Exhibit 10.6
LEASE
LEASE dated January 1, 2005, between
MSB Enterprises LLC, a New York limited liability company having an
office at 1418 Avenue N, Brooklyn, New York 11230
(“Owner”), and IBUYDIGITAL, Inc., a Delaware
corporation having an office at 244 Conover Street, Brooklyn, New
York 11231 (“Tenant”).
1. Demise; Term . (a) Owner
hereby leases to Tenant and Tenant hereby hires from Owner the
land, together with all buildings and improvements now or hereafter
located thereon, located at 244 Conover Street, Brooklyn, New York
(collectively, the “Premises”), for a term of five (5)
years commencing on January 1, 2005 (the “Commencement
Date”), and ending on the last day of the month in which
shall occur the fifth anniversary of the Commencement Date (the
“Expiration Date”), unless the term is sooner
cancelled, terminated or extended as provided in this lease,
subject to all covenants, restrictions, easements, agreements and
other matters now or hereafter affecting title to the
Premises.
(b) Tenant shall have the right to
extend the term of this lease for a period of five years,
commencing on the day immediately following the Expiration Date and
expiring on the fifth anniversary of the Expiration Date, on the
same terms as are set forth in this lease (except that the fixed
rent shall be as provided in this Section and Tenant shall have no
further option or right to extend the term), provided (i) Tenant
shall give notice to Owner of Tenant’s exercise of its right
to extend the term of this lease on or before the date which is 180
days prior to the date initially set forth as the Expiration Date
(time being of the essence) and (ii) Tenant is not in default under
this lease on the date Tenant exercises its right. If Tenant duly
exercises its right to extend the term, any reference in this lease
to the term shall be deemed a reference to the term, as
extended.
(c) The annual fixed rent during the
extended term shall be the higher of: (i) the annual fixed rent
payable in the last year of the initial term or (ii) the annual
fair market fixed rent (“Market Rent”) for the Premises
(on the terms set forth in this lease) as determined by Owner
within 60 days after receipt of Tenant’s notice. Promptly
after making the determination, Owner shall give notice to Tenant
of Owner’s determination. If Tenant disputes Owner’s
determination, Tenant shall give notice to Owner of the dispute
within 15 days after receipt of Owner’s notice. Owner shall,
within 15 days following Tenant’s notice, designate an
independent appraiser reasonably acceptable to Tenant to determine
the Market Rent. The appraiser must be a person having not less
than 10 years’ experience as an appraiser or real estate
broker of properties similar to the Premises in the City of New
York, New York. Owner and Tenant shall each have the right to
present to the appraiser such evidence as it may desire as to the
Market Rent. The determination of the appraiser shall be binding
and conclusive upon both Owner and Tenant; and the
appraiser’s determination shall be requested within 30 days
following his or her designation. Upon the determination of the
Market Rent, Owner and Tenant shall enter into an agreement fixing
the annual fixed rent for the extended term. The costs and expenses
of the appraiser shall be paid 50 percent by Owner and 50 percent
by Tenant. Each party, however, shall pay the costs and expense of
its own attorneys and experts and of presenting its evidence.
Pending the determination of the dispute, Tenant shall pay the
higher of the annual fixed rent payable in the last year of the
initial term or the Market Rent determined by Owner, and within 30
days
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following resolution of the dispute any
adjustment shall be refunded by Owner to Tenant retroactive to the
commencement of the renewal term. Except for the change, if any, of
the annual fixed rent, no other term of this lease shall
change.
2. Net Lease; No Services .
Except as specifically set forth in this lease, this lease is
intended to be, and shall be construed as, an absolutely net lease,
whereby under all circumstances and conditions (whether now or
hereafter existing or within the contemplation of the parties) the
fixed rent payable to Owner shall be a completely net return to
Owner throughout the term of this lease; and Tenant shall pay, and
shall indemnify, defend and hold harmless Owner from and against
any and all claims, losses, damages, expenses, costs, liabilities,
obligations and charges whatsoever (including, without limitation,
counsel fees) which shall arise or be incurred, or shall become
due, during the term of this lease, with respect to or in
connection with, the Premises, and the ownership, leasing,
operation, management, maintenance, repair, rebuilding, use or
occupation thereof, or any portion thereof. Owner shall not be
required to provide any services or do any act in connection with
the Premises, and the rent and additional rent under this lease
shall be paid to Owner without any claim on the part of Tenant for
diminution or abatement, and the fact that Tenant’s use and
occupancy of the Premises, shall be disturbed or prevented by any
cause whatsoever shall not in any way suspend, abate or reduce the
rental to be paid under this lease except as otherwise specifically
provided in this lease.
