LEASE
195 PROPERTY COMPANY,
LANDLORD
TO
BOLT, INC.,
TENANT
PREMISES:
THE ENTIRE SEVENTEENTH (17TH) AND NINETEENTH (19TH) FLOORS
AND
A PORTION OF THE EIGHTEENTH (18TH) FLOOR
AT
195 BROADWAY,
NEW YORK, NEW YORK 10007
<PAGE> 2
TABLE OF CONTENTS
CAPTION PAGE
ARTICLE 1 Demise, Premises, Term, Rents....................................1
ARTICLE 2 Use..............................................................6
ARTICLE 3 Failure To Give Possession.......................................8
ARTICLE 4 Preparation of the Demised Premises..............................9
ARTICLE 5 Adjustments of Rent.............................................11
ARTICLE 6 Security Deposit................................................22
ARTICLE 7 Subordination, Notice to Lessors and Mortgagees.................26
ARTICLE 8 Quiet Enjoyment.................................................29
ARTICLE 9 Assignment And Subletting.......................................29
ARTICLE 10 Compliance With Laws And Requirements Of Public Authorities.....38
ARTICLE 11 Insurance.......................................................40
ARTICLE 12 Rules And Regulations...........................................44
ARTICLE 13 Tenant's Changes................................................45
ARTICLE 14 Tenant's Property...............................................48
ARTICLE 15 Repairs And Maintenance.........................................50
ARTICLE 16 Electricity.....................................................51
ARTICLE 17 Heat, Ventilating And Air-Conditioning..........................57
ARTICLE 18 Landlord's Other Services.......................................59
ARTICLE 19 Access, Changes In Building Facilities, Name....................61
ARTICLE 20 Notice Of Accidents.............................................63
ARTICLE 21 Non-Liability And Indemnification...............................64
ARTICLE 22 Destruction Or Damage...........................................65
ARTICLE 23 Eminent Domain..................................................67
ARTICLE 24 Surrender; Holdover.............................................69
ARTICLE 25 Conditions Of Limitation........................................70
ARTICLE 26 Re-Entry By Landlord............................................72
ARTICLE 27 Damages.........................................................73
ARTICLE 28 Waiver..........................................................75
ARTICLE 29 No Other Waivers Or Modifications...............................76
ARTICLE 30 Curing Tenant's Defaults, Additional Rent.......................77
ARTICLE 31 Broker..........................................................78
i
<PAGE> 3
ARTICLE 32 Notices.........................................................78
ARTICLE 33 Estoppel Certificate............................................79
ARTICLE 34 Arbitration.....................................................79
ARTICLE 35 No Other Representations, Construction, Governing Law,
Consents......................................................80
ARTICLE 36 Parties Bound...................................................81
ARTICLE 37 Certain Definitions And Construction............................81
ARTICLE 38 Adjacent Excavation And Construction; Shoring; Vaults...........82
ARTICLE 39 Renewal Option..................................................82
ARTICLE 40 Real Estate Tax Abatement.......................................85
ARTICLE 41 Additional Space Option.........................................88
ARTICLE 42 Antenna.........................................................92
ARTICLE 43 Storage Space...................................................95
EXHIBIT A DESCRIPTION.................................................99
EXHIBIT B FLOOR PLANS................................................100
EXHIBIT C HEATING, VENTILATING AND AIR-CONDITIONING SYSTEM...........101
EXHIBIT D RULES AND REGULATIONS......................................102
EXHIBIT E DEFINITIONS................................................106
EXHIBIT F CLEANING SPECIFICATIONS....................................109
EXHIBIT G CERTIFICATE OF OCCUPANCY...................................111
EXHIBIT H FORM OF LETTER OF CREDIT...................................112
EXHIBIT I OPTION SPACE...............................................114
EXHIBIT J STORAGE SPACE..............................................115
-------------------------
This Index is included only as a matter of convenience of reference and
shall not be deemed or construed in any way to define or limit the scope of the
following lease or the intent of any provision thereof.
ii
<PAGE> 4
LEASE
LEASE dated as of February 18, 2000, between 195 PROPERTY COMPANY, a
New York partnership, having an office at 101 Park Avenue, New York, New York
10178 (hereinafter referred to as "LANDLORD") and BOLT, INC., a Delaware
corporation having an office at 304 Hudson Street, 7th Floor North, New York,
New York 10013 (hereinafter referred to as "TENANT").
WITNESSETH:
ARTICLE 1
DEMISE, PREMISES, TERM, RENTS
1.01 Landlord hereby leases to Tenant, and Tenant hereby hires
from Landlord, the premises hereinafter described, in the building located at
195 Broadway, in the Borough of Manhattan, City, County and State of New York
(hereinafter referred to as the "BUILDING"), on the parcel of land more
particularly described in EXHIBIT A (hereinafter referred to as the "LAND"), for
the term hereinafter stated, for the rents hereinafter reserved and upon and
subject to the conditions (including limitations, restrictions and reservations)
and covenants hereinafter provided. Each party hereby expressly covenants and
agrees to observe and perform all of the conditions and covenants herein
contained on its part to be observed and performed.
1.02 The premises hereby leased to Tenant are the seventeenth
(17th) floor (hereinafter referred to as the "17TH PREMISES"), the nineteenth
(19th) floor (hereinafter referred to as the "19TH PREMISES") and a portion of
the eighteenth (18th) floor (hereinafter referred to as the "18TH PREMISES") of
the Building, as shown on the floor plans annexed hereto as EXHIBIT B. Said
premises, together with all fixtures and equipment which at the commencement, or
during the term, of this lease are thereto attached (except items not deemed to
be included therein and removable by Tenant as provided in Article 14),
constitute and are hereinafter collectively
1
<PAGE> 5
referred to as the "DEMISED PREMISES".
1.03 The term of this lease, for which the Demised Premises
are hereby leased, shall commence (a) with respect to the 17th Premises, on the
date (hereinafter referred to as the "17TH FLOOR COMMENCEMENT DATE") which shall
be the day on which "Landlord's Work" (other than the "Lavatory Work") (as such
terms are defined in Article 4) in the 17th Premises has been substantially
completed (as set forth in Section 4.04) and vacant, broom clean possession of
the 17th Premises is available to Tenant and Landlord shall have given Tenant at
least five (5) days notice thereof (which notice, notwithstanding anything in
this lease to the contrary, may be hand-delivered), (b) with respect to the 18th
Premises, on the date (hereinafter referred to as the "18TH FLOOR COMMENCEMENT
DATE") which shall be the day on which "Landlord's Work" (other than the
"Lavatory Work") (as such terms are defined in Article 4) in or with respect to
the 18th Premises has been substantially completed (as set forth in Section
4.04) and vacant, broom clean possession of the 18th Premises is available to
Tenant and Landlord shall have given Tenant at least five (5) days notice
thereof (which notice, notwithstanding anything in this lease to the contrary,
may be hand-delivered) and (c) with respect to the 19th Premises, on the date
(hereinafter referred to as the "19TH FLOOR COMMENCEMENT DATE") which shall be
the day on which "Landlord's Work" (other than the "Lavatory Work") (as such
terms are defined in Article 4) in the 19th Premises has been substantially
completed (as set forth in Section 4.04) and vacant, broom clean possession of
the 19th Premises is available to Tenant and Landlord shall have given Tenant at
least five (5) days notice thereof (which notice, notwithstanding anything in
this lease to the contrary, may be hand-delivered), and shall end at noon of the
last day of the calendar month in which occurs the day preceding the tenth
(10th) anniversary of the "19th Floor Rent Commencement Date" (as defined in
Section 1.08), which ending date is hereinafter referred to as the "EXPIRATION
DATE", or shall end on such earlier date upon which said term may expire or be
cancelled or terminated pursuant to any of the conditions or covenants of this
lease or pursuant to law. Promptly following the 17th Floor Commencement Date,
the 18th Floor Commencement Date and the 19th Floor Commencement Date,
respectively, the parties hereto (hereinafter sometimes referred to as the
"PARTIES") shall enter into a recordable supplementary agreement fixing the
dates of the respective Commencement Dates and the Expiration Date and if they
cannot agree thereon within fifteen (15) days after Landlord's request therefor,
such dates shall be determined by arbitration in the manner provided in Article
34. Pending such determination, the dates designated by Landlord shall control
with a retroactive adjustment, if required, if Landlord's designation is
determined to be incorrect. The 17th Floor Commencement Date, the 18th Floor
Commencement Date and the 19th Floor Commencement Date are sometimes hereinafter
individually referred to as a "COMMENCEMENT DATE" and collectively as the
"COMMENCEMENT DATES").
1.04 The "rents" reserved under this lease, for the term
thereof, shall be and consist of:
2
<PAGE> 6
(a) "fixed rent" for the 17th Premises as follows:
(i) $1,091,424.00 per annum ($90,952.00 per
month) from the 17TH FLOOR RENT COMMENCEMENT DATE (as hereafter defined) through
the day next preceding the fifth (5th) anniversary of the 17th Floor Rent
Commencement Date, both dates inclusive; and
(ii) $1,227,852.00 per annum ($102,321.00
per month) from the fifth (5th) anniversary of the 17th Floor Rent Commencement
Date and continuing thereafter throughout the remainder of the initial term of
the lease,
all of which shall be payable in equal monthly installments in advance on the
first day of each and every calendar month during the term of this lease, and
(b) "fixed rent" for the 18th Premises as follows:
(iii) $746,208.00 per annum ($62,184.00 per
month) from the 18TH FLOOR RENT COMMENCEMENT DATE (as hereafter defined) through
the day next preceding the fifth (5th) anniversary of the 18th Floor Rent
Commencement Date, both dates inclusive; and
(iv) $839,484.00 per annum ($69,957.00 per
month) from the fifth (5th) anniversary of the 18th Floor Rent Commencement Date
and continuing thereafter throughout the remainder of the initial term of the
lease,
all of which shall be payable in equal monthly installments in advance on the
first day of each and every calendar month during the term of this lease, and
(c) "fixed rent" for the 19th Premises as follows:
(i) $1,116,928.00 per annum ($93,077.33 per
month) from the 19TH FLOOR RENT COMMENCEMENT DATE (as hereafter defined) through
the day next preceding the fifth (5th) anniversary of the 19th Floor Rent
Commencement Date, both dates inclusive; and
(ii) $1,256,544.00 per annum ($104,712.00
per month) from the fifth (5th) anniversary of the 19th Floor Rent Commencement
Date and continuing thereafter throughout the remainder of the initial term of
the lease,
all of which shall be payable in equal monthly installments in advance on the
first day of each and every calendar month during the term of this lease, and
(d) "ADDITIONAL RENT" for the Demised Premises
3
<PAGE> 7
consisting of all such other sums of money as shall become due from and payable
by Tenant to Landlord hereunder (for default in payment of which Landlord shall
have the same remedies as for a default in payment of fixed rent),
all to be paid to Landlord at its office, or such other place, or to such agent
and at such place, as Landlord may designate by notice to Tenant, in lawful
money of the United States of America.
1.05 Tenant shall pay the fixed rent and additional rent
herein reserved promptly as and when the same shall become due and payable,
without demand therefor and without any abatement, deduction or setoff
whatsoever except as expressly provided in this lease.
1.06 If the 17th Floor Rent Commencement Date, the 18th Floor
Rent Commencement Date or the 19th Floor Rent Commencement Date occurs on a day
other than the first day of a calendar month or the Expiration Date occurs on a
day other than the last day of a calendar month, the fixed rent for such
calendar month shall be prorated.
1.07 Tenant acknowledges that it has no rights to any
development rights, "air rights" or comparable rights appurtenant to the Land
and Building, and consents, without further consideration, to any utilization of
such rights by Landlord and agrees, at no cost or expense to Tenant (other than
de minimus legal fees or other expenses), to promptly execute and deliver any
instruments which may be requested by Landlord, including instruments merging
zoning lots, evidencing such acknowledgment and consent. The provisions of this
Section l.07 shall be deemed to be and shall be construed as an express waiver
by Tenant of any interest Tenant may have as a "party in interest" (as such
quoted term is defined in Section 12-10 Zoning Lot of the Zoning Resolution of
the City of New York) in the Land and Building.
