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AGREEMENT OF LEASE
Between
ZAPCO 1500 INVESTMENT L.P.
Landlord,
and
SALON INTERNET, INC.
Tenant.
PREMISES:
Portion of Fourteenth (14th) Floor
1500 Broadway
New York, New York
Lease Date:
March ___, 1998
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TABLE OF CONTENTS
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1. DEMISE, PREMISES, TERM, RENT....................................................................... 1
2. USE AND OCCUPANCY.................................................................................. 3
3. ALTERATIONS........................................................................................ 5
4. REPAIRS-FLOOR LOAD................................................................................. 9
5. WINDOW CLEANING.................................................................................... 10
6. REQUIREMENTS OF LAW................................................................................ 10
7. SUBORDINATION...................................................................................... 12
8. RULES AND REGULATIONS.............................................................................. 13
9. INSURANCE.......................................................................................... 14
10. DESTRUCTION OF THE PREMISES: PROPERTY LOSS OR DAMAGE............................................... 16
11. EMINENT DOMAIN..................................................................................... 18
12. ASSIGNMENT AND SUBLETTING.......................................................................... 18
13. CONDITION OF THE PREMISES.......................................................................... 27
14. ACCESS TO PREMISES................................................................................. 28
15. CERTIFICATE OF OCCUPANCY........................................................................... 32
16. LANDLORD'S LIABILITY............................................................................... 32
17. DEFAULT............................................................................................ 33
18. REMEDIES AND DAMAGES............................................................................... 35
19. FEES AND EXPENSES.................................................................................. 37
20. NO REPRESENTATIONS BY LANDLORD..................................................................... 38
21. END OF TERM........................................................................................ 39
22. QUIET ENJOYMENT.................................................................................... 40
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TABLE OF CONTENTS
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23. FAILURE TO GIVE POSSESSION......................................................................... 40
24. NO WAIVER.......................................................................................... 40
25. WAIVER OF TRIAL BY JURY............................................................................ 41
26. INABILITY TO PERFORM............................................................................... 42
27. BILLS AND NOTICES.................................................................................. 42
28. ESCALATION......................................................................................... 42
29. SERVICES........................................................................................... 46
30. PARTNERSHIP TENANT................................................................................. 52
31. VAULT SPACE........................................................................................ 53
32. SECURITY DEPOSIT/LETTER OF CREDIT.................................................................. 53
33. CAPTIONS........................................................................................... 54
34. ADDITIONAL DEFINITIONS............................................................................. 54
35. PARTIES BOUND...................................................................................... 55
36. BROKER............................................................................................. 55
37. INDEMNITY.......................................................................................... 55
38. ADJACENT EXCAVATION-SHORING........................................................................ 56
39. MISCELLANEOUS...................................................................................... 56
40. TENANT RELOCATION.................................................................................. 57
</TABLE>
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<PAGE>
AGREEMENT OF LEASE, made as of this _______ day of March, 1998 between
ZAPCO 1500 INVESTMENT L.P., a Delaware limited partnership, having an office c/o
Intertech Corporation, 1301 Pennsylvania Avenue, Washington, D.C. 20004
(hereinafter called "LANDLORD") and SALON INTERNET, INC., a California
corporation, having an office at 706 Mission Street, 2nd Floor, San Francisco,
California 94103 (hereinafter called "TENANT").
W I T N E S S E T H:
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
1. DEMISE, PREMISES, TERM, RENT.
1.1 Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord a portion of the fourteenth (14th) floor also known as Suite 1402 as
indicated on Exhibit 1 annexed hereto and made a part hereof (hereinafter called
the "PREMISES") in the building known as 1500 Broadway, in the Borough of
Manhattan, City, County and State of New York (said building is hereinafter
called the "BUILDING" and the Building, together with the plot of land upon
which it stands, is hereinafter called the "REAL PROPERTY") for a term
(hereinafter called the "TERM") to commence on the Commencement Date
(hereinafter defined) and to end on the Expiration Date (hereinafter defined)
both dates inclusive unless the Term shall sooner end pursuant to any of the
terms, covenants or conditions of this Lease or pursuant to law for the Rent
herein reserved. Tenant agrees to pay the Rent provided for herein in lawful
money of the United States which shall be legal tender in payment of all debts
and dues, public and private, at the time of payment. in equal monthly
installments, in advance, on the first (lst) day of each calendar month during
the Term from and after the Rent Commencement Date at the office of Landlord or
such other place as Landlord may designate, without any set-off, offset,
abatement or deduction whatsoever (except as otherwise expressly provided in
this Lease), provided, however, that Tenant shall pay the first monthly
installment on the execution of this Lease. The Rent for any portion of a
calendar month included in the Term shall be prorated in the ratio that the
number of days in such portion bears to the actual number of days in such month.
In the event that, on the Rent Commencement Date, or thereafter, Tenant shall be
in default in the payment of Rent to Landlord pursuant to the terms of another
lease of space in the Building with Landlord or with Landlord's predecessor-in-
interest, Landlord may, at Landlord's option and without notice to Tenant add
the amount of such arrearages to any monthly installment of the Rent and the
same shall be payable to Landlord as additional rent.
1.2 The following definitions contained in this subsection 1.2 of this
Article 1 shall have the meanings hereinafter set forth used throughout this
Lease, Exhibits, Schedules, and Riders (if any).
(i) "COMMENCEMENT DATE" shall mean the date upon which Landlord
delivers possession of the Premises to the Tenant, provided that upon such date
(i) Landlord shall have substantially completed construction of the demising
wall located within the Premises and (ii) electrical service to the Premises
shall be in good working order, subject to the provisions of subsection 1.3 of
this Article 1.
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(ii) "EXPIRATION DATE" shall mean the last day of the month in which
the sixth (6th) anniversary of the Commencement Date occurs, or such earlier or
later date on which the Term shall sooner or later end pursuant to any of the
terms or provisions of this Lease or pursuant to law.
(iii) "RENT" shall mean:
(a) One Hundred Fifty-Two Thousand Two Hundred Seventeen and
No/1 Dollars ($152,217.00) annually, payable in equal monthly installments, in
advance, of Twelve Thousand Six Hundred Four and 75/100 Dollars ($12,684.75),
from the Commencement Date through and including the last day preceding the one
(1) year anniversary of the Commencement Date;
(b) One Hundred Fifty-Six Thousand Four Hundred Thirty-Two and
24/100 Dollars ($156,432.24) annually, payable in equal monthly installments, in
advance, of Thirteen Thousand Thirty-Six and 02/100 Dollars ($13,036.02), from
the one (1) year anniversary of the Commencement Date through and including the
last day preceding the two (2) year anniversary of the Commencement Date;
(c) One Hundred Sixty Thousand Seven Hundred Sixty-Four and
57/100 Dollars ($160,764.57) annually, payable in equal monthly installments, in
advance, of Thirteen Thousand Three Hundred Ninety-Seven and 05/100 Dollars
($13,397.05), from the two (2) year anniversary of the Commencement Date through
and including the last day preceding the three (3) year anniversary of the
Commencement Date;
(d) One Hundred Seventy-Three Thousand Fifty-Nine and 02/100
Dollars ($173,059.02) annually, payable in equal monthly installments, in
advance, of Fourteen Thousand Four Hundred Twenty-One and 59/100 Dollars
($14,421.59), from the three (3) year anniversary of the Commencement Date
through and including the last day preceding the four (4) year anniversary of
the Commencement Date;
(e) One Hundred Seventy-Seven Thousand Eight Hundred Ninety-
Eight and 74/100 Dollars ($177,898.74) annually, payable in equal monthly
installments, in advance, of Fourteen Thousand Eight Hundred Twenty-Four and
90/100 Dollars ($14,824.90) from the four (4) year anniversary of the
Commencement Date through and including the last day preceding the five (5) year
anniversary of the Commencement Date; and
(f) One Hundred Eighty-Two Thousand Eight Hundred Fifty-Five
and 55/100 Dollars ($182,855.55) annually, payable in equal monthly
installments, in advance, of Fifteen Thousand Two Hundred Thirty-Seven and
96/100 Dollars ($15,237.96), from the five (5) year anniversary of the
Commencement Date through and including the Expiration Date;
together with any increases in Rent provided for in this Lease, all additional
rent and any other sums payable hereunder.
(iv) "PERMITTED USES" shall mean as executive and general offices,
and for no other purpose.
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(v) "BASE TAX YEAR" shall mean the fiscal tax year commencing July
1, 1998 and ending June 30, 1999.
(vi) "BASE TAXES" shall mean an amount equal to the Taxes payable
for the Base Tax Year.
(vii) "TENANT'S PROPORTIONATE SHARE" shall mean nine hundred eighty-
seven thousandths percent (.987%).
(viii) "ELECTRICAL INCLUSION FACTOR" shall mean $11,709.00.
(ix) "SECURITY DEPOSIT" shall mean the sum of $35,127.00.
(x) "BROKER" shall mean, collectively, (a) Cushman & Wakefield,
Inc. and (b) Williamson, Picket, Gross, Inc.
(xi) "RENT COMMENCEMENT DATE" shall mean the date which is two (2)
months after the Commencement Date.
1.3 Tenant agrees, upon demand of Landlord, to execute, acknowledge
and deliver to Landlord an instrument, in form reasonably satisfactory to
Landlord and Tenant, setting forth the Commencement Date, the Rent Commencement
Date and the Expiration Date, provided that Tenant's failure or refusal to
deliver such instrument shall have no effect on such dates.
1.4 Anything in subsections 1.1 or 1.2 of this Lease to the contrary
notwithstanding, the Rent described in subsection 1.2 above shall be partially
abated in the amount of Eleven Thousand Seven Hundred Nine and No/100 Dollars
($11,709.00) per month for the period (the "PARTIAL ABATEMENT PERIOD")
commencing on the Commencement Date and ending on the day immediately preceding
the Rent Commencement Date so that, during the Partial Abatement Period Tenant
shall be required to pay Rent in the amount of Nine Hundred Seventy-Five and
75/100 Dollars ($975.75) per month; provided that, if at any time during the
first eighteen (18) months of the term of this Lease Tenant shall be in default
in the payment of Rent or any other monetary obligation due hereunder beyond any
applicable grace or cure period hereunder, the Rent so abated shall immediately
be due and payable.
2. USE AND OCCUPANCY.
2.1 Tenant shall use and occupy the Premises for the Permitted Uses,
and for no other purpose. Tenant may use a portion of the Premises for a pantry
installed for use by Tenant's employees, subject to the terms and provisions of
this Lease, including the Building Rules and Regulations.
