TEN HANOVER LLC,
Landlord,
TO
THE GOLDMAN SACHS GROUP, L.P.,
Tenant
Lease
Dated as of August 22, 1997
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TABLE OF CONTENTS
1. LEASED PREMISES; TERM OF LEASE ............................................1
1.1 LEASED PREMISES .......................................................1
1.2 TERM ..................................................................2
1.3 STEPHANEZE PREMISES ...................................................2
1.4 TENANT'S TERMINATION OPTIONS ..........................................8
1.5 LANDLORD'S FINANCING ..................................................9
1.6 CERTAIN DEFINITIONS ..................................................11
2. BASIC RENT, ETC ..........................................................14
2.1 BASIC RENT ...........................................................14
2.2 DETERMINATION OF FAIR MARKET RENT ....................................15
2.3 SUPPLEMENTAL RENT ....................................................17
3. MANNER OF PAYMENT ........................................................17
4. NET LEASE; NO ABATEMENT ..................................................18
5. CONDITION AND USE OF LEASED PREMISES .....................................18
6. MAINTENANCE; ALTERATIONS; CERTAIN REIMBURSEMENTS; ETC. ...................19
6.1 GENERALLY ............................................................19
6.2 CERTAIN DEFINITIONS ..................................................20
6.3 SUBMISSION AND APPROVAL OF PLANS AND SPECIFICATIONS IN
CERTAIN INSTANCES ....................................................23
6.4 REIMBURSABLE ALTERATIONS .............................................26
6.5 GENERAL PROVISIONS ...................................................36
6.6 CONSIDERATION BY TENANT ..............................................36
6.7 ENGINEER; APPROPRIATE ENGINEER .......................................37
7. HAZARDOUS SUBSTANCES .....................................................38
8. UTILITY SERVICES .........................................................39
9. INDEMNIFICATION BY TENANT ................................................40
10. ENTRY BY LANDLORD .......................................................41
11. PAYMENT OF TAXES ........................................................42
11.1 DEFINITIONS .........................................................42
11.2 PAYMENT OF TAXES ....................................................43
11.3 INITIAL TAX PAYMENTS ................................................43
11.4 EXTENDED TAX PAYMENTS ...............................................43
11.5 GENERAL PROVISIONS APPLICABLE TO TAXES ..............................45
11.6 INDUSTRIAL AND COMMERCIAL INCENTIVE PROGRAM .........................45
12. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS AND
PERMITTED ENCUMBRANCES ..................................................46
12.1 GENERALLY ...........................................................46
12.2 PERMITTED CONTESTS ..................................................47
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13. LIENS ...................................................................48
14. INSURANCE ...............................................................48
14.1 RISKS TO BE INSURED .................................................49
14.2 POLICY PROVISIONS ...................................................50
14.3 DELIVERY OF INSURANCE CERTIFICATES; PAYMENT OF PREMIUM ..............51
14.4 NO LIMITATION OF DAMAGES ............................................51
15. DAMAGE TO OR DESTRUCTION OF PROPERTY ....................................51
15.1 WAIVER OF SS. 227; TENANT TO GIVE NOTICE ............................51
15.2 RESTORATION .........................................................51
15.3 APPLICATION OF INSURANCE PROCEEDS ...................................52
15.4 TERMINATION IN LIEU OF RESTORATION ..................................52
16. TAKING OF PROPERTY ......................................................59
16.1 NOTICE ..............................................................59
16.2 TOTAL TAKING ........................................................59
16.3 PARTIAL TAKING ......................................................60
16.4 APPLICATION OF AWARD ................................................61
16.5 TEMPORARY TAKING ....................................................62
17. DISBURSEMENT OF DEPOSITED SUMS ..........................................63
18. CERTIFICATE AS TO NO DEFAULT, ETC. ......................................65
19. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS, ETC. ...................66
20. ASSIGNMENT; SUBLEASES ...................................................67
21. VAULTS ..................................................................68
22. EVENTS OF DEFAULT; TERMINATION ..........................................68
23. REPOSSESSION ............................................................70
24. RELETTING ...............................................................70
25. SURVIVAL OF TENANT'S OBLIGATIONS; DAMAGES ...............................70
25.1 TERMINATION OF LEASE NOT TO RELIEVE TENANT OF OBLIGATIONS ...........70
25.2 CURRENT DAMAGES AND DAMAGES IN RESPECT OF SUPPLEMENTAL RENT .........71
25.3 FINAL DAMAGES .......................................................72
26. NO WAIVER ...............................................................73
27. REMEDIES CUMULATIVE .....................................................73
28. ACCEPTANCE OF EARLY TERMINATION OR SURRENDER ............................73
29. NO MERGER OF TITLE ......................................................74
30. EXCULPATION .............................................................74
31. DEFINITIONS. ............................................................75
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32. END OF LEASE TERM .......................................................77
33. NOTICES .................................................................78
34. ANNUAL REPORTS ..........................................................78
35. MISCELLANEOUS ...........................................................79
36. EXPEDITED ARBITRATION ...................................................81
37. SUBORDINATION ...........................................................82
38. LANDLORD'S FAILURE TO PAY TAXES .........................................83
39. LANDLORD'S FAILURE TO PAY COSTS OF BASE BUILDING UPGRADE WORK OR FIT-OUT
WORK ..................................................................84
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EXHIBITS
Exhibit A The Land
Exhibit B Initial Tax Payments
Exhibit C Permitted Encumbrances
Exhibit D Non-Disturbance Agreement
Exhibit E Major Building Equipment
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Index of Definitions
--------------------
Defined Term Section Where Defined
------------ ---------------------
50% Untenantability .............................................15.4
Accountant .......................................................6.7
Additional Bidders ...............................................6.4
Alterations ......................................................6.1
Appropriate Engineer .............................................6.7
Appropriate Engineer .............................................6.7
Article 38 Advance ................................................38
Article 38 Demand Amount ..........................................38
Article 38 Demand Notice ..........................................38
Article 38 Dispute Notice .........................................38
Article 39 Advance ................................................39
Article 39 Demand Amount ..........................................39
Article 39 Demand Notice ..........................................39
Article 39 Dispute Notice .........................................39
Associated Reimbursables .........................................6.4
balance to be apportioned .......................................16.4
Base Amount ......................................................6.2
Base Building Savings Constant Payment ...........................1.6
Base Building Savings Credit .....................................2.1
Base Building Savings ............................................1.6
Base Rate ........................................................1.6
Base Tax Amount .................................................11.1
Basic Rent .......................................................2.1
Benchmark Amount .................................................6.4
Business Day ......................................................31
Cancellation Payment Payment Date ................................1.4
Cancellation Payment .............................................1.4
Comparable Treasury Rate .........................................1.6
Completed Percentage .............................................6.4
Condemnation Proceeds ...........................................16.4
ConEd ..............................................................8
Contractors ......................................................6.4
Cost Division Date ...............................................6.2
Cost Participation Limitation Notice .............................6.4
Costs .............................................................31
Credit Amount .....................................................35
Damage Cancellation Payment .....................................15.4
Damage Date .....................................................15.4
Damage Payment ..................................................15.4
Damage Termination Notice .......................................15.4
Deductible Amount .................................................31
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Depositary ......................................................15.3
Deposited Sums ....................................................17
Determinated Amount ..............................................6.2
Determination Date ................................................19
Different Scope of Work Statement ................................6.4
Dispute Notice ...................................................6.4
Disputed Article 38 Amount ........................................38
Disputed Article 39 Amount ........................................39
Election Period .................................................15.4
Emergency Reimbursement Amount ...................................6.4
Engineer Designation Notice ......................................6.7
Engineer .........................................................6.7
Estimated Cost ...................................................6.4
Estimated Substantial Completion Date ............................6.4
Expedited Arbitration .............................................36
Expiration Date ..................................................1.2
Extended Completion Notice .......................................6.4
Extended Tax Payment ............................................11.4
Fair Market Rent .................................................2.2
Financing Closing Date ...........................................1.5
Financing Termination Notice .....................................1.5
First Rent Period ................................................2.1
First-Class Standard .............................................6.1
Fit-Out Work Constant Payment ....................................1.6
Fit-Out Work Interest Rate .......................................1.6
Fit-Out Work Investment ..........................................1.6
Fourth Rent Period ...............................................2.1
full placement cost .............................................14.1
Full Proceeds Amount ............................................15.4
GAAP..............................................................6.2
Gross Amount .....................................................6.4
Ground Lease ....................................................12.1
GS ................................................................30
Hazardous Substances ..............................................31
ICIP ............................................................11.6
Improvements .....................................................1.1
Index .............................................................31
Initial Improvements Agreement ...................................1.1
Initial Tax Payment .............................................11.3
Insurance Requirements ............................................31
Interest Rate ......................................................3
Land .............................................................1.1
Landlord ..........................................................31
Landlord ................................................Introduction
Landlord's Alternate Bidders .....................................6.4
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Landlord's Preferred Bidder ......................................6.4
Landlord's Revised Plans .........................................6.4
Lease Termination Notice ..........................................22
Leased Premises ..................................................1.1
Legal Requirement Alteration .....................................6.2
Legal Requirements ................................................31
Liability Insurance ..............................................1.3
Limited Reimbursement Amount .....................................6.4
LMEP ...............................................................8
Main Interest Rate ...............................................1.6
Major Building Equipment .........................................6.2
Measuring Fraction ...............................................6.2
net annual rental .................................................31
Next Available Termination Date .................................16.5
Non-Disturbance Agreement .........................................37
Notice ............................................................33
Notional Expiration Date ........................................25.1
Notional Fit-Out Work Loan Amount ................................1.6
Notional Main Loan Debt Service ..................................1.6
Notional Main Loan Original Balance ..............................1.6
Notional Main Loan Outstanding Balance ...........................1.6
Notional Make-Whole Amount .......................................1.6
Notional Termination Date ........................................6.4
Officer's Certificate .............................................31
OLS .............................................................11.6
Original Bidders .................................................6.4
Overrun Notice ...................................................6.4
Overrun ..........................................................6.4
Partial Taking ..................................................16.2
Permitted Encumbrances ...........................................1.1
Permitted Investment ..............................................31
Permitted Investments .............................................31
Plan Submission Date .............................................6.4
Plans and Specifications Notice ..................................6.3
Plans and Specifications ..........................................31
Plans Submission Notice ..........................................6.3
Post-Termination Insurance ......................................15.4
Pre-Existing Mortgages ..........................................12.1
Prime Rate ........................................................31
Project ..........................................................1.1
Property Insurance ..............................................14.1
Qualified Alteration .............................................6.2
Qualified Hazardous Substance .....................................31
Qualified Overrun ................................................6.4
Qualified Prefinancing Costs .....................................1.5
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Qualified Restoration Costs .....................................15.4
Reduced Proceeds Amount .........................................15.4
Reimbursable Alterations .........................................6.2
Reimbursable Legal Requirement Alteration ........................6.2
Reimbursable Removal of Hazardous Substances .....................6.2
Reimbursable Replacement .........................................6.2
Reimbursable Structural Work .....................................6.2
Reimbursement Advances ...........................................6.4
Reimbursement Amount .............................................6.4
removal ............................................................7
remove .............................................................7
Rent Based Cancellation Payment ..................................1.4
Rent Commencement Date ...........................................2.1
Required Replacements ............................................6.1
Restoration Advances ..............................................17
Retained Bidder ..................................................6.4
Rules ............................................................2.2
Second Rent Period ...............................................2.1
Significant Proceeds Amount .......................................31
Specified Damage Termination Date ...............................15.4
Stephaneze Possession Date .......................................1.3
Stephaneze Premises ..............................................1.3
Stephaneze Restriction Date ......................................1.3
Stephaneze .......................................................1.3
Structural Work ..................................................6.2
Successor Landlord ................................................37
successor-assignee ................................................30
Superior Mortgage .................................................37
Superior Mortgagee ................................................37
Supplemental Rent ................................................2.3
Taking Fraction .................................................16.2
Taking ............................................................31
Tax Payments ....................................................11.4
Tax Year ........................................................11.1
Taxes ...........................................................11.1
Tenant Impositions ..............................................11.5
Tenant ............................................................31
Tenant ..................................................Introduction
Tenant's Counsel ...................................................9
Tenant's Designation Notice ......................................2.2
Tenant's Selected Bidder .........................................6.4
Tenant's Total Taking Amount ....................................16.4
Term .............................................................1.2
Termination Date .................................................1.4
Termination Notice ...............................................1.4
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Termination Option ...............................................1.4
Third Rent Period ................................................2.1
Total Taking ....................................................16.2
Unamortized Fit-Out Work Investment ..............................1.6
Voluntary Alterations ............................................6.1
Witkoff Management Agreement ......................................31
work ..............................................................31
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LEASE, dated as of August 22, 1997, between TEN HANOVER LLC ("Landlord"),
a New York limited liability company having its principal office c/o The Witkoff
Group LLC, 156 William Street, New York, New York 10038, and THE GOLDMAN SACHS
GROUP, L.P. ("Tenant"), a Delaware limited partnership having its principal
office at 85 Broad Street, New York, New York 10004, Attention: General Services
Department.
WITNESSETH:
That in consideration of the mutual agreements herein contained, Landlord
and Tenant hereby agree and covenant to and with each other as follows:
1. Leased Premises; Term of Lease
1.1 Leased Premises
Landlord leases to Tenant, and Tenant rents from Landlord, subject
to the Permitted Encumbrances, the land located in the City, County and State of
New York more particularly described on Exhibit A hereto (the "Land"),
TOGETHER WITH (i) all Improvements (excluding any thereof which
pursuant to the final paragraph of this Section 1.1 are not Landlord's
property), and (ii) all personal property owned by Landlord now or
hereafter attached to or used in connection with the Improvements,
TOGETHER WITH all right, title and interest, if any, of Landlord in
and to:
(a) any strips and gores of land adjoining the Land on
any side thereof;
(b) any land lying in the bed of any street or avenue
abutting the Land, to the center line thereof; and
(c) any easements or other rights in adjoining property
enuring to Landlord by reason of ownership of the Land;
all of the foregoing (together with any Improvements excluded from clause (i)
above) are collectively called the "Leased Premises".
The Land and the Improvements are collectively called the "Project".
The term "Permitted Encumbrances" shall refer to the matters listed on Exhibit C
hereto. Simultaneously with the execution of this Lease, Landlord and Tenant are
executing an Initial Improvements Agreement of even date herewith (the "Initial
Improvements Agreement") relating to certain work to be done to prepare the
Leased Premises for occupancy by Tenant.
The term "Improvements" shall mean all buildings, structures,
fixtures, equipment and improvements now or hereafter located on, or attached to
or appurtenant to, the Land or to other Improvements, including any thereof
installed (i) as Base Building Upgrade Work (as such
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term is defined in the Initial Improvements Agreement) or Fit-Out Work (as such
term is defined in the Initial Improvements Agreement) pursuant to the Initial
Improvements Agreement, or (ii) by Tenant pursuant to Article 6; provided, that
the term "Improvements" shall not include any furniture, furnishings, trade
fixtures or business equipment furnished, installed or placed in the
Improvements by Tenant at Tenant's sole cost and expense.
Except as otherwise provided in the next paragraph, all Improvements
shall be (or if hereafter installed shall upon installation become) the property
of Landlord, a part of the Leased Premises and subject to this Lease.
Notwithstanding the provisions of Article 6, Tenant shall not remove from the
Leased Premises
(i) any Improvements constituting Base Building Upgrade Work, or
(ii) any Improvements constituting Fit-Out Work paid for by Landlord
unless (x) such removal is required by Legal Requirements, or (y) Tenant
replaces the Improvements so removed with other Improvements of substantially
equal value.
All Improvements constituting Fit-Out Work paid for by Tenant shall
remain the property of Tenant, subject to removal by Tenant subject to the
provisions of Article 6; provided, that unless and until so removed, the same
shall nonetheless constitute Improvements for all purposes under this Lease. Any
such Improvements that shall not have been so removed shall, upon the expiration
or sooner termination of this Lease, become the property of Landlord.
1.2 Term.
Except as otherwise provided in Section 1.3, the term of this Lease
shall commence on the Possession Date (as such term is defined in the Initial
Improvements Agreement) and, unless sooner terminated pursuant to law or
pursuant to any of the terms of this Lease, shall expire at 11:59 p.m. on June
30, 2018 (the "Expiration Date"). The term of this Lease is referred to herein
as the "Term".
1.3 Stephaneze Premises.
(a) Landlord represents and warrants to Tenant that, as of the date
of this Lease, the Leased Premises are vacant and free of any occupancy or
tenancy or right thereto, other than the occupancy or tenancy by Stephaneze
("Stephaneze") of a portion of the Leased Premises (the "Stephaneze Premises"),
and that Landlord has commenced a summary proceeding against Stephaneze seeking
to recover possession of the Stephaneze Premises, and has furnished Tenant with
copies of all material pleading and material motion papers filed or served by
any party thereto. Landlord shall diligently prosecute such summary proceeding
and if such summary proceeding is dismissed or terminated without Landlord
having recovered possession of the Stephaneze Premises, then Landlord shall take
such further action as may be available to Landlord to recover possession of the
Stephaneze Premises.
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Promptly after recovering possession of the Stephaneze Premises,
Owner shall (i) perform and complete any Asbestos Removal Work, Refireproofing
Work, and/or Demolition Work (as such terms are defined in the Initial
Improvement Agreement), that may be required under the provisions of the Initial
Improvement Agreement with respect to the Stephaneze Premises, and (ii) notify
Tenant that the foregoing has been performed and completed and, prior to or
together with such notice, furnish Tenant with one or more Forms ACP-5
evidencing the removal from the Stephaneze Premises of all asbestos and
asbestos-containing material.
The term of the Lease with respect to the Stephaneze Premises shall
commence on (and the term "Leased Premises" shall not include the Stephaneze
Premises until) the Stephaneze Possession Date. The term "Stephaneze Possession
Date" shall mean the last of
(x) the Possession Date,
(y) the date on which Landlord recovers possession
of the Stephaneze Premises,
(z) the date on which (i) all Asbestos Removal
Work, Refireproofing Work and Demolition Work throughout the
Stephaneze Premises shall have been completed, (ii) Tenant
shall have been furnished with or obtained one or more Forms
ACP-5 evidencing the removal from the Stephaneze Premises of
all asbestos and asbestos-containing material, and (iii)
Tenant shall have received the Stephaneze Completion Notice,
or, if Tenant shall so elect, such earlier date (not earlier than the later of
the Possession Date or the date 30 days after the date on which Landlord
recovers possession of the Stephaneze Premises) as Tenant shall elect by notice
to Landlord.
If the Stephaneze Possession Date does not occur by the later of the
Possession Date or October 15, 1997, then Tenant shall be entitled to a credit
against the Basic Rent during the 12 month period beginning on the Rent
Commencement Date equal to $347,000; one-twelfth of such credit shall be applied
against each of the 12 monthly installments of Basic Rent during such 12 month
period. If the Stephaneze Possession Date does not occur by the first or any
later anniversary of October 15, 1997, then Tenant shall be entitled to a credit
against the Basic Rent during the 12 month period beginning with the first or
such later anniversary of the Rent Commencement Date equal to $347,000; one
twelfth of such credit shall be applied against each of the 12 monthly
installments of Basic Rent during such 12 month period. The preceding sentence
may be applied repeatedly, so long as Landlord's inability to deliver vacant
possession of the Stephaneze Premises by an anniversary of October 15, 1997
continues.
This Section 1.3(a) shall be an express provision to the contrary
for purposes of Section 223-a of the New York Real Property Law and any other
law of like import now or hereafter in effect.
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(b) The following provisions of this Section 1.3(b) shall be
applicable until the Stephaneze Possession Date:
(i) There shall be no direct access between the Stephaneze
Premises and the Building (i.e., all access to or from the
Stephaneze Premises shall be from the street only).
(ii) Tenant shall not be required to furnish any services or
utilities to the Stephaneze Premises. If and to the extent
that the electricity, water, sewer, gas and telephone lines
currently serving the Stephaneze Premises run through the
Leased Premises, Tenant shall permit the same to remain;
provided, that Tenant shall have the right
(A) to relocate such lines at Tenant's expense;
provided, that (i) any such relocation shall be
performed only at times other than during the
regular business hours of Stephaneze, and (ii) no
such relocation shall be performed prior to the
earlier of (1) October 15, 1997, or (2) the date
on which Landlord recovers possession of the
Stephaneze Premises (such earlier date being
herein called the "Stephaneze Restriction Date"),
and
(B) to shut down such lines or otherwise to interrupt,
stop, suspend or curtail the delivery of services
through such lines whenever and for so long as may
be reasonably necessary by reason of damage to
such lines, accidents, or any testing,
maintenance, repairs, replacements, alterations,
additions or other work being undertaken by
Tenant, or by reason of any other cause beyond
Tenant's reasonable control; provided, that,
except in case of emergency, or reasonably
foreseeable or actual criminal liability of
Tenant, damage to such lines, accident or any
other cause beyond Tenant's reasonable control,
Tenant (i) shall not shut down such lines or
otherwise interrupt stop, suspend or curtail the
delivery of services through such lines prior to
the Stephaneze Restriction Date, and (ii) shall
use reasonable efforts to minimize interference
with the ordinary conduct of the business of
Stephaneze.
Provided that Tenant complies with the provisions of this
Section 1.3(b), Tenant shall have no liability to Landlord or
any Occupant of the Stephaneze Premises for or on account of
any shutdown of such lines or any interruption, stoppage,
suspension or curtailment of service through such lines for
any reason. In case of any damage to such lines, Tenant shall,
with reasonable promptness and diligence, immediately after
Tenant becomes aware of such damage, repair such damage (at
Landlord's
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expense, unless such damage shall have arisen from any act,
omission, negligence or intentional misconduct of Tenant). All
electricity, gas and water and sewer service to the Stephaneze
Premises shall be separately metered, and the charges therefor
shall be paid by Landlord directly to the public or municipal
utility supplier.
(iii) If the term of this Lease shall not have commenced with
respect to the Stephaneze Premises on or before March 1, 1998
then thereafter until the Stephaneze Possession Date: (A)
Landlord shall keep (or cause to be kept) all portions of the
Stephaneze Premises visible from without the Stephaneze
Premises in a well-maintained, clean and attractive condition;
(B) Landlord shall exterminate (or cause to be exterminated)
the Stephaneze Premises as necessary to keep the Stephaneze
Premises free of vermin; and (C) Landlord shall clean and
maintain (or cause to be cleaned and maintained) the exterior
surface of the exterior walls of the Stephaneze Premises,
including any and all glass located thereon.
(iv) Landlord shall make (or cause to be made) all repairs and
replacements in and to the Stephaneze Premises if the failure
to make such repair or replacement would result in an adverse
effect on the use, occupancy or appearance of the Leased
Premises and the need for such repair or replacement is not
the result of any act, omission, negligence or intentional
misconduct of Tenant (in which latter event such repair or
replacement shall be performed by Tenant). Landlord, at
Landlord's expense (unless the need for such compliance arises
out of any act, omission, negligence or intentional misconduct
of Tenant, in which event Tenant shall reimburse Landlord for
the cost of such compliance within 30 days after submission by
Landlord to Tenant of invoices evidencing the cost of such
compliance), shall promptly comply with all Legal
Requirements, Insurance Requirements and Permitted
Encumbrances relative to the Stephaneze Premises, whether or
not compliance therewith shall require Alterations or
interfere with the use or enjoyment of the Stephaneze
Premises. Landlord may contest any such Legal Requirement,
Insurance Requirement or Permitted Encumbrance (and not comply
therewith pending the resolution of such contest); provided,
that such contest has no adverse affect on Tenant's use or
occupancy of the Leased Premises. Tenant shall not at any time
use or occupy the Stephaneze Premises, or suffer or permit
anyone to use or occupy the Stephaneze Premises, in any
manner, or do anything in the Stephaneze Premises, or suffer
or permit anything to be done, brought into or kept on the
Stephaneze Premises which (A) constitutes a nuisance, public
or private, (B) makes unobtainable from reputable insurance
companies authorized to do business in New York State all risk
property insurance, or liability, elevator, boiler or other
insurance at standard rates, or (C) discharges objectionable
fumes, vapors or odors.
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(v) Landlord shall keep in effect commercial general liability
insurance, including broad form bodily injury, personal
injury, property damage and blanket contractual insurance,
against claims arising out of or connected with the
possession, use, operation or condition of the Stephaneze
Premises ("Liability Insurance") with a combined single limit
of not less than $10,000,000 for all claims with respect to
bodily injury, property damage and personal injury with
respect to any one occurrence. All such Liability Insurance
shall name Tenant as an additional insured and provide that no
cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least 30 days
after receipt by Tenant of written notice thereof. Landlord
may obtain the aforesaid insurance under blanket or umbrella
policies. On the date hereof (with respect to Liability
Insurance required to be carried by Landlord), and at least 7
days prior to each policy expiration, Landlord shall deliver
(or cause to be delivered) to Tenant certificates of all such
Liability Insurance.
(vi) Subject to the next sentence, Tenant shall have (A) the
exclusive right to use, disconnect or close (x) any pipe,
duct, conduit, utility line or similar installation running in
or through but not serving the Stephaneze Premises, or (y) any
exhaust duct running in or through or serving the Stephaneze
Premises, (B) the right to install in and through the
Stephaneze Premises new or additional pipes, ducts, conduits,
utility lines or similar installations, in locations adjacent
to ceiling slabs, demising walls or structural columns, in
each case in a manner so as not to unreasonably interfere with
the use or occupancy of the Stephaneze Premises as retail
space, (C) the right to maintain, repair and replace any of
the foregoing and (D) the right to enter the Stephaneze
Premises for (1) all or any of the foregoing purposes, (2) to
inspect the Stephaneze Premises or (3) to maintain or make
repairs, replacements, alterations, additions or improvements
in or to the Leased Premises; provided, that, except in case
of emergency or reasonably foreseeable or actual criminal
liability of Tenant, Tenant shall give Landlord reasonable
prior notice of any such entry and shall use reasonable
efforts to minimize interference with the use and occupancy of
the Stephaneze Premises arising by reason of such entry.
Notwithstanding the foregoing, except in case of emergency or
reasonably foreseeable or actual criminal liability of Tenant,
Tenant shall take no action pursuant to this Section
1.3(b)(vi) prior to the Stephaneze Restriction Date. The
Stephaneze Premises shall consist only of the space within the
inside surface of the structural (or centerline of any
non-structural) walls, windows, doors, columns, and floor
slabs bounding the Stephaneze Premises (exclusive of any such
space used for pipes, ducts, conduits, utility lines or
similar installations). If at any time any windows of the
Stephaneze Premises are either temporarily darkened or
obstructed by reason of maintenance, cleaning, repairs,
replacements, alterations, additions or improvements in or
about the Leased Premises or the
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Stephaneze Premises, including by way of a sidewalk bridge (or
permanently darkened or obstructed if required by law), Tenant
shall have no liability to Landlord or any Occupant of the
Stephaneze Premises on account thereof; provided, that Tenant
shall use reasonable efforts not to darken or obstruct any
windows of the Stephaneze Premises and to minimize any such
darkening or obstruction when the same cannot reasonably be
avoided.
(c) Subject to the last sentence of this Section 1.3(c), if
Landlord shall fail to make any payment or perform any act required to be made
or performed by Landlord hereunder with respect or relating to the Stephaneze
Premises Tenant may (but shall be under no obligation to) without waiving or
releasing any obligation or default:
(i) in case of emergency, or reasonably foreseeable or actual
criminal liability of Tenant or interference with the use or
occupancy of, or the performance of the Base Building Upgrade
Work or the Fit-Out Work in, the Leased Premises, or
(ii) if Tenant shall give notice to Landlord referring to Tenant's
intent to exercise its self-help right under this Section
1.3(c), which notice shall specify Landlord's failure with
respect to the Stephaneze Premises and require such failure to
be remedied, and Landlord shall not remedy such failure within
30 days after the giving of such notice; provided, that in
case such failure cannot with due diligence be remedied by
Landlord within a period of 30 days, if Landlord proceeds as
promptly as may be reasonably possible after the giving of
such notice and with all due diligence to remedy such failure
and thereafter to prosecute the remedying of such failure with
all due diligence, the period of time after the receipt of
such notice by Landlord within which to remedy such failure
shall be extended for such period as may be necessary to
remedy the same with all due diligence,
make such payment or perform such act for the account and at the expense of
Landlord, and may enter upon the Stephaneze Premises or any part thereof for
such purpose and take all such action therein as, in the opinion of Tenant, may
be necessary or appropriate therefor. All payments so made by Tenant and all
costs and expenses (including without limitation attorneys fees and expenses)
incurred in connection with Tenant's exercise of its self-help right under this
Section 1.3(c), together with interest thereon at the Interest Rate, shall be
paid by Landlord to Tenant within 30 days after Landlord's receipt of Tenant's
demand therefor, accompanied by invoices evidencing the costs incurred by
Tenant. If Landlord objects to Tenant's exercise of its right of self-help under
this Section 1.3(c), then Tenant shall not be entitled to any reimbursement
under this Section 1.3(c) unless and until the matter is resolved in favor of
Tenant by Expedited Arbitration. Except in case of emergency or reasonably
foreseeable or actual criminal liability of Tenant, Tenant shall take no action
under this Section 1.3(c) prior to the Stephaneze Restriction Date.
