STANDARD FORM OF OFFICE LEASE
The Real Estate Board of New York, Inc.
AGREEMENT OF
LEASE, made as of this 21 st day of
June 2006, between FIFTH AND 38TH LLC, a Delaware limited
liability company having an office at c/o Murray Hill Properties
LLC, 1140 Avenue of the Americas, New York, New York 10036, party
of the first part, hereinafter referred to as OWNER, and ATARI,
INC., having an address at 417 Fifth Avenue, New York, New York
10016, party of the second part, hereinafter referred to as
TENANT,
WITNESSETH:
Owner hereby leases to Tenant and Tenant hereby hires from Owner,
(a) the entire seventh (7th) and eighth (8th) floors of the
building (the “Building”) known as 417 Fifth Avenue in
the Borough of Manhattan, City, County and State of New York,
consisting of approximately 70,000 rentable square feet (the
“Office Space”) and (b) certain portions of the
basement of the Building, consisting initially of approximately
2,500 square feet but subject to increase pursuant to
Section 49D hereof (the “Basement Space”), each as
more particularly identified on Exhibit A attached hereto (but
excluding elements of the Building that penetrate through the
floor, all janitor or electrical closets and all
mechanical/electrical rooms), hereinafter referred to collectively
as the “Demised Premises” or the “demised
premises”, together with the non-exclusive right to use, in
common with other tenants of the Building, all appurtenances, areas
and facilities intended generally for the common use of tenants in
the Building, for a term (“Term”) to commence on the
“Commencement Date” (as defined in Article 37) and
to end on the “Expiration Date” (as defined in
Article 37) (unless extended or sooner terminated as
hereinafter provided), both dates inclusive, at an annual rental
rate set forth in Article 37,
which
Tenant agrees to pay in lawful money of the United States, which
shall be legal tender in payment of all debts and dues, public and
private, at the time of payment, in equal monthly installments in
advance on the first day of each month during said term, without
previous demand therefor, at the office of Owner or such other
place as Owner may designate, without any setoff or deduction
whatsoever, (except as otherwise expressly set forth in this
Lease).
If the Expiration Date occurs on a
day other than the last day of a calendar month, then the Fixed
Annual Rent for such calendar month shall be prorated based on the
applicable number of days.
The parties hereto, for themselves,
their heirs, distributees, executors, administrators, legal
representatives, successors and assigns, hereby covenant as
follows:
Rent:
1. Tenant shall pay the rent as above and as hereinafter
provided.
Occupancy:
2. Tenant shall use and occupy the demised premises only for
general and executive offices and a product display room (the
“Permitted Uses”). Subject to the other terms of this
Lease, Permitted Uses shall also include uses reasonably and
customarily ancillary to general and executive office use,
including without limitation the following: (a) customary
computer and other electronic and technological support systems,
electronic data processing equipment and business machines,
including computer networks and printing and duplicating equipment
used in connection with administrative, executive and general
office use; (b) file storage; (c) standard office-style
kitchens (i.e., a coffee maker, microwave, small refrigerator and
vending machines) solely for the use by Tenant’s and its
permitted subtenant’s officers, directors, employees and
guests; and (d) any private bathrooms or showers installed in
the Demised Premises prior to the date hereof. In no event shall
the Demised Premises be used for manufacturing or direct retail
sales to the public. Notwithstanding the foregoing or any other
provision of this Lease to the contrary, Tenant shall be
responsible for complying with all Laws (as defined herein)
applicable to its use of the Demised Premises (provided, however,
that Tenant shall not be required to make any structural
alterations to the Demised Premises or Building required by such
Laws except as set forth in Article 50) and for obtaining, at
Tenant’s sole cost and expense, all consents, approvals and
permits (including, without limitation, any amendment to the
certificate of occupancy for the Building and any public assembly
permit) required by reason of any such use. Owner makes no
representation to Tenant as to the suitability of the Demised
Premises for any particular use, but Owner shall be responsible for
maintaining a certificate of occupancy for the Building that
permits the Demised Premises to be used for office use.
Tenant Alterations:
3. Except as otherwise expressly set forth in this Lease,
Tenant shall make no changes in or to the demised premises of any
nature without Owner’s prior written consent. Tenant shall,
before making any alterations, additions, installations or
improvements, at its expense, obtain all permits, approvals and
certificates required by any governmental or quasi-governmental
bodies and (upon completion) certificates of final approval
thereof, and shall deliver promptly duplicates of all such permits,
approvals and certificates to Owner, and Tenant agrees to carry,
and will cause Tenant’s contractors and sub-contractors to
carry, such worker’s compensation, general liability,
personal and property damage insurance as is specified in this
Lease. If any mechanic’s lien is filed against the demised
premises, or the building of which the same forms a part, for work
claimed to have been done for, or materials furnished to, Tenant,
whether or not done pursuant to this article, the same shall be
discharged by Tenant within thirty days after notice thereof, at
Tenant’s expense, by payment or filing a bond as permitted by
law or otherwise. All fixtures and all paneling, partitions,
railings and like installations, installed in the demised premises
at any time, either by Tenant or by Owner on Tenant’s behalf,
shall, upon installation, become the property of Owner and shall
remain upon and be surrendered with the demised premises. Nothing
in this article shall be construed to give Owner title to, or to
prevent Tenant’s removal of, trade fixtures, moveable office
furniture and equipment, but upon removal of same from the demised
premises or upon removal, of other installations as may be required
by Owner pursuant to the terms hereof. Tenant shall immediately,
and at its expense, repair any damage to the demised premises or
the building due to such removal. Notwithstanding the foregoing,
Tenant will (upon request of Owner given no more than ninety
(90) days prior to the Expiration Date) be required to remove
any safes, vaults, raised computer floors, library and file storage
systems, antennas, dishes and internal stairways to the extent not
existing in the Demised Premises as of the Commencement Date
(collectively, the “Non-Standard Alterations”). Except
for Non-Standard Alterations, Tenant shall have no obligation to
remove any alterations or restore the Demised Premises.
Tenant’s obligation to remove Non-Standard Alterations, if so
requested by Owner, shall survive the termination of this Lease.
All property permitted or required to be removed by Tenant at the
end of the term remaining in the demised premises after
Tenant’s removal shall be deemed abandoned and may, at the
election of Owner, either be retained as Owner’s property or
may be removed from the demised premises by Owner, at
Tenant’s expense.
Maintenance and Repairs:
4. Except as to those repair and replacement obligations
which are the responsibility of Owner under this Lease, Tenant
shall, throughout the term of this lease, take good care of the
demised premises and the fixtures and appurtenances therein. Tenant
shall be responsible for all damage or injury to the demised
premises or any other part of the building and the systems and
equipment thereof, whether requiring structural or nonstructural
repairs caused by, or resulting from, carelessness, omission,
neglect or improper conduct of Tenant, Tenant’s subtenants,
agents, employees, invitees or licensees, or which arise out of any
work, (except for work performed by Owner or its contractors or
other agents) labor, service or equipment done for, or supplied to,
Tenant or any subtenant, or arising out of the installation, use or
operation of the property or equipment of Tenant or any subtenant.
Tenant shall also repair all damage to the building and the demised
premises caused by the moving of Tenant’s fixtures, furniture
and equipment. Tenant shall promptly make, at Tenant’s
expense, all repairs in and to the demised premises for which
Tenant is responsible, and, if such repairs are structural or
affect building systems, Tenant shall use only contractors approved
by Owner (such consent not to be unreasonably withheld) for such
repairs. Any other repairs in or to the building or the facilities
and systems thereof, for which Tenant is responsible, shall be
performed by Owner at the Tenant’s expense. Owner shall
maintain in good working order and repair the exterior and the
structural portions of the building, including the structural
portions of the demised premises, and the public portions of the
building interior and the building plumbing, electrical, heating
and ventilating systems (to the extent such systems presently
exist) serving the demised premises including, without limitation,
the structural, exterior and curtain walls, common areas, sanitary,
mechanical, plumbing, electrical, sprinkler and fire safety
systems, and other base building systems of the Building. All such
repairs shall be made in a good and workerlike manner and performed
with reasonable diligence and in a manner reasonably intended to
minimize interference with the conduct of Tenant’s business
and access to the Demised Premises; provided that Owner shall not
be required to employ contractors or labor at overtime or other
premium pay rates unless Tenant, at Tenant’s request and
expense, shall bear the cost thereof. Tenant agrees to give prompt
notice of any defective condition in the demised premises for which
Owner may be responsible hereunder. Except as expressly set forth
in Section 41B, there shall be no allowance to Tenant for
diminution of rental value and no liability on the part of Owner by
reason of inconvenience, annoyance or injury to business arising
from Owner or others making repairs, alterations, additions or
improvements in or to any portion of the building or the demised
premises, or in and to the fixtures, appurtenances or equipment
thereof. Except as expressly set forth in Section 41B, it is
specifically agreed that Tenant shall not be entitled to any setoff
or reduction of rent by reason of any failure of Owner to comply
with the covenants of this or any other article of this lease.
Except as expressly set forth in Section 41B, Tenant agrees
that Tenant’s sole remedy at law in such instance will be by
way of an action for damages for breach of contract. The provisions
of this Article 4 shall not apply in the case of fire or other
casualty, which are dealt with in Article 9 hereof.
Window Cleaning:
5. Tenant will not clean nor require, permit, suffer or
allow any window in the demised premises to be cleaned from the
outside in violation of Section 202 of the Labor Law or any
other applicable law, or of the Rules of the Board of Standards and
Appeals, or of any other Board or body having or asserting
jurisdiction.
