Exhibit 10.18

 

Execution Version

 

ONE HUDSON YARDS OWNER LLC,

 

Landlord

 

TO

 

INTERCEPT PHARMACEUTICALS, INC.,

 

  Tenant

 

 

 

Lease

 

 

 

Dated as of December 7, 2016

 

  

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE 1 Premises; Term; Use 1       1.01 Demise 1 1.02 Term 2
1.03 Possession Date 2 1.04 Use 5       ARTICLE 2 Rent 8       2.01 Rent 8 2.02
Fixed Rent 8 2.03 Additional Charges 8 2.04 PILOT Payments 8 2.05 Impositions 13
2.06 Tax Payments 15 2.07 Operating Payments 17 2.08 PILOT, Impositions, Tax and
Operating Provisions 25 2.09 Electric Charges 26 2.10 Manner of Payment 27 2.11
Security 28       ARTICLE 3 Landlord Covenants 29       3.01 Landlord Services
29 3.02 General Service Provisions 38 3.03 Landlord’s Contribution 39 3.04
Governmental Incentives 42       ARTICLE 4
Leasehold Improvements; Tenant Covenants 43       4.01 Initial Improvements 43
4.02 Alterations 53 4.03 Landlord’s and Tenant’s Property 57 4.04 Access and
Changes to Building 58 4.05 Repairs 60 4.06 Compliance with Laws; Hazardous
Materials 61 4.07 Tenant Advertising 62 4.08 Right to Perform Tenant Covenants
62 4.09 Telecommunications; Shaft Space 63       ARTICLE 5
Assignment and Subletting 64       5.01 Assignment; Etc 64 5.02 Landlord’s Right
of First Offer 66 5.03 Assignment and Subletting Procedures 69 5.04 General
Provisions 70

 

  - i - 

 

 

5.05 Assignment and Sublease Profits 72 5.06 Eligible Subtenant; Non-Disturbance
73 5.07 Disputes 74       ARTICLE 6 Subordination; Default; Indemnity 74      
6.01 Subordination 74 6.02 Estoppel Certificate 76 6.03 Default 76 6.04
Re-entry by Landlord 77 6.05 Damages 77 6.06 Other Remedies 78 6.07
Right to Injunction 78 6.08 Certain Waivers 78 6.09 No Waiver 79 6.10
Holding Over 79 6.11 Attorneys’ Fees 79 6.12 Nonliability and Indemnification 80
      ARTICLE 7 Insurance; Casualty; Condemnation 81       7.01
Compliance with Insurance Standards 81 7.02 Tenant’s Insurance 82 7.03
Subrogation Waiver 82 7.04 Condemnation 83 7.05 Casualty 84 7.06 Landlord’s
Insurance 86       ARTICLE 8 Miscellaneous Provisions 86       8.01 Notice 86
8.02 Rules and Regulations 88 8.03 Severability 89 8.04 Certain Definitions 89
8.05 Quiet Enjoyment 90 8.06 Limitation of Landlord’s and Tenant’s Personal
Liability 90 8.07 Counterclaims 90 8.08 Survival 90 8.09 Certain Remedies;
Arbitration 90 8.10 No Offer; Counterparts 92 8.11 Captions; Construction 92
8.12 Amendments 93 8.13 Broker 93 8.14 Merger 93 8.15 Successors 93 8.16
Applicable Law 93 8.17 No Development Rights 93 8.18 Condominium 94 8.19
Embargoed Person 94 8.20 Dining Facility; Wet Installations 95

 

  - ii - 

 

 

8.21 Press Releases 96 8.22 Tenant Creditworthiness 97 8.23 Recording 97 8.24
REIT/UBTI Compliance 97 8.25 Time of the Essence 98 8.26 Car Service Access to
Building 98       ARTICLE 9 Renewal Right 98       9.01 Renewal Right 98 9.02
Renewal Rent and Other Terms 99       ARTICLE 10 Intentionally Omitted 102      
ARTICLE 11 Right of First Offer 102       11.01 Offer Space Option 102      
ARTICLE 12 Signage 105       12.01 Premises Signage 105 12.02 Other Tenant Lobby
Signage 106 12.03 Signage Removal 106 12.04 Building Directory 106 12.05 Naming
106       ARTICLE 13 Terrace Space 107       13.01 Terrace Space 107

  

EXHIBITS

 

A Description of Land B-1 Floor Plans B-2 Approximate Rentable Square Footage of
Premises C Rules and Regulations D Standard Cleaning Specifications E-1 Delivery
Condition E-2 Post Delivery Condition F HVAC Specifications G Elevator
Specifications H Charges for Landlord Services and Personnel I-1 Tenant Design
Standards I-2 Construction Rules J Insurance Minimum Coverage and Limits K
Approved Contractors L Security Specifications M-1 Form of Superior Mortgagee
SNDA M-2 Form of Superior Lessor SNDA

 

  - iii - 

 

 

M-3 Form of PILOT SNDA N Form of Confidentiality Agreement O Form of Letter of
Credit P LEED-Related Requirements For Alterations Q Intentionally Omitted R
Intentionally Omitted S Location of Capped Valved Outlets T List of Base
Building Working Drawings U Designated Shaft Space V Form of Landlord’s
Non-Disturbance Agreement W Existing Superior Rights X Rated Partitions Around
Building Core Y Life Safety System Z Hoist Impacted Area AA Terrace Space

 

  - iv - 

 

 

INDEX OF DEFINED TERMS

 

Definition   Where Defined       Acceptance Notice   Section 11.01 Access Date  
Section 4.01 Additional Charges   Section 2.03 Additional Tax Amount   Section
2.04 Additional Tax Payment   Section 2.04 Affiliate   Section 5.01 Allocated
Generator Capacity   Section 3.01 Alterations   Section 4.02 Anticipated Offer
Space Inclusion Date   Section 11.01 Applicable Percentage   Section 6.10
Arbiter   Section 2.07 Assignment Consideration   Section 5.05 ATMs   Section
1.04 Available   Section 11.01 Base Building Work   Section 4.01 Base Building
Working Drawings   Section 4.01 Base Impositions Amount   Section 2.05 Base
Operating Amount   Section 2.07 Base Operating Year   Section 2.07 Base PILOT
Amount   Section 2.04 Base PILOT Year   Section 2.04 Basic Electric Charge  
Section 2.04 Broker   Section 8.13 Building   Recitals Business Days   Section
3.02 Business Hours   Section 3.02 Casualty   Section 7.05 Commencement Date  
Section 1.02 Control   Section 5.01 CPI   Section 8.04 Curing Party   Section
4.08 Customary Ancillary Uses   Section 1.04 Declaration   Section 8.18
Decorative Alterations   Section 4.02 Delay Cost Cap   Section 1.03 Delivery
Condition   Section 4.01 Desk Space User   Section 5.01 Dining Facility  
Section 1.04 Effective Date   Introduction Effective Period   Section 2.04
Electricity Additional Rent   Section 2.09 Elevators   Section 3.01

 

  - 1 - 

 

 

Eligible Sublease   Section 5.06 Eligible Subtenant   Section 5.06 Embargoed
Person   Section 8.19 Excluded Sublease   Section 5.02 Existing Superior Rights
  Section 11.01 Expiration Date   Section 1.02 Fair Market Rent   Section 9.02
Fair Offer Rent   Section 11.01 Fifth Reduction Date   Section 2.11 First Class
Office Building   Section 1.04 First Five Year Renewal Term   Section 9.01 First
Reduction Date   Section 2.11 Fixed Rent   Section 2.02 Fixtures   Section 4.03
Fourth Reduction Date   Section 2.11 Future Reduction Amount   Section 2.11 GAAP
  Section 2.07 Hazardous Materials   Section 4.06 Hoist Impacted Area   Section
4.01 Hoist Impacted Area Work   Section 4.01 Holidays   Section 3.02 IDA  
Section 2.04 Impositions   Section 2.05 Impositions Payment   Section 2.05
Initial Lease-Up Restriction   Section 5.01 Initial Meeting   Section 9.02
Initial Reduction Amount   Section 2.11 Intercept Tenant   Section 4.02 Interest
Rate   Section 4.08 Internal Stairs   Section 3.01 JAMS Arbitrator   Section
8.09 Land   Recitals Landlord   Introduction Landlord Delay   Section 4.01
Landlord Delay Notice   Section 4.01 Landlord Indemnified Party   Section 6.12
Landlord Services   Section 3.01 Landlord’s Determination   Section 9.02
Landlord’s Non-Disturbance Agreement   Section 5.06 Landlord’s Post Turnover
Work   Section 4.01 Landlord’s Rate   Section 2.09 Landlord’s Statement  
Section 2.07 Landlord’s Work   Section 4.01 Landlord’s Turnover Work   Section
4.01 Latent Defects   Section 4.01 Laws   Section 4.06

 

  - 2 - 

 

 

LC Date   Section 2.11 Letter of Credit   Section 2.11 Lobby   Section 12.02
Measurement Standard   Section 1.01 Messenger Center   Section 3.01 Messenger
Center Services   Section 3.01 Minimum Retainage   Section 3.03 NAM   Section
8.09 Net Effective Rental   Section 5.02 Net Present Rent Value   Section 5.02
New Tenant   Section 6.10 Non-Material Alteration   Section 4.02 Notice  
Section 8.01 Offer Notice   Section 11.01 Offer Period   Section 11.01 Offer
Space   Section 11.01 Offer Space Inclusion Date   Section 11.01 Offer Space
Option   Section 11.01 Operating Expenses   Section 2.07 Operating Payment  
Section 2.07 Operating Year   Section 2.07 Other Sublease Considerations  
Section 5.05 Outside Possession Date   Section 1.03 Outside Requisition Date  
Section 3.03 Outside TCO Date   Section 1.03 Permitted Users   Section 1.04
PILOT   Section 2.04 PILOT Agreement   Section 2.04 PILOT Amount   Section 2.04
PILOT Cessation Date   Section 2.04 PILOT Payment   Section 2.04 Possession Date
  Section 1.03 Post Delivery Condition   Section 4.01 Pre-Construction
Activities   Section 4.01 Premises   Section 1.01 Project   Recitals Punch List
Items   Section 4.01 Records   Section 2.07 Recurring Additional Charges  
Section 2.03 Reduction Amount   Section 2.11 Reduction Date   Section 2.11 REIT
  Section 8.24 Renewal Option   Section 9.01 Renewal Premises   Section 9.01
Renewal Term   Section 9.01 Rent   Section 2.01

 

  - 3 - 

 

 

Rent Commencement Date   Section 2.02 Requesting Party   Section 8.22 Required
Letter of Credit Amount   Section 2.11 Reserved Tonnage   Section 3.01
Restoration Work   Section 4.03 Rules and Regulations   Section 8.02 Second
Outside Possession Date   Section 1.03 Second Outside Tenant’s Occupancy Date  
Section 1.03 Second Reduction Date   Section 2.11 Second Renewal Notice  
Section 9.01 Second Renewal Option   Section 9.01 Second Renewal Term   Section
9.01 SNDA   Section 6.01 Specialty Installations   Section 4.03 Standby Power
Election Date   Section 3.01 Standby Power Election Notice   Section 3.01
Standby Power System   Section 3.01 Subject to CPI Increases   Section 8.04
Substantial Completion; Substantially Complete   Section 4.01 Substantial
Completion Notice   Section 4.01 Substantial Portion   Section 3.02 Successor
Landlord   Section 6.01 Superior Lease   Section 6.01 Superior Lessor   Section
6.01 Superior Mortgage   Section 6.01 Superior Mortgagee   Section 6.01 Tax
Payment   Section 2.06 Tax Year   Section 2.04 Taxes   Section 2.06 TCO  
Section 1.04 Temporary Hoist Enclosure   Section 4.01 Ten Year Renewal Term  
Section 9.01 Tenant   Introduction Tenant Delay   Section 4.01 Tenant
Indemnified Party   Section 6.12 Tenant Inspection Notice   Section 4.01 Tenant
Requisition   Section 3.03 Tenant’s Basic Cost   Section 5.05 Tenant's
Contractors   Section 4.01 Tenant’s Determination   Section 9.02 Tenant’s
Occupancy Date   Section 1.03 Tenant’s Occupancy Notice   Section 1.03 Tenant’s
Offer Notice   Section 5.02 Tenant’s Property   Section 4.03 Tenant’s Share  
Section 2.04 Tenant’s Statement   Section 2.07

 

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Tenant’s Initial Work   Section 3.03 Terrace Space   Section 13.01 Terrace Space
Floor   Section 13.01 Term   Section 1.02 Third Outside Tenant’s Occupancy Date
  Section 1.03 Third Reduction Date   Section 2.11 Transfer Notice   Section
5.03 Unavoidable Delay   Section 8.04 Untenantable   Section 3.02 Violations  
Section 4.01 Walk-Through Date   Section 4.01 Warranty Period   Section 4.01
Work Reimbursement Period   Section 3.03 Work Allowance   Section 3.03

 

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LEASE, dated as of December 7, 2016 (the “Effective Date”), between ONE HUDSON
YARDS OWNER LLC (“Landlord”), a Delaware limited liability company whose address
is c/o Related Companies, 60 Columbus Circle, New York, New York 10023 and
INTERCEPT PHARMACEUTICALS, INC. (“Tenant”), a Delaware corporation whose address
is 450 W 15th Street, Suite 505, New York, New York 10011.

 

WITNESSETH:

 

WHEREAS, Landlord is willing to lease to Tenant and Tenant is willing to hire
from Landlord, on the terms hereinafter set forth, certain space in the building
known as 55 Hudson Yards and located at 550 West 34th Street, New York, New York
(the “Building”), which is to be constructed on the land described on Exhibit A
(the “Land”, the Land and the Building and all plazas, sidewalks and curbs
adjacent thereto are, collectively, the “Project”).

 

NOW, THEREFORE, Landlord and Tenant agree as follows:

 

ARTICLE 1

 

Premises; Term; Use

 

1.01       Demise. (a)  Landlord hereby leases to Tenant and Tenant hereby hires
from Landlord, subject to the terms and conditions of this Lease, the entire
23rd through 25th floors of the Building (collectively, the “Premises”), in each
case, substantially as shown hatched and described as the “Marketing Floors” on
the plans annexed as Exhibit B-1. Landlord and Tenant agree that the Premises
leased pursuant to this Section 1.01(a) shall contain, in the aggregate,
approximately 85,281 rentable square feet, and that the rentable square footage
of each floor of the Premises shall be approximately as set forth on Exhibit B-2
annexed hereto; provided, that the rentable square footage of each such floor of
the Premises shall be measured and finally determined (subject to the provisions
of Section 1.03) in accordance with the Measurement Standard prior to or
promptly after the Possession Date (as hereinafter defined). “Measurement
Standard” means the Real Estate Board of New York Recommended Method of Floor
Measurement for Office Buildings effective January 1, 1987 (as amended in 2003)
applicable to measuring usable area, with a 27% loss factor applied to the
resulting number of usable square feet. Thus, for example, if a full floor
contained 10,000 usable square feet, such full floor would be deemed to contain
13,699 rentable square feet, obtained by dividing 10,000 by .73 (USF/[1-Loss
Factor] = RSF). For a partial floor, the number of usable square feet contained
within the common areas on such floor would be allocated on a proportional basis
among the leasable areas on such floor before applying the loss factor. Subject
to the other applicable provisions of this Lease, the leasing of the Premises by
Tenant shall be deemed to include the non-exclusive right to use in common with
others, for their intended uses, the common facilities in the Project designed
and intended for use by tenants or other occupants in the Building in common
with Landlord and other tenants of the Building, including, without limitation,
elevators, fire stairs, mechanical areas serving the Premises (if any), and
telephone and electrical closets and riser shafts serving the Premises (if any),
and all walkways, loading docks, plazas, courts, public areas within the
property line of the Building, service areas, lobbies, landscaped and garden
areas and all other common and service areas and common amenities of the
Project.

 

 - 1 - 

 

 

(b)       Notwithstanding the provisions of Section 1.01(a), Landlord shall have
the one-time right, exercisable upon written notice given to Tenant on or before
January 1, 2017, to redesignate the floors of the Premises; provided, that, in
any event, (i) the initial Premises (i.e., the Premises leased to Tenant
pursuant to this Section 1.01) shall consist of 3 contiguous full floors, the
lowest of which shall be no lower than the 23rd floor of the Building, (ii) all
of such 3 contiguous full floors shall be served by the same elevator bank (it
being agreed that such elevator bank may be different than the elevator bank
serving the Premises initially demised hereunder), (iii) the rentable square
footage of each redesignated floor shall not be increased or decreased by more
than 5% of the rentable square footage of the originally designated floor
hereunder and (iv) none of such redesignated floors shall incorporate mechanical
or structural equipment or elements or components, respectively, in areas in
which Tenant otherwise had access to and which were not located on the floors
originally designated. If Landlord exercises its right pursuant to this Section
1.01(b) to redesignate the floors of the Premises, Tenant shall lease such
redesignated floors upon all of the terms and conditions of this Lease, except
that references in this Lease to specific floors of the Building shall be
appropriately adjusted to account for such change. After the determination of
the floors of the initial Premises in accordance with the foregoing provisions
of this Section 1.01(b), Landlord and Tenant shall confirm such determination of
floors and any other adjustments to references in this Lease to specific floors
of the Building (including, without limitation, adjustments to the floors
serviced by the Elevators (as hereinafter defined) if the elevator bank serving
the redesignated floors is different from the elevator bank serving the Premises
initially demised hereunder) by executing an instrument reasonably satisfactory
to Landlord and Tenant; provided, that failure by Landlord or Tenant to execute
such instrument shall not affect the determination and adjustment of such floors
in accordance with this Section 1.01.