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(d) Landlord shall protect, indemnify and save harmless Tenant
from and against all liabilities, obligations, claims, damages, penalties,
causes of actions, costs and expenses (including, without limitation, attorneys'
fees and expenses) imposed upon or incurred by or asserted against Tenant by
reason of any action by Landlord to recover possession of the Stephaneze
Premises.
(e) Landlord shall reimburse Tenant for all incremental
out-of-pocket costs incurred by Tenant prior to the commencement of the Term
with respect to the Stephaneze Premises on account of the Stephaneze Premises,
or the use or occupancy thereof, including any such costs arising out of any
maintenance, repair or replacement of any utility lines serving the Stephaneze
Premises (unless the need therefor arises out of any act, omission, negligence
or intentional misconduct of Tenant). Such reimbursement shall be due from time
to time within 30 days after Tenant's presentation of an invoice detailing such
incremental out-of-pocket costs.
1.4 Tenant's Termination Options
(a) Subject to the further provisions of this Section 1.4,
Tenant shall have the option (each, a "Termination Option") to terminate this
Lease effective as of (i) September 30, 2004, (ii) September 30, 2006, (iii)
June 30, 2008 or (iv) June 30, 2013 (each of the dates set forth in the
preceding clauses (i) - (iv) is called a "Termination Date"), by giving an
exercise notice (the "Termination Notice") to Landlord on or before the date
that is (A) one year prior to the applicable Termination Date in the case of a
termination as of September 30, 2004 or September 30, 2006 or (B) 18 months
prior to the applicable Termination Date in the case of a termination as of June
30, 2008 or June 30, 2013. Time is of the essence with respect to the giving of
any Termination Notice. Tenant may, by notice to Landlord at any time, waive any
one or more of its Termination Options.
(b) If Tenant timely exercises a Termination Option providing
for the termination of this Lease as of September 30, 2004, September 30, 2006
or June 30, 2008, then Tenant shall pay to Landlord, on or before September 1,
2004, September 1, 2006 or June 1, 2008, as the case may be (the "Cancellation
Payment Payment Date"), in addition to the Basic Rent, Supplemental Rent and Tax
Payment due on the Cancellation Payment Payment Date, the applicable
Cancellation Payment. "Cancellation Payment" means
(i) the amount of the Unamortized Fit-Out Work Investment as
of the applicable Cancellation Payment Payment Date,
plus
(ii) in the case of a Termination Option providing for the
termination of this Lease as of September 30, 2004 or
September 30, 2006, the Basic Rent and the Tax Payments
that would be payable for the six month period
immediately following the applicable Termination Date if
Tenant had not exercised the Termination Option (the
portion of the Cancellation Payment referred to in this
clause (iii) is called the "Rent Based Cancellation
Payment").
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(c) If Tenant timely exercises any Termination Option, then on
the applicable Termination Date (i) this Lease shall terminate, (ii) Tenant
shall deliver to Landlord vacant possession of the Leased Premises subject to
and in accordance with all applicable provisions of this Lease as if the
Termination Date were the Expiration Date, and (iii) Basic Rent, Supplemental
Rent and Tax Payments due hereunder shall be payable through and apportioned as
of the Termination Date, and (except as provided in Section 32(b) with respect
to any holdover) Tenant shall have no liability for Basic Rent, Supplemental
Rent or Tax Payments which would otherwise have been payable after the
Termination Date.
(d) If (i) Tenant timely exercises a Termination Option as of
September 30, 2004 or September 30, 2006 and (ii) any Reimbursable Alteration
(other than Reimbursable Removal of Hazardous Substances) was performed prior to
the applicable Termination Date, then on or before the applicable Termination
Date, Landlord shall pay to Tenant, in respect of each such Reimbursable
Alteration, an amount equal to the excess of (A) the Reimbursement Amount which
would have been payable by Landlord with respect thereto if the Cost Division
Date with respect to such Reimbursable Alterations had been the applicable
Termination Date rather than the last day of the Second Rent Period, over (B)
the Reimbursement Amount paid by Landlord with respect thereto; provided, that
if with respect to any such Reimbursable Alteration Landlord shall have been
required to pay the Limited Reimbursement Amount rather than the Reimbursement
Amount and shall not have subsequently been required to make the payment
described in Section 6.4(g)(vi), then rather than the excess of the amount
described in clause (A) above over the amount described in clause (B) above
Landlord shall pay to Tenant, in respect of such Reimbursable Alteration, an
amount equal to the excess of (C) the Limited Reimbursement Amount which would
have been payable by Landlord with respect thereto if the Cost Division Date
with respect to such Reimbursable Alteration had been the applicable Termination
Date rather than the last day of the Second Rent Period, over (D) the Limited
Reimbursement Amount paid by Landlord with respect thereto.
1.5 Landlord's Financing.
(a) Landlord shall make reasonable efforts, as promptly as
reasonably possible, to cause the Financing Closing Date to occur. The term
"Financing Closing Date" shall refer to the date on which
(i) Landlord has received full disbursement of one or more
new loans sufficient in amount to permit Landlord to
deposit, and Landlord has deposited (a) $17,350,000 into
the account described in Section 6 of the Initial
Improvements Agreement, and (b) $50,000,000 into the
account described in Section 7 of the Initial
Improvements Agreement,
(ii) Landlord has caused the holders of all mortgages or
other liens on the Project (including but not limited to
the lender or lenders who shall have disbursed the new
loan or
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loans referred to above) to execute and deliver to
Tenant a Non-Disturbance Agreement, and
(iii) Tenant shall have received the certificate called for by
the last paragraph of Section 5 of the Option Agreement
of even date among Landlord, Tenant and certain others.
Landlord represents that it has furnished to Tenant a true and complete copy of
a commitment letter dated______ from Credit Suisse First Boston Mortgage
Capital. On the Financing Closing Date, Landlord shall furnish Tenant with
evidence that the deposits referred to in clause (i) above have been made.
(b) If the Financing Closing Date does not occur on or before
September 30, 1997, then either Landlord or Tenant may terminate this Lease by
notice (the "Financing Termination Notice") to the other given at any time prior
to the Financing Closing Date, in which event this Lease shall terminate as of
the date of the receipt of such Financing Termination Notice and neither party
shall have any further obligations or liabilities to the other, except that
Landlord shall reimburse Tenant in an amount not to exceed $6,700,000 for any
Qualified Prefinancing Costs incurred by Tenant. Tenant may make one or more
demands for reimbursement under this Section 1.5(b), each to be accompanied by
invoices paid or payable by Tenant, and each amount payable under this Section
1.5(b) shall be due within 30 days of such demand therefor. If any payment
required to be made pursuant to this Section 1.5(b) is not made when due, the
same shall bear interest in accordance with Section 3(c). Upon payment of any
amount pursuant to this Section 1.5(b), Tenant shall assign to Landlord all of
Tenant's right, title and interest in and to the plans and specifications, work,
equipment or other property to which such payment related (including the benefit
of any deposits or other payments made by Tenant and reimbursed by Landlord),
without recourse or representation.
"Qualified Prefinancing Costs" means any and all Costs paid or
incurred by Tenant for or in connection with the Base Building Work and/or the
Fit-Out Work on or prior to the date of termination of this Lease under this
Section 1.5(b), including any partial payments (e.g. deposits) with respect to
any systems or equipment to be installed as a part of the Base Building Work
and/or the Fit Out Work which were made by Tenant prior to the termination of
this Lease pursuant to this Section 1.5(b) or for which under commitments made
prior to the termination of this Lease pursuant to this Section 1.5(b) Tenant is
obligated, excluding in all cases any sums of which Tenant would be entitled to
a refund or which Tenant would be excused from paying if, promptly after
receiving notice of termination of this Lease under Section 1.5(b), Tenant gave
prompt notice of termination to Tenant's contractors, subcontractors or other
suppliers.
(c) If the Financing Closing Date shall not occur by September
30, 1997 Tenant shall have the right to arrange or provide on commercially
reasonable terms financing in the amount required
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(i) to make the deposits referred to in Section 1.5(a)
above,
(ii) to refinance the existing debt on the Property,
(iii) to pay all points, fees and other expenses, including,
without limitation, legal fees, title insurance premiums
and charges and mortgage recording taxes incurred by
Landlord in connection with all such financing being
provided under this Section 1(c),
(iv) to make all scheduled payments of principal and interest
through August 1, 1998 on the portion of the financing
being provided under this Section 1(c) applicable to the
deposits referred to in clause (i) above and to a
pro-rata share of the points, fees and other expenses
referred to in clause (iii) above, and
(v) to make all scheduled payments of principal and interest
through May 1, 1998 on the balance of the financing
being provided under this Section 1(c).
Notwithstanding the provisions of Section 1.5(b) above, Landlord shall not have
the right to terminate this Lease prior to October 15, 1997 and if prior to that
date Tenant shall arrange or provide a commercially reasonable commitment for
such financing, Landlord shall accept the same and close the financing to be
provided thereunder and shall not have the right to terminate this Lease
pursuant to Section 1.5(b).
1.6 Certain Definitions
The term "Notional Fit-Out Work Loan Amount" shall refer to the sum
of
(i) $50,000,000, plus
(ii) a pro rata portion of all points, fees and other
expenses, including, without limitation, legal
fees, title insurance premiums and charges and
mortgage recording taxes incurred by Landlord for
or in connection with the new loan or loans
referred to in clause (i) of Section 1.5(a), such
proration to be made according to the ratio which
the Notional Fit-Out Work Loan Amount bears to the
total amount of such new loan or loans, plus
(iii) the amount of all scheduled payments (including
principal and interest) which
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would be required to be paid on or before August
1, 1998 on a loan in the principal amount of the
Notional Fit-Out Work Loan Amount bearing
interest at the Fit-Out Work Interest Rate and
disbursed on the Financing Closing Date if such
loan had provided for constant monthly payments
on the first day of each month equal to the
constant monthly payment which would be required
to fully amortize such principal amount over such
constant monthly payments beginning on the first
day of the month after the month in which such
disbursement is made and ending December 1, 2009,
with each such payment being applied first to
accrued interest and then to a reduction in
principal (except that if the Financing Closing
Date is other than the first day of a month (x)
the first payment shall be deemed to consist of
interest only from the date of such disbursement
to the first day of the month after the month in
which such disbursement is made and to be due on
such first day of such month and (y) the
aforesaid constant monthly payments shall be
deemed to begin on the first day of the next
month).
The term "Fit-Out Work Investment" shall mean the Notional Fit-Out
Work Loan Amount minus all amounts included therein in respect of principal
under clause (iii) of the definition thereof (it being understood that in
computing the Fit-Out Work Investment the amount of the interest under said
clause (iii) shall not be deducted).
The term "Base Building Savings" shall mean the excess, if any, on
the Base Building Savings Commencement Date of (i) $17,350,000 over (ii) all
amounts disbursed by Landlord pursuant to Section 6 of the Initial Improvements
Agreement.
The term "Fit-Out Work Constant Payment" shall mean the constant
monthly payment which would be required to fully amortize, with interest at the
Fit-Out Work Interest Rate, the Fit-Out Work Investment over such constant
monthly payments on the first day of each month beginning September 1, 1998 and
ending on December 1, 2009 with each such payment being applied first to
interest accrued at the Fit-Out Work Interest Rate and then to amortization (and
with interest commencing to accrue on the Fit Out Work Investment as of August
1, 1998).
The term "Base Building Savings Constant Payment" shall mean the
constant monthly payment which would be required to fully amortize, with
interest at the Main Interest Rate, the Base Building Savings over such constant
monthly payments on the first day of each month beginning on the Base Building
Savings Commencement Date (as such term is defined in the Initial Improvements
Agreement) and ending June 1, 2008 with each such payment being applied first to
interest accrued at the Main Interest Rate and then to amortization (and with
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interest commencing to accrue on the Base Building Savings as of one month
before the Base Building Savings Commencement Date).
The term "Main Interest Rate" shall mean the sum of the Base Rate
plus 140 basis points per annum.
The term "Fit-Out Work Interest Rate" shall mean the sum of the Base
Rate plus 90 basis points per annum.
The term "Base Rate" shall mean the straight line interpolation to
seven years between (i) the interest rate on the on-the-run five year U.S.
Treasury securities quoted by Credit Suisse First Boston to Landlord and Tenant
at the time during the business day prior to the Financing Closing Date at which
the rate being paid by Landlord on the corresponding new loan referred to in
clause (i) of Section 1.5(a) is determined, and (ii) the interest rate on the
on-the-run ten year U.S. Treasury securities quoted by Credit Suisse First
Boston to Landlord and Tenant at such time.
The term "Unamortized Fit-Out Work Investment" shall mean, as of any
date, that amount which would be unamortized on such date if the Fit-Out Work
Investment were amortized with interest at the Fit-Out Work Interest Rate over
constant monthly payments on the first of each month equal to the Fit-Out Work
Constant Payment beginning on September 1, 1998 and ending on December 1, 2009,
with each such payment being applied first to interest accrued at the Fit-Out
Work Interest Rate and then to amortization (with interest commencing to accrue
on the Fit-Out Work Investment as of August 1, 1998). The Unamortized Fit-Out
Work Investment as of the first day of any month shall be computed as of after
the application of such constant monthly payment due on such first day of such
month.
The term "Notional Main Loan Original Balance" shall equal the
excess of (i) the principal amount of all mortgage debt of Landlord outstanding
(other than to affiliates) as of immediately after the Financing Closing Date
over (ii) the sum of (a) the Notional Fit-Out Work Loan Amount, plus (b) the
Base Building Savings.
The term "Notional Main Loan Outstanding Balance" shall mean, as of
any date, the principal amount which would be outstanding on a loan having an
original principal amount equal to the Notional Main Loan Original Balance,
disbursed on the Financing Closing Date, providing for 216 constant monthly
payments on the first day of each month, beginning on the lst day of the month
after the month in which such disbursement is made, equal to the constant
monthly payment which would be required to fully amortize the Notional Main Loan
Original Balance over such 216 constant monthly payments, with each such payment
being applied first to accrued interest and then to a reduction in principal
(except that if the Financing Closing Date is other than the first day of a
month (x) the first payment shall be deemed to consist of interest only from the
date of such disbursement to the first day of the month after the month in which
such disbursement is made and to be due on such first day of such month and (y)
the aforesaid 216 constant monthly payments shall be deemed to begin on the
first day of the next month).
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The term "Notional Main Loan Debt Service" shall mean the amount of
the constant monthly payment referred to in the definition of Notional Main Loan
Outstanding Balance.
The term "Notional Make-Whole Amount" shall mean, as of any date,
the excess, if any, of (i) the present value as of such date (determined by
using a discount rate equal to Comparable Treasury Rate) of all Supplemental
Rent scheduled to be paid by Tenant under Section 2.3 of this Lease after such
date over (ii) the Unamortized Fit-Out Work Investment as of such date. In the
making the determination under clause (i) above, it shall be assumed that Tenant
has not exercised any of its Termination Options and any Termination Options
actually exercised by Tenant shall be disregarded. As used above, the term
"Comparable Treasury Rate" shall, as of any date, mean the yield to maturity of
U.S. Treasury securities maturing on or about June 1, 2008 as published by The
Wall Street Journal for the third business day prior to such date.
Promptly after the requisite facts are known, Landlord and Tenant
shall join in one or more instruments confirming (a) the Base Rate, the Fit-Out
Work Interest Rate, the Fit-Out Work Notional Loan Amount, the Fit-Out Work
Investment, the Fit-Out Work Constant Payment, the Unamortized Fit-Out Work
Investment as of September 1, 2004, the Unamortized Fit-Out Work Investment as
of September 1, 2006, and the Unamortized Fit-Out Work Investment as of June 1,
2008, and (b) the Main Interest Rate, the Base Building Savings, the Base
Building Savings Constant Payment and the Notional Main Loan Debt Service. The
failure of either party to execute such instrument referred to above shall not
constitute a default hereunder or otherwise affect this Lease.
Any dispute as to the computations and determination to be made
pursuant to this Section 1.6 shall be determined by Expedited Arbitration.
2. Basic Rent, etc.
2.1 Basic Rent
(a) Tenant shall pay to Landlord, as fixed annual rent for the
Leased Premises, Basic Rent. Basic Rent shall be payable by Tenant to Landlord
in advance, in equal monthly installments, on the Rent Commencement Date and on
the first day of each and every month thereafter throughout the Term.
(b) As used herein:
(i) "Basic Rent" means (A) during the period commencing
on June 1, 1998 (the "Rent Commencement Date"), to and including May 31, 2003
(the "First Rent Period"), a per annum rate equal to $8,420,095.88, payable in
equal monthly installments of $701,674.66, (B) during the period commencing on
June 1, 2003 to and including June 30, 2008 (the "Second Rent Period"), a per
annum rate equal to $10,573,515.14, payable in equal monthly installments of
$881,126.26, (C) during the period commencing on July 1, 2008 to and including
June 30, 2013 (the "Third Rent Period"), a per annum rate equal to 95% of the
Fair Market Rent
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for such period and (D) during the period commencing on July 1, 2013 to and
including the Expiration Date (the "Fourth Rent Period") a per annum rate equal
to 95% of the Fair Market Rent for such period. Fair Market Rent shall be
determined in accordance with Section 2.2 below.
(ii) If (a) Tenant shall give a notice pursuant to
Section 6 of the Initial Improvements Agreement establishing the Base Building
Savings Commencement Date, and (b) there are any Base Building Savings, then
there shall be credited against the Basic Rent due for each of the months
beginning with the Base Building Savings Commencement Date and ending June 1,
2008, an amount equal to the Base Building Savings Constant Payment. The
aforesaid credit is herein called the "Base Building Savings Credit". In no
event shall Landlord ever be required to pay to Tenant any portion of the Base
Building Savings Credit.
2.2 Determination of Fair Market Rent
(a) Each determination of Fair Market Rent shall be made, to the
extent not inconsistent with this Section, in accordance with the rules from
time to time in effect of the American Arbitration Association or, if the
American Arbitration Association shall have ceased to function as an arbitration
association, of a successor or comparable organization (the "Rules"). There
shall be three arbitrators: one designated by Landlord; one designated by
Tenant; and one designated in the manner hereinafter described. Each arbitrator
shall, as of the date of his or her designation, be a real estate broker
licensed in the State of New York doing business in the Borough of Manhattan and
having at least 15 years experience in first-class Manhattan office building
leases. Not more than 30 months and not less than 24 months before the first day
of the Third Rent Period or the Fourth Rent Period, as applicable, Tenant shall
give to Landlord a notice designating the name and address of Tenant's
arbitrator ("Tenant's Designation Notice"). Landlord, by notice to Tenant given
not later than 20 days after the giving of Tenant's Designation Notice, shall
designate the name and address of Landlord's arbitrator.
If either party shall fail timely to designate its arbitrator, and such
failure shall continue for 10 days after receipt by the failing party of notice
of such failure, such other party may designate an arbitrator on behalf of the
failing party. Promptly after the designation of the second of the two
arbitrators to be designated, such two arbitrators shall meet and attempt to
mediate between Landlord and Tenant an agreement upon the Fair Market Rent in
question. If, within 15 days after the designation of the second of the two
arbitrators to be designated, Landlord and Tenant have not agreed upon the Fair
Market Rent in question, such two arbitrators shall jointly designate a third
arbitrator. If, within 30 days after the designation of the second of the two
arbitrators to be designated, no third arbitrator shall have been so jointly
designated, such third arbitrator shall be designated pursuant to the Rules. The
arbitrators shall render their decision within 60 days after the designation of
the third arbitrator to be designated. Landlord and Tenant shall each pay the
fees and disbursements of the arbitrator designated by or on behalf of it, and
Landlord and Tenant shall share equally the fees and disbursements of the third
arbitrator, if any.
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(b) "Fair Market Rent" means the fixed annual rent that
would be payable for the Leased Premises by a third-party tenant having the then
creditworthiness of Tenant under a five year lease commencing on the first day
of the Third Rent Period or the Fourth Rent Period (as the case may be) upon all
of the terms and conditions of this Lease to be applicable to the Third Rent
Period or Fourth Rent Period (as the case may be), including, without
limitation, the following:
(i) that such fixed annual rent is payable from and
after the first day of the Third Rent Period or
the Fourth Rent Period (as the case may be),
(ii) that the Initial Improvements Agreement is not
applicable to the Third Rent Period or the Fourth
Rent Period (as the case may be), and that Tenant
shall accept the Leased Premises in its "as-is"
condition at the commencement of the Third Rent
Period or the Fourth Rent Period (as the case may
be), and that in connection with the Third Rent
Period or the Fourth Rent Period (as the case may
be) Landlord shall not be required to perform any
work, pay any amount or render any services to
make the Leased Premises ready for Tenant's use
and occupancy or provide any abatement of Basic
Rent or other sums due hereunder,
(iii) that during the Third Rent Period or the Fourth
Rent Period (as the case may be), Tenant shall be
responsible for any increases in Taxes above the
Base Tax Amount, and
(iv) that the ground floor of the Improvements are
legally permitted to be used for retail purposes,
and taking into account all relevant factors.
(c) Each arbitrator shall render as his or her
determination of the Fair Market Rent a fixed dollar amount per annum (in the
aggregate, not per rentable square foot), and shall give a notice to the other
arbitrators and Landlord and Tenant thereof. All notices pursuant to the
preceding sentence shall be given simultaneously at a meeting (called by the
third arbitrator on at least five Business Days' notice to Landlord and Tenant
and the other arbitrators) at which all three arbitrators and Landlord and
Tenant are present. The arithmetic average, of the two determinations closest to
one another shall be and constitute the determination of the arbitration;
provided, that if in any case the highest and lowest determinations are
equidistant from the middle determination, then the middle determination shall
be and constitute the determination of the arbitration.
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2.3 Supplemental Rent
In addition to Basic Rent, Tenant shall pay to Landlord additional
rental (the "Supplemental Rent"), (a) in advance, on September 1, 1998 and on
the first day of each and every month through and including June 1, 2008, in an
amount equal to the Fit-Out Work Constant Payment and (b) on June 1, 2008 (in
addition to the amount required to be paid on such date under clause (a) of this
Section 2.3), an additional amount equal to the Unamortized Fit-Out Work
Investment as of June 1, 2008.
3. Manner of Payment
(a) Basic Rent, Supplemental Rent, Tax Payments and all other sums
payable by Tenant to Landlord hereunder, all of which shall constitute rent,
shall be payable in lawful money of the United States of America and shall be
paid to Landlord (i) in the case of Basic Rent, Supplemental Rent and Tax
Payments, by wire transfer of immediately available federal funds as directed by
Landlord, and (ii) in the case of all other sums, either by wire transfer as
aforesaid or by check (subject to collection) drawn on a New York Clearing House
Association member bank at Landlord's address set forth above or at such other
address of Landlord within the United States as Landlord from time to time may
designate or to such agent or person or persons resident or having an office at
such other address within the United States as Landlord from time to time may
designate.
(b) If Tenant fails timely to pay any Basic Rent, Supplemental Rent,
Tax Payment or other sum payable by Tenant to Landlord under this Lease, Tenant
shall pay interest thereon from the date when such amount became due to the date
of Landlord's receipt thereof at the lesser of (i) the greater of (A) 18% per
annum, or (B) the Prime Rate, and (ii) the maximum rate permitted by law (the
lesser of such rates is called the "Interest Rate"). Any sums payable by Tenant
for which no due date is specified in this Lease shall be due and payable on the
30th day after the giving of an invoice therefor.
(c) If Landlord fails timely to pay any sum payable by Landlord to
Tenant under this Lease other than (i) a payment which Landlord is required to
make under Section 11.2, which failure to make such payments is governed by
Article 38, or (ii) a payment which Landlord is required to make under Section 6
or Section 7 of the Initial Improvements Agreement, which failure to make such
payment is governed by Article 39, or (iii) a payment of net annual rental
payable under the Ground Lease which Landlord is required to make under Section
12.3, which failure to make such payment is governed by Article 38, Landlord
shall pay interest thereon from the date when such amount became due to the date
of Tenant's receipt thereof at the Interest Rate. Any sum payable by Landlord
for which no due date is specified in this Lease shall be due and payable on the
30th day after the giving of an invoice therefor.
(d) If Tenant shall fail timely to pay the Cancellation Payment or
the Supplemental Rent payable under clause (b) of Section 2.3 when due then, in
addition to such Cancellation Payment or Supplemental Rent, Tenant shall pay as
additional rental upon demand (x) an amount equal to interest at the Interest
Rate on such Cancellation Payment (excluding the Rent-Based Cancellation
Payment) or on such Supplemental Rent from the Cancellation
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Payment Payment Date or June 1, 2008 (as the case may be) until payment in full
by Tenant of the Cancellation Payment or such Supplemental Rent and all amounts
required by this sentence, and (y) in case of any failure timely to pay the
Cancellation Payment when due on September 1, 2004 or September 1, 2006,
interest at the Interest Rate on the Rent-Based Cancellation Payment from the
Cancellation Payment Payment Date until payment in full of the Cancellation
Payment and all other amounts required by this sentence. If Tenant shall fail
timely to pay the Cancellation Payment or the Supplemental Rent payable under
clause (b) of Section 2.3 when due then, in addition to the amounts which Tenant
is required to pay under the preceding sentence, Tenant shall indemnify Landlord
against all other losses, damages, costs and expenses arising out of such
failure.
4. Net Lease; No Abatement
Except as otherwise provided in the Initial Improvements Agreement,
Landlord shall not be required to provide any services or utilities to the
Leased Premises. Subject to the last sentence of this Article 4, this Lease is a
net lease of the Leased Premises, and Tenant shall pay all costs, charges,
taxes, assessments and other expenses of every character, foreseen or
unforeseen, ordinary or extraordinary, for the payment of which Landlord or
Tenant is or shall become liable by reason of its respective estate, right,
title or interest in the Leased Premises or any part thereof, or which are
connected with or arise out of the possession, use, occupancy, maintenance,
addition to, repair or rebuilding of the Leased Premises, including, without
limitation, those specifically referred to in this Lease. Except as provided in
Article 16, Section 20(a), Article 38 and Article 39, the Basic Rent and all
other sums payable by Tenant hereunder shall be paid without notice, demand,
counterclaim, setoff, deduction or defense and without abatement, suspension,
deferment, diminution or reduction. The foregoing provisions of this
Article 4(a) shall not relieve Landlord of, or require Tenant to bear or
reimburse Landlord for, the costs of performing (i) Landlord's obligations under
the Initial Improvements Agreement, (ii) Landlord's obligations to make certain
reimbursements pursuant to Article 6, or (iii) Landlord's obligations under
Articles 3, 7, 11, 12, 38 or 39 or any other provision of this Lease which by
its terms imposes any obligation on Landlord, and (b) shall not obligate Tenant
to pay or reimburse Landlord for (A) any taxes or assessments which Tenant is
not required by the provisions of Article 11 to pay or to reimburse to Landlord
or (B) any interest, principal, or other costs or expenses relative to any
indebtedness or other financing of Landlord; provided that the foregoing shall
not relieve Tenant of its obligation to pay Supplemental Rent.
5. Condition and Use of Leased Premises
LANDLORD DOES NOT MAKE, AND TENANT ACKNOWLEDGES THAT LANDLORD HAS NOT
MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THIS
LEASE, OR THE PRESENT OR FUTURE MERCHANTABILITY, HABITABILITY, CONDITION,
QUALITY, DURABILITY, FITNESS OR SUITABILITY OF THE LEASED PREMISES IN ANY
RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF TENANT, OR ANY
OTHER REPRESENTATION OR WARRANTY OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
WITH RESPECT THERETO, EXCEPT AS OTHERWISE
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PROVIDED IN THIS LEASE. Subject to the performance by Landlord of Landlord's
obligations under the Initial Improvements Agreement, Tenant accepts the Leased
Premises "as-is". Tenant may use the Leased Premises only as an office building
and, subject to applicable Legal Requirements, for purposes reasonably ancillary
thereto, including, without limitation, for one or more dining rooms,
cafeterias, restaurants, bars or other food service or preparation facilities
for use by Tenant's personnel and invitees and for one or more health or
exercise facilities for the use of Tenant's personnel. In addition, Tenant may
use any portion of the Improvements above the subcellar and below the 2nd floor
for retail uses so long as there remains throughout the Term a first-class
office building lobby on the ground floor of the Improvements. Tenant shall not
suffer or permit the Leased Premises or any part hereof, to be used by the
public in such a manner as would subject the Leased Premises or any part thereof
to a claim of adverse possession by the public.
6. Maintenance; Alterations; Certain Reimbursements; Etc.
6.1 Generally
(a) Subject to the provisions of this Lease, Tenant:
(i) shall, in accordance with first-class
office building maintenance and operating standards
generally applicable in 1998 (collectively, the
"First-Class Standard"), keep the Leased Premises in
overall first-class order, condition and repair;
(ii) shall promptly make all replacements in
and to the Leased Premises (whether interior or
exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen) which are
necessary or appropriate in a first-class office
building according to the standards thereof generally
applicable in 1998 (collectively, "Required
Replacements"); and
(iii) may make additions, alterations and
replacements (other than Required Replacements) in and
to and, subject to the provisions of Section 1.1,
removals from the Leased Premises (collectively,
"Voluntary Alterations"; Required Replacements,
Structural Work and Voluntary Alterations are
collectively called "Alterations").
