NORWALK IMPROVEMENTS LLC, Landlord to TN TECHNOLOGIES, INC.

Exhibit 10.15

 

NORWALK IMPROVEMENTS LLC,

 

Landlord

 

to

 

TN TECHNOLOGIES, INC.

 

Tenant

 

 

Lease

 

 

Dated as of April 21, 1998

 

 

TABLE OF CONTENTS

 

 

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ii

 

iii

 

iv

 

v

 

EXHIBITS AND SCHEDULES

 

 

vi

 

INDEX OF DEFINED TERMS

 

 

vii

 

viii

 

ix

 

x

 

xi

 

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LEASE , dated as of April 21, 1998, between NORWALK IMPROVEMENTS LLC , a New York limited liability company (“ Landlord ”), whose address is c/o DLC Management Corp., 580 White Plains Road, Tarrytown, New York 10591, and TN TECHNOLOGIES, INC. , a Delaware corporation (“ Tenant ”), whose address is 400 Nyala Farms, Nyala Farm Road, Westport, Connecticut 06880.

 

W I T N E S S E T H:

 

Landlord and Tenant hereby covenant and agree as follows:

 

ARTICLE 1

 

PREMISES

 

1.01 Demise . Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, subject to the covenants and agreements contained in this Lease, the space (the “ Premises ”) consisting of the entire second (2nd), third (3rd) and fourth (4th) (also known as the “Penthouse”)) floors, substantially as shown on the plans annexed hereto as Exhibit A , in the building known as 230 East Avenue, Norwalk, Connecticut (the “ Building ”) on the land (the “ Land ”) more particularly described on Exhibit B annexed hereto. The term “ Real Property ” shall mean the Land and the Building and, upon Landlord’s acquisition of legal title thereto, 3 Rowan Street (as hereinafter defined). Landlord represents to Tenant that Landlord owns fee simple title to the Real Property on the date hereof.

 

1.02 Term . The term of this Lease (the “ Term ”) shall commence on the Term Commencement Date (as defined in Section 1.03(a) hereof) and shall end, unless sooner terminated or extended as herein provided, on the day immediately preceding the tenth (10th) anniversary of the Rent Commencement Date (as hereinafter defined) (the “ Term Expiration Date ”).

 

1.03 Term Commencement Date . (a) The term “ Term Commencement Date ” shall mean the date upon which (x) the Completion Date (as hereinafter defined) shall have occurred with respect to all of the items of Landlord’s Initial Work (as hereinafter defined) other than item 3(b) of Landlord’s Work (the “Initial AC Work”) and (y) Landlord shall have notified Tenant that Landlord has obtained the necessary approvals from the City of Norwalk for the use of the Premises for the purposes set forth in Section 1.05 hereof. Landlord shall use commercially reasonable efforts to cause the Term Commencement Date to occur on or before the ninetieth (90th) day after the date of this Lease. If (i) the Completion Date shall fail to have occurred on or before the applicable Outside Date (as hereinafter defined), subject to the extension for the period that such occurrence is prevented due to a Tenant’s Delay or Force Majeure event (as hereinafter defined) and (ii) Tenant shall have given Landlord written notice (the “ Self-Help Notice ”) of such failure within thirty (30) days after the Outside Date clearly stating “NOTICE OF FAILURE TO COMPLETE LANDLORD’S INITIAL WORK; LANDLORD’S FAILURE TO COMPLETE LANDLORD’S INITIAL WORK FOR MORE THAN THIRTY (30) ADDITIONAL DAYS SHALL ENTITLE TENANT TO EXERCISE ITS SELF-HELP RIGHT TO COMPLETE LANDLORD’S INITIAL WORK” or language to substantially similar effect and (iii) the Completion Date fails to occur within 30 days after Tenant gives the Self-Help Notice, then Tenant shall have the right (the “ Self-Help Right ”) to cure such failure by completing such uncompleted item(s) of Landlord’s Initial Work in the manner Landlord is required to perform the same and to recover its reasonable out-of-pocket costs actually paid to third parties to cause the Completion Date to occur by offsetting such costs against the first installments of Base Rent (as hereinafter defined) accruing hereunder; provided however , that Tenant shall provide Landlord with paid receipts and invoices and partial lien waivers for all such work performed by Tenant and a bill therefor and shall give Landlord at least thirty (30) days to pay Tenant such bill prior to Tenant exercising any such right of offset against Base Rent. In the event that Landlord asserts that the Completion Date has not

 

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occurred on or before the Outside Date by reason of a Force Majeure event, then Landlord shall (x) within three (3) business days thereafter, provide Tenant with a reasonably detailed explanation of why Tenant’s exercise of the Self-Help Right would not expedite the occurrence of the Completion Date and (y) diligently and continuously attempt to cause the Completion Date to occur as soon thereafter as reasonably practicable.

 

(b) The term “ Completion Date ” shall mean the date upon which Landlord notifies Tenant that Landlord’s Initial Work (as hereinafter defined) is completed in accordance with applicable Legal Requirements. The items of work set forth on Exhibit C annexed hereto shall be referred to herein as “ Landlord’s Work ”, and items 3, 4, 6(a), 7, 10, and 11(a) of Landlord’s Work shall be referred to herein as “ Landlord’s Initial Work ”. Landlord shall use all commercially reasonable efforts (i) to cause the Completion Date to occur on or before the applicable Outside Date, and its failure to do so shall constitute a Landlord’s Delay for purposes of Section 1.04 hereof, (ii) to complete the items of Landlord’s Work other than Landlord’s Initial Work on or before the two hundred tenth (210th) day after the date hereof, subject to extension for the period that such occurrence is prevented due to a Tenant’s Delay or Force Majeure event and (iii) to provide Tenant with at least fifteen (15) days advance notice of the Completion Date. If Landlord is delayed in completing Landlord’s Initial Work due to a Tenant’s Delay, then the Completion Date shall be deemed to be the date it would have occurred but for Tenant’s Delay, as determined by Landlord in its reasonable judgment. The term “ Outside Date ” shall mean (x) the 90th day after the date of this Lease with respect to all of the items of Landlord’s Initial Work other than the Initial AC Work and (y) the 120th day after the date of this Lease with respect to the Initial AC Work.

 

(c) The term “ Tenant’s Delay ” shall mean an actual delay that Landlord encounters in the performance of Landlord’s Work by reason of the act or omission of Tenant, including, without limitation, the following:

 

(i) any change in the Initial Plans and Specifications (as hereinafter defined) requested by Tenant that in fact causes a delay;

 

(ii) the performance of any work in the Premises by any agent or contractor employed by or on behalf of Tenant that causes a delay, or any failure to complete or delay in completion of such work;

 

(iii) any other act or omission of Tenant in violation of the Lease that causes a delay, including, without limitation, Tenant’s failure timely to submit any plans or specifications or revisions thereof.

 

1.04 Failure to Deliver Possession . If Landlord is unable to deliver possession of the Premises on the applicable Completion Date for any reason whatsoever, including, without limitation, that Landlord’s Initial Work has not been sufficiently completed to make the Premises ready for Tenant’s possession thereof pursuant to Section 1.03 hereof, a certificate of occupancy has not been procured or for any other reason (each, a “ Landlord’s Delay ”), then the validity of this Lease shall not be impaired under such circumstances. The Rent payable under Article 2 shall be fully abated if a Tenant’s Delay is not the cause, directly or indirectly, of such inability to deliver possession by the period of such inability beyond the Completion Date (other than with respect to the Initial AC Work). If permission is given to Tenant to enter into possession of the Premises or to occupy premises other than the Premises prior to the date specified as the Term Commencement Date, Tenant covenants and agrees that such occupancy shall be deemed to be under all the terms, covenants, conditions and provisions of this Lease.

 

1.05 Use . (a) The Premises shall be used and occupied solely by Tenant as general and executive offices and for no other purpose.