 

1.02       Term. This Lease shall be effective as of the Effective Date as a
binding, enforceable agreement between Landlord and Tenant. The term of this
Lease (the “Term”) shall commence on the Possession Date (as hereinafter
defined; such commencement date shall sometimes be referred to in this Lease as
the “Commencement Date”) and shall end, unless sooner terminated as herein
provided, on the last day of the calendar month in which occurs the 15th
anniversary of the day preceding the Rent Commencement Date (as hereinafter
defined) (such date, as the same may be extended pursuant to Article 9, is
called the “Expiration Date”).

 

1.03       Possession Date. (a)  The “Possession Date” means the earlier of (i)
the later of (x) the earliest date upon which Substantial Completion of
Landlord’s Turnover Work shall have occurred or been deemed to have occurred in
accordance with the provisions of Section 4.01(a) of this Lease and (y) January
1, 2018 and (ii) the date Tenant takes possession of the Premises (or any
portion thereof) for the performance of Alterations or for any other reason
other than pursuant to Section 4.01(b). After the occurrence of the Possession
Date, Landlord and Tenant shall promptly confirm the Possession Date, the Rent
Commencement Date, the Expiration Date and the rentable square footage of each
portion of the Premises by a separate instrument; provided, that the failure to
execute and deliver such instrument shall not affect the determination of such
dates and rentable square footages in accordance with this Article 1 and Section
4.01(a) of this Lease. Any dispute with respect to the rentable square footage
of the Premises shall be resolved by arbitration in accordance with the
provisions of Section 8.09. Pending the resolution of any dispute as to the
Possession Date, the Rent Commencement Date and/or the rentable square footage
of the Premises (or any portion thereof), Tenant shall pay Rent based upon
Landlord’s determination, without prejudice to Tenant’s position or any waiver
of its rights under this Lease or at law.

 

 - 2 - 

 

 

(b)          Subject to the provisions of Section 1.03(c) hereinafter following,
if for any reason Landlord shall be unable to deliver possession of the Premises
to Tenant on any date specified in this Lease for such delivery, Landlord shall
have no liability to Tenant therefor and the validity of this Lease shall not be
impaired, nor shall the Term be extended, by reason thereof. This Section 1.03
shall be an express provision to the contrary for purposes of Section 223-a of
the New York Real Property Law and any other law of like import now or hereafter
in effect.

 

(c)           (i)        Notwithstanding anything to the contrary contained
herein, if the Possession Date has not occurred (or be deemed to have occurred)
on or before April 1, 2018 (as such date shall be extended on a day for day
basis for each day of Tenant Delay and Unavoidable Delay, the “Outside
Possession Date”) and, solely by reason of Landlord’s failure to cause the
Possession Date to occur on or before the Outside Possession Date, Tenant shall
actually be delayed in completing Tenant’s Initial Work (as hereinafter defined)
and occupying all or a portion of the Premises for the conduct of Tenant’s
business, Tenant’s sole and exclusive remedy for such delay shall be (1) the
Rent Commencement Date shall be extended by one-quarter (1/4) day (in addition
to the extension of the Rent Commencement Date which may result by virtue of the
Possession Date not having timely occurred) for each day that the Possession
Date has not occurred (or be deemed to have occurred) after the Outside
Possession Date until the earlier of the date the Possession Date occurs (is
deemed to have occurred) and the Second Outside Possession Date and (2) if the
Possession Date has not occurred (or be deemed to have occurred) on or before
the date that is 90 days after the Outside Possession Date (as such date shall
be extended on a day for day basis for each day of Tenant Delay and Unavoidable
Delay, the “Second Outside Possession Date”), the Rent Commencement shall
thereafter be extended by one-half (1/2) day (in addition to the extension of
the Rent Commencement Date which may result by virtue of the Possession Date not
having timely occurred) for each day that the Possession Date has not occurred
(or be deemed to have occurred) after the Second Outside Possession Date until
the date the Possession Date occurs (or is deemed to have occurred).

 

(ii)       If the Possession Date has not occurred (or be deemed to have
occurred) on or before the Outside Possession Date and, solely by reason of
Landlord’s failure to cause the Possession Date to occur on or before the
Outside Possession Date, Tenant shall actually be delayed in completing Tenant’s
Initial Work and occupying all or a portion of the Premises for the conduct of
Tenant’s business, Landlord shall reimburse (or, at Landlord’s option, Landlord
shall credit against the Rent thereafter coming due under this Lease) Tenant for
the actual out-of-pocket costs incurred by Tenant as a result of the delay in
Tenant being able to move its employees to the Premises but solely to the extent
such costs are incurred as a result of Landlord’s failure to cause the
Possession Date to occur on or before the Outside Possession Date; provided,
that such costs shall not exceed $125,000.00 in the aggregate (the “Delay Cost
Cap”). Landlord shall reimburse such costs (not to exceed the Delay Cost Cap)
or, at Landlord’s option, provide a credit against the Rent thereafter coming
due under this Lease, within 30 days after Tenant delivers reasonable supporting
documentation to Landlord evidencing any such costs.

 

 - 3 - 

 

 

(iii)      If Landlord has not obtained the TCO (as hereinafter defined) on or
before the date that Tenant has substantially completed Tenant’s Initial Work in
substantial accordance with the plans approved by Landlord with respect thereto
and is ready, willing and able to occupy the Premises for the ordinary conduct
of business (“Tenant’s Occupancy Date”) and, solely by reason of Landlord’s
failure to obtain the TCO on or before Tenant’s Occupancy Date, Tenant shall
actually be delayed in completing Tenant’s Initial Work and occupying all or a
portion of the Premises for the ordinary conduct of Tenant’s business, Tenant’s
sole and exclusive remedy therefor shall be that (1) the Rent Commencement Date
shall be extended by 1 day for each day that Landlord has not obtained the TCO
after Tenant’s Occupancy Date until the earlier of the date Landlord obtains the
TCO, or would have obtained the TCO but for any Tenant Delay or Unavoidable
Delay, and the Second Outside Tenant’s Occupancy Date, (2) if Landlord has not
obtained the TCO on or before the date that is 90 days after Tenant’s Occupancy
Date (the “Second Outside Tenant’s Occupancy Date”), the Rent Commencement Date
shall thereafter be extended by one and one-quarter (1 ¼) day for each day that
Landlord has not obtained the TCO after the Second Outside Tenant’s Occupancy
Date until the earlier of the date Landlord obtains the TCO, or would have
obtained the TCO but for any Tenant Delay or Unavoidable Delay, and the Third
Outside Tenant’s Occupancy Date and (3) if Landlord has not obtained the TCO on
or before the date that is 90 days after the Second Outside Tenant’s Occupancy
Date (the “Third Outside Tenant’s Occupancy Date”), the Rent Commencement Date
shall thereafter be extended by one and one-half (1 ½) day for each day that
Landlord has not obtained the TCO after the Third Outside Tenant’s Occupancy
Date until the date Landlord obtains the TCO or would have obtained the TCO but
for any Tenant Delay or Unavoidable Delay. Notwithstanding anything to the
contrary contained herein, after Tenant substantially completes Tenant’s Initial
Work Tenant shall notify Landlord in writing (“Tenant’s Occupancy Notice”) of
the anticipated Tenant’s Occupancy Date at least 10 Business Days prior to the
occurrence thereof (together with reasonable supporting documentation showing
that Tenant has made arrangements to occupy the Premises for the ordinary
conduct of business on such anticipated Tenant’s Occupancy Date), failing which
Tenant’s Occupancy Date shall be deemed to be the later of (1) the date that is
10 Business Days after the date Landlord delivers Tenant’s Occupancy Notice to
Landlord and (2) the date Tenant is ready, willing and able to occupy the
Premises for the ordinary conduct of business.

 

(iv)      If Landlord has not obtained the TCO (as hereinafter defined) on or
before the date that is 285 days after the Possession Date (as such date shall
be extended on a day for day basis for each day of Tenant Delay and Unavoidable
Delay, the “Outside Holdover Date”) and, solely by reason of Landlord’s failure
to obtain the TCO on or before the Outside Holdover Date, Tenant shall actually
be delayed in completing Tenant’s Initial Work and occupying all or a portion of
the Premises for the conduct of Tenant’s business and Tenant is holding over in
the 10 HY Premises solely as a result thereof, Landlord shall reimburse Tenant
for the 10 HY Indemnity Obligations for each day that Landlord has not obtained
the TCO after the Outside Holdover Date until the tenth (10th) Business Day
after Landlord obtains the TCO or would have obtained the TCO but for any Tenant
Delay or Unavoidable Delay. “10 HY Premises” means the portion of the 40th floor
of the building known as 10 Hudson Yards, New York, New York leased by Tenant
pursuant to the 10 HY Lease. “10 HY Lease” means that certain Lease dated as of
the date hereof between Legacy Yards Tenant LP and Tenant. “10 HY Indemnity
Obligations” means the aggregate amount of (A) the 10 HY Holdover Rental, minus
(B) the Current 10 HY Rental, plus any indemnification obligations actually paid
by Tenant pursuant to Section 6.10(i)(b) of the 10 HY Lease with respect to a
New Tenant (as defined in the 10 HY Lease). “10 HY Holdover Rental” means the
holdover rental actually paid by Tenant with respect to the 10 HY Premises
pursuant to Section 6.10(i) of the 10 HY Lease. “Current 10 HY Rental” means the
Rent (as defined in the 10 HY Lease) which would be payable by Tenant under the
10 HY Lease with respect to the 10 HY Premises had the term of the 10 HY Lease
with respect to the 10 HY Premises continued during such period on the same
terms as were in effect immediately prior to the 40th Floor Expiration Date (as
defined in the 10 HY Lease).

 

 - 4 - 

 

 

(v)       without duplication of Landlord’s reimbursement obligations under
clause (iv) but subject to the provisions of Section 4.01(d), if Tenant is
unable to perform Tenant’s Initial Work or open for the conduct of business on
or before the Outside Holdover Date to the extent resulting solely from any
Landlord Delay or any Violation, and solely by reason of such Landlord Delay or
Violation Tenant is holding over in the 10 HY Premises, then Landlord shall
reimburse Tenant for the 10 HY Indemnity Obligations for each day such inability
continues as a result of such Landlord Delay or Violation until the earlier to
occur of (x) such Landlord Delay or Violation is cured and (y) the date Tenant
is able to perform Tenant’s Initial Work or open for the conduct of business.

 

1.04       Use. (a)  Subject to compliance with Laws, the Premises shall be used
and occupied by Tenant (and any permitted subtenants and Desk Space Users)
solely for executive, administrative and general office use and Customary
Ancillary Uses in connection therewith as shall be reasonably required by Tenant
in the operation of its business, in each case, consistent with the standards
and character of a first-class office building located in midtown Manhattan of
comparable size, quality and character to the Building (“First Class Office
Building”), only, and for no other purpose. For purposes of this Lease,
“Customary Ancillary Uses” shall mean the following ancillary uses; provided,
that such Customary Ancillary Uses are (x) ancillary to the primary use of the
Premises for executive, administrative and general offices, (y) primarily for
the use of Tenant’s employees, business invitees and other persons expressly
entitled to use the Premises pursuant to the terms of this Lease (collectively,
“Permitted Users”) and for the use of operations within the Building and (z)
permitted in accordance with all Laws (it being acknowledged that Landlord makes
no representation that any of such ancillary uses are so permitted):

 

(i)        training facilities and classrooms in connection with Tenant’s
training programs for the exclusive use of Permitted Users;

 

(ii)       subject to the provisions of Section 8.20 hereof, cafeterias, dining
facilities and pantries solely for (x) reheating food via microwave or similar
food warming equipment, (y) serving prepared food and beverages delivered from
vendors and (z) vending machines (each, a “Dining Facility”) and vending
machines, in each case, for the exclusive use of Permitted Users (it being
agreed that no cooking, involving an open flame or which will require venting to
the exterior of the Building other than through the Building’s general exhaust
system may be done therein);

 

 - 5 - 

 

 

(iii)     duplicating, reproduction and/or offset or other printing facilities
(provided that Tenant shall cause such facilities to be constructed, operated
and maintained so that no noise or vibration will emanate from the Premises to
any other portions of the Buildings);

 

(iv)      board rooms, conference rooms and meeting rooms for the exclusive use
of Permitted Users;

 

(v)       storage rooms;

 

(vi)      shipping and mail rooms;

 

(vii)     computer and data processing rooms;

 

(viii)    a nursing station for the exclusive use of Permitted Users;

 

(ix)      health and exercise facilities with showers for the exclusive use of
Permitted Users (provided that (A) the entire floor on which any such exercise
facility is located and the entire floor immediately below the floor on which
such exercise facility is located shall be leased to Tenant, and (B) Tenant
shall cause such exercise facility to be constructed, operated and maintained so
that no noise or vibration (in each case, other than to a de minimis extent)
will emanate from the Premises to other portions of the Building, it being
agreed that if any other tenant or occupant complains to Landlord in good faith
about such noise or vibration, then such noise or vibration shall be deemed to
be emanating from the Premises to more than a de minimis extent);

 

(x)       private showers and lavatory facilities for the exclusive use of
Permitted Users;

 

(xi)      a travel office for the exclusive use of Permitted Users; and

 

(xii)     one or more automatic teller machines (“ATMs”) for the exclusive use
of Permitted Users (provided that Tenant agrees to maintain such ATMs with
Landlord’s preferred banking vendor at the Project if requested by Landlord and
Tenant, at Tenant’s sole cost and expense, shall (A) comply with all Laws with
respect to the ownership, use, operation, maintenance and repair of the ATMs,
(B) maintain and keep in full force and effect all licenses, permits and other
approvals required with respect to the ownership, use, operation, maintenance
and repair of the ATMs, (C) implement such measures as may be required by Laws,
or which Landlord shall reasonably require, to secure the area in and around the
ATMs and to otherwise ensure the safety and security of all persons using,
operating, maintaining or repairing the ATMs and (D) obtain and keep in full
force and effect such insurance as Landlord may reasonably require with respect
to the ATMs and the operations thereof).

 

 - 6 - 

 

 

(b)       Except to the extent expressly permitted pursuant to Section 1.04(a),
in no event shall the Premises be used for any of the following: (a) a banking,
trust company, or safe deposit business, in each case open for business to the
general public, (b) a savings bank, a savings and loan association, or a loan
company, in each case open for business to the general public, (c) the sale of
travelers’ checks and/or foreign exchange, in each case open for business to the
general public, (d) a stock brokerage office whose business involves
off-the-street retail sales to the general public, (e) a restaurant, bar or for
the sale of food or beverages (except to the extent expressly permitted pursuant
to Section 1.04(a)(ii)), (f) photographic reproductions and/or offset printing
(other than such incidental printing as Tenant may perform in connection with
the conduct of Tenant’s usual business operations (and as otherwise expressly
permitted pursuant to Section 1.04(a)(iii)), (g) an employment or travel agency
(except to the extent expressly permitted pursuant to Section 1.04(a)(vii)), (h)
a school or classroom (except to the extent expressly permitted pursuant to
Section 1.04(a)(i)), (i) medical or psychiatric offices (except to the extent
expressly permitted pursuant to Section 1.04(a)(viii)), (j) conduct of an
auction, (k) gambling activities, (l) conduct of obscene, pornographic or
similar disreputable activities, (m) offices of an agency, department or bureau
of the United States Government, any state or municipality within the United
States or any foreign government, or any political subdivision of any of them,
(n) offices of any charitable, religious, union or other not-for-profit
organization, (o) offices of any tax exempt entity within the meaning of Section
168(h)(2) of the Internal Revenue Code of 1986, as amended, or any successor or
substitute statute, or rule or regulation applicable thereto or (p)
manufacturing. The Premises shall not be used for any purpose which would lower
the first-class character of the Building, create unreasonable or excessive
elevator or floor loads, impair or interfere with any of the Building operations
or the proper and economic heating, ventilation, air-conditioning, cleaning or
other servicing of the Building, constitute a public or private nuisance, or
interfere with any other tenant or Landlord, or impair the appearance of the
Building.

 

(c)       Landlord shall obtain a temporary certificate of occupancy for the
Building core (the “TCO”) and Landlord agrees that the TCO when issued for the
Building, and any subsequent temporary or permanent base building certificate of
occupancy obtained by Landlord, will permit the use of the Premises for offices.
Landlord shall use commercially reasonable efforts to obtain the TCO on or
before Tenant’s Occupancy Date, it being agreed that Tenant’s sole and exclusive
remedy for Landlord’s failure to obtain the TCO on or before Tenant’s Occupancy
Date is set forth in Section 1.03(c)(iii). If Tenant requires an amendment to
such certificate of occupancy of the Building to use the Premises for any of the
uses permitted pursuant to this Section 1.04 other than mere office use,
Landlord, at Tenant’s expense, shall file for and use commercially reasonable
efforts to obtain such an amendment to the certificate of occupancy; provided,
that neither this Lease nor any of Tenant’s obligations hereunder shall be
conditioned upon Landlord obtaining the same. If Tenant desires to obtain any
special permits for use of the Premises (including, for purposes of illustration
only, and not by way of limitation, a public assembly permit or a temporary or
permanent liquor license for the serving of alcohol to Tenant’s employees and
business invitees for consumption in the Premises only (it being agreed that
Tenant shall have procured and furnished to Landlord a policy of liquor
liability insurance reasonably satisfactory to Landlord in connection therewith
and Tenant shall reimburse Landlord for any increased insurance costs incurred
by Landlord in connection therewith), Landlord, at Tenant’s expense, shall
reasonably cooperate with respect to the same to the extent such cooperation is
reasonably necessary; provided, that obtaining any such permits shall be the
sole responsibility of Tenant. If Landlord shall incur any actual out-of-pocket
cost in connection with such cooperation or the amendment to the certificate of
occupancy, Tenant shall, within 30 days after receipt of an invoice therefor,
reimburse Landlord for such costs as Additional Charges.