Notwithstanding the foregoing, (x) Tenant's obligation with respect to the shell
of the Building (excluding the roof) shall be limited to maintaining the same in
such condition as the same is required by applicable Legal Requirements to be
maintained and also in a condition not materially worse than the condition in
which the same was in on the date of this Lease, and (y) if Landlord shall give
a Cost Participation Limitation Notice with respect to any Reimbursable
Replacement or Reimbursable Legal Requirement Alteration, Tenant shall not be
obligated to Landlord to make such Reimbursement Replacement or Reimbursable
Legal Requirement
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Alterations nor, with respect to any such Reimbursable Replacement, to repair
the item which was to have been replaced.
(b) No Alteration may be undertaken if such Alteration would
(i) result in the Improvements not being a first-class office building or (ii)
materially and adversely affect any structural element of the Improvements or
any item of Major Building Equipment. Each Alteration shall be effected with due
diligence, in a good and workmanlike manner, and in compliance with all Legal
Requirements, Insurance Requirements and Permitted Encumbrances. All Structural
Work and all replacements of items of Major Building Equipment shall be of a
quality at least equal to the original installation. Landlord shall not be
liable to any contractors, subcontractors, laborers, materialmen, suppliers or
vendors for services performed or material provided on or in connection with the
Leased Premises. Landlord shall not be required to maintain, alter, repair,
rebuild or replace the Leased Premises or any part thereof. Tenant waives all
rights to make Alterations at Landlord's expense, except that Landlord shall in
accordance with the further provisions of this Article 6 make reimbursements to
Tenant on account of Reimbursable Alterations. Except as provided in Section
1.1, all Improvements arising from the making of any Alterations shall
immediately become the property of Landlord, shall be a part of the Leased
Premises and shall be subject to this Lease, and Tenant shall, upon demand of
Landlord, execute and deliver an appropriate instrument confirming Landlord's
title thereto.
6.2 Certain Definitions
As used herein:
(a) "Legal Requirement Alteration" means any Alteration
undertaken in order to comply with a Legal Requirement.
(b) "Reimbursable Replacement" means the replacement of any
item of Major Building Equipment in its entirety; provided, that (i) such
replacement is performed after completion of the Base Building Upgrade Work,
(ii) such replacement (in light of the physical condition of the item in
question) is consistent with the First-Class Standard, (iii) the repair of the
item in question is inconsistent with the First-Class Standard; (iv) such
replacement shall not have been necessitated by fire, other casualty or a
Taking, and (v) if the Witkoff Management Agreement shall have been terminated,
such replacement shall not have been necessitated by the negligence (including,
without limitation, failure to adhere to the manufacturer's suggested
maintenance procedures) or intentional misconduct of Tenant or the Building
management company employed by Tenant occurring after such termination.
(c) "Reimbursable Legal Recruitment Alteration" means any
Alteration undertaken solely in order to comply with a Legal Requirement enacted
after the date of this Lease and which (i) is performed after completion of the
Base Building Upgrade Work, (ii) in accordance with generally accepted
accounting principles consistently applied ("GAAP") should be capitalized, (iii)
is not an Alteration in any area designed for tenant occupancy, and (iv) is not
necessitated by fire, other casualty or a Taking.
(d) "Structural Work" consists solely of the following:
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(i) replacement and/or repair of the Building's
curtain wall in whole or in part, except that
Structural Work shall not include caulking
treatment of the curtain wall except for any such
caulking treatment done in conjunction with
repairs or replacement of the portion of the
curtain wall being caulked (other than any repairs
or replacement undertaken in order to avoid the
exclusion provided for in this clause (i)).
(ii) replacement and/or repair of the Building's steel
frame, footings, foundations, columns, beams,
floors (including concrete floors and the steel
floors supporting the concrete floors) and core
walls.
(iii) replacement (but not repair) of the roof in its
entirety (but not in part) required in order to
preserve the structural integrity of the Building
or the watertightness and airtightness of the
Building.
(iv) replacement of the watertight membrane or other
watertight barrier under the Building's plaza, and
any removal, reinstallation, repair or replacement
of the Building's plaza arising out of such
replacement
(e) "Reimbursable Structural Work" means any Structural Work
provided that (i) such Structural Work is performed after completion of the Base
Building Upgrades, (ii) such Structural Work (in light of a physical condition)
is consistent with the First-Class Standard, (iii) if such Structural Work is a
replacement, then (A) such replacement (in light of the physical condition of
the item in question) is consistent with the First-Class Standard and (B) the
repair of the item in question is inconsistent with the First-Class Standard,
(iv) such Structural Work shall not have been necessitated by fire, other
casualty or a Taking, and (v) if the Witkoff Management Agreement shall have
been terminated, such Structural Work shall not have been necessitated by the
negligence of Tenant or the Building management company employed by Tenant
occurring after such termination. Notwithstanding the foregoing, the first
$100,000 of Structural Work performed by Tenant in any calendar year which, but
for this sentence, would constitute Reimbursable Structural Work shall be deemed
not to be Reimbursable Structural Work.
(f) "Reimbursable Removal of Hazardous Substances" means the
removal of Qualified Hazardous Substances; provided, that (i) the term
"Reimbursable Removal of Hazardous Substances" shall not include any Asbestos
Removal Work or any Refireproofing Work except to the extent that Landlord fails
to perform the same on or before (a) the Partial Possession Date applicable to
the space in question with respect to any space other than the Stephaneze
Premises or (b) the Stephaneze Possession Date, in the case of the Stephaneze
Premises, and (ii) if the Costs of any removal of Qualified Hazardous Substances
(as reasonably
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estimated by Tenant) shall be less than $500,000 then, unless Tenant, by notice
to Landlord, shall elect to treat the same as a Reimbursable Removal of
Hazardous Substances, such removal shall be deemed not to be a Reimbursable
Removal of Hazardous Substance. In applying the provisions of this clause (ii)
each removal contracted for separately (unless done so solely in order to avoid
the provisions of this Section 6) shall be considered a separate removal.
(g) "Reimbursable Alterations" means, collectively,
Reimbursable Replacements, Reimbursable Structural Work, Reimbursable Legal
Requirement Alterations and Reimbursable Removal of Hazardous Substances.
(h) "Qualified Alteration" means (i) any Alteration (other
than any Reimbursable Replacement, any Structural Work or any Legal Requirement
Alteration) which affects any item of Major Building Equipment and (ii) any
Restoration.
(i) "Major Building Equipment" means any item listed on
Exhibit E and any replacement thereof.
(j) "Base Amount" means the lower of
1) the original contract price of the Retained
Bidder, less any portion of the original contract
price of the Retained Bidder not actually paid by
Tenant, or
2) the original contract price of Landlord's
Preferred Bidder or, if Tenant shall have timely
given the Dispute Notice and the Appropriate
Engineer shall have selected Tenant's Selected
Bidder, the original contract price of Tenant's
Selected Bidder.
(k) "Determined Amount" means the lower of
1) the original contract price of the Retained
Bidder, or
2) the original contract price of Landlord's
Preferred Bidder or, if Tenant shall have timely
given the Dispute Notice and the Appropriate
Engineer shall have selected Tenant's Selected
Bidder, the original contract price of Tenant's
Selected Bidder.
(l) "Cost Division Date" means, (i) with respect to any
Reimbursable Alteration (other than Reimbursable Removal of Hazardous
Substances) commenced during the First Rent Period or the Second Rent Period,
the last day of the Second Rent Period, (ii) with respect to any Reimbursable
Alterations commenced during the Third Rent Period, the last day of the Third
Rent Period, or (iii) with respect to any Reimbursable Alterations commenced
during the Fourth Rent Period, the last day of the Fourth Rent Period.
(m) "Measuring Fraction" means, with respect to any
Reimbursable Alteration (other than any Reimbursable Removal of Hazardous
Substances), the fraction whose
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numerator is the number of months in the period from the Cost Division Date with
respect to such Reimbursable Alteration to the end of the expected useful life
of such Reimbursable Alteration and whose denominator is the number of months in
the period from the Estimated Substantial Completion Date of such Reimbursable
Alteration to the end of the expected useful life thereof. Any dispute as to the
reasonableness of any Estimated Substantial Completion Date, and any dispute as
to the expected useful life of any Reimbursable Alteration, shall be determined
by the Appropriate Engineer. As to any Reimbursable Removal of Hazardous
Substances, the Measuring Fraction shall be one (1.00).
If Landlord and Tenant shall disagree (i) as to whether any item is an item of
Major Building Equipment, or (ii) as to whether any replacement is a
Reimbursable Replacement, or (iii) as to whether any work is Structural Work, or
(iv) as to whether any Structural Work is Reimbursable Structural Work, or (v)
as to whether a Legal Requirement requires an Alteration, or (vi) as to whether
an Alteration is a Legal Requirement Alteration, or (vii) as to whether any
Legal Requirement Alteration is a Reimbursable Legal Requirement Alteration, or
(viii) as to whether any Alteration is a Qualified Alteration, or (ix) as to
whether any removal of any Hazardous Substance is a Reimbursable Removal of
Hazardous Substances, the matter shall in each case be determined by the
Appropriate Engineer. Notwithstanding the foregoing, any dispute under clause
(vii) - in so far as it relates to whether in accordance with GAAP an item
should be capitalized - shall be determined by the Accountant.
6.3 Submission and Approval of Plans and Specifications in Certain
Instances.
(a) Required Submissions. Prior to:
(i) performing any of the Base Building
Upgrade Work; or
(ii) undertaking any Reimbursable
Replacement, any Structural Work (whether or not
Reimbursable Structural Work), any Legal Requirement
Alteration (whether or not a Reimbursable Legal
Requirement Alteration) or any Qualified Alteration;
Tenant shall (subject to Section 6.3(f)) submit all of the Plans and
Specifications therefor to Landlord for Landlord's approval, together with, in
case Tenant contends that the work in question is a Reimbursable Alteration, (i)
a statement to that effect, and (ii) a good faith estimate of the Costs of such
Reimbursable Alteration prepared by a reputable architect, engineer or
contractor. Each such submission is herein called a "Plans Submission Notice".
Landlord shall give notice (the "Plans and Specifications Notice") to Tenant of
Landlord's approval or disapproval of any Plans and Specifications within 20
Business Days after the date upon which the same are given to Landlord (which
Plans and Specifications Notice shall, in the case of a disapproval, be
accompanied by a reasonably complete and specific statement of the reasons for
disapproval); provided, that
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(A) with respect to all Plans and
Specifications submitted by Tenant prior to Tenant's
occupancy of the Leased Premises for the conduct of
business, the aforesaid 20 Business Day period shall be
shortened to 10 Business Days, and
(B) with respect to all Plans and
Specifications submitted by Tenant after Tenant's
occupancy of the Leased Premises for the conduct of
business, if (i) at least 10 Business Days before the
date upon which Tenant submits all of the Plans and
Specifications for the work in question to Landlord,
Tenant gives notice to Landlord that Tenant intends to
make any replacement of an item of Major Building
Equipment or to undertake any Structural Work, Legal
Requirement Alteration or Qualified Alteration (which
notice shall specify the general nature of the work and
an estimated date for the submission of all of the Plans
and Specifications therefor to Landlord) and (ii) Tenant
delivers all of the Plans and Specifications for the
work in question to Landlord within 2 Business Days of
the estimated submission date set forth in Tenant's
notice, then the aforesaid 20 Business Day period shall
be shortened to 10 Business Days.
If Tenant's notice shall have included a statement that the work in question is
a Reimbursable Alteration, the Plans and Specifications Notice shall include
Landlord's agreement or disagreement with such statement.
(b) Disapproval Only Under Certain Circumstances. Landlord
shall not disapprove any Plans and Specifications unless the work contemplated
thereby would (i) result in the Improvements not being a first-class office
building or (ii) materially and adversely affect any structural element of the
Improvements or any item of Major Building Equipment. If Tenant disputes
Landlord's right to disapprove, the matter shall be determined by the
Appropriate Engineer.
(c) Certain Conditions. Subject to Sections 6.3(d) and (f),
Tenant shall not perform any Base Building Upgrade Work or undertake any
Reimbursable Replacement, Structural Work, Legal Requirement Alteration or
Qualified Alteration unless and until (i) Landlord shall approve (or be deemed
to have approved) the Plans and Specifications therefor in a Plans and
Specifications Notice or (ii) the Appropriate Engineer shall determine that
Landlord did not have the right to disapprove such Plans and Specifications
pursuant to this Lease.
(d) Failure to Give timely Notice. Subject to the provisions
of the next paragraph, if Landlord shall fail timely to give Tenant a Plans and
Specifications Notice, Tenant may proceed with the work in question, and if
Landlord thereafter disapproves the Plans and Specifications therefor Tenant may
continue such work unless the Appropriate Engineer determines that Landlord had
the right to disapprove pursuant to this Lease. If the Appropriate
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Engineer so determines, Tenant shall cease such work, but the work done by
Tenant to the date of the Appropriate Engineer's determination shall not
constitute a default hereunder if Tenant thereupon commences and thereafter
diligently prosecutes to completion such remedial work (including, without
limitation, the removal of the work theretofore done by Tenant and the
restoration of the affected area of the Leased Premises) as Landlord may
reasonably determine to be appropriate in the circumstances (unless Tenant shall
dispute Landlord's determination, in which case the remedial work, if any, to be
done by Tenant shall be determined by the Appropriate Engineer).
Notwithstanding the provisions of the foregoing paragraph, if
(i) Tenant's Plans Submission Notice shall include the following statement in
block capital letters: "THIS NOTICE IS BEING GIVEN UNDER SECTION 6.3(a) OF OUR
LEASE. YOUR FAILURE TIMELY TO RESPOND WILL RESULT IN YOUR BEING DEEMED TO HAVE
APPROVED THE PLANS AND SPECIFICATIONS INCLUDED HEREWITH", and (ii) Landlord
shall fail timely to give to Tenant a Plans and Specifications Notice with
respect to such Plans and Specifications, then Landlord shall be deemed to have
given to Tenant a Plans and Specifications Notice approving such Plans and
Specifications and any Plans and Specifications Notice thereafter given by
Landlord disapproving such Plans and Specifications shall be void and of no
effect.
If (i) Tenant's Plans Submission Notice shall include the
following statement in block capital letters: "THIS NOTICE IS BEING GIVEN UNDER
SECTION 6.3(a) OF OUR LEASE WITH RESPECT TO A REIMBURSABLE ALTERATION. YOUR
FAILURE TIMELY TO DISAGREE WITH TENANT'S STATEMENT THAT THE WORK CALLED FOR BY
THE PLANS AND SPECIFICATIONS INCLUDED HEREWITH CONSTITUTES A REIMBURSABLE
ALTERATION WILL RESULT IN YOUR BEING DEEMED TO AGREE THAT SUCH WORK CONSTITUTES
A REIMBURSABLE ALTERATION." and (ii) Landlord shall fail timely to give to
Tenant a Plans and Specifications Notice with respect to such Plans and
Specifications indicating that Landlord disagrees with Tenant's statement that
the work called for by such Plans and Specifications constitutes a Reimbursable
Alteration, then Landlord shall be deemed to have agreed that such work
constitutes a Reimbursable Alteration.
(e) Submission of Certain Plans and Specifications Not
Requiring Approval. At the request of Landlord (made not more frequently than
once in any 12-month period), Tenant shall submit to Landlord Plans and
Specifications for all Alterations (other than Plans and Specifications required
to be submitted to Landlord pursuant to Section 6.3(a)) to the extent that such
Plans and Specifications have been prepared and have not theretofore been
submitted to Landlord. Landlord shall have no right to approve any Plans and
Specifications submitted by Tenant pursuant to this Section 6.3(e) unless it is
determined that such Plan and Specifications should have been submitted for
approval under Section 6.3(a).
(f) Emergencies. Provided that Tenant shall have given
Landlord prompt telephonic notice (confirmed in writing as soon as reasonably
practicable) of an emergency, Tenant may (without first complying with the
applicable provisions of Sections
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6.3(a)(b), (c) and (e)) proceed with such aspects of any Alteration as Tenant
may reasonably deem necessary in light of the emergency, but as promptly as
reasonably practicable thereafter Tenant shall comply with the applicable
provisions of said sections. Any dispute as to Tenant's right to avail itself of
this Section 6.3(f) shall be determined by the Appropriate Engineer.
6.4 Reimbursable Alterations
(a) Submission of Bids; Different Score of Work Statement.
(1) In the case of any Reimbursable Alteration, Tenant shall
(subject to Section 6.4(f)), simultaneously with the submission of all of the
Plans and Specifications therefor to Landlord (or as soon thereafter as
reasonably practicable, but in no event later than the date which is 5 Business
Days prior to the date upon which Landlord is required to give the Plans and
Specifications Notice), deliver to Landlord a list of at least 3 reputable
contractors (collectively, the "Original Bidders") from whom Tenant proposes to
obtain bids for the work. Landlord shall have the right, exercisable by notice
to Tenant delivered not later than 10 Business Days after receipt by Landlord of
the list of the Original Bidders, to designate no more than three additional
reputable contractors (which may include Landlord or an affiliate of Landlord)
from whom Landlord desires Tenant to obtain bids (collectively, the "Additional
Bidders"). Tenant shall, as promptly as reasonably practicable, obtain bids from
at least two of the Original Bidders and solicit bids from all of the Additional
Bidders (if any) on a competitive basis and submit all bids obtained (together
with the proposed contracts relating thereto) to Landlord together with (x)
Tenant's reasonable estimate of the date of substantial completion of the work
in question (the "Estimated Substantial Completion Date") and (y) Tenant's
reasonable estimate of reasonable fees and disbursements of any architect or
engineer retained by Tenant in connection with the work in question, and within
5 Business Days after receipt thereof Landlord shall give notice to Tenant
designating the Original Bidder or the Additional Bidder (in either case being a
bidder from whom Tenant has obtained a bid) which in Landlord's judgment should
perform the work in question (the bidder so designated by Landlord being called
"Landlord's Preferred Bidder"). All such bids shall be on a lump sum or
guaranteed maximum amount basis. Tenant shall have the right, exercisable by
notice (the "Dispute Notice") given to Landlord within 5 Business Days after the
date upon which Tenant receives notice of the identity of Landlord's Preferred
Bidder (which Dispute Notice shall specify the Original Bidder or the Additional
Bidder ("Tenant's Selected Bidder") which Tenant proposes to select to do the
work in question), to dispute Landlord's designation of Landlord's Preferred
Bidder, and if the Dispute Notice shall be timely given, the Appropriate
Engineer shall select either Landlord's Preferred Bidder or Tenant's Selected
Bidder as the bidder which (in light of the bid, contract terms, reputation and
experience of such bidder) is most appropriate to do the work in question.
Notwithstanding Landlord's designation of, or the Appropriate Engineer's
selection of, Landlord's Preferred Bidder, Tenant may retain any Original Bidder
or Additional Bidder from whom Tenant has obtained a bid in accordance with this
Section 6.4(a) to do the work in question (the bidder so retained being called
the "Retained Bidder").
(2) If Landlord believes that the Reimbursable Alteration reflected
in the Plans and Specifications submitted by Tenant is not the most appropriate
Alteration to address
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the condition in question (in the case of a Reimbursable Replacement or
Reimbursable Structural Work) or to comply with the Legal Requirement in
question (in the case of a Reimbursable Legal Requirement Alteration) or to
effect removal (in the case of Reimbursable Removal of Hazardous Substances)
then, Landlord shall include in its notice designating Landlord's Preferred
Bidder a statement to that effect (such statement being herein called a
"Different Scope of Work Statement") and shall include with such notice (x) such
revisions to or such replacement for the Plans and Specifications submitted by
Tenant as Landlord believes are needed to reflect such most appropriate
Alteration ("Landlord's Revised Plans"), (y) a list of at least 3 reputable
contractors from whom Landlord desires Tenant to obtain bids for the performance
of the Reimbursable Alteration in accordance with Landlord's Revised Plans
("Landlord's Alternate Bidders") and who may be the same as or different from
the Additional Bidders, and (z) if Landlord believes that the Alteration
reflected in Landlord's Revised Plans is not a Reimbursable Alteration, a
statement to that effect. In such a case, Tenant may elect to perform the
Alteration in question either pursuant to Landlord's Revised Plans or, subject
to Section 6.3(c), pursuant to the Plans and Specifications submitted by Tenant,
subject, in either case, to the provisions of Section 6.4(h). If Landlord shall
include the statement described in clause (z) above, and Tenant shall disagree
therewith, the dispute shall be resolved by the Appropriate Engineer.
If (A) Tenant's notice accompanying Tenant's submission to Landlord
of the bids required to be submitted to Landlord under Section 6.4(a)(1) shall
include the following statement in block capital letters: "THIS NOTICE IS BEING
GIVEN TO YOU UNDER SECTION 6.4(a) OF OUR LEASE WITH RESPECT TO A REIMBURSABLE
ALTERATION. YOUR FAILURE TIMELY TO FURNISH A DIFFERENT SCOPE OF WORK STATEMENT
WILL RESULT IN YOUR LOSING THE RIGHT TO FURNISH A DIFFERENT SCOPE OF WORK
STATEMENT. IF YOU FURNISH A DIFFERENT SCOPE OF WORK STATEMENT YOUR FAILURE TO
INCLUDE THEREIN A STATEMENT THAT YOU DO NOT BELIEVE THAT THE ALTERATION CALLED
FOR THEREBY IS NOT A REIMBURSABLE ALTERATION WILL RESULT IN YOUR BEING DEEMED TO
AGREE THAT SUCH ALTERATION CONSTITUTES A REIMBURSABLE ALTERATION" and (B)
Landlord shall fail to include in its notice designating Landlord's Preferred
Bidder a Different Scope of Work Statement or shall fail to include with such
notice Landlord's Revised Plans or shall fail to include with such notice a list
of Landlord's Alternate Bidders, then Landlord shall be deemed to have waived
its rights under this Section 6.4(a)(2) with respect to the Reimbursable
Alteration in question. If (i) Tenant's notice accompanying Tenant's submission
to Landlord of the bids required to be submitted to Landlord under Section
6.4(a)(1) shall include the statement set forth in clause (i) of the preceding
sentence, and (ii) Landlord shall furnish a Different Scope of Work Statement
and shall fail to include therein a statement that Landlord does not believe
that the Alteration called for thereby is not a Reimbursable Alteration, then
Landlord shall be deemed to have agreed that such Alteration is a Reimbursable
Alteration.
(b) Reimbursement Amount. Landlord shall, in accordance with Section
6.4(d) or 6.4(e), reimburse Tenant on account of any Reimbursable Alteration in
an amount (the "Reimbursement Amount") equal to the product of the Measuring
Fraction multiplied by the sum of (i) the Base Amount for the work in question,
plus (ii) any Qualified Overruns; plus (iii) the reasonable fees and
disbursements of any architect or engineer retained
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by Tenant in connection with the work in question (the sum of the amounts
referred to in clauses (i), (ii) and (iii) being herein called the "Gross
Amount"). Any dispute as to the reasonableness of the incurrence by Tenant of
any Cost under clause (ii) or (iii) above in connection with the work in
question, or as to the reasonableness of the amount of any such Cost, shall be
determined by the Appropriate Engineer.
(c) Overruns; Qualified Overruns. At any time during the performance
of any Reimbursable Alteration, Tenant may give notice (an "Overrun Notice") to
Landlord specifying any cost (an "Overrun") in excess of the original contract
price of Tenant's Selected Bidder which Tenant expects to incur and which Tenant
contends was unforeseeable by Tenant at the time of commencement of the work
(each Overrun Notice to specify the nature of and reasons for the Overrun in
question in reasonably complete and specific detail). Within 10 Business Days
after receipt of an Overrun Notice, Landlord shall notify Tenant as to whether
or not in Landlord's judgment the Overrun in question is reasonable in amount in
the circumstances and was unforeseeable by Tenant at the time of commencement of
the work. If Tenant shall dispute Landlord's judgment, the reasonableness of the
amount of, and the foreseeability by Tenant of, the Overrun in question shall be
determined by the Appropriate Engineer. Any Overrun determined by Landlord or
the Appropriate Engineer to be reasonable in amount in the circumstances and
unforeseeable by Tenant at the time of commencement of the work shall be a
"Qualified Overrun". Tenant shall not be chargeable with the failure by any
Contractor to foresee any Overrun.
(d) Reimbursement Upon Full Completion. Except in the case of a
Reimbursable Alteration in respect of which an Extended Completion Notice has
been given, Landlord shall upon the full completion of the work in question and
within 30 days after Landlord's receipt of Tenant's request therefor remit the
Reimbursement Amount to Tenant; provided, that Landlord shall not be obligated
to make such remittance unless:
(i) Tenant's request for remittance shall be
accompanied by (A) a certificate of Tenant (in
form reasonably satisfactory to Landlord) stating
that an amount at least equal to the Reimbursement
Amount has been paid to contractors,
subcontractors, materialmen, engineers, architects
or other persons (whose names and addresses and a
description of the work involved shall be stated)
who have furnished labor, materials, supplies,
permits or services for the work in question
(collectively, "Contractors") and that to Tenant's
best knowledge (after due inquiry) there is no
outstanding indebtedness due for labor, materials,
supplies, permits or services in any manner
connected with the work in question which if
unpaid might be the basis for any type of lien on
the Leased Premises or any part thereof, and (B) a
certificate of the architect or engineer who
prepared the related Plans and Specifications (in
form reasonably
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satisfactory to Landlord) stating that such work
has been fully completed in a good and
workmanlike manner and in accordance with the
Plans and Specifications (as approved by Landlord
or as determined by the Appropriate Engineer to
have been required to be approved by Landlord
pursuant to this Lease);
(ii) Landlord shall have received (A) true copies of
all bills paid by Tenant to Contractors in
connection with the work in question, (B) an
instrument in writing from any title company
insuring Landlord's estate in the Project
certifying that there are no undischarged
mechanics', laborers' or materialmen's liens
affecting any part of the Project (other than
liens, if any, in respect of which Landlord has
consented to take security pursuant to Article
13(a)(ii)) and
(iii) no Event of Default shall have occurred and be
continuing.
(e) Reimbursement as Work Proceeds. If at any time prior to or
during the performance of any Reimbursable Alteration Tenant determines that the
full completion thereof will not occur within six months after the commencement
of such Reimbursable Alteration, Tenant shall give Landlord notice of such
determination (an "Extended Completion Notice") and thereafter Landlord shall
from time to time within 30 days after Landlord's receipt of Tenant's request
therefor (but in no event more frequently than once during any 30-day period)
make advances to Tenant on account of the Reimbursement Amount for the work in
question (collectively, "Reimbursement Advances"); provided, that:
(i) no Reimbursement Advance shall be made until
Tenant shall have delivered to Landlord evidence
reasonably acceptable to Landlord that Tenant has
paid Contractors engaged in the work in question
an aggregate amount (the "Benchmark Amount") equal
to the positive remainder, if any, obtained by
subtracting the Determined Amount for the work in
question from the original contract price of the
Retained Bidder, and Reimbursement Advances shall
be made only for amounts paid by Tenant to such
Contractors which are in excess of the Benchmark
Amount;
(ii) no Reimbursement Advance (other than the final
Reimbursement Advance) shall be due unless:
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(a) Tenant's request for such Reimbursement Advance
shall be accompanied by (x) a certificate of
Tenant (in form reasonably satisfactory to
Landlord) stating that (1) the amount of the
Reimbursement Advance then requested has been paid
by Tenant to Contractors (whose names and
addresses and a description of the work involved
shall be stated) engaged in the work in question,
(2) the amount of the Reimbursement Advance then
requested (when taken together with the aggregate
amount of all Reimbursement Advances theretofore
made by Landlord) exceeds neither 90% of the
Reimbursement Amount nor the product of the
Determined Amount multiplied by the percentage
(the "Completed Percentage") of the work called
for in the contract of the Retained Bidder which
has actually been installed in the Leased
Premises, (3) the amount of the Reimbursement
Advance, when added to all amounts paid by Tenant
to Contractors engaged in the work in question and
not reimbursed by Landlord by way of prior
Reimbursement Advances or the then Reimbursement
Advance (but excluding the Benchmark Amount) is at
least equal to the quotient obtained by dividing
the amount of the then requested Reimbursement
Advance by the Measuring Fraction and (4) no part
of the cost of the work described in any previous
or then pending request for a Reimbursement
Advance has been or is being made the basis for
the Reimbursement Advance then being requested,
and (y) a certificate of the architect or engineer
who prepared the related Plans and Specifications
(in form reasonably satisfactory to Landlord)
stating in substance that the Completed Percentage
has been reached and that the work has been
performed in a good and workmanlike manner and in
accordance with the Plans and Specifications (as
approved by Landlord or as determined by the
Appropriate Engineer to have been required to be
approved by Landlord pursuant to this Lease);
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(b) Landlord shall have received true copies of all
bills paid or payable by Tenant to Contractors
which form the basis for the Reimbursement Advance
in question; and
(c) no Event of Default shall have occurred and be
continuing; and
(i) the final Reimbursement Advance shall not be due unless
all of the conditions specified in clauses (i) through
(iii) of Section 6.4(d) shall have been fulfilled in
respect of such Reimbursement Advance.