1.08 For purposes of this lease, (a) the term 17TH FLOOR RENT
COMMENCEMENT DATE shall mean the date which is the four (4) month anniversary of
the 17th Floor Commencement Date, it being agreed and understood that Tenant
shall have no obligation to pay any fixed rent as to the 17th Premises during
the period from the 17th Floor Commencement Date to the 17th Floor Rent
Commencement Date (hereinafter referred to as the "17TH FLOOR ABATEMENT
PERIOD"), (b) the term 18TH FLOOR RENT COMMENCEMENT DATE shall mean the date
which is the four (4) month anniversary of the 18th Floor Commencement Date, it
being agreed and understood that Tenant shall have no obligation to pay any
fixed rent as to the 18th Premises during the period from the 18th Floor
Commencement Date to the 18th Floor Rent Commencement Date (hereinafter referred
to as the "18TH FLOOR ABATEMENT PERIOD"), and (c) the term 19TH FLOOR RENT
COMMENCEMENT DATE shall mean the date which is the four (4) month anniversary of
the 19th Floor Commencement Date, it being agreed and understood that Tenant
shall have no obligation to pay any fixed rent as to the 19th Premises during
the period from the 19th Floor Commencement Date to the 19th Floor Rent
Commencement Date (hereinafter referred to as the "19TH FLOOR ABATEMENT
PERIOD"). The 17th Floor Abatement Period, the 18th Floor
4
<PAGE> 8
Abatement Period and the 19th Floor Abatement Period are sometimes hereinafter
individually referred to as an "ABATEMENT PERIOD" and collectively as the
"ABATEMENT PERIODS".
1.09 Notwithstanding anything in this lease to the contrary,
if "Landlord's Work" (other than the "Lavatory Work") (as such terms are defined
in Article 4) as to the 17th Premises is not substantially completed (as set
forth in Section 4.04) within sixty (60) days (hereinafter referred to as the
"17TH PREMISES WORK PERIOD") of the date hereof, then, as Tenant's sole and
exclusive right and remedy, the 17th Floor Abatement Period shall be extended by
one (1) day for each day (up to thirty (30) days) after the end of the 17th
Premises Work Period that said Landlord's Work as to the 17th Premises is not
substantially completed and one and one-half (1-1/2) days for each day after
the thirtieth (30th) day following the end of the 17th Premises Work Period that
said Landlord's Work as to the 17th Premises is not substantially completed.
Such extension of the 17th Floor Abatement Period shall not extend the
Expiration Date.
1.10 Notwithstanding anything in this Lease to the contrary,
if "Landlord's Work" (other than the "Lavatory Work") (as such terms are defined
in Article 4) as to the 18th Premises is not substantially completed (as set
forth in Section 4.04) within sixty (60) days (hereinafter referred to as the
"18TH PREMISES WORK PERIOD") of the date hereof, then, as Tenant's sole and
exclusive right and remedy, the 18th Floor Abatement Period shall be extended by
one (1) day for each day (up to thirty (30) days) after the end of the 18th
Premises Work Period that said Landlord's Work as to the 18th Premises is not
substantially completed and one and one-half (1-1/2) days for each day after
the thirtieth (30th) day following the end of the 18th Premises Work Period that
said Landlord's Work as to the 18th Premises is not substantially completed.
Such extension of the 18th Floor Abatement Period shall not extend the
Expiration Date.
1.11 Notwithstanding anything in this lease to the contrary,
if "Landlord's Work" (other than the "Lavatory Work") (as such terms are defined
in Article 4) as to the 19th Premises is not substantially completed (as set
forth in Section 4.04) within the period from May 1, 2000 to July 1, 2000
(hereinafter referred to as the "19TH PREMISES WORK PERIOD"), then, as Tenant's
sole and exclusive right and remedy, the 19th Floor Abatement Period shall be
extended by one (1) day for each day (up to thirty (30) days) after the end of
the 19th Premises Work Period that said Landlord's Work as to the 19th Premises
is not substantially completed and one and one-half (1-1/2) days for each day
after the thirtieth (30th) day following the end of the 19th Premises Work
Period that said Landlord's Work as to the 19th Premises is not substantially
completed. Such extension of the 19th Floor Abatement Period shall not extend
the Expiration Date. If any existing tenant in any portion of the 19th Premises
holds-over beyond May 15, 2000, Landlord agrees to use reasonable efforts to
remove such hold-over from the 19th Premises and otherwise obtain possession of
the 19th Premises, including, without limitation, the institution and diligent
prosecution of holdover proceedings.
ARTICLE 2
5
<PAGE> 9
USE
2.01
(a) Tenant and any permitted occupant, subtenant or
assignee of Tenant shall use and occupy the Demised Premises for executive and
general offices, and incidental related uses, and for no other purpose.
(b) Notwithstanding anything to the contrary
contained above or elsewhere in this Lease, portions of the Demised Premises may
be used for the following: (i) installation and operation of one or more pantry
areas for reheating but not for cooking, including microwave oven, dwyer unit,
one or more refrigerators and other similar equipment and machines for the
preparation and storage of food and beverages for Tenant's officers and
directors, employees and staff; (ii) sale in the Demised Premises for Tenant's
officers and directors, employees, staff and business visitors, by vending
machines of any item the sale of which is not prohibited by law, whether by
Tenant or third parties; (iii) use of an area of the Demised Premises as a
lunchroom for consumption of food and beverages by Tenant's officers and
directors, employees, staff and business visitors; (iv) installation and
operation in the Demised Premises of electronic data and word processing
equipment and business machines and printing and other reproducing equipment;
(v) installation and operation of communication equipment (such as telecopiers,
telex and the like); (vi) exercise area (with showers); and (vii) employee
lounges.
2.02 If any governmental license or permit, other than a
Certificate of Occupancy or any other license or permit required for mere
occupancy of the Demised Premises for the purposes set forth in Section 2.01(a)
shall be required for the proper and lawful conduct of Tenant's business in the
Demised Premises, or any part thereof, and if failure to secure such license or
permit would in any way adversely affect Landlord, Tenant, at its expense, shall
duly procure and thereafter maintain such license or permit and submit the same
for inspection by Landlord. Tenant shall at all times comply with the terms and
conditions of each such license or permit. Upon Tenant's request and at Tenant's
expense, Landlord shall join in the application for any licenses, permits,
approvals and authorizations (except for an application to change the
Certificate of Occupancy) whenever such joining by Landlord shall be required by
any governmental agency having jurisdiction.
2.03 Tenant shall not at any time use or occupy, or suffer or
permit anyone to use or occupy, the Demised Premises, or do or permit anything
to be done in the Demised Premises, in violation of the Certificate of Occupancy
for the Demised Premises or for the Building, a true and complete copy of which
is annexed hereto as EXHIBIT G.
2.04 Landlord shall permit Tenant and its agents to enter upon
the 17th Premises and the 18th Premises prior to the Commencement Dates with
respect thereto (and the 19th
6
<PAGE> 10
Premises after any existing tenant vacates, but prior to the Commencement Date
with respect thereto) so that Tenant or its agents or architect may perform
"Tenant's Work" (as defined in Section 4.03) utilizing its own contractors (to
be first approved in writing by Landlord which approval shall not be
unreasonably withheld or delayed as hereinafter set forth) and in accordance
with plans and specifications as approved in writing by Landlord (which approval
shall not be unreasonably withheld or delayed as hereinafter set forth). The
approved contractors performing Tenant's Work may perform Tenant's Work at the
same time that Landlord's contractors are working in such portions of the
Demised Premises, provided, however, that (a) the construction of such portions
of the Demised Premises, and all installations required to be made by Landlord
therein, shall have reached a point at which, in Landlord's reasonable judgment,
the performance of Tenant's Work will not delay or hamper Landlord in the
completion of the same and (b) Tenant and its contractors shall work in harmony
and shall not interfere with Landlord or Landlord's contractors. Landlord may,
at any time, deny access to such portions of the Demised Premises to Tenant
and/or to any of its contractors in the event that Landlord shall, in its
reasonable discretion, determine that the performance or manner of performance
of Tenant's Work interferes with, delays, hampers, or prevents Landlord from
proceeding with the completion of Landlord's Work at the earliest possible time.
In connection with the foregoing sentence, within twenty-four (24) hours after
Landlord's direction (which need not be given in writing and may be given by
Landlord or its agents or contractors to Tenant or its agents or contractors),
Tenant shall, and cause its contractors to, withdraw from the Building and such
portions of the Demised Premises and cease all work being performed by it or on
its behalf by any person, firm, or corporation (other than Landlord). Tenant
shall pay to Landlord, as additional rent, within ten (10) days after submission
to Tenant of a statement therefor, an amount equal to all costs incurred by
Landlord in connection with such early entry by Tenant including, without
limitation, costs for freight elevator service. All requests for any freight
elevator service shall be made by Tenant in writing.
2.05 In the event that Tenant or its contractor shall be
permitted to enter upon the 17th Premises or the 18th Premises (or the 19th
Premises after any existing tenant vacates) prior to the Commencement Dates with
respect thereto pursuant to the terms of Section 2.04 above, such entry shall be
deemed to be upon all of the terms, provisions and conditions of the Lease,
except as to the covenant to pay fixed rent and additional rent. In connection
therewith, Tenant and/or its contractors shall provide to Landlord, and shall
maintain at all times during the performance of any Tenant's Work, Builder's
Risk, worker's compensation, public liability and property damage insurance
policies, all of which shall contain limits, be with companies and be in form as
required pursuant to Article 11 of this lease. Certificates of the same shall be
furnished to Landlord before Tenant or its contractors commence to perform
Tenant's Work. Landlord shall not be liable in any way for any injury, loss or
damage that may occur to any of Tenant's or Tenant's contractors' decorations,
fixtures, installations, supplies, materials, or equipment prior to the
Commencement Date unless due to the negligence of Landlord or its agents or
contractors (it being understood and agreed that Landlord has no obligation to
secure
7
<PAGE> 11
same or take any action with respect thereto. Except as set forth in the
preceding sentence, any such entry by Tenant and/or its contractors shall be at
their sole risk.
ARTICLE 3
FAILURE TO GIVE POSSESSION
3.01 If the Demised Premises or any additional space to be
included within the Demised Premises shall not be available for occupancy by
Tenant on the specific date hereinbefore designated for the commencement of the
term of this lease or for the inclusion of such space by reason of the holding
over or retention of possession by any tenant, subtenant or any occupant or for
any reason whatsoever, then this lease shall not be affected thereby but, in
such case, said specific date shall be deemed to be postponed until the date
when the Demised Premises or the additional space, as the case may be, shall be
available for occupancy by Tenant and Tenant shall have been notified thereof by
Landlord, in each case, in the manner required pursuant to the terms of this
lease, and Tenant shall not be entitled to possession of the Demised Premises or
the additional space until the same are so available for occupancy by Tenant;
provided, however, except as otherwise expressly set forth herein, Tenant shall
have no claim against Landlord and, except as otherwise expressly set forth
herein, Landlord shall have no liability to Tenant by reason of any such
postponement of said specific date, and the parties hereto further agree that
any failure to have the Demised Premises or such additional space available for
occupancy by Tenant on said specific date or on the Commencement Date shall in
no way affect the obligations of Tenant hereunder except as otherwise expressly
set forth herein, nor shall the same be construed in any way to extend the term
of this lease. Landlord agrees to use reasonable efforts to obtain possession of
the Demised Premises or such additional space, including, without limitation,
the institution and diligent prosecution of hold-over proceedings, in the event
of a holdover. This Section 3.01 shall be deemed to be an express provision to
the contrary of Section 223-a of the Real Property Law of the State of New York
and any other law of like import now or hereafter in force.
ARTICLE 4
PREPARATION OF THE DEMISED PREMISES
4.01 Tenant has fully inspected the Demised Premises and is
satisfied with the condition thereof and except for Landlord's performance of
"Landlord's Work", as hereinafter defined, Tenant agrees to accept possession of
the Demised Premises in their "as is" condition.