 

 - 7 - 

 

 

ARTICLE 2

 

Rent

 

2.01       Rent. “Rent” shall consist of Fixed Rent and Additional Charges.

 

2.02       Fixed Rent. The fixed rent (“Fixed Rent”) shall be as follows:

 

(a)       for the period commencing on the Rent Commencement Date and ending on
the day immediately preceding the 5th anniversary of the Rent Commencement Date
at the rate per annum of $93.00 per rentable square foot of the Premises;

 

(b)       for the period commencing on the 5th anniversary of the Rent
Commencement Date and ending on the day immediately preceding the 10th
anniversary of the Rent Commencement Date at the rate per annum of $102.00 per
rentable square foot of the Premises; and

 

(c)       for the period commencing on the 10th anniversary of the Rent
Commencement Date and ending upon the Expiration Date (or, if the Term is
extended pursuant to Article 9, the date of expiration of the initial Term) at
the rate per annum of $112.00 per rentable square foot of the Premises.

 

(d)       Fixed Rent shall be payable by Tenant in equal monthly installments in
advance on the Rent Commencement Date and on the first day of each calendar
month thereafter (provided that if the Rent Commencement Date is not the first
day of a month, then Fixed Rent for the month in which the Rent Commencement
Date occurs shall be prorated and paid on the Rent Commencement Date). “Rent
Commencement Date” means the date occurring in the 12th month after the
Possession Date which is the same numerical date in the month as the Possession
Date (except that if no same numerical date shall exist in such 12th month, the
Rent Commencement Date shall be the last day of such 12th month. The Rent
Commencement Date may be subject to adjustment as expressly provided in Sections
1.03(c), 4.01(d)(iii) and 4.01(d)(iv) of this Lease.

 

2.03       Additional Charges. “Additional Charges” means PILOT Payments,
Additional Tax Payments, Impositions Payments, Tax Payments, Operating Payments
and all other sums of money, other than Fixed Rent, at any time payable by
Tenant under this Lease, all of which Additional Charges shall be deemed to be
rent. “Recurring Additional Charges” means Additional Tax Payments, Impositions
Payments, Operating Payments and either PILOT Payments or Tax Payments, as
applicable.

 

2.04       PILOT Payments. (a)   “Base PILOT Amount” means the PILOT Amount
payable by Landlord pursuant to the PILOT Agreement for the Tax Year commencing
on July 1, 2021 (the “Base PILOT Year”) pursuant to the terms of the PILOT
Agreement as in effect as of the Effective Date. “PILOT Amount” shall have the
meaning ascribed to such term in the PILOT Agreement, as such PILOT Agreement is
in effect on the Effective Date.

 

 - 8 - 

 

 

(b)       “PILOT Agreement” means that certain Agency Lease Agreement, dated as
of December 1, 2014, by and between the New York City Industrial Development
Agency (the “IDA”) and Landlord, as the same may be modified from time to time;
provided, however, that any modification of such PILOT Agreement which would
materially adversely affect or materially adversely increase Tenant’s
obligations under this Article 2 shall be disregarded for the purpose of
computing Tenant’s liability for PILOT Payments under this Article 2 (it being
agreed that Landlord shall not be restricted from entering into any such
modification but Landlord shall not have the right to pass through any such
obligations that materially adversely affect Tenant under this Article 2).
Landlord represents and warrants to Tenant that a true and complete copy of the
PILOT Agreement has been delivered or made available to Tenant.

 

(c)       “PILOT” means, with respect to any Tax Year, (i) the PILOT Amount
payable by Landlord for such Tax Year pursuant to the PILOT Agreement, (ii) any
reasonable expenses incurred in contesting the assessed value of the Project
(which expenses shall not exceed the amount of any refund or credit attributable
to any reduced assessment resulting from such contest), which expenses shall be
allocated to the Tax Year(s) to which such expenses relate and (iii) the “Annual
Administrative Fee” (as defined in the PILOT Agreement).

 

(d)       “Tax Year” means each period of 12 months, commencing on the first day
of July of each such period, in which occurs any part of the Term, or such other
period of 12 months occurring during the Term as hereafter may be adopted as the
fiscal year for real estate tax purposes of the City of New York.

 

(e)       “Tenant’s Share” means the percentage which is calculated by dividing
(i) the total rentable square footage of the Premises by (ii) the total rentable
square footage of the Building, provided that the method of calculating the
rentable square footage of the Premises shall be the same as the method of
calculating the rentable square footage of the Building at the time of any such
calculation. For the avoidance of doubt, the square footage of the Vent Building
(as such term is defined in that certain Easement Agreement, dated as of October
12, 2010, among Strategic/Extell 34th Street, LLC and the City of New York and
recorded in the Office of the City Register as CRFN 2010000394319) shall not be
included in the rentable square footage of the Building or any portion thereof
for any purpose under this Lease. The parties acknowledge and agree that
Tenant’s Share as of the date hereof with respect to the initial Premises
demised hereunder is 5.82%, it being agreed that such percentage is subject to
re-measurement and adjustment in accordance with and subject to Section 1.01 and
the other terms and conditions of this Lease.

 

(f)       (i)       If PILOT for any Tax Year from and after July 1 of the Tax
Year immediately following the Base PILOT Year (i.e., from and after the day
immediately following the last day of the Base PILOT Year) until the “Cessation
Date” (as defined in the PILOT Agreement; such date shall hereinafter be
referred to in this Lease as the “PILOT Cessation Date”), shall exceed the Base
PILOT Amount (or, with respect to the Tax Year in which the PILOT Cessation Date
occurs, if the PILOT Cessation Date occurs on a date other than the first day of
a Tax Year, if PILOT for such Tax Year shall exceed the amount that is the
product of the Base PILOT Amount multiplied by a fraction, the numerator of
which is the number of days in such Tax Year prior to the PILOT Cessation Date
and the denominator of which is the number of days in such Tax Year), Tenant
shall pay to Landlord (each, a “PILOT Payment”) Tenant’s Share of the amount by
which PILOT for such Tax Year is greater than the Base PILOT Amount. The PILOT
Payment for each Tax Year shall be due and payable by Tenant in installments in
the same manner that PILOT for such Tax Year is due and payable by Landlord,
whether as directed under the PILOT Agreement, to a Superior Lessor or Superior
Mortgagee or otherwise. Tenant shall pay the PILOT Payment (or any installment
thereof) within 30 days after the rendering of a statement therefor by Landlord
to Tenant, which statement may be rendered so as to require the PILOT Payment
(or installment thereof) to be paid by Tenant 30 days prior to the date such
PILOT Payment (or installment thereof) first becomes due and payable by
Landlord. The statement to be rendered by Landlord shall set forth in reasonable
detail the computation of Tenant’s Share of the particular installment(s) of
PILOT being billed. If there shall be any increase in the PILOT for any Tax
Year, whether during or after such Tax Year, or if there shall be any decrease
in the PILOT for any Tax Year, the PILOT Payment for such Tax Year shall be
appropriately adjusted and paid or refunded, as the case may be (in accordance
with Sections 2.04(g) and 2.08(a), to the extent applicable). In no event,
however, shall PILOT be reduced below the Base PILOT Amount.

 

 - 9 - 

 

 

(ii)       In addition to the PILOT Payments set forth above, and the
Impositions Payment and Tax Payment set forth below, Tenant shall pay, as
Additional Charges on account of real property taxes, for each Tax Year (or
portion thereof) throughout the Term of this Lease from and after the Tax Year
commencing on July 1, 2018, an amount equal to the product of (A) the applicable
Additional Tax Amount, multiplied by (B) the number of rentable square feet
contained in the Premises (the “Additional Tax Payment”); provided, that if the
rentable square footage of the Premises varies during any calendar year, such
variation shall be taken into account for purposes of the calculation of the
Additional Tax Payment for such calendar year. The Additional Tax Payment shall
be due and payable in equal installments on the dates on which PILOT Payments
(or installments thereof) are due and payable by Tenant. Tenant shall pay each
such installment within 30 days after the rendering of a statement therefor by
Landlord to Tenant, which statement may be rendered so as to require such
installments to be paid by Tenant on the same dates on which Tenant is required
to pay PILOT Payments (or installments thereof). The “Additional Tax Amount”
shall be (I) $0 for the Tax Year beginning July 1, 2018, (II) $0.75 for the Tax
Year beginning on July 1, 2019, (III) $1.75 for the Tax Year beginning on July
1, 2020 and (IV) $3.25 for each Tax Year thereafter for the full remaining Term
of this Lease. By way of example, if the Premises contains 100,000 rentable
square feet during the Tax Year beginning on July 1, 2021, the Additional Tax
Payment for the Tax Year beginning on such July 1 shall be $325,000.00 (i.e.,
$3.25 x 100,000 = $325,000.00).

 

(g)       If Landlord shall receive a refund of PILOT for any Tax Year in which
PILOT exceeded the Base PILOT Amount (or a credit in lieu of such a refund),
Landlord shall pay to Tenant Tenant’s Share of the net refund or credit (after
deducting from such refund or credit the reasonable costs and expenses of
obtaining the same, including, without limitation, appraisal, accounting and
legal fees, to the extent that such costs and expenses were not included in the
PILOT for such Tax Year and only to the extent that such costs and expenses
shall not exceed the amount of any refund or credit of Tenant’s Share of PILOT
for the corresponding Tax Year); provided, that such payment to Tenant shall in
no event exceed Tenant’s PILOT Payment paid for such Tax Year.

 

 - 10 - 

 

 

(h)          If the PILOT Amount comprising the Base PILOT Amount is reduced as
a result of an appropriate proceeding or otherwise, the PILOT as so reduced
shall for all purposes be deemed to be the Base PILOT Amount and Landlord shall
notify Tenant of the amount by which the PILOT Payments previously made were
less than the PILOT Payments required to be made under this Section 2.04, and
Tenant shall pay the deficiency within 30 days after demand therefor.

 

(i)           (i)       Tenant shall promptly cooperate with Landlord in
complying with the disclosure and reporting requirements set forth in the PILOT
Agreement, including, without limitation, by furnishing such information and/or
completing such questionnaires and reports as may be required to satisfy the
requirements of Section 8.7 (Employment Matters), Section 8.8
(Non-Discrimination), Section 8.14 (Automatically Deliverable Documents),
Section 8.15 (Requested Documents) and Section 8.16 (Periodic Reporting
Information for the Agency) of the PILOT Agreement. Tenant shall furnish any
such information and deliver any such completed questionnaires and reports to
Landlord on or prior to the date that is 10 Business Days before the date
Landlord is required to deliver same to the IDA (unless the period between a
request to Landlord from the IDA for any such information, questionnaires or
reports and the date such information, questionnaires or reports are due to the
IDA is shorter than 10 Business Days, in which case Tenant shall deliver such
information, questionnaires or reports to Landlord no less than 3 Business Days
prior to the date Landlord is required to deliver same to the IDA).

 

(ii)       Tenant represents and warrants that Tenant’s occupancy at the Project
will not result in the removal of an industrial or manufacturing plant or
facility of Tenant located outside of the City of New York, but within the State
of New York, to the Project or in the abandonment of one or more such industrial
or manufacturing plants or facilities of Tenant located outside of the City of
New York but within the State of New York.

 

(iii)      Tenant represents and warrants that neither Tenant, nor any
Principals of Tenant (A) is in default or in breach, beyond any applicable grace
period, of its obligations under any written agreement with the Agency or the
City, unless such default or breach has been waived in writing by the Agency or
the City, as the case may be, (B) has been convicted of a misdemeanor related to
truthfulness and/or business conduct in the past 5 years, (C) has been convicted
of a felony in the past 10 years, (D) has received formal written notice from a
federal, state or local governmental agency or body that such Person is
currently under investigation for a felony criminal offense, or (E) has received
written notice of default in the payment to the City of any taxes, sewer rents
or water charges, which have not been paid, unless such default is currently
being contested with due diligence in proceedings in court or other appropriate
forum. For purposes of this paragraph (iii) only, all capitalized terms used in
this paragraph (iii) (other than the term “Tenant”) shall have the meanings
ascribed to them in the PILOT Agreement.

 

 - 11 - 

 

 

(iv)      Tenant covenants that at all times from and after the Effective Date
through the expiration or earlier termination of this Lease (the “Effective
Period”), Tenant shall ensure that employees and applicants for employment with
Tenant are treated without regard to their race, color, creed, age, sex or
national origin. As used in this paragraph (iv) only, the term “treated” shall
mean and include the following: recruited, whether by advertising or other
means; compensated, whether in the form of rates of pay or other forms of
compensation; selected for training, including apprenticeship; promoted;
upgraded; downgraded; demoted; transferred; laid off; and terminated.

 

(v)       Tenant shall indemnify and hold Landlord harmless from and against any
and all loss, cost, liability, damage or expense (including, without limitation,
reasonable attorneys’ fees, disbursements and court costs, but specifically
excluding any consequential, special or punitive damages) incurred by Landlord
(or any of its Affiliates) arising from any failure of Tenant to comply in all
respects with Sections 2.04(i)(i) or 2.04(i)(iv) or any misrepresentation by
Tenant contained in Sections 2.04(i)(ii) or 2.04(i)(iii) or arising from any
other “Event of Default” (as defined in the PILOT Agreement) under the PILOT
Agreement which is solely caused by any act or omission of, or breach of any
representation or warranty by, Tenant, or any of its Affiliates, or any of their
respective officers, members, directors, principals, employees or agents, in
each case, beyond any applicable notice and cure periods set forth in the PILOT
Agreement (including, without limitation, Section 8.9(f)(iii) of the PILOT
Agreement). If any amount payable by Landlord under the PILOT Agreement is
greater than it would otherwise be, or if any additional amount is payable by
Landlord under the PILOT Agreement, in either case, due to any failure of Tenant
to comply in all respects with Sections 2.04(i)(i) or 2.04(i)(iv) or any
misrepresentation by Tenant contained in Sections 2.04(i)(ii) or 2.04(i)(iii),
Tenant shall pay to Landlord 100% of the amount by which such amount payable is
so greater than it would otherwise be or 100% of the additional amount payable,
as the case may be, within 10 days after Landlord’s demand therefor.

 

(vi)      Landlord agrees to observe and perform all of its obligations under
the PILOT Agreement and not to cause or permit an Event of Default (as defined
in the PILOT Agreement) to occur thereunder if and to the extent Landlord’s
failure to observe and perform any such obligations or to permit such Event of
Default, as applicable, is reasonably likely to materially adversely affect
Tenant’s obligations under this Article 2. Landlord shall indemnify and hold
Tenant harmless from and against any and all loss, cost, liability, damage or
expense (including, without limitation, reasonable attorneys’ fees,
disbursements and court costs, but specifically excluding any consequential,
special or punitive damages) incurred by Tenant or any of its Affiliates arising
from any “Event of Default” (as defined in the PILOT Agreement) under the PILOT
Agreement beyond any applicable notice and cure periods set forth therein which
is solely caused by Landlord, or any of its Affiliates, or any of their
respective officers, members, directors, principals, employees or agents and
which is not caused by any act or omission of, or breach of any representation
or warranty by, Tenant. If any amount payable by Landlord under the PILOT
Agreement is greater than it would otherwise be, or if any additional amount is
payable by Landlord under the PILOT Agreement, in either case, due to any “Event
of Default” (as defined in the PILOT Agreement) under the PILOT Agreement which
is solely caused by Landlord, or any of its Affiliates, or any of their
respective officers, members, directors, principals, employees or agents and
which is not caused by any act or omission of, or breach of any representation
or warranty by, Tenant, or any of its Affiliates, or any of their respective
officers, members, directors, principals, employees or agents, Tenant shall have
no liability to pay for any of such incremental amount by which Landlord’s
payment obligation is so greater or such additional amount and Landlord will
reasonably promptly provide Tenant with any information reasonably required to
verify such amounts.

 

 - 12 - 

 

 

(j)       Landlord shall, with respect to each Tax Year, initiate and pursue in
good faith an application or proceeding seeking a reduction in the assessed
valuation of the Building, except that Landlord shall not be required to
initiate or pursue any such application or proceeding for any such Tax Year if
Landlord obtains with respect to such Tax Year a letter from a reputable
certiorari attorney that in such person’s opinion it would not be advisable or
productive to bring such application or proceeding for the Tax Year in question.
Tenant, for itself and its immediate and remote subtenants and successors in
interest hereunder, hereby waives, to the extent permitted by law, any right
Tenant may now or in the future have to protest or contest any PILOT or Taxes or
to bring any application or proceeding seeking a reduction in PILOT, Taxes or
assessed valuation or otherwise challenging the determination thereof.

 

2.05       Impositions.

 

(a)       “Base Impositions Amount” means Impositions (excluding any amounts
described in Section 2.05(b)(ii)) for the Tax Year commencing on July 1, 2018.