(f) Emergencies. Provided that Tenant shall have given Landlord
prompt telephonic notice (confirmed in writing as soon as reasonably
practicable) of an emergency, Tenant may proceed with any Reimbursable
Alteration without first complying with the applicable provisions of this
Section 6.4 and Landlord shall, following full completion of the emergency work
in question and within 30 days after Landlord's receipt of Tenant's request
therefor, remit the Emergency Reimbursement Amount (as hereinafter defined) to
Tenant; provided that Landlord shall not be obligated to make such remittance
unless all of the conditions specified in clauses (i) through (iii) of Section
6.4(d) shall have been fulfilled in respect of the work in question (provided,
that (i) if no architect or engineer was retained for the emergency work in
question, Section 6.4(a)(i)(B) shall be deemed fulfilled if (x) Tenant shall
deliver a certificate to Landlord stating that such emergency work has been
fully completed in a good and workmanlike manner and (y) such emergency work has
been fully completed in a manner consistent with the character of the
Improvements as a first-class office building (with due regard to the character
of the work as emergency work), and (ii) if an architect or engineer was
retained for the emergency work in question but (due to the nature of the
emergency) no Plans and Specifications therefor were prepared, Section
6.4(a)(i)(B) shall be deemed fulfilled if (x) Tenant shall deliver to Landlord a
certificate of such architect or engineer stating that such emergency work has
been fully completed in a good and workmanlike manner and (y) such emergency
work has been fully completed in a manner consistent with the character of the
Improvements as a first-class office building (with due regard to the character
of the work as emergency work).
"Emergency Reimbursement Amount" means the product of the Measuring
Fraction multiplied by an amount equal to all Costs reasonably incurred by
Tenant in connection with the emergency work in question.
Any dispute as to Tenant's right to avail itself of this Section
6.4(f), or as to the reasonableness of the incurrence by Tenant of any Cost in
connection with the emergency work in question, or as to the reasonableness of
the amount of any such Cost, shall be determined by the Appropriate Engineer.
Landlord shall not be required to make payment of any amount in dispute pending
resolution of such dispute.
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(g) Landlord's Right to Decline to Participate in Certain Costs.
(i) The term "Notional Termination Date" shall mean, as of any
date, (a) if prior to such date Tenant shall have exercised any Termination
Option, the Termination Date with respect thereto, and (b) if prior to such date
Tenant shall not have exercised any Termination Option, the Termination Date
with respect to the earliest Termination Option which, as of such date, has not
lapsed without exercise or been waived or, if all of the Termination Options
shall then have lapsed without exercise or been waived, the Expiration Date.
(ii) The term "Plan Submission Date" with respect to any
Reimbursable Replacement or Reimbursable Legal Requirement Alteration shall mean
the date on which Tenant furnishes the Plans Submission Notice with respect
thereto to Landlord under Section 6.3(a).
(iii) The term "Associated Reimbursables" shall mean
(a) with respect to any Reimbursable Replacement, (i)
all other Reimbursable Replacements the Plan
Submission Date for which occurred earlier than,
and in the same calendar year as, such
Reimbursable Replacement, excluding any thereof
with respect to which Tenant, by notice to
Landlord under Section 6.4(g)(vii), shall have
withdrawn its Plans Submission Notice and (ii) all
Reimbursable Legal Requirement Alterations the
Plans Submission Date for which occurred earlier
than, and in the same calendar year as, such
Reimbursable Replacement, excluding any thereof
with respect to which Tenant, by notice to
Landlord under Section 6.4(g)(vii), shall have
withdrawn its Plans Submission Notice, or
(b) with respect to any Reimbursable Legal Requirement
Alteration, (i) all other Reimbursable Legal
Requirement Alterations the Plan Submission Date
for which occurred earlier than, and in the same
calendar year as, such Reimbursable Legal
Requirement Alteration, excluding any thereof with
respect to which Tenant, by notice to Landlord
under Section 6.4(g)(vii), shall have withdrawn
its Plans Submission Notice and (ii) all
Reimbursable Replacements the Plans Submission
Date for which occurred earlier than, and in the
same calendar year as, such Reimbursable Legal
Requirement Alteration, excluding any thereof with
respect to which Tenant, by notice to Landlord
under Section 6.4(g)(vii), shall have withdrawn
its Plans Submission Notice
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(iv) The term "Estimated Cost" with respect to any
Reimbursable Replacement or any Reimbursable Legal Requirement Alteration shall
mean the sum of (a) the Determined Amount with respect thereto, and (b) Tenant's
reasonable estimate of reasonable fees and disbursements of any architect or
engineer retained by Tenant in connection with the work in question.
(v) If (a) on the Plan Submission Date with respect to any
Reimbursable Replacement or any Reimbursable Legal Requirement Alteration the
Notional Termination Date is earlier than the fifth anniversary of such Plan
Submission Date, and (b) the Estimated Cost with respect to such Reimbursable
Replacement or such Reimbursable Legal Requirement Alteration, together with the
Estimated Cost with respect to all Associated Reimbursables, exceeds $500,000,
then Landlord shall have the right to give a notice with respect to such
Reimbursable Replacement or Reimbursable Legal Requirement Alteration referring
to this Section (a "Cost Participation Limitation Notice") and, if Landlord
shall timely give a Cost Participation Limitation Notice with respect to such
Reimbursable Replacement or such Reimbursable Legal Requirement Alteration, then
(x) Landlord shall not be required to make the
reimbursement which, in the absence of this clause (x)
Landlord would otherwise be required to make under the first
sentence of Section 6.4(b), and
(y) Landlord shall, in accordance with Section
6.4(d) or 6.4(e), reimburse Tenant on account of such
Reimbursable Replacement or such Reimbursable Legal
Requirement Alteration in an amount (the "Limited
Reimbursement Amount") equal to the product of the Measuring
Fraction multiplied by the lesser of
(a) the Gross Amount with respect to such
Reimbursable Replacement or such
Reimbursable Legal Requirement Alteration,
or
(b) the excess, if any, of $500,000 over the
Gross Amounts with respect to all Associated
Reimbursables, if any.
Landlord may give a Cost Participation Limitation Notice with respect to any
Reimbursable Replacement or any Reimbursable Legal Requirement Alteration at any
time on or before the date on which Landlord is entitled to give notice under
Section 6.4(a) designating Landlord's Preferred Bidder; provided, that if Tenant
timely gives a Dispute Notice with respect to such Reimbursable Replacement or
Reimbursable Legal Requirement Alteration and the Appropriate Engineer selects
Tenant's Selected Bidder as the bidder which is most appropriate to do the work
in question, Landlord may give a Cost Participation Limitation Notice with
respect to such Reimbursable Replacement or Reimbursable Legal Requirement
Alteration within five (5) Business Days after receipt of notice of such
selection by the Appropriate Engineer.
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(vi) If (A) at any time after Landlord shall have given a Cost
Participation Limitation Notice with respect to any Reimbursable Replacement or
any Reimbursable Legal Requirement Alteration, any Termination Option shall
lapse without exercise or be waived, and (B) had such Termination Option and all
earlier Termination Options been waived immediately prior to the Plan Submission
Date with respect to such Reimbursable Replacement or such Reimbursable Legal
Requirement Alteration, Landlord would not have been entitled to give a Cost
Participation Limitation Notice with respect to such Reimbursable Replacement or
such Reimbursable Legal Requirement Alterations, then Landlord shall pay to
Tenant the excess of (x) the Reimbursement Amount with respect to such
Reimbursement Replacement or such Reimbursement Legal Requirement Alteration
(i.e. the Reimbursement Amount which would have been payable under Section
6.4(b) if Landlord had not given a Cost Participation Limitation Notice), over
(y) the Limited Reimbursement Amount with respect to such Reimbursable
Replacement or such Reimbursable Legal Requirement Alteration. Such payment
shall be due within thirty (30) days of Tenant's demand therefor, but not
earlier than the date on which it would otherwise be due under the provisions of
this Section 6.4. Notwithstanding the fact that the amount required to be paid
pursuant to this Section 6.4(g)(vi) is required to be paid on a date later than
the date on which the Reimbursement Amount would have been required to be paid
if Landlord had not given the Cost Participation Limitation Notice, no interest
shall be due on such amount, except for interest under Section 3(c) from and
after the date on which such amount is required to be paid pursuant to this
Section 6.4(g)(vi) if Landlord shall fail timely to make such payment.
(vii) Tenant may, by notice to Landlord given at any time
prior to the commencement of any Reimbursable Replacement or any Reimbursable
Legal Requirement Alteration, withdraw its Plans Submission Notice with respect
to such Reimbursable Replacement or Reimbursable Legal Requirement Alterations.
If Tenant shall do so, and shall subsequently desire to make such Reimbursable
Replacement or Reimbursable Legal Requirement Alteration, it must again give a
Plans Submission Notice with respect thereto and all of the applicable
provisions of Section 6.3 and 6.4 shall again be applicable as if such withdrawn
Plans Submission Notice had never been given.
(viii) If after Landlord shall have given a Cost Participation
Limitation Notice with respect to any Reimbursable Replacement or any
Reimbursable Legal Requirement Alterations (the "Reimbursable Replacement or
Reimbursable Legal Requirement Alteration in question"), Tenant shall give a
notice under Section 6.4(g)(vii) with respect to any Reimbursable Replacement
or Reimbursable Legal Requirement Alteration which, in the absence of such
notice by Tenant, constituted an Associated Reimbursable with respect to the
Reimbursable Replacement or Reimbursable Legal Requirement Alteration in
question, then for purposes of computing the Limited Reimbursement Amount with
respect to the Reimbursable Replacement or Reimbursable Legal Requirement in
question such Reimbursable Replacement or Reimbursable Legal Requirement
Alterations with respect to which Tenant shall have given a notice under Section
6.4(g)(vii) shall not be deemed to be an Associated Reimbursable. Any increase
in the Limited Reimbursement Amount payable by reason of this Section
6.4(g)(viii) shall be due and payable within thirty (30) days of Tenant's demand
therefor, but not earlier than the date on which it would otherwise be due under
the provisions of this Section 6.4.
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(h) Different Scope of Work Statement The provisions of this
Section 6.4(h) shall be applicable to any Alterations as to which Landlord
timely gives a Different Scope of Work Statement and timely furnishes Landlord's
Revised Plans and a list of Landlord's Alternate Bidders in accordance with
Section 6.4(a).
If Tenant shall elect to perform such Alteration in accordance
with Landlord's Revised Plans and such Alteration is a Reimbursable Alteration,
then the foregoing provisions of this Section 6.4, including without limitation
the provisions requiring Tenant to obtain and/or solicit bids and furnish the
bids so received to Landlord (and the related provisions of this Article 6)
shall be applied with reference to Landlord's Revised Plans, except that in such
a case
(a) the term "Additional Bidders" shall refer
only to Landlord's Alternate Bidders,
(b) the term "Original Bidders" shall refer only
to any other bidders from whom Tenant
requests and receives a bid to perform the
Reimbursable Alteration in accordance with
Landlord's Revised Plans, and
(c) notwithstanding the third sentence of
Section 6.4(a)(1), Tenant shall not be
obligated to obtain bids from any minimum
number of Original Bidders.
If Tenant shall elect to perform the Alteration in accordance
with the Plans and Specifications submitted by Tenant and such Alteration is a
Reimbursable Alteration, then (i) the foregoing provisions of Section 6.4 shall
be applied with reference to the Plans and Specifications submitted by Tenant,
(ii) the Appropriate Engineer shall select as more appropriate either the Plans
and Specifications submitted by Tenant or Landlord's Revised Plans, and (iii) if
the Appropriate Engineer selects the Landlord's Revised Plans and the Alteration
reflected thereon is a Reimbursable Alteration then, provided that at least one
of Landlord's Alternate Bidders shall submit a bid in accordance with Section
6.4(a) for the performance of the Reimbursable Alteration in accordance with
Landlord's Revised Plans, the Reimbursement Amount, Limited Reimbursement
Amount, Base Amount, Determined Amount, and Gross Amount with respect to such
Reimbursable Alteration shall be, respectively, the lower of (p) the
Reimbursement Amount, Limited Reimbursement Amount, Base Amount, Determined
Amount, and Gross Amount resulting from the application of the foregoing
provisions of Section 6.4 (and the related provisions of this Article 6) with
reference to the Plans and Specifications submitted by Tenant, or (q) the
Reimbursement Amount, Limited Reimbursement Amount, Base Amount, Determined
Amount, and Gross Amount which would have resulted from the application of the
foregoing provisions of Section 6.4 (and the related provisions of this Article
6) with reference to Landlord's Revised Plans. In order to determine the amounts
referred to in clause (q) above, Tenant shall solicit bids for the performance
of the Reimbursable Alteration in accordance with Landlord's Revised Plans from
Landlord's Alternate Bidders and any other bidders from whom Tenant desires to
solicit bids, and
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(a) when used with reference to the amounts
referred to in clause (q) above, (1) the
term "Additional Bidders" shall refer only
to Landlord's Alternate Bidders, and (2) the
term "Original Bidders" shall refer only to
any other bidders from whom Tenant requests
and receives a bid to perform the
Reimbursable Alteration in accordance with
Landlord's Revised Plans, and
(b) notwithstanding the third sentence of
Section 6.4(a)(1), Tenant shall not be
obligated to obtain bids from any minimum
number of Original Bidders.
Notwithstanding the foregoing provisions of this Section
6.4(h), (a) if Tenant so elects, the Appropriate Engineer's selection under
clause (ii) of the preceding paragraph of the Plans and Specifications submitted
by Tenant or Landlord's Revised Plans as more appropriate and/or, if applicable,
the Appropriate Engineer's determination whether the Alteration shown on the
Plans and Specifications submitted by Tenant constitutes a Reimbursable
Alteration and/or, if applicable, the Appropriate Engineer's determination
whether the Alteration shown on Landlord's Revised Plans constitutes a
Reimbursable Alteration shall occur before Tenant decides whether to perform the
Reimbursable Alterations in accordance with Landlord's Revised Plans or the
Plans and Specifications submitted by Tenant, and (b) if Tenant so elects,
Tenant may solicit bids for the performance of the Reimbursable Alteration in
accordance with Landlord's Revised Plans from Landlord's Alternate Bidders and
other bidders from Tenant shall desire to obtain bids before deciding whether to
perform the Reimbursable Alterations in accordance with the Plans and
Specifications submitted by Tenant or Landlord's Revised Plans.
6.5 General Provisions
Time shall be of the essence with respect to the giving of notices
and other submissions under this Article. The right to receive any reimbursement
under this Article 6, in respect of Reimbursable Alterations shall be for the
exclusive benefit of Tenant, it being the express intent of the parties hereto
that in no event shall such right be conferred upon or for the benefit of any
third party, including, without limitation, any contractor, subcontractor,
materialman, laborer, architect, engineer, attorney or any other person, firm or
entity.
6.6 Consideration by Tenant
(a) Upon demand of Landlord, Tenant shall comply in all
respects with any reasonable and timely suggestions made by Landlord with
respect to construction matters relating to any Reimbursable Alteration, and
shall correct any defect in the work in question or any material departure from
the Plans and Specifications for the work in question. Any dispute pursuant to
this Section 6.6(a) shall be determined by the Appropriate Engineer.
(b) Tenant shall, within 10 Business Days after receipt of a
statement therefor (accompanied by true copies of the bills paid by Landlord),
reimburse Landlord for all
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reasonable out-of-pocket expenses incurred for the services of an architect or
engineer making inspections of any Restoration.
6.7 Engineer; Appropriate Engineer
(a) "Engineer" means each of the following:
Syska & Hennessey Inc.
Meyer Strong & Jones P.C.
Jaros Baum & Bolles
Robert Derector Associates
Cosentini Associates
Joseph Loring & Associates
Weidlinger & Associates
Purdy & Henderson Associates Inc.
Weiskopf & Pickworth
Gilsanz Murray Stefick LLP
Office of James Ruderman LLP
or
such other independent engineering firm or firms having at least 15 years'
experience in first-class Manhattan office buildings as shall from time to time
be designated by Landlord to Tenant and approved by the other party (which
approval shall not be unreasonably withheld or delayed; any dispute as to
whether Landlord or Tenant has unreasonably withheld or delayed such approval to
be determined by Expedited Arbitration).
(b) Except as otherwise provided in Section 6.7(d),
"Appropriate Engineer" means, in respect of any matter required by this Lease to
be determined by an Appropriate Engineer, such Engineer as Tenant may designate
by notice (an "Engineer Designation Notice") to Landlord; provided, that if
Tenant shall fail to give an Engineer Designation Notice within 7 Business Days
after Tenant receives Landlord's request for the same, the "Appropriate
Engineer" for the matter in question shall be such Engineer as Landlord may
designate in a notice to Tenant delivered at any time prior to receipt by
Landlord of such Engineer Designation Notice.
(c) Each Appropriate Engineer shall make its determination or
selection as promptly as reasonably practicable, but in any event within 20 days
after request therefor by Landlord or Tenant. Each determination or selection
made by an Appropriate Engineer pursuant to this Lease shall be final and
binding on Landlord and Tenant. Landlord and Tenant shall each pay one-half of
the fees and expenses of each Appropriate Engineer which is called upon to act
hereunder.
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(d) In respect of any determination to be made by the
Appropriate Engineer under clause (i), (ii), (iii), (iv). (v), (vi), (vii) or
(ix) of the last paragraph of Section 6.2 or any selection to be made by the
Appropriate Engineer under Section 6.4(h), "Appropriate Engineer" mean such
independent Engineer or other independent engineering firm having at least 15
years' experience in first-class Manhattan office buildings as Landlord and
Tenant shall jointly designate (or if Landlord and Tenant shall be unable to
agree upon such joint designation within five business days after request of
either party to the other) as shall be designated by the American Arbitration
Association or its successor. In such a case, each party shall pay one-half the
fees and expenses of the American Arbitration Association or its successor.
(e) "Accountant" means, in respect of any matter required by
the last sentence of Section 6.2 of this Lease to be determined by an
Accountant, such independent certified public accountant who is a member of a
"Big-6" accounting firm as Tenant may designate in a notice to Landlord and as
may be approved by Landlord (which approval shall not be unreasonably withheld
or delayed); provided, that if Tenant shall fail to give such notice within 7
Business Days after Tenant receives Landlord's request for the same, the
Accountant for the matter in question shall be such independent certified public
accountant who is a member of a "Big-6" accounting firm as Landlord may
designate in a notice to Tenant delivered at any time prior to receipt by
Landlord of Tenant's notice designating the Accountant and as may be approved by
Tenant (which approval shall not be unreasonably withheld or delayed). The
Accountant shall make his or her determination as promptly as reasonably
practicable, but in any event within 20 days after request therefor by Landlord
or Tenant. Each determination made by an Accountant pursuant to this Lease shall
be final and binding on Landlord and Tenant. Landlord and Tenant shall each pay
one-half of the fees and expenses of any Accountant which is called to act
hereunder. Any dispute as to whether Landlord or Tenant has unreasonably
withheld or delayed approval of an independent certified public accountant
designated by the other party shall be determined by Expedited Arbitration.
7. Hazardous Substances
If Tenant shall remove from the Leased Premises any Qualified
Hazardous Substances, then Landlord shall (subject to the last sentence of this
Article 7) reimburse Tenant for the actual reasonable costs incurred by Tenant
to remove such Qualified Hazardous Substances, such reimbursement to be made
within 30 days after Tenant notifies Landlord of the amounts incurred by Tenant,
which notice shall be accompanied by paid invoices or other evidence reasonably
satisfactory to Landlord of the Costs incurred; provided, that the foregoing
provisions of this Article 7 shall not be applicable to any Reimbursable Removal
of Hazardous Substances which are governed by the provisions of Article 6. As
used in this Article 7 and in Article 6 the terms "remove" and "removal" (i)
when used with respect to any Hazardous Substance used for fireproofing or other
purpose necessary or appropriate for the continued occupancy and operation of
the Leased Premises as a first-class office building shall include the
replacement of such removed Hazardous Substance with suitable substitute
materials, and (ii) when used with respect to any Hazardous Substance shall
include, if Tenant shall elect, in lieu of removal, to enclose, encapsulate or
otherwise remediate such Hazardous Substance, such enclosure, encapsulation or
other remediation. Notwithstanding the foregoing, in no event shall
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Landlord have any obligation under this Article 7 to reimburse Tenant for the
costs of any Asbestos Removal Work or Refireproofing Work except to the extent
that Landlord fails to perform the same on or before (i) the Possession Date
with respect to any space other than the Stephaneze Premises or (ii) the
Stephaneze Possession Date, in the case of the Stephaneze Premises.
8. Utility Services
(a) Tenant shall pay all charges for all public or private
electrical, steam, gas, fuel, power and other utility services at any time
rendered to or in connection with the Leased Premises. Tenant shall be a direct
customer of the utility companies providing such services. If any rebates or
benefits shall be available from the utility company as part of any utility
company sponsored energy conservation program on account of the energy efficient
nature of Tenant's lighting fixtures and/or equipment, then Landlord, at
Tenant's sole expense, shall take such actions as Tenant may reasonably request
to obtain such rebates or benefits and, if any such rebates or benefits are paid
to or received by Landlord, Landlord shall promptly remit the same to Tenant.
The term "ConEd" shall refer to the electric utility from time to time
furnishing electricity to the Improvements.
(b) Landlord hereby notifies Tenant that Landlord has applied for
benefits under the Lower Manhattan Energy Program (Article 2-I of the General
City Law) (the "LMEP") and a certification that the Improvements are an
"eligible building" under subparagraph (a) of Section 25-aa of the General City
Law. Landlord shall be responsible for the preparation of all applications
(including revised applications) and any other documents, certificates and
instruments that may be required to obtain such benefits and certification
and/or in order to maintain such benefits and certification in effect. Tenant
shall, at Landlord's request, cooperate with Landlord's efforts to obtain such
benefits and certification (including, without limitation, the execution within
5 Business Days after request of any forms required to be executed by Tenant or
otherwise customarily executed by similarly situated tenants and supplying such
information not considered by Tenant to be confidential as may be necessary to
complete such forms and as Landlord is unable to obtain itself), provided, that
Tenant shall not be required to alter, modify or delay the Base Building Upgrade
Work or the Fit-Out Work or to alter its usage of electricity or alter in any
manner adverse to Tenant any electrical equipment in or serving the
Improvements. Landlord shall pay to Tenant, within 30 days after demand,
Tenant's reasonable out-of-pocket costs and expenses (including without
limitation attorneys fees' and disbursements) incurred in reviewing such
applications and such other documents, certificates and instruments, or
otherwise cooperating, at Landlord's request, with Landlord's efforts to obtain
such benefits. In addition to all other rent required by this Lease to be paid
by Tenant, Tenant shall pay to Landlord, within thirty (30) days of Tenant's
receipt of each ConEd bill for electricity service to the Improvements an amount
equal to the reduction shown thereon as a result of the Improvements receiving
benefits under the LMEP. If the amount of any ConEd bill for electricity service
to the Improvements shall reflect a reduction in the amount billed as a result
of the Improvements receiving benefits under the LMEP, but the amount of such
reduction is not shown thereon, the parties shall endeavor to agree upon the
amount of such reduction and, if they have not agreed upon such amount within
fifteen (15) days after Tenant's receipt of such
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ConEd bill, the same shall be determined by arbitration. If in any such case the
amount of such reduction shall not have been agreed upon or determined by
arbitration by the date on which Tenant is required to make payment to Landlord
under this Section 8(b), Tenant shall make payment in accordance with Tenant's
determination of such amount, subject to adjustment (plus interest thereon at
the Prime Rate from the 30th day after Tenant's receipt of the relevant ConEd
bill to the date of payment of such adjustment) upon the amount of such
determination being agreed upon or determined in arbitration.
(c) Landlord hereby notifies Tenant that Landlord intends to apply
to ConEd for ConEd's Business Incentive Rate (the "BIR"). Landlord shall be
responsible for the preparation of all applications (including revised
applications) and any other documents, certificates and instruments that may be
required to obtain the BIR and/or in order to maintain the BIR in effect. Tenant
shall, at Landlord's request, cooperate with Landlord's efforts to obtain the
BIR (including, without limitation, the execution within 5 Business Days after
request of any forms required to be executed by Tenant or otherwise customarily
executed by similarly situated tenants and supplying such information not
considered by Tenant to be confidential as may be necessary to complete such
forms and as Landlord is unable to obtain itself), provided that Tenant shall
not be required to alter, modify or delay the Base Building Upgrade Work or the
Fit-Out Work or to alter its usage of electricity or alter in any manner adverse
to Tenant any electrical equipment in or serving the Improvements. Landlord
shall pay to Tenant, within 30 days after demand, Tenant's reasonable
out-of-pocket costs and expenses (including without limitation attorneys fees'
and disbursements) incurred in reviewing such applications and such other
documents, certificates and instruments, or otherwise cooperating, at Landlord's
request, with Landlord's efforts to obtain such benefits. In addition to all
other rent required by this Lease to be paid by Tenant, Tenant shall, within
thirty (30) days of Tenant's receipt of each ConEd bill for electricity service
to the Improvements, furnish Landlord with a copy of such bill and pay to
Landlord, an amount equal to the reduction shown thereon as a result of the
Improvements receiving the BIR. If the amount of any ConEd bill for electricity
service to the Improvements shall reflect a reduction in the amount billed as a
result of the Improvements receiving the BIR, but the amount of such reduction
is not shown thereon, the parties shall endeavor to agree upon the amount of
such reduction and, if they have not agreed upon such amount within fifteen (15)
days after Tenant's receipt of such ConEd bill, the same shall be determined by
arbitration. If in any such case the amount of such reduction shall not have
been agreed upon or determined by arbitration by the date on which Tenant is
required to make payment to Landlord under this Section 8(c), Tenant shall make
payment in accordance with Tenant's determination of such amount, subject to
adjustment (plus interest thereon at the Prime Rate from the 30th day after
Tenant's receipt of the relevant ConEd bill to the date of payment of such
adjustment) upon the amount of such determination being agreed upon or
determined in arbitration.
9. Indemnification by Tenant
(a) Tenant shall protect, indemnify and save harmless Landlord from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys' fees and
expenses) imposed upon or incurred
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by or asserted against Landlord or against the Leased Premises or any part
thereof by reason of the occurrence or existence of any of the following during
the Term: (1) the conduct, management or possession of the Leased Premises or
any part thereof, (2) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Leased Premises or any part
thereof or the adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, (3) any use, nonuse or condition of the Leased Premises or any
part thereof or the adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, (4) any failure on the part of Tenant to perform or comply with
any of the terms, provisions or conditions of this Lease, (5) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Leased Premises or any part thereof, (6) any negligence or
tortious act or omission on the part of Tenant or any of its partners, agents,
contractors, servants, employees, licensees or invitees, (7) any negligence or
tortious act or omission on the part of any subtenant of Tenant, or of any
partners, agents, contractors, servants, employees, licensees or invitees of any
subtenant of Tenant, (8) any sublease of all or any part of the Leased Premises
or (9) the execution by Landlord of any application, document or instrument
under Section 35(1) below.
(b) In case any claim is made against Landlord or in case any
action, suit or proceeding (a "proceeding") is brought against Landlord or the
Leased Premises or any part thereof by reason of any of the foregoing, Landlord
shall give prompt notice to Tenant and Tenant shall cause such claim or
proceeding to be defended by counsel ("Tenant's Counsel") designated by Tenant
and approved by Landlord (which approval shall not be unreasonably withheld).
Tenant shall have the right to control the defense and settlement of any such
claim or proceeding and shall not be required to indemnify Landlord from the
costs and expenses of any settlement agreed to without Tenant's consent;
provided, that Landlord shall have the right (i) to require Tenant and Tenant's
Counsel to consult with Landlord and counsel retained and paid by Landlord, (ii)
to assume control of the defense and settlement of any such claim or proceeding
at any time if Landlord waives its right to be indemnified by Tenant on account
thereof and (iii) to make any settlement without Tenant's consent if Landlord
pays the amount of such settlement and waives its right to be indemnified by
Tenant on account of the claim or proceeding to which such settlement relates;
provided, further, that Tenant shall not settle any claim or proceeding without
Landlord's consent if such settlement requires an admission of liability (civil
or criminal) on the part of Landlord. Landlord shall cooperate with Tenant, at
Tenant's expense, in the defense of any such claim or proceeding in such manner
as Tenant may from time to time reasonably request.
10. Entry by Landlord
Tenant shall permit Landlord to enter the Leased Premises or any part
thereof at all reasonable times upon reasonable notice (except in case of
emergency) for the purpose of inspecting the same or doing any work under
Articles 7 and 19, and to keep and store all such materials therein as may be
reasonably necessary or appropriate for any such purpose without the same
constituting a partial or complete, constructive or actual eviction (but nothing
contained herein shall create or imply any duty on the part of Landlord to do
any work under Article 19). Landlord shall not have any duty to make any such
inspection and shall not incur any liability or obligation by making or for not
making any such inspection. Tenant shall also permit Landlord
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to enter the Leased Premises or any part thereof at all reasonable times upon
reasonable notice for the purposes of exhibiting the Leased Premises for sale or
mortgage. In addition, Tenant shall permit Landlord to enter the Leased Premises
or any part thereof at all reasonable times upon reasonable notice during each
of the 24 month periods prior to any Termination Date and the 24 month period
prior to the Expiration Date for purposes of exhibiting the Leased Premises for
lease; provided, that with respect to Landlord exhibiting the Leased Premises
prior to any particular Termination Date, if the time for exercising the
Termination Option that would result in this Lease terminating on such
Termination Date shall have lapsed without exercise by Tenant or if such
Termination Option shall have been waived, Landlord shall no longer be permitted
to enter the Leased Premises for purposes of exhibiting same for lease during
such 24 month period. Any entry pursuant to this Article 10 shall be subject to
the condition that, except in case of emergency, if Tenant so desires, any
representative of Landlord shall be accompanied at all times by a representative
of Tenant.