2.2 Anything contained herein to the contrary notwithstanding, Tenant
shall not use the Premises or any part thereof, or permit the Premises or any
part thereof to be used in a manner or for a purpose that (a) violates any
certificate of occupancy in force for the Premises, or the Building; (b) causes
or is likely to cause damage to the Building, the Premises or any equipment,
facilities or other systems therein; (c) impairs the character, reputation,
image or
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appearance of the Building as a first-class office building, (d) interferes with
the proper, efficient and economic maintenance, operation and repair of the
Building or its equipment, facilities or systems, including without limitation,
the Building service systems; (e) constitutes a nuisance, annoyance or
inconvenience to other tenants or occupants of the Building or interferes with
or disrupts the use or occupancy of any area of the Building (other than the
Premises) by other tenants or occupants; (f) results in demonstrations, bomb
threats or other events that require evacuation of or increased security for the
Building or otherwise disrupts the use, occupancy or quiet enjoyment of the
Building by other tenants and occupants; (g) interferes with the transmission or
reception of microwave, television, radio or other communication signals by
antennae located on the roof of, or elsewhere in, the Building; (h) violates any
provision of any financing documents from time to time encumbering the Building,
all covenants, conditions and restrictions affecting the Building, or any
modifications, amendments, substitutions. replacements, supplements or additions
to any of the foregoing; or (i) violates any requirement or condition of any
insurance policy maintained by Landlord in connection with the Building or of
the standard fire insurance policy issues for office building in the City of New
York or the rules and regulations of the New York Board of Fire Underwriters or
Insurance Services Office (or similar bodies). In addition to the foregoing,
prohibited uses also include the use of any part of the Premises for: (i) a
restaurant or bar; (ii) the preparation, consumption, storage, manufacture or
sale of food, beverages, liquor, tobacco or drugs (excluding the sale, storage
and consumption of food or beverages from or in connection with vending machines
or the pantry installed for use by Tenant's employees); (iii) the business of
photocopying, multilith or offset printing (but Tenant may use part of the
Premises for photocopying in connection with its own business); (iv) a typing or
stenography business; (v) a school or classroom; (vi) cooking, lodging or
sleeping; (vii) the operation of retail facilities of a savings and loan
association or retail facilities of any financial, lending, securities brokerage
or investment activity; (viii) medical or dental offices or laboratories; (ix) a
barber, beauty or manicure shop; (x) an employment agency, executive search firm
or similar enterprise; (xi) a consulate; (xii) the manufacture, retail sale,
storage of merchandise or auction of merchandise, goods or property of any kind;
or (xiii) any immoral or illegal purposes.
2.3 Tenant, at its expense, shall procure and at all times comply with the
terms and conditions of any license or permit required for the proper and lawful
conduct of the Permitted Uses in the Premises. Tenant shall pay to any taxing
authority any fee, tax or other charge levied or assessed by any governmental
authority in connection with Tenant's use and/or occupancy of the Premises,
including the New York City commercial occupancy tax.
2.4 Tenant acknowledges that its use of the Premises in contravention
of the limitations in this Article 2, or the Building's Rules and Regulations,
would cause irreparable harm to Landlord, and acknowledges that Landlord is
entitled to interim and permanent injunctive relief against Tenant and any other
person so using the Premises, as a remedy in addition to all of Landlord's other
rights and remedies. Tenant shall cooperate with Landlord in seeking an
injunction against any use other than permitted herein by any other person
Tenant may have admitted to the Premises.
3. ALTERATIONS.
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3.1 Tenant shall not make or perform or permit the making or performance
of, any alterations, installations, improvements, additions or other physical
changes in or about the Premises (hereinafter collectively called "ALTERATIONS")
without Landlord's prior consent, provided, however, that Landlord's consent
shall not be required for Alterations consisting only of painting, installing or
removing wall covering or carpeting and other similar minor alterations costing
less than $15,000 in the aggregate, in each case, which are solely of a cosmetic
or decorative nature ("DECORATIVE ALTERATIONS") so long as such Decorative
Alterations are not visible from the exterior of the Building and provided
Tenant shall notify Landlord of the nature of such Decorative Alteration and the
contractors to be performing the same at least fifteen (15) days prior to
commencement and perform such Decorative Alteration in accordance with all other
provisions of this Article 3. Landlord's consent to Alterations may be withheld
for any reason or for no reason, provided, however, that with respect to
nonstructural Alterations which do not require electrical, plumbing, or HVAC
work and which do not affect any other Building systems or space outside of the
Premises ("NON-STRUCTURAL ALTERATIONS"), Landlord's consent shall not be
unreasonably withheld or delayed.
3.2 All Alterations shall be done in compliance with all applicable
laws, regulations and codes, at Tenant's expense and at such times and in such
manner as Landlord may from time to time reasonably designate. All Alterations
made and installed by Tenant, or at Tenant's expense, upon or in the Premises
which are of a permanent nature and which cannot be removed without damage to
the Premises or Building shall become and be the property of Landlord, and shall
remain upon and be surrendered with the Premises as a part thereof at the end of
the term of this Lease, except that Landlord may require as a condition of
Landlord granting its consent to any of such Alterations (which requirement
Landlord may exercise no later than ten (10) business days after Landlord grants
such consent) that, prior to the termination of the Lease and Tenant's surrender
of the Premises, any of such Alterations shall be removed and, in the event of
service of such notice, Tenant will, at Tenant's own cost and expense, remove
the same in accordance with such request, and restore the Premises to its
original condition, ordinary wear and tear and casualty excepted. All
furniture, furnishings and movable fixtures and partitions installed by Tenant
and all Alterations in and to the Premises which may be made by Tenant at its
own cost and expense prior to and during the Term, or any renewal thereof, shall
remain the property of Tenant and upon the Expiration Date or earlier end of the
Term or any renewal thereof, shall be removed from the Premises by Tenant,
provided, however, that Tenant shall repair any damage to the Premises or the
Building caused by such removal.
3.3 Prior to making any Alterations, Tenant (i) shall submit to Landlord
detailed plans and specifications (including layout, architectural, mechanical,
electrical, plumbing and structural drawings) for each proposed Alteration
(other than Decorative Alterations not requiring plans to be submitted to, or
permits to be obtained from, any governmental authority) and shall not commence
any such Alteration (other than a Decorative Alteration not requiring Landlord's
consent) without first obtaining Landlord's approval of such plans and
specifications, (ii) shall, at its expense, obtain all permits, approvals and
certificates required by any governmental or quasi-governmental bodies and
furnish copies of the same to Landlord, and (iii) shall furnish to Landlord
duplicate original policies of worker's compensation (covering all persons to be
employed by Tenant, and Tenant's contractors and subcontractors in connection
with such Alteration), comprehensive public liability insurance (including
property damage coverage,
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completed operations/product liability),and builder's risk insurance (issued on
a completed value basis), all in such form, with such companies, for such
periods and in such amounts as Landlord may reasonably require, naming Landlord
and its agents as additional insureds. With respect only to the plans and
specifications for the initial Alterations to be performed by Tenant in the
Premises in connection with Tenant's initial build-out of the Premises ("Initial
-------
Alterations"), Landlord shall notify Tenant of its approval or disapproval of
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the same within five (5) business days after Landlord's receipt thereof. Tenant
shall pay to Landlord an amount equal to ten percent (10%) of the cost of the
Alterations (other than Tenant's Initial Alterations and any Decorative
Alterations) to compensate Landlord for Landlord's indirect costs, field
supervision and coordination in connection with the work. In addition, Tenant
agrees to reimburse Landlord for Landlord's out-of-pocket expenses incurred in
connection with Landlord's (or Landlord's agents) review of the proposed
Alteration within ten (10) days of receipt of an invoice. Before commencing any
work, Tenant shall furnish to Landlord such bonds for payment and completion or
such other security for completion thereof and payment therefor as Landlord
shall reasonably require and in such form as is reasonably satisfactory to
Landlord and in an amount which shall be 120% of Landlord's estimate of the cost
of performing such work. Upon completion of such Alteration, Tenant, at Tenant's
expense, shall obtain certificates of final approval of such Alteration required
by any governmental or quasi-governmental bodies and shall furnish Landlord with
copies thereof, together with copies of "as-built" plans for such Alteration.
3.4 Prior to commencing any Alteration (including a Decorative
Alteration), Tenant shall submit to Landlord for its approval (which shall not
be unreasonably withheld or delayed) a list of the contractors and
subcontractors (categorized by trade) which Tenant proposes to use or from which
Tenant proposes to solicit bids in connection therewith. Tenant shall not
commence any Alteration until Landlord has approved of Tenant's proposed
contractors or subcontractors. If, prior to or after commencement of any
Alteration, there is a change in the contractors or subcontractors, Tenant shall
submit a new or supplemental list and the foregoing provisions shall be
applicable thereto. Notwithstanding anything to the contrary contained herein,
connections to, and disconnections from, the Building's fire safety system, the
Building's sprinkler, and the Building's condenser or chilled water system shall
be performed, in each case, solely at Tenant's expense, and only by contractors
designated by Landlord charging market rates. All Alterations shall be made and
performed in accordance with the Rules and Regulations (hereinafter defined);
all materials and equipment to be incorporated in the Premises as a result of
all Alterations shall be new and first quality; no such materials or equipment
shall be subject to any lien, encumbrance, chattel mortgage or title retention
or security agreement. Any mechanic's lien filed against the Premises, or the
Real Property, for work claimed to have been done for, or materials claimed to
have been furnished to, Tenant shall be discharged by Tenant within thirty (30)
days thereafter, at Tenant's expense, by payment or filing the bond required by
law. Notice is hereby given that Landlord shall not be liable for any labor or
materials furnished or to be furnished to Tenant upon credit, and that no
mechanic's or other lien for any such labor or materials shall attach to or
affect the reversion or other estate or interest of Landlord in and to the
Premises, and Tenant agrees to so notify any contractor performing work in the
Premises. Tenant shall not, at any time prior to or during the Term, directly or
indirectly employ, or permit the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or otherwise,
if, in Landlord's sole discretion, such employment will interfere or
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cause any conflict with other contractors, mechanics, or laborers engaged in the
construction, maintenance or operation of the Building by Landlord, Tenant or
others. In the event of any such interference or conflict or if any union
establishes a picket line with respect to such employment, and Tenant does not,
within 24 hours and without expense to Landlord, obtain an order from a court or
governmental agency enjoining such picketing, Tenant, upon demand of Landlord,
shall cause all contractors, mechanics or laborers causing such interference or
conflict to leave the Building immediately.
3.5 All Alterations performed by Tenant in and to the Premises shall
be done in a fashion such that the Premises and the Building shall be in
compliance with the requirements of Local Law 5 of 1973 of The City of New York,
as heretofore and hereafter amended ("LOCAL LAW 5 LAWS"). The foregoing shall
include, without limitation, (i) compliance with the compartmentalization
requirements of Local Law 5, (ii) relocation of existing fire detection devices,
alarm signals and/or communication devices necessitated by such Alterations and
(iii) installation of such additional fire control or detection devices as may
be required by applicable governmental or quasi-governmental rules, regulations
or requirements (including, without limitation, any requirements of the New York
Board of Fire Underwriters) as a result of Tenant's manner of use of the
Premises or the Alterations. Landlord shall not be responsible for any damages
to Tenant's fire control or detection devices nor shall Landlord have any
responsibility for the maintenance or replacement thereof unless any such damage
shall have been caused directly by the negligence or wilful misconduct of
Landlord or its agents or employees. Tenant shall submit to Landlord for
Landlord's approval all design specifications and requirements prepared in
connection with Tenant's installation of said fire control or detection devices.
Notwithstanding the foregoing, Landlord will determine what modifications, if
any, to the base building fire alarm system will be required as a result of
Tenant's fire control system and peripheral devices. Such modifications shall
be performed by Landlord at Tenant's sole, but reasonable, cost and expense.
All such fire control devices shall be manufactured by a company designated by
Landlord charging market rates. In the event a local panel is required to be
installed in the Premises in accordance with the foregoing provisions, such
local panel shall be a type designated by Landlord.
3.6 (A) Subject to the provisions of this Section 3.6, Landlord shall
contribute an amount not to exceed Thirty-Nine Thousand Thirty and 00/100
Dollars ($39,030.00) (the "TENANT FUND") toward (x) the cost of the performance
of Tenant's Initial Alterations (other than Soft Costs) to be performed by
Tenant in the Premises and (y) the fees of architects, engineers, expediters and
consultants incurred in connection with the performance of the Initial
Alterations (the costs described in this clause (y) being collectively referred
to herein as "SOFT COSTS"). Notwithstanding, the foregoing, Landlord shall not
be required to contribute toward Soft Costs an amount in excess of twenty
percent (20%) of the Tenant Fund.
