for each day that such failure or
delay shall continue. Tenant shall also pay to Owner a sum equal to any
additional cost to Owner in completing Owner's Initial Work resulting from any
of the foregoing failures, acts or omissions of Tenant. Any such sums may be
collected by Owner, from time to time, upon demand, whether or not the Demised
Term shall have commenced.
(4) A. Tenant, after the submission of Owner's Work Plans, may designate,
subject to Owner's approval, substitute or additional work, materials or
installations (referred to collectively as "Change Work") to be supplied and
installed by Owner in replacement of, or in addition to, the work, materials and
installations set forth on Owner's Work Plans, provided that such Change Work:
(i) is in compliance with the provisions of this Lease, including without
limitation Articles 3 and 6 hereof; (ii) is practical and consistent with the
physical conditions in the Building and with the plans for the Building filed
with the appropriate governmental authorities and agencies; (iii) will not
impair Owner's ability to perform any of Owner's obligations under the
provisions of this Lease; (iv) will not affect any portions of the Building
other than the Demised Premises; (v) shall (a) be in Auto-CAD format and be
signed, sealed and certified by a registered architect and, if applicable,
engineer duly licensed in the State of New York and (b) comply with all
applicable Legal Requirements so that Owner's Work Plans may, without further
amendment or change, be used for engineering drawings and specifications and
filed with and approved by the appropriate governmental authorities and
agencies; and (vi) will not tend to delay completion of Owner's Initial Work.
If, at or about the time of the submission by Tenant to Owner of any Change
Work, it appears to Owner that any item of Change Work designated by Tenant will
tend to delay completion of Owner's Initial Work, or, notwithstanding Owner's
approval of any Change Work, if it subsequently appears to Owner that any item
of Change Work designated by Tenant will tend to delay completion of Owner's
Initial Work, Owner in each case shall notify Tenant in writing to that effect
and Tenant, within five (5) days after the giving of such notice (as determined
in accordance with Article 27 of this Lease), will designate, subject to the
foregoing limitations (i) through (vi), other available items of Change Work
which will not so tend to delay completion. If Tenant fails to make such
designations within five (5) days after the giving of said notice, Owner will
have no obligation to supply or install the items set forth in such Owner's
notice or, at Owner's election, Owner shall have the right to perform such items
of Change Work in accordance with the provisions of this Exhibit B, except that,
solely for the purpose of determining whether or not Owner's Initial Work has
been substantially completed and for the purpose of fixing the Commencement Date
pursuant to Section 1.02 of this Lease, such items of Change Work and all other
related work and installations shall be deemed unfinished details of Owner's
Initial Work which may be performed after the Commencement Date in accordance
with the provisions of Paragraph III of this Exhibit B and, accordingly, shall
not affect the Commencement Date.
B. Tenant shall pay to Owner a sum equal to the amount by which the
aggregate of (a) the actual cost and expense to Owner of supplying and
installing all Change Work designated by Tenant (including, but not limited to,
the cost to Owner of a field superintendent, operating engineer, laborers,
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freight elevator costs, rubbish removal, temporary sprinkler and lighting,
electric and heat, protection, insurance, filing and expediting building permits
and other governmental approvals, blueprint costs and every other item which
customarily would be considered a general condition and, if applicable, any
construction management or other fees paid to the general contractor or
construction manager who is performing Owner's Initial Work [such aggregate
actual cost and expense is referred to as "Owner's Additional Construction
Cost"] plus (b) if there is no general contractor or construction manager who is
performing Owner's Initial Work, ten (10%) percent of Owner's Additional
Construction Cost for office overhead and as a construction management fee,
shall exceed (c) the following credits: a sum equal to the actual cost and
expense to Owner (including, but not limited to, the cost to Owner of a field
superintendent, operating engineer, laborers, freight elevator costs, rubbish
removal, temporary sprinkler and lighting, electric and heat, protection,
insurance, Building Department, filing and expediting building permits and other
governmental approvals, blueprint costs and every other item which customarily
would be considered a general condition) of all items required to be supplied
and installed by Owner pursuant to paragraph I of this Exhibit B for which
Change Work is substituted by Tenant (however, if the actual cost and expense to
Owner of any item of Change Work designated by Tenant as a substitution shall be
less than the actual cost and expense to Owner of the item set forth in
paragraph I of this Exhibit B for which such substitution is made, the credit to
which Tenant shall be entitled for such substitution shall be limited to the
actual cost and expense to Owner of the item of Change Work so designated by
Tenant; nor shall Tenant be entitled to any credit for the substitution of any
partitioning of less than floor-to-ceiling height). Any such excess shall be
payable by Tenant to Owner, whether or not the Demised Term shall have
commenced, within five (5) days next following the rendition of a written
statement by Owner to Tenant.