11. Payment of Taxes
11.1 Definitions
(a) "Base Tax Amount" means, with respect to (i) the Third Rent
Period, the Taxes (excluding any amounts described in Section 11.1(b)(ii)) for
the Tax Year beginning July 1, 2008 or such other date closest to and on or
after July 1, 2008 as may then be adopted as the beginning of the fiscal year
for real estate tax purposes for the City of New York and (ii) the Fourth Rent
Period, the Taxes (excluding any amounts described in Section 11.1(b)(ii)) for
the Tax Year beginning July 1,2013 or such other date closest to and on or after
July 1, 2013 as may then be adopted as the beginning of the fiscal year for real
estate tax purposes for the City of New York.
(b) "Taxes" means (i) the real estate taxes, vault taxes,
assessments and special assessments levied, assessed or imposed upon or with
respect to the Project by any federal, state, municipal or other government or
governmental body or authority and (ii) any expenses incurred by Landlord in
contesting such taxes or assessments and/or the assessed value of the Project,
which expenses shall be allocated to the Tax Year to which such expenses relate.
If at any time the method of taxation shall be altered so that in lieu of or as
a substitute for, the whole or any part of such real estate taxes, assessments
and special assessments now imposed on real estate, there shall be levied,
assessed or imposed (x) a tax, assessment, levy, imposition, fee or charge
wholly or partially as a capital levy or otherwise on the rents received
therefrom, or (y) any other such substitute tax, assessment, levy, imposition,
fee or charge, including without limitation, transit taxes, fees and
assessments, then all such taxes, assessments, levies, impositions, fees or
charges or the part thereof so measured or based shall be included in "Taxes".
If Landlord is an entity exempt from the payment of taxes described, in clauses
(i) and (ii), there shall be included in "Taxes" any amounts that such owner or
Tenant is obligated to pay in lieu of the taxes described in clauses (i) and
(ii). "Taxes" shall not include (A) any franchise, capital stock or transfer tax
(except to the extent franchise or capital stock taxes may be included in
"Taxes" under the preceding provisions of this Section 11.1), (B) personal
property taxes, (C) any business improvement district fees and charges, (D) all
taxes or charges imposed on Tenant
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with respect to the rentals payable under this Lease, including, without
limitation, the Commercial Rent or Occupancy Taxes imposed pursuant to Title 11,
Chapter 7 of the New York City Administrative Code, or (E) any water or sewer
charges, license fees, permit fees, inspection fees or similar charges, all of
which taxes, charges and fees described in clauses (B) through (E), subject to
the provisions of Section 12.2 shall be payable directly by Tenant to the
applicable taxing authority.
(c) "Tax Year" means each period of 12 months, commencing on the
first day of July of each such period, in which occurs any part of the Term, or
such other period of 12 months occurring during the Term as hereafter may be
adopted as the fiscal year for real estate tax purposes of the City of New York.
11.2 Payment of Taxes
Landlord shall pay, before any fine, penalty, interest or cost may
be added for non-payment, all Taxes, and upon request shall furnish Tenant with
an Officer's Certificate certifying to the payment of all Taxes and copies of
official receipts or other proof of payment satisfactory to Tenant.
11.3 Initial Tax Payments
On the first day of July, 1998 and on the first day of each and
every month thereafter through the end of the Second Rent Period, Tenant shall
pay to Landlord the respective monthly amounts set forth on Exhibit B (each, an
"Initial Tax Payment"); provided, that if the term of this Lease shall
terminate prior to the end of the Second Rent Period and on a day other than the
last day of the calendar month, the Initial Tax Payment for the month in which
the term of this Lease shall terminate shall be appropriately prorated. The
Initial Tax Payments shall not be affected by any changes in the Taxes assessed
against the Project, and Tenant shall have no right to share in any refund of
Taxes received by Landlord with respect to any periods occurring prior to June
30, 2008.
11.4 Extended Tax Payments
(a) During each of the Third Rent Period and the Fourth Rent Period,
if Taxes for any Tax Year exceed the Base Tax Amount applicable to such period,
Tenant shall pay to Landlord (each, an "Extended Tax Payment"; Initial Tax
Payments and Extended Tax Payments are collectively called "Tax Payments") the
amount by which Taxes for such Tax Year are greater than the applicable Base Tax
Amount. If there shall be any increase in the Taxes for any Tax Year, whether
during or after such Tax Year, or if there shall be any decrease in the Taxes
for any Tax Year, the Extended Tax Payments for such Tax Year shall be
appropriately adjusted and paid or refunded, as the case may be, in accordance
herewith. In no event, however, shall Taxes be reduced below the applicable Base
Tax Amount.
(b) If Landlord shall receive a refund of Taxes for any Tax Year in
respect of which Tenant has paid Extended Tax Payments, Landlord shall pay to
Tenant the net refund (i.e., after deducting the costs and expenses of obtaining
the same, including, without limitation,
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appraisal, accounting, consulting and legal fees, to the extent that such costs
and expenses were not included in the Taxes for such Tax Year); provided, that
such payment to Tenant shall in no event exceed Tenant's Tax Payment paid for
such Tax Year. If Landlord shall have received from the taxing authority any
interest on such refund, Landlord shall also pay to Tenant the portion of such
interest allocable to the portion of the refund being paid to Tenant.
(c) If the Taxes comprising the applicable Base Tax Amount are
reduced as a result of an appropriate proceeding or otherwise, the Taxes as so
reduced shall for all purposes be deemed to be the Base Tax Amount and Landlord
shall notify Tenant of the amount by which the Tax Payments previously made were
less than the Tax Payments required to be made under this Section 11.3, and
Tenant shall pay the deficiency within 10 days after demand therefor.
(d) Subject to the provisions of this Section 11.4(d), Landlord
shall have the sole right to contest the assessed valuation of the Project for
each Tax Year and to control the prosecution or settlement of such contest.
Notwithstanding the foregoing, Landlord shall not settle any tax reduction
proceedings with respect to any Tax Year commencing on or after July 1, 2009
without Tenant's consent, which consent (x) shall not be unreasonably withheld
and (y) if Landlord's request for consent shall include the following statement
in block capital letters:
THIS NOTICE IS BEING GIVEN UNDER SECTION 11.4 OF OUR
LEASE WITH YOU AND SEEKS YOUR CONSENT TO A PROPOSED
SETTLEMENT OF TAX REDUCTION PROCEEDINGS. YOUR FAILURE TO
GIVE NOTICE DENYING YOUR CONSENT WITHIN TEN DAYS AFTER
THE DATE OF THIS NOTICE
shall be deemed granted if not withheld in writing within 10 days after request
by Landlord. If on or before the 60th day prior to the last day on which a party
may contest the assessed valuation of the Project with respect to any such Tax
Year commencing on or after July 1, 2009, Tenant (by notice referring to this
Section 11.4(d)) shall request that Landlord advise Tenant whether or not
Landlord will contest the assessed valuation of the Project with respect to such
Tax Year, then (i) if Landlord shall not on or before the 30th day prior to such
last day advise Tenant that Landlord will contest the assessed valuation of the
Project with respect to such Tax Year then (subject to the last sentence of this
Section 11.4(d)) Tenant shall have the sole right to do so and to control the
prosecution or settlement of such contest, and (ii) if Landlord shall on or
before the 30th day prior to such last day advise Tenant that Landlord will
contest the assessed valuation of the Project with respect to such Tax Year then
Landlord shall do so. In any instance where pursuant to the foregoing provisions
of this Section 11.4(d) any such action or proceeding is being undertaken by
Tenant, (x) Landlord shall cooperate with Tenant, execute any and all documents
reasonably required in connection therewith and, if required by Legal
Requirements, join with Tenant in the prosecution thereof, and (y) Tenant shall
be entitled to recover first out of any refund obtained the costs and expenses
of obtaining the same, including, without limitation, appraisal, accounting,
consulting and legal fees and the balance of such refund shall be apportioned
between the parties subject to the provisions of Section 11.4(b).
Notwithstanding the foregoing, Tenant shall not settle any tax reduction
proceedings brought by Tenant pursuant to
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clause (i) above without Landlord's consent, which consent (x) shall not be
unreasonably withheld and (y) if Tenant's request for consent shall include the
following statement in block capital letters:
THIS NOTICE IS BEING GIVEN UNDER SECTION 11.4 OF
OUR LEASE WITH YOU AND SEEKS YOUR CONSENT TO A
PROPOSED SETTLEMENT OF TAX REDUCTION
PROCEEDINGS. YOUR FAILURE TO GIVE NOTICE
DENYING YOUR CONSENT WITHIN TEN DAYS AFTER
THE DATE OF THIS NOTICE
shall be deemed granted if not withheld in writing within 10 days after request
by Tenant.
11.5 General Provisions Applicable to Taxes
(a) The Extended Tax Payment for each Tax Year shall be due and
payable in installments in the same manner that Taxes for such Tax Year are due
and payable by Landlord, whether to the City of New York or to a Superior
Mortgagee. Tenant shall pay each such installment no later than the later of (i)
10 days after the rendering of a statement therefor by Landlord to Tenant, or
(ii) 20 days prior to the date on which the corresponding installment of Taxes
are due. The statement to be rendered by Landlord shall set forth in reasonable
detail the computation of the particular installment being billed.
(b) Landlord's failure to render or delay in rendering any
statement with respect to any Tax Payment or installment thereof shall not
prejudice Landlord's right to thereafter render such a statement, nor shall the
rendering of a statement for any Tax Payment or installment thereof prejudice
Landlord's right to thereafter render a corrected statement therefor.
(c) Except for amounts included in Taxes, subject to the
provisions of Section 12.2 Tenant shall pay, before any fine, penalty, interest
or cost may be added for nonpayment, (i) all personal property taxes, (ii) all
business improvement district fees and charges, (iii) all taxes or charges
imposed on Tenant with respect to the rentals payable under this Lease,
including, without limitation, the Commercial Rent or Occupancy Taxes imposed
pursuant to Title 11, Chapter 7 of the New York City Administrative Code, and
(iv) all water or sewer charges, license fees, permit fees, inspection fees or
similar charges, (collectively, "Tenant Impositions").
11.6 Industrial and Commercial Incentive Program
Landlord hereby notifies Tenant that Landlord intends to avail
itself of the Industrial and Commercial Incentive Program ("ICIP") with respect
to the Base Building Upgrade Work and the Fit-Out Work to the extent in either
case that the same qualify for the ICIP. In contracting pursuant to the Initial
Improvements Agreement for the Base Building Upgrade Work and, to the extent
that the same qualifies for the ICIP, the Fit-Out Work, Tenant shall include
provisions requiring all of the construction managers, contractors and
subcontractors to comply with the New York City Office of Labor
Services/Construction
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Division ("OLS") requirements applicable to construction projects benefiting
from the ICIP. Such compliance, as of the date hereof, includes the following:
the submission and approval of a Construction Employment Report, attendance at a
pre-construction conference with representatives of the OLS and adherence to the
provisions of Article 22 of the ICIP Rules and Regulations, the provisions of
New York City Charter Chapter 13-B and the provisions of Executive Order No. 50
(1980). Furthermore, at Landlord's request, Tenant shall (A) report to Landlord
the number of workers permanently engaged in employment in the Leased Premises,
the nature of each worker's employment and, to the extent applicable, the New
York City residency of each worker, (B) provide access to the Leased Premises by
employees and agents of the Department (as such term is defined in the ICIP
Rules and Regulations) at all reasonable times, and (C) enforce the contractual
obligations of such construction managers, contractors and subcontractors to
comply with the OLS requirements. Landlord shall be responsible for the
preparation of all applications (including any revised applications),
certificates of continuing eligibility and any other documents, certificates and
instruments that may be required in order to obtain benefits under the ICIP
and/or in order to maintain the benefits in effect. Tenant shall, at Landlord's
request, (i) make available to Landlord the Plans and Specifications and all
cost records relative to the Base Building Upgrade Work and the Fit-Out Work,
and (ii) otherwise cooperate with Landlord's efforts to obtain such benefits
(including, without limitation, the execution within 5 Business Days after
request of any forms required to be executed by Tenant or otherwise customarily
executed by similarly situated tenants), provided, that Tenant shall not be
required to alter, modify or delay the Base Building Upgrade Work or the Fit-Out
Work. Landlord shall pay to Tenant, within 30 days after demand, Tenant's
reasonable out-of-pocket costs and expenses (including, without limitation,
attorneys' fees and disbursements) incurred in reviewing such applications,
certificates of continuing eligibility and such other documents, certificates
and instruments, or otherwise cooperating, at Landlord's request, with
Landlord's efforts to obtain such benefits. All benefits obtained under ICIP
shall, to the extent legally permissible, accrue to Landlord (and if paid to or
received by Tenant, Tenant shall pay same to Landlord). Landlord shall indemnify
and hold harmless Tenant from and against any and all liability, damages,
claims, costs or expenses (including legal fees) incurred by or asserted against
Tenant by reason of or arising out of to the ICIP, any benefits granted
thereunder, or any application, certificates, documents or instruments prepared
or filed in connection therewith unless such liability, damages, claims, cost or
expenses arise out of Tenant's failure to comply with Article 11.
12. Compliance with Legal and Insurance Requirements and Permitted
Encumbrances
12.1 Generally
Subject to the Provisions of Article 6 and Section 12.2, Tenant
shall promptly comply (at Tenant's expense, unless the need for such compliance
arises out of any act, omission, negligence or intentional misconduct of
Landlord or any agent, employee, contractor, licensee of Landlord, in which case
Landlord shall reimburse Tenant for the costs of compliance within 30 days after
submission by Tenant to Landlord of invoices evidencing the costs of compliance)
with all Legal Requirements, Insurance Requirements and Permitted Encumbrances
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(exclusive of the lease described in item 1 of Exhibit C (the "Ground Lease")
and mortgages and related documents described in items 2, 3, 4 and 5 of Exhibit
C (the "Pre-Existing Mortgages"), as to which Tenant's obligations shall be only
as provided in Section 12.3), whether or not compliance therewith shall require
Alterations or interfere with the use and enjoyment of the Leased Premises or
any part thereof.
12.2 Permitted Contests
Tenant, without Landlord's consent may contest, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Tenant Imposition, Legal
Requirement, or Permitted Encumbrance and may withhold payment or performance of
the same pending such contest, provided, that (a) such proceedings shall suspend
the collection thereof from Landlord and the Leased Premises or any part
thereof, (b) neither the Leased Premises nor any part thereof or interest
therein would be in any danger of being sold, forfeited or lost, (c) Landlord
shall not be in any danger of any criminal liability by reason thereof and (d)
in the case of a contest involving any Legal Requirement or any Permitted
Encumbrance, if at any time Landlord determines that Landlord is in danger of
any civil liability in an amount in excess of one year's Basic Rent, Tenant
shall (within 5 Business Days after Tenant receives Landlord's request therefor)
furnish to Landlord such security against such civil liability as Landlord may
reasonably request. Tenant shall give prompt notice to Landlord of the
commencement of or of Tenant's desire to commence any contest permitted by the
preceding sentence and Landlord shall, at Tenant's expense, reasonably cooperate
with Tenant with respect to any such contest and, if in connection with the
commencement, prosecution or settlement of such contest only Landlord can
execute any report, certificate, instrument, application or other document or
take any other action, in each case reasonably required in connection with such
contest, then, upon Tenant's request and at Tenant's expense, Landlord shall
execute or take the same. If in connection with any such request Landlord
consults with an engineer, an attorney or other professional, Tenant shall,
within 10 days after Tenant's receipt of demand therefor accompanied by copies
of the bills paid by Landlord, reimburse Landlord for the reasonable
out-of-pocket expenses incurred by Landlord for the services of such
professionals. If such professional advises Landlord in writing that Landlord's
executing such document or taking such action might result in the Leased
Premises or any part thereof or interest therein being sold, forfeited or lost
or in Landlord becoming criminally liable, and if such professional furnishes a
reasonably detailed explanation of the foregoing and the reasons therefor,
Landlord shall promptly advise Tenant and furnish Tenant with a copy of such
professional's advice and explanation and Landlord need not execute such
document or take such action. If, while contesting any amount, Tenant withholds
payment of the same, Tenant shall maintain the amount withheld (together with
penalties and interest from time to time accruing thereon) on deposit in a
separate interest bearing account in Landlord's name with a bank or trust
company selected by Tenant having an office in the Borough of Manhattan and a
combined shareholders equity of at least $200 million (or, if Tenant and
Landlord so agree, with Landlord). If any of the conditions set forth in the
proviso to the first sentence of this Section 12.2 are violated, Landlord shall
be entitled to withdraw the funds on deposit in said account in order to make
payment of the amount being contested. All interest earned on funds in such an
account shall be credited to such account and Tenant shall pay all taxes
thereon. Upon termination or
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settlement of such contest, any required payment of the amount contested shall
be made from such account and the balance remaining in such account shall be
paid to Tenant. If the amount in the account is insufficient, Tenant shall pay
the amount of the deficiency.
12.3 Ground Lease and Pre-Existing Mortgages. Landlord shall comply
with the Ground Lease and the Pre-Exiting Mortgages; provided, that this Section
12.3 shall not be deemed to release Tenant from or require Landlord to perform
any of Tenant's obligations under this Lease and if and to the extent that any
action is required to be taken both by Landlord as tenant under the Ground Lease
or mortgagor under the Pre-Existing Mortgages and by Tenant as tenant hereunder,
such action shall be taken by Tenant hereunder at Tenant's expense.
Notwithstanding the foregoing, Landlord shall be solely responsible for the
payment of (i) the net annual rental payable under the Ground Lease, and (ii)
all principal and interest on any debt secured by any of the Pre-Existing
Mortgages. If and to the extent that Landlord shall be required by the
provisions of this Section 12.3 to perform any work in or to the Leased
Premises, Tenant shall have the right to perform such work at Landlord's
expense, in which case Landlord shall reimburse Tenant for the reasonable costs
of performance within 30 days after submission by Tenant to Landlord of invoices
evidencing the costs of performance. Landlord shall exercise all renewal options
required to keep the Ground Lease in effect so long as this Lease is in effect.
If Landlord shall acquire the lessor's interest under the Ground Lease, Landlord
shall have the right to terminate the same and, if Landlord acquires such
interest and terminates the Ground Lease, this Lease shall continue in full
force and effect, except that all provisions relating to the Ground Lease shall
be deemed deleted.
13. Liens
(a) Within 60 days after the date on which Landlord gives Tenant
notice, referring to this Article 13 and Section 19(a)(v), of the existence of
any mechanic's, laborer's or materialman's lien, any lien arising under any
Permitted Encumbrance or any security interest which might be or become a lien,
encumbrance or charge upon the Leased Premises or any part thereof (other than
any such lien, encumbrance or charge caused by Landlord) and directs Tenant to
remove or discharge the same, Tenant shall either (i) remove or discharge the
same, by bonding or otherwise, or (ii) if Landlord shall consent thereto,
provide Landlord with an unconditional and irrevocable letter of credit (issued
by a New York Clearing House Association member bank satisfactory to Landlord
and in form satisfactory to Landlord) or other security satisfactory to Landlord
indemnifying Landlord against such lien or security interest.
(b) Nothing contained in this Lease shall be deemed or construed in
any way as constituting the consent or request of Landlord, express or implied
by inference or otherwise, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any materials
for any specific improvement, alteration to or repair of the Leased Premises or
any part thereof.
14. Insurance
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14.1 Risks to be Insured
(a) Tenant shall maintain or cause to be maintained with insurers
and pursuant to insuring agreements approved by Landlord:
(i) insurance with respect to all buildings,
improvements, equipment and machinery constituting a part of the Leased Premises
against loss or damage by perils customarily included under standard "all-risk"
policies (including specifically damage by water), in amounts sufficient to
prevent Landlord or Tenant from becoming a co-insurer of any partial loss under
the applicable policies, and in any event in amounts not less than 90% of the
then full replacement cost (without deducting depreciation) of such buildings,
improvements, equipment and machinery (exclusive of the costs of foundations,
excavations and footings) (the "full replacement cost") as determined at the
request of Tenant (or at the request of Landlord, made not sooner than one year
after the previous determination), and (in either case) at Tenant's expense by
the insurer or insurers or by an expert selected by Tenant and approved by
Landlord;
(ii) boiler and machinery coverage, either, as Tenant
shall elect, as part of the policy referred to in clause (i) of this Section
14.1(a) or, if by a secondary policy, in an amount not less than $100,000,000 or
such greater amount as Landlord may reasonably require by notice to Tenant (the
insurance described in clause (i) above and this clause (ii) is collectively
called "Property Insurance");
(iii) commercial general liability insurance, including
broad form bodily injury, personal injury, property damage and blanket
contractual insurance, against claims arising out of or connected with the
possession, use, operation or condition of the Leased Premises with a combined
single limit of not less than $100,000,000 (or, such greater amount as Landlord
may reasonably require by notice to Tenant) for all claims with respect to
bodily injury, property damage and personal injury with respect to any one
occurrence;
(iv) appropriate builder's risk insurance with respect
to any Alterations (including, without limitation, any Restoration) or other
work on or about the Leased Premises or any part thereof;
(v) appropriate workers compensation and employer's
liability insurance with respect to any Alteration (including, without
limitation, any Restoration) or other work on or about the Leased Premises or
any part thereof; and
(vi) such other insurance with respect to the Leased
Premises or any part thereof in such amounts and against such insurable
casualties as Landlord from time to time may reasonably require by notice to
Tenant.
(b) All insurance required to be maintained under clause (ii) or
(iii) of Section 14.1(a) may be subject to a deductible of not more than the
Deductible Amount. Landlord shall not unreasonably withhold any of the approvals
referred to in Section 14.1(a). Any dispute whether Landlord has unreasonably
withheld such an approval and any dispute regarding the dollar amounts of the
limits of coverage under clause (ii) or (iii) of Section 14.1(a)
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and any dispute under clause (iv), (v), or (vi) of Section 14.1(a) shall be
resolved by arbitration. Pending the outcome of such arbitration, Tenant may act
as if the dispute had been resolved in its favor.
(c) The insurance required to be maintained by Tenant under
clause (i) of Section 14.1(a) shall also include (1) flood coverage of not less
than $25 million, (2) earthquake coverage of not less than $25 million, (3)
broad form water coverage (including backup of sewers and drains) of not less
than $5 million, (4) demolition coverage of not less than $10 million, (5)
increased cost of construction coverage of not less than $10 million, and (6)
law and ordinance coverage of not less than $10 million.
(d) Whenever in connection with any Alterations Tenant causes
its general contractor to name Tenant as an insured under any commercial general
liability insurance, Tenant shall also cause its general contractor also so to
name Landlord.
14.2 Policy Provisions
All insurance maintained by Tenant pursuant to Section 14.1(a)
shall: (a) except for any workers' compensation insurance and employers'
liability insurance, name as insureds, as their respective interests may appear,
Landlord and Tenant and any Superior Mortgagee who shall have executed and
delivered a Non-Disturbance Agreement; (b) include a stipulation that premiums
will be paid by and are the responsibility of Tenant; (c) except for any
comprehensive general liability, worker's compensation insurance or employer's
liability insurance, provide that no act or omission of Tenant shall impair or
affect the rights of the insureds to receive and collect the proceeds under the
relevant policy; and (d) provide that no cancellation, reduction in amount or
material change in coverage thereof shall be effective until at least 30 days
after receipt by Landlord of written notice thereof. Tenant shall have the sole
authority to settle claims under insurance policies; provided, that in case of
any damage or destruction affording Tenant the right to terminate this Lease
pursuant to Section 15.4(a), Tenant may not settle all or any of the claims
under the policies referred to in clauses (i), (ii), (iv) or (vi) of Section
14.1(a) arising from any damage or destruction unless it shall waive such right
with respect to such damage or destruction. Tenant may obtain any of the
insurance required hereby under blanket or umbrella policies; provided, that any
such policy of insurance provided for under clauses (i), (ii), (iv) or (vi) of
Section 14.1(a): (i) shall permit recovery in the amount required by the clause
in question to be carried without regard to other insured events with respect to
other properties, and (ii) shall not contain any clause which would result in
the insured thereunder being required to carry insurance with respect to the
property covered thereby in an amount equal to a minimum specific percentage of
the full insurable value of such property in order to prevent the insured
therein named from becoming a co-insurer of any loss with the insurer under such
policy.
Tenant shall also cause the members, partners or shareholders of
Landlord whose names shall have been furnished to Tenant and, so long as The
Witkoff Group LLC is an affiliate of Landlord, The Witkoff Group LLC as
additional named insureds under the insurance required to be maintained by
Tenant under clause (iii) of Section 14.1(a).
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14.3 Delivery of Insurance Certificates; Payment of Premium
On the date hereof and not less than 7 days prior to each policy
expiration Tenant shall deliver to Landlord certificates of all insurance
policies required by this Lease to be maintained. Tenant shall pay all premiums
on each such insurance policy within the time required under such policy and
furnish Landlord with evidence of payment thereof within 10 Business Days after
payment.
14.4 No Limitation of Damages
Landlord shall not be limited in the proof of any damages which
Landlord may claim against Tenant arising out of or by reason of Tenant's
failure during the Term (or thereafter in case of insurance required to be
provided under Section 15.4(k)) to provide and keep in force the insurance
required under this Lease to the amount of the insurance premium or premiums not
paid or incurred by Tenant and which would have been payable upon such
insurance, but Landlord shall also be entitled to recover as damages for such
breach the uninsured amount of any loss to the extent of any deficiency between
the insurance required by the provisions of this Lease and the insurance carried
by Tenant, together with all costs and expenses incurred by Landlord which
Landlord would not have incurred if the required insurance had been maintained
by Tenant. However, any such damages so recovered by Landlord shall be subject
to and limited by the provisions of Article 25.
15. Damage to or Destruction of Property
15.1 Waiver of ss. 227; Tenant to Give Notice
Tenant hereby waives the provisions of Article 227 of the Real
Property Law and confirms that the provisions of this Article 15 shall govern
and control in lieu thereof. In case of any damage to or destruction of the
Leased Premises or any part thereof, if, in Tenant's reasonable opinion, the
cost to repair or rebuild the same will exceed $1,000,000, Tenant shall promptly
give notice thereof to Landlord, generally describing the nature and extent of
such damage or destruction.
15.2 Restoration
In case of any damage to or destruction of the Leased Premises or
any part thereof, this Lease shall continue in full force and effect without
abatement of any Basic Rent, Supplemental Rent or other amounts payable by
Tenant hereunder. Tenant, whether or not the insurance proceeds, if any, on
account of such damage or destruction shall be sufficient for the purpose, shall
(subject to the applicable provisions of Article 6 and Section 15.4(c))
promptly commence and proceed with due diligence to complete the restoration,
replacement or rebuilding of the Leased Premises (which may include demolition
of the remaining portions of the Leased Premises prior to rebuilding) as nearly
as possible to its condition immediately prior to such damage or destruction
with such Voluntary Alterations as Tenant shall (subject to the applicable
provisions of Article 6) elect (such restoration, replacement and rebuilding,
together with any
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temporary repairs and protection pending completion of the work, being herein
called "Restoration").
15.3 Application of Insurance Proceeds
(a) Promptly after the occurrence of any damage to or destruction of
the Leased Premises or any part thereof the insurance proceeds with respect to
which are expected by Tenant to exceed the Significant Proceeds Amount, Tenant
by notice to Landlord and the institution appointed, shall appoint a depositary
of the insurance proceeds under this Section 15.3 (the "Depositary"). Without
limiting the foregoing, Tenant may appoint a Depositary at any other time. The
Depositary shall be a bank or trust company having an office in the Borough of
Manhattan and a combined shareholders equity of at least $200 million. Funds
held by the Depositary shall be invested by the Depositary, upon the
instructions of Tenant, in Permitted Investments.
(b) All insurance proceeds on account of any damage to or
destruction of the Leased Premises or any part thereof shall be payable as
follows:
(i) to Tenant, to the extent that such proceeds are
equal to or less than the Significant Proceeds Amount, and
(ii) to the Depositary, to the extent that such proceeds
are in excess of the Significant Proceeds Amount;
provided, that if an Event of Default shall have occurred and be continuing, the
amounts paid or payable to Tenant in accordance with the foregoing clause (i)
shall be paid to the Depository and shall (without the necessity of Tenant's
compliance with the provisions of Article 17) be returned (together with the
interest thereon) to Tenant only upon the curing of such Event of Default, but
less the portion, if any, applied and disbursed by the Depositary in accordance
with the provisions of Article 17.