(B) Landlord shall disburse a portion of the Tenant Fund to Tenant
from time to time, within fifteen (15) business days after receipt of the items
set forth in Section 3.6(C) hereof, provided that such request is received by
Landlord by the tenth (10th) day of the calendar month in which Landlord
receives such request, and further provided that on the date of a request and on
the date of disbursement from the Tenant Fund, no Event of Default shall have
occurred and be continuing. Disbursements from the Tenant Fund shall not be
made more frequently than
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monthly, and shall be in an amount equal to ninety percent (90%) of the
aggregate amount theretofore paid or which is then due (as certified by the
chief executive or financial officer of Tenant and Tenant's independent,
licensed architect) to Tenant's contractors, subcontractors and materialmen, or
on account of Soft Costs which in either case have not been the subject of a
previous disbursement from the Tenant Fund; provided, however, that in no event
shall Tenant be entitled to a disbursement from the Tenant Fund on account of
any Soft Costs (other than architect's and engineer's fees and expenses) unless
and until the performance of the Initial Alterations has been completed, and all
of the costs incurred in connection therewith (other than Soft Costs) shall have
been paid in fall.
(C) Landlord's obligation to make disbursements from the Tenant Fund
shall be subject to receipt of: (a) a request for such disbursement from Tenant
signed by the chief executive or financial officer of Tenant, together with the
certification required by Section 3.6(B) hereof, (b) copies of all receipts,
invoices and bills for the work completed and materials furnished in connection
with the Initial Alterations and incorporated in the Premises, or with respect
to Soft Costs, which in either case have been paid by Tenant or which is then
due and for which Tenant is seeking reimbursement, (c) with respect to
disbursements of the Tenant Fund to cover costs other than Soft Costs, a
certificate of Tenant's independent licensed architect stating (i) that, in his
opinion, the portion of the Initial Alterations theretofore completed and for
which the disbursement is requested was performed in a good and workerlike
manner in accordance with the final detailed plans and specifications for such
Initial Alterations, as approved by Landlord, (ii) the percentage of completion
of the initial Alteration as of the date of such certificate, and (iii) the
estimated total cost to complete the performance of the Initial Alterations, and
(d) partial lien waivers, to the extent permitted by law, from each contractor,
subcontractor and materialman who performed work in connection with the Initial
Alterations, to the extent of the amount theretofore paid to such contractor,
subcontractor or materialman.
(D) In no event shall the aggregate amount paid by Landlord to Tenant
under this Section 3.6 exceed the amount of the Tenant Fund. Upon the
completion of the Initial Alterations (which shall include completion of all
"punch list" items and payment of Soft Costs, and satisfaction of the conditions
set forth in Section 3.6(E) hereof), any amount of the Tenant Fund which has not
been previously disbursed shall be credited by Landlord against the ensuing Rent
payments. Upon the disbursement or credit of the entire Tenant Fund, Landlord
shall have no further obligation or liability whatsoever to Tenant for further
disbursement of any portion of the Tenant Fund to Tenant. It is expressly
understood and agreed that Tenant shall complete, at its sole cost and expense,
the Initial Alterations, and pay Soft Costs, whether or not the Tenant Fund is
sufficient to fund such completion and Soft Costs: provided that, subject to
Landlord's reasonable prior approval, in the event of some unforeseen expense,
Tenant may eliminate some improvements to keep costs within the amount of the
Tenant Fund. Any costs to complete the Initial Alterations and pay Soft Costs
in excess of the Tenant Fund shall be the sole responsibility and obligation of
Tenant.
(E) Within thirty (30) days after completion of the Initial
Alterations, Tenant shall deliver to Landlord final waivers of lien from all
contractors, subcontractors and materialmen involved in the performance of the
Initial Alterations and the materials furnished in connection therewith, and a
certificate from Tenant's independent licensed architect certifying
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that (i) in his opinion the Initial Alterations have been performed in a good
and workerlike manner and completed in accordance with the final detailed plans
and specifications for such Initial Alterations as approved by Landlord, and
(ii) all contractors, subcontractors and materialmen have been paid for the
Initial Alterations and materials furnished through such date.
4. REPAIRS-FLOOR LOAD.
Landlord shall maintain and repair the public portions of the Building,
both exterior and interior, including the roof in conformance with the standards
of non-institutional office buildings in Manhattan comparable to the Building.
In making such repairs, Landlord shall use reasonable efforts to minimize
interference with Tenant's occupancy of the Premises, provided that (i) the
Landlord shall not be obligated to use overtime or premium pay labor, and (ii)
the foregoing shall not apply to repairs in an emergency situation. Tenant
shall, throughout the Term, take good care of the Premises and the fixtures and
appurtenances therein and at Tenant's sole cost and expense, make all
nonstructural repairs thereto as and when needed to preserve them in good
working order and condition, reasonable wear and tear and damage for which
Tenant is not responsible under the terms of this Lease excepted. Tenant shall
pay Landlord the reasonable cost of all replacements to the lamps, tubes,
ballasts and starters in the lighting fixtures installed in the Premises.
Notwithstanding the foregoing, all damage or injury to the Premises or to any
other part of the Building, or to its fixtures, equipment and appurtenances,
whether requiring structural or nonstructural repairs, caused by or resulting
from carelessness, omission, neglect or improper conduct of or Alterations made
by Tenant, Tenant's servants, employees, invitees or licensees, shall be
repaired promptly by Landlord at Tenant's sole cost and expense, to the
reasonable satisfaction of Landlord. Tenant also shall repair all damage to the
Building and the Premises caused by the moving of Tenant's fixtures, furniture
or equipment. All the aforesaid repairs shall be of quality or class equal to
the original work or construction and shall be made in accordance with the
provisions of Article 3 hereof. If Tenant fails after ten (10) days' notice to
proceed with due diligence to make repairs required to be made by Tenant or if
such repairs are structural in nature or affect a Building system, the same may
be made by Landlord, at the expense of Tenant and the expenses thereof incurred
by Landlord, shall be collectible by Landlord as additional rent within ten (10)
days after rendition of a bill or statement therefor. Tenant shall give Landlord
prompt notice of any defective condition in any plumbing, electrical, air-
cooling or heating system located in, servicing or passing through the Premises.
Tenant shall not place a load upon any floor of the Premises exceeding the floor
load per square foot area which such floor was designed to carry and which is
allowed by law. Landlord reserves the right to prescribe the weight and position
of all safes, business machines and heavy equipment and installations. Business
machines and mechanical equipment shall be placed and maintained by Tenant at
Tenant's expense in settings sufficient in Landlord's reasonable judgment to
absorb and prevent vibration, noise and annoyance. Except as provided in Article
10 hereof or if directly caused by the negligence or wilful misconduct of
Landlord or its agents or employees, there shall be no allowance to Tenant for a
diminution of rental value and no liability on the part of Landlord by reason of
inconvenience, annoyance or injury to business arising from Landlord, Tenant or
others making, or failing to make, any repairs, alterations, additions or
improvements in or to any portion of the Building, or the Premises, or in or to
fixtures, appurtenances, or equipment thereof. If the Premises are or become
infested with vermin, Tenant, at Tenant's expense, shall cause the same to be
exterminated from time to time
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to the satisfaction of Landlord and shall employ such exterminators and such
exterminating company or companies as shall be approved by Landlord. The water
and wash closets and other plumbing fixtures shall not be used for any purposes
other than those for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other substances shall be deposited therein.
5. WINDOW CLEANING.
Tenant shall not clean, nor require, permit, suffer or allow any
window in the Premises to be cleaned, from the outside in violation of Section
202 of the Labor Law, or any other applicable law, or of the rules of the Board
of Standards and Appeals, or of any other board or body having or asserting
jurisdiction.
6. REQUIREMENTS OF LAW.
6.1 Tenant at its sole expense shall comply with all existing or future
laws, orders and regulations of federal, state, county and municipal authorities
and with any existing or future direction of any public officer or officers,
pursuant to law, and all existing or future rules, orders, regulations or
requirements of the New York Board of Fire Underwriters, or any other similar
body which shall impose any violation, order or duty upon Landlord or Tenant
with respect to the Premises or Tenant's occupancy of the Premises.
Notwithstanding the foregoing, Tenant's obligations under the preceding sentence
shall impose no obligation on Tenant to make any alterations to the Premises or
the Building, whether structural or otherwise, or to otherwise comply with any
of such laws, orders and regulations, unless such obligations under the
preceding sentence arise as a result of (i) the manner of conduct of Tenant's
business or operation of its equipment therein, but excluding any use of the
Premises merely as general office space; (ii) any cause or condition created by
or at the instigation of Tenant, including, without limitation, any Alteration;
(iii) the breach of any of Tenant's obligations hereunder; or (iv) any Hazardous
Material brought into the Building by Tenant, any subtenant of Tenant or any of
their agents, contractors or invitees. Tenant shall promptly forward to Landlord
any notice it receives of the violation of any law involving the Premises.
Tenant shall pay, within twenty (20) days after demand thereof, all the costs,
expenses, fines, penalties and damages that may be imposed upon Landlord by
reason of or arising out of Tenant's failure to comply with the provisions of
this Subsection 6. 1.
6.2 Landlord represents, that to the best of its knowledge, no asbestos
containing materials ("ACM") exist in the Premises. Notwithstanding the
foregoing, to the extent any ACM is found to exist in the Premises during the
term of the Lease (other than any ACM placed in the Premises by Tenant), which
ACM shall be required to be removed, encapsulated or otherwise treated as a
result of Alterations being performed by Tenant, or pursuant to applicable law,
then Landlord, at Landlord's sole cost and expense, shall remove, treat or
encapsulate such ACM in accordance with applicable law and Landlord shall use
reasonable efforts to minimize interference with Tenant's occupancy of the
Premises, provided that the (i) Landlord shall not be obligated to use overtime
or premium pay labor, and (ii) the foregoing shall not apply to repairs in an
emergency situation.
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6.3 Tenant shall not do or permit to be done any act or thing upon
the Premises which will invalidate or be in conflict with any insurance policies
covering the Building and fixtures and property therein; and shall not do, or
permit anything to be done in or upon the Premises, or bring or keep anything
therein, except as now or hereafter permitted by the New York City Fire
Department, New York Board of Fire Underwriters, New York Fire Insurance Rating
Organization or other authority having jurisdiction and then only in such
quantity and manner of storage as not to increase the rate for fire insurance
applicable to the Building, or use the Premises in a manner which shall increase
the rate of fire insurance on the Building or on property located therein, over
that in similar type buildings or in effect prior to this Lease. Any work or
installations made or performed by or on behalf of Tenant or any person claiming
through or under Tenant pursuant to this Article shall be made in conformity
with, and subject to the provisions of, Article 3 hereof. If by reason of
failure of Tenant to comply with the provisions of this Article, the fire
insurance rate shall at the beginning of this Lease or at any time thereafter be
higher than it otherwise would be, then Tenant shall reimburse Landlord, as
additional rent hereunder, for that part of all fire insurance premiums
thereafter paid by Landlord which shall have been charged because of such
failure or use by Tenant, and shall make such reimbursement upon the first day
of the month following such outlay by Landlord. In any action or proceeding
wherein Landlord and Tenant are parties, a schedule or "make up" of rates for
the Building or the Premises issued by the New York Fire Insurance Rating
Organization, or other body fixing such fire insurance rates, shall be
conclusive evidence of the facts therein stated and of the several items and
charges in the fire insurance rates then applicable to the Premises. If either
Landlord or Tenant is required to provide cleaning and/or rubbish removal
services at the Premises, Tenant shall take such steps, and shall cause its
employees, agents, contractors and business visitors to observe such rules,
regulations and requirements as may, from time to time. be imposed or enacted by
Landlord by notice to Tenant with respect to such cleaning or rubbish removal,
as are, in Landlord's reasonable judgment, necessary to ensure that such
cleaning and/or rubbish removal services are performed in accordance with all
applicable ordinances, laws, statutes or other rules, regulations or
requirements related thereto as are, or shall be, enacted or imposed in
connection with the Building or the Premises. Tenant shall indemnify and hold
Landlord harmless from and against any loss, cost, liability or expense of any
kind or nature incurred by Landlord as a result of the Tenant's failure to
comply, or cause its employees, agents, contractors or business visitors to
comply with all such rules, regulations and requirements as may be imposed or
enacted by Landlord in connection herewith.