 

(b)       “Impositions” means (i) subject to clause (B) of the last sentence of
this Section 2.05(b), any and all real estate taxes, vault taxes, assessments
and special assessments, levied, assessed or imposed upon or with respect to the
Project by any federal, state, municipal or other government or governmental
body or authority, including, without limitation, any taxes, assessments or
charges imposed upon or against the Project or Landlord solely with respect to
any business improvement district and (ii) any reasonable expenses incurred by
Landlord in contesting such taxes, assessments or charges, which expenses shall
be allocated to the Tax Year to which such expenses relate to the extent that
such expenses do not exceed the amount of any reduction in Impositions for the
corresponding Tax Year. If at any time the method of taxation shall be altered
so that in lieu of or as an addition to or as a substitute for, the whole or any
part of such taxes theretofore imposed on real estate (other than real estate
taxes levied by the City of New York) there shall be levied, assessed or imposed
(x) a tax, assessment, levy, imposition, fee or charge wholly or partially as a
capital levy or otherwise on the rents received therefrom, or (y) any other such
substitute tax, assessment, levy, imposition, fee or charge, including without
limitation, business improvement district and transportation taxes, fees and
assessments, then all such taxes, assessments, levies, impositions, fees or
charges or the part thereof so measured or based shall be included in
“Impositions” to the extent that such substitution is evidenced by either the
terms of the legislation imposing such tax or assessment, the legislative
history thereof, or other documents or evidence that reasonably demonstrate that
the applicable governmental authority intended for such tax or assessment to
constitute a substitution for any Impositions (provided that the same shall be
computed as if the Project is Landlord's sole asset and the income therefrom is
Landlord’s sole income). If the owner, or lessee under a Superior Lease (as
hereinafter defined), of all or any part of the Project is an entity exempt from
the payment of taxes, assessments or charges described in clause (i), there
shall be included in “Impositions” the taxes, assessments or charges described
in clause (i) which would be so levied, assessed or imposed if such owner or
lessee were not so exempt, and such taxes, assessments or charges shall be
deemed to have been paid by Landlord on the dates on which such taxes,
assessments or charges otherwise would have been payable if such owner or lessee
were not so exempt but only to the extent Landlord is actually obligated to and
does pay such taxes, assessments or charges or any payments in lieu thereof. If
any Impositions consisting of a special tax assessment may be payable in
installments, then, for the purposes of this Section 2.05 such Impositions shall
be deemed to have been so divided and to be payable in the maximum number of
installments permitted by law (together with any interest charged by the
applicable government authority, if interest is so charged), and there shall be
deemed included in Impositions for each Tax Year only the installments of such
assessment deemed to be payable during such Tax Year. “Impositions” shall not
include (A) any municipal, state or federal income taxes assessed against
Landlord, any capital levy, estate, gift, succession, inheritance or transfer
taxes, or any corporate franchise taxes or unincorporated business taxes, income
or profit tax, or any transfer or mortgage recording tax imposed upon any owner
or lessee of the Project, or any part thereof, or capital levy that is or may be
imposed upon the net income of Landlord, (B) any PILOT and Taxes and (C) any
penalties, interest and late charges imposed on Landlord, any Superior Lessor or
Superior Mortgagee for failure to make payments when due, except to the extent
directly resulting from a default by Tenant hereunder.

 

 - 13 - 

 

 

(c)       For each Tax Year from and after the Tax Year commencing on July 1,
2019, if Impositions for any Tax Year shall exceed the Base Impositions Amount,
Tenant shall pay to Landlord (each, an “Impositions Payment”) Tenant’s Share of
the amount by which Impositions for such Tax Year are greater than the Base
Impositions Amount. The Impositions Payment for each Tax Year shall be due and
payable in installments in the same manner that Impositions for such Tax Year
are due and payable by Landlord, whether to the applicable taxing authority, to
a Superior Lessor or Superior Mortgagee or otherwise. Tenant shall pay Tenant’s
Share of each such installment within 30 days after the rendering of a statement
therefor by Landlord to Tenant, which statement may be rendered so as to require
Tenant’s Share of Impositions to be paid by Tenant 30 days prior to the date
such Impositions first become due and payable by Landlord. The statement to be
rendered by Landlord shall set forth in reasonable detail the computation of
Tenant’s Share of the particular installment(s) being billed. If there shall be
any increase in the Impositions for any Tax Year, whether during or after such
Tax Year, or if there shall be any decrease in the Impositions for any Tax Year,
the Impositions Payment for such Tax Year shall be appropriately adjusted and
paid or refunded, as the case may be (in accordance with Sections 2.05(d) and
2.08(a), to the extent applicable). In no event, however, shall Impositions be
reduced below the Base Impositions Amount.

 

(d)       If Landlord shall receive a refund of Impositions for any Tax Year in
which Impositions exceeded the Base Impositions Amount, Landlord shall pay to
Tenant Tenant’s Share of the net refund (after deducting from such refund the
reasonable costs and expenses of obtaining the same, including, without
limitation, appraisal, accounting and legal fees, to the extent that such costs
and expenses were not included in the Impositions for such Tax Year and to the
extent that such expenses do not exceed the amount of any reduction in Tenant’s
Share of Impositions for the corresponding Tax Year); provided, that such
payment to Tenant shall in no event exceed Tenant’s Impositions Payment paid for
such Tax Year.

 

 - 14 - 

 

 

(e)       If the Base Impositions Amount is reduced as a result of an
appropriate proceeding or otherwise, Landlord shall notify Tenant of the amount
by which any Impositions Payments previously made were less than the Impositions
Payments required to be made under this Section 2.05, and Tenant shall pay the
deficiency within 30 days after demand therefor.

 

(f)       Tenant shall pay any and all commercial rent occupancy tax and any
other occupancy tax or rent tax relating to the Premises now in effect or
hereafter enacted. If any occupancy tax or rent tax (including, without
limitation, any commercial rent occupancy tax) now in effect or hereafter
enacted shall be payable by Landlord in the first instance or hereafter is
required to be paid by Landlord, then Tenant shall reimburse Landlord as
Additional Charges for all such amounts paid within 30 days after demand
therefor.

 

2.06       Tax Payments. (a)   “Taxes” means (i) the real estate taxes levied,
assessed or imposed upon or with respect to the Project by the City of New York
and (ii) any reasonable expenses incurred by Landlord in contesting such taxes
or assessments and/or the assessed value of the Project, which expenses shall be
allocated to the Tax Year to which such expenses relate. If at any time the
method of taxation shall be altered so that in lieu of or as an addition to or
as a substitute for, the whole or any part of such real estate taxes theretofore
imposed there shall be levied, assessed or imposed (x) a tax, assessment, levy,
imposition, fee or charge wholly or partially as a capital levy or otherwise on
the rents received therefrom, or (y) any other such substitute tax, assessment,
levy, imposition, fee or charge, including without limitation, business
improvement district and transportation taxes, fees and assessments, then all
such taxes, assessments, levies, impositions, fees or charges or the part
thereof so measured or based shall be included in “Taxes” to the extent
substituted and to the extent that such substitution is evidenced by either the
terms of the legislation imposing such tax or assessment, the legislative
history thereof, or other documents or evidence that reasonably demonstrate that
the applicable governmental authority intended for such tax or assessment to
constitute a substitution for any Taxes (provided that the same shall be
computed as if the Project is Landlord’s sole asset and the income therefrom is
Landlord’s sole income). If the owner, or lessee under a Superior Lease, of all
or any part of the Project is an entity exempt from the payment of taxes
described in clause (i), there shall be included in “Taxes” the taxes described
in clause (i) which would be so levied, assessed or imposed if such owner or
lessee were not so exempt and such taxes shall be deemed to have been paid by
Landlord on the dates on which such taxes otherwise would have been payable if
such owner or lessee were not so exempt but only to the extent Landlord is
actually obligated to and does pay such taxes, assessments or charges or any
payments in lieu thereof. If any Taxes consisting of a special tax assessment
may be payable in installments, then, for the purposes of this Section 2.06 such
Taxes shall be deemed to have been so divided and to be payable in the maximum
number of installments permitted by law (together with any interest charged by
the applicable government authority, if interest is so charged), and there shall
be deemed included in Taxes for each Tax Year only the installments of such
assessment deemed to be payable during such Tax Year. “Taxes” shall not include
(A) any municipal, state or federal income taxes assessed against Landlord, any
capital levy, estate, gift, succession, inheritance or transfer taxes, or any
corporate franchise taxes or unincorporated business taxes, income or profit
tax, or any transfer or mortgage recording tax imposed upon any owner or lessee
of the Project, or any part thereof, or capital levy that is or may be imposed
upon the net income of Landlord, (B) any PILOT and Impositions and (C) any
penalties, interest and late charges imposed on Landlord, any Superior Lessor or
Superior Mortgagee for failure to make payments when due, except to the extent
directly resulting from a default by Tenant hereunder.

 

 - 15 - 

 

 

(b)          (i)       From and after the PILOT Cessation Date, if Taxes for any
Tax Year, including the Tax Year in which the PILOT Cessation Date occurs, shall
exceed the Base PILOT Amount (or, with respect to the Tax Year in which the
PILOT Cessation Date occurs, if the PILOT Cessation Date occurs on a date other
than the first day of a Tax Year, if Taxes for such Tax Year shall exceed the
amount that is the product of the Base PILOT Amount multiplied by a fraction,
the numerator of which is the number of days in such Tax Year from and after the
PILOT Cessation Date and the denominator of which is the number of days in such
Tax Year), Tenant shall pay to Landlord (each, a “Tax Payment”) Tenant’s Share
of the amount by which Taxes for such Tax Year (or portion thereof from and
after the PILOT Cessation Date) are greater than the Base PILOT Amount (or such
pro-rated amount described in the first parenthetical in this sentence, if
applicable). The Tax Payment for each Tax Year shall be due and payable in
installments in the same manner that Taxes for such Tax Year are due and payable
by Landlord, whether to the City of New York, to a Superior Lessor or Superior
Mortgagee or otherwise. Tenant shall pay Tenant’s Share of each such installment
within 30 days after the rendering of a statement therefor by Landlord to
Tenant, which statement may be rendered so as to require Tenant’s Share of Taxes
to be paid by Tenant 30 days prior to the date such Taxes first become due and
payable by Landlord. The statement to be rendered by Landlord shall set forth in
reasonable detail the computation of Tenant’s Share of the particular
installment(s) being billed. If there shall be any increase in the Taxes for any
Tax Year, whether during or after such Tax Year, or if there shall be any
decrease in the Taxes for any Tax Year, the Tax Payment for such Tax Year shall
be appropriately adjusted and paid or refunded, as the case may be (in
accordance with Sections 2.06(c) and 2.08(a), to the extent applicable). In no
event, however, shall Taxes be reduced below the Base PILOT Amount.

 

(ii)     Notwithstanding the occurrence of the PILOT Cessation Date, after the
PILOT Cessation Date Tenant shall continue to pay Additional Tax Payments as set
forth in Section 2.04(f)(ii), except that such Additional Tax Payments shall be
due and payable in installments on the dates on which Tax Payments (or
installments thereof) are due and payable by Tenant, and Tenant shall pay each
such installment within 10 days after the rendering of a statement therefor by
Landlord to Tenant, which statement may be rendered so as to require such
installments to be paid by Tenant on the same dates on which Tenant is required
to pay Tax Payments (or installments thereof).

 

(c)           If Landlord shall receive a refund of Taxes for any Tax Year in
which Taxes exceeded the Base PILOT Amount (from and after the occurrence of the
PILOT Cessation Date), Landlord shall pay to Tenant Tenant’s Share of the net
refund (after deducting from such refund the reasonable costs and expenses of
obtaining the same, including, without limitation, appraisal, accounting and
legal fees, to the extent that such costs and expenses were not included in the
Taxes for such Tax Year and to the extent that such expenses do not exceed the
amount of any reduction in Tenant’s Share of Taxes for the corresponding Tax
Year); provided, that (i) such payment to Tenant shall in no event exceed
Tenant’s Tax Payment paid for such Tax Year and (ii) if the PILOT Cessation Date
occurs on a date other than the first day of any Tax Year, any refund with
respect to such Tax Year shall be prorated to correspond to the portion of such
Tax Year with respect to which Tenant paid a Tax Payment.

 

 - 16 - 

 

 

(d)       If the Base PILOT Amount is reduced as a result of an appropriate
proceeding or otherwise after the PILOT Cessation Date, Landlord shall notify
Tenant of the amount by which any Tax Payments previously made were less than
the Tax Payments required to be made under this Section 2.06, and Tenant shall
pay the deficiency within 30 days after demand therefor.

 

2.07       Operating Payments. (a)   “Base Operating Amount” means Operating
Expenses for the Base Operating Year; provided, that, if, due to construction
warranties in effect during the Base Operating Year, materially fewer expenses
on account of repairs to the Building are paid or incurred by or on behalf of
Landlord during such Base Operating Year than would typically be paid or
incurred during a calendar year with respect to a new First Class Office
Building comparable in size to the Building with no construction warranties in
effect, then the Operating Expenses for the Base Operating Year shall be
adjusted to reflect the Operating Expenses that would have been paid or incurred
if such construction warranties had not been in effect during the Base Operating
Year. For purposes of the foregoing sentence only, the term “construction
warranties” shall be deemed to refer solely to warranties in effect for a newly
constructed First Class Office Building that would not typically be in effect at
any given time for a First Class Office Building on account of alterations,
improvements, repairs and replacements.

 

(b)       “Base Operating Year” means the calendar year 2019.

 

(c)       “Landlord’s Statement” means an instrument setting forth the Operating
Payment payable by Tenant for a specified Operating Year.

 

 - 17 - 

 

 

(d)       “Operating Expenses” means, without duplication, all expenses paid or
incurred by or on behalf of Landlord in respect of the repair, replacement,
maintenance, operation and security of the Project as reflected on Landlord’s
books and records (which Landlord shall keep in accordance with GAAP or other
acceptable accounting method consistent with the standards of a First Class
Office Building), including, without limitation, (i) subject to clause (BB) of
this Section 2.07(d), salaries, wages, medical, surgical, insurance (including,
without limitation, group life and disability insurance), union and general
welfare benefits, pension payments, severance payments, sick day payments and
other fringe benefits of employees of Landlord, Landlord’s affiliates and their
respective contractors engaged in such repair, replacement, maintenance,
operation and/or security; (ii) subject to clause (BB) of this Section 2.07(d),
payroll taxes, worker’s compensation, uniforms and related expenses (whether
direct or indirect) for such employees; (iii) the cost of fuel, gas, steam,
electricity, heat, ventilation, air-conditioning and chilled or condenser water,
water, sewer and other utilities, together with any taxes and surcharges on, and
fees paid in connection with the calculation and billing of, such utilities;
(iv) the cost of painting and/or decorating all areas of the Project, excluding,
however, any space contained therein which is demised or available for demise to
tenants; (v) the cost of casualty, liability, fidelity, rent and all other
insurance regarding the Project; (vi) subject to the limitations on capital
expenditures hereinafter provided, the cost of all supplies, tools, materials
and equipment, whether by purchase or rental, used in the repair, replacement,
maintenance, operation and/or security of the Project, and any sales and other
taxes thereon; (vii) the fair market rental value of Landlord’s office in the
Building and any other premises in the Building utilized by the personnel of
either Landlord, Landlord’s affiliates or Landlord’s contractors, in connection
with the repair, replacement, maintenance, operation and/or security thereof,
and all office expenses, such as telephone, utility, stationery and similar
expenses incurred in connection therewith; provided, that (A) for the purpose of
calculating Operating Expenses for the Base Operating Year and each subsequent
Operating Year, the aggregate rentable square footage of Landlord’s office shall
be assigned a fixed number, (B) the fair market rental of such office shall be
included in the Base Operating Year, and (C) such fair market rental shall
annually be subject to fair market rental increases; (viii) the cost of cleaning
and janitorial services, including, without limitation, glass cleaning, snow and
ice removal and garbage and waste collection and disposal; (ix) the cost of all
interior and exterior landscaping and all temporary exhibitions located at or
within the Project; (x) the cost of all alterations, repairs, replacements
and/or improvements made at any time following the Base Operating Year by or on
behalf of Landlord, whether structural or non structural, ordinary or
extraordinary, foreseen or unforeseen, and whether or not required by this
Lease, and all tools and equipment related thereto; provided, that if under
generally accepted accounting principles consistently applied (“GAAP”), any of
the costs referred to in this clause (x) are required to be capitalized, then
such costs shall not be included in Operating Expenses unless they (I) are
required by any Laws that first became effective (1) on or after the Possession
Date or (2) before the Possession Date but with respect to which the obligation
to comply first arises after the Possession Date, (II) have the effect of
reducing expenses that would otherwise be included in Operating Expenses (to the
extent of the reduction in Operating Expenses reasonably anticipated by
Landlord) or (III) constitute a replacement which in Landlord’s reasonable
judgment is prudent to make in lieu of repairs to the replaced item(s) so long
as it is reasonably likely that the amortized replacement cost of the item in
question will be less expensive than the aggregate reasonably anticipated total
cost to repair such item (which may include multiple repairs) over the same
amortization period, in any of which events the cost thereof, together with
interest thereon at either (A) if Landlord shall not finance such alterations,
repairs, replacements and/or improvements, the Interest Rate in effect on
December 31 of the Operating Year in which such costs were incurred or (B) if
Landlord shall finance such alterations, repairs, replacements and/or
improvements, the actual costs incurred by Landlord to finance such alterations,
repairs, replacements and/or improvements shall be amortized and included in
Operating Expenses over the useful life of the item in question, as reasonably
determined by Landlord in accordance with GAAP or such alternative measure as
referred to hereinabove; provided further, that if any such alterations,
repairs, replacements and/or improvements described in clause II are made for
the purpose of having a beneficial impact on the environment (including, without
limitation, if the same are made in connection with participating in a program
intended to have a beneficial impact on the environment), then, at Landlord’s
option, the cost thereof, together with such interest as described in the
foregoing clauses (A) and (B), may be amortized and included in Operating
Expenses over the period that Landlord reasonably determines in accordance with
GAAP that it will take for such cost to equal the aggregate amount of the
reduction in Operating Expenses realized as a result of such alteration, repair,
replacement and/or improvement; (xi) costs of security services, including,
without limitation, offsite vehicle screening for vehicles seeking access to the
Project; (xii) management fees not exceeding 3% of the aggregate rents,
additional rents and other charges payable to Landlord by tenants of the
Building; (xiii) all reasonable costs and expenses of legal, bookkeeping,
accounting and other professional services; (xiv) condominium assessments,
common charges or similar charges, if the Project is at any time converted to a
condominium structure; (xv) customary fees, dues and other contributions paid by
or on behalf of Landlord to civic or other real estate organizations and any
assessments, dues, levies or other charges paid to any business improvement
district, owners’ association or similar organization or to any entity on behalf
of such an organization; (xvi) all costs and expenses expressly included in
Operating Expenses pursuant to the provisions of this Lease; and (xvii) all
other fees, costs, charges and expenses properly allocable to the repair,
replacement, maintenance, operation and/or security of the Project, in
accordance with then prevailing customs and practices of the real estate
industry in the Borough of Manhattan, City of New York. Notwithstanding the
foregoing, “Operating Expenses” shall not include the following:

 

 - 18 - 

 

 

(A)       depreciation and amortization (except with respect to the alterations,
repairs, replacements, and/or improvements described in clauses I, II and III of
clause (x) of this Section 2.07(d));

 

(B)       principal and interest payments and other costs incurred in connection
with any financing or refinancing of the Project or any portion thereof (except
as provided in clause (x) above) including, without limitation, legal,
accounting, consultant, mortgage, brokerage or other expenses related thereto;

 

(C)       the cost of tenant improvements made for tenant(s) of the Building or
cash allowances in lieu thereof;

 

(D)       brokerage commissions and advertising and promotional expenses
incurred in procuring tenants for the Building;

 

(E)       cost of any work or service performed for any tenant of the Building
(including Tenant), whether at the expense of Landlord or such tenant, to the
extent that such work or service is in excess of the work or service that
Landlord is required to furnish Tenant under this Lease at the expense of
Landlord, and all costs incurred by Landlord in connection with the performance
of any sundry services to individual tenants which are not generally provided to
all office tenants (including Tenant);

 

(F)       the cost of any electricity consumed in the Premises or in any other
space in the Building demised or available for demise to tenants;

 

(G)       the cost of overtime heating, ventilating and air conditioning
(including costs related to chilled water) for which Landlord is directly
compensated by payment by tenants, or any other occupant of the Building,
including Tenant;

 

(H)       PILOT, Impositions and Taxes;

 

(I)        attorneys’ fees and disbursements and costs and expenses incurred in
connection with preparing and negotiating leases, amendments and modifications
thereto, consents to sublease, assignments, takeover or assumption fees, or any
form leases with respect to the operation of the Project and disputes with
tenants or occupants in the Building;

 

 - 19 - 

 

 

(J)       legal fees incurred in connection with suits brought by tenants with
respect to their leases or occupancy agreements in the Building;

 

(K)       any cost to the extent Landlord is reimbursed therefor out of
insurance proceeds or otherwise (other than by means of operating expense
reimbursement provisions contained in the leases of other tenants) or any such
cost to the extent Landlord would have been compensated therefor if Landlord had
carried the insurance coverage required of Landlord hereunder;

 

(L)       expenses of relocating or moving any tenant(s) of the Building, and
all costs and expenses of taking over or assuming the lease obligations of a
tenant for such tenant’s premises in a location other than the Project and the
costs and expenses of relocating such tenant to the Project, including any
payments required to be made in connection with the termination of such lease
pursuant to Article 31-B of the Tax Law of the State of New York or other
similar statute;

 

(M)      costs (including attorney’s fees and costs of settlements, judgments
and arbitration awards) arising from claims or disputes in connection with tort
or negligence litigation pertaining to Landlord and/or the Project, or in
connection with any such claims or disputes arising from Landlord’s negligence
or willful misconduct;

 

(N)       costs incurred with respect to a sale of all or any portion of the
Project or any interest therein or in any person or entity of whatever tier
owning an interest therein and the cost of maintaining, organizing or
reorganizing the entity that is the landlord under this Lease;

 

(O)       costs of alterations and improvements and other expenditures which are
required to be capitalized under GAAP, unless permitted to be included in
Operating Expenses under clause (x) of this Section 2.07(d);

 

(P)       any lease payments for equipment which, if purchased, would be
specifically excluded as a capital improvement, unless same is permitted to be
included in Operating Expenses under clause (x) of this Section 2.07(d);

 

(Q)       costs incurred in connection with the acquisition or sale of air
rights, transferable development rights, easements or other real property
interests;

 

(R)       costs of performing the Base Building Work, and the costs incurred to
correct any defect discovered during the first eighteen (18) month period
following the Possession Date (or such longer period as may be covered under any
enforceable warranty or guaranty in connection with the Base Building Work) to
the extent resulting from the improper initial construction or design of the
Building, and all other hard and soft costs and expenses relating to the initial
construction of the Project;

 

 - 20 - 

 

 

(S)       any rent, additional rent or other charge under any ground leases or
under Superior Leases (provided, however, that Landlord shall not be required to
exclude from Operating Expenses any expense that would otherwise be includable
in Operating Expenses pursuant to the terms of this Lease merely because
Landlord’s obligation under any such ground lease or Superior Lease to incur
such expense is characterized as a rental obligation under any such ground lease
or Superior Lease);

 

(T)       any cost representing an amount paid to an Affiliate of Landlord to
the extent the same is in excess of the amount which would reasonably have been
paid in the absence of such relationship;

 

(U)       the cost of any additions to or expansions of the Building that
increase the leasable space in the Building;

 

(V)       expenditures for repairing and/or replacing any defect in any work
performed by or on behalf of Landlord pursuant to the provisions of this Lease
which Landlord is obligated to do at its sole cost and expense, to the extent
expenditures for such repairs and/or replacements would have been covered had
Landlord obtained a commercially reasonable warranty for such work;

 

(W)       all costs of remediating, removing or encapsulating asbestos, or other
hazardous materials or substances in or about the Project, except to the extent
the same shall be attributable to any act or omission of Tenant, Tenant’s
agents, employees, contractors, invitees or licensees;

 

(X)       interest, fines, penalties or other late payment charges paid by
Landlord as the result of Landlord’s failure to make payments when due, except
to the extent (1) that Landlord is contesting such payments timely and in good
faith, or (2) resulting from a default by Tenant hereunder;

 

(Y)       to the extent any costs includable in Operating Expenses are incurred
with respect to both (1) the Project and (2) other properties, there shall be
excluded from Operating Expenses a fair and reasonable percentage thereof which
is properly allocable to such other properties;

 

(Z)       costs of withdrawal liability or unfunded pension liability under the
Multi-Employer Pension Plan Act, except to the extent that such costs are offset
by savings realized by Landlord in connection therewith;

 

(AA)   franchise or income taxes imposed upon Landlord;

 

 - 21 - 

 

 

(BB)    except to the extent specifically permitted in accordance with the
provisions of this Section 2.07 to be included in Operating Expenses, Landlord’s
corporate overhead and general and administrative expenses not specifically
allocated to the operation, use, management, maintenance, repair or ownership of
the Building, including, without limitation, salaries and the cost of benefits
in either case for personnel above the level of building manager;

 

(CC)    costs of acquiring, leasing, insuring, restoring, removing or replacing
works of art and sculptures of the quality and nature of “fine art” rather than
decorative art work customarily found in First Class Office Buildings; provided,
that Landlord shall not be required to exclude from Operating Expenses the costs
of insuring and cleaning any such “fine art” to the extent such insurance and
cleaning costs are consistent with the costs incurred for such items and
generally included in “operating expenses” for purposes of operating expense
escalation provisions in other First Class Office Buildings;

 

(DD)    the cost of installing, operating and maintaining any specialty facility
such as any emergency generator, co-generation plant(s) and related equipment,
an observatory and access thereto, broadcasting facilities, luncheon club,
athletic or recreational club, child care facility, auditorium, restaurant,
cafeteria or dining facility, conference center or similar specialty facilities
(but not the cost of maintaining and operating any satellite antennae facility
for use by Building tenants, the Messenger Center, or any of the aforementioned
specialty facilities if such facilities are made available at no separate charge
(other than an additional rent payment in the nature of an operating expense
escalation) for use by tenants (including Tenant) of the Building generally);

 

(EE)     any bad debt loss, rent loss or reserves for bad debts or rent loss;
and

 

(FF)     duplicative charges for the same item.

 

(e)       “Operating Year” means each calendar year during the Term.

 

(f)       From and after the day immediately following the expiration of the
Base Operating Year, for each Operating Year, Tenant shall pay (each, an
“Operating Payment”) Tenant’s Share of the amount, if any, by which Operating
Expenses for such Operating Year exceed the Base Operating Amount. If Tenant’s
obligation to pay Operating Expenses commences on a date other than January 1,
Tenant’s Operating Payment for the Operating Year immediately following the Base
Operating Year shall be prorated to correspond to the portion of such Operating
Year with respect to which Tenant is obligated to pay Operating Expenses
pursuant to the terms of this Lease.

 

 - 22 - 

 

 

(g)       If during any relevant period (including, without limitation, the Base
Operating Year) (i) less than 95% of the rentable square footage in the Building
shall be occupied, and/or (ii) the tenant or occupant of any space in the
Building undertook to perform work or services therein in lieu of having
Landlord perform the same and the cost thereof would have been included in
Operating Expenses, with the result that tenants or occupants of less than 95%
of the rentable square footage of the Building are having Landlord perform any
such work or service, then, in either such event, the Operating Expenses for
such period shall be increased to reflect the Operating Expenses that would have
been incurred if 95% of the rentable square footage of the Building had been
occupied or if Landlord had performed such work or services for tenants
occupying 95% of the rentable square footage of the Building, as the case may
be. Additionally, and without limiting the foregoing, it shall be assumed during
any relevant period that all services in respect of the Project shall be in
place and fully costed (e.g., discounts for the initial period of multi-year
contracts shall be appropriately adjusted); and with respect to the calculation
of the Operating Expenses for the Base Operating Year only, if and to the extent
certain expenses are incurred with respect to only a portion of the Base
Operating Year, then such expenses shall be annualized to more closely
approximate the cost that will be incurred for such expense over the course of
the subsequent full year.

 

(h)       Landlord may furnish to Tenant, prior to the commencement of each
Operating Year, a statement setting forth Landlord’s reasonable estimate of the
Operating Payment for such Operating Year. Tenant shall pay to Landlord on the
first day of each month during such Operating Year, an amount equal to 1/12th of
Landlord’s estimate of the Operating Payment for such Operating Year. If
Landlord shall not furnish any such estimate for an Operating Year or if
Landlord shall furnish any such estimate for an Operating Year subsequent to the
commencement thereof, then (A) until the first day of the month following the
month in which such estimate is furnished to Tenant, Tenant shall pay to
Landlord on the first day of each month an amount equal to the monthly sum
payable by Tenant to Landlord under this Section 2.07 in respect of the last
month of the preceding Operating Year; (B) after such estimate is furnished to
Tenant, Landlord shall notify Tenant whether the installments of the Operating
Payment previously made for such Operating Year were greater or less than the
installments of the Operating Payment to be made in accordance with such
estimate, and (x) if there is a deficiency, Tenant shall pay the amount thereof
within 30 days after demand therefor, or (y) if there is an overpayment,
Landlord shall refund to Tenant the amount thereof within 30 days after such
determination; and (C) on the first day of the month following the month in
which such estimate is furnished to Tenant and monthly thereafter throughout
such Operating Year Tenant shall pay to Landlord an amount equal to 1/12th of
the Operating Payment shown on such estimate. Landlord may, during each
Operating Year, furnish to Tenant a revised statement of Landlord’s estimate of
the Operating Payment for such Operating Year, and in such case, the Operating
Payment for such Operating Year shall be adjusted and paid or refunded as the
case may be, substantially in the same manner as provided in the preceding
sentence.

 

(i)       Landlord shall furnish to Tenant a Landlord’s Statement for each
Operating Year (and shall endeavor to do so within 270 days after the end of
each Operating Year). If Landlord’s Statement shall show that the sums paid by
Tenant, if any, under Section 2.07(h) exceeded the Operating Payment to be paid
by Tenant for the applicable Operating Year, Landlord shall refund to Tenant the
amount of such excess within 30 days after such determination; and if the
Landlord’s Statement shall show that the sums so paid by Tenant were less than
the Operating Payment to be paid by Tenant for such Operating Year, Tenant shall
pay the amount of such deficiency within 30 days after demand therefor.

 

 - 23 - 

 

 

(j)            (i)       Tenant, upon notice given within 120 days after
Tenant’s receipt of a Landlord’s Statement, may elect to have Tenant’s
designated (in such notice) representative (who may be an employee of Tenant or
a third party accountant or consultant but who may not, in any case, be retained
by Tenant on a contingency fee basis or any other fee basis by which such
representative’s compensation is based upon the amount refunded or credited by
Landlord to Tenant as a result of such audit) examine such of Landlord’s books
and records (collectively, “Records”) as are directly relevant to such
Landlord’s Statement, and Landlord shall provide access to the Records upon
reasonable prior notice. As a condition to Tenant’s right to review the Records,
Tenant shall pay all sums required to be paid in accordance with the Landlord’s
Statement in question, without prejudice to its position. If Tenant shall not
give such notice within such 120-day period, then such Landlord’s Statement
shall be conclusive and binding upon Tenant. Tenant and Tenant’s employees,
accountants and agents shall treat all Records as confidential, and, upon
request by Landlord, shall confirm such confidentiality obligation in writing by
executing a confidentiality agreement in the form attached hereto as Exhibit N.

 

(ii)       Tenant, within 90 days after the date on which the Records are made
available to Tenant, may send a notice (“Tenant’s Statement”) to Landlord that
Tenant disagrees with the applicable Landlord’s Statement, specifying in
reasonable detail the basis for Tenant’s disagreement and the amount of the
Operating Payment Tenant claims is due. If Tenant fails timely to deliver a
Tenant’s Statement, then such Landlord’s Statement shall be conclusive and
binding on Tenant. Landlord and Tenant shall attempt to adjust such
disagreement. If they are unable to do so and provided that the amount of the
Operating Payment Tenant claims is due is substantially different from the
amount of the Operating Payment Landlord claims is due, Tenant shall notify
Landlord, within 90 days after the date on which the Records are made available
to Tenant in connection with the disagreement in question, that such
disagreement shall be determined by an Arbiter in accordance with this Section
2.07(j), and promptly thereafter Landlord and Tenant shall jointly designate a
certified public accountant (the “Arbiter”) whose determination made in
accordance with this Section 2.07(j)(ii) shall be binding upon the parties; it
being understood that if the amount of the Operating Payment Tenant claims is
due is not substantially different from the amount of the Operating Payment
Landlord claims is due, then Tenant shall have no right to protest such amount
and shall pay the amount that Landlord claims is due to the extent not
theretofore paid. If Tenant timely delivers a Tenant’s Statement, the
disagreement referenced therein is not resolved by the parties and Tenant fails
to notify Landlord of Tenant’s desire to have such disagreement determined by an
Arbiter within the 90-day period set forth in the preceding sentence, then the
Landlord’s Statement to which such disagreement relates shall be conclusive and
binding on Tenant. If the determination of the Arbiter shall substantially
confirm the determination of Landlord, then Tenant shall pay the cost of the
Arbiter. If the Arbiter shall substantially confirm the determination of Tenant,
then Landlord shall pay the cost of the Arbiter. In all other events, the cost
of the Arbiter shall be borne equally by Landlord and Tenant. The Arbiter shall
be a member of an independent certified public accounting firm having at least
15 accounting professionals and shall have at least 10 years of experience in
real estate accounting matters, and such Arbiter and the accounting firm with
whom such Arbiter is affiliated shall be disinterested. If Landlord and Tenant
shall be unable to agree upon the designation of the Arbiter within 15 days
after receipt of notice from a party requesting agreement as to the designation
of the Arbiter, which notice shall contain the names and addresses of two or
more certified public accountants meeting the requirements of this Section
2.07(j)(ii) and who are acceptable to the party sending such notice, then either
party shall have the right to request JAMS to designate as the Arbiter a
certified public accountant meeting the requirements of this Section 2.07(j)(ii)
whose determination made in accordance with this Section 2.07(j)(ii) shall be
conclusive and binding upon the parties, and the cost of such certified public
accountant shall be borne as provided above in the case of the Arbiter
designated by Landlord and Tenant. Any determination made by an Arbiter shall
not exceed the amount determined to be due in the first instance by Landlord’s
Statement, nor shall such determination be less than the amount claimed to be
due by Tenant in Tenant’s Statement, and any determination which does not comply
with the foregoing shall be null and void and not binding on the parties. In
rendering such determination such Arbiter shall not add to, subtract from or
otherwise modify the provisions of this Lease, including the immediately
preceding sentence. Pending the resolution of any contest pursuant to this
Section 2.07(j)(ii), and as a condition to Tenant’s right to prosecute such
contest, Tenant shall pay all sums required to be paid in accordance with the
Landlord’s Statement in question, without prejudice to its position. If Tenant
shall prevail in such contest, an appropriate refund shall be made by Landlord
to Tenant within 30 days after such determination. The term “substantially” as
used in this Section 2.07(j)(ii), shall mean a variance of 2% or more of the
Operating Payment in question. If the Arbiter determines that Landlord
overstated the actual amount of Operating Expenses for a particular Operating
Year by more than five percent (5%) of the actual amount of Operating Expenses
for such Operating Year, then in addition to the refund to which Tenant is
entitled, Landlord shall reimburse Tenant for (or, at Landlord’s option,
Landlord shall credit against the Rent thereafter coming due under this Lease)
the reasonable out-of-pocket costs actually paid to Tenant’s auditor in
connection with Tenant’s audit of the Records within 30 days after Tenant gives
to Landlord reasonable supporting documentation describing such costs.

 

 - 24 - 

 

 

2.08       PILOT, Impositions, Tax and Operating Provisions. (a)  In any case
provided in Sections 2.04, 2.05, 2.06 or 2.07 in which Tenant is entitled to a
refund, Landlord may, in lieu of making such refund, credit against future
installments of Rent any amounts to which Tenant shall be entitled. Nothing in
this Article 2 shall be construed so as to result in a decrease in the Fixed
Rent. If this Lease shall expire before any such credit shall have been fully
applied, then (provided Tenant is not in default under this Lease) Landlord
shall refund to Tenant the unapplied balance of such credit.