Requirements of Law, Fire Insurance, Floor Loads:
6. Prior to the commencement of the lease term, if Tenant is
then in possession, and at all times thereafter, Tenant, at
Tenant’s sole cost and expense, shall promptly comply with
all present and future laws, orders and regulations of all state,
federal, municipal and local governments, departments, commissions
and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, Insurance Services Office, or any similar body which
shall impose any violation, order or duty upon Owner or Tenant with
respect to the demised premises, whether or not arising out of
Tenant’s particular use or manner of use thereof, (including
Tenant’s permitted use) or, with respect to the building if
arising out of Tenant’s particular use or manner of use of
the demised premises or the building (as opposed to the mere use of
the Demised Premises for office uses) as and to the extent provided
in Article 50 hereof. Nothing herein shall require Tenant to
make structural repairs or alterations or pay the cost of any
unless Tenant has, by its particular (as opposed to the mere use of
the Demised Premises for office uses) manner of use of the demised
premises or method of operation therein, violated any such laws,
ordinances, orders, rules, regulations or requirements with respect
thereto. Tenant may, after securing Owner to Owner’s
reasonable satisfaction against all damages, interest, penalties
and expenses, including, but not limited to, reasonable attorneys
fees, by cash deposit or by surety bond in an amount and in a
company satisfactory to Owner, contest and appeal any such laws,
ordinances, orders, rules, regulations or requirements provided
same is done with all reasonable promptness and provided such
appeal shall not subject Owner to prosecution for a criminal
offense, or constitute a default under any lease or mortgage under
which Owner may be obligated, or cause the demised premises or any
part thereof to be condemned or vacated, Tenant
shall
not do or permit any act or thing to be done in or to the demised
premises which is contrary to law, or which will invalidate or be
in conflict with public liability, fire or other policies of
insurance at any time carried by or for the benefit of Owner with
respect to the demised premises or the building of which the
demised premises form a part, or which shall or might subject Owner
to any liability or responsibility to any person, or for property
damage, Tenant shall not keep anything in the demised premises,
except as now or hereafter permitted by the Fire Department, Board
of Fire Underwriters, Fire Insurance Rating Organization or other
authority having jurisdiction, and then only in such manner and
such quantity so as not to increase the rate for fire insurance
applicable to the building, nor use the demised premises in a
manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the
commencement of Tenant’s occupancy. Tenant shall pay all
costs, expenses, fines, penalties, or damages, which may be imposed
upon Owner by reason of Tenant’s failure to comply with the
provisions of this article, and if by reason of such failure the
fire insurance rate shall, at the beginning of this lease, or at
any time thereafter, be higher than it otherwise would be, then,
Tenant shall reimburse Owner, as additional rent hereunder, for
that portion of all fire insurance premiums thereafter paid by
Owner which shall have been charged because of such failure by
Tenant. In any action or proceeding wherein Owner and Tenant are
parties, a schedule or “make-up” of rate for the
building or the demised premises issued by the New York Fire
Insurance Exchange, or other body making fire insurance rates
applicable to said premises shall be conclusive evidence of the
facts therein stated and of the several items and charges in the
fire insurance rates then applicable to said premises. Tenant shall
not place a load upon any floor of the demised premises exceeding
the floor load per square foot area which it was designed to carry
and which is allowed by law. Owner reserves the right to reasonably
prescribe the weight and position of all safes, business machines
and mechanical equipment. Such installations shall be placed and
maintained by Tenant, at Tenant’s expense, in settings
sufficient, in Owner’s reasonable judgement, to absorb and
prevent vibration, noise and annoyance.
Subordination:
7.
Property Loss, Damage Reimbursement Indemnity:
8. Owner or its agents shall not be liable for any damage to
property of Tenant or of others entrusted to employees of the
building, nor for loss of or damage to any property of Tenant by
theft or otherwise, nor for any injury or damage to persons or
property resulting from any cause of whatsoever nature, unless
caused by, or due to, the negligence or willful misconduct of
Owner, its agents, servants or employees or contractors. Owner or
its agents will not be liable for any such damage caused by other
tenants or persons in, upon or about said building, or caused by
operations in construction of any private, public or quasi public
work. Except as expressly set forth in Section 41B, if at any
time any windows of the demised premises are temporarily closed,
darkened or bricked up (or permanently closed, darkened or bricked
up, if required by law) for any reason whatsoever including, but
not limited to, Owner’s own acts, Owner shall not be liable
for any damage Tenant may sustain thereby, and Tenant shall not be
entitled to any compensation therefor, nor abatement or diminution
of rent, nor shall the same release Tenant from its obligations
hereunder, nor constitute an eviction.
Destruction, Fire and Other Casualty:
9. (a) If the demised premises or any part thereof
shall be damaged by fire or other casualty, Tenant shall give
immediate notice thereof to Owner, and this lease shall continue in
full force and effect except as hereinafter set forth. (b) If
the demised premises are partially damaged or rendered partially
unusable by fire or other casualty or are rendered inaccessible or
unusable in whole or in part for the normal conduct of
Tenant’s business (including damage to building systems which
materially and adversely affects access to or the tenantability of
the Demised Premises), then (subject to the provisions of
Section 41B), the damages thereto shall be repaired by, and at
the expense of, Owner, and the rent and other items of additional
rent, until such repair shall be substantially completed, shall be
apportioned from the day following the casualty, according to the
part of the demises premises which is usable and accessible (c) If
the demised premises are totally damaged or rendered wholly
unusable or inaccessible or unusable for the normal conduct of
Tenant’s business (including damage to the building systems
which materially and adversely affects access to or the
tenantability of the Demised Premises) by fire or other casualty,
then the rent and other items of additional rent, as hereinafter
expressly provided, shall be proportionately paid up to the time of
the casualty, and thenceforth shall cease until the date when the
demised premises, building services and access to the Demised
Premises shall have been repaired and restored by Owner (or if
sooner reoccupied in part by Tenant for the conduct of its business
then rent shall be apportioned as provided in subsection (b)
above), subject to Owner’s right to elect not to restore the
same as hereinafter provided and subject to the provisions of
Section 41B, (d) If the demised premises are rendered
wholly unusable or (whether or not the demised premises are damaged
in whole or in part) if the building shall be so damaged that Owner
shall decide to demolish it or to rebuild it and provided that
Owner shall terminate all other office tenants of the Building
then, in any of such events, Owner may elect to terminate this
lease by written notice to Tenant, given within ninety
(90) days after such fire or casualty, or thirty
(30) days after adjustment of the insurance claim for such
fire or casualty, whichever is sooner, specifying a date for the
expiration of the lease, which date shall not be less than thirty
(30) nor more than sixty (60) days after the giving of such
notice, and upon the date specified in such notice the term of this
lease shall expire as fully and completely as if such date were the
date set forth above for the termination of this lease, and Tenant
shall forthwith quit, surrender and vacate the demised premises
without prejudice however, to Landlord’s rights and remedies
against Tenant under the lease provisions in effect prior to such
termination, and any rent owing shall be paid up to such date, and
any payments of rent made by Tenant which were on account of any
period subsequent to such date shall be returned to Tenant. Unless
Owner shall serve a termination notice as provided for herein,
Owner shall make the repairs and restorations under the conditions
of (b) and (c) hereof, with all reasonable expedition,
subject to delays due to adjustment of insurance claims, labor
troubles and causes beyond Owner’s control. After any such
casualty, Tenant shall cooperate with Owner’s restoration by
removing from the demised premises as promptly as reasonably
possible, all of Tenant’s salvageable inventory and moveable
equipment, furniture, and other property, Tenant’s liability
for rent shall resume five (5) days after written notice from
Owner that the demised premises are substantially ready for
Tenant’s occupancy, (e) Nothing contained hereinabove
shall relieve Tenant from liability, if any, that may exist as a
result of damage from fire or other casualty. Notwithstanding the
foregoing, including Owner’s obligation to restore under
subparagraph (b) above, each party shall look first to any
insurance in its favor before making any claim against the other
party for recovery for loss or damage resulting from fire or other
casualty, and to the extent that such insurance is in force and
collectible, and to the extent permitted by law, Owner and Tenant
each hereby releases and waives all right of recovery with respect
to subparagraphs (b), (d), and (e) above, against the other or any
one claiming through or under each of them by way of subrogation or
otherwise. The release and waiver herein referred to shall be
deemed to include any loss or damage to the demised premises and/or
to any personal property, equipment, trade fixtures, goods and
merchandise located therein. The foregoing release and waiver shall
be in force only if both releasors’ insurance policies
contain a clause providing that such a release or waiver shall not
invalidate the insurance. If, and to the extent, that such waiver
can be obtained only by the payment of additional premiums, then
the party benefiting from the waiver shall pay such premium within
ten days after written demand or shall be deemed to have agreed
that the party obtaining insurance coverage shall be free of any
further obligation under the provisions hereof with respect to
waiver of subrogation. Tenant acknowledges that Owner will not
carry insurance on Tenant’s furniture and/or furnishings or
any fixtures or equipment, improvements, or appurtenances removable
by Tenant, and agrees that Owner will not be obligated to repair
any damage thereto or replace the same, (f) Tenant hereby
waives the provisions of Section 227 of the Real Property Law
and agrees that the provisions of this article shall govern and
control in lieu thereof. If a casualty causing at least fifty
percent (50%) of the Demised Premises to be untenantable or
inaccessible shall occur and as a result thereof such portion of
the Premises shall be unoccupied by Tenant or the permitted
occupants thereof (a “Material Casualty”) and Owner
shall not elect to terminate this Lease as provided in this
Article 9, Owner shall send a notice to Tenant within sixty
(60) days after such casualty setting forth Owner’s
estimate of the length of time necessary to restore the Demised
Premises to a tenantable and accessible condition (to the extent of
Owner’s obligations therefor as set forth in
Section 44F). If Owner’s estimate exceeds two hundred
seventy (270) days from the date of the Material Casualty,
then Tenant may elect to terminate this Lease upon written notice
to Landlord within thirty (30) days after receipt of
Landlord’s notice. If Tenant does not elect to terminate this
Lease, and the Demised Premises is not so restored within such two
hundred seventy (270) day period, then Tenant shall have the
right to terminate this Lease upon notice to Landlord given at any
time after such two hundred seventy (270) day period, provided
the applicable restoration has not been substantially completed on
the date of such notice. In addition, if during the last twelve
(12) months of the Term a casualty causing at least
thirty-three percent (33%) of the Demised Premises to be
untenantable or inaccessible shall occur and as a result thereof
such portion of the Premises shall be unoccupied by Tenant or the
permitted occupants thereof, then Tenant shall have the right to
terminate this Lease by written notice to Owner within thirty (30)
days after such casualty.
Eminent Domain:
10. If the whole or any part of the demised premises shall
be acquired or condemned by Eminent Domain for any public or quasi
public use or purpose, then, and in that event, the term of this
lease shall cease and terminate from the date of title vesting in
such proceeding, and Tenant shall have no claim for the value of
any unexpired term of said lease, and assigns to Owner,
Tenant’s entire interest in any such award. Tenant shall have
the right to make an independent claim to the condemning authority
for the value of Tenant’s moving expenses and personal
property, trade fixtures and equipment, provided Tenant is entitled
pursuant to the terms of the lease to remove such property, trade
fixture and equipment at the end of the term, and provided further
such claim does not reduce Owner’s award.
Assignment, Mortgage, Etc.:
11. Except as otherwise expressly provided in
Article 48 below, 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, or suffer or permit the
demised premises or any part thereof to be used by others, without
the prior written consent of Owner 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, Owner may, after
default by Tenant, beyond applicable notice and cure periods
collect rent from the assignee, undertenant or occupant, and apply
the net amount collected to the rent herein reserved, but no such
assignment, underletting, occupancy or collection shall be deemed a
waiver of this covenant, or 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 Owner to an assignment or
underletting shall not in any wise be construed to relieve Tenant
from obtaining the express consent in writing of Owner to any
further assignment or underletting when such consent is required
under this Lease.