4.02 Landlord agrees that it shall perform the following items
of work, at its expense, as "LANDLORD'S WORK" (all such work to be in accordance
with all applicable laws and code compliant):
(a) demolish all existing installations in the
Demised Premises including, without limitation, (i) removal of any asbestos or
asbestos containing
8
<PAGE> 12
material (and performance of fireproofing, if necessary) in accordance with
applicable law and delivery to Tenant of an ACP-5 certificate (sprinkler and
HVAC distribution ducts to be left in place) and (ii) removal of all existing
low voltage cabling and telephone wire from the Demised Premises (including from
existing telephone closets);
(b) scrape existing floors of the Demised Premises of
all previous floor finishes and patch existing floors of the Demised Premises,
where required, and deliver same in broom clean condition;
(c) core walls and base Building partitions of the
Demised Premises to be framed, taped and spackled and, if any free standing
columns are damaged by Landlord during demolition, same will be patched as
necessary;
(d) provide at least two (2) fire alarm points per
floor of the Demised Premises from the Building Class "E" System and a code
compliant remote terminal unit or data gathering panel as to the Demised
Premises with respect to the Building Class "E" System;
(e) repair windows, if necessary;
(f) construct a common corridor on the eighteenth
(18th) floor of the Building so as to make said eighteenth (18th) floor a legal
multi-tenant floor and erect a demising wall(s) as to the 18th Premises; and
(g) renovate existing men's and ladies lavatories on
each floor of the Demised Premises utilizing Building standard finishes,
fixtures and equipment, using all new materials, and place same in compliance
with The Americans With Disabilities Act of 1990, as amended (the work set forth
in this item (g) is hereinafter referred to as the "LAVATORY WORK");
Notwithstanding anything in this lease to the contrary, the Lavatory
Work with respect to each portion of the Demised Premises shall be performed
contemporaneously with the performance of "Tenant's Work" (as hereinafter
defined) in each such portion of the Demised Premises and shall be coordinated
with Tenant's Work and shall be substantially completed on or before the date
that is the later to occur of (i) three (3) days prior to the date that Tenant
has substantially completed Tenant's Work in the 17th Premises, the 18th
Premises, or the 19th Premises, as the case may be, and (ii) eight (8) weeks
after (A) the 17th Floor Commencement Date with respect to the 17th Premises,
(B) the 18th Floor Commencement Date with respect to the 18th Premises, and (C)
the 19th Floor Commencement Date with respect to the 19th Premises. In the event
the Lavatory Work as to any portion of the Demised Premises is not substantially
completed as aforesaid, then, as Tenant's sole and exclusive right and remedy,
the Abatement Period with respect to such portion of the Demised Premises shall
be extended by one (1) day for
9
<PAGE> 13
each day (up to thirty (30) days) after the date the respective Lavatory Work
should have been substantially completed and one and one-half (1-1-1/2) days for
each day thereafter until the respective Lavatory Work is substantially
completed. Any such extension of any Abatement Period or Abatement Periods shall
not extend the Expiration Date.
4.03 Any other installations, materials or work which may be
undertaken by or for the account of Tenant to equip, decorate or furnish the
Demised Premises for Tenant's occupancy (hereinafter referred to as "TENANT'S
WORK") shall be performed by Tenant, at its sole cost and expense, in accordance
with all the terms, covenants and conditions of this lease, including without
limitation, Articles 13 and 14 hereof, as if such Tenant's Work was a "Tenant's
Change" as defined in Article 13.
4.04 Landlord's Work shall be deemed substantially complete
notwithstanding the fact that minor or insubstantial details of construction,
mechanical adjustment, or decoration remain to be performed, the noncompletion
of which does not materially interfere with Tenant's use of the Demised Premises
or the performance of Tenant's Work. Within ten (10) days after notice from
Tenant, Landlord shall promptly commence, and thereafter diligently complete,
any incomplete items of Landlord's Work.
4.05 If and when Tenant shall take actual possession of each
portion of the Demised Premises after substantial completion of Landlord's Work
(other than the Lavatory Work) with respect thereto to prepare the same for
Tenant's occupancy, it shall be conclusively presumed that, except for the
performance by Landlord of the Lavatory Work, the same were in satisfactory
condition (except for latent defects) as of the date of such taking of
possession, unless within thirty (30) business days after the respective
Commencement Date as to such portion of the Demised Premises Tenant shall give
Landlord notice specifying the respects in which such portion of the Demised
Premises were not in satisfactory condition. Subject to the rights of existing
tenants in the Building and to the extent permitted under, and in accordance
with, the terms of leases with such existing tenants, Landlord agrees to
cooperate with Tenant with respect to the installation of electrical wiring (or
other similar items of Tenant's Work) for the 17th Premises in the ceiling
between the 17th Premises and the sixteenth (16th) floor below. In connection
with the installation of such electrical wiring (or other similar items of
Tenant's Work), Landlord agrees to exercise its right of access to such ceiling
on behalf of Tenant and Tenant agrees to do any work with respect to such
electrical wiring (or other similar items of Tenant's Work) on an after-hours
basis if necessary and to engage security guard services at Tenant's expense if
required by any of the other tenants in the Building.
ARTICLE 5
ADJUSTMENTS OF RENT
5.01 TAX ESCALATION. For the purpose of Sections 5.01-5.06:
10
<PAGE> 14
(a) "TAXES" shall mean the real estate taxes and
assessments and special assessments imposed upon the Building and the Land
including, without limitation, any assessments for public improvement or benefit
to the Building or Land, or the locality in which the Land is situated, such as
Business Improvement District taxes and assessments. If at any time during the
term of this lease the methods of taxation prevailing at the commencement of the
term hereof shall be altered so that in lieu of or as an addition to or as a
substitute for the whole or any part of the taxes, assessments, levies,
impositions or charges now levied, assessed or imposed on real estate and the
improvements thereon, there shall be levied, assessed or imposed (i) a tax,
assessment, levy, imposition or charge wholly or partially as capital levy or
otherwise on the rents received therefrom, or (ii) a tax, assessment, levy,
imposition or charge measured by or based in whole or in part upon the Demised
Premises and imposed upon Landlord, or (iii) a license fee measured by the rents
payable by Tenant to Landlord, then all such taxes, assessments, levies,
impositions or charges, or the part thereof so measured or based, shall be
deemed to be included within the term "Taxes" for the purposes hereof;
The term "Taxes" shall not include any income, franchise, transfer, inheritance,
capital stock or other similar tax imposed on Landlord unless, due to a future
change in the method of taxation, an income, franchise, transfer, inheritance,
capital stock or other tax shall be levied against Landlord in substitution for
any tax or increase therein which would otherwise constitute "Taxes", as defined
in the first sentence of paragraph (a), in which event such income, franchise,
transfer, inheritance, capital stock or other tax shall be deemed to be included
in the term "Taxes" but any such income or similar tax shall be computed as if
the Building and the Land were the only property of Landlord. The term "Taxes"
shall not include late charges or penalties.
Notwithstanding the provisions of Article 40 of this lease, the Taxes for the
"Base Tax Year" and any subsequent "Tax Year" (as such terms are hereafter
defined) shall not be deemed to be reduced as a result of any Abatement (as
defined in Article 40).
If, by law, any assessment may be paid in installments, then, for the purposes
hereof (i) such assessment shall be deemed to have been payable in the maximum
number of installments permitted by law and (ii) there shall be included in
Taxes, for each Tax year in which such installments may be paid, the
installments of such assessment so becoming payable during such Tax Year,
together with any interest thereon payable during such Tax Year.
Anything herein contained to the contrary notwithstanding, Taxes shall not
include any assessment or real estate taxes on any expansion of the Building
which is constructed or completed after the 17th Floor Commencement Date of this
lease.
(b) "BASE TAX YEAR" shall mean fiscal years July 1,
1999 to June 30, 2000 and July 1, 2000 to June 30, 2001, inclusive;
(c) "BASE TAX RATE" shall mean the average Taxes, as
11
<PAGE> 15
finally determined, for the two fiscal years comprising the Base Tax Year;
(d) "TAX YEAR" shall mean the fiscal year for which
Taxes are levied by the governmental authority;
(e) "TENANT'S PROPORTIONATE SHARE" shall mean for
purposes of this lease and all calculations in connection herewith an aggregate
10.552% (3.898% as to the 17th Premises, 2.665% as to the 18th Premises and
3.989% as to the 19th Premises), which has been computed on the basis of a
fraction, the numerator of which is the agreed rentable square foot area of each
portion of the Demised Premises as set forth below (which rentable square foot
area as to each portion of the Demised Premises is hereinafter sometimes
referred to as the "MULTIPLICATION FACTOR") and the denominator of which is the
agreed rentable square foot area of the Building as set forth below. The parties
agree that the rentable square foot area of the Demised Premises shall be deemed
to be an aggregate 92,330 rentable square feet comprised of 34,107 rentable
square feet as to the 17th Premises, 23,319 rentable square feet as to the 18th
Premises and 34,904 rentable square feet as to the 19th Premises, and that the
agreed rentable square foot area of the Building shall be deemed to be 875,000
square feet (hereinafter referred to as the "BUILDING AREA"). Notwithstanding
the foregoing, Tenant's Proportionate Share shall be based only on those
portions of the Demised Premises as to which this lease has commenced.
(f) "TENANT'S PROJECTED SHARE OF TAXES" shall mean
the Tax Payment (as hereinafter defined), if any, payable by Tenant for the
immediately prior Tax Year divided by twelve (12) and payable monthly by Tenant
to Landlord as additional rent.
5.02 If the Taxes for any Tax Year shall be more than the Base
Tax Rate, Tenant shall pay, as additional rent for such Tax Year, an amount
equal to Tenant's Proportionate Share of the amount by which the Taxes for such
Tax Year are greater than the Base Tax Rate. (The amount payable by Tenant is
hereinafter referred to as the "TAX PAYMENT"). The Tax Payment and the Base Tax
Rate shall be appropriately prorated, if necessary, to correspond with that
portion of a Tax Year occurring within the Term of this lease as to each portion
of the Demised Premises. After Landlord has furnished Tenant with written demand
for the Tax Payment, which demand shall be accompanied by a copy of the tax bill
along with Landlord's computation of the Tax Payment, Tenant shall pay Landlord,
with the monthly installments of rent due on June 1 and December 1 of each such
Tax Year, an amount equal to one-half (1/2) of the total sum of the Tax Payment
for such Tax Year, until such time as a new demand (and said accompanying
information) for a subsequent Tax Year shall become effective. If a demand and
accompanying information are furnished to Tenant after the commencement of the
Tax Year in respect of which such demand is made, Tenant shall, within twenty
(20) days after the date of receipt by Tenant of a request by Landlord for such
payment, pay to Landlord an amount equal to those installments of the total Tax
Payment payable as provided in the preceding sentence. If,
12
<PAGE> 16
during the term of this lease, Taxes are required to be paid in full or in
quarterly or other installments, on any other date or dates than as presently
required, then Tenant's installments of its Tax Payment shall be correspondingly
modified so that said payments are due twenty (20) days after the date of
receipt by Tenant of a request by Landlord for such payment.
5.03 Notwithstanding the fact that the increase in rent is
measured by an increase in Taxes, such increase is additional rent and shall be
paid by Tenant as provided herein regardless of the fact that Tenant may be
exempt, in whole or in part, from the payment of any taxes by reason of Tenant's
diplomatic or other tax exempt status or for any other reason whatsoever.
5.04 Only Landlord shall be eligible to institute tax
reduction or other proceedings to reduce the assessed valuation of the Land and
Building. Should Landlord be successful in any such reduction proceedings and
obtain a rebate or a reduction in assessment for periods during which Tenant has
paid or is obligated to pay Tenant's Proportionate Share of increases in Taxes
then either (a) Landlord shall, in the event a rebate is obtained, return
Tenant's Proportionate Share of such rebate to Tenant after deducting Landlord's
reasonable expenses (unless Tenant has already paid Tenant's Proportionate Share
of the Tax Expenses), including without limitation, reasonable attorneys' fees
and disbursements in connection with such rebate (such expenses incurred with
respect to a rebate or reduction in assessment being hereinafter referred to as
"TAX EXPENSES"), or, (b) if a reduction in assessment is obtained prior to the
date Tenant would be required to pay Tenant's Proportionate Share of such
increase in Taxes, Tenant shall pay to Landlord, within fifteen (15) days after
written request, Tenant's Proportionate Share of such Tax Expenses.
5.05 Commencing with the first Tax Year after Landlord shall
be entitled to receive a Tax Payment, Tenant, at Landlord's option and upon
notice from Landlord, shall pay to Landlord, as additional rent for the then Tax
Year, Tenant's Projected Share of Taxes. Upon each date that a Tax Payment or an
installment on account thereof shall be due from Tenant pursuant to the terms of
Section 5.02 hereof, Landlord shall apply the aggregate of the installments of
Tenant's Projected Share of Taxes then on account with Landlord against the Tax
Payment or installment thereof then due from Tenant. In the event that such
aggregate amount shall be insufficient to discharge such Tax Payment or
installment, Landlord shall so notify Tenant in a demand served upon Tenant
pursuant to the terms of Section 5.02, and the amount of Tenant's payment
obligation with respect to such Tax Payment or installment pursuant to Section
5.02 shall be equal to the amount of the insufficiency. If, however, such
aggregate amount shall be greater than the Tax Payment or installment, Landlord
shall forthwith either (a) pay the amount of excess directly to Tenant
concurrently with the notice or (b) permit Tenant to credit the amount of such
excess against the next payment of Tenant's Projected Share of Taxes due
hereunder and, if the credit of such payment is not sufficient to liquidate the
entire amount of such excess, Landlord shall then pay the amount of any
difference to Tenant.