 

(b)       Landlord’s failure to render or delay in rendering a Landlord’s
Statement with respect to any Operating Year or any component of the Operating
Payment shall not prejudice Landlord’s right to thereafter render a Landlord’s
Statement with respect to any such Operating Year or any such component;
provided, that such Landlord’s Statement is delivered within 2 years after the
end of the Operating Year in question, nor shall the rendering of a Landlord’s
Statement for any Operating Year prejudice Landlord’s right to thereafter render
a corrected Landlord’s Statement for such Operating Year within such 2-year
period. Landlord’s failure to render or delay in rendering any statement with
respect to any PILOT Payment, Additional Tax Payment, Impositions Payment or Tax
Payment (or installment thereof) shall not prejudice Landlord’s right to
thereafter render such a statement; provided, that such statement is delivered
within 2 years following the later of (i) the end of the Tax Year in question or
(ii) the final determination of the PILOT, Impositions or Taxes, as applicable,
for the Tax Year in question, nor shall the rendering of a statement for any
PILOT Payment, Additional Tax Payment, Impositions Payment or Tax Payment (or
installment thereof) prejudice Landlord’s right to thereafter render a corrected
statement therefor within such 2-year period.

 

 - 25 - 

 

 

(c)          Landlord and Tenant confirm that the computations under this
Article 2 are intended to constitute a formula for agreed rental escalation and
may or may not constitute an actual reimbursement to Landlord for PILOT,
Impositions, Taxes and other costs and expenses incurred by Landlord with
respect to the Project.

 

(d)          Each PILOT Payment, Additional Tax Payment, Impositions Payment or
Tax Payment in respect of a Tax Year, and each Operating Payment in respect of
an Operating Year, which ends after the expiration or earlier termination of
this Lease, and any PILOT, Impositions or Taxes refund with respect to such a
Tax Year, shall be prorated to correspond to that portion of such Tax Year or
Operating Year occurring within the Term.

 

2.09       Electric Charges. (a)  Tenant’s demand for, and consumption of,
electricity serving the Premises shall be determined by meters or submeters, the
first installation of which shall be at Landlord’s expense with respect to one
meter or submeter per floor of the Premises and any additional or subsequent
installations of which shall be at Tenant’s expense, it being understood,
however, that in all cases such meters and submeters shall be maintained by
Landlord as an Operating Expense. Such meters or submeters shall be capable of
providing information regarding both the aggregate KWH of consumption for the
Premises and the total coincidental demand for the Premises in KW (treated as if
such demand were measured by a single meter), and shall be billed as if there
was only one (1) meter in the Premises. Tenant shall pay for electric
consumption (“Electricity Additional Rent”) as provided in this Section 2.09
within 30 days after rendition of a bill therefor, which shall be rendered by or
on behalf of Landlord and may not be rendered more frequently than once per
month.

 

(b)          The Electricity Additional Rent will consist of the following:

 

(i)       The Basic Electric Charge (as hereinafter defined and calculated);
plus

 

(ii)      An amount equal to 3% of the Basic Electric Charge for the applicable
billing cycle to take into account the deemed line losses (and actual cost of
transformer losses, if applicable) between the Building’s master meter and
Tenant’s meters or submeters; it being agreed by the parties that such actual
line or transformer losses are not reasonably capable of being accurately
measured and the above percentage is a reasonable estimation thereof and not a
markup of the Basic Electric Charge.

 

 - 26 - 

 

 

(c)       “Basic Electric Charge” means, for each billing cycle, the amount (as
adjusted from time to time, “Landlord’s Rate”) that Landlord is charged from
time to time for the purchase of each KW and KWH of electricity for the Building
for the same period by the vendor (the “Electricity Provider”) from which
Landlord is then purchasing electricity for the Building (including all
surcharges, taxes, fuel adjustments, market supply and market adjustment
charges, taxes passed on to consumers by the public utility, and other sums
payable in respect thereof), plus all surcharges, taxes, and other sums payable
in respect of Landlord’s sale of electricity to Tenant. Landlord’s Rate shall be
determined by applying KW and KWH (on-peak and off-peak, if applicable) as
derived from Tenant’s meters or submeters to the same rates charged by the
Electricity Provider during each respective service period. Electricity shall be
billed as if there was only one (1) meter in the Premises. Notwithstanding
anything to the contrary herein, Landlord shall not be obligated to apply
Tenant’s interval data to Landlord’s Rate to determine the amount payable by
Tenant hereunder.

 

(d)       Notwithstanding anything to the contrary contained in this Lease, the
DX units serving the Premises shall be connected to submeters measuring Tenant’s
use of electricity in the Premises and Tenant shall pay all electricity costs in
connection with the use of such equipment in accordance with this Section 2.09.

 

2.10       Manner of Payment. Tenant shall pay all Rent as the same shall become
due and payable under this Lease (a) in the case of Fixed Rent and Recurring
Additional Charges, by wire transfer of immediately available federal funds as
directed in writing by Landlord, and (b) in the case of all other sums, either
by wire transfer as aforesaid or by check (subject to collection) drawn on a
bank that clears through The Clearing House Payments Company L.L.C., in each
case at the times provided herein without notice or demand and without setoff or
counterclaim. All Rent shall be paid in lawful money of the United States to
Landlord at its office or such other place as Landlord may from time to time
designate in writing. If Tenant fails timely to pay any Rent, Tenant shall pay
interest thereon from the date when such Rent became due to the date of
Landlord’s receipt thereof at the Interest Rate. If Tenant fails to timely pay
any installment of Fixed Rent or Recurring Additional Rent on 2 occasions within
any rolling 365-day period, in addition to all other rights and remedies
Landlord may have under this Lease and the payment of interest as provided in
the immediately preceding sentence, Tenant shall pay to Landlord, as Additional
Charges, together with such 2nd late payment of Fixed Rent or Recurring
Additional Rent (and any subsequent late payment of Fixed Rent or Recurring
Additional Rent within any such 365-day period), a fee in the amount of 2% of
the amount of the late Fixed Rent or Recurring Additional Rent payment in order
to defray Landlord’s costs in connection with Tenant’s late payment of Fixed
Rent or Recurring Additional Rent. Tenant shall pay interest on such fee at the
Interest Rate from the date the applicable late payment of Fixed Rent or
Recurring Additional Rent was due until the date of Landlord’s receipt of such
fee. Any Additional Charges for which no due date is specified in this Lease
shall be due and payable on the 30th day after the date of invoice. Subject to
the foregoing, whenever this Lease shall provide that Landlord or Tenant shall
pay the out-of-pocket costs of the other party, the party seeking reimbursement
of such out-of-pocket costs shall deliver to the requesting party bills,
receipts, invoices or other reasonable supporting documentation reasonably
evidencing such costs and, except to the extent such costs are incurred by
Landlord following a default hereunder by Tenant or otherwise at the request of
Tenant (e.g., if Tenant requests that Landlord reasonably cooperate with Tenant
in connection with an amendment to the certificate of occupancy in accordance
with Section 1.04(c)), such out-of-pocket costs shall be commercially
reasonable.

 

 - 27 - 

 

 

2.11       Security. (a)  Within 30 days of the date of this Lease, Tenant shall
deliver to Landlord, as security for the performance of Tenant’s obligations
under this Lease, an unconditional, irrevocable letter of credit (the “Letter of
Credit”) in the amount of $8,698,662 (the “Required Letter of Credit Amount”) in
the form of Exhibit O attached hereto and issued by Citibank, N.A., permitting
multiple and partial draws thereon. The Letter of Credit shall provide that it
is assignable by Landlord without charge and shall either (x) expire on the date
which is 60 days after the expiration or earlier termination of this Lease (the
“LC Date”) or (y) be automatically self-renewing until the LC Date. Tenant shall
be responsible for paying the issuer’s assignment, transfer and processing fees
in connection with the first assignment or transfer of the Letter of Credit
during the Term and, if Landlord advances any such fees (without having any
obligation to do so) in connection with the first such assignment or transfer,
Tenant shall reimburse Landlord for any such transfer or processing fees in
connection with the first such assignment within 30 days after Landlord’s
written request therefor. If any Letter of Credit is not renewed at least 30
days prior to the expiration thereof or if Tenant holds over in the Premises
without the consent of Landlord after the expiration or termination of this
Lease, Landlord may draw upon the Letter of Credit and hold the proceeds thereof
as security for the performance of Tenant’s obligations under this Lease.
Landlord may draw on the Letter of Credit (or the proceeds thereof) to remedy
defaults by Tenant beyond applicable notice and cure periods in the payment or
performance of any of Tenant’s obligations under this Lease. If Landlord shall
have so drawn upon the Letter of Credit (or the proceeds thereof), Tenant shall
promptly upon demand deliver to Landlord a replacement Letter of Credit or an
amendment to the Letter of Credit such that the Letter of Credit shall be in the
amount of the Required Letter of Credit Amount, as such Required Letter of
Credit Amount may be decreased pursuant to clause (c) below.

 

(b)       Provided Tenant is not in default under this Lease and Tenant has
surrendered the Premises to Landlord substantially in accordance with all of the
terms and conditions of this Lease, within 5 Business Days after the LC Date:
(i) Landlord shall return to Tenant the Letter of Credit (or the proceeds
thereof) then held by Landlord or (ii) if Landlord shall have drawn upon such
Letter of Credit (or the proceeds thereof) to remedy defaults by Tenant in the
payment or performance of any of Tenant’s obligations under this Lease, Landlord
shall return to Tenant that portion, if any, of the proceeds of the Letter of
Credit remaining in Landlord’s possession.

 

(c)       Provided that on the applicable Reduction Date (i) Tenant is not then
in default under this Lease and (ii) Tenant has not been in default under this
Lease beyond applicable notice and cure periods, (1) Tenant shall be entitled to
a reduction in the amount of the Letter of Credit of $724,888.50 (the “Initial
Reduction Amount”) on the 3rd anniversary of the Rent Commencement Date (the
“First Reduction Date”), (2) Tenant shall be entitled to a further reduction in
the amount of the Letter of Credit by the Initial Reduction Amount on the 5th
anniversary of the Rent Commencement Date (the “Second Reduction Date”), (3)
Tenant shall be entitled to a further reduction in the amount of the Letter of
Credit by the Initial Reduction Amount on the 7th anniversary of the Rent
Commencement Date (the “Third Reduction Date”), (4) Tenant shall be entitled to
a further reduction in the amount of the Letter of Credit by the Initial
Reduction Amount on the 9th anniversary of the Rent Commencement Date (the
“Fourth Reduction Date”) and (5) Tenant shall be entitled to a further reduction
in the amount of the Letter of Credit of $1,449,777.00 (the “Future Reduction
Amount”; each of the Initial Reduction Amount and the Future Reduction Amount
being referred to herein as a “Reduction Amount”) on the 11th anniversary of the
Rent Commencement Date (the “Fifth Reduction Date”; each of the First Reduction
Date, the Second Reduction Date, the Third Reduction Date, the Fourth Reduction
Date and the Fifth Reduction Date being referred to herein as a “Reduction
Date”). In no event shall the Letter of Credit be reduced to less than
$4,349,331.00. On or after each Reduction Date, Tenant shall deliver to Landlord
an amendment to the Letter of Credit (the form and substance of such amendment
to be reasonably satisfactory to Landlord), reducing the amount of the Letter of
Credit by the applicable Reduction Amount, and Landlord shall execute the
amendment and such other documents as are reasonably necessary to reduce the
amount of the Letter of Credit in accordance with the terms hereof.
Notwithstanding anything to the contrary contained in this clause (c), if Tenant
is in default under this Lease prior to the expiration of any applicable notice
and cure period on a Reduction Date and thereafter Tenant fully cures such
default and any other defaults prior to the expiration of any such applicable
notice and cure period, then Tenant shall be entitled to such reduction in the
amount of the Letter of Credit in the applicable Reduction Amount on such later
date, provided that all other conditions to the reduction in the amount of the
Letter of Credit set forth in this clause (c) are satisfied on such later date.

 

 - 28 - 

 

 

ARTICLE 3

 

Landlord Covenants

 

3.01       Landlord Services. From and after the date that Tenant first occupies
the Premises for the conduct of Tenant’s business, Landlord shall furnish Tenant
with the following services (collectively, “Landlord Services”):

 

(a)           heat, ventilation and air-conditioning to the Premises during
Business Hours substantially in accordance with the design specifications set
forth in Exhibit F attached hereto; if Tenant shall require heat, ventilation or
air conditioning at any other times, Landlord shall furnish such service (i) in
the case of a Business Day, upon receiving notice from Tenant by 1:00 p.m. of
such Business Day and (ii) in the case of a day other than a Business Day, upon
receiving notice from Tenant by 5:00 p.m. of the immediately preceding Business
Day, and Tenant shall pay to Landlord within 30 days after demand Landlord’s
then established charges therefor, which charges shall be calculated in
accordance with Exhibit H attached hereto and shall be subject to increase to
the extent of any actual increase in the cost to Landlord of providing such
services; provided, that Tenant shall be subject to a 4 hour minimum charge for
any such overtime service unless such overtime service is requested for a period
of time immediately preceding or immediately following Business Hours on a
Business Day, in which case Tenant shall be entitled to request a minimum of 1
full hour of such overtime service;

 

(b)           (i)       subject to service changes due to emergency and
necessary maintenance, for Tenant’s non-exclusive use and benefit, destination
dispatch passenger elevators serving floors 18 through 30 of the Building (the
“Elevators”) in accordance with the specifications attached hereto as Exhibit G
at all times during Business Hours on Business Days, with at least 2 Elevators
subject to call at all other times. Except for purposes of maintenance, repairs
and any reason beyond Landlord’s reasonable control, Landlord shall not remove
any Elevators serving the Premises from service during Business Hours on
Business Days;

 

 - 29 - 

 

 

(ii)      subject to the Rules and Regulations, freight elevator and loading
dock service to the Premises for Tenant’s non-exclusive use and benefit on a
“first-come, first-served” basis (without affording any other tenant more
favorable availability than that which is afforded to Tenant); provided, that
with respect to such service other than during Business Hours on Business Days,
(A) Tenant shall pay to Landlord within 30 days after demand Landlord’s then
established charges therefor, which charges as of the Effective Date are set
forth on Exhibit H attached hereto and shall be Subject to CPI Increases and (B)
Tenant shall be subject to a 4 hour minimum charge unless such overtime service
is requested for a period of time immediately preceding or immediately following
Business Hours on a Business Day, in which case Tenant shall be entitled to
request a minimum of 1 full hour of such overtime service. Notwithstanding the
foregoing, during the performance of Tenant’s Initial Work and Tenant’s initial
move-in to the Premises, (1) Tenant shall be entitled to up to 80 overtime hours
in the aggregate of freight elevator and loading dock service at no charge and
(2) the charges for Tenant’s use of freight elevator and loading dock service
shall be as more particularly described in Section 4.01(c)(v);

 

(c)           reasonable quantities of hot and cold water to the floor(s) on
which the Premises are located for core lavatory, cleaning, drinking and cold
water for pantry (other than dishwashers and subject to Section 8.20(b)(v), it
being agreed that the heating of water supplied to the pantry, together with the
cost thereof, including electricity, shall be the sole responsibility of Tenant)
purposes only; if Tenant requires additional water for any other purpose,
Landlord shall furnish cold water at the Building core riser through a capped
outlet located on each floor on which the Premises is located (within the core
of the Building), and the cost of heating such water (including, without
limitation, the cost of electric to heat such water) and the cost of piping and
supplying such water to the Premises shall be paid by Tenant (provided that
Landlord shall install and maintain hot water heaters for the core toilet rooms
and janitors closets); Landlord may install and maintain, at Tenant’s expense,
meters to measure Tenant’s consumption of such additional water in which event
Tenant shall reimburse Landlord for the quantities of water shown on such
meters, within 30 days after demand accompanied by reasonable supporting
documentation, at Landlord’s then established charges therefor, which charges as
of the Effective Date are set forth on Exhibit H attached hereto and shall be
subject to increase to the extent of any actual increase in the cost to Landlord
of providing such water;

 

 - 30 - 

 

 

(d)       electric energy on a submetered basis through the transmission
facilities installed by Landlord in the Building for Tenant’s reasonable use of
lighting and other electrical fixtures, appliances and equipment at a level of
not less than 5 watts demand load per gross square foot of space (exclusive of
electricity required to operate the base building systems installed by Landlord,
including, without limitation, the Building HVAC system, but inclusive of any
Tenant installed portion of the HVAC distribution system such as fan powered
boxes); in no event shall Tenant’s consumption of electricity exceed the
capacity of existing feeders to the Building or the risers or wiring serving the
Premises, nor shall Tenant be entitled to any unallocated power available in the
Building except that Landlord agrees to provide Tenant with at least an
additional 2 watts demand load per gross square foot if, in Landlord’s
reasonable judgment (i) Tenant has demonstrated the need for such additional
electrical power by providing a load letter provided by an electrical engineer
reasonably approved by Landlord certifying that Tenant requires such additional
electrical capacity and (ii) taking into account the then existing and future
needs of other then existing and future tenants, and other needs of the
Building, the same is available for Tenant’s use, and if Landlord shall provide
such additional power, Tenant shall pay to Landlord, within 30 days after
demand, Landlord’s costs incurred in providing such additional power to the
Premises and the cost of installing additional risers, meters, switches and
related equipment necessary to provide such additional power. To the extent
there is insufficient electrical power available in the Building to meet
Tenant’s needs for additional electrical power in excess of 5 watts demand load
per gross square foot and such additional 2 watts demand load per gross square
foot as demonstrated in accordance with the immediately preceding sentence,
Landlord, at Tenant’s expense, shall use commercially reasonable efforts to
obtain additional electrical power (provided the same would not result in the
diminution of electrical capacity, or any other adverse effect upon the Building
or the electrical capacity and electrical cost for the balance of the Building).
Any riser or risers necessary to supply Tenant’s electrical requirements in
excess of 5 watts demand load per gross square foot of space and such additional
2 watts demand load per gross square foot as demonstrated herein (exclusive of
electricity for the Building HVAC system) shall be installed by Landlord at the
sole cost and expense of Tenant and only if, in Landlord’s reasonable judgment,
the same is reasonably practicable and will not cause adverse damage or injury
to the Building or the operation thereof or the Premises, or cause or create a
dangerous or hazardous condition. In addition to the installation of such riser
or risers, Landlord shall also, at the sole cost and expense of Tenant, install
all other equipment proper and necessary in connection therewith, subject to the
aforesaid terms and conditions. All of such costs and expense shall be paid by
Tenant to Landlord within 30 days after rendition of any bill or statement to
Tenant therefor accompanied by appropriate invoices and other reasonable
evidence of the costs incurred. Subject to Laws and Landlord’s approval of
Tenant’s plans therefor, Tenant shall have the right to redistribute the
electric power furnished on each floor of the Premises by Landlord throughout
the Premises; provided, that (1) such redistribution does not cause Tenant’s
consumption of electricity to exceed the capacity of the feeders, risers or
wiring serving the Premises, (2) Tenant, at Tenant's sole expense, shall perform
any work required prior to the expiration or earlier termination of the Term so
that the electrical capacity stated in this Section 3.01(d) is restored to each
floor of the Premises and (3) if Tenant shall surrender any portion of the
Premises prior to surrendering the entire Premises, Tenant, at Tenant’s sole
expense, shall perform any work required prior to such partial surrender so that
the electrical capacity stated in this Section 3.01(d) is restored to the
surrendered portion of the Premises;