15.4 Termination in Lieu of Restoration
(a) If:
(i) (x) after September 30, 2004 the Leased Premises shall be so
damaged or destroyed that the Costs of Restoration shall
exceed the product of $10,000,000 multiplied by a fraction
whose numerator is the Index for the month which is three
months prior to the month in which the damage or destruction
occurred and whose denominator is the Index for April, 1997,
and (y) on the date of such damage or destruction Tenant's
right to terminate this Lease as of June 30, 2008 shall not
have lapsed without exercise,
(ii) (x) after September 30, 2009 the Leased Premises shall be so
damaged or destroyed that the Costs of Restoration shall
exceed the
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product of $10,000,000 multiplied by a fraction whose
numerator is the Index for the month which is three months
prior to the month in which the damage or destruction occurred
and whose denominator is the Index for April, 1997, and (y) on
the date of such damage or destruction Tenant's right to
terminate this Lease as of June 30, 2013 shall not have lapsed
without exercise,
(iii) after September 30, 2014 the Leased Premises shall be so
damaged or destroyed that the Costs of Restoration shall
exceed the product of $10,000,000 multiplied by a fraction
whose numerator is the Index for the month which is three
months prior to the month in which the damage or destruction
occurred and whose denominator is the Index for April, 1997,
or
(iv) at any time the Leased Premises shall be so damaged or
destroyed that 50% or more of the useable area thereof cannot,
with the exercise by Tenant of all due diligence, be rendered
tenantable and fit for the normal conduct of business within
90 days after the date of the damage or destruction (the
condition described in this clause (iv) being called "50%
Untenantability"),
then (subject to the further provisions of this Section 15.4) Tenant may, by
notice (the "Damage Termination Notice") to Landlord given within the 180-day
period (the "Election Period") following the date (the "Damage Date") of damage
or destruction, elect to terminate this Lease as of a date specified in the
Damage Termination Notice (the "Specified Damage Termination Date"), which
Specified Damage Termination Date shall be no earlier than 20 days after the
giving of such Damage Termination Notice and no later than one year after the
giving of such Damage Termination Notice.
(b) If Tenant shall timely give the Damage Termination Notice then,
subject to Section 15.4(i), this Lease shall terminate on the Specified Damage
Termination Date; provided, that if on or prior to the date which is 15 days
after the giving of such Damage Termination Notice Landlord shall by notice to
Tenant dispute Tenant's right to terminate this Lease pursuant to Section
15.4(a), the matter shall be determined by the Appropriate Engineer and (i) if
the Appropriate Engineer's determination is in Landlord's favor, then this Lease
shall continue in full force and effect or (ii) if the Appropriate Engineer's
determination is in Tenant's favor, then, subject to Section 15.4(i), this Lease
shall terminate effective as of the Specified Damage Termination Date. At any
time at the request of Landlord or Tenant, the Appropriate Engineer shall make a
determination as to whether Tenant has the right to terminate this Lease
pursuant to this Section 15.4.
(c) At all times prior to the giving of the Damage Termination
Notice, Tenant shall prosecute the Restoration with all due diligence and in
accordance with the Plans and Specifications therefor (as approved by Landlord
or as determined by the Appropriate Engineer to have been required to be
approved by Landlord pursuant to this Lease); provided, that unless
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(i) Tenant waives in writing Tenant's termination right under this
Section 15.4 with respect thereto, or
(ii) Tenant does not give the Damage Termination Notice on or prior
to the end of the applicable Election Period,
Tenant shall not be obligated to (i) expend more than the Significant Proceeds
Amount with respect to the Restoration of such damage or destruction, or (ii)
expend any Costs which are not Qualified Restoration Costs. The term "Qualified
Restoration Costs" shall mean Costs of any Restoration to the extent undertaken
to (i) secure or prevent further damage to the Leased Premises and/or (ii)
effect Restoration of Building systems but only to the extent the same are not
located in any area designed for tenant occupancy.
(d) Simultaneously with the giving of the Damage Termination Notice,
Tenant shall:
(i) assign to Landlord (by instruments reasonably satisfactory to
Landlord) all of Tenant's right, title and interest in and to
the Plans and Specifications (if any) for the Restoration;
(ii) assign to Landlord (by instruments reasonably satisfactory to
Landlord) all of Tenant's right, title and interest in and to
that portion (if any) of the proceeds of Tenant's Property
Insurance which has not yet been received by Tenant from the
insurer (provided, that if and when Landlord receives such
portion of the proceeds of Tenant's Property Insurance from
the insurer, Landlord shall, within 10 Business Days after
receipt of a request therefor from Tenant, pay to Tenant an
amount equal to the lesser of (x) such portion of the proceeds
of Tenant's Property Insurance received by Landlord from the
insurer or (y) the amount, if any, by which the aggregate
amount expended by Tenant for Qualified Restoration Costs in
connection with the Restoration on or prior to the date of the
Damage Termination Notice exceeds the sum of (l) the portion
of the proceeds of Tenant's Property Insurance (if any)
received by Tenant from the insurer on or prior to the date of
the Damage Termination Notice and (2) the Deductible Amount
under the insurance policy required to be maintained by Tenant
under Section 14.1(a));
(iii) pay to Landlord, in immediately available funds, an amount
(the "Damage Payment") equal to the sum of the positive
remainder, if any, obtained by subtracting the aggregate
amount theretofore expended by Tenant for Qualified
Restoration Costs in connection with the Restoration from the
sum of (A) that portion (if any) of the proceeds of Tenant's
Property Insurance which Tenant received from the insurer on
or prior to the date of the Damage Termination Notice plus (B)
the Deductible Amount under the insurance policy required to
be maintained by Tenant under Section 14.1(a) (the computation
of the payment under
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this clause (iii) shall not be affected by any amount of
proceeds of Tenant's Property Insurance that Tenant may have
spent on other than Qualified Restoration Costs) ; and
(iv) if the insurance policy required to be maintained by Tenant
under Section 14.1(a) was for less than the full replacement
cost most recently determined pursuant to said Section,
deposit with the Depositary, in immediately available funds,
an amount equal to the excess of (x) the amount which would
have been recoverable from the insurer if such policy had been
for the full replacement cost most recently determined
pursuant to said Section over (y) the amount which is
recoverable from the insurer under such policy on account of
the damage or destruction.
If the insurer under the insurance policy required to be maintained
by Tenant under Section 14.1(a) shall pay to Tenant any amount which is required
by Section 15.3 to be paid to the Depositary, Tenant shall immediately deposit
such amount with the Depositary.
(e) Subject to Section 15.4(f), during the period commencing on the
date of the Damage Termination Notice and ending on the Specified Damage
Termination Date, Landlord shall have full control over the Restoration and may
use the Damage Payment and the amounts on deposit with the Depositary to defray
the costs of the Restoration. Landlord and Tenant shall reasonably cooperate
with one another to effectuate the Restoration in an efficient manner, and
during the Restoration Landlord shall use reasonable efforts to minimize
interference with Tenant's use of the undamaged portion (if any) of the Leased
Premises. Landlord shall not be liable to Tenant for any matter relating to or
arising out of the Restoration unless due to Landlord's gross negligence or
willful misfeasance; provided, that Landlord shall retain reputable contractors
who carry reasonable and customary public liability insurance.
(f) If following the giving of the Damage Termination Notice,
Landlord shall timely dispute Tenant's right to terminate this Lease pursuant to
Section 15.4(a) and the Appropriate Engineer shall determine that Tenant had no
right to terminate this Lease pursuant to Section 15.4(a), then:
(i) Tenant shall thereupon assume full control of the Restoration
and shall prosecute the same with all due diligence to
completion in accordance with the requirements of this Lease;
and
(ii) within 10 Business Days after the Appropriate Engineer's
determination, Landlord shall (x) reassign to Tenant that
which was assigned to Landlord pursuant to Section 15.4(d)(i)
and (ii) and (y) pay to Tenant in immediately available funds
an amount equal to the positive remainder, if any, obtained by
subtracting the aggregate amount theretofore expended by
Landlord in connection with the Restoration (exclusive,
however, of any amount disbursed to Landlord by the
Depositary) from the sum of (a) the amount, if any, received
by Landlord from the insurer by reason of the assignment
referred to in Section
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15.4(d)(ii) (exclusive, however, of any portion of such amount
paid by Landlord to Tenant pursuant to Section 15.4(d)(ii)),
and (b) the Damage Payment.
(g) Prior to the termination of this Lease pursuant to this Section
15.4 there shall be no abatement of the Basic Rent, Supplemental Rent or any
other sum payable by Tenant hereunder. Basic Rent, Supplemental Rent and Tax
Payments due hereunder shall be payable through and apportioned as of the
Specified Damage Termination Date, and (except as provided in Section 32(b) with
respect to any holdover) Tenant shall have no liability for Basic Rent,
Supplemental Rent or Tax Payments which would otherwise have been payable after
the Specified Damage Termination Date.
(h) If this Lease is terminated pursuant to this Section 15.4, then,
in addition to all amounts payable under Section 15.4(d), Tenant shall pay to
Landlord, on or before the Specified Damage Termination Date, a cancellation
payment (the "Damage Cancellation Payment") equal to the sum of
(i) the Basic Rent and the Tax Payments that would be payable for
the period commencing on the Specified Damage Termination Date
and ending on the earlier of (x) the date six months after the
Specified Damage Termination Date, or (y) (i) if the damage or
destruction shall have occurred on or before the end of the
Second Rent Period and Tenant shall have timely exercised
Tenant's option to terminate the Lease as of June 30, 2008,
the last day of the Second Rent Period, (ii) if the damage or
destruction shall have occurred during the Third Rent Period
and Tenant shall have timely exercised Tenant's option to
terminate the Lease as of June 30, 2013, the last day of the
Third Rent Period, or (iii) if the damage or destruction shall
have occurred during the Fourth Rent Period, the last day of
the Fourth Rent Period, plus
(ii) if the Specified Damage Termination Date shall occur prior to
June 1, 2008, the sum of (x) the amount of the Unamortized
Fit-Out Work Investment as of the Specified Damage Termination
Date, (y) if the Specified Damage Termination Date shall be
other than the first day of a month, interest at the Fit-Out
Work Interest Rate on such Unamortized Fit-Out Work Investment
from the first day of the month in which the Specified Damage
Termination Date shall occur to the Specified Damage
Termination Date, and (z) the Notional Make-Whole Amount as of
the Specified Damage Termination Date
provided, that (a) Tenant shall be entitled to a credit against the amount
required to be paid pursuant to clause (i) above equal to all Basic Rent and Tax
Payments previously paid, if any, which is attributable to the period after the
Specified Damage Termination Date, and (b) if under Section 15.4(b) Landlord
shall timely dispute Tenant's right so to terminate this Lease, then Tenant
shall not be required to make the Damage Cancellation Payment unless the
Appropriate
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Engineer's determination is in Tenant's favor. In any case under clause (b) of
the preceding sentence, the Damage Cancellation Payment shall be due within 5
days after the determination.
(i) It shall be a condition to the effectiveness of the Damage
Termination Notice and the termination of this Lease pursuant to this Section
15.4, that on or before the Specified Damage Termination Date Tenant pays either
(1) all amounts required to be paid by Tenant under Section 15.4(d) and Section
15.4(h), or (2) all amounts which Tenant believes in good faith are required to
be paid by Tenant under Section 15.4(d) and Section 15.4(h). Any dispute with
respect to the determination of any amount required to be paid by Tenant under
Section 15.4(d) shall be resolved by arbitration and any dispute with respect to
the determination of any amount required to be paid by Tenant under Section
15.4(h) shall be resolved by Expedited Arbitration. If in such arbitration or
Expedited Arbitration it is determined that Tenant underpaid, Tenant shall pay
the amount of the underpayment to Landlord within 5 days after the such
determination, together with interest thereon at the Prime Rate from the
Specified Damage Termination Date until paid by Tenant. If in such arbitration
or Expedited Arbitration it is determined that Tenant overpaid, Landlord shall
pay the amount of the overpayment to Tenant within 5 days after such
determination, together with interest thereon at the Prime Rate from the
Specified Damage Termination Date until paid by Landlord.
(j) If by reason of the termination of this Lease pursuant to
Section 15.4 or Tenant's failure to effect Restoration by reason of Tenant's
having so terminated this Lease
(p) the insurer under the insurance policy required to
be maintained by Tenant under clauses (i) and (ii) of
Section 14.1(a) is released under the terms of the
policy from its obligation to make payment on account of
the loss arising out of such damage or destruction, or
(q) the amount which under the terms of the policy such
insurer is required to pay on account of the loss
arising out of such damage or destruction is less than
the amount which under the terms of the policy such
insurer would have been required to pay if this Lease
had not been terminated and Tenant had effected such
restoration as Landlord, within the time period provided
by the policy, actually commits to such insurer to
effect (such lesser amount being herein called the
"Reduced Proceeds Amount"),
then Tenant shall, within 30 days after Landlord's demand,
(x) in the case of (p) above, pay to Landlord the amount
which under the terms of the policy such insurer would
have been required to pay on account of the loss arising
out of such damage or destruction if this Lease had not
been terminated and Tenant had effected such restoration
as
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Landlord, within the time period provided by the policy,
actually commits to such insurer to effect (the "Full
Proceeds Amount"), or
(y) in the case of (q) above, pay to Landlord the excess
of the Full Proceeds Amount over the Reduced Proceeds
Amount.
Together with the assignment delivered under Section l5.4(d) (ii),
Tenant shall furnish Landlord with a notice, in block capital letters, of the
period provided by the policy within which Tenant must make its restoration
commitment to the insurer.
Landlord, at Tenant's expense, shall prosecute all insurance claims
the proceeds of which have been assigned to Landlord under Section 15.4(d)(ii)
diligently and in accordance with the terms of the applicable policies and,
notwithstanding the provisions of Section 14.2 to the contrary, Landlord shall
have the sole right to settle such claims.
(k) If Tenant shall terminate this Lease pursuant to this Section
15.4, Tenant shall maintain in effect the insurance required by clauses (i) and
(ii) of Sections 14.1(a) ("Post-Termination Insurance") until the earliest of
(1) the later of (a) the end of Tenant's then current policy
period, or (b) the date two years after the Specified
Damage Termination Date,
(2) the date on which Landlord receives the proceeds of the
insurance required to be maintained by Tenant under
clauses (i) and (ii) of Section 14.1(a) with respect to
the damage or destruction giving rise to such
termination (including any amounts payable under Section
15.4(j)), or
(3) the date on which Landlord commences restoration of such
damage or destruction (other than protective work or
demolition).
All of the provisions of Article 14, in so far as they relate to the insurance
required by clauses (i) and (ii) of Sections 14.1(a), shall be applicable to
such Post-Termination Insurance, except that (a) Landlord shall be solely
entitled to all proceeds of such Post-Termination Insurance arising out of any
casualty occurring after the Specified Damage Termination Date, and (b)
Landlord, at its expense, shall prosecute all insurance claims to the proceeds
of which it is so entitled diligently and in accordance with the terms of the
applicable policies and, notwithstanding the provisions of Section 14.2 to the
contrary, Landlord shall have the sole right to settle such claims. At
Landlord's request, Tenant shall join in the execution of any documents
reasonably required by the insurer to be executed by Tenant in connection with
such claims. If Tenant shall fail, within 10 Business Days of Landlord's request
to execute any such document, Landlord is hereby appointed Tenant's
attorney-in-fact to do so.
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On or before the Specified Damage Termination Date, Tenant shall
furnish Landlord with a certificate of the insurance required by this Section
15.4(k) showing as the expiration date thereof the end of Tenant's then current
policy period. So long as Tenant is required by this Section 15.4(k) to maintain
insurance, Tenant shall, no later than 7 days prior to the end of each of
Tenant's policy periods, furnish Landlord with a certificate of the insurance
required by this Section 15.4(k) showing as the expiration date thereof the end
of Tenant's next policy period or, if such next policy period will end after two
years after the Specified Damage Termination Date, two years after the Specified
Damage Termination Date. No certificate delivered pursuant to this paragraph
shall be effective to extend the date through which Tenant is required by this
Section 15.4(j) to maintain insurance. If at any time Tenant does not maintain
the insurance required by this Section 15.4(k) to be maintained by it, Landlord,
after 2 Business Days notice to Tenant, may purchase insurance providing the
same coverage, and if Landlord does so Tenant shall reimburse Landlord on demand
for all of the costs incurred by Landlord in maintaining such insurance.
(l) If this Lease is terminated pursuant to this Section 15.4 on or
prior to June 1, 2008, Tenant shall also reimburse Landlord, within 10 days of
Landlord's demand, any document preparation fee, recording fee, attendance fee
or similar fee charged by any of Landlord's lenders, not exceeding $10,000 in
the aggregate for all lenders, by reason of Landlord applying the sum received
under Section 15.4(h)(ii) to prepayment of any of Landlord's mortgage debt due
to such lender.
16. Taking of Property
16.1 Notice
Landlord and Tenant shall each notify the other if it becomes aware
of a Taking, or the commencement of any proceedings or negotiations which might
result in a Taking.
16.2 Total Taking
In case of a Total Taking, this Lease shall terminate on the date of
such Taking. For purposes of the preceding sentence, a Taking shall be deemed a
"Total Taking" if all of the Leased Premises are taken or if, in Tenant's
reasonable opinion, the remainder of the Leased Premises that is not taken is
not reasonably susceptible to use by Tenant for the conduct of its business. In
the event of a dispute as to whether a Taking constitutes a Total Taking, the
matter shall be determined by Expedited Arbitration and (a) if the arbitrator
determines that the Taking in question is not a Total Taking the Taking in
question shall be deemed a Partial Taking or (b) if the arbitrator determines
that the Taking in question is a Total Taking this Lease shall terminate on the
later of the date of the determination or the date of such Taking. Basic Rent,
Supplemental Rent and Tax Payments due hereunder shall be payable through and
apportioned as of the date of termination, and (except as provided in Section
32(b) with respect to any holdover) Tenant shall have no liability for Basic
Rent, Supplemental Rent or Tax Payments which would otherwise have been payable
after the date of termination. Within 10 Business Days after termination of the
Lease in accordance with this Section 16.2, Landlord shall return to Tenant all
Basic Rent
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and Tax Payments previously paid, if any, which is attributable to the period
after such termination.
If this Lease shall terminate pursuant to this Section 16.2 on or
prior to June 1 2008, Tenant shall pay to Landlord an amount equal to the sum of
(x) the Unamortized Fit-Out Work Investment as of the date of termination, (y)
if the date of termination shall be other than the first day of a month,
interest at the Fit-Out Work Interest Rate on such Unamortized Fit-Out Work
Investment from the first day of the month in which the date of termination
shall occur to the date of termination, and (z) the Notional Make Whole Amount
as of the date of termination. In such a case, Tenant shall also reimburse
Landlord, within 10 days of Landlord's demand, any document preparation fee,
recording fee, attendance fee or similar fee charged by any of Landlord's
lenders, not exceeding $10,000 in the aggregate for all lenders, by reason of
Landlord applying the sum received pursuant to this paragraph to prepayment of
any of Landlord's mortgage debt due to such lender.
Any claim for compensation resulting from a Total Taking may be
settled by Landlord without Tenant's consent. Notwithstanding the foregoing, in
case of any Total Taking in respect of which Tenant will be required to make any
payment pursuant to the preceding paragraph (i) Tenant shall be entitled, at
Tenant's expense, to participate in the prosecution of such claim, and (ii) the
same shall not be settled without Tenant's consent unless the amount of such
settlement is sufficient to pay in full the Tenant's Total Taking Amount in
respect of such Total Taking.
16.3 Partial Taking
In case of a Taking other than a Total Taking (a "Partial Taking")
(a) this Lease shall remain in full force and effect; provided, that on the date
of such Taking this Lease shall terminate as to the portion of the Leased
Premises taken (which portion shall be deemed excluded from the Leased Premises)
and if the portion of the Leased Premises that was taken shall include any area
designed for tenant occupancy, the Basic Rent shall be reduced by multiplying
the same by a fraction, the numerator of which is the rentable square footage of
the portion of the Leased Premises that was taken and the denominator of which
is the rentable square footage of the Leased Premises prior to the Taking (the
"Taking Fraction") and (b) Tenant, whether or not the awards or payments, if
any, on account of such Taking shall be sufficient for the purpose shall
promptly commence Restoration of the Leased Premises (exclusive of the taken
portion) and thereafter diligently prosecute the same to completion in
accordance with the Plans and Specifications therefor (as approved by Landlord
or as determined by the Appropriate Engineer to be required to have been
approved by Landlord pursuant to this Lease). Notwithstanding any Partial
Taking, the Supplemental Rent shall not be reduced or otherwise abated.
Any claim for compensation resulting from a Partial Taking may be
settled by Landlord without Tenant's consent; provided, that if the portion
thereof awarded for Restoration is less than the estimated cost of such
Restoration then Tenant shall have a right to approve any such settlement, such
approval not to be unreasonably withheld, and if the portion of the Leased
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Premises that was taken shall include any Fit-Out Work, then Tenant shall have
the right to participate, at Tenant's expense, in the prosecution of such claim
and the right to approve any such settlement, such approval not to be
unreasonably withheld. Any dispute under the preceding sentence should be
resolved by the Appropriate Engineer.
16.4 Application of Award
(a) In the event of a Total Taking, the award for such Taking,
including interest, if any, paid by the condemning authority through the date of
payment of such award (the "Condemnation Proceeds"), shall be paid as follows:
(i) Landlord shall first be entitled to receive such
portion of the Condemnation Proceeds as shall
equal the Notional Main Loan Outstanding Balance
on the date of the Total Taking, plus interest
thereon at the Main Interest Rate from the date of
the Total Taking through the day of payment of
such amount to Landlord;
(ii) subject to Section 16.4(e), Tenant shall next be
entitled to receive such portion of the
Condemnation Proceeds as shall equal the amount
payable by Tenant pursuant to Section 16.2 by
reason of such Total Taking, if any, plus interest
thereon at the Fit-Out Work Interest Rate from the
date of such payment by Tenant through the day of
payment of such amount to Tenant (the amount so
payable by Tenant, plus such interest, is herein
called "Tenant's Total Taking Amount"); and
(iii) Landlord shall be entitled to receive the balance
of such Condemnation Proceeds.
(b) In the event of a Partial Taking, the Condemnation Proceeds
shall be paid as follows:
(i) Tenant shall first be entitled to receive such
portion of the Condemnation Proceeds as shall be
awarded for Restoration, plus interest thereon (if
paid by the condemning authority) at the rate paid
by the condemning authority from the date of the
Partial Taking through the day of payment of such
amount to the Depositary (and the amount referred
to in this clause (i) shall be paid to the
Depositary for disbursement in accordance with
Article 17); and
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(ii) (A) If the portion of the Leased Premises that was
taken does not include any Fit-Out Work, then
Landlord shall be entitled to the entire balance
of such award; or (B) if the portion of the Leased
Premises that was taken does include any Fit-Out
Work, then the balance of such award exclusive of
any interest thereon paid by the condemning
authority (the "balance to be apportioned") shall
be apportioned between Landlord and Tenant such
that (x) Landlord shall be entitled to receive all
of the balance to be apportioned exclusive of the
portion thereof allocable to the Fit-Out Work that
was so taken, and (y) Tenant shall be entitled to
receive the portion of the balance to be
apportioned allocable to the Fit Out Work, and (z)
all interest shall be apportioned in the same
proportions.
(c) If the order or decree in any condemnation or similar
proceeding shall fail separately to state the amount of the compensation for
Restoration and/or the apportionment of the Condemnation Proceeds pursuant to
Section 16.4(a) or (b), and if Landlord and Tenant cannot agree thereon within
30 days after the final award or awards shall have been fixed and determined,
the dispute shall be determined by arbitration.
(d) Nothing in this Lease shall preclude Tenant from claiming
or receiving from the condemning authority any compensation to which Tenant may
otherwise lawfully be entitled in respect of Tenant's furniture, furnishings,
trade fixtures or business equipment furnished, installed or placed in the
Improvements by Tenant at Tenant's sole cost and expense or for moving to a new
location or for interruption of, or damage to, Tenant's business; provided, that
any award made is separate to Tenant and not part of damages recoverable by
Landlord.
(e) Notwithstanding the provisions of Section 16.4(a), if and
to the extent that on the date of the payment by the condemning authority of the
Condemnation Proceeds with respect to any Total Taking Tenant shall not have
paid the amount payable by Tenant pursuant to Section 16.2 by reason of such
Total Taking, the amount which would otherwise be paid to Tenant under clause
(ii) of Section 16.4 shall be paid to Landlord and shall be a credit against
Tenant's obligation under the second paragraph of Section 16.2
16.5 Temporary Taking
Sections 16.2 through 16.4 to the contrary notwithstanding, the
provisions of this Section 16.5 shall govern any Taking for temporary use. In
the case of any Taking for temporary use, this Lease shall remain in effect as
to the Leased Premises (including the portion taken) and there shall be no
reduction in Basic Rent or (unless otherwise legally required) other change in
the obligations of Tenant hereunder. If the term of the temporary Taking shall
not extend (a) beyond the next Termination Date in respect of which Tenant has
or may then exercise a
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Termination Option (the "Next Available Termination Date"), or (b) if Tenant has
not exercised any Termination Option and no longer has available any Termination
Options, beyond the Expiration Date, then in either such case the entire award
shall be payable to Tenant and Tenant shall make Restoration of the Leased
Premises in accordance with the requirements of this Lease. If the term of the
temporary Taking shall extend (i) beyond the Next Available Termination Date, or
(ii) if Tenant has not exercised any Termination Option and no longer has
available any Termination Options, beyond the Expiration Date, then in either
such case Tenant need not make Restoration, the portion of the award applicable
to the Restoration shall be paid to Landlord and the balance of the award shall
be apportioned between Landlord and Tenant as of such Next Available Termination
Date or the Expiration Date (as the case may be) by the condemning authority or,
if the condemning authority fails to act, by arbitration; provided, that if
pursuant to the foregoing provisions of this sentence, such balance is
apportioned as of a Next Available Termination Date with respect to which Tenant
has not exercised its Termination Option and Tenant shall not thereafter
exercise such Termination Option then, in each case, such balance (together with
interest thereon at the Prime Rate from the date such award was originally paid
to and including the date such reapportioned award is payable) shall be
reapportioned between Landlord and Tenant as of the next succeeding Termination
Date.
17. Disbursement of Deposited Sums
(a) Subject to the provisions of this Article 17 the Depositary
shall, from time to time as any Restoration proceeds and within 10 Business Days
after receipt of Tenant's request therefor (but in no event more frequently than
once during any 30-day period), make disbursements (collectively, "Restoration
Advances") to Tenant from the funds deposited with the Depositary pursuant to
Sections 15.3(b), 15.4(d)(iii) or 16.4(b)(i) (collectively, the "Deposited
Sums") for application to the Costs of the Restoration in question.
Simultaneously with the delivery of each such request to the Depositary, Tenant
shall give notice thereof to Landlord (which notice shall be accompanied by
copies of such request and all other papers delivered to the Depositary).
(b) No Restoration Advance shall be made on account of any fire or
other casualty until Tenant shall have delivered evidence reasonably
satisfactory to Landlord that an aggregate amount at least equal to the
Significant Proceeds Amount has been expended for Costs in connection with the
Restoration, and Restoration Advances on account of any fire or other casualty
shall be made only for amounts paid or payable by Tenant for Costs which are in
excess of the Significant Proceeds Amount.
(c) No Restoration Advance (other than the final Restoration
Advance) in respect of any fire or other casualty or any Partial Taking shall be
due unless Tenant's request for such Restoration Advance shall be accompanied
by:
(i) a certificate of Tenant addressed to the Depositary and
Landlord (in form reasonably satisfactory to Landlord) stating that (A) the
amount of the Restoration Advance then requested has been paid or is then duly
payable by Tenant to Contractors (whose names and addresses and a description of
the work involved shall be stated), (B) the amount of
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the Restoration Advance then requested (when taken together with the aggregate
amount of all Restoration Advances theretofore made by the Depositary) exceeds
neither 90% of the Deposited Sums (together with interest on such amount) nor
the Installed Value of the Restoration work in question (Tenant's certificate to
set forth a calculation of the Installed Value), and (C) no part of cost of the
work described in any previous or then pending request for a Restoration Advance
has been or is being made the basis for the Restoration Advance then being
requested; and
(ii) a certificate of the architect or engineer who prepared
the related Plans and Specifications addressed to the Depositary and Landlord
(in form reasonably satisfactory to Landlord) stating in substance that (A) the
calculation of Installed Value as set forth in the certificate referred to in
the foregoing clause (i) is correct, (B) the work has been performed in a good
and workmanlike manner and in accordance with the Plans and Specifications (as
approved by Landlord or as determined by the Appropriate Engineer to have been
required to be approved by Landlord pursuant to this Lease) and (C) the
unadvanced portion of the Deposited Sums in question, together with any
additional amount to be available from the insurer, are at least equal to the
Costs of the Restoration which will remain unpaid after giving effect to the
Restoration Advance in question.
(d) No Restoration Advance (including the final Restoration Advance)
in respect of any fire or other casualty or any Partial Taking shall be due
unless:
(i) no certificate delivered to the Depositary or Landlord by
Tenant or by any architect or engineer in connection with the Restoration in
question shall have been materially incorrect at the time of delivery (Landlord
to give notice to Tenant within 10 Business Days after Landlord's receipt of the
certificate in question if Landlord contends that such certificate was
materially incorrect; any such dispute to be determined by the Appropriate
Engineer);
(ii) Landlord shall have received true copies of all bills
paid or payable by Tenant to Contractors which form the basis for the
Restoration Advance in question;
(iii) in the case of a Restoration Advance to be made on
account of a fire or other casualty, Tenant shall have waived its right to
terminate this Lease pursuant to Section 15.4(a) on account of such damage or
other casualty; and
(iv) no Event of Default shall have occurred and be
continuing.