Electric Current:
12. Rates and conditions in respect to submetering or rent
inclusion, as the case may be, to be added in RIDER attached
hereto. Tenant covenants and agrees that at all times its use of
electric current shall not exceed the capacity of existing feeders
to the building or the risers or wiring installation, and Tenant
may not use any electrical equipment which, in Owner’s
opinion, reasonably exercised, will overload such installations or
interfere with the use thereof by other tenants of the building.
The change at any time of the character of electric service shall
in no wise make Owner liable or responsible to Tenant, for any
loss, damages or expenses which Tenant may sustain.
Access to Premises:
13. Owner or Owner’s agents shall have the right (but
shall not be obligated) to enter the demised premises in any
emergency at any time, and, at other reasonable times, upon
reasonable advance notice to examine the same and to make such
repairs, replacements and improvements as Owner may deem necessary
and reasonably desirable to the demised premises or to any other
portion of the building or which Owner may elect to perform. Tenant
shall permit Owner, upon reasonable advance notice, to use and
maintain and replace pipes and conduits in and through the demised
premises and to erect new pipes and conduits therein, provided they
are concealed within the walls, floor, or ceiling. Subject to
Section 41B, Owner may, during the progress of any work in the
demised premises, take all necessary materials and equipment into
said premises without the same constituting an eviction, nor shall
the Tenant be entitled to any abatement of rent while such work is
in progress, nor to any damages by reason of loss or interruption
of business or otherwise, and provided further that (a) Owner
shall not unreasonably interfere with or interrupt the business
operations of Tenant within the Demised Premises; (b) Owner
shall not thereby reduce Tenant’s usable space (except to a
de minimis extent); (c) Owner shall box in any
of the same installed adjacent to existing walls, floors or
ceilings, with construction materials substantially similar to
those existing at the time in the affected areas of the Demised
Premises; and (d) Owner shall repair all damage caused by the
same and restore such areas of the Demised Premises to the prior
existing condition except as provided in this sentence. Throughout
the term hereof, Owner shall have the right to enter the demised
premises at reasonable hours (provided Owner shall use commercially
reasonable efforts to minimize the disruption of Tenant’s use
or occupancy of the Demised Premises). for the purpose of showing
the same to prospective purchasers or mortgagees of the building,
and during the last six months of the term, for the purpose of
showing the same to prospective tenants. If Tenant is not present
to open and permit an entry into the demised premises, Owner or
Owner’s agents may enter the same whenever such entry may be
necessary or permissible by master key or forcibly, and provided
reasonable care is exercised to safeguard Tenant’s property,
such entry shall not render Owner or its agents liable therefor,
nor in any event shall the obligations of Tenant hereunder be
affected. In connection with any such entry, except in the case of
an emergency, Owner shall give Tenant reasonable prior written
notice and, if required by Tenant, Owner shall be accompanied by a
representative of Tenant provided such representative is made
available. All work done during the course of such entry must be
done by Owner in a good and workerlike manner, with due diligence
and in an manner reasonably intended to minimize the interference
with Tenant’s ability to use the Demised Premises as
contemplated by this Lease. If during the last month of the term
Tenant shall have removed all or substantially all of
Tenant’s property therefrom, Owner may immediately enter,
alter, renovate or redecorate the demised premises without
limitation or abatement of rent, or incurring liability to Tenant
for any compensation, and such act shall have no effect on this
lease or Tenant’s obligations hereunder.
Vault, Vault Space, Area:
14. No vaults, vault space or area, whether or not enclosed
or covered, not within the property line of the building, is leased
hereunder, anything contained in or indicated on any sketch, blue
print or plan, or anything contained elsewhere in this lease to the
contrary notwithstanding. Owner makes no representation as to the
location of the property line of the building. All vaults and vault
space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such
license be revoked, or if the amount of such space or area be
diminished or required by any federal, state or municipal authority
or public utility, Owner shall not be subject to any liability, nor
shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction. Any tax, fee
or charge of municipal authorities for such vault or area shall be
paid by Tenant.
Occupancy:
15. Tenant will not at any time use or occupy the demised
premises in violation of the certificate of occupancy issued for
the building of which the demised premises are a part. Tenant has
inspected the demised premises and accepts them as is, subject to
the riders annexed hereto with respect to Owner’s work, if
any. In any event, Owner makes no representation as to the
condition of the demised premises, except as expressly set forth in
this Lease, and Tenant agrees to accept the same subject to
violations, whether or not of record, that do not materially
adversely affect Tenant’s use or occupancy of the Demised
Premises. Owner shall not amend the certificate of occupancy during
the term of this Lease to preclude the use of the Demised Premises
for office use or to reduce the number of persons who may lawfully
occupy the Demised Premises.
Bankruptcy:
16. (a) Anything elsewhere in this lease to the
contrary notwithstanding, this lease may be cancelled by Owner by
the sending of a written notice to Tenant within a reasonable time
after the happening of any one or more of the following events:
(1) the commencement of a case in bankruptcy or under the laws
of any state naming Tenant as the debtor (provided that, if same is
involuntary, it is not dismissed within forty-five (45) days
after the commencement of such proceeding) or (2) the making
by Tenant of an assignment or any other arrangement for the benefit
of creditors under any state statute. Neither Tenant nor any person
claiming through or under Tenant, or by reason of any statute or
order of court, shall thereafter be entitled to possession of the
premises demised but shall forthwith quit and surrender the demised
premises. If this lease shall be assigned in accordance with its
terms, the provisions of this Article 16 shall be applicable
only to the party then owning Tenant’s interest in this
lease.
(b) it
is stipulated and agreed that in the event of the termination of
this lease pursuant to (a) hereof, Owner shall forthwith,
notwithstanding any other provisions of this lease to the contrary,
be entitled to recover from Tenant as and for liquidated damages,
an amount equal to the difference between the rent reserved
hereunder for the unexpired portion of the term demised and the
fair and reasonable rental value of the demised premises for the
same period. In the computation of such damages the difference
between any installment of rent becoming due hereunder after the
date of termination, and the fair and reasonable rental value of
the demised premises for the period for which such installment was
payable, shall be discounted to the date of termination at the rate
of four percent (4%) per annum. If such demised premises or any
part thereof be re-let by the Owner for the unexpired term of said
lease, or any part thereof, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the amount
of rent reserved upon such re-letting shall be deemed to be the
fair and reasonable rental value for the part or the whole of the
demised premises so re-let during the term of the re-letting.
Nothing herein contained shall limit or prejudice the right of the
Owner to prove for and obtain as liquidated damages, by reason of
such termination, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing
the proceedings in which, such damages are to be proved, whether or
not such amount be greater, equal to, or less than, the amount of
the difference referred to above.
Default:
17. (1) If Tenant defaults in fulfilling any of the
covenants of this lease; or if any execution or attachment shall be
issued against Tenant or any of Tenant’s property, whereupon
the demised premises shall be taken or occupied by someone other
than Tenant; or if this lease be rejected under $365 of Title 11 of
the U.S. Code (Bankruptcy Code); then, in any one or more of such
events, upon Owner serving a written thirty (30) days (or, for
any monetary default, five (5) days) notice upon Tenant
specifying the nature of said default, and upon the expiration of
said five (5) days in the case of a monetary default or thirty
(30) days (as to non-monetary defaults), if Tenant shall have
failed to comply with or remedy such default, or if the said
default or omission complained of shall be a non-monetary default
and of a nature that the same cannot be completely cured or
remedied within said thirty (30) period, and if Tenant shall not
have diligently commenced curing such default within such thirty
(30) period, and shall not thereafter with reasonable
diligence and in good faith, proceed to remedy or cure such
default, then Owner may serve a written five (5) days notice
of cancellation of this lease upon Tenant, and upon the expiration
of said five (5) days this lease and the term thereunder shall
end and expire as fully and completely as if the expiration of such
five (5) day period were the day herein definitely fixed for
the end and expiration of this lease and the term thereof, and
Tenant shall then quit and surrender the demised premises to Owner,
but Tenant shall remain liable as hereinafter provided.
(2) If
the notice provided for in (1) hereof shall have been given,
and the term shall expire as aforesaid; then, and in any of such
events, Owner may without notice, re-enter the demised premises
either by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or
other occupant of the demised premises, and remove their effects
and hold the demised premises as if this lease had not been made,
and Tenant hereby waives the service of notice of intention to
re-enter or to institute legal proceedings to that end. If Tenant
shall make default hereunder prior to the date fixed as the
commencement of any renewal or extension of this lease, Owner may
cancel and terminate such renewal or extension agreement by written
notice.
Remedies of Owner and Waiver of Redemption:
18. In case of any such default, re-entry, expiration and/or
dispossess by summary proceedings or other wise, (a) the rent
shall become due thereupon and be paid up to the time of such
re-entry, dispossess and/or expiration, (b) Owner may re-let
the demised premises or any part or parts thereof, either in the
name of Owner or otherwise, for a term or terms, which may at
Owner’s option be less than or exceed the period which would
otherwise have constituted the balance of the term of this lease,
and may grant concessions or free rent or charge a higher rental
than that in this lease, and/or (c) Tenant or the legal
representatives of Tenant shall also pay to Owner as liquidated
damages for the failure of Tenant to observe and perform said
Tenant’s covenants herein contained, any deficiency between
the rent hereby reserved and/or covenanted to be paid and the net
amount, if any, of the rents collected on account of the lease or
leases of the demised premises for each month of the period which
would otherwise have constituted the balance of the term of this
lease. The failure of Owner to re-let the demised premises, or any
part or parts thereof, shall not release or affect Tenant’s
liability for damages. In computing such liquidated damages there
shall be added to the said deficiency such reasonable expenses as
Owner may incur in connection with re-letting, such, as legal
expenses, reasonable attorneys fees, brokerage, advertising and for
keeping the demised premises in good order or for preparing the
same for re-letting. Any such liquidated damages shall be paid in
monthly installments by Tenant on the rent day specified in this
lease, and any suit brought to collect the amount of the deficiency
for any month shall not prejudice in any way the rights of Owner to
collect the deficiency for any subsequent month by a similar
proceeding. Owner, in putting the demised premises in good order or
preparing the same for re-rental may, at Owner’s option, make
such alterations, repairs, replacements, and/or decorations in the
demised premises as Owner, in Owner’s sole judgement,
considers advisable and necessary for the purpose of re-letting the
demised premises, and the making of such alterations, repairs,
replacements, and/or decorations shall not operate or be construed
to release Tenant from liability hereunder as aforesaid. Owner
shall in no event be liable in any way whatsoever for failure to
re-let the demised premises, or in the event that the demised
premises are re-let, for failure to collect the rent thereof under
such re-letting, and in no event shall Tenant be entitled to
receive any excess, if any, of such net rents collected over the
sums payable by Tenant to Owner hereunder. In the event of a breach
or threatened breach by Tenant of any of the covenants or
provisions hereof, Owner shall have the right of injunction and the
right to invoke any remedy allowed at law or in equity as if
re-entry, summary proceedings and other remedies were not herein
provided for, Mention in this lease of any particular remedy, shall
not preclude Owner or Tenant from any other remedy, in law or in
equity (except to the extent such remedy is expressly precluded by
this Lease). Tenant hereby expressly waives any and all rights or
redemption granted by or under any present or future laws in the
event of Tenant being evicted or dispossessed for any cause, or in
the event of Owner obtaining possession of the demised premises, by
reason of the violation by Tenant of any of the covenants and
conditions of this lease, or otherwise.