6.4 Neither Tenant nor any of its officers, partners, employees,
agents, subtenants, contractors or invitees shall cause or permit any Hazardous
Material (including asbestos or asbestos containing materials) to be used,
stored, released, handled, produced or installed in, on or from the Premises or
the Building, other than customary amounts of office and cleaning supplies for
which no special governmental permit, approval or license is required and only
so long as the same are stored, used and disposed of in strict compliance with
all laws. For purposes of this Lease, "HAZARDOUS MATERIALS" shall mean any
element, compound, chemical mixture, contaminant, pollutant, material, waste or
other substance which is defined, determined or identified as a "hazardous
substance", "hazardous waste" or "hazardous material" under any federal, state
or local statute, regulation or ordinance applicable to the Premises, as well as
any
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amendments and successors to such statutes and regulations, as may be enacted
and promulgated from time to time.
6.5 Tenant shall promptly comply with all requirements relating to
the Americans with Disabilities Act, 42 U. S. C. (S) 12,101 et seq.., and the
-- ----
regulations promulgated thereunder as in effect from time to time and with all
similar state and local laws ("ADA REQUIREMENTS"). Tenant shall have exclusive
responsibility for compliance with ADA Requirements pertaining to the interior
of the Premises, including for the design and construction of the access thereto
and egress therefrom. Landlord shall have responsibility for compliance with
ADA Requirements which affect the public areas of the Building to the extent
failure to comply will affect Tenant's use or occupancy of the Premises or the
performance by Tenant of Alterations. Tenant shall comply with any reasonable
plan adopted by Landlord which is designed to comply with ADA Requirements.
7. SUBORDINATION.
7.1 This Lease is subject and subordinate to each and every ground or
underlying lease of the Real Property or the Building heretofore or hereafter
made by Landlord (collectively the "SUPERIOR LEASES") and to each and every
trust indenture and mortgage (collectively the "MORTGAGES") which may now or
hereafter affect the Real Property, the Building or any such Superior Lease and
the leasehold interest created thereby, and to all renewals, extensions,
supplements, amendments, modifications, consolidations, and replacements thereof
or thereto, substitutions therefor, and advances made thereunder. This clause
shall be self-operative and no further instrument of subordination shall be
required to make the interest of any lessor under a Superior Lease, or trustee
or mortgagee of a Mortgage superior to the interest of Tenant hereunder. In
confirmation of such subordination, however, Tenant shall execute promptly any
certificate that Landlord may reasonably request and Tenant hereby irrevocably
constitutes and appoints Landlord as Tenant's attorney-in-fact to execute any
such certificate or certificates for and on behalf of Tenant. If the date of
expiration of any Superior Lease shall be the same day as the Expiration Date,
the Term shall end and expire twelve (12) hours prior to the expiration of the
Superior Lease. Tenant covenants and agrees that, except as expressly provided
herein, Tenant shall not do anything that would constitute a default under any
Superior Lease or Mortgage, or omit to do anything that Tenant is obligated to
do under the terms of this Lease so as to cause Landlord to be in default under
any of the foregoing. If, in connection with the financing of the Real
Property, the Building or the interest of the lessee under any Superior Lease,
any lending institution shall request reasonable modifications of this Lease
that do not materially increase the obligations or materially and adversely
affect the rights of Tenant under this Lease, Tenant covenants to make such
modifications.
7.2 If at ant time prior to the expiration of the Term (i) any
Superior Lease shall terminate or be terminated for any reason or (ii) any
mortgagee shall foreclose upon Landlord's interest in the Building, Tenant
agrees, at the election and upon demand of any owner of the Real Property or the
Building, or the lessor under any such Superior Lease, or of any mortgagee in
possession of the Real Property or the Building, to attorn, from time to time,
to any such owner, lessor or mortgagee, upon the then executory terms and
conditions of this Lease, for the remainder of the term originally demised in
this Lease. The provisions of this subsection 7.2
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shall inure to the benefit of any such owner, lessor or mortgagee, shall apply
notwithstanding that, as a matter of law, this Lease may terminate upon the
termination of any such Superior Lease, and shall be self-operative upon any
such demand, and no further instrument shall be required to give effect to said
provisions. Tenant, however, upon demand of any such owner, lessor or mortgagee,
agrees to execute, from time to time, instruments in confirmation of the
foregoing provisions of this subsection 7.2, satisfactory to any such owner,
lessor or mortgagee, acknowledging such attornment and setting forth the terms
and conditions of its tenancy. Nothing contained in this subsection 7.2 shall be
construed to impair any right otherwise exercisable by any such owner, lessor or
mortgagee.
7.3 If any act or omission of Landlord would give Tenant the right,
immediately or after the giving of notice and/or a lapse of time, to cancel or
terminate this Lease, or to claim a partial or total eviction, Tenant shall not
exercise such right until: (i) it has given written notice of the act or
omission to Landlord and each owner, lessor or mortgagee whose name and address
had been furnished to Tenant, which notice shall describe Landlord's default
with reasonable detail, specifying the section of this Lease as to which
Landlord is in default, and a reasonable period for remedying the act or
omission shall have elapsed following the giving of such notice and no remedy
shall have been commenced. If within such reasonable period, such owner, lessor
or mortgagee gives Tenant notice of its intention to remedy the act or omission
and thereafter commences and diligently prosecutes the required remedial action
to completion, Tenant shall have no right to terminate this Lease on account of
the act or omission.
8. RULES AND REGULATIONS.
Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faithfully, and comply strictly with, the Rules and
Regulations annexed hereto and made a part hereof as Schedule A (the "RULES AND
REGULATIONS"), and such other and further reasonable Rules and Regulations as
Landlord or Landlord's agents may from time to time adopt on such notice to be
given as Landlord may reasonably elect. Nothing in this Lease contained shall
be construed to impose upon Landlord any duty or obligation to enforce the Rules
and Regulations or terms, covenants or conditions in any other lease, against
any other tenant and Landlord shall not be liable to Tenant for violation of the
same by any other tenant, its servants. employees, agents, visitors or
licensees, provided that Landlord shall endeavor to apply the Rules and
Regulations in a non-discriminatory manner. No sign, advertisement, object,
notice or lettering shall be exhibited, inscribed, painted or affixed by Tenant,
in or on the windows or doors, or on any part of the outside of the Premises or
the Building, or on any point inside the Premises where the same might be
visible outside of the Premises, without the prior written consent of Landlord
in each instance. Signs and lettering on doors shall be inscribed, painted or
affixed for Tenant by Landlord at the expense of Tenant, and shall be of a size
and color reasonably acceptable to Landlord. Tenant acknowledges that Landlord
intends to have a uniform signage program for the Building and all signage in
the elevator lobby on the floor on which the Premises is located, as well as all
signage within the Premises which is visible from public portions of the
Building, shall be required to conform to such program. Landlord may remove any
such signage and lettering which does not conform to such program or which has
not been approved by Landlord without any liability and may charge the expense
incurred by such removal to Tenant.
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9. INSURANCE.
9.1 Tenant shall obtain and keep in full force and effect during the
Term:
(i) a policy of commercial general public liability insurance,
including bodily injury and property damage coverage, with a broad form
contractual liability endorsement or its equivalent, naming, Tenant as insured
and protecting Landlord, Landlord's employees and agents, and any mortgagees or
lessors having an interest in the Real Property of which Tenant shall have been
notified, as additional insureds (issued on an "occurrence" basis and not a
"claims made" basis) against claims for personal injury, death and/or third-
party property damage occurring in or about the Premises or the Building, and
under which the insurer agrees to waive any right of recovery such insurer may
have had against Landlord, Landlord's employees and agents, and any mortgagees
or lessors having an interest in the Real Property and to indemnify, defend and
hold Landlord harmless from and against, among other things, all cost, expense
and/or liability (including, without limitation, reasonable attorneys' fees)
arising out of or based upon any and all claims, accidents, injuries and damages
mentioned in Article 37 hereof. Such policy shall contain a provision that no
act or omission of Tenant shall affect or limit the obligation of the insurance
company to pay the amount of any loss sustained to Landlord. The minimum limits
of liability applicable exclusively to the Premises shall be a combined single
limit with respect to each occurrence in an amount of not less than $3,000,000
(or in any increased amount (or in the form of an umbrella liability policy for
"excess" liability coverage) required by Landlord in the exercise of Landlord's
commercially reasonable discretion); and
(ii) insurance against loss or damage by fire and such other risks and
hazards (including burglary, theft, vandalism, sprinkler leakage, breakage of
glass within the Premises and, if the Premises are located at or below grade,
broad form flood insurance) as are insurable under then available standard forms
of "all risk" insurance policies, to Tenant's personal property and business
equipment and fixtures (hereinafter, "TENANT'S PROPERTY") and, whether or not
such alterations or tenant improvements had been paid for or performed by
Tenant, any Alterations and tenant improvements in and to the Premises
(hereinafter, "TENANT'S WORK") for the full replacement cost value thereof (with
such policy having a deductible not in excess of an amount to be determined by
Landlord in the exercise of Landlord's commercially reasonable discretion)
protecting Tenant, Landlord, Landlord's employees and agents, and any mortgagees
or lessors having an interest in the Real Property of which Tenant shall have
been notified; and
(iii) business interruption insurance in an amount sufficient to
prevent Tenant from becoming a co-insurer.
9.2 Prior to the time such insurance is first required to be carried
by Tenant and thereafter, at least thirty (30) days prior to the expiration or
other termination of any such policies, Tenant agrees to deliver to Landlord,
upon Landlord's request therefor, evidence of payment for the policies and true
and complete copies of the actual policies together with certificates evidencing
such insurance. All such policies shall contain endorsements that (a) such
insurance may not be modified or canceled or allowed to lapse except upon thirty
(30) days' written notice to Landlord containing the policy number and the names
of the insured and the certificate holder, and (b) Tenant shall be solely
responsible for payment of all premiums under
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such policies and Landlord shall have no obligation for the payment thereof
notwithstanding that Landlord is or may be named as an additional insured.
Tenant's failure to provide and keep in force the aforementioned insurance shall
be regarded as a material default hereunder, entitling Landlord to exercise any
or all of the remedies as provided in this Lease in the event of Tenant's
default. All insurance required to be carried by Tenant pursuant to the terms of
this Lease shall be effected under valid and enforceable policies issued by
reputable and independent insurers permitted to do business in the State of New
York which rate, in Best's Insurance Guide, or any successor thereto (or if
there be none, an organization having a national reputation), as having a
general policy-holder rating of "A" and a financial rating of at least "XIII".
Tenant shall not carry separate or additional insurance, whether concurrent or
contributing, in the event of any loss or damage, with any insurance required to
be obtained by Tenant under this Lease.
9.3 The parties hereto shall procure an appropriate clause in, or
endorsement on, any "all risk" or fire or extended coverage insurance covering
the Premises, the Building, the personal property, fixtures or equipment located
thereon or therein, pursuant to which the insurance companies waive subrogation
or consent to a waiver of right of recovery by the insured prior to any loss.