3. Fixed Rent .
(a) The fixed rent payable under
this lease (the “Fixed Rent”) shall be as
follows:
(i) $215,800 per annum from the
Commencement Date, through and including the day immediately prior
to the first anniversary of the Commencement Date.
(ii) $222,274 per annum from the
first anniversary of the Commencement Date, through and including
the day immediately prior to the second anniversary of the
Commencement Date.
(iii) $228,942 per annum from the
second anniversary of the Commencement Date, through and including
the day immediately prior to the third anniversary of the
Commencement Date.
(iv) $235,810 per annum from the
third anniversary of the Commencement Date, through and including
the day immediately prior to the fourth anniversary of the
Commencement Date.
(v) $242,884 per annum from the
fourth anniversary of the Commencement Date, through and including
the Expiration Date.
(b) The Fixed Rent shall be payable
(i) in lawful money of the United States which is legal tender for
payment of all debts and dues, public and private, at the time of
payment, or by check subject to collection, at the office of Owner
or such other place as Owner may designate, without notice or
demand, and without any setoff or deduction whatsoever, and (ii) in
equal
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monthly installments in advance, on the first
day of each month, except that the first full monthly installment
of fixed rent shall be paid on the execution of this lease (and, if
the Commencement Date is not the first day of a calendar month, the
fixed rent for the first partial month shall also be paid on the
execution of this lease). All other sums payable by Tenant under
this lease shall be deemed additional rent and Owner shall have the
same remedies in case of default in the payment thereof as Owner
has in the case of default in the payment of fixed rent.
4. Real Estate Taxes and Other
Expenses .
(a) Tenant shall, during the term of
this lease, pay and discharge punctually, or cause to be paid and
discharged punctually as and when the same shall become due and
payable (or at Owner’s option, reimburse Owner therefor) (i)
all taxes, special and general assessments, water rents, rates and
charges, sewer rents and other governmental impositions and charges
of every kind and nature whatsoever, extraordinary as well as
ordinary (collectively, “Taxes”), and each and every
installment thereof which shall or may during the term of this
lease be charged, levied, laid, assessed, imposed, become due and
payable, or liens upon or for or with respect to the Premises, or
any part thereof, or any buildings, appurtenances or equipment
owned by Tenant or Owner thereon or therein or any part thereof,
together with all interest and penalties thereon under or by virtue
of all present or future laws, ordinances, requirements, orders,
directives, rules or regulations of the federal, state, county,
town and city governments and of all other governmental authorities
whatsoever (all of which shall also be included in the term
“Taxes”) and (ii) all other charges levied, assessed,
imposed or otherwise payable in respect of the Premises, or the
ownership, leasing, operation, use, occupancy or possession
thereof, including, without limitation, all charges for water,
steam, heat, gas, hot water, electricity, light, power and any
other service, facility or utility, furnished to the Premises,
during the term of this lease (collectively, “Other
Expenses”), but the term “Other Expenses” shall
not include Owner’s franchise, inheritance, estate,
succession, income, profits, revenues, gains, excise, corporate,
gift, capital levy, rent, transfer or mortgage taxes. Owner shall
deliver to Tenant, promptly upon receipt, all bills received by
Owner for Taxes or Other Expenses. Any late charges, interest or
penalties which accrue during any period in which Owner failed to
promptly deliver a bill which was in Owner’s possession shall
be paid by Owner. If there shall be any dispute between Owner and
Tenant under the preceding sentence, Tenant shall pay all late
charges, interest and penalties, and such dispute shall be settled
by arbitration pursuant to Section 42.
(b) Tenant shall furnish to Owner
official receipts or other satisfactory proof of payment of Taxes
and Other Expenses within 15 days of the due date thereof. If any
person to whom any payment is directly payable by Tenant under this
lease shall refuse to accept payment from Tenant, Tenant shall give
notice to Owner and shall pay the sum directly to Owner, who shall
pay it to such person.