Fees
and Expenses:
19. If Tenant shall default in the observance or performance
of any term or covenant on Tenant’s part to be observed or
performed under, or by virtue of, any of the terms or provisions in
any article of this lease, after notice, if required, and upon
expiration of any applicable grace period, if any, (except in an
emergency), then, unless otherwise provided elsewhere in this
lease, Owner may immediately, or at any time thereafter and without
notice, perform the obligation of Tenant thereunder. If Owner, in
connection with the foregoing, or in connection with any default by
Tenant in the covenant to pay rent hereunder, makes any
expenditures or incurs any obligations for the payment of money,
including but not limited to reasonable attorneys’ fees, in
instituting, prosecuting or defending any action or proceeding, and
prevails in any such action or proceeding, then Tenant will
reimburse Owner for such sums so paid, or obligations incurred,
with interest and costs. The foregoing expenses incurred by reason
of Tenant’s default shall be deemed to be additional rent
hereunder, and shall be paid by Tenant to Owner within ten
(10) days of rendition of any bill or statement to Tenant
therefor. If Tenant’s lease term shall have expired at the
time of making of such expenditures or incurring of such
obligations, such sums shall be recoverable by Owner, as
damages.
Building Alterations and Management:
20. Owner shall have the right at any time without the same
constituting an eviction and without incurring liability to Tenant
therefor, to change the arrangement and/or location of public
entrances, passageways, doors, doorways, corridors, elevators,
stairs, toilets or other public parts or the building, and to
change the name, number or designation by which the building may be
known provided Tenant’s access to the Demised Premises is not
adversely affected thereby except to a de minimis extent. There
shall be no allowance to Tenant for diminution of rental value and
no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner or other Tenants
making any repairs in the building or any such alterations,
additions and improvements provided the same is performed with due
diligence and in a manner reasonably intended to minimize
interference with Tenant’s use and enjoyment of the Demised
Premises, furthermore, Tenant shall not have any claim against
Owner by reason of Owner’s imposition of such reasonable
controls of the manner of access to the building by Tenant’s
social or business visitors as the Owner may deem necessary for the
security of the building and its occupants.
No
Representations Owner:
21. Neither Owner nor Owner’s agents have made any
representations or promises with respect to the by physical
condition of the building, the land upon which it is erected or the
demised premises, the rents, leases, expenses of operation or any
other matter or thing affecting or related to the demised premises,
except as herein expressly set forth, and no rights, easements or
licenses are acquired by Tenant by implication or otherwise, except
as expressly set forth in the provisions of this lease. Tenant has
inspected the building and the demised premises and is thoroughly
acquainted with their condition and agrees to take the same
“as-is”, and acknowledges that the taking of possession
of the demised premises by Tenant shall be conclusive evidence that
the said premises and the building of which the same form a part
were in good and satisfactory condition at the time such possession
was so taken, except as to latent defects. All understandings and
agreements heretofore made between the parties hereto are merged in
this contract, which alone fully and completely expresses the
agreement between Owner and Tenant, and any executory agreement
hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of it in whole or in part, unless such
executory agreement is in writing and signed by the party against
whom enforcement of the change, modification, discharge or
abandonment is sought.
End
of Term:
22. Upon the expiration or other termination of the term of
this lease, Tenant shall quit and surrender to Owner the demised
premises, “broom-clean”, in good order and condition,
damage by casualty or condemnation, ordinary wear and damages which
Tenant is not required to repair as provided elsewhere in this
lease excepted, and Tenant shall remove all its property to the
extent required hereunder. Tenant’s obligation to observe or
perform this covenant shall survive the expiration or other
termination of this lease. If the last day of the term of this
lease or any renewal thereof, falls on Sunday, this lease shall
expire at noon on the preceding Saturday, unless it be a legal
holiday, in which case it shall expire at noon on the preceding
business day.
Quiet Enjoyment:
23. Owner covenants and agrees with Tenant that as long as
Tenant is not in default, beyond any applicable notice and grace
periods, in observing and performing all the terms, covenants and
conditions, on Tenant’s part to be observed and performed,
Tenant may peaceably and quietly enjoy the premises hereby demised,
subject, never-
theless,
to the terms and conditions of this lease including, but not
limited to, Article 31 hereof, and to the ground leases,
underlying leases and mortgages hereinbefore mentioned.
Failure to Give Possession:
24. Tenant acknowledges that Tenant is currently in
possession of the entirety of the Demised Premises pursuant to the
Existing Lease (as defined in Article 63 below). The
provisions of this article are intended to constitute “an
express provision to the contrary” within the meaning of
Section 223-a of the New York Real Property Law.
No
Waiver:
25. The failure of Owners or Tenant, as the case may be, to
seek redress for violation of, or to insist upon the strict
performance of, any covenant or condition of this lease or of any
of the Rules or Regulations, set forth or hereafter adopted by
Owner, shall not prevent a subsequent act which would have
originally constituted a violation from having all the force and
effect of an original violation. The receipt by Owner or the
payment by Tenant of rent and/or additional rent with knowledge of
the breach of any covenant of this lease shall not be deemed a
waiver of such breach, and no provision of this lease shall be
deemed to have been waived by Owner or Tenant, as the case may be,
unless such waiver be in writing signed by Owner or Tenant, as the
case may be. No payment by Tenant or receipt by Owner of a lesser
amount than the monthly rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement of any check or any letter
accompanying any check or payment as rent be deemed an accord and
satisfaction, and Owner may accept such check or payment without
prejudice to Owner’s right to recover the balance of such
rent or pursue any other remedy in this lease provided. No act or
thing done by Owner or Owner’s agents during the term hereby
demised shall be deemed an acceptance of a surrender of the demised
premises, and no agreement to accept such surrender shall be valid
unless in writing signed by Owner. No employee of Owner or
Owner’s agent shall have any power to accept the keys of said
premises prior to the termination of the lease, and the delivery of
the keys to any such agent or employee shall not operate as a
termination of the lease or a surrender of the demised
premises.
Waiver of Trial by Jury:
26. It is mutually agreed by and between Owner and Tenant
that the respective parties hereto shall, and they hereby do, waive
trial by jury in any action proceeding or counterclaim brought by
either of the parties hereto against the other (except for personal
injury or property damage) on any matters whatsoever arising out
of, or in any way connected with, this lease, the relationship of
Owner and Tenant, Tenant’s use of, or occupancy of, the
demised premises, and any emergency statutory or any other
statutory remedy.
Inability to Perform:
27. This Except as otherwise expressly provided in this
Lease, this lease and the obligation of Tenant to pay rent
hereunder and perform all of the other covenants and agreements
hereunder on part of Tenant to be performed shall in no wise be
affected, impaired or excused because Owner is unable to fulfill
any of its obligations under this lease, or to supply, or is
delayed in supplying, any service expressly or impliedly to be
supplied, or is unable to make, or is delayed in making, any
repair, additions, alterations, or decorations, or is unable to
supply, or is delayed in supplying, any equipment, fixtures, or
other materials, if Owner is prevented or delayed from so doing by
reason of strike or labor troubles or any cause whatsoever
including, but not limited to, government preemption or
restrictions or by reason of any rule, order or regulation of any
department or subdivision thereof of any government agency, or by
reason of the conditions which have been or are affected, either
directly or indirectly, by war or other emergency.
Bills and Notices:
28.
(Intentionally Omitted)
Services Provided by Owners:
29. As long as this lease shall be in full force and effect,
Owner shall provide (at Owner’s cost and expense) (a) an
adequate quantity of hot and cold water for cleaning, drinking, and
core lavatory purposes (including the supply of water to pantry
areas in the Demised Premises, but excluding any cafeteria or
restaurant), 24 hours a day, 7 days a week, to the Demised
Premises (it being understood and agreed that if Tenant requires
water for any other purpose in the Demised Premises or in
quantities in excess of that required for normal office occupancy
and Owner (acting reasonably) consents to such use or if Tenant
uses or consumes water for any other purposes or in unusual
quantities (of which fact Owner shall be the sole judge), Owner may
install a water meter at Tenant’s expense, which Tenant shall
thereafter maintain at Tenant’s expense in good working order
and repair, to register such water consumption, and Tenant shall
pay for water consumed as shown on said meter as additional rent,
but only to the extent of such excess water usage, within twenty
(20) days after Tenant’s receipt of bills therefor, in
an amount equal to 105% of the charge actually paid by Owner to the
entity furnishing such quantities of water; and; (b) cleaning
service for the demised premises on business days at Owner’s
expense (including, but not limited to, trash removal and exterior
window washing) as more particularly described in the Cleaning
Specification annexed hereto as Exhibit B to this Lease
(subject to Section 57B), and for the common areas of the
Building, the Building’s exterior and the sidewalks; (c)
Subject to Section 41B hereof, Owner reserves the right to
stop services of the heating, elevators, plumbing,
air-conditioning, electric, power systems or cleaning or other
services, if any, when necessary by reason of accident, or for
repairs, alterations, replacements or improvements necessary or
desirable in the reasonable judgment of Owner, or by reason of
fire, storm, explosion, strike, lockout, labor dispute, casualty,
lack or failure of sources or supply of fuel, act of God, act of a
public enemy, riot, interference by civil or military authorities,
or by reason of any other cause beyond Owner’s control, or
for emergency or for inspection or cleaning, for as long as may be
reasonably required by reason thereof. If the building of which the
demised premises are a part supplies manually operated elevator
service, Owner at any time may substitute automatic control
elevator service and proceed diligently with alterations necessary
therefor without in any wise affecting this lease or the
obligations of Tenant hereunder.
Captions:
30. The Captions are inserted only as a matter of
convenience and for reference, and in no way define, limit or
describe the scope of this lease nor the intent of any provisions
thereof.