 

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(b) Tenant shall not use, suffer or permit the Premises or any part thereof to be used in any manner, or anything to be done therein, or suffer or permit anything to be brought into or kept therein, which would in any way (i) violate any of the provisions of any Superior Lease or Superior Mortgage (as such terms are defined in Section 6.01 hereof) of which Tenant has notice or any Legal Requirements (as defined in Section 4.06 hereof) in any material respect, (ii) make void or voidable any fire or liability insurance policy then in force with respect to any portion of the Real Property, (iii) make unobtainable from reputable insurance companies authorized to do business in Connecticut any fire insurance with extended coverage, or liability, elevator, boiler, machinery or other insurance required to be furnished by Landlord under the terms of any Superior Lease or Superior Mortgage at standard rates, (iv) cause physical damage to the Building or any part thereof, (v) constitute a public or private nuisance, (vi) impair the appearance, character or reputation of the Building, (vii) discharge objectionable fumes, vapors or odors into the Building air conditioning system or into the Building flues or vents not designed to receive them or otherwise in such manner as may cause a nuisance to other tenants or occupants, (viii) impair or interfere with beyond a de minimis extent any of the Building services or the proper and economic heating, cleaning, air conditioning or other servicing of the Building or the Premises beyond a de minimis extent or impair or interfere with the use of any of the other areas of the Building by, or annoy Landlord or any of the other tenants or occupants of the Building, (ix) increase the pedestrian traffic in and out of the Premises or the Building above an ordinary level for businesses of Tenant’s type, or (x) exceed the maximum floor loads of the Premises or the Building. Violation of this Section 1.05(b) shall be deemed a material default under this Lease.

 

1.06 No Representations by Landlord . Tenant hereby acknowledges that, except as expressly set forth in this Lease, including all Exhibits attached, as set or referred to herein, neither Landlord nor Landlord’s agents have made any representations or promises with respect to the physical condition of the Building, the Land or the Premises, or any other matter or thing affecting or related to the Premises. No rights, easements or licenses are acquired by Tenant by implication or otherwise except as expressly set forth in this Lease. Tenant has inspected the Building and the Premises and agrees to take the same “as is” on the date of this Lease, except for Landlord’s obligation to perform Landlord’s Work, and acknowledges that the taking of possession of the Premises by Tenant shall be conclusive evidence that the Premises and the Building systems serving the Premises were in good and satisfactory condition at the time Tenant took possession thereof, except for those items of Landlord’s Work to be performed after such taking of possession.

 

ARTICLE 2

 

RENT

 

2.01 Rent . The “ Rent ” shall be the sum of (a) the Base Rent (as defined in Section 2.02 ) plus (b) the Operating Expense Payment (as defined in Section 2.03 ) plus (c) the Tenant’s Tax Payment (as defined in Section 2.04 hereof).

 

2.02 Base Rent . (a) Tenant shall pay base rent (the “ Base Rent”) to Landlord (i) at the rate of $1,086,000.00 per year for the period from the date (the “ Rent Commencement Date ”) that is the later of (A) the one hundred fifty-first (151st) calendar day after the Completion Date applicable to all of the items of Landlord’s Initial Work other than the Initial AC Work or (B) November 1, 1998, to and including the day immediately preceding the fifth (5th) anniversary of the Rent Commencement Date in equal monthly installments of $90,500.00 and (ii) at the rate of $1,248,900.00 per year for the period from the fifth (5th) anniversary of the Rent Commencement Date to and including the Term Expiration Date in equal monthly installments of $104,075.00. The Base Rent provided in this Section 2.02 shall be subject to adjustment as set forth in Section 11.01(a)(ii)(B) hereof.

 

(b) Base Rent shall be payable by Tenant in advance on the Rent Commencement Date and on the first day of each calendar month thereafter (appropriately prorated in the case of the first installment if the Rent Commencement Date is not the first day of

 

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a calendar month or the last installment if the Term Expiration Date is not the last day of a calendar month); except that, upon the execution of this Lease, Tenant shall pay to Landlord $90,500.00 on account of the first installment of Base Rent becoming due hereunder.

 

(c) If any of the Base Rent or additional rent (as defined in Section 2.06 hereof) payable under this Lease shall be or become uncollectible, reduced or required to be refunded because of any Legal Requirement, Tenant shall enter into such agreements and take such other steps (without additional expense to Tenant) as Landlord may reasonably request and as may be legally permissible to permit Landlord to collect the maximum rents which from time to time during the continuance of such legal rent restriction may be legally permissible (and not in excess of the amounts reserved therefor under this Lease). Upon the termination of such legal rent restriction, (i) the Base Rent and additional rent shall become and thereafter be payable in accordance with the amounts reserved herein for the periods following such termination and (ii) Tenant shall pay to Landlord, to the maximum extent legally permissible, an amount equal to (A) the Base Rent and additional rent which would have been paid pursuant to this Lease but for such legal rent restriction, less (B) the rents and payments in lieu of rents paid by Tenant during the period such legal restriction was in effect.

 

(d) Provided that Tenant is not then in default of this Lease beyond the expiration of all applicable grace and cure periods, Tenant shall be entitled to receive a credit against Base Rent accruing hereunder in the sum of $106,903.12 to be applied against the first installments of Base Rent accruing hereunder.

 

2.03 Operating Expense Payment . (a) For each Lease Year (hereinafter defined) during the Term, Tenant shall pay as additional rent an amount equal to the Operating Expense Payment (hereinafter defined).

 

(b) Operating Expense Definitions:

 

(i) The term “ Lease Year ” shall mean each twelve (12) month period following the Base Year (hereinafter defined).

 

(ii) The term “ Operating Expenses ” shall mean all costs and expenses actually paid or incurred by the Landlord or on Landlord’s behalf in respect of the repair, maintenance or operation of the Land or the Building or the curbs, sidewalks, plazas and other appurtenances adjoining the same, including, without limitation, the costs and expenses which belong within any one or more of the following categories:

 

(A) salaries, wages, medical, surgical, insurance (including group life and disability), union and general welfare benefits and pension payments of employees engaged in the repair, operation or maintenance of the Land or the Building;

 

(B) payroll taxes, workers’ compensation, uniforms and related expenses for employees;

 

(C) the cost of painting and the cost of interior and exterior landscape maintenance, exclusive of any portion thereof included in Landlord’s Work;

 

(D) premiums and other charges for rent, casualty, boiler, sprinkler, plate-glass, liability, fidelity and any other insurance Landlord maintains or is required to maintain with regard to the Land or the Building or the maintenance or operation thereof;

 

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(E) the cost of all supplies (including, without limitation, cleaning supplies), hand tools and other materials used in the repair, maintenance or operation of the Building, and sales and other taxes thereon;

 

(F) the depreciation for, or the rental cost or value (including all applicable sales taxes) of all movable equipment used in the repair, maintenance or operation of the Building;

 

(G) the cost to purchase or lease and install any Building security or other system used in connection with life or property protection installed after the Base Year (including the cost of, or the cost of value of the rental of, all machinery, electronic systems and other equipment comprising any part thereof), as well as the cost of the operation and repair of any such system in the operation during the Base Year;

 

(H) the cost of all charges for window and other cleaning, janitorial and security services;

 

(I) intentionally omitted ;

 

(J) the cost of repairs and the cost of replacements made in connection with repairs of cables, fans, pumps, boilers, cooling equipment, wiring and electrical fixture and metering, control and distribution equipment, component parts of the HVAC, electrical, plumbing, elevator and any life or property protection systems (including, without limitation, sprinkler systems), window washing equipment and snow removal equipment;

 

(K) intentionally omitted ;

 

(L) intentionally omitted ;

 

(M) the costs for alterations and improvements to the Building made after the Base Year by reason of the laws and requirements of any public authorities or the requirements of insurance bodies or Landlord’s insurer; provided , howeve r, that to the extent such costs are capitalized under generally accepted accounting principles (“ GAAP ”), such costs shall be amortized over the useful life thereof under GAAP;

 

(N) management fees not in excess of the then prevailing rates for management fees of first-class office buildings in Fairfield County;

 

(O) the cost of improvements, equipment or machinery installed for the purpose of reducing energy consumption or reducing other Operating Expenses; provided , however , that to the extent such costs are capitalized under generally accepted accounting principles, such costs shall be amortized over the useful life of such improvements as determined under GAAP, provided , however , that the amount to be included in Operating Expenses in any year shall not exceed the savings in Operating Expenses in such year occasioned by the installation of such improvements.