The waiver of subrogation or permission for waiver of the right of recovery in
favor of Tenant shall also extend to all other persons or entities occupying or
using the Premises in accordance with the terms of the Lease. If the payment of
an additional premium is required for the inclusion of such waiver of
subrogation provisions or consent to a waiver of right of recovery, each party
shall advise the other of the amount of any such additional premiums by written
notice and the other party shall pay the same or shall be deemed to have agreed
that the party obtaining the insurance coverage in question shall be free of any
further obligations under the provisions hereof relating to such waiver or
consent. It is expressly understood and agreed that Landlord will not be
obligated to carry insurance on and will not be responsible for Tenant's
Property or any Alterations performed by Tenant or insurance against
interruption of Tenant's business.
9.4 As to each party hereto, provided such party's right of full
recovery under the applicable policy is not adversely affected, such party
hereby releases the other (along with its servants, agents, employees and
invitees) with respect to any claim (including a claim for negligence) which it
might otherwise have against the other party for loss, damages or destruction
with respect to its property by fire or other casualty i.e. in the case of
----
Landlord, as to the Building, and, in the case of Tenant, as to Tenant's
Property and Tenant's Work (including rental value or business interruption, as
the case may be) occurring during the Term of this Lease.
9.5 Nothing in this Article 9 shall prevent Tenant from taking out
insurance of the kind and in the amounts provided for under this Article 9 under
a blanket insurance policy or policies covering other properties as well as the
Premises provided, however, that any such policy or policies of blanket
insurance (i) shall specify therein, or Tenant shall furnish Landlord with a
written statement from the insurers under such policy or policies specifying,
the amount of the total insurance allocated to the Premises, which amounts shall
not be less than the amounts required by this Article 9, and (ii) such amounts
so specified shall be sufficient to prevent Tenant from becoming a co-insurer
within the terms of the applicable policy or policies, and provided further,
however, that any such policy or policies of blanket insurance shall, as to the
Premises, otherwise comply as to endorsements and coverage with the provisions
of this Article 9.
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10. DESTRUCTION OF THE PREMISES: PROPERTY LOSS OR DAMAGE.
10.1 If the Premises shall be damaged by fire or other casualty, and
if Tenant shall give prompt notice thereof to Landlord, the damages shall be
repaired by and at the expense of Landlord and the Rent until such repairs shall
be made shall be reduced in the proportion which the area of the part of the
Premises which is not usable by Tenant bears to the total area of the Premises.
Notwithstanding anything to the contrary contained herein, Landlord shall have
no obligation to repair any damage to, or to replace, any of Tenant's Property,
any Alterations performed by Tenant or other property or effects of Tenant.
10.2 (a) Anything in subsection 10:1 of this Article 10 to the
contrary notwithstanding, if the Premises are totally damaged or are rendered
wholly untenantable, and if Landlord shall decide not to restore the Premises,
or if the Building shall be so damaged by fire or other casualty that, in
Landlord's opinion, substantial alteration, demolition, or reconstruction of the
Building shall be desirable (whether or not the Premises shall have been damaged
or rendered untenantable), then in any of such events, Landlord, at Landlord's
option, may, not later than sixty (60) days following the damage, give Tenant a
notice in writing terminating this Lease. If Landlord elects to terminate this
Lease, the Term shall expire upon the tenth (10th) day after such notice is
given, and Tenant shall vacate the Premises and surrender the same to Landlord.
Upon the termination of this Lease under the conditions provided for in the next
preceding sentence, Tenant's liability for Rent due from and after the date of
such damage shall cease as of the day following such damage.
(b) If the Premises are totally damaged or are rendered wholly
untenantable, and if Landlord shall decide to restore the Premises, Landlord
shall, within the aforesaid sixty (60) day period, give notice to Tenant of the
date by which Landlord reasonably believes the restoration of the Premises shall
be substantially completed (the "RESTORATION DATE"). If such notice shall
indicate that such restoration shall not be completed on or before a date which
shall be twelve (12) months following the date of such damage, then Tenant shall
have the right to terminate this Lease by giving notice to Landlord no later
than ten (10) days after receiving such notice. If Tenant shall not so elect to
terminate this Lease, but Landlord shall thereafter fail to substantially
complete the restoration of the Premises on or before the Restoration Date
(subject, however, to extension of such restoration period and deferral of such
Restoration Date on account of force majeure as to which Tenant shall be
notified), Tenant shall have the right to terminate this Lease by giving written
notice (the "TERMINATION NOTICE") to Landlord not later than ten (10) days
following the Restoration Date (as so extended) and if Landlord shall fail to so
complete such restoration within thirty (30) days following Landlord's receipt
of such Termination Notice, this Lease shall be deemed canceled and terminated
as of the date of the Termination Notice as if such date were the Expiration
Date of this Lease. Upon the termination of this Lease under the conditions
provided for in this Section, Tenant's liability for Rent and additional rent
from and after the date of such total casualty (but not for any period prior to
the date of such casualty) shall cease as of the day following such casualty.
10.3 No penalty shall accrue for reasonable delay which may arise by
reason of adjustment of fire insurance on the part of Landlord and/or Tenant,
and for reasonable delay on account of "labor troubles" or any other cause
beyond Landlord's control.
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10.4 The parties agree that this Article 10 constitutes an express
agreement governing any case of damage or destruction of the Premises or the
Building by fire or other casualty, and that Section 227 of the Real Property
Law of the State of New York, which provides for such contingency in the absence
of an express agreement, and any other law of like import now or hereafter in
force shall have no application in any such case.
10.5 Any Building employee to whom any property shall be entrusted by
or on behalf of Tenant shall be deemed to be acting as Tenant's agent with
respect to such property and neither Landlord nor its agents shall be liable for
any damage to property of Tenant or of others entrusted to employees of the
Building, nor for the loss of or damage to any property of Tenant by theft or
otherwise. Neither Landlord nor its agents shall be liable for any injury or
damage to persons or property or interruption of Tenant's business resulting
from fire, explosion, falling plaster, steam, gas, electricity, water, rain or
snow or leaks from any part of the Building or from the pipes, appliances or
plumbing works or from the roof, street or subsurface or from any other place or
by dampness or by any other cause of whatsoever nature; nor shall Landlord or
its agents be liable for any such damage caused by other tenants or persons in
the Building or caused by construction of any private, public or quasi-public
work; nor shall Landlord be liable for any latent defect in the Premises or in
the Building. Anything in this Article 10 to the contrary notwithstanding,
nothing in this Lease shall be construed to relieve Landlord from responsibility
directly to Tenant for any loss or damage caused directly to Tenant wholly or in
part by the negligence or willful misconduct of Landlord. Nothing in the
foregoing sentence shall affect any right of Landlord to the indemnity from
Tenant to which Landlord may be entitled under Article 37 hereof in order to
recoup for payments made to compensate for losses of third parties. If at any
time any windows of the Premises are temporarily closed, darkened or bricked-up
for any reason whatsoever including, but not limited to, Landlord's own acts, or
any of such windows are permanently closed, darkened or bricked-up if required
by law or related to any construction upon the Building or the Real Property or
upon property adjacent to the Real Property by Landlord or others, (including,
without limitation the construction of any signage on the Building), Landlord
shall not be liable for any damage Tenant may sustain thereby and Tenant shall
not be entitled to any compensation therefor nor abatement of Rent nor shall the
same release Tenant from its obligations hereunder nor constitute an eviction.
Tenant shall reimburse and compensate Landlord as additional rent within ten
(10) days after rendition of a statement for all expenditures made by, or
damages or fines sustained or incurred by, Landlord due to non-performance or
non-compliance with or breach or failure to observe any term, covenant or
condition of this Lease upon Tenant's part to be kept, observed, performed or
complied with. Tenant shall give immediate notice to Landlord in case of fire
or accident in the Premises or in the Building. Tenant shall not move any safe,
heavy machinery, heavy equipment, freight, bulky matter or fixtures into or out
of the Building without Landlord's prior consent and payment to Landlord of
Landlord's reasonable costs in connection therewith.
11. EMINENT DOMAIN.
11.1 If the whole of the Real Property or the Building or the whole
or any material part of the Premises shall be acquired or condemned for any
public or quasi-public use or purpose, this Lease and the Term shall end as of
the date of the vesting of title with the same effect as if said date were the
Expiration Date. In the event of any termination of this Lease and the Term
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pursuant to the provisions of this subsection 11.1, the Rent shall be
apportioned as of the date of sooner termination and any prepaid portion of Rent
for any period after such date shall be refunded by Landlord to Tenant.
11.2 In the event of any such acquisition or condemnation of all or
any part of the Real Property, Landlord shall be entitled to receive the entire
award for any such acquisition or condemnation, Tenant shall have no claim
against Landlord or the condemning authority for the value of any unexpired
portion of the Term and Tenant hereby expressly assigns to Landlord all of its
right in and to any such award. Nothing contained in this subsection 11.2 shall
be deemed to prevent Tenant from making a separate claim in any condemnation
proceedings for the then value of any furniture, furnishings and fixtures
installed by and at the sole expense of Tenant and included in such taking,
provided that such award shall not reduce the amount of the award otherwise
payable to Landlord.
12. ASSIGNMENT AND SUBLETTING.
12.1 Except as otherwise set forth in this Article 12, Tenant, for
itself, its heirs, distributees, executors, administrators, legal
representatives, successors and assigns, expressly covenants that it shall not
assign, mortgage, pledge, encumber, or otherwise transfer this Lease, nor
underlet, nor suffer, nor permit the Premises or any part thereof to be used or
occupied by others (whether for desk space, mailing privileges or otherwise),
without the prior written consent of Landlord in each instance. If this Lease
be assigned, or if the Premises or any part thereof be underlet or occupied by
anybody other than Tenant, Landlord may, after default by Tenant, collect rent
from the assignee, undertenant or occupant, and apply the net amount collected
to the rent herein reserved, and after Tenant shall have defaulted in respect of
any of its obligations under this Lease, Tenant shall hold any amounts it
receives from any undertenant or occupant in constructive trust for payment of
Tenant's obligations hereunder; but no assignment, underletting, occupancy or
collection shall be deemed a waiver of the provisions hereof, the acceptance of
the assignee, undertenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Landlord to an assignment or underletting shall not
in any way be construed to relieve Tenant from obtaining the express consent in
writing of Landlord to any further assignment or underletting. In no event
shall any permitted sublessee assign or encumber its sublease or further sublet
all or any portion of its sublet space, or otherwise suffer or permit the sublet
space or any part thereof to be used or occupied by others, without Landlord's
prior written consent in each instance. Any assignment, sublease, mortgage,
pledge, encumbrance or transfer in contravention of the provisions of this
Article 12 shall be void.
12.2 If Tenant shall at any time or times during the Term desire to
assign this Lease or sublet all or part of the Premises and Landlord's consent
thereto is required under this Article 12, Tenant shall give notice thereof to
Landlord, which notice shall be accompanied by (i) the essential terms and
conditions of proposed assignment or sublease, including the effective or
commencement date thereof, which shall be not less than thirty (30) nor more
than one hundred and eighty (180) days after the giving of such notice, (ii) a
statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use of the
Premises, (iii) current financial information with respect to the proposed
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assignee or subtenant, and (iv) an agreement by Tenant to indemnify Landlord
against liability resulting from any claims that may be made against Landlord by
the proposed assignee or sublessee or by any brokers or other persons claiming a
commission or similar compensation in connection with the proposed assignment or
sublease. The aforesaid notice shall be deemed an offer from Tenant to Landlord
whereby Landlord (or Landlord's designee) may, at its option, (a) sublease such
space (hereinafter called the "LEASEBACK SPACE") from Tenant upon the terms and
conditions hereinafter set forth (if the proposed transaction is a sublease of
all or part of the Premises), or (b) terminate this Lease (if the proposed
transaction is an assignment or a sublease of all or substantially all of the
Premises). Said options may be exercised by Landlord by notice to Tenant at any
time within thirty (30) days after the aforesaid notice has been given by Tenant
to Landlord; and during such thirty (30) day period Tenant shall not assign this
Lease nor sublet such space to any person.