Definitions:
31. The term “office,” or “offices”,
wherever used in this lease, shall not be construed to mean
premises used as a store or stores, for the sale or display, at any
time, of goods, wares or merchandise, of any kind, or as a
restaurant, shop, booth, bootblack or other stand, barber shop, or
for other similar purposes, or for manufacturing. The term
“Owner” means a landlord or lessor, and as used in this
lease means only the owner, or the mortgagee in possession for the
time being, of the land and building (or the owner of a lease of
the building or of the land and building) of which the demised
premises form a part, so that in the event of any sale or sales of
said land and building, or of said lease, or in the event of a
lease of said building, or of the land and building, the said Owner
shall be, and hereby is, entirely freed and relieved of all
covenants and obligations of Owner hereunder, accruing after any
such sale or lease of the entire Building or assignment of such
lease and it shall be deemed and construed without further
agreement between the parties or their successors in interest, or
between the parties and the purchaser, at any such sale, or the
said lessee of the building, or of the land and building, that the
purchaser or the lessee of the building has assumed and agreed to
carry out any and all covenants and obligations of Owner,
hereunder. The words “re-enter” and
“re-entry” as used in this lease are not restricted to
their technical legal meaning. The term "Lease" whenever used in
this Lease shall mean the pre-printed portion of this Lease
together with these inserts and the Rider attached thereto.
Adjacent Excavation-Shoring:
32. If an excavation shall be made upon land adjacent to the
demised premises, or shall be authorized to be made. Tenant shall
afford to the person causing or authorized to cause such
excavation, a license to enter upon the demised premises for the
purpose of doing such work as said person shall deem necessary to
preserve the wall or the building, of which demised premises from a
part, from injury or damage, and to support the same by proper
foundations, without any claim for damages or indemnity against
Owner, or diminution or abatement of rent.
Rules and Regulations:
33. Tenant and Tenant’s servants, employees, agents,
visitors, and licensees shall observe faithfully, and comply
strictly with, the Rules and Regulations and such other and further
reasonable Rules and Regulations as Owner or Owner’s agents
may from time to time adopt. At least ten (10) days prior
written notice in accordance with Article 58 of any additional
Rules or Regulations shall be given. In case Tenant disputes the
reasonableness of any additional Rules or Regulations hereafter
made or adopted by Owner or Owner’s agents, the parties
hereto agree to submit the question of the reasonableness of such
Rules or Regulations for decision to the New York office of the
American Arbitration Association, whose determination shall be
final and conclusive upon the parties hereto. The right to dispute
the reasonableness of any additional Rules or Regulations upon
Tenant’s part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing, upon Owner, within
fifteen (15) days after the giving of notice thereof. Nothing
in this lease contained shall be construed to impose upon Owner any
duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease, as against any other
tenant, and Owner shall not be liable to Tenant for violation of
the same by any other tenant, its servants, employees, agents,
visitors or licensees. Owner shall enforce the Rules and
Regulations against Tenant and the other occupants of the Building
in a non-discriminatory manner. In the event of any conflict or
inconsistency between the provisions of this Lease and of any of
the Rules and Regulations, the provisions of this Lease shall
control.
Security:
34. Tenant has deposited with Owner the sum required by
Article 59 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 (beyond
applicable notice and cure periods) 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, Owner may use, apply
or retain the whole or any part of the security so deposited 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 Owner may 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 in the re-letting of the demised premises,
whether such damages or deficiency accrued before or after summary
proceedings or other re-entry by Owner. 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 within forty-five (45) days after
the date fixed as the end of the lease and after delivery of entire
possession of the demised premises to Owner. In the event of a sale
of the land and building, or leasing of the building, of which the
demised premises form a part, Owner shall transfer the security to
the vendee or lessee, and owner shall thereupon be released by
Tenant from all liability for the return of such security; and
Tenant agrees to look to the new Owner
solely
for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made
of the security to a new Owner. Tenant further covenants that it
will not assign or encumber, or attempt to assign or encumber, the
monies deposited herein as security, and that neither Owner nor its
successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance.
Estoppel Certificates:
35. (Intentionally
Omitted)
Successors and Assigns:
36. The covenants,
conditions and agreements contained in this lease shall bind and
inure to the benefit of Owner and Tenant and their respective
heirs, distributees, executors, administrators, successors, and
except as otherwise provided in this lease, their assigns. Tenant
shall look only to Owner’s estate and interest in the land
and building, for the satisfaction of Tenant’s remedies for
the collection of a judgment (or other judicial process) against
Owner in the event of any default by Owner hereunder, and no other
property or assets of such Owner (or any partner, member, officer
or director thereof, disclosed or undisclosed), shall be subject to
levy, execution or other enforcement procedure for the satisfaction
of Tenant’s remedies under, or with respect to, this lease,
the relationship of Owner and Tenant hereunder, or Tenant’s
use and occupancy of the demised premises.
[SEE
ATTACHED RIDER HEREBY MADE A PART HEREOF]
IN
WITNESS WHEREOF the parties hereto have duly executed this Lease as
of the day and year first above written.
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| LANDLORD: |
FIFTH AND 38TH LLC, a Delaware limited
liability
company
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By: |
/s/ Michael Green |
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Name: |
Michael Green |
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Title: |
President |
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| TENANT: |
ATARI, INC.
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By: |
/s/ BRUNO BONNELL |
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Name: |
BRUNO BONNELL |
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Title: |
Chairman, CEO & Chief Creative
Officer |
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TENANT
ACKNOWLEDGMENT :
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STATE OF NEW
YORK
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ss.: |
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COUNTY OF NEW
YORK
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On the 20 day of June, in the
year 2006, before me, the undersigned, a notary public in and for
said State, personally appeared Bruno Bonnell, personally known to
me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the
instrument.
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/s/ NANCY SEAMAN |
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Notary Public
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NANCY SEAMAN
Notary Public, State Of New York
No. 01SE6074886
Qualified in Nassau County
Commission Expires May 27, 2008 |
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IMPORTANT-PLEASE READ
RULES AND REGULATIONS ATTACHED TO AND
MADE A PART OF THIS LEASE
IN ACCORDANCE WITH ARTICLE 33.
1. The
sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed
or encumbered by Tenant or used for any purpose other than for
ingress or egress from the demised premises, and for delivery of
merchandise and equipment in a prompt and efficient manner using
elevators and passageways designated for such delivery by Owner.
There shall not be used in any space, or in the public hall of the
building, either by Tenant or by jobbers or others in the delivery
or receipt of merchandise, any hand trucks, except those equipped
with rubber tires and sideguards. If said premises are situated on
the ground floor of the building, Tenant thereof shall further, at
Tenant’s expense, keep the sidewalk and curb in front of said
premises clean and free from ice, snow, dirt and rubbish.
2. The
water and wash closets and plumbing fixtures shall not be used for
any purposes other than those for which they were designed or
constructed, and no sweepings, rubbish, rags, acids or other
substances shall be deposited therein, and the expense of any
breakage, stoppage, or damage resulting from the violation of this
rule shall be borne by the Tenant, whether or not caused by the
Tenant, or its clerks, agents, employees or visitors.
3. No
carpet, rug or other article shall be hung or shaken out of any
window of the building and Tenant shall not sweep or throw, or
permit to be swept or thrown, from the demised premises any dirt or
other substances into any of the corridors or halls, elevators, or
out of the doors or windows or stairways of the building, and
Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in the demised premises, or permit or
suffer the demised premises to be occupied or used in a manner
offensive or objectionable to Owner or other occupants of the
building by reason of noise, odors, and/or vibrations, or interfere
in any way with other tenants or those having business therein, nor
shall any bicycles, vehicles, animals, fish, or birds be kept in or
about the building. Smoking or carrying lighted cigars or
cigarettes in the elevators of the building is prohibited.
4. No
awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of Owner.
5. No
sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on any part of the outside
of the demised premises or the building, or on the inside of the
demised premise if the same is visible from the outside of the
demised premises, without the prior written consent of Owner,
except that the name of Tenant may appear on the entrance door of
the demised premises. In the event of the violation of the
foregoing by Tenant, Owner may remove same without any liability,
and may charge the expense incurred by such removal to Tenant.
Interior signs on doors and directory tablet shall be inscribed,
painted or affixed for Tenant by Owner at the expense of Tenant,
and shall be of a size, color and style acceptable to Owner.
6.
Tenant shall not mark, paint, drill into, or in any way deface, any
part of the demised premises or the building of which they form a
part, except in connection with normal decoration of the Demised
Premises or any Alteration permitted hereunder. No boring, cutting
or stringing of wires shall be permitted, except with the prior
written consent of Owner, and as Owner may direct. Tenant shall not
lay linoleum, or other similar floor covering, so that the same
shall come in direct contact with the floor of the demised
premises, and, if linoleum or other similar floor covering is
desired to be used, an interlining of builder’s deadening
felt shall be first affixed to the floor, by a paste or other
material, soluble in water, the use of cement or other similar
adhesive material being expressly prohibited.
7. No
additional locks or bolts of any kind shall be placed upon any of
the doors or windows by Tenant, nor shall any changes be made in
existing locks or mechanism thereof. Tenant must, upon the
termination of his tenancy, restore to Owner all keys of stores,
offices and toilet rooms, either furnished to, or otherwise
procured by, Tenant, and in the event of the loss of any keys, so
furnished, Tenant shall pay to Owner the cost thereof.
8.
Freight, furniture, business equipment, merchandise and bulky
matter of any description shall be delivered to and removed from
the demised premises only on the freight elevators and through the
service entrances and corridors, and only during hours and in a
manner reasonably approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude
from the building all freight which violates any of these Rules and
Regulations of the lease, or which these Rules and Regulations are
a part.
9.
Canvassing, soliciting and peddling in the building is prohibited
and Tenant shall cooperate to prevent the same.
10.
Owner reserves the right to exclude from the building all persons
who do not present a pass to the building signed by Owner. Owner
will furnish passes to persons for whom Tenant requests same in
writing. Tenant shall be responsible for all persons for whom he
requests such pass, and shall be liable to Owner for all acts of
such persons. Tenant shall not have a claim against Owner by reason
of Owner excluding from the building any person who does not
present such pass.
11.
Owner shall have the right to prohibit any advertising by Tenant
which in Owner’s reasonable opinion tends to impair the
reputation of the building or its desirability as a building for
offices, and upon written notice from Owner, Tenant shall refrain
from or discontinue such advertising.
12.
Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible, explosive, or
hazardous fluid, material, chemical or substance, except such
ordinary quantities as are customarily maintained in office
premises or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors, to permeate
in, or emanate from, the demised premises.
13. If
the building contains central air conditioning and ventilation,
Tenant agrees to keep all windows closed at all times and to abide
by all rules and regulations issued by Owner with respect to such
services. Tenant shall cooperate with Owner in obtaining maximum
effectiveness of the cooling system by lowering and closing
venetian blinds and/or drapes and curtains when the sun’s
rays fall directly on the windows of the demised premises.