 

(P) legal, accounting and other professional fees incurred in connection with the operation, maintenance, or management of the Land or the Building;

 

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(Q) fees, dues and other similar payments made by Landlord to real estate-related organizations in Fairfield County and only to the extent the same directly benefit the Real Property;

 

(R) water use and sewer use charges; and

 

(S) notwithstanding anything to the contrary contained in this Lease, the following items are to be excluded from Operating Expenses: (1) Labor Costs (as hereinafter defined) in respect of officers and executives of Landlord above the grade of Building manager, unless for work actually performed in or about the Building, and then only at compensation commensurate with that which would have been paid to a third person; (2) legal and other professional fees, leasing commissions advertising expenses, and other costs incurred in leasing or attempting to lease any portion of the Building; (3) any insurance premiums to the extent that Landlord is specifically reimbursed therefor by Tenant pursuant to this Lease (other than pursuant to this Paragraph) or by any other tenant or other occupant of the Building pursuant to its lease (other than pursuant to an operating expenses escalation clause contained herein); (4) the cost of any items actually paid by the insurance Landlord is obligated to maintain or for which Landlord is entitled to be compensated, including reimbursement by any tenant; (5) the cost of any alterations, additions, changes, replacements, improvements and repairs and other items which are made in order to prepare space for occupancy by a new tenant and any supervisory fee charged to such tenant by Landlord in connection therewith; (6) the cost of electricity furnished to the Premises or any other space in the Building leased to tenants and for which tenants are responsible in accordance with the terms of their leases; (7) all Taxes; (8) refinancing costs; (9) (i) ground rents and mortgage debt service, (ii) reserves for anticipated future expenses, bad debt loss, or rent loss, (iii) interest and penalties incurred as a result of Landlord’s delinquent payment of any obligation of Landlord, (iv) costs associated with the operation of the business of the entity which constitutes Landlord, which costs are not directly related to the operation, management, maintenance and repair of the Building including, by way of example, and without limitation, the formation of the entity, internal accounting and legal matters, preparation of tax returns and financial statements, costs and legal fees incurred in enforcing leases against tenants, including Tenant, costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord’s interest in the Building, and the costs of any disputes between Landlord and its employees, (v) expenditures for capital improvements, except (A) those which under generally applied real estate practice are expensed or (B) as provided in Section 2.03(b)(ii)(M) and Section 2.03(b)(ii)(O) hereof (as hereinafter defined), (vi) costs of removing or otherwise remediating any Hazardous Materials (as hereinafter defined) and of complying with Environmental Requirements (as hereinafter defined) in effect as of the Commencement Date; (vii) penalties imposed as a result of Landlord’s failure to comply with applicable Legal Requirements unless Landlord is contesting the validity or applicability thereof in good faith, (viii) franchise or income taxes imposed on Landlord, and (ix) costs related to expanding the Building; and (10) (i) costs of the original construction (as distinguished from operation and maintenance) of the Building or any expansion thereof, and (ii) costs of correcting defects; in the design or construction of the Building and the costs of repairing damage caused as a result of such defects. The term “ Labor Costs ” shall mean all expenses incurred by Landlord or on Landlord’s behalf which shall be related to employment of personnel, including without limitation amounts incurred for wages, salaries and other compensation for services, payroll, social security, unemployment and other similar taxes, workers’ compensation insurance, liability benefits, pensions, hospitalization, retirement plans and insurance (including without limitation, group life and disability), uniforms and working clothes and the cleaning thereof, and expenses imposed on or on behalf of Landlord pursuant to any collective bargaining agreement relating to such employees. With respect to employees who are not employed on a full-time basis with respect to the Building, a pro rata portion of expenses allocable to the time any such employee is employed with respect to the Building shall be included in Labor Costs.

 

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(iii) The term “ Operating Expense Payment ” shall mean Tenant’s Percentage (as hereinafter defined) of the amount by which the Operating Expenses for a Lease Year exceeded the Operating Expenses for the Base Year.

 

(iv) The term “ Base Year ” shall mean, with respect to the Operating Expense payment for the calendar year 1999.

 

(c) Intentionally omitted .

 

(d) If during any Base Year or any Lease Year (i) any rentable space in the Building shall be vacant or unoccupied, or (ii) the tenant or occupant of any space in the Building undertook to perform work or services therein in lieu of having Landlord perform the same and the cost thereof would have been included in Operating Expense, then, in either of such events, at Landlord’s option, the Operating Expenses for the Base Year or such Lease Year, as applicable, shall be adjusted to reflect the Operating Expenses that would have been incurred if such space had been occupied for the entire Base Year or Lease Year, as applicable, or if Landlord had performed such work or services, as the case may be.

 

(e) Within the first 90 days of each Lease Year, Landlord may furnish to Tenant a written statement (an “ Estimate Statement ”) setting forth Landlord’s estimate of the Operating Expense Payment for such Lease Year (the “ Estimated Payment ”). Tenant shall pay to Landlord on the first day of each month during each Lease Year an amount equal to one-twelfth (1/12th) of the Estimated Payment up to a maximum of 105% of the greater of (1) the Estimated Payment shown on the Estimate Statement for the immediately preceding Lease Year or (2) the Operating Expense Payment for the immediately preceding Lease Year; provided , however , that such 105% limitation shall not apply to any item included in Operating Expenses for which Landlord provides Tenant, together with an Estimate Statement, with a reasonably detailed explanation (for example, an accepted estimate for particular contract services) of why Landlord anticipates that the cost of such item is likely to increase by more than 5% over its cost for the immediately preceding Lease Year. If Landlord furnishes an Estimate Statement for a Lease Year subsequent to the commencement thereof, then (i) until the first day of the month following the month in which the Estimate Statement is furnished to Tenant, Tenant shall continue to pay to Landlord on the first day of each month an amount equal to the monthly sum payable by Tenant to Landlord with respect to the next previous Lease Year; (ii) promptly after the Estimate Statement is furnished to Tenant, Landlord shall give notice to Tenant stating whether the amount previously paid by Tenant to Landlord for the current Lease Year was greater or less than the installments of the Estimated Payment to be paid for the current Lease Year, and (a) if there shall be a deficiency, Tenant shall pay the amount thereof within thirty (30) days after demand therefor, or (b) if there shall have been an overpayment, Landlord shall credit the amount thereof against the next monthly installments of the Base Rent payable under this Lease; and (iii) on the first day of the month following the month in which the Estimate Statement is furnished to Tenant, and monthly thereafter throughout the remainder of the Lease Year, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of the Estimated Payment shown on the Estimate Statement. Landlord may, from time to time during each Lease Year, furnish to Tenant a revised Estimate Statement; if a revised Estimate Statement is furnished to Tenant, the Estimated Payment for such Lease Year shall be adjusted in the same manner as provided in the preceding sentence.

 

(f) Within 90 days after the expiration of each Lease Year, Landlord shall furnish to Tenant an annual statement (the “ Annual Statement ”) for such Lease Year with reasonably detailed documentation for the amounts shown thereon. If the Annual Statement shows that the Estimated Payment (or other payments) for such Lease Year exceeded the Operating Expense Payment which should have been paid for such Lease Year, Landlord shall credit the amount of such excess against the next monthly installments of Base Rent payable under this Lease (or promptly refund such amount if this Lease has terminated); if the Annual Statement for such Lease Year shows that the Estimated Payment for such Lease Year was less than the Operating Expense Payment (or other payments) which should have been paid for such

 

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Lease Year, Tenant shall pay the amount of such deficiency within ten (10) days after receipt of the Annual Statement.