(c) Tenant may contest, by
appropriate proceedings, the amount or validity, in whole or in
part, of any Tax in any manner permitted by applicable law;
provided, that (i) such contest is conducted by Tenant diligently
and in good faith, (ii) Tenant may, subject to this subsection,
proceed with such contest only after payment of such Tax, (iii)
such contest shall not subject Owner to any liability (criminal,
civil or otherwise), create any lien against the Premises or
pose
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an imminent threat to the title of the Premises,
(iv) Owner is provided notice of such contest prior to its
commencement and (v) such contest is permitted by the holder of
each Fee Mortgage (as hereinafter defined). Upon the termination of
such contest, Tenant shall pay such Taxes or part thereof (to the
extent then unpaid), as finally determined in such proceedings.
Tenant shall promptly pay all interest, penalties and other costs
and liabilities in connection with such contest. Any refunds or
rebates on account of the Taxes paid by Tenant under the provisions
of this Lease shall belong to Tenant. Any refunds or rebates
received by Owner shall be deemed trust funds and as such shall be
received by Owner in trust and paid to Tenant forthwith.
(d) Notwithstanding any provision of
this section to the contrary, Tenant shall, at Owner’s
option, deposit with Owner on the first day of each month an amount
equal to one-twelfth (1/12th) of the aggregate annual payments for
the Taxes. In addition, Tenant shall deposit with Owner such sum of
money which, together with said monthly installments, shall be
sufficient to pay all of the Taxes at least thirty (30) days prior
to the due date thereof. If the amount of the Taxes is not
ascertainable at the time any deposit is required to be made, the
deposit shall be made on the basis of the amount of the Taxes for
the prior tax year and, upon the amount of the Taxes being fixed
for the then current year, Tenant shall, on not less than five days
notice from Owner, deposit any deficiency with Owner. The funds so
deposited with Owner shall be held by it without interest, and may
be commingled with other funds of Owner, and provided that Tenant
shall not be in default in the performance of any of its
obligations under this lease, such funds shall be applied in
payment of the Taxes when due to the extent that Tenant has
deposited funds with Owner for such purpose. In the event of
Owner’s sale of the Premises, Owner shall have the right to
pay over the balance of such deposits in its possession to the
vendee, and thereupon Owner shall be completely released from all
liability with respect to such deposits and Tenant shall look
solely to the vendee in reference thereto. The provisions of the
preceding sentence shall apply to each and every sale of the
Premises to a new vendee. Tenant shall, at its expense, at all
times during the term of this lease, comply with the requirements
of all insurance authorities, the provisions of all insurance
policies applicable to the Premises (provided, with respect to
Owner’s policies, that Owner or the insurance company has
given Tenant notice of such requirements) and the requirements of
all liens, encumbrances and other matters affecting title to the
Premises.
5. Use . Tenant shall use and
occupy the Premises for warehouse storage and packaging and
ancillary executive and general offices in connection with
Tenant’s business, and for no other purpose. Tenant shall not
use or occupy, or permit or suffer the Premises or any part thereof
to be used or occupied for any unlawful or illegal business, use or
purpose, or in such a manner as to constitute a nuisance of any
kind, or for any purpose or in any way in violation of the
certificate of occupancy for the Premises or any present or future
governmental laws, ordinances, requirements, orders, directions,
rules or regulations.
6. Services and Utilities .
Tenant shall arrange for, and promptly pay when due all amounts and
charges for, all services and utilities to the Premises and Owner
shall reasonably cooperate with Tenant in connection with obtaining
any such services and utilities. Owner shall not be required to
furnish or render any services or utilities to the Premises, Tenant
or any occupant. The use of gas and electricity and any other
utilities consumed in or on the
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Premises shall not exceed the capacity of the
mains, feeders, ducts and conduits bringing the same to the
Premises or of the outlets, risers, wiring, piping, duct work or
other means of distribution of such utilities within the Premises.