12.3 If Landlord exercises its option to terminate this Lease in the
case whereby Tenant desires either to assign this Lease or sublet all or
substantially all of the Premises, then, this Lease shall end and expire on the
date that such assignment or sublet was to be effective or commence, as the case
may be, and the Rent and additional rent due hereunder shall be paid and
apportioned to such date.
12.4 If Landlord exercises its option to terminate this Lease
pursuant to subsection 12.2 of this Article 12, Landlord shall be free to and
shall have no liability to Tenant if Landlord should lease the Premises (or any
part thereof) to Tenant's prospective assignee or subtenant.
12.5 If Landlord exercises its option to sublet the Leaseback Space,
such sublease to Landlord or its designee (as subtenant) shall be at a rental
rate equal to the lesser of (x) the rental rate provided for in the proposed
sublease and (y) the rental rate per rentable square foot of Rent and additional
rent then payable pursuant to this Lease, and shall be for the same term as that
of the proposed subletting, and such sublease:
(a) shall be expressly subject to all of the covenants, agreements,
terms, provisions and conditions of this Lease except such as are irrelevant or
inapplicable. and except as otherwise expressly set forth to the contrary in
this Article 12;
(b) shall be upon the same terms and conditions as those contained in
the proposed sublease, except such as are irrelevant or inapplicable and except
as otherwise expressly set forth to the contrary in this Article 12;
(c) shall give the sublessee the unqualified and unrestricted right,
without Tenant's permission, to assign such sublease or any interest therein
and/or to sublet the space covered by such sublease or any part or parts of such
space and to make any and all changes, alterations and improvements in the space
covered by such sublease, provided, however, that if such sublease is for less
than all or substantially all of the Term of the lease, then at the end of the
term of such sublease and if requested to do so by Tenant, the Premises shall be
restored by Landlord to a condition reasonably suitable for general office
purposes;
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(d) shall provide that any assignee or further subtenant of Landlord
or its designee, may, at the election of Landlord, be permitted to make
alterations, decorations and installations in such space or any part thereof and
shall also provide in substance that any such alterations, decorations and
installations in such space therein made by any assignee or subtenant of
Landlord or its designee may be removed, in whole or in part, by such assignee
or subtenant, at its option, prior to or upon the expiration or other
termination of such sublease provided that such assignee or subtenant, at its
expense, shall repair any damage and injury to such space so sublet caused by
such removal, provided, however, that if such sublease is for less than all or
substantially all of the Term of the lease, then at the end of the term of such
sublease and if requested to do so by Tenant, the Premises shall be restored by
Landlord to a condition reasonably suitable for general office purposes; and
(e) shall also provide that (i) the parties to such sublease expressly
negate any intention that any estate created under such sublease be merged with
any other estate held by either of said parties, (ii) any assignment or
subletting by Landlord or its designee (as the subtenant) may be for any purpose
or purposes that Landlord, in Landlord's uncontrolled discretion, shall deem
suitable or appropriate, (iii) Tenant, at Tenant's expense, shall and will at
all times provide and permit reasonably appropriate means of ingress to and
egress from such space so sublet by Tenant to Landlord or its designee, (iv)
Landlord, at Tenant's expense, to the extent required by the proposed sublease,
may make such alterations as may be required or deemed necessary by Landlord to
physically separate the subleased space from the balance of the Premises and to
comply with any legal or insurance requirements relating to such separation, and
(v) that at the expiration of the term of such sublease, Tenant will accept the
space covered by such sublease in its then existing conditions, subject to the
obligations of the sublessee to make such repairs thereto as may be necessary to
preserve the premises demised by such sublease in good order and condition.
12.6 (i) If Landlord exercises its option to sublet the Leaseback
Space, Landlord shall indemnify and save Tenant harmless from all obligations
under this Lease as to the Leaseback Space during the period of time it is so
sublet to Landlord.
(ii) Performance by Landlord, or its designee, under a sublease of the
Leaseback Space shall be deemed performance by Tenant of any similar obligation
under this Lease and any default under any such sublease shall not give rise to
a default under a similar obligation contained in this Lease nor shall Tenant be
liable for any default under this Lease or deemed to be in default hereunder if
such default is occasioned by or arises from any act or omission of the tenant
under such sublease or is occasioned by or arises from any act or omission of
any occupant holding under or pursuant to any such sublease.
(iii) Tenant shall have no obligation, at the expiration or earlier
termination of the Term, to remove any alteration, installation or improvement
made in the Leaseback Space by Landlord (or its designee).
12.7 In the event Landlord does not exercise either option provided
to it pursuant to subsection 12.2 and provided that Tenant is not in default of
any of Tenant's obligations under this Lease (after notice and the expiration of
any applicable grace period) as of the time of
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Landlord's consent, and as of the effective date of the proposed assignment or
commencement date of the proposed sublease, Landlord's written consent to the
proposed assignment or sublease shall be given within five (5) business days
after the expiration of the thirty (30) day period described in Section 12.2,
provided and upon condition that:
(i) Tenant shall have complied with the provisions of subsection
12.2 and Landlord shall not have exercised any of its options under said
subsection 12.2 within the time permitted therefor;
(ii) In Landlord's reasonable judgment the proposed assignee or
subtenant is engaged in a business or activity, and the Premises, or the
relevant part thereof, will be used in a manner, which (a) is in keeping with
the then standards of the Building, (b) is limited to the use of the Premises
for the Permitted Uses, and (c) will not violate any negative covenant as to use
contained in any other lease of office space in the Building;
(iii) The proposed assignee or subtenant is a reputable person of
good character and with sufficient financial worth considering the
responsibility involved, and Landlord has been furnished with reasonable proof
thereof;
(iv) Neither (a) the proposed assignee or sublessee nor (b) any
person which, directly or indirectly, controls, is controlled by, or is under
common control with, the proposed assignee or sublessee, is then an occupant of
any part of the Building provided Landlord has comparable space available in the
Building,
(v) The proposed assignee or sublessee is not a person with whom
Landlord is then negotiating to lease space in the Building or a person who has
leased or negotiated to lease space in the Building during the six (6) month
period ending on the date of the proposed assignment or sublet;
(vi) The form of the proposed sublease or instrument of assignment
shall be in form reasonably satisfactory to Landlord and shall comply with the
applicable provisions of this Article 12;
(vii) There shall not be more than two (2) subtenants (including
Landlord or its designee) of the Premises;
(viii) The rental and other terms and conditions of the sublease are
substantially similar to those contained in the notice furnished to Landlord
pursuant to subsection 12.2;
(ix) Tenant shall reimburse Landlord on demand for the reasonable
costs that may be incurred by Landlord in connection with said assignment or
sublease, including, without limitation, the costs of making investigations as
to the acceptability of the proposed assignee or subtenant, and reasonable legal
costs incurred in connection with the granting of any requested consent;
(x) Tenant shall not have advertised or publicized in any way the
availability of the Premises without prior notice to and approval by Landlord,
which approval shall not be
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unreasonably withheld, nor shall any advertisement state the name (as
distinguished from the address) of the Building or proposed rental rate lower
than the rental rate then payable under this Lease; provided, however, that
nothing contained herein shall preclude Tenant from entering into a sublease at
such a lower rental rate;
(xi) The proposed occupancy shall not increase the office cleaning
requirements or impose an extra burden upon services to be supplied by Landlord
to Tenant, unless Tenant agrees to pay any extra costs incurred thereby; and
(xii) The proposed subtenant or assignee shall not be entitled,
directly or indirectly, to diplomatic or sovereign immunity and shall be subject
to the service of process in, and the jurisdiction of the courts of New York
State.
Except for any subletting by Tenant to Landlord or its designee pursuant to
the provisions of this Article 12, each subletting pursuant to this subsection
12.7 shall be subject to all of the covenants, agreements, terms, provisions and
conditions contained in this Lease. Notwithstanding any such subletting to
Landlord or any such subletting to any other subtenant and/or acceptance of Rent
or additional rent by Landlord from any subtenant, Tenant shall and will remain
fully liable for the payment of the Rent and additional rent due and to become
due hereunder and for the performance of all the covenants, agreements, terms,
provisions and conditions contained in this Lease on the part of Tenant to be
performed and all acts and omissions of any licensee or subtenant or anyone
claiming under or through any subtenant which shall be in violation of any of
the obligations of this Lease shall be deemed to be a violation by Tenant.
Tenant further agrees that notwithstanding any such subletting, no other and
further subletting of the Premises by Tenant or any person claiming through or
under Tenant shall or will be made except upon compliance with and subject to
the provisions of this Article 12. If Landlord shall decline to give its consent
to any proposed assignment or sublease, or if Landlord shall exercise either of
its options under subsection 12.2, Tenant shall indemnify, defend and hold
harmless Landlord against and from any and all loss, liability, damages, costs,
and expenses (including reasonable counsel fees) resulting from any claims that
may be made against Landlord by the proposed assignee or sublessee or by any
brokers or other persons claiming a commission or similar compensation in
connection with the proposed assignment or sublease.
12.8 In the event that (i) Landlord fails to exercise either of its
options under subsection 12.2 and consents to a proposed assignment or sublease,
and (ii) Tenant fails to execute and deliver the assignment or sublease to which
Landlord consented within ninety (90) days after the giving of such consent,
then, Tenant shall again comply with all of the provisions and conditions of
subsection 12.2 before assigning this Lease or subletting all or part of the
Premises, subject to the provisions of Section 20.2 of this Lease.
12.9 With respect to each and every sublease or subletting authorized by
Landlord under the provisions of this Lease, it is further agreed that:
(i) No subletting shall be for a term ending later than one (1)
day prior to the Expiration Date of this Lease;
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(ii) No sublease shall be delivered, and no subtenant shall take
possession of the Premises or any part thereof, until an executed counterpart of
such sublease has been delivered to Landlord;
(iii) Each sublease shall provide that it is subject and subordinate
to this Lease and to the matters to which this Lease is or shall be subordinate,
and that in the event of termination, re-entry or dispossession by Landlord
under this Lease Landlord may, at its option, take over all of the right, title
and interest of Tenant, as sublessor, under such sublease, and such subtenant
shall, at Landlord's option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not (a) be liable for
any previous act or omission of Tenant under such sublease, (b) be subject to
any counterclaim, offset or defense, or (c) be bound by any previous
modification of such sublease or by any previous prepayment of more than one (1)
month's rent. The provisions of this Article 12 shall be self-operative and no
further instrument shall be required to give effect to this provision; and
(iv) In the event that there is any purported assignment,
subletting or other occupancy of the Premises in violation of this Article 12,
then, in addition to and without waiver of any other of Landlord's rights and
remedies, such person agrees, by entering into such purported assignment, sublet
or other occupancy, without need for any further writing, to, at Landlord's
election, attorn to Landlord as if such person too was named as Tenant
hereunder.