13
<PAGE> 17
5.06
(a) Anything in this Article 5 to the contrary
notwithstanding, in the event that the holder of any superior mortgage or the
lessor of any superior lease (as such terms are defined in Section 7.01 hereof)
shall require advance payments from Landlord on account of Taxes, then Tenant
will pay Tenant's Proportionate Share of any amounts on account of Taxes
required to be paid in advance by Landlord to the holder of the superior
mortgage or the lessor of the superior lease to the extent that such payments
made by Landlord exceed the Base Tax Rate. Any payments to be made by Tenant
under this Section 5.06(a) shall be made ten (10) days prior to the date
Landlord is required to make such payments to the holder of the superior
mortgage or the lessor of the superior lease and Landlord shall give Tenant at
least fifteen (15) days notice of such requirement;
(b) Anything in Sections 5.01 through 5.06 to the
contrary notwithstanding, in no event whatsoever shall the fixed rent be reduced
below the fixed rent initially set forth in Section 1.04(a) hereof as same may
be increased by provisions of this lease other than Sections 5.01 through 5.06.
5.07 EXPENSE ESCALATION. For purposes of this Article:
(a) "OPERATING EXPENSES" shall mean any or all
expenses incurred by Landlord in connection with the operation of the Building
including all expenses incurred as a result of Landlord's compliance with any of
its obligations hereunder other than Landlord's Work and such expenses shall
include: (i) salaries, wages, medical, surgical and general welfare benefits,
(including group life insurance) pension payments and other fringe benefits of
employees of Landlord engaged in the operation and maintenance of the Building
(The salaries and other benefits aforesaid of such employees servicing the
Building shall be comparable to those of employees servicing buildings similar
to the Building, located in the Borough of Manhattan and if such employees shall
service other buildings, only the share of the salaries and benefits
representing compensation for work in the Building shall be included in
Operating Expenses); (ii) payroll taxes, worker's compensation, uniforms and dry
cleaning for the employees referred to in subdivision (i); (iii) the cost of all
charges for steam, heat, ventilation, air conditioning and water (including
sewer rental) furnished to the Building and/or used in the operation of all of
the service facilities of the Building and the cost of all charges for
electricity furnished to the public and service areas of the Building and/or
used in the operation of all of the service facilities of the Building including
any taxes on any of such utilities; (iv) the cost of all charges for rent,
casualty, war risk insurance (if obtainable from the United States government)
and of liability insurance for the Building to the extent that such insurance is
required to be carried by Landlord hereunder or under any superior lease or
superior mortgage or if not required under any superior lease or superior
mortgage then to the extent such insurance is carried by owners of Buildings
comparable to the Building; (v) the cost of all building and cleaning supplies
14
<PAGE> 18
for the common areas of the Building and charges for telephone for the Building;
(vi) the cost of all charges for management, security, cleaning and service
contracts for the Building (if no managing agent is employed by Landlord, there
shall be included in Operating Expenses a sum equal to 2.5% of all rents,
additional rents and other charges collected from tenants or other permitted
occupants of the Building) provided, however, that in the event a third-party
managing agent is employed by Landlord, the fee payable to such managing agent
shall be comparable to those paid by owner of buildings located in downtown
Manhattan similar to the Building; (vii) the cost of rentals of capital
equipment designed to result in savings or reductions in Operating Expenses to
the extent of actual savings or reductions only and (viii) the cost incurred,
which are non-capital expenditures, except as set forth in (E) below, in
connection with the maintenance and repair of the Building. Provision in this
lease for an expense item to be Landlord's expense or at Landlord's expense
shall not affect the inclusion thereof, to the extent above provided, in
Operating Expenses. Operating Expenses shall not include or shall have deducted
from them, as the case may be, and as shall be appropriate (A) administrative
wages and salaries; (B) renting commissions; (C) franchise taxes or income taxes
of Landlord and inheritance, personal property or other taxes imposed on
Landlord; (D) Taxes on the Land and Building; (E) expenditures for capital
improvements except (l) those which under generally accepted accounting
principles consistently applied as applied to the real estate industry are
expensed or regarded as deferred expenses and (2) for capital improvements
required by any law and/or requirements of public authority enacted after the
date of this lease or any modifications or amendments of presently existing laws
and/or requirements of public authority enacted after the date of this lease or
required in order to cause the Building to remain in compliance with any
presently existing law and/or requirement (but in no event including costs
incurred in connection with the making of capital improvements in order to
comply with existing laws and/or requirements of public authority to the extent
that the Building is not, as of the date hereof, in compliance with such
existing laws and/or requirements) or (3) for capital improvements which are
designed to result in a saving in the amount of Operating Expenses, in any of
such cases the cost thereof shall be included in Operating Expenses for the
Operational Year in which the costs are incurred and subsequent Operational
Years, amortized on a straight line basis, over the useful life thereof as
determined in accordance with generally accepted accounting principles
consistently applied (except that, with respect to a capital improvement which
is of the type specified in clause (3), such cost shall be amortized on a
straight line basis over such period of time as Landlord reasonably estimates
such savings in Operating Expenses will equal Landlord's cost for such capital
improvement provided that the amount to be included in Operating Expenses in any
Operational Year shall not exceed the savings in Operating Expenses for any such
Operational Year), with an interest factor in any of such cases equal to two
(2%) percent above the prime rate (hereinafter referred to as the "BASE RATE")
of The Chase Manhattan Bank (or Citibank, N.A. if The Chase Manhattan Bank shall
not then have an established prime rate; or the prime rate of any major banking
institution doing business in New York City, as selected by Landlord, if none of
the aforementioned banks shall be in existence or have an established prime
rate) at the time of Landlord's having incurred said expenditure;
15
<PAGE> 19
Additionally, Operating Expenses shall not include or shall have
deducted from them, as the case may be, and as shall be appropriate, the
following except to the extent specifically permitted by a specific exception to
the following:
1. depreciation;
2. interest on, and amortization of, mortgages
and any recording or mortgage tax or expense in connection therewith and other
debt service with respect to any other loan, secured or unsecured;
3. leasehold improvements (including painting)
made for tenants of the Building or made in order to prepare for occupancy by a
new tenant or any cash or other consideration paid by Landlord on account of,
with respect to, or in lieu of such leasehold improvements, including any fees
or services incurred in connection with the performance of such work;
4. financing costs in connection with any
financing or refinancing of the Building or of any other loan, secured or
unsecured, including, without limitation, points, commitment fees, broker's
fees, and legal fees and expenses;
5. the cost of repairs or restoration
necessitated by fire or other casualty or any condemnation;
6. the cost of any items from which Landlord is
reimbursed or has the right to be reimbursed by insurance (or would have been
reimbursed had Landlord maintained the insurance required hereunder or under any
superior lease or superior mortgage or, if not required under any superior lease
or superior mortgage, then to the extent such insurance is carried by owners of
buildings comparable to the Building), by other tenants of the Building (except
pursuant to provisions similar to Sections 5.07-5.11 hereof or other escalation
provisions designed to reimburse Landlord for increases in the cost of operating
the Building), by warranty, by award in condemnation or otherwise compensated;
7. the cost of any work or service performed
for or made available to any tenant or other occupant of the Building (other
than Tenant) to a greater extent or in a more favorable manner than that
furnished generally, without additional expense, to the tenants and other
occupants of the Building (including Tenant);
8. Rent and other amounts payable under any
ground, superior leases as defined in Section 7.01;
9. the cost of any electric current furnished
to the Demised Premises or any areas of the Building occupied by tenants for
purposes other than operation of building
16
<PAGE> 20
equipment or machinery or the lighting of toilets, shaftways or building
machinery or fan rooms;
10. salaries, compensation or other benefits
paid in respect of officers and executives of Landlord above the level of
building manager;
11. any cost stated in Operating Expenses
representing an amount paid to a Landlord-related corporation or entity which is
in excess of the amount which would be paid in the absence of such relationship;
12. advertising and promotional expenses of the
Building;
13. the cost of installing, operating and
maintaining (to the extent such operating and maintenance costs exceed such
costs for operating and maintaining office space) any specialty use or
installation such as (but not limited to) an observatory, broadcasting
facilities, luncheon club, athletic or recreational club, theater, rehearsal
hall, art gallery or garage including, without limitation, any compensation paid
to clerks, attendants or other persons;
14. auditing fees, other than auditing fees in
connection with the preparation of statements required pursuant to additional
rent or lease escalation provisions;
15. the cost of correcting defects in the
construction of the Building or in the Building equipment, except that
conditions (not occasioned by construction or equipment defects) resulting from
ordinary wear and tear shall not be deemed defects for the purpose of this
category;
16. cost of any repair made by Landlord to
remedy damage caused by, or resulting from, the negligence or willful act or
omission of Landlord, its agents, servants, contractors or employees;
17. any insurance premium to the extent that
Landlord is entitled to be reimbursed therefor by Tenant pursuant to this Lease
or by any other occupant of the Building pursuant to its lease except pursuant
to provisions similar to Sections 5.07-5.11 hereof or other escalation
provisions designed to reimburse Landlord for increases in the cost of operating
the Building;
18. legal, architectural, engineering, space
planner's and other professional fees and expenses incurred in preparing,
negotiating and executing leases, amendments, terminations and extensions or in
resolving any disputes with tenants and other occupants or enforcing lease
obligations, including, without limitation, court costs;
19. expenses incurred by Landlord in connection
with the transfer or disposition of the Land or Building or any ground,
underlying or overriding lease, including,
17
<PAGE> 21
without limitation, transfer, deed and gains taxes;
20. cost incurred to correct any
misrepresentation by Landlord to Tenant;
21. bad debt loss, rent loss or reserves for
either;
22. costs for sculpture, paintings or other
objects of art;
23. costs incurred by Landlord arising out of
its failure to perform, or breach of, any of its covenants, agreements,
representations, warranties, guarantees or indemnities made under this Lease;
24. costs, fines, interest or penalties incurred
by Landlord due to violations of any applicable governmental law, requirement or
order;
25. and any late fees, penalties, interest
charges or similar fees incurred by Landlord;
26. costs associated with the operation of the
business of the entity which constitutes Landlord as the same are distinguished
from the costs of operation of the Building, including, without limitation,
accounting and legal expenses, costs of selling, syndicating, financing,
mortgaging or hypothecating Landlord's interest in the Building, costs of any
disputes between Landlord and its employees, or building managers;
27. overtime HVAC costs or electricity costs for
other Building tenants;
28. "takeover expenses" (i.e., expenses incurred
by Landlord with respect to the leaseback by Landlord of space either located in
another building or in the Building in connection with the leasing of space in
the Building);
29. any amounts payable by Landlord by way of
indemnity or for damages or which constitute a fine, interest, or penalty,
including interest or penalties for any late payments of operating costs;
30. except as set forth in Section
5.07(a)(E)(2), any improvement installed or work performed or any other cost or
expense incurred by Landlord in order to comply with the requirements for the
obtaining or renewal of a certificate of occupancy for the Building or any space
therein;
31. the cost of overtime or other expense to
Landlord in curing its
18
<PAGE> 22
defaults; and
32. costs incurred in the removal, abatement or
other treatment of asbestos or other materials presently designated as
"hazardous" present in the Building or on the Land as of the date of this lease
and which materials other than asbestos are required to be removed or otherwise
dealt with by Landlord pursuant to applicable laws and/or requirements of
governmental authorities in effect as of the date of this lease.
33. the cost of remedying violations of the New
York City Building Code requirements or other legal requirements existing on the
date hereof or arising by reason of Landlord's (or its predecessors) failure,
prior to the date hereof, to construct, maintain or operate the Building or any
part thereof in compliance with such Building Code requirements on other legal
requirements and regulations.
Additionally, there shall be deducted from Operating Expenses all amounts
received by Landlord through proceeds of insurance or condemnation awards to the
extent they are compensation for, or reimbursement of, sums previously included
in Operating Expenses hereunder.
If during all or part of the Base Operational Year or any other Operational
Year, Landlord shall not furnish any particular item(s) of work or service
(which would otherwise constitute an Operating Expense hereunder) to office
portions of the Building due to the fact that (i) such portions are not occupied
or leased, (ii) such item of work or service is not required or desired by the
tenant of such portion, or (iii) such tenant is itself obtaining and providing
such item of work or service, then, for the purposes of computing Operating
Expenses, the amount for such item and for such period shall be deemed to be
increased by an amount equal to the additional costs and expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such item of work or services to such portion of the
Building or to such tenant.