 

(g) Each Annual Statement shall be conclusive and binding upon Tenant unless, within ninety (90) days after receipt thereof, Tenant shall notify Landlord that it disputes the correctness of the Annual Statement, specifying the particular respects in which the Annual Statement is claimed to be incorrect. If such notice is sent, Tenant shall pay to Landlord the amount shown to be due to Landlord on the disputed Annual Statement, pending the resolution of any dispute relating thereto. The parties agree that, due to the confidential nature of Landlord’s books and records, either party may refer the decision of the issue raised to a reputable independent nationally recognized firm of certified public accountants selected by Landlord and Tenant and the decision of such accountants shall be conclusive and binding upon the parties. The fees and expenses involved in such decision shall be borne by the unsuccessful party (and if both parties are partially unsuccessful, the accountants shall apportion the fees and expenses between the parties based on the degree of success of each party).

 

(h) (i) Tenant may, at its sole cost and expense and upon reasonable written notice given within thirty (30) days after the giving of such notice, elect to have a reputable independent nationally recognized firm of certified pubic accountants jointly selected by Tenant and Landlord, examine Landlord’s books and records (collectively, the “ Records ”) as are relevant to the Lease Year in question.

 

(ii) In the event that Tenant, after having reasonable opportunity to examine the Records, shall disagree with the Landlord’s Statement, then Tenant may send a written notice (“ Tenant’s Statement ”) to Landlord of such disagreement, specifying in reasonable detail the basis for Tenant’s disagreement, the amount of the additional rent that Tenant claims was due for the applicable operating year and the amount of any refund claimed to be due Tenant. Landlord and Tenant shall attempt to adjust such disagreement. If they are unable to do so within thirty (30) days of receipt by Landlord of Tenant’s Statement, Landlord and Tenant shall designate a reputable independent nationally recognized firm of certified public accountants not regularly engaged by either (the “ Expense Arbiter ”) whose determination made in accordance with this Section 2.03(h) shall be binding upon the parties. The fees and expenses of the Expense Arbiter shall be paid equally by the parties. The Expense Arbiter shall hold a hearing within thirty (30) days after selection at which representatives of Landlord and Tenant shall have an opportunity to present their respective positions and evidence. Landlord shall credit any excess payments made by Tenant against the next monthly installment of Base Rent and additional rent due hereunder, which credit may include interest on such overpayment at the prime rate (as hereinafter defined). In the event that Landlord and Tenant shall be unable to agree upon the designation of the Expense Arbiter within thirty (30) days after receipt of notice from the other party requesting agreement as to the designation of the Expense Arbiter, which notice shall contain the names and addresses of two (2) or more certified public accountants who are acceptable to the party sending such notice (any of whom, if acceptable to the party receiving such notice as evidenced by notice given by the receiving party to the other party within such thirty (30) day period, shall be the agreed upon Expense Arbiter), then either party shall have the right to request the American Arbitration Association (“ AAA ”) (or any successor thereto) to designate as the Expense Arbiter a certified public accountant whose determination made in accordance with this Section 2.03(h) shall be conclusive and binding upon the parties. Landlord and Tenant hereby agree that any determination made by an Expense Arbiter designated pursuant to this Section 2.03(h) shall not exceed the amount(s) as determined to be due in the first instance by the Landlord’s Statement and that any determination which does not comply with the foregoing shall be null and void and not binding on the parties. In rendering such determination, the Expense Arbiter shall not add to, subtract from or otherwise modify any of the provisions of this Lease, including the provisions of the immediately preceding sentence.

 

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2.04 Taxes . (a) The following terms shall have the following meanings:

 

(i) The term “ Tenant’s Percentage” shall mean Forty-five and five-tenths percent (45.5%).

 

(ii) The term “ Tax Statement ” shall mean a computation of additional rent due pursuant to the provisions of this Section 2.04 furnished by Landlord to Tenant.

 

(iii) The term “ Base Tax Year ” shall mean the Tax Year commencing July 1, 1998, and ending June 30, 1999.

 

(iv) The term “ Taxes ” shall mean (A) all real estate taxes, assessments (special or otherwise), rates and charges of a similar or dissimilar nature, whether general, special, ordinary, extraordinary, foreseen or unforeseen, which may be assessed, levied or imposed upon all or any part of the Real Property, whether or not the same constitute one or more tax lots, and whether levied by the City of Norwalk or any other taxing authority, and (B) any expenses, including attorneys’ fees and disbursements and experts’ and other witnesses’ fees, incurred by Landlord in contesting any of the foregoing or the assessed valuation of all or any part of the Real Property; but “Taxes” shall not include (1) any net income, franchise, “value added”, inheritance or estate tax imposed upon Landlord, the Premises or the Real Property, except to the extent provided in the last sentence of this Section 2.04 (a) (iv) or (2) any interest or penalties incurred by Landlord as a result of Landlord’s late payment of Taxes, except for interest payable in connection with the installment payments of assessments pursuant to the next sentence. If by law, any assessment may be divided and paid in annual installments, then, provided the same is not prohibited under the terms of any Superior Lease or Superior Mortgage, for purposes of this Section, (x) such assessment shall be deemed to have been so divided and to be payable in the maximum number of annual installments permitted by law and (y) there shall be deemed included in Taxes for each Tax Year the annual installment of such assessment becoming payable during such Tax Year, together with interest payable during such Tax Year on such annual installment and on all installments thereafter becoming due as provided by law, all as if such assessment had been so divided. If the methods of taxation prevailing on the date hereof shall subsequently be altered so that in lieu of or as an addition to or substitute for the whole or any part of the taxes, assessments, rents, rates, charges, levies or imposition now assessed, levied or imposed upon all or any part of the Real Property, there shall be assessed, levied or imposed (a) a tax, assessment, levy, imposition or charge based on the income or rents received therefrom whether or not wholly or partially as a capital levy or otherwise, or (b) a tax, assessment, levy, imposition or charge measured by or based in whole or in part upon all or any part of the Real Property and imposed upon Landlord, or (c) a license fee measured by the rents, or (d) a net income, franchise, “value added”, inheritance, estate or other tax, assessment, levy, imposition, charge or license fee however described or imposed, then all such taxes, assessments, levies, imposition, charges or license fees or the part thereof so measured or based shall be deemed to be Taxes.

 

(v) The term “ Tax Year ” shall mean the twelve (12) month period commencing on July 1 of each year following the Base Tax Year, or such other period of twelve (12) months as may be duly adopted as the fiscal year for real estate tax purposes by the appropriate taxing authority or authorities applicable to the Real Property.

 

(b) (i) (A) Tenant shall pay as additional rent for each Tax Year all or any portion of which shall be within the Term, a sum (“ Tenant’s Tax Payment ”) equal to Tenant’s Percentage of the amount, if any, by which the Taxes payable for such Tax Year exceed the Taxes payable for the Base Tax Year, as finally adjusted and determined.