(e) Neither any final Restoration Advance nor the release of any
remaining balance of Deposited Sums pursuant to Article 17(f) shall be made
unless:
(i) Tenant's request for such Restoration Advance or such
release shall be accompanied by (x) a certificate of Tenant addressed to the
Depositary and Landlord (in from reasonably satisfactory to Landlord) stating
that Tenant's best knowledge (after due inquiry) there shall (after giving
effect to such Restoration Advance or release) be no outstanding indebtedness
due for labor, materials, supplies, permits or services in any manner connected
with the Restoration which if unpaid might be the basis for any type of lien on
the Leased Premises, or
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any part thereof, and that (in the case of a request for a final Restoration
Advance) the amount requested has been paid or is then duly payable to
Contractors (whose names and addresses and a description of the work involved
shall be stated) and (y) a certificate of the architect or engineer who prepared
the related Plans and Specifications addressed to the Depositary and Landlord
(in form reasonably satisfactory to Landlord) stating that the Restoration work
has been fully completed in a good and workmanlike manner and in accordance with
the Plans and Specifications (as approved by Landlord or as determined by the
Appropriate Engineer to have been required to be approved by Landlord pursuant
to this Lease); and
(ii) the Depositary and Landlord shall have received (x) an
instrument in writing from any title company insuring Landlord's estate in the
Leased Premises certifying that there are no undischarged mechanics', laborers'
or materialmen's liens affecting any part of the Leased Premises (other than
liens, if any, in respect of which Landlord has consented to take security
pursuant to Article 13(a)(ii)) and (y) evidence reasonably satisfactory to
Landlord that Tenant has obtained waivers of mechanics', laborers' or
materialmen's liens or releases of such liens from all Contractors engaged in
the Restoration.
(f) Subject to Article 17(g), any balance of a Deposited Sum
(together with interest thereon) remaining with the Depositary upon the
completion of any Restoration on account of fire or other casualty or any
Partial Taking shall (i) in the case of fire or other casualty, be remitted to
Tenant promptly upon its request and (ii) in the case of a Partial Taking, be
remitted to Landlord promptly upon its request.
(g) Notwithstanding anything to the contrary contained in this
Lease, upon any early termination of this Lease (including, without limitation,
any early termination pursuant to Section 15.4(a)), the Depositary shall
forthwith remit to Landlord the balance of all Deposited Sums (together with
accrued interest thereon) held by the Depositary immediately prior to such
termination.
(h) Each Restoration Advance shall be made by the Depositary as soon
as reasonably practicable, but in no event later than the date which is 30 days
after Tenant shall have satisfied all of the applicable conditions to such
Restoration Advance specified in this Article 17.
18. Certificate as to No Default, etc.
Landlord and Tenant shall each deliver to the other within 10 days after
request, an Officer's Certificate stating (a) that this Lease is unmodified and
in full force and effect (or, if there have been modifications, that this Lease
is in full force and effect, as modified, and stating the modifications), (b)
the dates to which the Basic Rent, Supplemental Rent and Tax Payments have been
paid and that, to the best knowledge (after due inquiry) of the party giving
such certificate, no Event of Default has occurred and is continuing hereunder,
or, if any Event of Default has occurred and is continuing specifying the nature
and period of existence thereof, and (c) that, to the best knowledge (after due
inquiry) of the party giving such certificate, the other party has fulfilled all
of its obligations under this Lease or, if not, stating in what respects such
other party has failed to do so. Any Officer's Certificate may be relied upon by
any prospective
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purchaser or mortgagee of the Leased Premises or any part thereof or interest
therein or by any prospective assignee of this Lease or any prospective
subtenant.
19. Right of Landlord to Perform Tenant's Covenants, etc.
(a) If Tenant shall fail to make any payment or perform any act required
to be made or performed by Tenant hereunder, Landlord may (but shall be under no
obligation to) without waiving or releasing any obligation or default:
(i) in case of emergency, or reasonably foreseeable or actual
criminal liability,
(ii) if such failure is under Section 14.1(a), 14.2 or 14.4,
and if Landlord shall give notice to Tenant referring to this Section 19(a)
(ii) and specifying such failure and requiring it to be remedied and Tenant
shall not remedy such failure within 7 days after the giving of such notice,
(iii) if such failure is under Section 14.3, and if Landlord
shall give notice to Tenant referring to this Section 19(a)(iii) and specifying
such failure and requiring it to be remedied and Tenant shall not remedy such
failure within 4 days after the giving of such notice,
(iv) if such failure is under Article 12, and if Landlord
shall give notice to Tenant referring to this Section 19(a)(iii) and specifying
such failure and requiring it to be remedied and Tenant shall not remedy such
failure within 15 days after the giving of such notice; provided, that in case
such failure cannot with due diligence be remedied by Tenant within a period of
15 days, if Tenant proceeds as promptly as may be reasonably possible after the
receipt of such notice and with all due diligence to remedy such failure
thereafter to prosecute the remedying of such failure with all due diligence,
the period of time after the giving of such notice by Tenant within which to
remedy such failure shall be extended for such period as may be necessary to
remedy the same with all due diligence,
(v) if such failure is under Article 13, or
(vi) if such failure is under any provision of this Lease
other than Articles 12, 13 or 14, subject to the provisions of Section 19(b), if
Landlord shall give notice to Tenant referring to this Section 19(a)(vi) and
specifying such failure and requiring it to be remedied and Tenant shall not
remedy such failure within 30 days after the giving of such notice; provided,
that in case such failure cannot with due diligence be remedied by Tenant within
a period of 30 days, if Tenant proceeds as promptly as may be reasonably
possible after the giving of such notice and with all due diligence to remedy
such failure and thereafter to prosecute the remedying of such failure with all
due diligence, the period of time after the receipt of such notice by Tenant
within which to remedy such failure shall be extended for such period as may be
necessary to remedy the same with all due diligence,
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make such payment or perform such act for the account and at the expense of
Tenant, and may enter upon the Leased Premises or any part thereof for such
purpose and take all such action thereon as, in the opinion of Landlord, may be
necessary or appropriate therefor. All payments so made by Landlord and all
costs and expenses (including, without limitation, Costs and attorneys' fees and
expenses) incurred in connection therewith, together with interest thereon at
the Interest Rate, shall be paid by Tenant to Landlord within 10 days after
Tenant's receipt of Landlord's demand therefor referring to this Article 19 and
Section 22(c) accompanied by copies of all bills therefor.
(b) If within 15 days after the date on which Tenant receives notice
from Landlord under Section 19(a)(vi), Tenant shall commence an arbitration
seeking a determination that the matter referred to in Landlord's notice under
Section 19(a)(vi) does not constitute a failure to make a payment or perform an
act required to be made or performed hereunder, then (i) Landlord may not make
such payment or perform such act for the account and at the expense of Tenant
and may not enter upon the Leased Premises or any part thereof for such purpose
or take action thereon prior to the date upon which the determination in
arbitration is made (the "Determination Date") and (ii) if the action is
determined in a manner adverse to Tenant, the 30 day (or longer) period
referred to in Section 19(a)(vi) above shall be extended to the date 30 days
after the Determination Date (or for such longer period commencing on the
Determination Date as may reasonably be required in order to remedy the matters
in question with all due diligence).
20. Assignment; Subleases
(a) Tenant may, subject to the restrictions on the use of the Leased
Premises set forth in this Lease, sublet the Leased Premises or any part
thereof, or assign this Lease without the consent of Landlord; provided, that
(i) Tenant shall deliver to Landlord a fully executed counterpart of each such
sublease, assignment or other relevant instrument and any modification or
amendment of any of the foregoing promptly after execution thereof and shall
notify Landlord of any occupancy no later than the date on which such occupancy
is to be taken, (ii) no assignment, whether by operation of law, consolidation,
merger or otherwise, shall be made unless within 15 days thereafter the assignee
shall execute and deliver to Landlord an instrument assuming all the obligations
of Tenant under this Lease thereafter accruing, (iii) no sublease, assignment or
other transaction and no assumption, shall affect or reduce any of the
obligations of Tenant (including the original Tenant and each such assignee)
hereunder but this Lease and all the obligations of Tenant (including the
original Tenant and each such assignee) hereunder shall continue in full force
and effect as the obligations of a principal and not the obligations of a
guarantor or surety and (iv) each sublease, assignment or other instrument made
by Tenant after the date hereof shall be subject and subordinate to this Lease
and the terms and provisions hereof. Each sublease of all or any part of the
Leased Premises made by Tenant after the date hereof shall provide that if
Landlord shall terminate this Lease prior to the scheduled expiration date of
such sublease then, upon Landlord's request, the subtenant thereunder (and
anyone holding by, through or under such subtenant) shall attorn to Landlord
upon all of the terms, covenants and conditions of such sublease. As and for
security for the due and punctual payment and performance of its obligations
under this Lease, Tenant hereby assigns to Landlord all rents and other sums due
to Tenant under any sublease of all or any part of the Leased
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Premises; provided, that other than upon the occurrence of and during the
continuance of an Event of Default Tenant may (A) freely modify or terminate all
or any of the subleases or otherwise deal with all or any of the subtenants, (B)
collect rents when due, (C) permit and collect prepayments of rent and (D)
retain all such rents (paid when due or prepaid) and other sums free of any
claim or lien of Landlord. All amounts received by Landlord pursuant to the
preceding sentence shall be set-off against Tenant's obligations hereunder.
Tenant shall not mortgage, pledge or otherwise encumber this Lease or any
interest therein.
(b) The interest of Landlord in this Lease and/or in and to the
Leased Premises may, at any time, be sold, conveyed, assigned or otherwise
transferred, or mortgaged, pledged or otherwise encumbered, without the consent
of Tenant. Upon any conveyance of the Leased Premises and the assumption by the
new owner of the Leased Premises of the obligations of Landlord hereunder
thereafter accruing, the conveyor shall be completely relieved of and from any
and all obligations of Landlord hereunder thereafter accruing, and Tenant shall
thereupon look only to the new owner of the Leased Premises for the performance
of any obligations of Landlord hereunder thereafter accruing.
21. Vaults
Landlord shall have no responsibly for title to or any other aspect of
vaults and areas, if any, now or hereafter built extending beyond the boundary
line of the Land. Tenant may occupy and use the same during the Term, subject to
this Lease and any Legal Requirements. No revocation on the part of any
governmental department or authority of any license or permit to maintain and
use any such vault and areas shall in any way affect this Lease or the amount of
the rent or any other charge payable by Tenant hereunder. Tenant shall comply
with all such licenses and permits, and if any such license or permit shall be
revoked, Tenant shall do and perform all such work as may be necessary to comply
with any order revoking the same.
22. Events of Default; Termination
Each of the following shall constitute an Event of Default:
(a) if Tenant shall fail to pay any Basic Rent, Supplemental Rent,
Tax Payment or Cancellation Payment, when and as the same becomes due and
payable and such failure continues for a period of 7 days after notice from
Landlord of such failure referring to this Section 22(a), specifying such
failure and requiring it to be remedied is given to Tenant; or
(b) if, in any period of 12 consecutive months, (i) in two separate
instances, Tenant shall fail to pay any Basic Rent, Supplemental Rent or Tax
Payment when and as the same becomes due and payable and notice of such failure
has been given to Tenant under Section 22(a) and (ii) in a third or later
instance, Tenant shall fail to pay any Basic Rent, Supplemental Rent or Tax
Payment coming due when and as the same becomes due and payable;
(c) if Tenant shall fail to pay any sum due to Landlord under the
Initial Improvements Agreement or under this Lease other than any Basic Rent,
Supplemental Rent or Tax Payment when and as the same becomes due and payable
and such failure continues for a
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period of 30 days after notice from Landlord of such failure referring to this
Section 22(c), specifying such failure and requiring it to be remedied is given
to Tenant;
(d) if Tenant shall fail to pay any amount under Article 19 when
due; or
(e) if Tenant shall fail to perform or comply with any term of
Article 13 or 14 and such failure continues for a period of 15 days after notice
from Landlord of such failure referring to this Section 22(e), specifying such
failure and requiring it to be remedied is given to by Tenant; or
(f) if Tenant shall fail to perform or comply with any term of
Article 12, and such failure shall continue for more than 30 days after notice
from Landlord of such failure referring to this Section 22(f), specifying such
failure and requiring it to be remedied is given to Tenant; provided, that in
case such failure cannot with due diligence be remedied by Tenant within a
period of 30 days, if Tenant proceeds as promptly as may be reasonably possible
after the giving of such notice and with all due diligence to remedy such
failure and thereafter to prosecute the remedying of such failure with all due
diligence, the period of time after the receipt of such notice by Tenant within
which to remedy such failure shall be extended for such period as may be
necessary to remedy the same with all due diligence; or
(g) if Tenant shall fail to perform or comply with any term of this Lease or the
Initial Improvements Agreement (other than any failure referred to in a previous
subdivision of this Article 22), and such failure shall continue for more than
30 days after notice from Landlord of such failure referring to this Section
22(g), specifying such failure and requiring it to be remedied is given to
Tenant; provided, that in case such failure cannot with due diligence be
remedied by Tenant within a period of 30 days, if Tenant proceeds as promptly as
may be reasonably possible after the receipt of such notice and with all due
diligence to remedy such failure and thereafter to prosecute the remedying of
such failure with all due diligence, the period of time after the receipt of
such notice by Tenant within which to remedy such failure shall be extended for
such period as may be necessary to remedy the same with all due diligence;
provided further that, in the case of this Section 22(g) only, if Tenant within
15 days after the receipt of such notice of default shall dispute the existence
of such failure the matter shall be determined by arbitration and if it shall be
determined that such failure exists, the time within which Tenant shall have to
remedy the same shall run from the date of such determination; provided finally,
however, that if (i) by reason of such failure, any Superior Mortgagee shall
give notice of default under the Superior Mortgage held by it, and (ii) Landlord
shall so notify Tenant, then the immediately preceding proviso shall cease to be
effective with respect to such failure and the time within which Tenant shall
have to remedy the same shall run from the date of Landlord's notice under this
proviso.
This Lease and the term and estate hereby granted are subject to the
limitation that if an Event of Default shall occur then, in addition to any
other remedies available to Landlord at law or in equity, Landlord may at any
time during the continuance of such Event of Default give to Tenant a notice (a
"Lease Termination Notice") specifying a date, not less than five days after the
date of such notice, on which specified date this Lease shall terminate, and on
such date, subject
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to Article 25 relating to the survival of Tenant's obligations, this Lease and
the term and estate hereby granted shall expire and terminate by limitation and
all rights of Tenant under this Lease shall cease, but Tenant shall remain
liable for damages as provided herein or pursuant to law. All costs and expenses
incurred by or on behalf of Landlord (including, without limitation, attorneys'
fees and expenses) occasioned by any Event of Default by Tenant under this Lease
shall be payable by Tenant upon demand by Landlord (together with interest
thereon at the Interest Rate).
23. Repossession
If an Event of Default shall have occurred and be continuing, Landlord,
after termination of this Lease pursuant to Article 22, may enter upon and
repossess the Leased Premises or any part thereof by summary proceedings or
other legal proceedings and may remove Tenant and all other persons and any and
all property therefrom. Landlord shall be under no liability for or by reason of
such entry, repossession or removal.
24. Reletting
At any time or from time to time before or after the repossession of the
Leased Premises or any part thereof pursuant to Article 23, Landlord may (but
shall have no obligation to) relet the Leased Premises or any part thereof for
the account of Tenant, in the name of Tenant or Landlord or otherwise, without
notice to Tenant, for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the Term) and on
such conditions (which may include concessions or free rent) and for such uses
as Landlord, in its uncontrolled discretion may determine, and may collect and
receive the rents therefor. Landlord shall not be responsible or liable for any
failure to relet the Leased Premises or any part thereof or for any failure to
collect any rent due upon any such reletting.
25. Survival of Tenant's Obligations; Damages
25.1 Termination of Lease Not to Relieve Tenant of Obligations
No expiration or termination of the Term pursuant to Article 22 or
otherwise (other than a termination of this Lease under and in accordance with
Section 1.4, Article 15 or Article 16), and no repossession of the Leased
Premises or any part thereof pursuant to Article 23 or otherwise, shall relieve
Tenant of its liabilities and obligations accruing hereunder prior to such
expiration or termination, all of which shall survive such expiration,
termination or repossession. The term "Notional Expiration Date" shall refer to
(i) if prior to such expiration, termination or repossession
pursuant Articles 22 or 23 Tenant shall have exercised any
Termination Option, the Termination Date with respect thereto,
and
(ii) if prior to such expiration, termination or repossession
pursuant to Article 22 or 23 Tenant shall not have exercised
any Termination Option, the Termination Date with respect to
the earliest
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Termination Option which, as of the date of such expiration,
termination or repossession, had not lapsed without exercise
or been waived or, if all of the Termination Options shall
then have lapsed without exercise and/or been waived, the
Expiration Date,
provided, that, in case of any expiration, termination or repossession pursuant
to Articles 22 or 23 arising out of any Event of Default arising out of Tenant's
failure timely to pay the Cancellation Payment by reason of the exercise of a
Termination Option providing for the termination of this Lease as of September
30, 2004 or September 30, 2006, the Notional Expiration Date shall be deemed for
all purposes of this Lease (including without limitation Section 25.2(c) and
Section 25.3(b)) to be June 30, 2008. In case of any expiration, termination or
repossession pursuant to Articles 22 or 23 arising out of any Event of Default
arising out of Tenant's failure timely to pay the Cancellation Payment by reason
of the exercise of a Termination Option providing for the termination of this
Lease as of September 30, 2004, September 30, 2006 or June 30, 2008, Tenant
shall be entitled to a credit against the amounts payable by it under Section
25.2(b) and (c) and Section 25.3(b) equal to the amount of any payments made by
Tenant under Section 1.4.
Notwithstanding any provision of this Lease to the contrary (except as provided
in the next sentence), in case of any expiration or termination of the Term of
this Lease or repossession of the Leased Premises pursuant to Articles 22 or 23,
Tenant's liability in respect of any period after the Notional Expiration Date
shall be limited to that provided for in Section 25.2 and/or Section 25.3. The
preceding sentence shall not release Tenant from (i) any obligations under this
Lease with respect to any period after the Notional Expiration Date but prior to
Tenant's surrender to Landlord of vacant possession of the Leased Premises, or
(ii) any liability (other than for rent or on account of the non-payment
thereof) arising out of any act or omission in violation of this Lease committed
by Tenant or any party claiming by, through or under Tenant, or (iii) any
obligation which under Section 35(k) survives the termination or expiration of
this Lease.
25.2 Current Damages and Damages in Respect of Supplemental Rent
In the event of any such expiration, termination or repossession pursuant to
Articles 22 or 23, Tenant shall pay to Landlord
(a) (i) immediately upon such expiration, termination or
repossession, the Basic Rent, Supplemental Rent, Tax Payments and all other
sums required to be paid by Tenant pursuant to this Lease up to the time of such
expiration, termination or repossession, and (ii) thereafter Tenant, until the
Notional Expiration Date, and whether or not the Leased Premises or any part
thereof shall have been relet, shall be liable to Landlord for, and shall pay to
Landlord, as liquidated and agreed current damages for Tenant's default, (a) the
Basic Rent and Tax Payments and all other sums which would be payable under this
Lease by Tenant in the absence of such expiration, termination or repossession
(other than Supplemental Rent), plus (b) all reasonable expenses of Landlord in
connection with such expiration, termination and repossession and any reletting
effected for the account of Tenant pursuant to Article 24 (including, without
limitation, all repossession costs, brokerage commissions, legal expenses,
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attorneys' fees, employees' expenses, alteration costs and expenses of preparing
for such reletting) less (c) the proceeds, if any, of such reletting. Tenant
shall pay such current damages monthly on the days on which the Basic Rent and
Tax Payments and other sums would have been payable under this Lease in the
absence of such expiration, termination or repossession, and Landlord shall be
entitled to recover the same from Tenant on each such day, plus
(b) immediately upon such expiration, termination or repossession,
if such expiration, termination or repossession shall occur on or prior to June
1, 2008, the sum of (i) the then present value, discounted at the Fit-Out Work
Interest Rate, of the Supplemental Rent which would be payable under this Lease
from the date of such expiration, termination or repossession for what would be
the then unexpired Term in the absence of such expiration, termination or
repossession, plus (ii) the Notional Make-Whole Amount as of the date of such
expiration, termination or repossession, plus (iii) any charges (other than
prepayment or make-whole charges) incurred by Landlord to any of Landlord's then
existing lenders by reason of such expiration, termination or repossession.
(c) upon the Notional Expiration Date, if the Notional Expiration
Date is September 30, 2004 or September 30, 2006, the sum of the Basic Rent and
Tax Payments that would be payable for the 6 month period following such
Notional Expiration Date.
25.3 Final Damages
At any time after any such expiration, termination or repossession,
whether or not Landlord shall have collected any current damages as aforesaid,
Landlord at its option shall be entitled to recover from Tenant and Tenant shall
pay to Landlord on demand, as and for liquidated and agreed final damages for
Tenant's default and in lieu of all damages under Section 25.2(a)(ii) and
Section 25.2(c) (but not in lieu of damages under Section 25.2(b) which shall be
payable in addition to the damages payable under this Section 25.3) beyond the
date of such demand, an amount equal to the sum of
(a) the excess, if any, of (i) the then present value
discounted at the Main Interest Rate in effect on the date of termination
of this Lease, of the Basic Rent, Tax Payments and all other sums
(exclusive of Supplemental Rent) which would be payable under this Lease
from the date of such demand (or, if it be earlier, the date to which
Tenant shall have satisfied in full its obligations under Section 25.2(a)
to pay current damages) to the Notional Expiration Date (such Tax Payments
during the First and Second Rent Periods to be determined pursuant to
Exhibit B attached hereto and during the Third Rent Period and Fourth Rent
Period to be computed based on the assumption that Taxes will increase by
three percent per annum (on a compounded basis) over the Taxes in effect
for the Tax Year last ended prior to such expiration, termination or
repossession), over (ii) the sum of (x) the then present value, discounted
at the Prime Rate in effect on the date of termination of this Lease, of
the then fair net rental value (i.e. the fixed rent that would be paid
assuming that Tenant pays all Taxes and operating expenses for the
Improvements) of the Leased Premises for the same period, and (y) the then
present value, discounted at the Prime Rate in effect of the date of
termination of this
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Lease, of the Taxes for the same period (such Taxes to be computed on the
basis of the assumption that Taxes will increase three percent per annum
(on a compounded basis) above the Taxes in effect for the Tax Year last
ended prior to such expiration, termination or repossession), plus
(b) if the Notional Expiration Date is September 30, 2004 or
September 30, 2006, the sum of the Basic Rent and Tax Payments that would
be payable for the 6 month period following such Notional Expiration Date.
If any statute or rule of law shall limit the amount of such liquidated final
damages to less than the amount above agreed upon, Landlord shall be entitled to
the maximum amount allowable under such statute or rule of law, but not in
excess of the amount provided by this Section 25.3.
26. No Waiver
No failure by Landlord or Tenant to insist upon the strict performance of
any term hereof or to exercise any right, power or remedy consequent upon a
breach thereof, and no payment or acceptance of full or partial rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term. No waiver of any breach shall affect or alter this Lease,
which shall continue in full force and effect, or the rights of Landlord or
Tenant with respect to any other then existing or subsequent breach.
27. Remedies Cumulative
Each right, power and remedy of Landlord or Tenant provided for in this
Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise by
Landlord or Tenant of any one or more of the rights, powers or remedies provided
for in this Lease or now or hereafter existing at law or in equity or by statute
or otherwise shall not preclude the simultaneous or later exercise by Landlord
or Tenant of any or all such other rights, powers or remedies. All sums payable
by Tenant to Landlord hereunder (other than the Basic Rent and Supplemental
Rent) shall be deemed additional rent and Landlord shall have all of the same
rights, powers and remedies in the case of the failure by Tenant to pay any such
sum when due as Landlord would have in the case of the failure by Tenant to pay
Basic Rent or Supplemental Rent when due.
28. Acceptance of Early Termination or Surrender
No early termination of this Lease (other than pursuant to and in
accordance with Section 1.4, Article 15 or Article 16) or surrender to Landlord
of this Lease, and no surrender of the Leased Premises or any part thereof or of
any interest therein, shall be valid or effective unless agreed to and accepted
in writing by Landlord, and no act by Landlord, other than such a written
agreement and acceptance by Landlord, shall constitute an agreement thereto or
acceptance thereof.
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29. No Merger of Title
There shall be no merger of this Lease nor of the leasehold estate created
by this Lease with the fee estate or any other leasehold estate in the Leased
Premises or any part thereof by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease or any interest in
this Lease or in any such leasehold estate, and (b) the fee estate or any other
leasehold estate in the Leased Premises or any part thereof or any interest in
such fee estate or leasehold estate, and no such merger shall occur unless and
until all persons, firms, corporations and other entities having an interest in
or lien upon (i) this Lease or the leasehold estate created by this Lease and
(ii) the fee estate or any other leasehold estate in the Leased Premises or any
part thereof shall join in a written instrument effecting such merger and shall
duly record the same.
30. Exculpation
(a) Except as provided below, no general or limited partner of The
Goldman Sachs Group, L.P., a Delaware limited partnership ("GS"), or of any
assignee which is a successor to substantially all the assets and business of
GS (a "successor-assignee") shall have any personal liability under this Lease
and any judgment taken or rendered against GS or any successor-assignee
hereunder or related hereto shall be enforceable only against the property of GS
or such successor-assignee; provided, that:
(i) if at any time GS or a successor-assignee (x) shall
dissolve (other than pursuant to, or as a result of, insolvency proceedings) and
(y) shall distribute its assets without adequately providing for any and all of
its obligations and liabilities under this Lease, then all persons who were
general partners of GS or of such successor-assignee immediately prior to the
dissolution shall be personally and jointly and severally liable to GS or such
successor-assignee or the benefit of Landlord to extent of any loss, cost,
damage or injury which Landlord may suffer as a result of the failure to make
adequate provision for such obligations and liabilities; and
(ii) this Article 30(a) shall not relieve any general or
limited partner of GS or of a successor-assignee from any obligation to restore
to GS or such successor-assignee any distributions of cash, property or other
assets by GS or such successor-assignee made to such partner which (x) were made
at any time when the distributor was insolvent or (y) resulted in the
distributor's becoming insolvent. For purposes of this Lease, GS or a
successor-assignee shall be "insolvent" if (A) it is generally unable to pay its
debts and other liabilities as they become due or (B) the sum of its debts is
greater than all of its property at a fair valuation (taking into account this
Lease and the liabilities of Tenant hereunder).
This Article 30(a) is for the sole benefit of GS and each successor-assignee.
Any other party acquiring the leasehold estate created by this Lease shall have
full personal liability hereunder.
(b) Any judgment taken or rendered against Landlord hereunder or
related hereto shall be enforceable only against the interest of Landlord in the
Project or, in the event of a sale, financing or other disposition by Landlord
of the Project or any part thereof, against cash,
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property or other assets of Landlord (but not of any member, partner,
stockholder, principal, officer or other person or entity which, directly or
indirectly, has an interest in Landlord) equal in amount to the proceeds of such
sale, financing or other disposition.
31. Definitions
As used in this Lease, the following terms have the following respective
meanings:
"Business Day" means any weekday on which the New York Stock Exchange, or
its successor, is open for business.
"Costs" means, with respect to any construction, improvements, alteration,
restoration, replacement, repairs, or rebuilding ("work"), the costs charged by
contractors, subcontractors and materialmen for all labor, materials, machinery
and equipment purchased, leased or used in connection with such work, fees and
compensation payable to contractors and subcontractors in connection with such
work, governmental fees and charges assessed or incurred in connection with such
work, fees and expenses of architects and engineers for estimates, surveys,
preliminary investigations, plans, drawings, specifications and supervision
related to such work, and the reasonable out-of-pocket expenses of
administration, supervision and inspection of such work.
"Deductible Amount" means, with respect to any insurance policy issued in
any month, the product of $500,000 multiplied by the fraction whose numerator is
the Index for the third month preceding the month in which such policy is issued
and whose denominator is the Index for April, 1997.
"Hazardous Substances" means any flammable or explosive materials, any
petroleum or petroleum products (including oil, crude oil, natural or synthetic
gas), any radioactive materials, any asbestos or asbestos containing materials,
PCBs, or any other hazardous or toxic waste, material or substance, including,
without limitation, any waste, material or substance now or hereafter included
in the definition of "hazardous substances," "hazardous wastes," hazardous
materials," "toxic substances," "toxic wastes" or "toxic materials" (or similar
term) contained in any Legal Requirement.
"Index" means, for any month the "Consumer Price Index" for such month for
all Urban Consumers, New York, New York-Northeastern New Jersey Area (1982-1984
= 100), published by the Bureau of Labor Statistics of the U.S. Department of
Labor or any successor index thereto. If the Index ceases to use 1982-1984 = 100
as basis of calculation, then the Index shall be adjusted to the figure that
would have been arrived at had the manner of computing the Index in effect at
the date of this Lease not been altered. In the event such Index (or a successor
index) is not available, another index reasonably selected by Landlord and
reasonably acceptable to Tenant shall be substituted therefor.
"Insurance Requirements" means all terms of or incorporated by reference
into any insurance policy covering or applicable to the Leased Premises.
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"Landlord" means only the owner, at the time in question, of the Project,
so that in the event of any transfer or transfers of title to the Project and
the assumption by the transferee of all of Landlord's obligations and liability
hereunder accruing after such transfer, the transferor shall be and hereby is
relieved and freed of all obligations of Landlord under this Lease accruing
after such transfer.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions, health, safety, environmental and other requirements
of all governmental, public or quasi-public departments, commissions, boards,
courts, authorities and agencies foreseen or unforeseen, ordinary or
extraordinary, which now or at any time hereafter may be applicable to the
Stephaneze Premises (when such term is used in Section 1.3) or to the Leased
Premises (when such term is used in any other Section of this Lease).