(b) "OPERATIONAL YEAR" shall mean each calendar year
or part thereof occurring during the Term of this lease;
(c) "BASE OPERATIONAL YEAR" shall mean calendar year
2000;
(d) "BASE OPERATING EXPENSES" shall mean Operating
Expenses for the Base Operational Year;
(e) "TENANT'S PROJECTED SHARE OF OPERATING EXPENSE"
shall mean (i) Tenant's Operating Expense Payment, if any, for the prior
Operating Year divided by (ii) twelve (12), and payable monthly by Tenant to
Landlord as additional rent.
19
<PAGE> 23
5.08 After the expiration of the Base Operational Year,
Landlord shall furnish Tenant a statement, in reasonable detail, setting forth
the aggregate amount of the Operating Expenses for the Base Operational Year.
After the expiration of each Operational Year after the Base Operational Year,
Landlord shall furnish Tenant a statement in reasonable detail, setting forth
the aggregate amount of the Operating Expenses for such Operational Year, each
of which statements shall be prepared by an independent certified public
accountant. The statement furnished under this Section 5.08 is hereinafter
referred to as an "Operating Statement". Landlord will use reasonable efforts to
have the Operating Statement furnished within ninety (90) days after the
expiration of the Base Operational Year and every Operational Year, as the case
may be.
5.09 If the Operating Expenses for any Operational Year shall
be more than the Base Operating Expenses, Tenant shall pay, as additional rent
for such Operational Year, an amount equal to Tenant's Proportionate Share of
the amount by which the Operating Expenses for such Operational Year are greater
than the Base Operating Expenses. (The amount payable by Tenant is hereinafter
referred to as the "OPERATING EXPENSE PAYMENT".) The Operating Expense Payment
shall be prorated, if necessary, to correspond with that portion of an
Operational Year occurring within the Term of this lease. The Operating Expense
Payment shall be payable by Tenant within thirty (30) days after receipt of the
Operating Statement.
5.10 Commencing with the first Operational Year after Landlord
shall be entitled to receive an Operating Expense Payment, Tenant shall pay to
Landlord as additional rent for the then Operational Year, Tenant's Projected
Share of Operating Expenses. If the then Operating Statement furnished by
Landlord to Tenant at the end of then Operational Year shall indicate that
Tenant's Projected Share of Operating Expenses exceeded the Operating Expense
Payment, Landlord shall forthwith either (a) pay the amount of excess directly
to Tenant concurrently with the notice or (b) permit Tenant to credit the amount
of such excess against the subsequent payment of rent due hereunder; if such
Operating Statement furnished by Landlord to Tenant hereunder shall indicate
that the Operating Expense Payment exceeded Tenant's Projected Share of
Operating Expenses for the then Operational Year, Tenant shall forthwith pay the
amount of such excess to Landlord within thirty (30) days of receipt of a
request therefor.
5.11
(a) Every Operating Statement given by Landlord
pursuant to Section 5.08 shall be conclusive and binding upon Tenant unless (i)
within one hundred twenty (120) days after the receipt of such Operating
Statement Tenant shall notify Landlord that it disputes the correctness of the
Operating Statement, specifying in reasonable detail either the particular
respects in which, or the basis upon which, the Operating Statement is claimed
to be incorrect, and (ii) if such dispute shall not have been settled by
agreement, shall submit the dispute to arbitration within one hundred eighty
(180) days after receipt of the
20
<PAGE> 24
Operating Statement. Pending the determination of such dispute by agreement or
arbitration as aforesaid, Tenant shall within thirty (30) days after receipt of
such Operating Statement, pay additional rent, if due, in accordance with the
Operating Statement and such payment shall be without prejudice to Tenant's
position. If the dispute shall be determined in Tenant's favor, Landlord shall,
on demand, pay Tenant the amount of Tenant's overpayment of rents, if any,
resulting from compliance with the Operating Statement. Landlord agrees to grant
Tenant reasonable access to Landlord's books and records, during the one hundred
eighty (180) day period set forth in Section 5.11(a)(ii) above, for the purpose
of verifying Operating Expenses incurred by Landlord and to have and make copies
of any and all bills and vouchers relating thereto and subject to reimbursement
by Tenant for the cost thereof. Tenant agrees that all information with respect
to Operating Expenses to which Tenant is given access shall be held in
confidence and Tenant shall require that any agent or outside party it may
retain shall agree, in writing, to hold such information in confidence.
(b) Anything in Sections 5.07 through 5.12 to the
contrary notwithstanding, in no event whatsoever shall the fixed rent be reduced
below the fixed rent initially set forth in Section 1.04(a) hereof.
5.12 Subject to the further provisions of this Section 5.12,
Landlord shall be under no obligation to contest the Taxes or the assessed
valuation of the Land and/or the Building for any Tax Year, or to refrain from
contesting the same, and may settle any such contest on such terms as Landlord
in its sole judgment considers proper. Within thirty (30) days after receipt by
Landlord of an inquiry from Tenant, Landlord will advise Tenant whether or not
Landlord intends to contest such Taxes or the assessed valuation of the Land
and/or Building for such Tax Year. If tenants of at least seventy-five (75%)
percent of the total rentable area of the Building shall, by timely notice to
Landlord, request Landlord to do so, Landlord shall institute appropriate
proceedings to reduce the Taxes for any Tax Year and use best efforts to effect
a reduction therein. If tenants of seventy-five (75%) percent of the total
rentable area of the Building request Landlord to do so and Tenant shall be one
of such requesting tenants, then Tenant shall pay its proportionate share
(according to the relation that the rentable area of the Demised Premises bears
to the total rentable area represented by all such requesting tenants) of the
reasonable costs and expenses of such proceedings that shall have been
instituted at the request of such tenants. In the event that such proceedings
shall cover more than one (1) Tax Year, the expenses referred to in this Section
5.12 shall be allocated to each Tax Year involved on the basis of the reduction
effectuated. Landlord shall not compromise, cancel, or withdraw such proceedings
that shall have been instituted at the request of tenants at seventy-five (75%)
percent or more of the total rentable area of the Building, unless it shall have
first notified all such requesting tenants of its proposal to do so and shall
not have received, within thirty (30) days thereafter, objections in writing
from tenants of more than fifty (50%) percent of the total rentable areas
represented by such requesting tenants, accompanied by written agreements to
reimburse Landlord forthwith for all of its costs and expenses in connection
therewith, for which
21
<PAGE> 25
such objectors shall be liable ratably according to their respective rentable
areas in relation to the total rentable area represented by all such objectors.
Upon receipt of such objections, agreements and reimbursements, Landlord shall
transfer the responsibility for such proceedings to said objectors, who may
carry on the same in their own names or in Landlord's name, as may be
appropriate, at their own expense and shall be entitled to recoupment for all of
their costs and expenses from any refund obtained, but not otherwise.
5.13 Landlord's failure during the lease term to prepare and
deliver any of the tax bills, statements, notice or bills set forth in this
Article 5, or Landlord's failure to make a demand, shall not in any way cause
Landlord to forfeit or surrender its rights to collect any of the foregoing
items of additional rent which may have become due during the term of this
lease. Landlord's and Tenant's liability for the amounts due to the other under
this Article 5 shall survive the expiration of the term of this lease.
ARTICLE 6
SECURITY DEPOSIT
6.01 Subject to the provisions of Section 6.02, Tenant shall
have deposited with Landlord, on or before the date hereof the sum of
$4,010,000.00. as security for the faithful performance and observance by Tenant
of the terms, provisions and conditions of this lease; it is agreed that in the
event Tenant defaults in respect of any of the terms, provisions and conditions
of this lease, including, but not limited to, the payment of rent and additional
rent, which default continues after any notice required under this lease and the
expiration of any applicable cure period, Landlord may use, apply or retain the
whole or any part of the security so deposited or the proceeds of the Letter of
Credit (as set forth in Section 6.02 hereof) to the extent required for the
payment of any rent and additional rent or any other sum as to which Tenant is
in default or for any sum which Landlord may reasonably expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this lease, including but not limited to, any
damages or deficiency accrued before or after summary proceedings or other
re-entry by Landlord. The security shall be deposited in a separate interest
bearing account segregated from Landlord's funds, in a commercial bank which is
a member of the New York Clearing House Association located in the City of New
York selected by Landlord and any interest earned thereon (less any
administrative fee to which Landlord may be entitled pursuant to applicable law)
shall be paid to Tenant annually provided Tenant is not then in default in the
observance or performance of any of its obligations under this lease which
continues after notice and the expiration of any applicable cure period. In the
event that Tenant shall fully and faithfully comply with all of the terms,
provisions, covenants and conditions of this lease, the security shall be
returned to Tenant no later than ten (10) days after the Expiration Date and
after delivery of entire possession of the Demised Premises to Landlord. In the
event Landlord applies or retains any portion or all of the security deposited,
Tenant shall forthwith restore the amount so applied or retained so that at all
times the amount deposited shall be $4,010,000.00.
22
<PAGE> 26
6.02 In lieu of a cash deposit, Tenant may deliver to Landlord
a clean, irrevocable, unconditional and transferable (without cost to the
beneficiary thereof) Letter of Credit issued by and drawn upon any commercial
bank which is a member of the New York Clearing House Association (hereinafter
referred to as the "ISSUING BANK") with offices for banking purposes in the City
of New York and having a net worth of not less than Five Hundred Million and
00/100 ($500,000,000.00) Dollars, which Letter of Credit shall have a term of
not less than one year, be in the form annexed hereto as EXHIBIT H or in such
other form and content as is reasonably satisfactory to Landlord, be for the
account of Landlord and be in the amount of $4,010,000.00. The Letter of Credit
shall provide that:
(i) The Issuing Bank shall pay to Landlord
an amount up to the face amount of the Letter of Credit upon presentation of the
Letter of Credit and a sight draft in the amount to be drawn;
(ii) The Letter of Credit shall be deemed to
be automatically renewed, without amendment, for consecutive periods of one year
each during the term of this Lease, unless the Issuing Bank sends written notice
(hereinafter referred to as the "NON-RENEWAL NOTICE") to Landlord by certified
or registered mail, return receipt requested, not less than thirty (30) days
next preceding the then expiration date of the Letter of Credit, that it elects
not to have such Letter of Credit renewed;
(iii) In the event that the Issuing Bank
sends a Non-Renewal Notice, Tenant shall have twenty (20) days to provide
Landlord with a substitute Letter of Credit which meets the requirements of this
Section 6.02. In the event that Tenant fails within said twenty (20) day period
to provide Landlord with a substitute Letter of Credit, Landlord, within twenty
(20) days of its receipt of the Non-Renewal Notice, shall have the right,
exercisable by a sight draft, to receive the monies represented by the Letter of
Credit (which moneys shall be held by Landlord as a cash deposit pursuant to the
terms of this Article 6 pending the replacement of such Letter of Credit or
Tenant's default hereunder); and
(iv) Upon Landlord's sale of Landlord's
interest in the land and the Building, the Letter of Credit shall be
transferable by Landlord as provided in Section 6.03 hereof.
6.03 In the event of a sale of Landlord's interest in the Land
and the Building, Landlord shall have the right to transfer the cash security or
Letter of Credit, as the case may be, deposited hereunder to the vendee or
lessee, in accordance with Section 7.105 of the New York General Obligation Law,
and Landlord shall thereupon be released by Tenant from all liability for the
return of such cash security or Letter of Credit provided that (a) Tenant is
given written notice of such sale; (b) the vendee or lessee, as the case may be,
shall, by written agreement, assume all of Landlord's duties and obligations
under this Lease with respect to such security and
23
<PAGE> 27
a copy of such assumption agreement shall be delivered to Tenant promptly after
the effective date of such sale; and (c) in the event that Landlord transfers
cash security, Tenant shall be given notice of the name, address and bank
account number where such cash security is deposited. In such event, and subject
to the satisfaction of the foregoing requirements, Tenant agrees to look solely
to the new Landlord for the return of said cash security or Letter of Credit. In
the event that Landlord fails to transfer the cash security or Letter of Credit
to a vendee or lessee, Landlord shall return the cash security or Letter of
Credit, as the case may be, to Tenant no later than the first business day
following the effective date of such sale. It is agreed that the provisions
hereof shall apply to every transfer or assignment made of said cash security or
Letter of Credit to a new Landlord.
6.04 Tenant covenants that it will not assign or encumber, or
attempt to assign or encumber, the monies or Letter of Credit deposited
hereunder as security, and that neither Landlord nor its successors or assigns
shall be bound by any such assignment, encumbrance, attempted assignment, or
attempted encumbrance.
6.05 Landlord agrees that it will not draw down the proceeds
of the Letter of Credit except in the event of a default by Tenant hereunder
after the notice required under this Lease and expiration of the applicable cure
period or the non-renewal of such Letter of Credit by the Issuing Bank after the
expiration of the period provided to Tenant in Section 6.02(iii) to substitute a
new Letter of Credit.