14.
Tenant shall not move any safe, heavy machinery, heavy equipment,
bulky matter, or fixtures into or out of the building without
Owner’s prior written consent. If such safe, machinery,
equipment, bulky matter or fixtures requires special handling, all
work in connection therewith shall comply with the Administrative
Code of the City of New York and all other laws and regulations
applicable thereto, and shall be done during such hours as Owner
may designate.
15.
Refuse and Trash. (1) Compliance by Tenant. Tenant covenants
and agrees, at its sole cost and expense, to comply with all
present and future laws, orders, and regulations, of all state,
federal, municipal, and local governments, departments, commissions
and boards regarding the collection, sorting, separation and
recycling of waste products, garbage, refuse and trash. Tenant
shall sort and separate such waste products, garbage, refuse and
trash into such categories as provided by law. Each separately
sorted category of waste products, garbage, refuse and trash shall
be placed in separate receptacles reasonably approved by Owner.
Such separate receptacles may, at Owner’s option, be removed
from the demised premises in accordance with a collection schedule
prescribed by law. Tenant shall remove, or cause to be removed by a
contractor acceptable to Owner, at Owner’s sole discretion,
such items as Owner may expressly designate. (2) Owner’s
Rights in Event of Noncompliance. Owner has the option to refuse to
collect or accept from Tenant waste products, garbage, refuse or
trash (a) that is not separated and sorted as required by law
or (b) which consists of such items as Owner may expressly
designate for Tenant’s removal, and to require Tenant to
arrange for such collection at Tenant’s sole cost and
expense, utilizing a contractor satisfactory to Owner. Tenant shall
pay all costs, expenses, fines, penalties, or damages that may be
imposed on Owner or Tenant by reason of Tenant’s failure to
comply with the provisions of this Building Rule 15, and, at
Tenant’s sole cost and expense, shall indemnity, defend and
hold Owner harmless (including reasonable legal fees and expenses)
from and against any actions, claims and suits arising from such
noncompliance, utilizing counsel reasonably satisfactory to
Owner.
ADDITIONAL RULES AND REGULATIONS ATTACHED TO AND MADE A
PART OF THIS LEASE IN ACCORDANCE WITH ARTICLE 33
No
tenant shall obtain for use upon the demised premises ice, drinking
water, towel and other similar services, or accept barbering or
bootblacking services in the demised premises, except from persons
reasonably approved by Owner and at hours and under regulations
fixed by Owner. Canvassing, soliciting and peddling in the building
is prohibited and each tenant shall cooperate to prevent the
same.
Any
person whose presence in the building at any time shall, in the
reasonable judgment of Owner, be prejudicial to the safety,
character, security, reputation or interests of the building or the
tenants of the building may be denied access to the building or may
be ejected from the building. In the event of invasion, riot,
public excitement or other commotion, Owner may prevent all access
to the building during the continuance of the same by closing the
doors or otherwise, for the safety of tenants and the protection of
property in the building.
The
sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public
places in the building shall not be covered or obstructed by any
tenant, nor shall any bottles, parcels, or other articles be placed
on the window sills.
No
showcases, merchandise, furniture or other articles shall be put in
front of or affixed to any part of the exterior of the building,
nor placed in the common halls, corridors or vestibules without the
prior written consent of Owner.
No
bicycles, vehicles or animals, other than seeing-eye dogs, of any
kind shall be brought into or kept in or about the building and/or
the demised premises.
No
tenant shall engage or pay any employees on the demised premises,
except those actually working for such tenant on the demised
premises, nor advertise for laborers giving an address at the
demised premises.
Each
tenant, before closing and leaving the demised premises at any
time, shall close all windows in the demised premises.
The
demised premises shall not be used for lodging or sleeping or for
any immoral or illegal purpose.
The
requirements of tenants will be attended to only upon application
at the office of the building. Employees of Owner shall not perform
any work or do anything outside of the regular duties, unless under
special instructions from the office of Owner.
Each
tenant shall, at the expense of such tenant, provide light, power
and water for the agents, contractors and employees of Owner, while
doing janitor service or other cleaning in the demised premises and
while making repairs or alterations in or to the demised
premises.
Whenever
any tenant shall submit to Owner any plan, agreement or other
document for the consent or approval of Owner, such tenant shall
pay to Owner, on demand, a processing fee in the amount of the
reasonable third party out-of-pocket fees for the review thereof,
including the services of any architect, engineer or attorney
employed by Owner to review such plan, agreement or document.
Owner
reserves the right to rescind, alter, waive or add, as to one or
more or all tenants, any reasonable rule or regulation at any time
prescribed for the building when, in the reasonable judgment of
Owner, Owner deems it necessary or desirable for the reputation,
safety, character, security, care, appearance or interest of the
building, or the preservation of good order therein, or the
operation or maintenance of the building, or the equipment thereof,
or the comfort of tenants or others in the building. No rescission,
alteration, waiver or addition of any rule or regulation in respect
of one tenant shall operate as a rescission, alteration or waiver
in respect of any other tenant. However, Owner shall not enforce
any of the Rules and Regulations in such manner as to discriminate
against Tenant or anyone claiming under or through Tenant.
No
noise, including, but not limited to, music, the playing of musical
instruments, recording, radio or television, which, in the
reasonable judgment of Owner, might disturb other tenants in the
building, shall be made or permitted by any tenant. Nothing shall
be done or permitted by any tenant which would impair or interfere
with the use or enjoyment by any other tenant or any other space in
the building. Tenant shall not be precluded from customary and
reasonable noise during reasonable periods of performance of
alterations, provided Tenant shall cause its contractors to use
their best efforts to minimize such noise during business hours on
business days.
In the
event of any conflict between the Lease and these Rules and
Regulations, the provisions of the Lease shall prevail.
RIDER TO
AGREEMENT OF LEASE DATED AS OF JUNE 21, 2006 BETWEEN FIFTH AND 38TH
LLC, AS OWNER, AND ATARI, INC., AS TENANT.
IN THE
EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN ANY PROVISION OF
THIS RIDER AND ANY PROVISION OF THE PRINTED FORM OF LEASE TO WHICH
THIS RIDER IS ATTACHED (OR THE INSERTS THERETO), THE PROVISION OF
THIS RIDER SHALL GOVERN.
37.
Basic Provisions: The definitions set forth above, herein
and in this Article 37 are an integral part of this Lease and
all of the terms hereof are incorporated into this Lease. In
addition to the other terms which are elsewhere defined in this
Lease, the following capitalized terms, whenever used in this
Lease, shall have the meanings set forth in this Article, and only
such meanings, unless such meanings are expressly contradicted,
limited or expanded elsewhere herein:
A. “ADA”
shall mean the Americans with Disabilities Act of 1990 (42 U.S.C.
§ 12101 et seq.), as amended from time to time.
B. “Additional
Insureds” shall mean Owner, Fifth and 38th Mezz LLC, Big
Apple Funding LLC, MHP 417 Fifth Avenue LLC, GEBAM, Inc., Murray
Hill Properties Real Estate Investment II L.P., Murray Hill GP, LLC
and Murray Hill Properties LLC and any additional or other parties
as Owner may designate from time to time upon not less than ten
(10) Business Days prior written notice to Tenant.
C. “Brokers”
shall mean Murray Hill Properties LLC and CB Richard Ellis,
Inc.
D. “Business
Day” shall mean any day excluding Saturdays, Sundays and all
days observed as holidays by either the federal or New York State
governments and/or any of the labor unions servicing the Building,
from time to time.
E. “Business
Hours” shall mean 8:00 a.m. to 6:00 p.m. on Business
Days.
F. “Commencement
Date” shall mean July 1, 2006.
G. “CPI”
shall mean the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the United States
Department of Labor, New York, N.Y. — Northeastern N.J. Area,
All Items (1982-84 = 100), or any successor or substitute index
thereto, appropriately adjusted.
H. “CPI
Increase” shall mean the percent of increase, if any, in the
CPI for the month in which the applicable date occurs over the CPI
for the month in which the Commencement Date occurs.
I. “Expiration
Date” shall mean the day preceding the fifteen (15) year
anniversary of the Commencement Date, or such other date upon which
the
2
Term
shall cease and expire pursuant to the provisions of this Lease
(pursuant to Article 17 or Article 60 or
otherwise).
J. “Fixed
Annual Rent” (subject to the Credit, as set forth in
Section 46C) shall be:
(i) With
respect to the Office Space:
(1) from
the Commencement Date through and including June 30, 2011, Two
Million Three Hundred Eighty Thousand and 00/100 Dollars
($2,380,000.00) per annum ($198,333.33 per month);
(2) from
July 1, 2011 through and including June 30, 2016, Two
Million Six Hundred Sixty-six Thousand and 00/100 Dollars
($2,660,000.00) per annum ($221,666.67 per month); and
(3) from
July 1, 2016 through and including the Expiration Date, Two
Million Nine Hundred Forty Thousand and 00/100 Dollars
($2,940,000.00) per annum ($245,000.00 per month).
(ii) With
respect to the Basement Space, from the Commencement Date through
and including the Expiration Date, at a rate per annum equal to Ten
Dollars ($10.00) per rentable square foot of Basement Space demised
at such time.
K. “Person”
(whether or not capitalized) shall mean any individual, sole
proprietorship, corporation, partnership, limited liability
company, unincorporated organization, mutual company, joint stock
company, trust, estate, union or other entity.
L. “Rent
Commencement Date” shall mean July 1, 2007.
M. “Tenant’s
Percentage” shall mean 17.00%.
38.
Escalation Payments.
A. Real
Estate Tax Increase Payment.
(1) For
each Tax Year (hereinafter defined) during the Term after the Base
Tax Year, Tenant shall pay, as Additional Rent (hereinafter
defined), the Tax Payment (hereinafter defined) for such Tax
Year.
(2) Tax
Definitions:
(a)
The term “Real Estate Taxes” shall mean (i) the
sum of the real estate taxes and assessments, Business Improvement
District taxes, charges and assessments, and special assessments
imposed upon the Building and the plot of land on which the
Building stands (the “Land”) and
3
any rights or
interests appurtenant thereto payable by Owner during any Tax Year
and (ii) reasonable attorneys’ fees, court, or other
administrative costs and disbursements incurred by Owner in
connection with any reduction in Real Estate Taxes which is
obtained prior to the date such Real Estate Taxes are payable. If
at any time during the Term the methods of taxation prevailing at
the time of the commencement thereof 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 real estate taxes, assessments, levies, impositions
or charges now levied, assessed or imposed, there shall be levied,
assessed or imposed a tax, assessment, levy, imposition or charge
wholly or partially as a capital levy or on the rents, licenses or
other charges received with respect to the Demised Premises, the
Land or the Building, then all such taxes, assessments, levies,
impositions or charges payable shall be deemed to be included
within the term “Real Estate Taxes” for the purposes
hereof. A copy of the tax bill of The City of New York or other
taxing authority imposing Real Estate Taxes on the Land or the
Building shall be sufficient evidence of the amount of Real Estate
Taxes and (to the extent available to Owner) shall be delivered to
Tenant together with the Tax Statement. Notwithstanding the fact
that the aforesaid Additional Rent is measured by Real Estate
Taxes, such amount 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 Real Estate
Taxes for any reason whatsoever. Real Estate Taxes also shall not
include any penalties or interest that derive from Owner’s
failure to pay Real Estate Taxes to the applicable governmental
authority on a timely basis, except to the extent (if any) that
Landlord incurred such penalties or interest because Tenant failed
to make a Tax Payment hereunder when due.