C. The term "substitute" or "substitution" as used in paragraph (IV)(4)(B)
above shall be expressly limited to an item of Change Work designated by Tenant
in replacement of an item required to be supplied or installed by Owner pursuant
to paragraph I of this Exhibit B which item of Change Work so designated by
Tenant serves the same function as the item so replaced, e.g., a lighting
fixture in replacement of a lighting fixture designated on Owner's Work Plans.
Any Change Work for which Tenant shall have received any credit or other
allowance shall not be deemed Tenant's personal property but shall be and remain
Owner's property.
V. During the performance of Owner's Initial Work, Tenant shall not be permitted
to perform any Alterations in the Demised Premises prior to the Commencement
Date, except to the extent such Alterations and the performance thereof during
Owner's Initial Work are expressly approved by Owner. In the event Tenant is so
permitted to perform Alterations while Owner is performing Owner's Initial Work,
then each of the parties shall cause its contractors to cooperate with the other
and the other's contractors so that Owner's Initial Work and Tenant's
Alterations may be completed efficiently and economically, such cooperation to
relate to including, without limitation, the storage of tools and materials.
VI. Any dispute between the parties as to whether or not Owner's Initial
Work is "substantially complete" shall be submitted to arbitration in accordance
with the provisions of Article 36 of this Lease.
3
SCHEDULE A
BUILDING RULES
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed or
encumbered by any of the tenants, their agents, clerks, servants or
visitors or used for any purpose other than ingress and egress to and from
the Demised Premises. Any tenant whose premises are situate on the ground
floor of the Building shall, at said tenant's own expense, keep the
sidewalks and curb directly in front of said premises clean and free from
ice and snow. Nothing shall be swept or thrown by the tenants or by their
agents clerks, servants or visitors into the corridors, halls, stairways,
elevators or light shafts, or upon any skylights of the Building, or into
any heating or ventilating registers, or plumbing apparatus in the
Building, or upon the adjoining building on the street.
2. No awnings or other projections, including air conditioner units, shall be
attached to the outside walls or windows of the Building without the prior
consent of Owner. No curtains, blinds, shades, or screens shall be attached
to or hung in, or used in connection with, any window or door of the
Demised Premises without the prior consent of Owner. Such awnings,
projections, curtains, blinds, shades, screens or other fixtures must be of
a quality, type, design and color, and attached in a manner, approved by
Owner.
3. No sign, advertisement, object, notice or other lettering shall be
exhibited, inscribed, painted or affixed on any part of the outside or
inside of the Demised Premises without the prior consent of Owner. Interior
signs on doors and directory tablets, if any, shall be of a size, color and
style approved by Owner.
4. The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed, nor shall any bottles,
parcels, or other articles be placed on any window sills.
5. No showcases or other articles shall be put in front of or affixed to any
part of the exterior of the Building, nor placed in the halls, corridors,
vestibules or other public parts of the Building.
6. The water and wash closets and other plumbing fixtures shall not be used
for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, ashes, chemicals, refuse from electric batteries
or other substances shall be thrown therein. All damages resulting from any
misuse of the plumbing fixtures shall be borne by the tenant who, or whose
servants, employees, agents, visitors or licensees, shall have caused the
same. No tenant shall bring or keep, or permit to be brought or kept, any
inflammable, combustible or explosive fluid, material, chemical or
substance in or about the Demised Premises.
7. No tenant or occupant shall mark, paint, drill into, or in any way deface,
damage or mutilate any part of the Building or the Demised Premises. No
boring, cutting or stringing of wires shall be permitted, except with the
prior consent of Owner, and as Owner may direct. No tenant or occupant
shall install any resilient tile, linoleum or similar floor covering in the
Demised Premises except in a manner approved by Owner.
8. No bicycles, vehicles or animals of any kind, other than seeing eye dogs,
shall be brought into or kept in or about the Demised Premises. No cooking
shall be done or permitted in the Building by any tenant without the
approval of Owner. No tenant shall cause or permit any unusual or
objectionable odors to emanate from the Demised Premises.
9. Without the prior consent of Owner, no tenant shall use or occupy, or
permit any portion of the Demised Premises to be used or occupied for the
storage of merchandise (except for the storage of sample products to be
displayed in such tenant's showroom), or for the sale of merchandise, goods
or property of any kind at auction.