Owner reserves the right, without any liability whatsoever, or
abatement of the Rent, to stop any heating, plumbing, electric and
other systems in or serving the Premises (notwithstanding that such
services are not furnished by Owner) when necessary by reason of
accidents or emergencies or for repairs, alterations, replacements
or improvements; provided, that Owner agrees (a) to use good faith
reasonable efforts to minimize any interference (except minor or de
minimis interference) with Tenant’s access to the Premises or
Tenant’s use or occupancy of the Premises, or Tenant’s
business therein, (b) to carry out such repairs, alterations,
replacements and improvements promptly and diligently and in
compliance with all applicable laws, ordinances and regulations of
all governmental authorities, and all applicable insurance
policies, and (c) (except in an emergency) to schedule such
repairs, alterations, replacements, improvements, after
consultation with Tenant, in such manner, at such times and in such
locations as to create the least practicable interference with
Tenant’s business.
7. Alterations; Signs
.
(a) Except as set forth in this
lease, Tenant shall make no changes, additions, improvements, or
substitutions in or to the Premises (collectively,
“Tenant’s Work”) of any nature without
Owner’s prior consent which consent may be withheld in
Owner’s sole and absolute discretion. For the purposes of
this Lease, Tenant’s Work that affects the exterior of the
Premises or the structure, systems or facilities of the Premises
(including, without limitation, the mechanical, electrical, air
conditioning, heating and plumbing systems and facilities) or
Tenant’s Work which adversely affects the value of the
Premises shall be deemed to be “Tenant’s Structural
Work”. Notwithstanding anything in this lease to the
contrary, Owner’s consent to Tenant’s Work other than
Tenant’s Structural Work shall not be unreasonably withheld
or delayed. For purposes of this lease, decorations in or to the
Premises, restriping of the Premises, signage specified in Section
7(b), and routine maintenance and repairs shall not be deemed to be
Tenant’s Work, and Tenant may make such decorations,
restriping of the Premises, signage and routine maintenance and
repairs without Owner’s consent; provided that Tenant gives
Owner reasonable prior notice thereof. All fixtures and all
panelings, partitions, railings and like installations (but not any
of Tenant’s trade fixtures, inventory and movable personal
property, which shall be and remain the property of Tenant, subject
to this lease) installed in the Premises at any time by Tenant
shall upon installation become the property of Owner and shall
remain in the Premises upon the expiration or sooner termination of
this lease. Any of Tenant’s property remaining in the
Premises after the expiration or sooner termination of this lease
shall be deemed abandoned by Tenant and Owner may dispose of the
same at its discretion and at Tenant’s expense.
(b) Tenant shall erect or place on
the Premises only such identification and directional signs as
shall conform to and meet all requirements of the proper
governmental authorities having jurisdiction and all permits and
licenses for such signs shall be obtained and paid for by Tenant.
Tenant shall give Owner notice of all identification signs so
erected but shall not be required to give notice of any directional
signs. Owner shall have the right to display a “For
Sale” sign or any other sign indicating that the Premises are
available for sale or development at
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any time, and a “For Rent” sign only
during the final three months of the term of this lease. Tenant and
Owner shall at all times maintain any of their respective signs or
lettering, as may be approved and/or permitted hereunder, in good
condition and shall hold each other harmless from injury to persons
or property arising from the erection and maintenance of any such
signs.
(c) Prior to the commencement of any
Tenant’s Structural Work, Tenant shall submit to Owner for
its approval two sets of complete plans, drawings and
specifications (“Tenant’s Plans”), including,
without limitation, all mechanical, electrical, air conditioning,
heating, plumbing and other utility systems and facilities, for
Tenant’s Structural Work, prepared by an architect and/or
engineer duly licensed in the State of New York. Within 15 days
following Owner’s receipt of Tenant’s Plans, Owner
shall review or cause the same to be reviewed and shall thereupon
return to Tenant one set of Tenant’s Plans with Owner’s
approval or disapproval noted thereon, and if same shall be
disapproved in any respect Owner shall state the reasons for such
disapproval. Subject to the foregoing, if Owner shall not approve
Tenant’s Plans, Tenant shall, if it desires to continue with
the performance of such work, within 5 days of receipt thereof,
cause its architect or engineer to make such changes to
Tenant’s Plans as Owner shall require and shall thereupon
resubmit the same to Owner for its approval. To the extent required
pursuant to any mortgage affecting Owner’s interest in the
Premises (as renewed, modified, consolidated, replaced and
extended, a “Fee Mortgage”), or the landlord of Owner,
if any, Tenant’s Plans shall also be subject to the prior
approval of the holder of each Fee Mortgage and the landlord of
Owner, if any. Following the approval of Tenant’s Plans, the
same shall be final and shall not be changed by Tenant without the
prior approval of Owner (and such holder and landlord, if
required), except as may be required by law. Tenant shall give
prior notice to Owner of any changes required by law and shall
furnish Owner (and such holder and landlord, if required) with
copies of all such required changes in Tenant’s Plans.