6.06 In the event that at any time during the term of this
lease (a) the net worth of the Issuing Bank shall be less than the minimum
amount specified in Section 6.02 as indicated in any filing with the Securities
and Exchange Commission, the Federal Reserve Board, the Federal Deposit
Insurance Corporation or any other governmental entity, or (b) the Issuing Bank
files for protection under any chapter of the United States Bankruptcy Code or
the bankruptcy code of the state or country of its formation or is seized by the
appropriate regulatory authorities of the State of New York, the United States
or the state or nation of its formation and as a result thereof is incapable of,
unable to, or prohibited from honoring the then existing Letter of Credit
(hereinafter referred to as the "EXISTING L/C") in accordance with the terms
thereof, then, upon the happening of either of the foregoing, Landlord may send
written notice to Tenant (hereinafter referred to as the "REPLACEMENT NOTICE")
requiring Tenant within thirty (30) days to replace the Existing L/C with a new
letter of credit (hereinafter referred to as the "REPLACEMENT L/C") from an
Issuing Bank meeting the qualifications described in Section 6.02. Upon receipt
of a Replacement L/C meeting the qualifications of Section 6.02, Landlord shall
forthwith return the Existing L/C to Tenant. In the event that a Replacement L/C
meeting the qualifications of Section 6.02 is not received by Landlord within
the time specified, the Existing L/C may be presented for payment by Landlord
and the proceeds thereof shall be held by Landlord in accordance with Section
6.01 subject, however, to Tenant's right, at any time thereafter prior to a
Tenant's default hereunder, to replace such cash security with a new letter of
credit meeting the
24
<PAGE> 28
qualifications of Section 6.02. Tenant shall have the right from time to time
and at any time to substitute the Existing L/C with a Letter of Credit meeting
the qualifications of Section 6.02.
6.07
(a) Notwithstanding anything set forth in
this Article 6 to the contrary, and provided that Tenant is not then in default
in the observance or performance of Tenant's obligations under this lease which
default continues after any required notice and the expiration of any applicable
cure period and Landlord has not previously applied any such security in
accordance with the provisions of this Article 6 which has not been restored by
Tenant, then, commencing on the first (1st) anniversary of the 19th Floor Rent
Commencement Date and on each anniversary thereafter of the 19th Floor Rent
Commencement Date (hereinafter individually referred to as an "ANNUAL REDUCTION
DATE"), the security deposit (whether in the form of cash or the Letter of
Credit) shall be reduced, after ten (10) days' notice from Tenant to Landlord
given not sooner than ten (10) days prior to each Annual Reduction Date
(hereinafter referred to as a "REDUCTION NOTICE"), by the sum of $401,000.00,
but in no event shall the security deposit be reduced below the amount of
$401,000.00. No failure by Tenant to give Landlord a Reduction Notice prior to
any Annual Reduction Date shall operate to waive or discharge Landlord's
obligation to so reduce the security deposit, but Landlord shall have no
obligation to reduce the security deposit until twenty (20) days after Tenant
shall give the Reduction Notice with respect to such Annual Reduction Date.
(b) If Tenant has deposited the security
deposit in cash, Landlord shall refund to Tenant the amounts by which the
security deposit is reduced pursuant to this Section 6.07, on or after the
applicable Annual Reduction Date within ten (10) days after receipt of the
Reduction Notice. If Tenant has provided a Letter of Credit, then, provided that
Tenant tenders to Landlord a replacement Letter of Credit or an amendment to the
Letter of Credit (which amendment or replacement must meet the applicable
requirements set forth in Section 6.02) for the appropriately reduced amount of
the security deposit, Landlord shall exchange the Letter of Credit then held by
Landlord for the replacement Letter of Credit tendered by Tenant, or execute the
amendment, as applicable.
ARTICLE 7
SUBORDINATION, NOTICE TO LESSORS AND MORTGAGEES
7.01 This lease, and all rights of Tenant hereunder, are and
shall be subject and subordinate in all respects to all ground leases,
overriding leases and underlying leases of the Land and/or the Building now or
hereafter existing and to all mortgages which may now or hereafter affect the
Land and/or the Building and/or any of such leases, whether or not such
mortgages shall also cover other lands and/or buildings, to each and every
advance made or hereafter to be made under such mortgages, and to all renewals,
modifications, replacements and extensions of such leases and such mortgages and
spreaders and consolidations of such
25
<PAGE> 29
mortgages. This Section shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant
shall promptly execute and deliver any instrument that Landlord, the lessor of
any such lease or the holder of any such mortgage or any of their respective
successors in interest may reasonably request to evidence such subordination.
The leases to which this lease is, at the time referred to, subject and
subordinate pursuant to this Article are hereinafter sometimes referred to as
"SUPERIOR LEASES" and the mortgages to which this lease is, at the time referred
to, subject and subordinate are hereinafter sometimes referred to as "SUPERIOR
MORTGAGES" and the lessor of a superior lease or its successor in interest at
the time referred to is sometimes hereinafter referred to as a "LESSOR".
7.02 In the event of any act or omission of Landlord which
would give Tenant the right, immediately or after lapse of a period of time, to
cancel or terminate this lease, or to claim a partial or total eviction, Tenant
shall not exercise such right (i) until it has given written notice of such act
or omission to the holder of each superior mortgage and the lessor of each
superior lease whose name and address shall previously have been furnished to
Tenant in writing, and (ii) unless such act or omission shall be one which is
not capable of being remedied by Landlord or such mortgage holder or lessor
within a reasonable period of time, until a reasonable period for remedying such
act or omission shall have elapsed following the giving of such notice and
following the time when such holder or lessor shall have become entitled under
such superior mortgage or superior lease, as the case may be, to remedy the same
(which reasonable period shall in no event be less than the period to which
Landlord would be entitled under this lease or otherwise, after similar notice,
to effect such remedy), provided such holder or lessor shall with due diligence
give Tenant written notice of intention to, and commence and continue to remedy
such act or omission.
7.03 If the lessor of a superior lease or the holder of a
superior mortgage shall succeed to the rights of Landlord under this lease,
whether through possession or foreclosure action or delivery of a new lease or
deed, then at the request of such party so succeeding to Landlord's rights
(herein sometimes referred to as "SUCCESSOR LANDLORD") and upon successor
landlord's written agreement to accept Tenant's attornment, Tenant shall attorn
to and recognize such successor landlord as Tenant's landlord under this lease,
and shall promptly execute and deliver any instrument that such successor
landlord may reasonably request to evidence such attornment. Upon such
attornment this lease shall continue in full force and effect as, or as if it
were, a direct lease between the successor landlord and Tenant upon all of the
terms, conditions and covenants as are set forth in this lease and shall be
applicable after such attornment except that the successor landlord shall not
be:
(a) liable for any previous act or omission
of Landlord (or its predecessor in interest) under this lease, but such
successor shall be obligated to comply with the provisions of this lease from
and after such attornment, subject to the further provisions of this Section
7.03;
26
<PAGE> 30
(b) bound by any previous modification of
this lease, not expressly provided for in this lease, or by any previous
prepayment of more than one month's fixed rent, unless such modification or
prepayment shall have been expressly approved in writing by the lessor of the
superior lease or the holder of the superior mortgage through or by reason of
which the successor landlord shall have succeeded to the rights of Landlord
under this lease unless such approval shall not be required pursuant to such
superior mortgage and/or superior lease;
(c) responsible for any monies owing by
Landlord to the credit of Tenant;
(d) subject to any credits, offsets, claims,
counterclaims, demands or defenses which Tenant may have against Landlord (or
its predecessors in interest) except for any abatements and/or offsets expressly
set forth in this lease;
(e) bound by any covenant to undertake or
complete any construction of the Demised Premises or any portion thereof or pay
for or reimburse Tenant for any costs incurred in connection with such
construction, except for Landlord's Work;
(f) required to account for any security
deposit other than any security deposit actually delivered to the successor
landlord;
(g) bound by any obligation to make any
payment to Tenant or grant or be subject to any credits, except for services,
repairs, maintenance and restoration provided for under this lease to be
performed after the date of attornment, it being expressly understood, however,
that the successor landlord shall not be bound by an obligation to make payment
to Tenant with respect to construction performed by or on behalf of Tenant at
the Demised Premises.
7.04 If, in connection with obtaining financing or refinancing
for the Building of which the Demised Premises form a part, or Landlord's estate
and interest therein, a lender shall request reasonable modifications to this
lease as a condition to such financing or refinancing, Tenant will not withhold,
delay or defer its consent thereto, provided that such modifications do not
increase the obligations or decrease the rights of Tenant hereunder (except,
perhaps, to the extent that Tenant may be required to give notices of any
defaults by Landlord to such lender and/or permit the curing of such defaults by
such lender together with the granting of such additional time for such curing
as may be required for such lender to get possession of the Building or
Landlord's interest therein) or materially adversely affect the leasehold
interest hereby created. In no event shall a requirement that the consent of any
such lender be given for any modification of this lease be deemed to materially
adversely affect the leasehold interest hereby created.
27
<PAGE> 31
7.05 Notwithstanding anything to the contrary set forth in
Section 7.01 hereof, this lease shall be subject and subordinate to (i) any
superior mortgages now existing or made by Landlord subsequent to the date
hereof and (ii) any superior leases now existing or entered into by Landlord
subsequent to the date hereof, provided that Tenant shall obtain a
Subordination, Non-Disturbance and Attornment Agreement (hereinafter referred to
as an "SNDA") for the benefit of Tenant from the holders of such superior
mortgages or from the lessors under such superior leases which SNDA shall be in
form and content then utilized by such holders or lessors, shall not increase
Tenant's obligations or reduce Tenant's rights under this lease, and which shall
also contain, in substance, the provisions set forth in the subsections (a) and
(b) below:
(a) From the lessor under a superior lease:
An agreement, for the benefit of Tenant, to the effect, inter alia, that as long
as Tenant is not in default in the payment of fixed rent or additional rent or
any other term, covenant or condition of this lease which continues after any
required notice and beyond any applicable cure period set forth in this lease
and provided Tenant attorns to such lessor under the terms and provisions of
this lease, (i) its rights as Tenant hereunder shall not be affected or
terminated, (ii) its possession of the Demised Premises shall not be disturbed,
(iii) no action or proceeding shall be commenced to remove or evict Tenant, and
(iv) this lease shall at all times continue in full force and effect
notwithstanding the termination or expiration of the superior lease, prior to
the expiration or termination of this lease.
(b) From the holders of superior mortgages:
An agreement, for the benefit of Tenant, to the effect, inter alia, that as long
as Tenant is not in default in the payment of fixed rent or additional rent or
any other term, covenant or condition of this lease which continues after any
required notice and beyond any applicable cure period set forth in this lease,
(i) its rights as Tenant hereunder shall not be terminated and (ii) the
possession of Tenant shall not be disturbed by the mortgagee or by any
proceedings on the debt which any such superior mortgage secures or by virtue of
a right or power contained in any such superior mortgage or the bond or note
secured thereby and (iii) that any sale at foreclosure will be subject to this
lease.
7.06 Landlord represents that as of the date of execution
hereof, (i) there are no existing superior mortgages other than that certain
mortgage(s) held by 195 Property Funding Co., LLC (hereinafter referred to as
"195 PROPERTY FUNDING") and (ii) there are no existing superior leases. Tenant
shall receive an SNDA from 195 Property Funding upon the execution and delivery
of this lease.
7.07 Landlord's inability to obtain any subsequent SNDA (after
Tenant receives the SNDA from 195 Property Funding referred to in Section 7.06)
shall not adversely affect this lease or Tenant's obligations hereunder.
28
<PAGE> 32
ARTICLE 8
QUIET ENJOYMENT
8.01 So long as this lease is in full force and effect, Tenant
shall peaceably and quietly have, hold and enjoy the Demised Premises subject,
nevertheless, to the obligations, terms, covenants and conditions of this lease
and, as provided in Article 7, to the superior leases and the superior
mortgages.
ARTICLE 9
ASSIGNMENT AND SUBLETTING
9.01 Subject to the further provisions of this Article 9,
Tenant, for itself, its heirs, distributees, executors, administrators, legal
representatives, successors and assigns, expressly covenants that it shall not
assign, mortgage or encumber this agreement, nor underlet, nor suffer, nor
permit the Demised Premises or any part thereof to be used or occupied by
others, without the prior written consent of Landlord in each instance. If this
lease be assigned, or if the Demised Premises or any part thereof be underlet or
occupied by anybody other than Tenant, Landlord may, after default by Tenant,
collect rent from the assignee, undertenant or occupant, and apply the net
amount collected to the rent herein reserved, but no assignment, underletting,
occupancy or collection shall be deemed a waiver of the provisions hereof, the
acceptance of the assignee, undertenant or occupant as tenant, or a release of
Tenant from the further performance by Tenant of covenants on the part of Tenant
herein contained. The consent by Landlord to an assignment or underletting shall
not in any wise be construed to relieve Tenant from obtaining the express
consent in writing of Landlord to any further assignment or underletting. In no
event shall any permitted sublessee assign or encumber its sublease or further
sublet all or any portion of its sublet space, or otherwise suffer or permit the
sublet space or any part thereof to be used or occupied by others, without
Landlord's prior written consent in each instance which will be granted or
deemed on the same basis as a similar request by Tenant.