 

(B) With respect to each Tax Year occurring in whole or in part during the Term, Tenant shall pay to Landlord Tenant’s Tax Payment, in equal monthly installments during the calendar year in which a Tax Year commences, in the manner hereinafter described. At any time within the first 90 days of the calendar

 

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year in which a Tax Year commences, Landlord may furnish to Tenant a written estimate (a “ Tax Estimate ”) setting forth Landlord’s estimate of the Tax Payment for such Tax Year (“ Estimated Tax Payment ”). Such estimate shall be determined by Landlord by applying to the most recently announced assessed value of the Land and Building (whether final or otherwise) such tax rate (or so-called “mill rate”) as Landlord shall reasonably anticipate is the tax rate to be finally determined for such Tax Year (unless such tax rate has actually been determined). Subject to adjustment as hereinafter provided, Tenant shall pay Landlord on the first day of each month during each calendar year occurring in whole or in part during the term hereof, an amount equal to one-twelfth (1/12th) of the Estimated Tax Payment for the Tax Year commencing during such calendar year in which such Tax Year begins, then (a) until the first day of the month following the month in which the Tax Estimate is furnished to Tenant, Tenant shall continue to pay to Landlord on the first day of each month an amount equal to the monthly sum payable by Tenant to Landlord with respect to the next previous Tax Year; (b) promptly after the Tax Estimate is furnished to Tenant, Landlord shall give notice to Tenant stating whether the amount previously paid by Tenant to Landlord during such calendar year was greater or less than the installments of the estimated Tax Payment to be paid during such calendar year in accordance with the Tax Estimate, and (i) if there shall be a deficiency, Tenant shall pay the amount thereof within thirty (30) days after demand therefor, or (ii) if there shall have been an overpayment, Landlord shall credit of the amount thereof against each of the next monthly installments of the Base Rent payable under this Lease, and (c) on the first day of the month following the furnishing to Tenant of the Tax Estimate, and monthly thereafter until the rendering to Tenant of a Tax Statement (hereinafter defined) for such Tax Year, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12) of the amount shown on such Tax Estimate. At any time during or after such Tax Year, (x) Landlord shall furnish to Tenant a written statement a Tax Statement setting forth the Tax Payment for such Tax Year, and stating whether the sum of the installments previously paid by Tenant to Landlord pursuant to the Tax Estimate or otherwise for such Tax Year was greater or less than the sum of the installments of the Tax Payment to be paid for such Tax Year in accordance with the Tax Statement, (y) any deficiency or overpayment shall be disposed of in the manner of a deficiency or overpayment in Estimated Tax Payment (or refunded if the Term has ended), and (z) on the first day of the month following the month in which the Tax Statement is furnished to Tenant, and monthly thereafter until a new Tax Estimate or Tax Statement is furnished to Tenant, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of the Tax Payment shown on the Tax Statement.

 

(C) If at any time after the date hereof, Taxes are required to be paid (either to the appropriate taxing authority or as tax escrow payments to a Superior Lessor or Superior Mortgagee), on any other date or dates than as presently required, then Tenant’s Tax Payments shall be correspondingly accelerated or revised so that said Tenant’s Tax Payments are due in full at least twenty (20) days prior to the last date payments are due without penalty to such taxing authority, Superior Lessor or Superior Mortgagee.

 

(D) If Landlord shall receive a refund of Taxes for any Tax Year after the Base Tax Year, Landlord shall either pay to Tenant or, at Landlord’s election, credit against subsequent payments under this Section 2.04(b) Tenant’s Percentage of the amount of such refund (or promptly refund such amount if this Lease has terminated), but in no event shall any such payment or credit to Tenant exceed Tenant’s Tax Payment paid for the Tax Year to which such refund applies.

 

(E) If Landlord shall receive the benefit of any discount for any early payment or prepayment of Taxes or of any tax exemption, incentive or subsidy (whether in the form of an abatement, credit or otherwise) relating to all or any part of the Real Property, then Landlord shall pay Tenant Tenant’s Percentage of the amount of such refund in the manner set forth in Section 2.04(b)(i)(D) hereof.

 

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(ii) Only Landlord shall have the right to institute tax reduction or other proceedings to reduce the assessed valuation of the Real Property; provided , however , that Tenant may request in writing that Landlord notify Tenant whether it will be instituting such a proceeding for a given Tax Year after the assessment for such Tax Year has been made public. If Tenant makes such a request, then Landlord shall notify Tenant at least thirty (30) days prior to the filing deadline for such Tax Year as to whether it will institute such proceeding; if Landlord states that it will not then, then Tenant shall have the right to institute such proceedings in Landlord’s stead, at Tenant’s sole expense, and Landlord shall, at no expense to Landlord, reasonably cooperate with Tenant in connection therewith.

 

(iii) Tenant’s Tax Payment and any credits with respect thereto as provided in this Section 2.04(b) shall be made as provided in this Section 2.04(b) regardless of the fact that Tenant may be exempt, in whole or in part, from the payment of any Taxes by reason of Tenant’s diplomatic or other tax exempt status or for any other reason whatsoever.

 

(iv) Tenant shall pay to Landlord, within thirty (30) business days after demand, as additional rent, any occupancy tax or rent tax hereafter enacted and payable with respect to the Premises or this Lease, if payable by Landlord in the first instance or hereafter required to be any paid by Landlord.

 

(v) If only a portion of a Tax Year shall be included within the Term, any additional rent under this Section 2.04(b) for such Tax Year shall be apportioned in the ratio which the number of days in such Tax Year bears to the total number of days in such Tax Year. In the event of a termination of this Lease, any additional rent under this Section 2.04(b) shall be paid or adjusted within thirty (30) days after submission of a Tax Statement. In no event shall Base Rent ever be reduced by operation of this Section 2.04(b) and the rights and obligations of Landlord and Tenant under the provisions of this Section 2.04(b) with respect to any additional rent shall survive the termination of the Term.

 

(vi) Each Tax Statement furnished by Landlord with respect to Tenant’s Tax Payment shall be accompanied by a copy of the real estate tax bill for the Tax Year referred to therein, but Landlord shall have no obligation to deliver more than one such copy of the real estate tax bill in respect of any Tax Year.

 

(c) (i) Landlord’s failure to render Tax Statements with respect to any Tax Year shall not prejudice Landlord’s right thereafter to render a Tax Statement with respect thereto or with respect to any subsequent Tax Year, nor shall the rendering of a Tax Statement prejudice Landlord’s right thereafter to render a corrected Tax Statement for that Tax Year. Nothing herein contained shall restrict Landlord from issuing a Tax Statement at any time there is an increase in Taxes during any Tax Year or any time thereafter.

 

(ii) Each Tax Statement shall be conclusive and binding upon Tenant unless, within ninety (90) days after receipt of such Tax Statement, Tenant notifies Landlord that it disputes the correctness of such Tax Statement, specifying the particular respect in which such Tax Statement is claimed to be incorrect. Pending the resolution of such dispute, Tenant shall pay Tenant’s Tax Payment in accordance with the applicable Tax Statement, without prejudice to Tenant’s position. If such dispute is ultimately determined in Tenant’s favor, Landlord shall promptly after such determination pay to Tenant any amount so overpaid by Tenant.

 

2.05 Electric Charges . (a) Tenant shall, at its sole cost and expense, obtain electricity directly from the utility company furnishing electricity to the Building. The cost of such service shall be paid by Tenant directly to such utility company. Landlord shall, as part of

 

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Landlord’s Work, install electric meters to provide for direct metering of electricity in accordance with Exhibit C hereof.

 

(b) Tenant’s consumption of electric current shall not exceed the capacity of the feeders, risers or wiring installed by Landlord or Tenant (if such installation has previously been approved in writing by Landlord, which approval shall not be unreasonably withheld) in the Premises or the Building.

 

(c) If, in Landlord’s reasonable judgment, Tenant’s electrical requirements necessitate installation of an additional riser, risers or other proper and necessary equipment or services, including additional ventilating or air conditioning (i) in the Premises, then such items shall be installed by Tenant at Tenant’s sole expense with materials all first approved by Landlord in writing, which consent shall not be unreasonably withheld, conditioned or delayed, or (ii) in any other portion of the Building, such items shall be installed by Landlord, at Tenant’s sole expense, the actual cost of which expense (which shall include the reasonable value of services rendered by Landlord’s employees) shall constitute additional rent and be payable thirty (30) days after the rendition to Tenant of a bill therefor.

 

(d) Landlord shall not be liable in any way to Tenant for any change in the supply or character of electric service furnished to the Premises, for any expense that Tenant may sustain or incur in connection therewith, or if the amount of such current available to the Building is reduced or, for any reason not attributable to the negligence of Landlord, such electric current is unsuitable for the requirements of Tenant.

