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EX-10.58: AGREEMENT OF LEASE

Lease Agreement

EX-10.58: AGREEMENT OF LEASE | Document Parties: ATARI INC | ATARI, INC | FIFTH AND 38TH LLC | Murray Hill Properties LLC | New York, Inc | Real Estate Board You are currently viewing:
This Lease Agreement involves

ATARI INC | ATARI, INC | FIFTH AND 38TH LLC | Murray Hill Properties LLC | New York, Inc | Real Estate Board

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Title: EX-10.58: AGREEMENT OF LEASE
Governing Law: New York     Date: 9/18/2007
Industry: Software and Programming     Law Firm: Paul Weiss;Loeb Loeb     Sector: Technology

EX-10.58: AGREEMENT OF LEASE, Parties: atari inc , atari  inc , fifth and 38th llc , murray hill properties llc , new york  inc , real estate board
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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.
         
LANDLORD:  FIFTH AND 38TH LLC, a Delaware limited liability
     company
 
 
  By:   /s/ Michael Green    
    Name:   Michael Green   
    Title:   President   
 
TENANT:  ATARI, INC.
 
 
  By:   /s/ BRUNO BONNELL    
    Name:   BRUNO BONNELL   
    Title:   Chairman, CEO & Chief Creative Officer   
 
             
TENANT ACKNOWLEDGMENT :
           
 
STATE OF NEW YORK
    )      
 
    )     ss.:
COUNTY OF NEW YORK
    )      
     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.
         
  /s/ NANCY SEAMAN    
  Notary Public
 
 
  NANCY SEAMAN
Notary Public, State Of New York
No. 01SE6074886
Qualified in Nassau County
Commission Expires May 27, 2008  
 


 
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.


 
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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.

 


 
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          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

 

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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

 

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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

 

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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.

 

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                    (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

 

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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

 

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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

 

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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

 

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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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