Owner’s approval of Tenant’s Plans or of any revisions
shall not constitute an opinion or agreement by Owner that the same
are structurally sufficient or that Tenant’s Plans are in
compliance with law, nor shall such approval impose any present or
future liability on Owner or waive any of Owner’s rights
under this lease. Tenant shall only employ licensed persons and
firms (where required by law) and labor to perform Tenant’s
Work and any routine maintenance and repairs and restriping. In any
event, all contractors Tenant proposes to employ shall be bondable
and, with respect to Tenant’s Structural Work, shall be
subject to Owner’s prior approval, which will not be
unreasonably withheld or delayed, provided that such contractors
agree to enter into construction contracts containing insurance,
bonding and release of lien provisions reasonably satisfactory to
Owner. Such approval shall be requested by Tenant prior to the
commencement of any Tenant’s Structural Work.
(d) Promptly following Owner’s
approval of Tenant’s Plans, Tenant shall secure or cause to
be secured all necessary approvals of Tenant’s Plans from all
governmental authorities having jurisdiction and all permits and
licenses necessary to perform Tenant’s Work. Tenant shall
obtain all necessary approvals from all governmental authorities
for any Tenant’s Work and any decoration, restriping or
routine maintenance and repairs to be made in or to the Premises.
Prior to the commencement of any Tenant’s Work, Tenant shall
furnish Owner with copies of Tenant’s Plans (if applicable)
as approved by such governmental authorities and, promptly upon
Owner’s request, copies of the foregoing permits and
licenses; provided, that with respect to Tenant’s
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Structural Work, the filing of any applications
with any governmental authorities for such approval or for any
permits or licenses required to perform such Tenant’s
Structural Work shall be done by a person or entity approved by
Owner (which approval shall not be unreasonably withheld or
delayed). Prior to such filing for Tenant’s Structural Work,
Tenant shall submit copies of such applications to Owner for its
approval, which shall not be unreasonably withheld or
delayed.
(e) Upon Tenant having secured the
approvals from Owner and from governmental authorities, all as
required under this Section, Tenant shall promptly (i) with respect
to Tenant’s Structural Work, enter into contracts in form and
substance approved by Owner, which approval shall not be
unreasonably withheld or delayed, provided that such contracts
shall provide for indemnification, insurance, bonding and release
of lien provisions reasonably satisfactory to Owner and (ii) upon
Owner’s request, furnish Owner with a copy of each executed
contract.
(f) Following compliance by Tenant
with its obligations under the foregoing provisions of this
Section, Tenant shall promptly commence or cause to be commenced
Tenant’s Work, decorating, restriping, signage or routine
maintenance and repairs and shall complete or cause the same to be
completed with reasonable diligence, in a first-class, workmanlike
manner in accordance with the approved Tenant’s Plans (if
applicable), all licenses and permits, all liens, encumbrances and
other matters affecting title to the Premises, this lease, all
applicable laws, ordinances and regulations of all governmental and
insurance authorities and all applicable requirements of the Board
of Fire Underwriters.
(g) Promptly following the
completion of Tenant’s Work, decorating, restriping or
signage or routine maintenance and repairs, Tenant shall obtain
and, promptly upon Owner’s request, submit to Owner copies of
all final necessary governmental and fire underwriters’
approvals or certificates evidencing the completion thereof in
compliance with all governmental and fire underwriters’
requirements. Effective on the expiration or sooner termination of
this lease, all warranties and guaranties, if any, in connection
with Tenant’s Work shall be assigned to Owner.
(h) Upon reasonable prior notice and
at reasonable times (except in an emergency where only such verbal
notice as shall be practicable under the circumstances shall be
required), Owner reserves the right, at any time and without
liability (except as specifically set forth in this lease and
except for the negligence or wilful misconduct of Owner, its
employees, contractors, representatives and agents) to Tenant, to
make changes in or to the Premises as it may deem reasonably
necessary or desirable; provided that same shall not interfere with
Tenant’s use and occupancy thereof, or Tenant’s
business therein or interfere with Tenant’s access to the
Premises (except for minor or de minimis interference).