 

2.06 Manner of Payment . Tenant shall pay to Landlord all Base Rent, Tenant’s Tax Payment, Operating Expense Payment, and other sums of money as the same shall become due and payable under this Lease at the times and in the manner provided herein without notice or demand and, except as is expressly otherwise provided in Section 1.03 hereof, without setoff or counterclaim, and all such sums other than Base Rent shall be referred to herein as “ additional rent .” Any Base Rent, Tenant’s Tax Payment, Operating Expense Payment or other additional rent due hereunder shall bear interest for the period from the tenth (10th) day after the date the same become due through the date of Landlord’s receipt thereof at an annual rate (the “ Stipulated Rate ”) equal to the lesser of (a) two percent (2%) plus the prime commercial lending rate from time to time announced by The Chase Manhattan Bank, N.A. (or its successor or if there is no successor, the then largest commercial bank by capital and assets in New York City) to be in effect at its principal office in New York City (the “ prime rate ”) or (b) the maximum rate permitted by law.

 

2.07 No Waiver of Additional Rent (a) Landlord’s failure to make a demand under any provision of this Lease or Landlord’s miscalculation in any such statements or bills shall not in any way deemed to be a waiver of, or cause Landlord to forfeit or surrender, its rights to collect any Tenant’s Tax Payment, Operating Expense Payment or additional rent which may have become due during the Term. Tenant’s liability for the payments of Tenant’s Tax Payment, Operating Expense Payment and additional rent due hereunder and Landlord’s obligations to furnish the statements and documents required under this Lease with respect to such payments shall continue unabated during the remainder of the Term and shall survive the expiration or sooner termination of the Term.

 

(b) In no event shall any adjustment of any sums payable by Tenant in accordance with the provisions of this Lease result in a decrease in Base Rent nor shall any adjustment of any Tenant’s Tax Payment, Operating Expense Payment or additional rent payable by Tenant pursuant to any provision of this Lease result in a decrease in any other sum payable by Tenant pursuant to any other provision of this Lease, it being agreed and understood that the payment of Operating Expense Payments and Tenant’s Tax Payments under Section 2.03 and Section 2.04 , respectively, are obligations supplemental to Tenant’s obligations to pay Base Rent and any additional rent pursuant to any other provision of this Lease.

 

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ARTICLE 3

 

LANDLORD COVENANTS

 

3.01 Landlord Services . Landlord shall furnish the following services to Tenant (“ Landlord Services ”):

 

(a) subject to curtailment pursuant to Legal Requirement, heat in season, as and when required for the comfortable occupancy of the Premises in accordance with the specifications set forth in Exhibit E annexed hereto (the “ HVAC Specifications ”) on Mondays through Fridays from 8:00 a.m. to 7:00 p.m. and on Saturdays from 8:00 a.m. to 1:00 p.m., and, upon reasonable advance request by Tenant, Landlord shall furnish heating at other times, in which event Tenant shall pay Landlord for furnishing such heating at Landlord’s actual cost to furnish the same to Tenant;

 

(b) Landlord shall, at its sole cost and expense, equip each floor of the Premises with air conditioning unit(s) which Tenant may operate as and when needed sufficient to provide for the comfortable occupancy of the Premises in accordance with the HVAC Specifications.

 

(c) Landlord shall make available from the public water supply reasonably adequate quantities of potable domestic cold and hot water to a point or points in the Premises for ordinary lavatory and drinking purposes. Landlord shall, at its expense, install, maintain and replace (if necessary) a meter to measure Tenant’s consumption of water in the Premises. Tenant agrees to pay for water consumed as shown on such meter at the rate charged to Landlord by the utility company for such water, together with all sewer charges and any other rent, tax, levy or charge based thereon which now or hereafter is assessed, imposed or a lien upon the Premises or the Building, as and when bills are rendered. Landlord shall have no liability to Tenant for any loss, damage or expense which Tenant may sustain or incur if the quantity or character of water service is changed or is no longer available or suitable for Tenant’s purposes provided that neither Landlord nor its agents or contractors is the cause of such change, unavailability or unsuitability;

 

(d) routine maintenance, cleaning, painting (as reasonably necessary) and electric lighting service for all common corridors, common stairwells, entrance areas, fire exits, roadways, pedestrian sidewalks, lobbies, landscaped areas, elevators, and parking lots of the Real Property in the manner and to the extent appropriate for first-class office buildings in Fairfield County, Connecticut;

 

(e) cleaning service for the Premises substantially in accordance with the cleaning specifications set forth in Exhibit F annexed hereto;

 

(f) (i) security for the Building and the Real Property during forty (40) normal business hours (as defined in Exhibit D hereof and as the same may be amended by Landlord from time to time) on Mondays through Fridays at standard wage rates; provided , however , that (A) Landlord shall provide security beyond such forty (40) hours or at premium or overtime rates only if Tenant agrees in writing to be solely responsible for any additional costs thereof above said forty (40) standard rate hours actually payable by Landlord to third parties and (B) Landlord shall have no responsibility or obligation to prevent, and shall not be liable to Tenant (or any person claiming under or through Tenant) for, loss to Tenant (or any such person) or their agents, contractors, employees, invitees or licensees, arising out of theft, burglary or damage or injury to persons or property caused by persons gaining access to the Building;

 

(ii) Landlord shall afford Tenant and Tenant’s employees access to the Premises, Building and Real Property on a seven (7) day per week, twenty-four (24) hour per day basis;

 

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(g) electricity of at least 8 watts per rentable square foot on a connected load basis to operate the air conditioning system located in and exclusively serving the Premises and all other equipment in the Premises; provided, however , that (x) nothing herein contained shall obligate Landlord in any manner to pay for the costs of electricity consumed in the Premises, which costs shall remain Tenant’s sole responsibility and (y) if Tenant’s electrical equipment requires air conditioning in excess of the air conditioning system serving the Premises, the equipment necessary to provide such excess air conditioning shall be installed by Tenant at it sole expense (subject, nevertheless, to the other provisions of this Lease, including, without limitation, Sections 2.05 and 4.02 hereof), and Tenant shall pay all actual operating and electricity costs related thereto;

 

(h) nonexclusive passenger elevator service to the Premises at all times and nonexclusive freight elevator service during normal business hours. Use of the freight elevator at times other than normal business hours shall be arranged by Tenant upon reasonable prior notice, and Tenant shall pay Landlord’s actual costs to provide the same;

 

(i) a full-time handyman and manager/superintendent shall be employed to service the Building’s operation and maintenance needs during normal business hours; and

 

(j) Landlord shall make accessible by telephone or beeper a responsible employee to respond to Tenant’s emergency needs after normal business hours.

 

No more than twice per year, following ten (10) days’ written notice from Tenant to Landlord, Landlord shall hold a meeting of Tenant and Landlord or the managing agent of the Building to: (i) discuss any Tenant concerns regarding the Landlord Services or scope of same: (ii) advise Tenant of plans regarding Landlord Services in the future; and (iii) advise Tenant of any anticipated capital expenditures which, during the ensuing six (6) months, Landlord plans to incur and later amortize pursuant to Section 2.03 hereof.

 

3.02 Cessation of Landlord’s Services . Except as expressly otherwise provided in this Lease, Landlord shall not be liable for damages to either person or property or be deemed to have evicted Tenant, nor shall there be any abatement of Base Rent or additional rent nor shall Tenant be relieved from performance of any covenant on its part to be performed hereunder by reason of (a) Landlord’s failure to furnish, or cessation of, Landlord Services due to causes or circumstances beyond the reasonable control of Landlord or (b) breakdown of equipment or machinery utilized in supplying any Landlord Service. Landlord shall use reasonable diligence to make such repairs as may be required to machinery or equipment within the Building to provide restoration of any Landlord Service and, where the cessation or interruption of such Landlord Service has occurred due to circumstances or conditions beyond the Real Property boundaries, to cause the same to be restored by diligent application or request to the provider of such service. In no event shall any Superior Mortgagee or Superior Lessor be or become liable for the performance of Landlord’s obligations under this Section.