9.02 If Tenant shall at any time or times during the term of
this lease desire to assign this lease or sublet all or part of the Demised
Premises, Tenant shall give notice thereof to Landlord, which notice shall be
accompanied by (a) a term sheet signed by an officer or principal of Tenant
containing all material terms and conditions in connection with the proposed
assignment or sublease, the effective or commencement date of which shall be not
less than thirty (30) nor more than 180 days after the giving of such notice,
(b) a statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use of the
Demised Premises, and (c) current financial information with respect to the
proposed assignee or subtenant, including, without limitation, its most recent
financial report. Such notice shall be deemed an offer from Tenant to Landlord
whereby Landlord (or Landlord's designee) may, at its option (hereinafter
referred to as "LANDLORD'S OPTION"), (i) sublease such space (hereinafter
referred to as the "LEASEBACK SPACE") from Tenant upon the terms and
29
<PAGE> 33
conditions hereinafter set forth (if the proposed transaction is a sublease of
all or part of the Demised Premises), (ii) terminate this lease (if the proposed
transaction is an assignment or a sublease of all or substantially all of the
Demised Premises), or (iii) terminate this lease with respect to the Leaseback
Space (if the proposed transaction is a sublease of part of the Demised Premises
expiring during the last year of the term of this lease). Landlord's Option may
be exercised by Landlord by notice to Tenant at any time within twenty (20) days
after such notice has been given by Tenant to Landlord; and during such twenty
(20) day period Tenant shall not assign this lease nor sublet such space to any
person.
9.03 If Landlord exercises Landlord's Option to terminate this
lease in the case where Tenant desires either to assign this lease or sublet all
or substantially all of the Demised Premises, then, this lease shall end and
expire on the date that such assignment or sublet was to be effective or
commence, as the case may be, and the fixed rent and additional rent shall be
paid and apportioned to such date.
9.04 If Landlord exercises Landlord's Option to terminate this
lease in part in any case where Tenant desires to sublet part of the Demised
Premises, then, (a) this lease shall end and expire with respect to such part of
the Demised Premises on the date that the proposed sublease was to commence; (b)
from and after such date the fixed rent and additional rent shall be adjusted,
based upon the proportion that the rentable area of the Demised Premises
remaining bears to the total rentable area of the Demised Premises; and (c)
Landlord shall physically separate such part of the Demised Premises from the
balance of the Demised Premises and shall comply with any laws and requirements
of any public authorities relating to such separation.
9.05 If Landlord exercises Landlord's Option to sublet the
Leaseback Space, such sublease to Landlord or its designee (as subtenant) shall
be at the rentals set forth in the proposed sublease, and shall be for the same
term as that of the proposed subletting, and such sublease shall:
(a) be expressly subject to all of the
covenants, agreements, terms, provisions and conditions of this lease except
such as are irrelevant or inapplicable, and except as otherwise expressly set
forth to the contrary in this Section;
(b) be upon the same terms and conditions as
those contained in the proposed sublease, except such as are irrelevant or
inapplicable and except as otherwise expressly set forth to the contrary in this
Section;
(c) give the sublessee the unqualified and
unrestricted right, without Tenant's permission, to assign such sublease or any
interest therein and/or to sublet the Leaseback Space or any part or parts of
the Leaseback Space and to make any and all changes, alterations, and
improvements in the space covered by such sublease provided such changes,
alterations and improvements are of an "office-type" nature, but Tenant shall
not be
30
<PAGE> 34
obligated to restore such changes, alterations and improvements;
(d) provide that any assignee or further
subtenant, of Landlord or its designee, may, at the election of Landlord, be
permitted to make alterations, decorations and installations in the Leaseback
Space or any part thereof of an "office-type" nature and shall also provide in
substance that any such alterations, decorations and installations in the
Leaseback Space therein made by any assignee or subtenant of Landlord or its
designee may be removed, in whole or in part, by such assignee or subtenant, at
its option, prior to or upon the expiration or other termination of such
sublease provided that such assignee or subtenant, at its expense, shall repair
any damage and injury to that portion of the Leaseback Space so sublet caused by
such removal and further provided that Tenant shall have no obligation to remove
such alterations, decorations and installations or otherwise restore the
Leaseback Space at the expiration or sooner termination of this lease; and
(e) also provide that (i) the parties to
such sublease expressly negate any intention that any estate created under such
sublease be merged with any other estate held by either of said parties, (ii)
any assignment or subletting by Landlord or its designee (as the subtenant) may
be for any purpose or purposes that Landlord, in Landlord's uncontrolled
discretion, shall deem suitable or appropriate, (iii) Tenant, at Tenant's
expense, shall and will at all times provide and permit reasonably appropriate
means of ingress to and egress from the Leaseback Space so sublet by Tenant to
Landlord or its designee, (iv) Landlord, at it's sole cost and expense, shall
make such alterations as may be required or deemed necessary by Landlord to
physically separate the Leaseback Space from the balance of the Demised Premises
and shall comply with any laws and requirements of public authorities relating
to such separation, and (v) that at the expiration of the term of such sublease,
Tenant will accept the space covered by such sublease in its then existing
condition, subject to the obligations of the sublessee to make such repairs
thereto as may be necessary to preserve the premises demised by such sublease in
good order and condition, but Tenant shall not be obligated to restore such
changes, alterations and improvements.
9.06
(a) If Landlord exercises Landlord's Option
to sublet the Leaseback Space, Landlord shall indemnify and save Tenant harmless
from all obligations under this lease as to the Leaseback Space during the
period of time it is so sublet to Landlord;
(a) Performance by Landlord, or its
designee, under a sublease of the Leaseback Space shall be deemed performance by
Tenant of any similar obligation under this lease and any default under any such
sublease shall not give rise to a default under a similar obligation contained
in this Lease, nor shall Tenant be liable for any default under this lease or
deemed to be in default hereunder if such default is occasioned by or arises
from any act or omission of the tenant under such sublease or is occasioned by
or arises from any act or
31
<PAGE> 35
omission of any occupant holding under or pursuant to any such sublease;
(b) Tenant shall have no obligation, at the expiration or
earlier termination of the term of this lease, to remove any alteration,
installation or improvement made in the Leaseback Space by Landlord or its
designee.
9.07 In the event Landlord does not exercise Landlord's Option pursuant
to Section 9.02 and providing that Tenant is not in default of any of Tenant's
obligations under this lease after notice and the expiration of any applicable
grace period, Landlord's consent (which must be in writing and in form
reasonably satisfactory to Landlord) to the proposed assignment or sublease
shall not be unreasonably withheld, delayed or conditioned and shall be given or
denied within the twenty (20) day period set forth in Section 9.02 (it being
agreed that in the event that Landlord fails to respond to Tenant within such
twenty (20) day period, Tenant shall send to Landlord a notice (hereinafter
referred to as the "SECOND NOTICE") which shall state that unless Landlord
either grants or denies its consent to the proposed assignment or subletting
within ten (10) days after receipt of the Second Notice, Landlord's consent to
such assignment or subletting shall be deemed granted, and, in the event
Landlord fails to respond to such Second Notice within five (5) days of receipt
thereof, Landlord will be deemed to have consented to such assignment or
subletting), provided and upon condition that:
(a) Tenant shall have complied with the provisions of Section
9.02 and Landlord shall not have exercised Landlord's Option under said Section
9.02 within the time permitted therefor;
(b) In Landlord's reasonable judgment the proposed assignee or
subtenant is engaged in a business and the Demised Premises, or the relevant
part thereof, will be used in a manner which (i) is in keeping with the then
standards of the Building, (ii) is limited to the uses permitted hereunder and
(iii) will not violate any negative covenant as to use contained in any other
lease of space in the Building of which Tenant has received prior notice;
(c) The proposed assignee or subtenant is a reputable person
of good character and with sufficient financial worth considering the
responsibility involved, and Landlord has been furnished with reasonable proof
thereof;
(d) Provided Landlord then has space in the Building of
comparable size and for at least a comparable term available, neither (i) the
proposed assignee or sublessee nor (ii) any person which, directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed assignee or sublessee or any person who controls the proposed assignee
or sublessee, is then an occupant of any part of the Building;
(e) Provided Landlord then has space in the Building of
32
<PAGE> 36
comparable size and for a comparable term available, the proposed assignee or
sublessee is not a person with whom Landlord is then actively negotiating to
lease space in the Building;
(f) The form of the proposed sublease shall comply with the
applicable provisions of this Article;
(g) There shall not be more than six (6) other separate
entities or persons not affiliated with Tenant on any full floor portion of the
Demised Premises(and not more than four (4) such entities or persons as to the
18th Premises);
(h) The rental and other terms and conditions of the executed
sublease are substantially the same in all material respects as those contained
in the proposed term sheet furnished to Landlord pursuant to Section 9.02;
(i) Tenant shall reimburse Landlord on demand for any
reasonable costs that may be incurred by Landlord in connection with said
assignment or sublease, including, without limitation, the reasonable costs of
making investigations as to the acceptability of the proposed assignee or
subtenant and reasonable legal costs incurred in connection with the review of
any term sheet, proposed assignment or sublease or any documentation in
connection therewith and in the preparation of any documentation in connection
with any request for consent, whether or not granted;
(j) Tenant shall not have (i) advertised (but it may list,
upon notice to Landlord) the availability of the Demised Premises without prior
notice to and approval by Landlord which approval shall not be unreasonably
withheld or delayed, nor shall any advertisement state the proposed rental, (ii)
advertised (but it may list) the Demised Premises for subletting or assignment,
at a rental rate less than the fixed rent and additional rent at which Landlord
is then offering to lease other comparable space in the Building; and
(k) The sublease shall not allow the use of the Demised
Premises or any part thereof for (i) the preparation and/or sale of food for on
or off premises consumption except as otherwise expressly permitted by this
lease or (ii) use by a foreign or domestic government or governmental agency.
Except for any subletting by Tenant to Landlord or its designee pursuant to the
provisions of this Article, each subletting pursuant to this Article shall be
subject to all of the covenants, agreements, terms, provisions and conditions
contained in this lease. Notwithstanding any such subletting to Landlord or any
such subletting to any other subtenant and/or acceptance of rent or additional
rent by Landlord from any subtenant, Tenant shall and will remain fully liable
for the payment of the fixed rent and additional rent due and to become due
hereunder and for the performance of all the covenants, agreements, terms,
provisions and conditions contained in this lease on the part of Tenant to be
performed and all acts and omissions of any licensee or
33
<PAGE> 37
subtenant or anyone claiming under or through any subtenant which shall be in
violation of any of the obligations of this lease, and any such violation shall
be deemed to be a violation by Tenant. Tenant further agrees that
notwithstanding any such subletting, no other and further subletting of the
Demised Premises by Tenant or any person claiming through or under Tenant
(except as provided in Section 9.05) shall or will be made except upon
compliance with and subject to the provisions of this Article. If Landlord shall
decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise Landlord's Option, Tenant shall indemnify, defend and
hold harmless Landlord against and from any and all loss, liability, damages,
costs and expenses (including reasonable counsel fees) resulting from any claims
that may be made against Landlord by the proposed assignee or sublessee or by
any brokers or other persons claiming a commission or similar compensation in
connection with the proposed assignment or sublease.
9.08 In the event that (a) Landlord fails to exercise Landlord's Option
and consents (or is deemed to have consented in accordance with the provisions
of this Article 9) to a proposed assignment or sublease, and (b) Tenant fails to
execute and deliver the assignment or sublease to which Landlord consented
within one hundred eighty (180) days after the giving of such consent, then,
Tenant shall again comply with all of the provisions and conditions of Section
9.02 before assigning this lease or subletting all or part of the Demised
Premises.