(i) Upon reasonable prior notice and
at reasonable times (except in an emergency where only such verbal
notice as shall be practicable under the circumstances shall be
required), Owner may install and maintain pipes, fans, ducts, wires
and conduits within or through the walls, floors or ceilings of the
Premises so long as such installation and maintenance (i) shall not
materially interfere with Tenant’s use and occupancy thereof,
or Tenant’s business therein or (ii) materially interfere
with Tenant’s access to the Premises or materially or
permanently reduce the number of parking spaces available to
Tenant.
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8. Maintenance and Repairs;
Covenant Against Waste; and Right of Inspection .
(a) Tenant shall, throughout the
term of this lease, at Tenant’s expense, maintain the
Premises, and all equipment and other personal property used in
connection with the maintenance or operation thereof, in good
order, condition and repair, and Tenant shall not commit or suffer
any waste with respect thereto. Except as set forth herein, Tenant
shall promptly make all repairs, interior and exterior, structural
and nonstructural, ordinary as well as extraordinary, foreseen as
well as unforeseen, necessary to keep the Premises in good and
lawful order and condition, and said repairs shall be at least
equal in quality and class to the original work and performed by
reputable, independent contractors in a good and workmanlike
manner. Tenant shall maintain all portions of the Premises, and the
curbs and sidewalks adjoining the Premises, in a clean and orderly
condition, free of accumulation of dirt, rubbish, snow and ice, and
Tenant shall not permit or suffer the overloading of any of the
floors of the Premises. In no event shall Owner be liable to Tenant
for any damage to the Premises or to any property of Tenant
resulting from any cause, including, without limitation, roof
leaks. Tenant shall not place safes, units, filing systems,
libraries or other heavy equipment or furniture within the Premises
without first obtaining Owner’s consent.
(b) Notwithstanding any provision of
this lease to the contrary, Owner shall perform any structural
repairs or replacements of the structural portions of the roof,
load bearing walls and floors, load bearing columns, load bearing
beams, load bearing foundation and all other load bearing
components of the Premises, and shall perform any replacements of
major building systems, unless (i) the need for any structural
repair or replacement is caused by Tenant or Tenant’s failure
to comply with the provisions of this lease or (ii) the unexpired
term of this lease shall be one year or less.
(c) Tenant shall permit Owner, the
authorized representative of Owner, the holder of any mortgage on
the Premises and any prospective purchaser, mortgagee or tenant of
the Premises to enter the Premises at all reasonable times for the
purpose of inspecting all or any part thereof. Further, if Tenant
shall fail to perform any repairs, restoration or other work which
Tenant is obligated to perform under this lease and such default is
not remedied within the applicable grace period provided for in
this lease, or at any other time in the case of an emergency, Owner
and its authorized representatives shall have the right to enter
the Premises and to perform such work. If Tenant is not present to
permit entry into the Premises, Owner or its agents may enter the
same by master key or forcibly, provided reasonable care is
exercised to safeguard Tenant’s property, and such entry
shall not render Owner or its agents liable therefor, nor shall the
obligations of Tenant under this lease be affected. Any amount paid
by Owner for any of said purposes, and all necessary and incidental
costs and expenses (including, without limitation, counsel fees) of
Owner in connection therewith, together with interest thereon at
the rate of 12 percent per annum, or the then maximum lawful
interest rate, whichever shall be less, from the date of the making
of such expenditure by Owner, shall be due and payable by Tenant to
Owner on demand
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as additional rent. Nothing in this section
shall imply any duty on Owner to do any such work or to make any
alterations, repairs (including, without limitation, repairs and
other restoration work made necessary due to any fire or other
casualty), additions or improvements to the Premises, of any kind
whatsoever. The performance thereof by Owner shall not constitute a
waiver of Tenant’s default in failing to perform the
same.
(d) Without limiting the generality
of the foregoing, Tenant shall comply with the requirements and
recommendations contained in any operations and maintenance program
prepared by an independent and reputable engineering or
construction firm or company (as the same may be amended from time
to time upon reasonable prior notice to Tenant) forwarded to Tenant
by Owner with respect to the maintenance and repair of the
Premises; provided that such requirements and recommendations are
substantially typical of those which such firm or company would
provide to comparable or similarly situated Premises located in New
York, New York.