 

3.03 Repairs by Landlord .

 

(a) Landlord shall maintain the Building’s structural elements, roof, and electrical, heating-ventilation-airconditioning, plumbing, electrical and security systems and the Real Property’s common areas (including parking lots) in good working order and condition, and shall keep the roof watertight, except that, with respect to repairs necessitated by the negligence or other tortious conduct of Tenant or its agents, employees or contractors, or Tenant’s breach of this Lease, Tenant shall be responsible to repair the same.

 

(b) Landlord reserves the right, at any time to make changes in or to the Real Property as it may reasonably deem necessary or desirable for the convenient operation of the Building, provided that (i) Landlord exercises all reasonable efforts to minimize inconvenience to Tenant in connection therewith and (ii) no action taken by Landlord under this Section 3.03 shall

 

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impede access to, reduce the size or otherwise diminish the utility of the Premises in any material respect, including any services provided thereto, and Landlord agrees to (A) use commercially reasonable efforts to locate any such pipes, ducts and conduits within the core areas of the Building and (B) not take space affecting offices occupied by Tenant. Landlord may install and maintain pipes, fans, ducts, wires and conduit within or through the walls, floors or ceilings of the Premises that are necessary or desirable, in Landlord’s reasonable judgment, for the convenient operation of the Building.

 

(c) Landlord, its agents and representatives, shall have the right, upon prior notice to Tenant (except that no notice shall be required in an emergency), to enter the Premises to inspect, clean or perform such work as Landlord may reasonably deem necessary or to exhibit the Premises to prospective tenants or purchasers, for any other purpose as Landlord may deem necessary or desirable. Tenant shall not be entitled to any abatement or reduction of Base Rent or additional rent by reason of such entry. Landlord shall not be required to make any improvements or repairs of any kind or character to the Premises during the Term.

 

3.04 Compliance with Laws by Landlord . (a) Landlord shall (i) comply with all Legal Requirements applicable to the portions of the Real Property other than the Premises or premises occupied by other tenants to the extent the same would affect Tenant’s use and occupancy of the Premises and (ii) use commercially reasonable efforts to cause such other tenants to comply with Legal Requirements applicable to their premises to the extent the same would affect Tenant’s use and occupancy of the Premises, unless Landlord or such other tenant, as applicable, shall, in good faith, be contesting the applicability thereof to the Real Property. Landlord shall notify Tenant of any notice it receives of a violation of Legal Requirements that, in the Landlord’s reasonable judgment, might adversely affect Tenant’s use of the Premises, the Building or the Real Property. Landlord shall, at its expense, take all necessary actions (including, without limitation, commencing litigation), in its reasonable judgment, to diligently cure and remove of record any such violation that Landlord is not so contesting or any such violation caused by the negligence or other tortious acts of Landlord and its agents, employees and contractors.

 

(b) Landlord hereby covenants that, in the event that a notice of violation of a Legal Requirement is filed in the public records at any time during the Term as a result of a condition that exists in the Premises on the date hereof, in any Additional Space (as hereinafter defined) on the applicable Additional Space Commencement Date (as hereinafter defined) or in the First Floor Space (as hereinafter defined) on May 1, 2000, then Landlord shall, at its expense, take the necessary actions (including, without limitation, commencing litigation), in its reasonable judgment, to remedy such violation and to cause it to be dismissed of record. Tenant shall cooperate with Landlord to enable Landlord to effect such remedy and dismissal expeditiously.

 

(c) Landlord represents to Tenant that, to the best of Landlord’s knowledge, (i) no Hazardous Material is currently located at, on, in, under or about the Premises, except as specifically set forth in the (A) “Update Sampling and Analysis Report”, dated January 17, 1997, by Heynen Teale Engineers, (B) “Environmental Site Assessment, Phase II”, dated February 16, 1994, by Heynen Teale Engineers, (C) “Hydrogeologic Investigation at the Norwalk Factory Store”, dated September 29, 1989, by HRP Associates, Inc., and (D) “Report on Updated Site Assessment”, dated November 3, 1992, by HRP Associates, Inc. (the “ Environmental Reports ”), (ii) no Hazardous Material is currently located at, in, on, under or about the Premises in a manner which violates any Environmental Requirement (as hereinafter defined), or which requires cleanup or corrective action of any kind under any Environmental Requirement, (iii) no releasing, emitting, discharging, leaching, dumping, disposing or transporting of any Hazardous Material from the Premises onto any other portion of the Building or from any other portion of the Building onto or into the Premises has occurred or is occurring in violation of any Environmental Requirement, and (iv) no notice of violation, non-compliance, liability or potential liability, lien, compliant, suit, order or other notice with respect to the Premises is presently outstanding under any Environmental Requirement, nor does Landlord have knowledge or reason to believe that any such notice will be received or is being threatened. For the purposes of this section, the following terms shall have the following meanings: (1) the term “ Hazardous Material ” shall

 

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mean any material or substance that, whether by its nature or use (except for unreportable quantities of solvents, cleansers and fuel oil customarily used in offices and general business), is now or hereafter defined or regulated as a hazardous waste, hazardous substance, pollutant or contaminant under any Environmental Requirement, or which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous or which is or contains petroleum, gasoline, diesel fuel, another petroleum hydrocarbon product, asbestos, asbestos-containing materials or polychlorinated biphenyl’s, (ii) the “ Environmental Requirements ” shall collectively mean all present and future laws, statutes, common law, ordinances, rules, regulations, orders, codes, licenses, permits, decrees, judgments, directives or the equivalent of or by any Governmental Authority having jurisdiction over the Premises and relating to or addressing the protection of the environment or human health, and (iii) the term “ Governmental Authority ” shall mean the Federal government, or any state or other political subdivision thereof, or any agency, court or body of the Federal government, any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions.

 

(d) Landlord represents to Tenant that it has no actual knowledge of the existence of any unremedied and undismissed violations of Legal Requirements that are noted of record against the Premises or the Real Property on the date hereof.

 

(e) Landlord represents that it has commenced the process of registering the underground fuel oil tanks on the Real Property (the “ UST’s ”) with the Connecticut Department of Environmental Protection and covenants to diligently and continuously pursue such registration to completion. Landlord shall provide Tenant with copies all documentation related to such registration. Landlord shall, at its expense, comply with all Environmental Requirements applicable to the UST’s.

 

(f) Landlord shall cause Tenant to be named as an additional insured on its environmental liability insurance policy American International Specialty Lines Insurance Company, policy number PLS 8191628, covering the Premises (the “ Environmental Insurance Policy ”) and shall deliver to Tenant an endorsement thereto or a comparable instrument confirming the same, that such insurance company has received copies of the Environmental Reports and that Coverages I and J of the Environmental Insurance Policy cover Tenant. Landlord shall cause the Environmental Insurance Policy (including such endorsements) to be renewed by such insurance company or issued by another insurer reasonably acceptable to Tenant for such additional period(s) as shall be necessary to cause such coverage to exist through the Term Expiration Date originally set forth herein.

 

(g) Landlord hereby represents to Tenant that Landlord has investigated the Premises for the presence of asbestos containing materials and has abated and/or removed any such asbestos containing materials in compliance with applicable Environmental Requirements.

 

ARTICLE 4

 

LEASEHOLD IMPROVEMENTS; TENANT COVENANTS

 

4.01 Initial Improvements . (a) Tenant shall deliver to Landlord, for Landlord’s approval pursuant to this Section 4.01 and Section 4.02 hereof, plans and specifications relating to Tenant’s construction of Tenant’s leasehold improvements to the Premises necessary to prepare the Premises for Tenant’s initial occupancy thereof (the “ Initial Improvements ”).