(b)
The term “Base Real Estate Taxes” shall mean the Real
Estate Taxes for the Base Tax Year.
(c)
The term “Base Tax Year” shall the twelve
(12) month period commencing on July 1, 2007 and ending
on June 30, 2008.
(d)
The term “Tax Year” shall mean each twelve
(12) month fiscal period commencing on July 1 and ending on
June 30 of the following year, any portion of which fiscal
period occurs during the Term.
(e)
The term “Tax Payment” shall mean Tenant’s
Percentage of the amount by which the Real Estate Taxes payable for
a Tax Year exceed the Base Real Estate Taxes, whether such increase
results from a higher tax rate or an increase in the assessed
valuation of the Land or the Building, or both, or from any other
cause or reason whatsoever.
(3) With
respect to each Tax Year after the Base Tax Year occurring in whole
or in part during the Term, Tenant shall pay to Owner the Tax
Payment in the manner described in this Section 38A(3) and in
accordance with Section 38C. At any time after the date which
is sixty (60) days prior to the commencement of each such Tax
Year, Owner may furnish to Tenant a written statement (a
“Tax
4
Statement”) setting forth the amount of Real Estate Taxes for
such Tax Year, the amount of Base Real Estate Taxes and the amount
of the Tax Payment for such Tax Year. Tenant shall pay the Tax
Payment for each such Tax Year to Owner as Additional Rent in two
(2) semi-annual installments, the first (i.e., with respect to
the first half of the Tax Year) within thirty (30) days after
receipt by Tenant of such Tax Statement (together with a copy of
the applicable tax bill) and the second (i.e., with respect to the
second half of the Tax Year) not later than thirty (30) days
prior to the date on which the payment of Real Estate Taxes with
respect to the second half of the Tax Year is due to the taxing
authority (it being understood that the second installment shall
reflect any corrected amount of Real Estate Taxes set forth on any
corrected Tax Statement, such that Tenant shall pay the entire Tax
Payment, as so corrected, for the applicable Tax Year).
(4) Only
Owner shall be entitled to institute tax reduction or other
proceedings to reduce the assessed valuation of the Land or the
Building. Should Owner be successful in any such reduction
proceedings and obtain a rebate for any Tax Year for which Tenant
has paid the Tax Payment, Owner, after deducting the expenses
incurred in obtaining such rebate (but only to the extent not
already included in Taxes) including, without limitation,
attorneys’ fees, court, or other administrative costs and
disbursements, shall credit Tenant’s Percentage of such
rebate against the next monthly installments of the Fixed Annual
Rent payable under this Lease (or, if this Lease shall terminate
prior to the full application of such credit, then Owner shall pay
any remaining portion of Tenant’s Percentage of such rebate
to Tenant). In the event that the assessed valuation which had been
utilized in computing the Base Real Estate Taxes is reduced (as a
result of settlement, final determination of legal proceedings or
otherwise) then (i) the Base Real Estate Taxes shall be
retroactively adjusted to reflect such reduction, (ii) all Tax
Payments theretofore made by Tenant shall be recalculated based on
the reduced amount of Base Real Estate Taxes and (iii) all
amounts due from Tenant to Owner by reason of such recalculation
shall be payable by Tenant to Owner within thirty (30) days
after the rendition of a bill therefor.
(5) If
the Building or Land is subject to any tax abatement during the
Base Tax Year or any succeeding Tax Year, the Taxes for the Base
Tax Year and each succeeding Tax Year shall be determined as if
such abatement were not applicable and the Building and Land were
fully assessed.
(6) If
any assessment may be paid in installments, only the installment(s)
actually paid in a particular Tax Year shall be included in Real
Estate Taxes for such Tax Year.
B.
Operating Expense Increase Payment.
(ii) For
each Operating Year (as hereinafter defined) during the Term,
Tenant shall pay, as Additional Rent, the Operating Payment (as
hereinafter defined) for such Operating Year, in accordance with
the further provisions of this Section 38B.
5
(iii) For
purposes hereof, the following definitions shall apply:
(1) The
term “Operating Year” shall mean calendar year 2007 and
each succeeding calendar year thereafter occurring in whole or in
part during the Term.
(2) The
term “Wage Rate” shall mean the undiscounted regular
hourly wage rate (excluding, however, fringe benefits) payable to
or in respect of Porters (as hereinafter defined) of Class A
office buildings in New York County, in effect as of January 1 of
the Operating Year in question, pursuant to agreement(s) (herein
individually or collectively called “Agreement”)
between the Real Estate Advisory Board on Labor Relations,
Incorporated (“RAB”) and Local 32B-32J of the Service
Employees International Union, AFL-CIO (“Local
32B-32J”) (or, if either or both of such entities is not in
existence or acting in respect of such matters, then, by any
successor(s) or substitute(s) performing similar functions).
(3) The
term “Class A office buildings” shall mean the
class of office buildings defined as such under the current
Agreement with Local 32B-32J.
(4) The
term “regular hourly wage rate” shall include all
payments of every kind (excluding, however, fringe benefits) then
payable to or in respect of Porters, computed on the basis of the
total annual amount payable to or in respect of Porters pursuant to
the Agreement, provided, however, if any union agreement shall
require the regular employment of Porters on days or during hours
when overtime or other premium pay rates are in effect, then the
“regular hourly wage rate,” as used above and subject
to the other adjustments provided for herein, shall be deemed to
mean the actual weekly wage rate, divided by the actual hours in a
calendar week during which Porters are required to be employed (if,
for example, as of the Commencement Date, an agreement between RAB
and Local 32B-32J shall require the regular employment of Porters
for forty (40) hours during a calendar week at a minimum
hourly wage rate of $3.00 for the first thirty (30) hours, and
premium or overtime hourly wage rate of $4.50 for the remaining ten
(10) hours, the minimum regular hourly wage rate under this
Article, as of the Commencement Date, shall be deemed to be the
total weekly wage rate of $135.00 divided by the total number of
required hours of employment, forty (40), or $3.375). If no
Agreement shall be in effect as of any such January 1 with
reference to which the regular hourly wage rate for Porters is to
be determined, then the applicable computations and payments under
this Lease shall be made upon the basis of the regular hourly wage
rate (determined in accordance with the preceding provisions of
this Article) being paid by Owner or by the contractor performing
the cleaning services for Owner on such January 1 to or in respect
of Porters, and thereafter appropriate retroactive adjustment shall
be made when the regular hourly wage rate payable to or in respect
of such Porters is determined pursuant to Agreement. For the
purposes hereof, if the regular hourly wage rate of Porters shall
increase during any Operating Year the regular hourly wage rate
“in effect as of January 1” of such Operating Year
shall be adjusted for the
6
portion
of the year for which the increase shall be effective. The Wage
Rate and Base Wage Rate shall be calculated by dividing the annual
undiscounted cost for a Porter receiving the regular hourly wage
rate, by 2,080 hours for each full calendar year involved. In
calculating the regular hourly wage rate Owner shall apply such
procedures and practices as are generally applied in such
calculations by the owners of Class A office buildings in the
midtown area of the County, City and State of New York, and any
dispute or controversy as to or relating to the calculation of the
“Wage Rate” shall be determined by arbitration, which
arbitration shall be by three independent arbitrators each of whom
shall have at least ten years’ experience in the supervision
of the operation and management of Class A office buildings in
New York County.
(5) The
term “Porters” shall mean that classification of
employee engaged in the general maintenance and operation of office
buildings currently classified as “others” in the
current Agreement, or failing such classification in any subsequent
Agreement, the most nearly comparable classification in such
Agreement.
(6) The
term “Base Wage Rate” shall mean the Wage Rate in
effect as of January 1, 2007.
(7) The
term “Wage Rate Multiple” shall mean 70,000.
(8) In
the event that the Wage Rate in effect as of January 1 of any
Operating Year commencing January 1, 2008 shall exceed the
Base Wage Rate, Tenant shall pay to Owner, as Additional Rent for
such Operating Year, an amount (the “Operating
Payment”) equal to the product obtained by multiplying
(a) the number of cents (including any fraction of a cent) by
which the Wage Rate exceeds the Base Wage Rate, by (b) the
Wage Rate Multiple. By or after the start of the Operating Year
commencing January 1, 2007 and by or after the start of each
Operating Year thereafter, Owner shall furnish to Tenant a
statement relating to such Operating Year and a statement of the
Base Wage Rate, showing the escalation, if any, which shall be due
hereunder from Tenant to Owner and the additional rent then payable
by Tenant to Owner shall be paid as provided below (each such
statement, an “Escalation Statement”). The obligation
of Tenant to pay additional rent pursuant to this Section 38B
is not predicated upon the rendition by Owner of any cleaning
service to the Premises or upon the employment by Owner of Porters
or cleaners or by the application to Owner or to the Building of
the collective bargaining agreements referred to above. Tenant
acknowledges that the payment of Additional Rent to Owner pursuant
to the provisions of this Section 38B is intended to be an
escalation payment to provide additional rent to Owner and is not a
measurement of actual increased costs incurred by Owner in the
operation of the Building.
(iv) Any
such adjustment payable by reason of the provisions of this
Section 38B shall commence to be payable in equal monthly
installments, as of the first day of the period commencing on or
after January 1, 2008 for which the Wage Rate shall exceed the
Base Wage Rate, and after Owner shall furnish
7
Tenant
with an Escalation Statement relating to such Operating Year, all
monthly installments of rental shall reflect one-twelfth (1/12) of
the annual amount of such adjustment until a new adjustment becomes
effective pursuant to the provisions of this Section 38B;
provided, however, that if said Escalation Statement is furnished
to Tenant after the commencement or effective date of any change in
the Wage Rate, there shall be due from Tenant to Owner within
thirty (30) days after such Escalation Statement, an amount
equal to the portion of such adjustment allocable to the period
prior to the date upon which said Escalation Statement is furnished
to Tenant. In the event that the Wage Rate shall be changed or
shall change more frequently than once a year, the adjustment
hereunder shall similarly be made by Owner in a supplemental
Escalation Statement furnished by Owner to Tenant, so as to reflect
such change in the monthly installments due hereunder, and to
reflect the effective date of each such change.