 

 - 31 - 

 

 

(e)       cleaning services for the Premises in accordance with the
specifications provided in Exhibit D attached hereto. Tenant shall pay to
Landlord within 30 days after demand the out-of-pocket costs incurred by
Landlord for (i) extra cleaning work in the Premises required because of (A)
carelessness, indifference, misuse or neglect on the part of Tenant, its
subtenants or their respective employees or visitors, (B) interior glass
partitions or an unusual quantity of interior glass surfaces (i.e., any cleaning
in excess of spot cleaning of glass in the Premises within arms-length reach),
(C) non-standard materials or finishes installed in the Premises and/or (D) the
use of the Premises other than during Business Hours on Business Days, and (ii)
removal from the Premises and the Building of any refuse of Tenant in excess of
that ordinarily accumulated in business office occupancy, including, without
limitation, kitchen and pantry refuse, or at times other than Landlord’s
standard cleaning times, provided that such extra out-of-pocket costs are at
commercially competitive rates charged to landlords of comparable First Class
Office Buildings. Notwithstanding the foregoing, Landlord shall not be required
to clean any portions of the Premises used for preparation, serving or
consumption of food or beverages, training rooms, trading floors, data
processing or reproducing operations, private lavatories or toilets or other
special purposes requiring greater or more difficult cleaning work than office
areas and Tenant shall retain Landlord’s cleaning contractor at Tenant’s expense
to perform such cleaning and any other cleaning services in excess of those
provided for in Exhibit D, provided such cleaning contractor charges rates that
are reasonably competitive with rates charged by other cleaning contractors
providing similar services to First Class Office Buildings. Notwithstanding the
foregoing, Tenant may use its own employees to provide minor cleaning services
to pantries and conference rooms within the Premises; provided, that (A) the
provisions of Section 4.02(e) relating to the avoidance of union-related
conflict shall apply to such minor cleaning services, (B) Landlord shall have no
liability to Tenant or Tenant’s employees in connection with such minor cleaning
services and (C) any such minor cleaning services shall be subject to such
reasonable rules and regulations that may be established by Landlord with
respect thereto (including, without limitation, Landlord’s green cleaning policy
for the Building). Landlord’s cleaning contractor shall have access to the
Premises after 6:00 p.m. and before 8:00 a.m. and shall have the right to use,
without charge therefor, all light, power and water in the Premises reasonably
required to clean the Premises;

 

(f)       30 tons of condenser water for the Premises (i.e., 10 tons per full
floor of the Premises) for Tenant’s supplemental HVAC system from the common
cooling tower unit serving the Building 24 hours a day, 7 days a week (the
“Reserved Tonnage”). Tenant shall have the right to use the Reserved Tonnage
throughout the Term. Tenant shall not be entitled to any additional condenser
water; provided, that Tenant shall be entitled to increase (but not decrease)
the Reserved Tonnage by up to 10 tons of condenser water for the Premises (i.e.,
to 40 tons total) if on or before June 1, 2017 Tenant has demonstrated the need
for such additional condenser water by providing a load letter provided by an
engineer reasonably approved by Landlord certifying that Tenant requires such
additional condenser water and delivered a notice to Landlord specifying the
amount of such additional condenser water so requested by Tenant (not to exceed
an additional 10 tons of condenser water). Tenant shall perform all necessary
work and install all required equipment to permit Tenant to tap into Landlord’s
condenser water riser (provided that Landlord shall provide capped valved
outlets as set forth on Exhibit S), and Landlord shall waive any tap-in fee or
“drain-down” charge for Tenant’s tap into Landlord’s condenser water riser.
Tenant shall pay to Landlord, within 30 days after demand, for such reservation
of condenser water, an amount equal Landlord’s then established charges
therefor, which charges as of the date hereof are $750 per ton reserved per
annum and shall be subject to increase to the extent of any actual increase in
the cost to Landlord of providing such condenser water. Subject to Laws and
Landlord’s approval of Tenant’s plans therefor, Tenant shall have the right, at
Tenant sole cost and expense, to redistribute the condenser water furnished on
each floor of the Premises throughout the Premises (it being agreed that
condenser water is being allocated on the basis of 10 tons of condenser water
per floor); provided, that if Tenant shall surrender the Premises (or any
portion of the Premises prior to surrendering the entire Premises), Tenant shall
perform any work required prior to such surrender (or such partial surrender) so
that the condenser water capacity stated in this Section 3.01(f) is restored to
the Premises (or the surrendered portion of the Premises);

 

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(g)           (i)       security in accordance with Exhibit L attached hereto;
provided, that, except to the extent due to Landlord’s negligence or willful
misconduct, Landlord shall have no responsibility to prevent, and Landlord shall
have no liability to Tenant (or anyone claiming through or under Tenant) for
loss to Tenant (or such other person) or their agents, contractors, employees,
invitees, or licensees, arising out of theft, burglary or damage or injury to
persons or property caused by persons gaining access to the Building or other
causes;

 

(ii)      Tenant shall have the right, at Tenant’s sole cost and expense, to
install a security system (which may be, at Tenant’s option, a key-card access
system) in the Premises; provided that Tenant shall provide Landlord’s security
personnel with any key-cards, information or other items required to access the
Premises in accordance with the provisions of Section 4.04(d). If Tenant desires
to install a security system in the Premises that is compatible with the
Building security system so as to enable individuals to utilize a single
security/access card to access both the ground floor elevator lobby serving the
Premises and the Premises, Landlord shall reasonably cooperate with Tenant, at
Tenant’s sole cost and expense, with respect to Tenant’s installation and
maintenance of such compatible security system;

 

(iii)     Landlord shall provide access cards for entry to the ground floor
elevator lobby serving the Premises and Tenant shall pay to Landlord, within 30
days after demand therefor, Landlord’s established charges therefor.
Notwithstanding the foregoing, Landlord shall provide, without charge, 1 such
access card for each employee of Tenant with a place of work in the Premises as
of the date that Tenant first occupies the Premises for the conduct of Tenant’s
business;

 

(h)          Landlord shall operate (or cause an outside contractor to operate)
a messenger center for the Building (the “Messenger Center”). The service to be
provided by the Messenger Center from time to time, the manner in which such
services are provided from time to time and hours of operation observed from
time to time (the “Messenger Center Services”) shall comply with all applicable
Laws and shall be reasonably formulated by Landlord with a view toward the
security protocols for the Building. Tenant shall, throughout the Term, use, in
common with Landlord and other tenants and occupants of the Building, the
Messenger Center and the Messenger Center Services. Landlord shall have the
right, from time to time, to make such modifications to the Messenger Center
Services as it deems reasonably necessary, taking into account requirements of
applicable Laws and the security of the Building and its tenants and other
occupants. Landlord reserves the right to reconfigure or relocate the Messenger
Center. Landlord shall have no liability to Tenant for accepting or failing to
accept or for providing or not providing or for requesting or failing to request
receipts or evidence of delivery for any mail or packages or for the handling
of, or damage to, such mail or packages absent the gross negligence or willful
misconduct of Landlord. The cost of maintaining the Messenger Center and
Messenger Center Services shall be an Operating Expense under this Lease;

 

 - 33 - 

 

 

(i)            (i)       Tenant shall have the non-exclusive right to use the
portion of one of the Building’s core fire staircases (such core fire staircase
to be designated by Landlord after consultation with Tenant) connecting
contiguous floors of the Premises (such portion of the Landlord-designated core
fire staircase connecting contiguous floors of the Premises, the “Internal
Stairs”) solely as convenience stairs in accessing each floor; provided, that
Tenant, at its sole cost and expense, complies with all applicable Laws in
connection with such use. In using the Internal Stairs and in preparing said
Internal Stairs for use by Tenant, Tenant shall be responsible for all
incremental costs and expenses in connection therewith (including any increase
in Landlord’s insurance costs resulting from Tenant’s use thereof and any
additional costs to Landlord resulting from the need to install, maintain and
provide electricity to continuous lighting fixtures serving the Internal Stairs)
and shall comply with the terms of this Lease, all Rules and Regulations, all
applicable Laws and insurance requirements applicable to the Building. If Tenant
so utilizes the Internal Stairs as convenience stairs, then, unless Landlord
directs Tenant otherwise, Tenant shall maintain at its sole cost and expense the
Internal Stairs, including, without limitation, the periodic painting and
cleaning thereof in a manner appropriate for a First Class Office Building.
Tenant shall not use any shared fire stairs so as to interfere with the rights
of other tenants or occupants in the Building;

 

(ii)      Tenant shall have the right to make reasonable code-compliant
decorative alterations to the Internal Stairs (such as painting, lighting and
handrails), provided that Tenant obtains Landlord’s prior written consent
thereto (which shall be granted or withheld in Landlord’s reasonable discretion
so long as (A) said decorative alterations do not violate any Laws and/or
insurance requirements with respect to the Building, (B) said decorative
alterations do not increase Landlord’s insurance costs (unless Tenant reimburses
Landlord for the incremental amount of such increased insurance costs), (C) said
decorative alterations do not reduce light output in the Internal Stairs below
the level required to properly charge the photoluminescent tape therein (and in
no event shall such light output be reduced below 1FC) and (D) in no event shall
Tenant be permitted to paint over or cover up reflective glow tape in the
Internal Stairs, if any.

 

(iii)    In connection with any use of the Internal Stairs and subject to the
terms of Article 4 hereof, Tenant, at Tenant’s sole cost and expense shall (A)
subject to applicable re-entry rules and regulations from time to time in
effect, install and regularly maintain a security and control system with
key-card access at the core doors between the Internal Stairs and the Premises
that is satisfactory to Landlord in its reasonable discretion (including,
without limitation, the installation of additional fire safety equipment and
video and other surveillance equipment), (B) provide Landlord with at least 3
key cards to any such security system and update such key cards, at no cost or
expense to Landlord, from time to time, if such update is necessary in order to
permit such key cards to be operable, and (C) tie such system into the
Building’s security and Class E fire safety systems, the Building management
system and such other systems as Landlord may reasonably require. Tenant
acknowledges that any alterations required to tie such security system into the
fire safety system of the Building shall be performed by Landlord’s designated
fire safety contractor for the Building (at said fire safety contractor’s then
standard charges therefor, which charges shall be at commercially competitive
rates for similar services then being provided in other First Class Office
Buildings), at Tenant’s sole cost and expense. If Tenant installs any manual
lock(s) between the Internal Stairs and the Premises, such manual lock(s) shall
have a base building lockset which is keyed to the Building’s stair master key
and sub-mastered to Tenant’s key, or, at Tenant’s request, keyed alike;

 

 - 34 - 

 

 

(iv)    In no event shall Tenant be permitted to store any equipment, furniture,
storage boxes or any other personal property whatsoever in the Internal Stairs;
and

 

(v)    Tenant acknowledges that Landlord has made no representation or warranty
as to whether Tenant’s use of the stairwell area as contemplated hereunder is
permitted under applicable Laws and/or insurance requirements. In the event that
Tenant is not permitted to use the stairwell area for any reason whatsoever
Landlord shall not have liability to Tenant therefor. Further, Landlord shall
have no liability to Tenant relating to Tenant’s use of the stairwell area as
contemplated hereunder and Tenant acknowledges and agrees that Tenant shall use
the stairwell area in accordance with this Section 3.01(i) at its sole risk.
Tenant shall be solely responsible for the operation of the locking system on
the doors from the Internal Stairs to the Premises and hereby waives any and all
claims against Landlord arising out of or in connection with parties gaining
access to and from the Premises through the Internal Stairs, except to the
extent any such claims arise as a direct result of Landlord's gross negligence
or willful misconduct. All of the provisions of this Lease in respect of
indemnification shall apply to the Internal Stairs, as if the same were part of
the Premises, if and to the extent any such indemnification obligation arises
from the use or misuse or maintenance of or alterations to the Internal Stairs
by Tenant or any Tenant Indemnified Party or anyone claiming by, through or
under Tenant;

 

(j)            subject to Landlord’s security procedures and the provisions of
this Lease, access to the Premises 24 hours per day, 7 days per week except in
cases of emergency;

 

(k)           operation, maintenance and repair of the public and common areas
of the Building and of the systems and equipment serving the Building, and the
provision of services required hereunder, in a manner consistent with standards
maintained in First Class Office Buildings (it being understood that any
specifications for the provision of services required hereunder included in this
Lease or the exhibits attached hereto shall be deemed to meet such standards);
provided, that Landlord’s obligations under this Section 3.01(k) shall be
limited to areas of, and systems and equipment within, the Building which Tenant
is entitled to use or which otherwise serve the Premises and Landlord shall have
no liability to Tenant for any failure to maintain such standards except to the
extent such failure adversely affects Tenant’s use and enjoyment of the
Premises;

 

(l)           emergency power through the emergency generator(s) for the
Building sufficient to make operational all base building systems serving the
Premises which are required by applicable Laws to be operational for emergency
power, including exit lights and egress illumination, fire pumps, smoke exhaust
systems, stair pressurization and the fire alarm system;

 

(m)          water pressure and reserve capacity to the fire sprinkler system
serving the Premises at the levels required pursuant to the Building Code for
the City of New York;

 

 - 35 - 

 

 

(n)          a fire alarm and life safety system as more particularly shown on
Exhibit Y, including a “DGP” on at least one floor of the Premises initially
demised hereunder (or such redesignated floors in accordance with Section
1.01(b), if applicable) for Tenant’s connections to such life safety system; and

 

(o)          Landlord shall make available to the Premises from a generator
installed by Landlord for the use of Building tenants (“Standby Power System”)
100 KW of standby power demand load (the “Allocated Generator Capacity”).
Landlord shall make available to Tenant throughout the Term the Allocated
Generator Capacity. The Standby Power System and related equipment and the
Allocated Generator Capacity shall be supplied by Landlord upon and subject to
the following conditions:

 

(i)       Tenant shall, at its sole cost and expense and subject to the
applicable provisions of this Section 3.01(o), perform any work necessary to
connect the Premises to the Allocated Generator Capacity and any other work
necessary to distribute power and make the Allocated Generator Capacity usable
for Tenant’s purposes, all of which work shall be deemed an Alteration for all
purposes under this Lease and shall only be performed upon reasonable prior
notice to Landlord and under the supervision of the appropriate operations
personnel of Landlord (who shall be made available to Tenant at reasonable times
upon reasonable advance notice from Tenant). In connection with such
supervision, Tenant shall pay to Landlord, within 30 days after demand therefor,
Landlord’s established charges for the time of such operations personnel, which
charges as of the Effective Date are set forth on Exhibit H and shall be
increased from time to time to the extent of Landlord’s actual increase in cost
for the time of such operations personnel; provided, that Tenant shall be
subject to a 4 hour minimum charge for such operations personnel unless
supervision by such operations personnel occurs during, immediately preceding or
immediately following Business Hours on a Business Day, in which case Tenant
shall only be subject to charge in 1 hour increments for such supervision;

 

(ii)      Tenant shall pay, as Additional Charges, an amount equal to Landlord’s
then established charges per KW per annum of Allocated Generator Capacity (which
charges as of the date hereof are $500.00 per KW of Allocated Generator Capacity
per annum, and which charge shall be increased from time to time only to the
extent necessary to reflect Landlord’s actual increases in Landlord’s
incremental cost of testing, repairing and maintaining the Standby Power System
from such cost as of the date of this Lease), which amount shall be payable
within 30 days after rendition of a bill therefor, accompanied by reasonable
supporting documentation evidencing such cost. Landlord shall waive any tap-in
fee for Tenant’s tap into the Standby Power System;

 

(iii)     Upon such connection of the Premises to the Standby Power System,
Tenant shall be responsible for the payment of Tenant’s pro rata share (based on
the number of KW of Allocated Generator Capacity relative to the total number of
KW of standby power available from the Standby Power System) of any and all
costs in connection with (A) the purchase of fuel in connection with the Standby
Power System, and Landlord shall maintain sufficient fuel to run the Standby
Power System at full load for 48 hours and (B) the testing, repair and
maintenance of the Standby Power System, which payment shall be made by Tenant,
as Additional Charges, within 30 days after rendition of a bill therefor.