The phrase "net annual rental" shall refer to the net annual rental
payable under the Ground Lease, as such phrase is used therein.
"Officer's Certificate" means a certificate signed by a party or a general
partner or corporate officer of a party.
"Permitted Investment" means (i) direct obligations of the United States
of America, or obligations for which the full faith and credit of the United
States of America is pledged, and obligations of any agency or instrumentality
of the United States of America, (ii) obligations of any State of the United
States of American or Canada or any Province of Canada or any political
subdivision or agency or instrumentality of any thereof rated in the third
highest grade or better by two or more of Standard and Poor's Corporation,
Moody's Investors Service Inc. or Fitch Investors Service (or their successors),
(iii) any commercial paper issued by a corporation organized under the laws of
the United States of America or any State thereof or of Canada or any Province
thereof or by any foreign bank having a branch or agency in the United States of
America and rated in the second highest grade or better by two or more of
Standard & Poor's Corporation, Moody's Investors Service Inc. or Fitch Investors
Service (or their successors) and having a maturity not in excess of nine
months, (iv) certificates of deposit of, or drafts or bills of exchange accepted
generally by, any bank or trust company or any savings and loan association
incorporated under the laws of the United States of America or any State thereof
or Canada or any Province thereof or by any foreign bank having a branch or
agency in the United States of America and, in each case, which has capital and
surplus aggregating at least $200,000,000 as of the date of its most recent
report of condition and (v) such other securities or investments as Landlord
shall from time to time consent to; provided, that in no event shall either of
the following be "Permitted Investments": (a) any security of, or investment in,
any person or entity in which Tenant and/or any affiliate of Tenant have (either
directly or indirectly) a 5% or greater equity interest or (b) a security or
investment of any kind whose stated maturity is longer than 3 years.
"Prime Rate" means the prime interest rate announced by Morgan Guaranty
Trust Company of New York (or, if Morgan Guaranty Trust Company of New York
shall not exist or
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shall cease to publish such rate, such other bank in New York, New York as shall
be designated by Landlord in a notice to Tenant) to be in effect at its
principal office in New York, New York.
"Plans and Specifications" means plans and specifications prepared by a
reputable and licensed architect or engineer regularly involved in first-class
office buildings in the Borough of Manhattan in work of the nature described in
such Plans and Specifications.
"Qualified Hazardous Substance" means any Hazardous Substance which (a)
exists in the Leased Premises on the date of this Lease or (b) is introduced by
Landlord, Landlord's agents, employees, contractors, or licensees, into the
Leased Premises after the date of this Lease.
"Significant Proceeds Amount" means with respect to any damage or
destruction or Taking, the product of $5 million multiplied by the fraction
whose numerator of which is the Index for the third month preceding the month in
which such damage or destruction or Taking occurs and whose denominator is the
Index for April, 1997.
"Taking" means a taking during the Term of all or any part of the Leased
Premises, or any interest therein or right accruing thereto, including, without
limitation, any right of access thereto, as the result of or in lieu of or in
anticipation of the exercise of the right of condemnation or eminent domain, or
a change of grade affecting the Leased Premises or any part thereof.
"Tenant" means the tenant originally named herein or any successor or
assign.
"Witkoff Management Agreement" means the Management Agreement of even date
herewith between Tenant and The Witkoff Group LLC as the same may be assigned,
amended, restated or supplemented from time to time.
The words "enter", "re-enter", "entry" and "re-entry" as used in this
lease are not restricted to their technical legal meaning.
32. End of Lease Term
(a) Upon the expiration or earlier termination of this Lease, Tenant
shall quit and surrender to Landlord the Leased Premises free and clear of all
tenancies and occupancies and in good order and condition, ordinary wear and
tear and damage which Tenant is not required hereunder to repair excepted.
(b) If Tenant holds over without the consent of Landlord after
expiration or termination of this Lease, Tenant shall pay as holdover rental (in
addition to any and all amounts payable by Tenant upon such expiration or
termination of this Lease) for each month of the holdover tenancy an amount
equal to the greater of (i) 125% of the fair market rental value of the Leased
Premises for such month, or (ii) 125% of the Basic Rent and Tax Payments which
Tenant was obligated to pay for the month immediately preceding the end of the
Term; provided, that
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(x) if such holdover shall continue for more than three
months the percentage under each of clause (i) and clause (ii)
shall increase for periods after the third month to 150%, and
(y) if such holdover shall continue for more than six
months the percentage under clause (ii) shall increase for
periods after the sixth month to 200%.
The aforesaid holdover rent shall be Landlord's sole monetary remedy on account
of such holdover, but Tenant shall not be deemed released from its obligation to
pay damages under Article 25 or from any obligation which under Section 35(k)
survives the termination or expiration of this Lease. Tenant shall not be liable
for Supplemental Rent in respect of any holdover, or for any consequential or
other damages incurred by Landlord on account of such holdover. No holding over
by Tenant after the Term shall operate to extend the Term. Notwithstanding the
foregoing, the acceptance of any rent paid by Tenant pursuant to this Section
32(b) shall not preclude Landlord from commencing and prosecuting a holdover or
summary eviction proceeding.
33. Notices
All notices, requests, demands, certifications and other communications
hereunder (each, a "Notice") shall (except in the case of the telephonic notices
expressly permitted under this Lease) be in writing and shall be delivered by
(a) personal delivery, (b) United States mail, certified or registered, postage
prepaid, return receipt requested, or (c) nationally recognized overnight
courier, in each case addressed to the party to be notified at the address for
such party specified in the first paragraph of this Lease or to such other place
as the party to be notified may from time to time designate by at least 10 days'
notice to the notifying party. Notices by either party may be given by such
party's attorney. Each notice shall be deemed to have been given on the date
such notice is actually received as evidenced by a written receipt therefor, and
in the event of such failure to deliver by reason of changed address of which no
notice was given or refusal to accept delivery, as of the date of such failure.
Whenever Landlord gives any Notice under this Lease, it shall give a copy
thereof in the same manner to Tenant at 85 Broad Street, New York, New York
10004, Attention: General Counsel, or at such other place as the party to be
notified may from time to time designate by at least 10 days' notice to the
notifying party.
Whenever Tenant gives any Notice under this Lease, it shall give a copy
thereof in the same manner to Landlord at 156 William Street, New York, New York
10038, Attention: James F. Stomber, Esq. or at such other place as the party to
be notified may from time to time designate by at least 10 days' notice to the
notifying party.
34. Annual Reports
Within 120 days of the end of each of Tenant's fiscal years ending during
the Term, Tenant shall furnish to Landlord a statement of operating expenses for
the Improvements for
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such fiscal year together with a schedule of subleases of all or any part of the
Leased Premises indicating the premises demised, commencement date, expiration
date, renewal options, base rent and escalation provisions.
35. Miscellaneous
(a) If any term of this Lease or any application thereof shall be
invalid or unenforceable, the remainder of this Lease and any other application
of such term shall not be affected thereby. All covenants and obligations of
Landlord and Tenant hereunder which are not fully performed upon the expiration
or earlier termination of this Lease shall survive such expiration or earlier
termination.
(b) This Lease may be changed or amended only by an instrument in
writing, signed by the party against whom enforcement of such change or
amendment is sought.
(c) Subject to Article 20, this Lease shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto.
(d) This Lease shall be construed and enforced in accordance with
and governed by the laws of the State of New York.
(e) The headings in this Lease are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. References herein to
sections are, unless otherwise indicated, references to sections hereof.
(f) Landlord and Tenant each represents to the other that it has
dealt with no broker (other than affiliates of Tenant) in connection with the
negotiation and execution of this Lease. Tenant shall pay, and shall indemnify
and defend Landlord against any claims for, any commission with respect to this
Lease due to any such affiliate.
(g) Landlord and Tenant hereby waive trial by jury in any action
arising under this Lease.
(h) No matter concerning this Lease shall be arbitrable unless
arbitration of such matter is specifically provided for herein. Except (1) as
provided in Section 2.2 with respect to any arbitration under said Section and
(2) as provided in Article 36 with respect to any arbitration under any
provision of this Lease providing for Expedited Arbitrations, in any instance in
this Lease in which arbitration is specifically provided for, such arbitration
shall be conducted pursuant to the rules of the American Arbitration
Association, or if the American Arbitration Association shall have ceased to
function as an arbitration association, of a successor or comparable
organization and the arbitrators shall be persons experienced in matters of the
same general nature as the matter subject to arbitration. If, in any
arbitration, the arbitrator or arbitrators shall award any sum to be paid by one
party hereto to the other, the arbitrators shall also award interest thereon,
computed at the Prime Rate in effect from time to time, from the date (prior to
such arbitration) on which, according to the terms hereof, such sum was to have
been paid.
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(i) In any instance in this Lease in which Landlord covenants not
unreasonably to withhold its consent or approval, Tenant's sole remedy in case
of such unreasonable withholding is an action for specific performance or
injunction directing such consent or approval and Landlord shall have no
liability for monetary damages. In any instance in this Lease in which Tenant
covenants not unreasonably to withhold its consent or approval, Landlord's sole
remedy in case of such unreasonable withholding is an action for specific
performance or injunction directing such consent or approval and Tenant shall
have no liability for monetary damages. In any such action, the prevailing party
shall be entitled to recover its reasonable attorneys fees and disbursements
from the other party.
(j) Neither Landlord nor Tenant shall, without the consent of the
other party, refer to the other party, this Lease or any related transaction in
any advertising, promotional material, publicity, press release or similar
material. This Article 35(j) shall not prohibit disclosures in any offering
materials relating to any securitization of any mortgage debt on the Leased
Premises or relating to any other type of public or private security offering.
(k) No expiration or termination of the Term shall relieve Landlord
or Tenant of its respective liabilities and obligations.
(1) accruing hereunder prior to such expiration or
termination, or
(2) provided by this Lease to be performed after such
expiration or termination (including without limitation
Tenant's obligations under Section 15.4(k) in case of
any termination of this Lease pursuant to Section 15.4),
all of which shall survive such expiration or termination.
(l) If any governmental agency or any electric, gas, water, steam,
sewer or telecommunications utility or supplier shall require or request that
any application or other document or instrument required or requested by it to
be furnished to it in connection with any Alterations or with any electric, gas,
water, steam, sewer or telecommunication service to the Leased Premises be
executed by the owner of the Leased Premises, Landlord shall within
(1) prior to Tenant's opening for the conduct of
business in the Leased Premises, 2 Business Days after the
submission of such application, document or instrument to it
by Tenant, or
(2) thereafter, 5 Business Days after the submission of
such application, document or instrument to it by Tenant,
execute and return the same to Tenant. Notwithstanding the foregoing, Landlord
shall have no obligation to execute and return any such application, document or
instrument unless such application, document or instrument is either (i)
reasonable, or (ii) customarily required by any governmental agency or any
electric, gas, water, steam, sewer or telecommunications utility or
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supplier in situations similar to the situation in question, or (iii) required
by any Legal Requirement. Any dispute as to whether Landlord shall be obligated
to execute and return any application, document or instrument shall be subject
to Expedited Arbitration. If Tenant shall prevail and Landlord shall not execute
and return such application, document or instrument within 2 Business Days of
the decision in arbitration, Tenant is hereby appointed as attorney-in-fact of
Landlord to execute such application, document or instrument.
(m) This Lease shall be construed without regard to any presumption
or other rule requiring construction against the party which drafted or caused
to be drafted the provisions hereof.
(n) If on (i) the date of any termination of this Lease pursuant to
Section 15.4, (ii) the date of any termination of this Lease pursuant to Section
16.2, or (iii) any expiration, termination or repossession pursuant to Article
22 or 23, the aggregate amount theretofore disbursed by Landlord pursuant to
Section 7 of the Initial Improvements Agreement shall be less than the Owner's
FOW Cost Limit (as defined in the Initial Improvements Agreement), then (x) the
amount of the excess of the Owner's FOW Cost Limit over such aggregate amount
theretofore disbursed is herein called the "Credit Amount", and (y)
notwithstanding any provision of this Lease to the contrary, Tenant shall be
entitled to a credit equal to the Credit Amount against (1) in the case of
clause (i) above, the amount payable under Section 15.4(h)(ii), (2) in the case
of clause (ii) above, the amount payable under the second paragraph of Section
16.2, and (3) in the case of clause (iii) above, the amount payable under
Section 25.2(b). Promptly after Landlord's request given at any time after the
aggregate amount disbursed by Landlord pursuant to said Section 7 shall exceed
Owner's FOW Cost Limit, Tenant shall execute an instrument, in form reasonably
satisfactory to Landlord, confirm such fact and that Tenant shall have no right
to any credit pursuant to this Section 35(n).
(o) At the request of either party, the parties shall execute,
deliver and acknowledge a memorandum of this Lease under Section 291-c of the
Real Property Law, and any other documents required in connection with the
recording thereof. The requesting party shall bear the costs of recording the
same.
36. Expedited Arbitration.
The term "Expedited Arbitration" shall refer to arbitration under
this Article 36. In any case under this Lease in which a matter is to be
determined by Expedited Arbitration, either party may give notice to the other
stating that it wishes such dispute to be so determined. The arbitrator in any
such matter shall be the first of the following that is able and willing to act
as such:
Lee Kuntz
Lloyd Shor
If none of such named persons shall be able and willing to act as the
arbitrator, the parties shall apply to the American Arbitration Association
located in the City of New York for the designation of such arbitrator and if no
arbitrator shall have been appointed within 10 Business
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Days then either party may apply to the Supreme Court in New York County or to
any other court having jurisdiction for the designation of such arbitrator. Any
arbitrator so appointed shall be an attorney who is a partner at a law firm
having at least 100 attorneys and shall have at least 15 years experience in the
practice of commercial real estate in the Borough of Manhattan. The arbitrator
shall conduct such hearings as he or she may deem appropriate, and shall notify
Landlord and Tenant of his or her determination as soon as practicable, and, if
reasonably possible, within 5 Business Days after the designation of the
arbitrator. Judgment upon any decision rendered in arbitration held pursuant to
this Article 36 shall be final and binding upon Landlord and Tenant, whether or
not a judgment shall be entered in any court. Each party shall pay its own
counsel fees and expenses, if any, in connection with any arbitration under this
Article 36, and the parties shall share the fees of the arbitrator and all other
expenses and fees of any such arbitration. The arbitrator shall select as his or
her determination the determination of either Landlord or Tenant in the matter
that is in dispute, except that in arbitrations under Section 1.3, Article 38 or
Article 39 the arbitrator may make his or her determination partially in favor
of one party and partially in favor of the other, but in no event shall the
arbitrator make any award in excess of the amount claimed due by Tenant. The
arbitrator shall be bound by the provisions of this Lease, and shall not add to,
subtract from or otherwise modify such provisions.
37. Subordination
(a) Subject to Section 37(b), this Lease is subject and subordinate
to each mortgage (a "Superior Mortgage") which may now or hereafter affect all
or any portion of the Leased Premises. The mortgagee under a Superior Mortgage
is called a "Superior Mortgagee". Tenant shall execute, acknowledge and deliver
any instrument reasonably requested by Landlord or a Superior Mortgagee to
evidence such subordination, but no such instrument shall be necessary to make
such subordination effective. Tenant shall execute any amendment of this Lease
requested by a Superior Mortgagee, provided such amendment shall not (i)
increase the rent, (ii) reduce or extend the Term, (iii) enlarge or diminish the
Leased Premises, (iv) other than to a de minimis extent, increase Tenant's
obligations under this Lease or reduce Landlord's obligations under this Lease,
(v) other than to a de minimis extent, reduce Tenant's rights under this Lease
or increase Landlord's rights under this Lease, or (vi) other than to a de
minimis extent, otherwise adversely affect Tenant. In the event of the
enforcement by a Superior Mortgagee of the remedies provided for by law or by
such Superior Mortgage Tenant, upon request of any person succeeding to the
interest of Landlord (a "Successor Landlord"), shall automatically become the
tenant of such Successor Landlord upon the terms of any Non-Disturbance
Agreement between Tenant and the applicable Superior Mortgagee.
(b) Notwithstanding Section 37(a), this Lease shall not be subject
and subordinate to any Superior Mortgage unless the Superior Mortgagee under
such Superior Mortgage shall have executed and delivered to Tenant a
non-disturbance agreement in the form attached hereto as Exhibit D or another
form no less favorable to Tenant in any material respect (a "Non-Disturbance
Agreement"). Anything contained in Section 37(a) to the contrary
notwithstanding, if (i) such Superior Mortgagee executes and delivers to Tenant
a Non-Disturbance Agreement accompanied by a notice from Landlord including the
following statement in block capital letters -THIS NOTICE IS BEING GIVEN UNDER
SECTION 37(B)
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OF YOUR LEASE. YOUR FAILURE TIMELY TO RESPOND MAY RESULT IN LANDLORD BEING
DEEMED TO HAVE SATISFIED ITS OBLIGATION UNDER SAID SECTION 37(B) WITH RESPECT TO
THE MORTGAGE IN QUESTION - and (ii) Tenant either fails or refuses to execute
and deliver such Non-Disturbance Agreement within 15 Business Days after
delivery of such Non-Disturbance Agreement to Tenant, then, so long as such
Superior Mortgagee does not withdraw such Non-Disturbance Agreement and the same
remains available for acceptance and execution by Tenant, Landlord shall be
deemed to have satisfied its obligation under this Section 37(b) and shall have
no further obligation to deliver to Tenant a Non-Disturbance Agreement with
respect to the Superior Mortgage in question.
38. Landlord's Failure to Pay Taxes
(a) If Tenant believes that Landlord has failed timely to pay to the
appropriate governmental agency any amount which Landlord is required by Section
11.2 to pay, then (i) Tenant may give Landlord a notice (an "Article 38 Demand
Notice") specifying and identifying such amount (an "Article 38 Demand Amount")
and containing the following statement in block capital letters: "THIS NOTICE IS
BEING GIVEN UNDER ARTICLE 38 OF OUR LEASE. YOUR FAILURE TIMELY TO PAY THE TAXES
HEREIN SPECIFIED AND FURNISH EVIDENCE THEREOF TO TENANT WILL RESULT IN TENANT
HAVING THE RIGHT TO PAY SUCH TAXES AND OFFSET THE AMOUNT SO PAID AGAINST RENT
DUE UNDER THE LEASE" and (ii) at any time on or after the 30th day after the
giving of such Article 38 Demand Notice Tenant may pay the Article 38 Demand
Amount or any portion thereof to the appropriate governmental agency (together
with all interest, penalties, late charges and similar fees thereon or with
respect thereto); provided, that if within 30 days after the giving of the
Article 38 Demand Notice Landlord notifies Tenant that Landlord has paid all of
such Article 38 Demand Amount to the appropriate governmental agency (together
with all interest, penalties, late charges and similar fees thereon or with
respect thereto) (which notice shall include evidence of such payment) and
Landlord has actually done so Tenant shall not be entitled to make payment of
the Article 38 Demand Amount or any portion thereof, and if within 30 days after
the giving of such Article 38 Demand Notice Landlord notifies Tenant that
Landlord has paid a portion identified and specified in such notice of the
Article 38 Demand Amount to the appropriate governmental agency (together with
all interest, penalties, late charges and similar fees thereon or with respect
thereto) (which notice shall include evidence of such payment) and Landlord has
actually done so Tenant may pay only the balance of such Article 38 Demand
Amount not so paid by Landlord or any portion of such balance to the appropriate
governmental agency (together with all interest, penalties, late charges and
similar fees thereon or with respect thereto). The amount paid by Tenant
pursuant to this Section 38(a) is called an "Article 38 Advance").
(b) If Tenant makes an Article 38 Advance in accordance with Section
38(a), then, except as otherwise provided in Section 38(c), (i) Landlord shall
reimburse to Tenant within 15 days after Tenant's demand therefor the amount of
the Article 38 Advance, together with interest thereon at the Interest Rate from
the date of payment by Tenant to the date on which Landlord so reimburses
Tenant, (ii) if Landlord shall fail timely to make such reimbursement, Tenant
shall have the right to set-off the amount of the Article 38 Advance together
with such
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interest thereon against the rent under this Lease (exclusive of the
Supplemental Rent), and (iii) Landlord shall be deemed to have waived its right
to claim that such setoff was improper or constitutes a failure to pay rent or
other default under this Lease; provided, that Landlord shall have the right to
bring and maintain a separate action against Tenant as provided for in Section
38(d).
(c) If within 30 days after the giving of the Article 38 Demand
Notice, Landlord notifies Tenant (an "Article 38 Dispute Notice") that Landlord
believes that all or a portion identified and specified in such Article 38
Dispute Notice of the Article 38 Demand Amount is not required by Section 11.2
to be paid by Landlord or is not overdue (in either case all or such identified
and specified portion being herein called the "Disputed Article 38 Amount"),
then Landlord shall not be required to reimburse Tenant and Tenant shall not
have a right of set-off with respect to the Disputed Article 38 Amount except to
the extent that the dispute with respect thereto is resolved in Tenant's favor
in accordance with the next sentence. Tenant shall have the right, with respect
to any such dispute, to elect by notice to Landlord that such dispute be
resolved by litigation or Expedited Arbitration, but any such election shall be
irrevocable with respect to the dispute in question.
(d) If Landlord does not timely give an Article 38 Dispute Notice,
Landlord shall nevertheless have the right to recover from Tenant by separate
action so much of the Article 38 Demand Amount setoff by Tenant as Landlord was
not required by Section 11.2 to pay or which was not overdue; provided, that
Landlord's sole remedy in such an action shall be a money judgment against
Tenant.
(e) Notwithstanding the provisions of Section 20(b) or the
provisions of the definition of the term "Landlord" set forth in Article 31,
Tenant's rights under this Article 38 shall survive any sale, conveyance,
assignment or other transfer of the Leased Premises and after any thereof shall
continue to be enforceable against the new owner of the Leased Premises,
notwithstanding that the amounts to which such rights relate were originally
required to be paid by such new owner's predecessor.
(f) The provisions of this Article 38 shall also be applicable to
the net annual rental which Landlord is required to pay under the Ground Lease,
mutatis mutandis. In applying such provisions to such net annual rent,
references in this Article 38 to the "appropriate governmental agency" shall be
deemed to refer to the landlord under the Ground Lease and references in this
Article 38 to "Section 11.2" shall be deemed to refer to the provisions of the
Ground Lease requiring the payment of net annual rental.
39. Landlord's Failure to Pay Costs of Base Building Upgrade Work or
Fit-Out Work
(a) If Tenant believes that Landlord has failed timely to pay to the
appropriate party any amount which Landlord is required by Section 6 or 7 of the
Initial Improvements Agreement to pay, then (i) Tenant may give Landlord a
notice (an "Article 39 Demand Notice") specifying and identifying such amount
(an "Article 39 Demand Amount") and containing the following statement in block
capital letters: "THIS NOTICE IS BEING GIVEN UNDER ARTICLE 39 OF
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OUR LEASE. YOUR FAILURE TIMELY TO PAY THE COSTS HEREIN SPECIFIED AND FURNISH
EVIDENCE THEREOF TO TENANT WILL RESULT IN TENANT HAVING THE RIGHT TO PAY SUCH
COSTS AND OFFSET THE AMOUNT SO PAID AGAINST RENT DUE UNDER THE LEASE" and (ii)
at any time on or after the 10th day after the giving of such Article 39 Demand
Notice Tenant may pay the Article 39 Demand Amount or any portion thereof to the
appropriate party (together with all interest, penalties, late charges and
similar fees thereon or with respect thereto) provided, that if within 10 days
after the giving of the Article 38 Demand Notice Landlord notifies Tenant that
Landlord has paid all of such Article 39 Demand Amount to the appropriate party
(together with all interest, penalties, late charges and similar fees thereon or
with respect thereto) (which notice shall include evidence of such payment) and
Landlord has actually done so Tenant shall not be entitled to make payment of
the Article 39 Demand Amount or any portion thereof and if within 10 days after
the giving of such Article 39 Demand Notice Landlord notifies Tenant that
Landlord has paid a portion identified and specified in such notice of the
Article 39 Demand Amount to the appropriate party (together with all interest,
penalties, late charges and similar fees thereon or with respect thereto) (which
notice shall include evidence of such payment) and Landlord has actually done so
Tenant may pay only the balance of such Article 39 Demand Amount not so paid by
Landlord or any portion of such balance to the appropriate party (together with
all interest, penalties, late charges and similar fees thereon or with respect
thereto). The amount paid by Tenant pursuant to this Section 39(a) is called an
"Article 39 Advance").
(b) If Tenant makes an Article 39 Advance in accordance with Section
39(a), then, except as otherwise provided in Section 39(c), (i) Landlord shall
reimburse to Tenant within 15 days after Tenant's demand therefor the amount of
the Article 39 Advance, together with interest thereon at the Interest Rate from
the date of payment by Tenant to the date on which Landlord so reimburses
Tenant, (ii) if Landlord shall fail timely to make such reimbursement, Tenant
shall have the right to setoff the amount of the Article 39 Advance together
with such interest thereon against the rent under this Lease, and (iii) Landlord
shall be deemed to have waived its right to claim that such setoff was improper
or constitutes a failure to pay rent or other default under this Lease and its
right to bring and maintain a separate action against Tenant to recover all or
any portion of the Article 39 Demand Amount.
(c) If within 10 days after the giving of the Article 39 Demand
Notice, Landlord notifies Tenant (an "Article 39 Dispute Notice") that Landlord
believes that all or a portion identified and specified in such Article 39
Dispute Notice of the Article 39 Demand Amount is not required by Section 6 or 7
of the Initial Improvements Agreement to be paid by Landlord or is not overdue
(in either case all or such identified and specified portion being herein called
the "Disputed Article 39 Amount"), then Landlord shall not be required to
reimburse Tenant and Tenant shall not have a right of set-off with respect to
the Disputed Article 39 Amount except to the extent that the dispute with
respect thereto is resolved in Tenant's favor in accordance with the next
sentence. Tenant shall have the right, with respect to any such dispute, to
elect by notice to Landlord that such dispute be resolved by litigation or
Expedited Arbitration, but any such election shall be irrevocable with respect
to the dispute in question.
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(d) Notwithstanding the provisions of Section 20(b) or the
provisions of the definition of the term "Landlord" set forth in Article 31,
Tenant's rights under this Article 39 shall survive any sale, conveyance,
assignment or other transfer of the Leased Premises and after any thereof shall
continue to be enforceable against the new owner of the Leased Premises,
notwithstanding that the amounts to which such rights relate were originally
required to be paid by such new owner's predecessor.
(e) For purposes of computing the Base Building Savings, the Base
Building Savings Constant Payment and the Base Building Savings Credit, Landlord
shall be deemed to have disbursed pursuant to Section 6 of the Initial
Improvements Agreement all amounts reimbursed by Landlord or set-off by Tenant
pursuant to this Article 39, exclusive of all such amounts representing
interest, penalties, late charges or similar fees paid by Tenant or interest
paid by Landlord. The resulting decrease in the Base Building Savings Constant
Payment and Base Building Savings Credit shall be effective as of the Basic Rent
payment date next following such reimbursement or set-off and, if such Basic
Rent payment date shall be after the Rent Commencement Date, shall be computed
with respect to the number of months provided for in the definition of "Base
Building Constant Monthly Payment" minus the number of months in the period
commencing with the Base Building Savings Commencement Date and ending on the
day preceding the day prior to such Basic Rent payment date, rather than the
number of months provided for in the definition of "Base Building Constant
Monthly Payment". Promptly after such reimbursement or set-off Landlord and
Tenant shall join in one or more supplements to the instruments referred to in
the penultimate paragraph of Section 1.6 confirming the matters set forth in
this Section 39(e). The failure of either party to execute such supplement shall
not constitute a default hereunder or otherwise affect this Lease.
(f) Each Article 39 Advance shall constitute a loan from Tenant to
Landlord and notwithstanding Tenant's having made such Article 39 Advance the
Base Building Upgrade Work and/or the Fit-Out Work to which such Article 39
Advance shall relate, shall nonetheless constitute the property of Landlord, a
part of the Lease Premises and subject to the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have caused this lease to be duly
executed and delivered, all as of the date and year first above written.
TEN HANOVER L.L.C.
By: NEXT GENERATION DEVELOPMENT, L.L.C.
its sole manager
By: /s/ Steven C. Witkoff
-------------------------------------
Steven C. Witkoff, its sole manager
THE GOLDMAN SACHS GROUP L.P
By: /s/ Edward F. Markiewicz
-------------------------------------
Edward F. Markiewicz
Attorney-in-Fact
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Exhibit A
The Land
All that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City and State o New York, more particularly bounded and
described as follows:
BEGINNING at the corner formed by the intersection of the northeasterly side of
Hanover Square and the southeasterly side of Pearl Street;
RUNNING THENCE Northeasterly along the southeasterly side of Pearl Street,
187.129 feet to a point;
THENCE RUNNING along a line forming an interior angle of 92 degrees 26 minutes
50 seconds to the last mentioned course, 120.854 feet to the northwesterly side
of Water Street;
THENCE RUNNING along the northwesterly side of Water Street, 189.352 feet to the
northeasterly side of Hanover Square;
THENCE RUNNING along the northeasterly side of Hanover Square, 138.897 feet to
the point or place of BEGINNING.
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Exhibit B
Initial Tax Payments
10 Hanover Square (New York, NY) Lease - Ten Hanover LLC and Goldman Sachs Group Inc.
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