(e) With respect to repairs and
replacements described in Section 9(b) which are Owner’s
responsibility, Owner shall comply with the requirements and
recommendations prepared by an independent, reputable and
experienced engineering or construction firm or company reasonably
selected by Owner, provided that such requirements and
recommendations are substantially typical of those which such firm
or company would provide to comparable or similarly situated
Premises located in the New York, New York. If Owner shall fail to
perform any repair or replacement which Owner is obligated to
perform under this lease and such default is not remedied within
any applicable grace period provided for in this lease, or at any
other time in the case of an emergency (in which event Tenant shall
promptly notify Owner of the same), Tenant shall have the right to
perform such work and the obligations of Owner under this lease
shall not be affected. Any reasonable amount paid by Tenant for any
of said purposes, and all reasonably necessary and incidental costs
and expenses (including, without limitation, reasonable
attorneys’ fees) of Tenant in connection therewith, together
with interest thereon at the rate of 12 percent per annum, or the
then maximum lawful interest rate, whichever shall be less, from
the date of the making of such expenditure by Tenant, shall be due
and payable by Owner to Tenant on demand. The performance thereof
by Tenant shall not constitute a waiver of Owner’s default in
failing to perform the same.
9. Mechanics’ Liens
.
(a) Tenant shall not suffer or
permit any mechanic’s or other liens to be filed against the
Premises, or any part thereof, or against Tenant’s leasehold
estate in the Premises, by reason of any work, labor, services or
materials done for, or supplied, or claimed to have been done for,
or supplied to, Tenant or anyone holding the Premises or any part
thereof through or under Tenant. If any such lien shall at any time
be filed against the Premises, Tenant shall promptly notify Owner
and shall take such action as bonding, deposit, payment or
otherwise as will cause the same to be discharged of record within
20 days after the filing thereof. If Tenant shall fail to discharge
any such lien within such period, then, in addition to any other
right or remedy of Owner, Owner may, but shall not be obligated to,
procure the discharge of record of the same either by paying the
amount claimed to be due or by deposit in court or by bond, and
Owner shall
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be entitled, if Owner so elects, to compel the
prosecution of an action for the foreclosure of any such lien by
the lienor (which Owner may, at its option, elect not to defend or
to defend in such manner as Owner shall determine in its sole
discretion) and to pay the amount of the judgment, if any, in favor
of the lienor with interest, costs and allowances. Any amount paid
or deposited by Owner for any of the aforesaid purposes, and all
legal and other expenses of Owner, including, without limitation,
counsel fees, in defending any such action or in obtaining the
discharge of any such lien, together with interest thereon at the
rate of 12 percent per annum, or the then maximum lawful interest
rate, whichever shall be less, from the date of payment or deposit,
shall be due and payable by Tenant to Owner on demand as additional
rent.
(b) Nothing contained in this lease
shall be deemed to be, or construed in any way as constituting, the
consent or request of Owner, express or implied, by inference or
otherwise, to any person, for the performance of any labor or the
furnishing of any materials for any construction, rebuilding,
alteration, improvement, or repair of or to the Premises or any
part thereof, nor as giving Tenant any right, power or authority to
contract for or permit the rendering of any services or any
material which might in any way give rise to the right to file any
lien against Owner’s or Tenant’s interest in the
Premises. Further, Owner hereby gives notice to all persons who may
furnish labor or materials to Tenant at the Premises that Owner
does not consent to the filing of any mechanic’s or other
lien against Owner’s or Tenant’s interest or estate in
the Premises, and that all persons furnishing labor and materials
to Tenant shall look only to Tenant’s credit and such
security as Tenant may furnish for the payment of all such labor
and materials.
10. Requirements of Law .
Tenant shall, at its expense, at all times during the term of this
lease, 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 affecting the Premises, and/or
Tenant’s use, occupancy, repair and/or maintenance thereof,
and shall keep in full force and effect all licenses and permits
which are required or necessary to carry on the operation of
Tenant’s business at the Premises; except that Tenant shall
not be required to make or pay for any structural alterations in
order to so comply unless such alterations shall be necessitated by
the acts, omissions or negligence of Tenant or its employees,
contractors, agents, visitors or licensees. Tenant shall, at its
expense, at all times during the term of this leases comply with
the requirements of insurance authorities, the provision of all
insurance policies applicable to the Premises and the requirements
of all liens, encumbrances and other matters affecting title to the
Premises. Tenant shall pay all costs, expenses, liabilities,
losses, damages, fines, penalties, claims and demands, including,
without limitation, counsel fees, that may in any manner arise out
of or be imposed because of the failure of Tenant to comply with
this section.