12.10 If the Landlord shall give its consent to any assignment of
this Lease or to any sublease for which Landlord's consent is required under
this Article 12, Tenant shall in consideration therefor, pay to Landlord, as
additional rent:
(i) in the case of an assignment, an amount equal to fifty percent
(50%) of all sums and other considerations paid to Tenant by the assignee for or
by reason of such assignment (including, but not limited to, sums paid for the
sale of Tenant's fixtures, leasehold improvements, equipment, furniture,
furnishings or other personal property less, in the case of a sale thereof, the
then net unamortized or undepreciated cost thereof determined on the basis of
Tenant's federal income tax returns) less all reasonable expenses actually
incurred by Tenant including, without limitation, on account of brokerage
commissions, work allowances, advertising costs, and architect and legal fees in
connection with such assignment; and
(ii) in the case of a sublease, fifty percent (50%) of any rents,
additional charges or other consideration actually paid under the sublease to
Tenant by the subtenant which is in excess of the Rent and additional rent
accruing during the term of the sublease in respect of the subleased space (at
the rate per square foot payable by Tenant hereunder) pursuant to the terms
hereof (including, but not limited to, sums paid for the sale or rental of
Tenant's fixtures, leasehold improvements, equipment, furniture or other
personal property, less, in the case of the sale thereof, the then net
unamortized or undepreciated cost thereof determined on the basis of Tenant's
federal income tax returns), less all reasonable expenses actually incurred by
Tenant including, without limitation, on account of brokerage commissions, work
allowances, advertising costs, and architect and legal fees, and the cost of
demising the premises so sublet (including the cost of constructing any
necessary entranceways) in connection with such
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sublease. The sums payable under this subsection 12.10(ii) shall be paid to
Landlord as and when received by Tenant from the subtenant.
12.11 (i) If Tenant is a corporation, the provisions of subsection 12.1
shall apply to (x) a transfer (by one or more transfers occurring within any
twelve (12) month period) of a majority of the stock of Tenant, (y) the creation
of new stock (by one or more transactions occurring within any twelve (12) month
period) resulting in the vesting of a majority of the stock of Tenant in a party
or parties who are not stockholders as of the date immediately prior to such
transaction, as if such transfer or vesting of a majority of the stock of Tenant
were an assignment of this Lease or (z) an initial public offering of the stock
of the Tenant on a nationally recognized stock exchange; but said provisions
shall not apply to the circumstances set forth in clause (z) or to transactions
with a corporation into or with which Tenant is merged or consolidated or to
which substantially all of Tenant's assets are transferred, provided that in any
of such events (a) the successor to Tenant has a net worth computed in
accordance with generally accepted accounting principles at least equal to the
greater of (1) the net worth of Tenant immediately prior to such merger,
consolidation, transfer or initial public offering, or (2) the net worth of
Tenant herein named on the date of this Lease, (b) proof satisfactory to
Landlord of such net worth shall have been delivered to Landlord at least ten
(10) days prior to the effective date of any such transaction, and (c) such
transaction is not entered into for the purpose of avoiding the provisions of
this Article 12.
(ii) If Tenant is a partnership, the provisions of subsection 12.1
shall apply to a transfer (by one or more transfers occurring within any twelve
(12) month period) of a majority interest in the partnership, as if such
transfer were an assignment of this Lease.
(iii) Notwithstanding anything to the contrary contained in this
Article 12, Tenant may assign this Lease and sublease all or any part of the
Premises to any Affiliate of Tenant without obtaining Landlord's consent but
subject to all of the other provisions of this Article 12. For purposes of this
Article 12 "AFFILIATE OF TENANT" shall mean any person or entity directly or
indirectly controlling, controlled by, or under common control with, Tenant. For
purposes of this definition "control" (including with correlative meanings, the
terms "controlling," "controlled by" and "under common control with"), as
applied to any person or entity, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that person or entity, whether through the ownership of voting securities, by
contract, or otherwise, together with ownership of at least 51 % of the equity
and voting interests in such person or entity.
(iv) Notwithstanding anything to the contrary contained in this
Article 12, as long as Salon Internet, Inc. is the Tenant hereunder, Tenant
shall have the privilege, subject to the terms and conditions hereinafter set
forth, in connection with an on-going business relationship with Tenant, to
permit any temporary use or occupancy of desk space in the Premises of not more
than ten percent (10%) of the Premises by customers, clients or investors of
Salon Internet, Inc. (each individually, the "Desk Space Occupant") without (A)
obtaining the prior consent of Landlord and (B) such arrangement being subject
to the subletting and assignment provisions of this Lease, provided any such
occupancy is maintained in accordance with the following terms and conditions:
(1) such arrangement will terminate automatically upon the occurrence of a
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default continuing beyond any applicable notice and/or grace period under this
Lease; (2) the Desk Space Occupant shall use the Premises in conformity with all
applicable provisions of this Lease; (3) in no event shall the use of any
portion of the Premises by the Desk Space Occupant be deemed to create any
right, title or interest in or to the Premises; (4) the portion of the Premises
occupied by the Desk Space Occupant and the portion of the Premises occupied by
Tenant shall not be, shall not be required by law to be, separated by demising
wall so as to create a separate entrance from the elevator landing or public
corridors; (5) Tenant shall receive no rent, payment or other consideration in
connection with the occupancy by the Desk Space Occupant (except for any
expenses incurred by Tenant in connection with the Desk Space Occupant's use of
such Premises; and any such arrangement shall be for a bona fide and valid
business purpose, and the Desk Space Occupant shall be receiving substantial
services to or supplying substantial economic benefit to, the Tenant. Tenant
hereby represents and covenants that the Desk Space Occupant is substantially in
the same business as Tenant, and Tenant hereby agrees that the foregoing
provisions of this Section 12.11(iv) shall apply for only such period as the
Desk Space Occupant continues in such business, and that Tenant shall give
Landlord written notice of any change in the nature of the Desk Space Occupant's
business. In the event that the nature of the Desk Space Occupant's business
changes, Tenant's rights under this Section 12.11(iv) shall be contingent upon
Landlord's approval of such business, which approval may be withheld in
Landlord's sole discretion. Any such use of all or any portion of the Premises
by the Desk Space Occupant shall not relieve Tenant of any of its obligations or
liabilities under this Lease.
12.12 Any assignment or transfer, whether made with Landlord's consent
pursuant to subsection 12.1 or without Landlord's consent pursuant to subsection
12.11, shall be made only if, and shall not be effective until, the assignee
shall execute, acknowledge and deliver to Landlord an agreement in form and
substance reasonably satisfactory to Landlord whereby the assignee shall assume
the obligations of this Lease on the part of Tenant to be performed or observed
from and after the date of such assignment as if it was the original named
Tenant and whereby the assignee shall agree that the provisions in subsection
12.1 shall, notwithstanding such assignment or transfer, continue to be binding
upon it in respect of all future assignments and transfers. The original named
Tenant covenants that, notwithstanding (i) any assignment or transfer, whether
or not in violation of the provisions of this Lease, (ii) the acceptance of Rent
and/or additional rent by Landlord from an assignee, transferee or any other
party, (iii) any modification of this Lease entered into between Landlord and an
assignee, (iv) any exercise by an assignee of any option to extend, expand or
renew this Lease set forth herein, or (v) any default by an assignee, whether or
not the original named Tenant has notice thereof, the original named Tenant
shall remain fully liable for the payment of the Rent and additional rent and
for the other obligations of this Lease on the part of Tenant to be performed or
observed.
12.13 The joint and several liability of Tenant and any immediate or remote
successor in interest of Tenant and the due performance of the obligations of
this Lease on Tenant's part to be performed or observed shall not be discharged,
released or impaired in any respect by any agreement or stipulation made by
Landlord extending the time, or modifying any of the obligations, of this Lease,
or by any waiver or failure of Landlord to enforce any of the obligations of
this Lease.
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12.14 The listing of any name other than that of Tenant, whether on the
doors of the Premises or the Building directory, or otherwise, shall not operate
to vest any right or interest in this Lease or in the Premises, nor shall it be
deemed to be the consent of Landlord to any assignment or transfer of this Lease
or to any sublease of the Premises or to the use or occupancy thereof by others,
nor shall it be deemed notice to Landlord that anyone other than the original
named Tenant or an assignee or subtenant permitted hereunder is occupying the
Premises. Any such listing, shall constitute a privilege extended by Landlord,
revocable at Landlord's will by notice to Tenant.
12.15 INTENTIONALLY DELETED.
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12.16 If the Landlord shall recover or come into possession of the Premises
before the date herein fixed for the termination of this Lease, Landlord shall
have the right, at its option, to take over any and all subleases or sublettings
of the Premises or any part thereof made by Tenant and to succeed to all the
rights of said subleases and sublettings or such of them as it may elect to take
over. Tenant hereby expressly assigns and transfers to Landlord such of the
subleases and sublettings as Landlord may elect to take over at the time of such
recovery of possession, such assignment and transfer not to be effective until
the termination of this Lease or re-entry by Landlord hereunder or if Landlord
shall otherwise succeed to Tenant's estate in the Premises, at which time Tenant
shall upon request of Landlord, execute, acknowledge and deliver to Landlord
such further instruments of assignment and transfer as may be necessary to vest
in Landlord the then existing subleases and sublettings. Every subletting
hereunder is subject to the condition and by its acceptance of and entry into a
sublease, each subtenant thereunder shall be deemed conclusively to have thereby
agreed from and after the termination of this Lease or re-entry by Landlord
hereunder of or if Landlord shall otherwise succeed to Tenant's estate in the
Premises, that such subtenant shall waive any right to surrender possession or
to terminate the sublease and, at Landlord's election, such subtenant shall be
bound to Landlord for the balance of the term of such sublease and shall attorn
to and recognize Landlord, as its landlord, under all of the then executory
terms of such sublease, except that Landlord shall not (i) be liable for any
previous act, omission or negligence of Tenant under such sublease. (ii) be
subject to any counterclaim, defense or offset, (iii) be bound by any previous
modification or amendment of such sublease (unless Landlord shall have expressly
consented to such modification or amendment) or by any previous prepayment of
more than one (1) month's rent and additional rent which shall be payable as
provided in the sublease, (iv) be obligated to repair the subleased space or the
Building or any part thereof, in the event of total or substantial total damage
beyond such repair as can reasonably be accomplished from the net proceeds of
insurance actually made available to Landlord, (v) be obligated to repair the
subleased space or the Building or any part thereof, in the event of partial
condemnation beyond such repair as can reasonably be accomplished from the net
proceeds of any award actually made available to Landlord as consequential
damages allocable to the part of the subleased space or the Building not taken
or (vi) be obligated to perform any work in the subleased space of the Building
or to prepare them for occupancy beyond Landlord's obligations under this Lease,
and the subtenant shall execute and deliver to Landlord any instruments Landlord
may reasonably request to evidence and confirm such attornment. Each subtenant
or licensee of Tenant shall be deemed automatically upon and as a condition of
occupying or using the Premises or any part thereof, to have given a waiver of
the type described in and to the extent and upon the conditions set forth in
this Article 12.
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13. CONDITION OF THE PREMISES.
Tenant agrees (i) to accept possession of the Premises in the condition
which shall exist on the Commencement Date "AS IS", and further agrees that
Landlord shall have no obligation, to perform any work or make any installations
in order to prepare the Premises for Tenant's occupancy, unless otherwise
provided in this Lease, and (ii) Landlord and Landlord's agents have made no
representations, warranties or promises whatsoever with respect to the Premises,
the Building, the Real Property, the rents, leases, Taxes. or any other matter
or thing, except as herein expressly set forth, and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as expressly
set forth 'in this Lease. Tenant represents and warrants that it is fully
familiar with the Premises and has thoroughly inspected same. The taking of
possession of the Premises by Tenant shall be conclusive evidence as against
Tenant that, at the time such possession was so taken, the Premises were in good
and satisfactory condition, and that all of the Premises and appurtenances
thereto that are the subject of this Lease have been received by Tenant.