C.
All Escalation Payments.
(1) Subject
to Tenant’s rights as set forth herein to dispute the
correctness of any statement, bill or demand furnished by Owner
with respect to any item of Additional Rent provided for in this
Article 38, Tenant’s obligation to make any payment
provided for in this Article 38 shall be absolute and not
conditioned on the happening of any act, thing or occurrence,
including without limitation the time or timeliness at or with
which such statement, bill or demand is furnished to or made upon
Tenant. Owner’s failure during the Term to prepare and
deliver any statements or bills required to be delivered to Tenant
hereunder, or Owner’s failure to make a demand under this
Article 38 or under any other provisions of this Lease shall
not in any way be deemed to be a waiver of, or cause Owner to
forfeit or surrender its rights to collect, any Additional Rent
which may have become due pursuant to this Article 38 during
the Term. Except as otherwise expressly set forth above,
Tenant’s liability for the Additional Rent due under this
Article 38 and Owner’s obligation to make payments and
refunds to Tenant hereunder, shall continue unabated during the
remainder of the Term and shall survive the expiration or sooner
termination of this Lease.
(2) In
no event shall any adjustment of any payments payable by Tenant in
accordance with the provisions of this Article 38 result in a
decrease in Fixed Annual Rent nor shall any adjustment of any
Additional Rent payable by Tenant pursuant to any provision of this
Article 38 result in a decrease in any other Additional Rent
payable by Tenant pursuant to any other provision of this
Article 38 or any other provisions of this Lease, it being
agreed and understood that the payment of Additional Rent under
this Article 38 is an obligation supplemental to
Tenant’s obligations to pay Fixed Annual Rent and any
Additional Rent pursuant to any other provision of this
Lease.
(3) Notwithstanding
any provision hereof to the contrary, if a Tax Year or an Operating
Year shall end after the expiration or termination of the Term, the
Additional Rent payable by Tenant in respect thereof shall be
prorated to correspond to that portion of such year occurring
within the Term.
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(4) Owner’s
failure to render any Tax Statement or Escalation Statement with
respect to any Tax Year or Operating Year shall not prejudice
Owner’s right to thereafter render a Tax Statement or
Escalation Statement with respect thereto or with respect to any
subsequent Tax Year or Operating Year, nor shall the rendering of a
Tax Statement or Escalation Statement prejudice Owner’s right
to thereafter render a corrected Tax Statement or Escalation
Statement for that Tax Year or Operating Year. Nothing herein
contained shall restrict Owner from issuing a Tax Statement at any
time there is an increase in Real Estate Taxes during any Tax Year
or any time thereafter. Notwithstanding any provision of this
Article 38 to the contrary, if Owner renders a Tax Statement
or Escalation Statement (or correction thereto) to Tenant with
respect to any Tax Year or Operating Year more than twenty-four
(24) months after the last day thereof (except with respect to
any amounts for which Owner is first billed after the last day of
such Operating Year or Tax Year and for which Owner bills Tenant
within sixty (60) days after Owner’s receipt of such
bill), then Tenant shall not be obligated to pay any such amounts
(or corrected amounts) set forth therein that was not included in a
previous Tax Statement or Escalation Statement (or correction
thereto).
(5) Each
Tax Statement and each Escalation Statement shall be conclusive and
binding upon Tenant unless (i) Tenant shall notify Owner (on
or before the date that is the later of (x) the date which is
ninety (90) days after the end of the applicable fiscal or
calendar year to which such Tax Statement relates and (y) the
date which is ninety (90) days after Tenant’s receipt of such
Escalation Statement, as applicable), that Tenant disputes the
correctness thereof and stating in general terms how such statement
is claimed to be incorrect. Pending the determination of such
dispute, Tenant shall pay to Owner (as and when otherwise payable
to Owner under this Article 38) all Tax Payments and operating
payments (whether disputed or undisputed) in accordance with the
applicable Tax Statement or Escalation Statement (and, promptly
following the determination of such dispute, Owner shall refund or
credit any overpayment by Tenant).
(6) At
Tenant’s request, Owner shall provide Tenant with a copy of
any tax bill in question, together with a copy of such backup
information as shall be reasonably necessary so as to permit Tenant
to determine the accuracy of Owner’s calculation of the Tax
Statement. Tenant and its representatives shall agree to treat all
such information in a confidential manner.
(7) Tenant
shall pay to Owner upon demand, as Additional Rent, any occupancy
tax or rent tax now in effect or hereafter enacted, which Owner is
now or hereafter is required to pay with respect to the Demised
Premises or this Lease.
39.
Electric Current.
A. Tenant’s
use of electric energy in the Demised Premises shall not at any
time exceed the capacity of any of the electrical conductors and
equipment in or otherwise serving the Demised Premises, as set
forth in Section 39D. Should Owner consent to the installation
of additional risers or other equipment required
9
by
Tenant above the present capacity of the connections, risers,
switches, wiring installations or other electrical facilities
serving the Demised Premises, which consent shall not be
unreasonably withheld or delayed, same shall be provided by Owner
and the reasonable cost of such installation thereof shall be paid
by Tenant upon Owner’s demand. If Owner provides additional
electricity above the capacity of the existing transformers serving
the Demised Premises through a high voltage riser, Tenant shall pay
a one-time reasonable fee reasonably determined by Owner for the
right to each 200 additional amps. If Owner provides such
additional electricity, Tenant shall, at its sole cost and expense,
step down the voltage in the riser.
B. For
purposes of this Article 39:
(i) “Tenant’s
consumption” shall mean the kilowatt hours of electric
current consumed in the Office Space (exclusive of the HVAC System
(as hereinafter defined)), as measured by submeters through which
the electric current supplied to the Office Space is drawn, during
the Term, commencing immediately upon the Commencement Date (or, if
later, the installation and activation of the applicable
submeter).
(ii) “Rate”
shall mean the amount per kilowatt hour (including energy and
demand) that is charged by the public utility company supplying
electric current to the Building, at the average cost per kilowatt
hour at which Owner then purchases electricity utilized in the
Building for the same period from the utility company, taking into
consideration time of day rates, volume and other applicable
discounts. The Rate shall include taxes, energy charges, demand
charges, fuel adjustment charges, rate adjustment charges and other
charges actually imposed in connection therewith.
(iii) “Tenant’s
Cost” shall mean one hundred three percent (103%) of an
amount determined by applying the Rate to Tenant’s
consumption demand and hours of use.
C. (i) Submeters
shall measure the supply of electrical energy furnished to the
Office Space, exclusive of the HVAC System. Owner, at Owner’s
sole cost and expense shall keep all such submeters in good working
order and repair and if more than one (1) submeter is used
then Tenant shall have the right to install, at its own sole cost
and expense, a totalizer so that same approximates a single meter
charge. Owner shall, from time to time, furnish Tenant with a
statement indicating the appropriate period during which the
Tenant’s consumption was measured and the amount of
Tenant’s Cost payable by Tenant to Owner for furnishing
electrical current. Within thirty (30) days after receipt of each
such statement, Tenant shall pay the amount of Tenant’s Cost
set forth thereon to Owner as Additional Rent. If any tax is
imposed upon Owner’s receipts from the sale or resale of
electrical energy to Tenant by any federal, state, city or local
authority, the pro-rata share of such tax allocable to the
electrical energy service received by Tenant shall be passed onto
and paid by Tenant as Additional Rent if and to the extent
permitted by law (but without duplication of the amounts payable
pursuant to Section 39B above). If at any time any submeter is
out of
10
service
or requires repair, Tenant shall pay for electricity with respect
to the portion of the Demised Premises covered by such inoperable
submeter at a charge reasonably estimated by an independent
engineer designated by Owner and approved by Tenant (such approval
not to be unreasonably withheld or delayed) based on prior readings
of the particular inoperable submeter during comparable periods (or
otherwise fairly and appropriately adjusted), provided that pending
receipt of such estimate Tenant shall pay for electricity at a
charge reasonably estimated by Owner (with credit or debit, as
applicable, after receipt of the engineer’s estimate).
(ii) With
respect to the Basement Space, Tenant shall pay to Owner an annual
charge for electricity (the “Basement Electricity
Fee”) using a factor of One Dollar ($1.00) per rentable
square foot of such space, which factor was based on certain
mutually-acceptable theoretical assumptions incorporating
approximate estimates of the probable consumption of electrical
energy in such space assuming the use thereof in accordance with
this Lease and the cost of furnishing such electrical energy as of
the date of this Lease. At any time and from time to time during
the Term (but no more often than once per six (6) months),
Owner may have the Basement Electricity Fee then in effect adjusted
as reasonably determined by an independent engineer designated by
Owner and approved by Tenant (such approval not to be unreasonably
withheld or delayed) to take into account any increase in the rates
charged by the public utility serving the Building or any increase
in taxes based on the amounts charged by said public utility, since
the effective date of the Basement Electricity Fee then in effect
(taking into account any prior adjustments). Upon any determination
of a new Basement Electricity Fee, Owner shall deliver to Tenant a
statement in writing recomputing and adjusting the Basement
Electricity Fee, which statement shall include reasonably
sufficient detail to enable Tenant to verify the determination of
the amount of the adjustment referred to therein. The new Basement
Electricity Fee shall take effect on a day designated by Owner that
is not less than thirty (30) days after the date of such statement.
The parties shall cooperate in good faith to resolve any dispute
regarding such adjustment to the Basement Electricity Fee.
Notwithstanding the foregoing, each of Owner and Tenant shall have
the right to install (at the sole cost and expense of the party
pursuing such installation) a submeter to measure the use of
electrical energy furnished to the Basement Space, in which event
Tenant shall thereafter pay for electricity in the Basement Space
in the manner set forth in Section 39C(i) instead of through
the Basement Electricity Fee.
D. Owner
will provide a basic electric capacity of six (6) watts
(demand load) per rentable square foot in the Office Space,
exclusive of the floor air conditioning units servicing the Demised
Premises as of the Commencement Date (such units and any
replacements thereof, the “HVAC System”), and shall
furnish electric capacity to the HVAC System.
E. If
either the quantity or character of electrical service is changed
by the public utility corporation supplying electrical service to
the Building, or is no longer available or suitable for
Tenant’s requirements, no such change, unavailability or
unsuitability shall constitute an actual or constructive eviction,
in whole or in part, or entitle Tenant to any abatement or
diminution of rent, or relieve Tenant from any of its
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obligations under this Lease, or impose any liability upon Owner or
Owner’s agents unless such change, unavailability or
unsuitability (i) rend
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