11. Subordination . (a) This
lease is subject and subordinate to all ground or underlying leases
and to all mortgages which may now or hereafter affect such leases
or the Premises and to all renewals, modifications, consolidations,
replacements and extensions of any such leases and mortgages. This
clause shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such
subordination, Tenant shall execute promptly any certificate Owner
may request. To the extent not provided by applicable law, in
the
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event of the enforcement by any holder of a
mortgage on the Premises of the remedies provided for by law or by
such mortgage, Tenant will, upon request of any person succeeding
to the interest of Owner as the result of said enforcement,
automatically become the lessee of such successor in interest,
without any change in the terms or other provisions of this lease;
provided , however , that said successor in interest
shall not be bound by any payment of fixed rent or additional rent
for more than one month in advance, except prepayments in the
nature of security for the performance of its obligations under
this lease. Upon request by said successor in interest, Tenant
shall execute and deliver an instrument or instruments confirming
its attornment.
(b) If any act or omission of Owner
would give Tenant the right, immediately or after lapse of a period
of time, to cancel or terminate this lease, or to abate the payment
of Rent or to claim a partial or total eviction, Tenant shall not
exercise such right (i) until it has given written notice of such
act or omission to Owner and each holder of a Fee Mortgage whose
name and address shall previously have been furnished to Tenant and
(ii) until 30 days shall have elapsed following the giving of such
notice if the same can be remedied within a 30-day period or if the
same cannot be remedied within 30 days until a reasonable period of
time has elapsed to cure provided such cure has commenced within
the 30-day period, and, further, provided the holder of the Fee
Mortgage or the Owner shall with due diligence continue to remedy
such act or omission.
(c) Owner shall use reasonably
commercial efforts to obtain a nondisturbance agreement from each
holder of a Fee Mortgage encumbering the Premises on the
Commencement Date or future holder of a Fee Mortgage, in recordable
form and in the standard form customarily employed by such holder,
pursuant to which such holder shall agree that if and so long as no
default hereunder shall have occurred and be continuing, the
leasehold estate granted to Tenant and the rights of Tenant
pursuant to this Lease to quiet and peaceful possession of the
Premises shall not be terminated, modified, affected or disturbed
by any action which such holder of the Fee Mortgage may take to
foreclose any such Fee Mortgage, as applicable, and that any
successor landlord shall recognize this lease as being in full
force and effect as if it were a direct lease between such
successor landlord and Tenant upon all of the terms, covenants,
conditions and options granted to Tenant under this lease, except
as otherwise provided herein.
12. Default .
(a) If Tenant defaults in fulfilling
any of its obligations under this lease, other than the obligations
for the payment of Rent; or if the Premises become abandoned; or if
the Premises are damaged by reason of negligence or carelessness of
Tenant, its agents, employees or invitees; or if any execution or
attachment shall be issued against Tenant or any of Tenant’s
property whereupon the Premises shall be taken or occupied by
someone other than Tenant; then in any one or more of such events,
upon Owner serving a 30 days’ notice upon Tenant specifying
the nature of said default and upon the expiration of said 30 days,
if Tenant shall have failed to comply with or remedy such default,
or if the said default or omission complained of shall be of a
nature that the same cannot be completely cured or remedied within
said 30-day period and cannot be cured with the payment of money,
and if Tenant shall not have diligently commenced curing such
default within said 30-day period and thereafter continuously
prosecuted the curing with due diligence until completion, then
Owner may serve a 3 days’ notice of cancellation
of
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this lease upon Tenant, and upon the expiration
of said 3 days, this lease and the term under this lease shall end
and expire as fully and completely as if the expiration of such
3-day period was the day definitely fixed for the expiration of the
term of this lease and Tenant shall then quit and surrender the
Premises to Owner but shall remain liable as hereinafter
provided.
(b) If the notice provided for in
subsection (a) of this Section shall have been given, and the term
shall expire as aforesaid; or if Tenant shall default in the
payment of Rent and the same i