 

(b) After plans for the Initial Improvements have been submitted and, if necessary, re-submitted to Landlord and approved by Landlord as provided in this Section 4.01 and Section 4.02 hereof, the Initial Improvements shall be constructed in compliance with such approved plans and specifications, all applicable Legal Requirements) and all orders, rules, recommendations and other requirements of all applicable fire safety organizations and any other

 

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body exercising the same or similar functions and having or asserting jurisdiction over all or any part of the Premises or the Real Property (collectively, “ Insurance Requirements ”). Landlord’s Work and the Initial Improvements shall be performed by the parties hereto and their respective agents and contractors (as applicable) in such a manner as not to delay or interfere with any other construction in, or the maintenance or operation of, the Building, and Landlord and Tenant hereby agree to use commercially reasonable efforts to cause Landlord’s Work and the Initial Improvements to be performed harmoniously and in a coordinated manner so as to avoid delaying the completion of either.

 

(c) Tenant shall cause to be prepared, at Tenant’s sole cost and expense, and shall submit to Landlord for Landlord’s reasonable approval detailed plan and specifications for the Initial Improvements, including layout, architectural, mechanical, electrical, and structural drawings (the “ Initial Plans and Specifications ”). If Landlord disapproves such Initial Plans and Specifications submitted by Tenant, then it shall provide Tenant with the detailed, written reasons for such disapproval within 10 business days after Landlord receives Tenant’s submission. Promptly thereafter, Tenant shall resubmit such proposed final plans and specifications with any reasonable changes that Landlord may have requested. Tenant’s proposed final plans and specifications shall comply with all applicable Legal Requirements and provisions of this Lease. If Landlord fails to approve or disapprove of such proposed final plans and specifications or any modifications thereof within ten (10) business days after their submission, which approval shall not be unreasonably withheld, conditioned or delayed, and Tenant informs Landlord of such failure by written notice that states “ SECOND REQUEST FOR LANDLORD’S APPROVAL OF PROPOSED FINAL PLANS AND SPECIFICATIONS. LANDLORD’S FAILURE TO RESPOND WITHIN TEN (10) BUSINESS DAYS OF RECEIPT SHALL BE DEEMED TO CONSTITUTE LANDLORD’S APPROVAL OF SUCH PROPOSED FINAL PLANS AND SPECIFICATIONS IN ACCORDANCE WITH THE TERMS OF THE LEASE”, or language to substantially the same effect, then Landlord’s failure to approve or disapprove within such additional ten (10) business days shall be deemed to constitute Landlord’s approval of such proposed final plans and specifications. Such proposed final plans and specifications shall not be modified by Tenant without such approval (or deemed approval) by Landlord, which shall not be unreasonably withheld, conditioned or delayed, but Landlord shall not in any event be obligated to approve any modifications to the Initial Plans and Specifications (or any further revisions thereof) which, in Landlord’s reasonable judgment, would cause and delay in the completion of Landlord’s Work or the Initial Improvements or impose any cost or expense upon Landlord beyond the time period or expense contemplated by the Initial Plans and Specifications unless Tenant first acknowledges in writing its responsibility for such delay or additional cost or expense.

 

(d) Within 10 days after Landlord has approved the final plans and specifications for the Initial Improvements (the “ Plan Approval Date ”), Tenant shall submit such approved final plans and specifications to up to three (3) reputable general contractors approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and to Landlord’s designated general contractor(s) and shall solicit bids for the performance of the work contemplated thereby. Tenant shall submit to Landlord the bid that Tenant desires to accept. If the actual cost to perform the Initial Improvements is less than $1,737,600.00 (the “ Maximum Contribution ”), then Tenant shall receive a credit of the difference between the actual cost to perform the Initial Improvements and the Maximum Contribution to be applied against the cost of any improvements Tenant performs to the First Floor Space (as hereinafter defined) and the Additional Space (as hereinafter defined) to prepare the same for Tenant’s initial occupancy thereof.

 

(e) Intentionally Omitted .

 

(f) Landlord shall contribute an amount (“ Landlord’s Contribution ”) up to the Maximum Contribution toward the costs and expenses that Tenant actually pays in connection with the Initial Improvements. Landlord’s Contribution shall, at Tenant’s election, be made directly to Tenant to reimburse it for expenses that it actually paid or shall be paid directly to the general contractor, construction manager or other unrelated third parties who have performed

 

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labor or supplied materials in connection with the Initial Improvements and architectural, engineering and design fees and for any filing fees (collectively, “ Project Costs ”). Landlord’s Contribution shall be made in installments from time to time, but not more often than once in each calendar month, promptly after Landlord receives from Tenant (a) partial lien waivers from Tenant’s general contractor or construction manager and all major trade contractors and materialmen performing labor or supplying materials in connection with the Project Costs to the extent of sums paid for Project Costs out of Landlord’s Contribution for portions of the Initial Improvements theretofore performed and (b) a certification by a reputable independent architect designated by Landlord that the portions of the Initial Improvements that relate to any Project Costs for which Tenant is then seeking reimbursement have been satisfactorily performed and incorporated into the Premises. If, upon the completion of the Initial Improvements in accordance with the final approval plans and specifications, there shall be any undisbursed amount of Landlord’s Contribution, then Tenant shall have the right to credit up to such deficiency against any improvements Tenant performs to the Additional Space (as hereinafter defined) and the First Floor Space to prepare the same for Tenant’s initial occupancy thereof.

 

(g) Landlord shall be entitled to withhold from Landlord’s Contribution a commercially reasonable fee not in excess of $7,500.00 for the actual costs incurred by Landlord in connection with the review, monitoring and supervision of the Initial Improvements, including, without limitation, sums paid to architects, engineers and designers and the reasonable value of services rendered by Landlord’s employees and agents.

 

4.02 Alterations . (a) Tenant shall not make or allow to be made to the Premises any alterations, improvements, installations, additions or other physical changes, including the installation of fixtures (each, an “ Alteration ”; collectively, “ Alterations ”), or place safes, vaults, filing systems, libraries or other heavy furniture or equipment within the Premises, without first obtaining the written consent of Landlord to the performance of such Alteration and the plans and specifications therefor, but such consent shall not be withheld by Landlord if (i) such improvements (A) are nonstructural in nature, do not affect the exterior of the Building, (B) would not, in Landlord’s reasonable judgment, affect, impair or reduce the performance of any portion of the Building electrical, HVAC, plumbing, security or other systems, (C) would not require Tenant to obtain a building permit or other governmental approval, and (D) would not cost, in the aggregate, in excess of $50,000.00 ( except if such Alterations are purely decorative in nature, such as carpeting, painting, window treatments, or wallpaper and are removable without damage to the Premises, then this clause (D) shall not apply) and (ii) Tenant gives written notice to Landlord of such work in reasonable detail a reasonable period (but in no event less than ten (10) business days) prior to performing the same. Landlord shall be entitled to retain independent architects, engineers and designers to review the plans and specifications for, and the progress of construction of, any proposed Alteration or Initial Improvement, and Tenant shall reimburse Landlord within ten (10) days after request therefor, for all of the actual fees of such retained parties. All contractors retained by Tenant for Alterations shall be subject to the prior approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Tenant shall use all commercially reasonable efforts to ensure that neither it nor its laborers disturb the harmony with any trade engaged in performing any other work in and about the Real Property or contribute to any labor dispute. Tenant shall deliver to Landlord a copy of final “as built” plans and specifications showing the actual construction of all Alterations and Initial Improvements.

 

(b) Prior to making any proposed Alteration and in accordance with Landlord’s then standard Building regulations with respect to Alterations, Tenant shall (i) promptly submit and, if necessary, re-submit to Landlord detailed plans and specifications (including layout, architectural, mechanical and structural drawings) until Tenant shall have obtained Landlord’s approval thereof, which shall not be unreasonably withheld, conditioned or delayed and (ii) furnish to Landlord duplicate original policies of workers’ compensation and comprehensive liability insurance from both Tenant and its contractors in such form, with such companies and in such amounts as Landlord may require, naming Landlord and its agents and contractors and any Superior Mortgagees and Superior Lessors as additional insu