1
10. No tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with other tenants or occupants of the
Building or neighboring buildings or premises whether by the use of any
musical instrument, radio, television set or other audio device, unmusical
noise, whistling, singing, or in any other way. Nothing shall be thrown out
of any doors or windows. No tenant shall do anything or permit anything to
be done, in its Demised Premises, or bring or keep anything therein or in
the Building, that will in any way obstruct or interfere with the rights of
other tenants, or in any way injure or annoy them, or those having business
with them.
11. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows, nor shall any changes be made in existing locks or the
mechanism thereof. Each tenant must, upon the termination of its tenancy,
restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such tenant.
12. Owner reserves the right to restrict and regulate the use of the
aforementioned public areas of the Building by the tenants, their
employees, guests, contractors and customers and by persons making
deliveries to tenants, including but not limited to the right to allocate
certain elevators for delivery service and the right to designate which
Building entrances shall be used by persons making deliveries in the
Building. All removals from the Building, or the carrying in or out of the
Building or the Demised Premises demised to any tenant, of any safes,
freight, furniture or bulky matter of any description must take place at
such time and in such manner as Owner or its agents may determine, from
time to time, which may involve overtime work for Owner's employees, agents
or contractors. Tenant shall reimburse Owner for such costs incurred by
Owner, including the cost of such overtime work. The moving of safes shall
occur at such times as Owner shall designate upon previous notice to Owner
or Owner's agent; and the persons employed to move the safes in and out of
the Demised Premises must be acceptable to Owner in its sole discretion. No
tenant shall use the passenger elevators for the hauling and removal of
materials or debris and the same shall be done only after Business Hours
and only via the designated freight elevator. Owner reserves the right to
inspect all freight to be brought into the Building and to exclude from the
Building all freight which violates any of the Building Rules or the
provisions of such tenant's lease.
13. No tenant shall use or occupy, or permit any portion of the Demised
Premises to be used or occupied, as an office for a public stenographer or
typist, or as a barber or manicure shop, or as an employment bureau. No
tenant or occupant shall engage or pay any employees in the Building,
except those actually working for such tenant or occupant in the Building,
nor advertise for laborers, giving an address at the Building.
14. No tenant or occupant shall purchase spring water, ice, food, beverage,
lighting maintenance, cleaning, towels, or other like service, from any
company or persons not approved by Owner, such approval not unreasonably to
be withheld. No tenant shall install or permit the installation or use of
any machine dispensing goods for sale, including without limitation, foods,
beverages, cigarettes or cigars; permit the delivery of any food or
beverage to the Demised Premises. No food or beverage shall be carried in
the public halls and elevators of the Building except in closed containers.
15. Owner shall have the right to prohibit any advertising by any tenant or
occupant which, in Owner's opinion, tends to impair the reputation of the
Building or its desirability as a building for offices, and upon notice
from Owner, such tenant or occupant shall refrain from or discontinue such
advertising.
16. Owner reserves the right to exclude from the Building, between the hours of
6 P.M. and 8 A.M. on business days and at all hours on Saturdays, Sundays
and holidays, all persons who do not present a pass to the Building signed
by Owner. Owner will furnish passes to persons for whom any tenant requests
such passes. Each tenant shall be responsible for all persons for whom it
requests such passes and shall be liable to Owner for all acts of such
persons. Owner may require all such persons to sign a register on entering
or leaving the Building.
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17. Each tenant, before closing and leaving the Demised Premises at any time,
shall see that all entrance doors are locked and all windows closed.
18. Each tenant shall, at its expense, provide artificial light in the Demised
Premises for Owner's agents, contractors and employees while performing
janitorial or other cleaning services and making repairs or alterations in
the Demised Premises.
19. The Demised Premises shall not be used, or permitted to be used, for
lodging or sleeping or for any immoral or illegal purpose.
20. The requirements of tenants will be attended to only upon application at
the office of Owner. Building employees shall not be required to perform,
and shall not be requested by any tenant or occupant to perform, any work
outside of their regular duties, unless under specific instructions from
the office of Owner. Owner shall not be responsible to Tenant for the
non-observance or violation of these rules and regulations by any other
tenant or occupant.
21. Canvassing, soliciting and peddling in the Building are prohibited and each
tenant and occupant shall cooperate in seeking their prevention.
22. There shall not be used in the Building, either by any tenant or occupant
or by their agents or contractors, in the delivery or receipt of
merchandise, freight or other matter, any hand trucks or other means of
conveyance except those equipped with rubber tires, rubber side guards and
such other safeguards as Owner may require.
23. If the Demised Premises become infested with vermin, such tenant, at its
sole cost and expense, shall cause its Demised Premises to be exterminated,
from time to time, to the satisfaction of Owner, and shall employ such
exterminators therefor as shall be approved by Owner.