14. ACCESS TO PREMISES.
14.1 Landlord reserves the right, and Tenant shall permit Landlord,
without any of the same constituting an eviction and without incurring liability
to Tenant therefor, (a) to install, erect, use and maintain, repair and replace
pipes, ducts and conduits in and through the Premises; provided, however, that
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Landlord shall, to the extent reasonably practicable under the circumstances,
disguise, conceal or camouflage the pipes, ducts and conduits; (b) to change the
arrangement and/or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the Building,
provided that any such changes will not materially decrease the useable square
feet of the Premises; (c) to change the Building name or address; and (d) to
impose such controls as it deems reasonably prudent with respect to access to
the Building by Tenant's visitors. Landlord or Landlord's agents shall have the
right to enter the Premises at all reasonable times and, where reasonably
feasible, upon reasonable advance notice to Tenant, to examine the same, to show
them to prospective or existing purchasers, mortgagees, lessors or lessees of
the Building or space therein, and to make such decorations, repairs,
alterations, improvements or additions as Landlord may deem reasonably necessary
or desirable to the Premises or to any other portion of the Building or which
Landlord may elect to perform following Tenant's failure to make repairs or
perform any work which Tenant is obligated to perform under this Lease, or for
the purpose of complying with laws, regulations or other requirements of
government authorities and Landlord shall be allowed to take all material into
and upon the Premises that may be required therefor without the same
constituting an eviction or constructive eviction of Tenant in whole or in part
and the rent shall in no wise abate while said repairs, alterations,
improvements, or additions are being made, by reason of loss or interruption of
business of Tenant, or otherwise. During the one year prior to the Expiration
Date or the expiration of any renewal or extended term, Landlord may exhibit the
Premises to prospective tenants thereof. If, during the last twelve (12) months
of the Term, Tenant shall have abandoned the Premises and removed all or
substantially all of Tenant's property therefrom, Landlord may immediately enter
and alter. renovate and redecorate the Premises, without elimination or
abatement of rent, or incurring liability to Tenant for any compensation, and
such acts shall not be deemed an actual or constructive eviction and shall have
no effect upon this
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Lease. If Tenant shall not be personally present to open and permit an entry
into the Premises, at any time, when for any reason an entry therein shall be
necessary or permissible, Landlord or Landlord's agents may enter the same by a
master key, or may, only in an emergency, forcibly enter the same, without
rendering Landlord or such agents liable therefor (if during such entry Landlord
or Landlord's agents shall accord reasonable care to Tenant's property), and
without in any manner affecting the obligations and covenants of this Lease.
Nothing herein contained, however, shall be deemed or construed to impose upon
Landlord any obligation, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as herein
provided, unless caused by Landlord's negligence or that of its agents.
14.2 (A) Tenant understands and agrees that the Landlord intends to
perform substantial renovation work in and to the public parts of the Building
and the mechanical systems serving the Building (which work may include the
repair or replacement of the building exterior facade, window glass, elevators,
electrical systems, air-conditioning and ventilating systems, plumbing systems,
common hallway or lobby, requiring access to the same from within the Premises)
at any time or from time to time during the Term, and that Landlord shall incur
no liability to Tenant, nor shall Tenant be entitled to any abatement of rent,
on account of any noise, vibration or other disturbance to Tenant's business at
the Premises (provided that Tenant is not denied access to the Premises) which
shall arise out of the performance by Landlord of the aforesaid renovations at
the Building; provided Landlord shall use reasonable efforts to minimize
interference with Tenant's occupancy of the Premises. Tenant agrees to grant
access to the Premises at all reasonable times, upon reasonable notice, for the
purpose of performing the aforesaid renovations. Tenant acknowledges and agrees
that neither the exterior walls of the Building nor the exterior of the windows
and the exterior areas created by the Building set-backs are part of the
Premises and Landlord reserves all rights with respect to those walls, windows
and set-back areas, including, without limitation, the right of access to such
set-back areas and the right to construct permanent signage or other
improvements on such set-back areas and elsewhere on the exterior of the
Building which may, among other things, obstruct views from the Premises.
Subject to the provisions of Section 14.2 (B) below, Landlord shall have no
liability to Tenant, nor shall Tenant be entitled to any abatement of rent or
claim of constructive eviction or other claim for damages on account of any
construction or operation of signage or other improvements on the Building or on
account of the loss of light or views from the Premises due to permanent or
temporary signage or signage improvements on the Building; provided, however,
that in the event that Landlord shall voluntarily construct any signage or other
improvement on the exterior of the Building (other than any improvement required
by any applicable law, rule or regulation or in the case of an emergency in
connection with any repair that Landlord or Landlord's agents is performing to
the Building), Landlord shall use all reasonable efforts to notify Tenant of the
same no later than five (5) business days prior to the initial construction
thereof.
(B) Notwithstanding anything in this Lease to the contrary, provided
that Tenant is not then in default beyond the expiration of any applicable
notice and cure periods, in the event that Landlord has voluntarily constructed
any signage or other improvement on the exterior of the Building (but excluding
any improvement required by any applicable law, rule or regulation or otherwise
reasonably necessary in connection with any repair that Landlord or Landlord's
agents is performing to the Building) which remains in place for longer than
three (3)
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months (the "TEMPORARY PERIOD") and which has the result of substantially
blocking Tenant's views from the Premises (it being understood and agreed that
"substantial blockage" or "substantially blocking," as such terms are used in
this Section, shall mean any blockage of more than thirty-three and one-third
percent (33 1/3%) of the windows of the Premises), Tenant shall have the right
no later than fifteen (15) business days after the expiration of the Temporary
Period (the "RELOCATION NOTIFICATION PERIOD") to elect to be relocated in the
Building to the Signage Substitution Space (as hereinafter defined), subject to
the following terms and provisions:
(i) Tenant shall provide Landlord with written notice ("TENANT'S
RELOCATION REQUEST") of its intention to exercise its right to relocation under
this Section 14.2(B) within the Relocation Notification Period (it being
understood that Landlord shall have the right to designate the Signage
Substitution Space in accordance with the terms and provisions of this Section),
which notice shall contain a certificate of an authorized officer of Tenant
certifying that the views and/or light from the Premises have been substantially
blocked as a result of such permanent signage or improvement on the exterior of
the Building.
(ii) Landlord shall provide Tenant, no later than fifteen (15)
business days after Landlord receives Tenant's Relocation Request, with written
notice ("LANDLORD'S SIGNAGE RELOCATION RESPONSE") describing the Signage
Substitution Space and specifying the rental rate therefor and the effective
date of such substitution of the Signage Substitution Space; provided that such
effective date shall be no earlier than fifteen (15) days and no later than
thirty (30) days after Tenant's receipt of Landlord's Signage Relocation
Response.
(iii) (1) Subject to the provisions herein, the Signage Substitution
Space shall (A) be located anywhere in the Building as Landlord shall determine
in its sole discretion, (B) contain at least the same number of offices as the
Premises, (C) have a similar or better layout as the Premises, (D) consist of at
least the same square footage as the Premises and (E) have any exposure and not
be substantially blocked by signage as of the date of Landlord's Signage
Relocation Response; provided, however, that Landlord will use reasonable
efforts to provide that such Signage Substitution Space shall (x) contain at
least the same number of windows as the Premises, (y) have the same or
substantially similar exposure and substantially similar views as the Premises,
and (z) be located on the fourteenth (14th) floor of the Building or higher.
(2) In the event that the Signage Substitution Space shall
either (A) be on a floor lower than the fourteenth (14th) floor of the Building
or (B) be on a higher floor of the Building but with an exposure other than the
Southwest exposure of the Premises, the Rent for such Signage Substitution Space
shall be the lesser of (x) the Rent set forth in subsection 1.2(iii) of this
Lease, or (y) the then fair market rent for the Signage Substitution Space, as
such rent shall be reasonably determined by Landlord.
(3) In the event that Landlord shall be unable to relocate
Tenant to any Signage Substitution Space anywhere in the Building which complies
with the provisions of Sections 14(B)(iii)(1)(A)(iii),(B), (C), (D) and (E)
above, Tenant shall have the right to elect to terminate this Lease; provided
that Tenant shall provide Landlord, no later than ten (10) business
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days after Tenant receives Landlord's Signage Relocation Response, written
notice exercising its termination right and specifying the effective date of
such termination, which effective date shall be no earlier than fifteen (15)
days and no later than sixty (60) days after Tenant's receipt of Landlord's
Signage Relocation Response, and whereupon such effective date this Lease shall
terminate and be of no further force and effect, except for such terms and
provisions which by their express terms survive the termination hereof.
(iv) Tenant may exercise its right to relocate to the Signage
Substitution Space by providing Landlord with notice, no later than ten (10)
business days after Tenant receives Landlord's Signage Relocation Response,
which notice shall be irrevocable after Landlord's receipt thereof. TIME IS OF
THE ESSENCE WITH RESPECT TO THE FOREGOING TIME PERIOD AND NO EXTENSIONS SHALL BE
GRANTED BY LANDLORD. If Tenant does not deliver to Landlord its written response
to Landlord's Signage Relocation Response in accordance with the foregoing
provisions and within the applicable time period, then (a) Tenant shall have
forever waived and relinquished its right to relocate to any substitute space by
virtue of any signage or other improvement blocking Tenant's views, (b) Landlord
shall at any time thereafter be entitled to lease the Signage Substitute Space
to others as Landlord in its sole discretion may desire, and (c) Tenant, upon
Landlord's request, shall promptly deliver to Landlord a notice acknowledging
that Tenant has forever waived and relinquished its right to exercise the
relocation right granted under this Section 14.2(B).
(v) If Tenant timely accepts Landlord's Signage Relocation
Response in accordance with subsection (iv) above, then Landlord shall
substitute, instead of the Premises, other space of at least the area of the
Premises and satisfying the other conditions set forth herein (such other space
being hereinafter referred to as the "SIGNAGE SUBSTITUTION SPACE") and, as of
the effective date specified in Landlord's Signage Relocation Response:
(1) The description of the Premises set forth in the Lease
shall, without further act on the part of Landlord and Tenant, be deemed amended
so that the Signage Substitution Space shall be deemed to be the Premises under
the Lease, and all of the terms, covenants, conditions and provisions and
agreements of the Lease shall continue in full force and effect and apply to the
Signage Substitution Space (it being understood and agreed that Tenant's Rent
shall not increase as a result of such relocation but that Tenant's Rent may
decrease in accordance with Section 14.2(B)(iii) above only); and
(2) Tenant shall move from the original Premises into the
Signage Substitution Space on or before the effective date of the Signage
Substitution Space in its "AS IS" condition as of the effective date stated in
Landlord's Signage Relocation Response, subject to the alterations Landlord is
required to perform pursuant to the provisions of this subsection 14(B)(v)(2).
If Tenant exercises this relocation right, Landlord shall pay directly, upon
presentation of invoices, for any of Tenant's actual and reasonable out-of-
pocket expenses for moving and installing Tenant's furniture, equipment,
supplies, telephones and telephone equipment and all of Tenant's other property
in the Premises from the original Premises to the Substitution Space, which move
and installation shall be accomplished during the period beginning with the
close of Tenant's business on a Friday and ending with the opening of Tenant's
business on the next following Monday, but Tenant shall not be compensated and
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Landlord shall not be liable for any inconvenience to the Tenant or for any
interruption of Tenant's business or affairs. Additionally, Landlord, at
Landlord's expense, shall alter the Signage Substitution Space in substantially
the same manner as the original Premises were initially constructed by Tenant in
connection with the Initial Alterations and the effective date of the
substitution of the Signage Substitution Space shall not be deemed to have
occurred until the substantial completion of such alterations, if any. If Tenant
requests materials or installations in the Signage Substitution Space other than
those originally installed by Landlord in the original Premises, i