9.09 With respect to each and every sublease or subletting authorized
by Landlord under the provisions of this lease, it is further agreed:
(a) no subletting shall be for a term ending later than one
day prior to the expiration date of this lease or the "Renewal Term Expiration
Date" (as defined in Article 39), provided Tenant has duly exercised the
"Renewal Option" (as defined in Article 39) in accordance with the provisions of
Article 39 hereof;
(b) no sublease shall be valid, and no subtenant shall take
possession of the Demised Premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Landlord;
(c) each sublease shall provide that it is subject and
subordinate to this lease and to the matters to which this lease is or shall be
subordinate, and that in the event of termination, re-entry or dispossess by
Landlord under this lease Landlord may, at its option, take over all of the
right, title and interest of Tenant, as sublessor, under such sublease, and such
subtenant shall, at Landlord's option, attorn to Landlord pursuant to the then
executory provisions of such sublease, except that Landlord shall not (i) be
liable for any previous act or omission of Tenant under such sublease, (ii) be
subject to any offset, not expressly provided in such sublease, which
theretofore accrued to such subtenant against Tenant, or (iii) be bound by any
previous modification of such sublease or by any previous prepayment of more
than one month's rent.
34
<PAGE> 38
9.10 If Landlord shall give its consent (or shall be deemed to have
consented in accordance with the provisions of this Article 9) to any assignment
of this lease or to any sublease, Tenant shall in consideration therefor, pay to
Landlord, as additional rent:
(a) in the case of an assignment, an amount equal to 50% of
all sums and other considerations paid to Tenant by the assignee for or by
reason of such assignment (including, but not limited to, sums paid for the sale
of Tenant's fixtures, leasehold improvements, equipment, furniture, furnishings
or other personal property, less, in the case of a sale thereof, the then fair
market value thereof) and less the reasonable costs (hereinafter referred to as
the "ASSIGNMENT EXPENSES") paid by Tenant for alteration costs (or contributions
in lieu thereof), advertising, brokerage or consulting fees or commissions and
legal fees in connection with such assignment; and
(b) in the case of a sublease, an amount equal to 50% of any
rents, additional charge or other consideration payable under the sublease to
Tenant by the subtenant which is in excess of the fixed rent and additional rent
accruing during the term of the sublease in respect of the subleased space (at
the rate per square foot payable by Tenant hereunder) pursuant to the terms
hereof (including, but not limited to, sums paid for the sale or rental of
Tenant's fixtures, leasehold improvements, equipment, furniture or other
personal property, less, in the case of the sale thereof, the then fair market
value thereof) and less the reasonable costs (hereinafter referred to as the
"SUBLETTING EXPENSES") paid by Tenant for alteration costs (or contributions in
lieu thereof), advertising, brokerage or consulting fees or commissions and
legal fees in connection with such subletting. The sums payable under Sections
9.10(a) and (b) shall be paid to Landlord as and when paid by the assignee or
subtenant, as the case may be, to Tenant and upon the execution and delivery of
such assignment or sublease, as the case may be, Tenant shall provide to
Landlord a statement of the Assignment Expenses or Subletting Expenses, as the
case may be, certified as correct by an officer or principal of Tenant. In the
event of any dispute with respect to the Assignment Expenses or the Subletting
Expenses, such dispute shall be determined by arbitration in accordance with the
provisions of Article 34 hereof.
9.11
(a) If Tenant is a corporation other than a corporation whose
stock is or becomes listed and traded on a nationally or internationally
recognized stock exchange (which listing is permitted hereunder), the provisions
of 9.01 shall apply to a transfer (however accomplished, whether in a single
transaction or in a series of related or unrelated transactions) of stock (or
any other mechanism such as, by way of example, the issuance of additional
stock, a stock voting agreement or change in class(es) of stock) which results
in a change of control of Tenant but only where the principal purpose of which
is a transfer of this lease as if such transfer of stock (or other mechanism)
which results in a change of control of
35
<PAGE> 39
Tenant were an assignment of this lease, and if Tenant is a partnership or joint
venture or other entity, said provisions shall apply with respect to a transfer
(by one or more transfers) of an equity interest in such partnership or joint
venture or other entity (or other mechanism, such as, by way of example, the
creation of additional general partnership or limited partnership interests or
other interest) which results in a change of control of such partnership or
joint venture or other entity but only where the principal purpose of which is a
transfer of this lease, as if such transfer of an equity interest in such
partnership or joint venture or other entity which results in a change of
control of such partnership or joint venture or other entity were an assignment
of this lease. Notwithstanding the foregoing, if the principal purpose of any
such transaction described in this clause is not the assignment of this lease,
no Landlord consent shall be required and the provisions of Sections 9.02, 9.07,
9.08 and 9.10 shall not be applicable thereto.
(b) Notwithstanding anything in this lease to the contrary,
the provisions of the first sentence of Section 9.01, Landlord's Option, Section
9.07(a)-(f), (h) and (j), Section 9.08 and 9.10 hereof shall not apply to
transactions entered into by Tenant with (i) a corporation into or with which
Tenant is merged or consolidated or with an entity to which all or substantially
all of Tenant's assets are transferred, provided (x) such merger, consolidation
or transfer of assets is for a valid business purpose and not principally for
the purpose of transferring the leasehold estate created hereby, and (y) the
assignee or successor entity has a net worth (determined in accordance with
generally accepted accounting principles consistently applied) at least equal to
or in excess of the net worth of Tenant immediately prior to such merger,
consolidation or transfer and Landlord has been provided with reasonable proof
thereof prior to such transaction or (ii) any entity which is controlled by,
under common control with or which controls Tenant (for purposes hereof the term
"control" shall have the meaning ascribed to it in Exhibit E).
9.12 Any assignment or transfer, whether made with Landlord's consent
pursuant to Section 9.01 or without Landlord's consent pursuant to Section 9.11,
shall be made only if, and shall not be effective until, the assignee shall
execute, acknowledge and deliver to Landlord an agreement in form and substance
reasonably satisfactory to Landlord whereby the assignee shall assume the
obligations of this lease on the part of Tenant to be performed or observed from
and after the date of said assignment or transfer and whereby the assignee shall
agree that the provisions in Section 9.01 shall, notwithstanding such assignment
or transfer, continue to be binding upon it in respect of all future assignments
and transfers. The original named Tenant covenants that, notwithstanding any
assignment or transfer, whether or not in violation of the provisions of this
lease, and notwithstanding the acceptance of fixed rent and/or additional rent
by Landlord from an assignee, transferee, or any other party, the originally
named Tenant shall remain fully liable for the payment of the fixed rent and
additional rent and for the other obligations of this lease on the part of
Tenant to be performed or observed; if this lease be modified after any such
assignment so as to increase Tenant's obligations, then the originally named
Tenant, unless it consented to such modification, shall be liable only for the
obligations
36
<PAGE> 40
under this lease as same existed prior to such modifications.
9.13 The joint and several liability of Tenant and any immediate or
remote successor in interest of Tenant and the due performance of the
obligations of this lease on Tenant's part to be performed or observed shall not
be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time of, or modifying any of the
obligations of, this lease, or by any waiver or failure of Landlord to enforce
any of the obligations of this lease.
9.14 The listing of any name other than that of Tenant, whether on the
doors of the Demised Premises or the Building directory, or otherwise, shall not
operate to vest any right or interest in this lease or in the Demised Premises,
nor shall it be deemed to be the consent of Landlord to any assignment or
transfer of this lease or to any sublease of the Demised Premises or to the use
or occupancy thereof by others.
9.15 Tenant hereby agrees that the elevator lobby and public hallways
on any floor on which Tenant shall have subleased space to a subtenant shall
conform in all respects (including, without limitation, colors schemes) to
either (a) the elevator lobby and hallways (if any) on other floors leased to
Tenant (if Tenant has leased more than one (l) floor from Landlord) or (b)
Landlord's then building standard for elevator lobbies and public hallways on
multi-tenanted floors of the Building, or shall otherwise be approved in writing
by Landlord, prior to the commencement of work thereon, notwithstanding anything
in this lease to the contrary.
9.16 Notwithstanding anything herein contained to the contrary, Tenant
shall have the right to sublet (but only as to one (1) floor), without being
subject to Landlord's Option, either the 17th Premises (or portions thereof),
the (18th) Premises (or portions thereof) or the 19th Premises (or portions
thereof) (but only as to one (1) such floor) during the first three (3) years of
this lease for a term to expire no later than the third (3rd) anniversary of the
17th Floor Commencement Date as to the 17th Premises (or portions thereof), the
third (3rd) anniversary of the 18th Floor Commencement Date as to the 18th
Premises (or portions thereof) or the third (3rd) anniversary of the 19th Floor
Commencement Date as to the 19th Premises (or portions thereof), as the case may
be, subject in all events to all other terms and provisions of this Article 9.
ARTICLE 10
COMPLIANCE WITH LAWS AND REQUIREMENTS
OF
PUBLIC AUTHORITIES
10.01 Tenant shall give prompt notice to Landlord of any notice it
receives of the violation of any law or requirement of public authority, and
Tenant, at its expense, shall comply with all laws and requirements of public
authorities which shall, with respect to the Demised
37
<PAGE> 41
Premises or the use and occupation thereof, or the abatement of any nuisance,
impose any violation, order or duty on Landlord or Tenant, arising from (i)
Tenant's use of the Demised Premises, (ii) the manner of conduct of Tenant's
business or operation of its installations, equipment or other property therein,
(iii) any cause or condition created by or at the instance of Tenant, other than
by Landlord's performance of any work for or on behalf of Tenant, or (iv) breach
of any of Tenant's obligations hereunder. However, Tenant shall not be so
required to make any structural or other substantial change in the Demised
Premises unless the requirement arises from a cause or condition referred to in
clause (ii), (iii) or (iv) above. Furthermore, Tenant need not comply with any
such law or requirement of public authority so long as Tenant shall be
contesting the validity thereof, or the applicability thereof to the Demised
Premises, in accordance with Section 10.02. Landlord, at its expense, shall
comply with all other such laws and requirements of public authorities as shall
affect the Demised Premises, but may similarly contest the same subject to
conditions reciprocal to Subsections (a), (b) and (d) of Section 10.02.
10.02 Tenant may, at its expense (and if necessary, in the name of but
without expense to Landlord) contest, by appropriate proceedings prosecuted
diligently and in good faith, the validity, or applicability to the Demised
Premises, of any law or requirement of public authority, and Landlord shall
cooperate with Tenant in such proceedings, provided that:
(a) Landlord shall not be subject to criminal penalty or to
prosecution for a crime nor shall the Demised Premises or any part thereof be
subject to being condemned or vacated, by reason of non-compliance or otherwise
by reason of such contest;
(b) Tenant shall defend, indemnify and hold harmless Landlord
against all liability, loss or damage which Landlord shall suffer by reason of
such non-compliance or contest, including reasonable attorney's fees and other
expenses reasonably incurred by Landlord;
(c) such non-compliance or contest shall not constitute or
result in any violation of any superior lease or superior mortgage, or if such
superior lease and/or superior mortgage shall permit such non-compliance or
contest on condition of the taking of action or furnishing of security by
Landlord, such action shall be taken and such security shall be furnished at the
expense of Tenant; and
(d) Tenant shall keep Landlord advised as to the status of
such proceedings.
Without limiting the application of Subsection (a) above thereto, Landlord shall
be deemed subject to prosecution for a crime within the meaning of said
Subsection, if Landlord, or any officer of Landlord individually, is charged
with a crime of any kind or degree whatever, whether by service of a summons or
otherwise, unless such charge is withdrawn before Landlord or such officer (as
the case may be) is required to plead or answer thereto.
38
<PAGE> 42
10.03 Tenant shall not knowingly cause or permit "HAZARDOUS MATERIALS"
(as defined below) to be used, transported, stored, released, handled, produced
or installed in, on or from, the Demised Premises or the Building. The term
"Hazardous Materials" shall, for the purposes hereof, mean any flammable
explosives, radioactive materials, hazardous wastes, hazardous and toxic
substances, or related materials, asbestos or any material containing asbestos,
or any other substance or material, as defined by any federal, state or local
environmental law, ordinance, rule or regulation including, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended, the Hazardous Materials Transportation Act, as amended, the Resource
Conservation and Recovery Act, as amended, and in the regulations adopted and
publications promulgated pursuant to each of the foregoing. The parties agree
that nothing contained in this Section 10.03 shall prohibit, and Landlord
herewith consents to, Tenant's use and maintenance in the Demised Premises of
limited quantities of substances reasonably necessary in the ordinary operation
and maintenance of office equipment, provided such substances are used,
transported, stored, released, handled, and maintained within the Demised
Premises in accordance with all applicable laws and regulations. In the event of
a breach of the provisions of this Section 10.03, Landlord shall, in addition to
all of its rights and remedies under this lease and pursuant to law, require
Tenant to remove any such Hazardous Materials from the Demised Premises in the
manner prescribed for such removal by the applicable law, ordinance, rule or
regulation. The provisions of