24. The Demised Premises shall not be used, or permitted to be used, at any
time, without the prior approval of Owner, for the sale, at retail, whether
directly, by mail order or otherwise, of goods, wares or merchandise of any
kind, or as a restaurant, shop, booth, bootblack or other stand, or for the
conduct of any business or occupation which predominantly involves direct
patronage of the general public in the Demised Premises or for
manufacturing or for other similar purposes.
25. No tenant shall clean, or permit to be cleaned, any window of the Building
from the outside in violation of Section 202 of the New York Labor Law or
any successor law or statute, or of the rules of the Board of Standards and
Appeals or of any board or body having or asserting jurisdiction.
26. No tenant shall move, or permit to be moved, into or out of the Building or
the Demised Premises, any heavy or bulky matter, without the specific
approval of Owner. If any such matter requires special handling, only a
person holding a Master Rigger's license shall be employed to perform such
special handling. No tenant shall place, or permit to be placed, on any
part of the floor or floors of the Demised Premises, a load exceeding the
floor load per square foot which such floor was designed to carry and which
is allowed by law. Owner reserves the right to prescribe the weight and
position of safes and other heavy matter, which must be placed so as to
distribute the weight.
27. No borrowed lights (display windows) in the partitioning separating the
Demised Premises from the Building's public corridors shall be obstructed
in any manner by the tenant.
28. Telegraph, telephone and other wires and instruments shall not be
introduced by Tenant without previous notice to Owner and with its
reasonable approval.
29. Owner may from time to time adopt additional systems and procedures to
improve the security or safety of the Building, any persons occupying,
3
using or entering the same, or any equipment, finishing or contents
thereof, and Tenant shall comply with Owner's reasonable requirements
relative thereto.
30. Owner reserves the right to rescind, alter, waive or add, as to one or more
or all tenants, any rule or regulation at any time prescribed for the
Building when, in the reasonable judgment of Owner, Owner deems it
necessary or desirable for the reputation, safety, character, security,
care, appearance or interests of the Building, or the preservation of good
order therein, or the operation or maintenance of the Building, or the
equipment thereof, or the comfort of tenants or others in the Building. No
rescission, alteration, waiver or addition of any rule or regulation in
respect of one tenant shall operate as a rescission, alteration or waiver
in respect of any other tenant.
31. Business machines and mechanical equipment used in the Demised Premises
that cause vibrations or noise that may be transmitted to any other space
in the Building to such a degree as to be reasonably objectionable to Owner
or to any tenants or occupants of the Building shall be placed and
maintained by Tenant, at its expense, in settings of cork, rubber or
spring-type vibration eliminators sufficient, in Owner's judgment, to
eliminate such vibrations or noise.
32. Tenant shall neither contract for, nor employ, any labor in connection with
the maintenance or cleaning of, or providing of any other services to, the
Demised Premises (but excluding Tenant's Property) without the prior
written consent of Owner in its sole discretion (Owner may withhold any
such consent on the ground that use of such service provider would disturb
labor harmony in the Building.)
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SCHEDULE B
Owner's Cleaning Services
I. Office Space--Tenant Area: (nightly unless otherwise noted)
A. Empty all waste receptacles
B. Sweep all hard surface floors
C. Vacuum high traffic, main corridor areas
D. Wipe all areas within hand high reach including windowsills, wall
ledges, chairs, tables, baseboards and all manner of office furniture
E. Wipe clean all desktops and glasswork surfaces, if clear of work
papers and file folders.
F. Vacuum all carpeted areas weekly
II. Lavatories: (nightly unless otherwise noted)
A. Clean and disinfect all bowls, seats, urinals and sinks
B. Clean all mirrors
C. Empty all trash receptacles and sanitary napkin disposal receptacles
and remove to a designated area
D. Wipe dry all metal
E. Refill all soap, paper towel, toilet tissue and seat cover dispensers
F. Sweep and damp mop tile floors with disinfectant
G. Wipe clean the exterior of all waste cans and dispensing units
H. Spot clean and disinfect all walls and partitions
I. Scrub flooring as necessary
J. Remove smudges from doors, doorframes and light switches
III. Hallways and Corridors: (nightly unless otherwise noted)
A. Spot clean all glass
B. Clean all drinking fountains
C. Vacuum all carpeted areas, as necessary
IV. Rubbish Removal Service:
Remove all ordinary office dry rubbish and paper from waste paper
receptacles nightly, Monday through Friday, holidays excepted.
V. Window Cleaning Service:
Clean all exterior window, inside and out, periodically during the year as
Owner deems necessary.
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