 

 - 36 - 

 

 

(iv)    Landlord shall be responsible for the maintenance, repair and testing of
the Standby Power System, which shall be performed in a manner consistent with
industry standards for similar systems and in compliance with manufacturer
maintenance and service requirements. If, due to a cause beyond the reasonable
control of Landlord, the Standby Power System fails to provide sufficient
standby power for Landlord to provide the amounts of standby power reserved from
the Standby Power System by Tenant and other occupants of the Building, then, to
the extent reasonably practicable given the effects of the circumstances
limiting the performance of the Standby Power System and subject to the terms of
other leases in the Building, Landlord will allocate such standby power as
Landlord is able to provide from the Standby Power System to occupants of the
Building on a pro rata basis to each of such occupants then reserving standby
power from the Standby Power System (determined based on the respective rentable
square footages of the space in the Building occupied by each of such
occupants).

 

(v)     The Standby Power System will be available to Tenant in an “AS IS”
“WHERE IS” condition without representation or warranty by Landlord; Tenant
hereby acknowledges that its right to use the Standby Power System providing the
Allocated Generator Capacity hereunder is permitted solely as an accommodation
to Tenant and nothing contained herein shall obligate Landlord to replace the
Standby Power System or any component thereof, including, without limitation,
any component providing the Allocated Generator Capacity, at any time during the
Term; provided, that Landlord shall make any replacements necessary to the
generator which are components of the Standby Power System.

 

(vi)    Tenant hereby acknowledges that Landlord has made no, and shall not be
deemed to have made any, representations or warranties regarding the Standby
Power System or the use thereof, whether expressed or implied, by operation of
law or otherwise (including, without limitation, warranties of merchantability
or fitness for a particular purpose);

 

(vii)   Notwithstanding any provision to the contrary contained in this Lease
(including, without limitation, Section 3.01(o)(iv)), Landlord shall have no
liability to Tenant for any loss, damage, claim, cost or expense which Tenant
may sustain or incur by reason of any change, failure, inadequacy or defect in
the supply or character of the fuel furnished to the Standby Power System or in
the operation and maintenance of the Standby Power System or if the quantity or
character of the fuel is no longer available or suitable for Tenant’s
requirements; further, Landlord shall have no liability whatsoever to Tenant for
any loss, damage, claim, cost or expense which Tenant may sustain or incur by
reason of (A) Tenant’s use of the Standby Power System providing the Allocated
Generator Capacity, (B) any failure of the Standby Power System, or any related
equipment, including without limitation any fuel pumps, to operate, (C) an
overload condition that causes the Standby Power System to shed Tenant’s load or
to go into a load shedding operation or (D) any defect(s), latent or otherwise,
which may exist on, prior or subsequent to the date hereof with respect to the
Standby Power System; and without limiting the generality of the foregoing,
Tenant agrees that its use of and access to the Standby Power System shall be at
Tenant’s sole risk; and

 

 - 37 - 

 

 

(viii)  The rights granted to Tenant to use the Allocated Generator Capacity
hereunder are given in connection with, and as part of the rights created under,
this Lease and are not separately transferable or assignable (except in
connection with a permitted assignment of this Lease to an Intercept Tenant or
other permitted assignee of Tenant), and the rights granted to Tenant under this
Section 3.01(o) shall terminate upon the expiration or sooner termination of
this Lease.

 

3.02       General Service Provisions. (a)  Subject to the provisions
hereinafter set forth, Landlord may stop or interrupt any Landlord Service,
electricity, or other service and may stop or interrupt the use of any
facilities and systems at such times as may be necessary and for as long as may
reasonably be required by reason of accidents, strikes, or the making of
repairs, alterations or improvements or the performance of maintenance, or
inability to secure a proper supply of fuel, gas, steam, water, electricity,
labor or supplies, or by reason of any other cause beyond the reasonable control
of Landlord. Landlord may modify the delivery and scope of any services if
required by reason of any Laws. Landlord shall have no liability to Tenant by
reason of any stoppage, interruption or modification of any Landlord Service,
electricity or other service or the use of any facilities and systems for any
reason except as otherwise expressly provided in Section 3.02(d). Landlord shall
use reasonable diligence (which shall not include incurring overtime charges) to
make such repairs as may be required to machinery or equipment within Landlord’s
control to provide restoration of any Landlord Service and, where the cessation
or interruption of such Landlord Service has occurred due to circumstances or
conditions beyond Landlord’s control, to cause the same to be restored by
diligent application or request to the provider; provided, however, that
Landlord, at its expense (subject to reimbursement through Operating Expenses in
accordance with the terms of this Lease, so that, for example, if same is a
capital expenditure, it shall be amortized in accordance with the terms of
Section 2.07(d)), shall employ contractors or labor at overtime rates if
necessary to remedy any condition that either (i) results in a denial of
reasonable access to the Premises or (ii) is required to respond to an emergency
involving imminent threat to life or property. In all other cases, at Tenant’s
written request, Landlord shall employ contractors or labor at overtime rates
and incur any other overtime costs or expenses in making any repairs,
alterations, additions or improvements, provided Tenant shall pay to Landlord,
as Additional Charges, within 30 days after demand, an amount equal to the
excess of (a) the overtime rates, including all fringe benefits and other
elements of such pay rates, over (b) the regular pay rates for such labor,
including all fringe benefits and other elements of such pay rates.
Notwithstanding the foregoing, any such work that unreasonably and materially
interferes with Tenant’s business operations in the Premises and that would
customarily be performed after Business Hours or on non-Business Days by
landlords of First Class Office Buildings shall be performed after Business
Hours or on non-Business Days at no cost to Tenant (subject to reimbursement
through Operating Expenses in accordance with the terms of this Lease). In
making any repairs, alterations, additions or improvements, Landlord shall use
commercially reasonable efforts to cause its contractors or labor to cover and
secure such repair areas and equipment in such a manner to minimize interference
with Tenant’s business operations during Business Hours. If more than one
occupant of the Building, including Tenant, is chargeable by Landlord for the
same overtime costs and expenses relating to the same work for which Tenant is
chargeable, then Tenant shall only be charged for a proportionate share of such
overtime costs and expenses, which apportionment shall be based on the amount of
overtime work requested by such parties.

 

 - 38 - 

 

 

(b)       Without limiting any of Landlord’s other rights and remedies, if
Tenant shall be in default beyond any applicable notice and grace period,
Landlord shall not be obligated to furnish to the Premises any service outside
of Business Hours on Business Days, and Landlord shall have no liability to
Tenant by reason of any failure to provide, or discontinuance of, any such
service; provided, that if Tenant shall tender full payment in advance, by
certified or bank check or by wire transfer of immediately available funds, for
any such service, then Landlord shall furnish such service to the Premises in
accordance with the provisions of this Article 3.

 

(c)       “Business Hours” means 8:00 a.m. to 6:00 p.m. on Business Days and
9:00 a.m. to 1:00 p.m. on Saturdays. “Business Days” means all days except (a)
Saturdays, (b) Sundays and (c) Holidays. “Holidays” means New Year’s Day, Martin
Luther King, Jr.’s Birthday, President’s Day, Memorial Day, Independence Day,
Labor Day, Columbus Day, Thanksgiving, Christmas and any other days which are
either (i) observed by both the federal and the state governments as legal
holidays or (ii) designated as a holiday by the Building Service Union Employee
Service contract.

 

(d)       If without the fault or neglect of Tenant or any person claiming
through or under Tenant, any Substantial Portion of the Premises is rendered
Untenantable for a period of 5 consecutive Business Days after Tenant shall have
notified Landlord of such Untenantability, by reason of any stoppage or
interruption of any Landlord Service due to a default by Landlord in the
performance of any obligation of Landlord pursuant to the provisions of this
Lease, then, as Tenant’s sole and exclusive remedy, for the period commencing on
the 6th Business Day after Tenant’s giving notice to Landlord that such
Substantial Portion of the Premises is so Untenantable until such Substantial
Portion of the Premises is no longer Untenantable for such reason, Fixed Rent
and Additional Charges shall be appropriately abated with respect only to such
Substantial Portion. “Untenantable” means that Tenant shall be unable to use the
Premises or the applicable portion thereof for general, administrative or
executive office uses (including due to lack of access through the elevators
serving the Premises), and shall not be using the Premises for any use.
“Substantial Portion” shall mean any portion of the Premises consisting of
10,000 or more contiguous rentable square feet.

 

(e)       No normally operating equipment installed by Landlord shall generate
an ambient noise level in excess of NC-35 within the Premises (except within
10’-0’’ of any fan rooms or other mechanical equipment room in the Premises
where it will not exceed NC-40); provided that Landlord shall have no
responsibility for noise resulting from Tenant’s Alterations, installations or
equipment.

 

3.03       Landlord’s Contribution. (a)  Landlord shall reimburse Tenant (or, at
Tenant’s request, pay directly to Tenant’s general contractor or construction
manager) for costs incurred by Tenant for Tenant’s Initial Work performed within
3 years after the Possession Date (the “Work Reimbursement Period”) up to an
amount (the “Work Allowance”) equal to $75.00 per rentable square foot of the
Premises initially demised under this Lease, upon the following terms and
conditions:

 

 - 39 - 

 

 

(A)       The cost of Tenant’s Initial Work (as reasonably estimated by a
licensed general contractor selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed) shall be
paid by Landlord and Tenant pro rata based on the proportion that the amount of
the Work Allowance bears to the total cost of Tenant’s Initial Work as so
estimated by such general contractor (e.g., if the amount of the Work Allowance
is 30% of the estimate of the total cost of Tenant’s Initial Work, then, subject
to the other requirements of this Section 3.03, Landlord shall be required to
disburse 30% of the total cost of any portion of Tenant’s Initial Work costs for
which a disbursement is sought by Tenant, until Landlord has disbursed the full
amount of the Work Allowance); provided that in no event shall Landlord pay more
than the amount of the Work Allowance, it being agreed that if the total cost of
Tenant’s Initial Work exceeds the estimate on which the pro rata payments were
based, after the Work Allowance is exhausted, all costs of Tenant’s Initial Work
shall be paid by Tenant without any contribution by Landlord. The Work Allowance
shall be payable to Tenant (or to Tenant’s general contractor or construction
manager, as directed by Tenant) in installments as Tenant’s Initial Work
progresses, but in no event more frequently than monthly. Installments of the
Work Allowance shall be payable by Landlord within 30 days following Tenant’s
satisfaction of (or substantial compliance to Landlord’s reasonable satisfaction
with) each of the conditions required for disbursement set forth in this Section
3.03(a), it being understood that minor or insubstantial deviations from any
documentary requirements included in said conditions that are otherwise
reasonably satisfactory to Landlord shall not result in a withholding of the
installment of the Work Allowance requested by Tenant.

 

(B)       Prior to the payment of any installment, Tenant shall deliver to
Landlord a request for disbursement (each being hereinafter called a “Tenant
Requisition”), which shall be accompanied by (1) invoices for Tenant’s Initial
Work performed or incurred since the last Tenant Requisition and disbursement of
the Work Allowance, (2) a certificate signed by Tenant’s architect and an
officer of Tenant certifying that to such architect’s and officer’s knowledge,
Tenant’s Initial Work and services represented by the aforesaid invoices have
been satisfactorily completed in substantial accordance with the plans and
specifications therefor approved by Landlord to the date of such certification,
and have not been the subject of a prior disbursement of the Work Allowance, and
(3) lien waivers by architects, contractors, subcontractors and all materialmen
for all such work and services (it being understood and agreed that conditional
lien waivers shall be delivered for work which is the subject of Tenant
Requisition in question and unconditional lien waivers shall be delivered for
all completed work which was the subject of the previous Tenant Requisition). If
any matter concerning a Tenant Requisition is disputed by Landlord, any
undisputed portion thereof shall be funded by Landlord without limiting
Landlord’s rights to dispute the disputed portion, and such dispute with respect
to such disputed portion shall be resolved by arbitration in accordance with the
provisions of Section 8.09. Each installment payment of the Work Allowance shall
be limited to an amount equal to the amount requested by Tenant pursuant to
clause (1) of this paragraph. In addition, if the amount requested by Tenant
does not already reflect the Minimum Retainage against the amount requested by
the applicable contractor or subcontractor, then Landlord shall be permitted to
retain from each disbursement an amount equal to the Minimum Retainage of the
amount requested to be disbursed by Tenant. “Minimum Retainage” means (1) 10%
until at least 50% of Tenant’s Initial Work is substantially complete and paid
for and (2) 5% thereafter.

 

 - 40 - 

 

 

(C)         Tenant is not then in default under this Lease.

 

(D)         In no event shall more than 15% of the Work Allowance be made
available to Tenant for Tenant’s soft costs of construction (including, without
limitation, filing and permit fees and expenses, architecture, engineering and
other consulting fees and expenses and moving expenses).

 

(b)          “Tenant’s Initial Work” means the alterations, installations and
improvements to be performed by Tenant in the Premises to prepare the same for
initial occupancy thereof.

 

(c)           The right to receive reimbursement for the cost of Tenant’s
Initial Work as set forth in this Section 3.03 shall be for the exclusive
benefit of Tenant, it being the express intent of the parties hereto that in no
event shall such right be conferred upon or for the benefit of any third party,
including, without limitation, any contractor, subcontractor, materialman,
laborer, architect, engineer, attorney or any other person, firm or entity.
Without in any way limiting the provisions of Section 6.12(b), Tenant shall
indemnify and hold harmless each Landlord Indemnified Party from and against any
and all liability, damages, claims, costs or expenses arising out of or relating
to Landlord’s payment of any installment of the Work Allowance directly to
Tenant’s general contractor or construction manager, together with all costs,
expenses and liabilities incurred in or in connection with each such claim or
action or proceeding brought thereon, including, without limitation, all
reasonable attorneys’ fees and expenses.

 

(d)           Tenant shall not be entitled to deliver a Tenant Requisition for a
disbursement of any portion of the Work Allowance later than the date that is 60
days after the last day of the Work Reimbursement Period (the “Outside
Requisition Date”) and if Tenant shall fail to deliver a Tenant Requisition for
a disbursement in connection with any Tenant’s Initial Work by the Outside
Requisition Date, then Tenant shall waive Tenant’s right to receive any payment
in connection therewith.

 

 - 41 - 

 

 

(e)           If Tenant satisfies all of the conditions to payment of the Work
Allowance in accordance with this Section 3.03 and Landlord fails to pay to
Tenant any amount of the Work Allowance on or before the date on which the same
is due and payable to Tenant under this Section 3.03, and provided that such
failure continues for 30 days after Tenant notifies Landlord of such failure
(which notice shall contain a legend in not less than 14 point font bold upper
case letters as follows: “THIS IS A NOTICE OF A CLAIMED OFFSET RIGHT GIVEN IN
ACCORDANCE WITH SECTION 3.03(e) OF THE LEASE”), then, subject to the further
provisions of this Section 3.03(e), Tenant may set off such amount against the
next installments of Rent coming due under this Lease. Landlord shall have the
right within such 30-day period to deliver written notice to Tenant that
Landlord disputes, in good faith, Tenant’s entitlement to the amount claimed by
Tenant, together with a reasonably detailed explanation of the reasons therefor,
it being agreed that if Landlord timely delivers such written notice, then
Tenant shall not have the right to set off such amounts until the dispute is
resolved in accordance with the further provisions of this Section 3.03(e). If
Landlord fails to deliver such written notice to Tenant within such 30-day
period, Landlord shall be deemed to have accepted Tenant’s entitlement to the
amount claimed by Tenant. In the event Landlord does deliver such written notice
to Tenant within such 30-day period as provided above, the parties shall, in
good faith, resolve such dispute(s) in a timely manner. Either party may submit
any such dispute that remains unresolved for more than 30 days to arbitration in
accordance with the provisions of Section 8.09. Any other dispute with respect
to the payment of the Work Allowance shall also be resolved by arbitration in
accordance with the provisions of Section 8.09. If any such dispute is resolved
in favor of Tenant, then the amount in dispute shall be paid to Tenant within 10
days after the determination of the arbitrator, failing which Tenant may give to
Landlord 5 Business Days’ notice of Tenant’s intent to offset the amount due to
Tenant against the next installments of Rent due under this Lease (which notice
shall contain a legend in not less than 14 point font bold upper case letters as
follows: “THIS IS A NOTICE OF A CLAIMED OFFSET RIGHT GIVEN IN ACCORDANCE WITH
SECTION 3.03(e) OF THE LEASE”) and if Landlord does not, within such 5 Business
Day period, pay such amount to Tenant, then Tenant may set off such amount
against the next installments of Rent coming due under this Lease.

 

3.04         Governmental Incentives. Landlord shall cooperate in all reasonable
respects with Tenant’s efforts to obtain any available governmental and
quasi-governmental benefits, incentives or entitlements; provided, that (i) such
efforts shall not adversely affect the ability or eligibility of Landlord or
other tenants or occupants of the Building and (ii) Tenant shall, within 30 days
after receipt of each of Landlord’s invoices therefor, reimburse Landlord for
the actual out-of-pocket costs incurred by Landlord in connection with such
cooperation. In no event shall Landlord have any liability, nor, subject to
clause (b) below, shall Tenant’s obligations under this Lease be affected, in
the event that Tenant shall not obtain any particular governmental or
quasi-governmental benefits, incentives or entitlements. Any governmental or
quasi-governmental benefits, incentives or entitlements obtained, to the extent
the same relate solely to Tenant and/or the Premises, shall be for the benefit
of Tenant and shall be passed on to Tenant.

 

 - 42 - 

 

 

ARTICLE 4

 

Leasehold Improvements; Tenant Covenants

 

4.01         Initial Improvements. (a)  Landlord’s Work.  (i) Landlord, at
Landlord’s expense, shall perform or cause to be performed the work required to
satisfy the Delivery Condition and the Post Delivery Condition (collectively or
individually, as the context requires, “Landlord’s Work”). The “Delivery
Condition” means the condition of the Premises which satisfies the criteria set
forth on Exhibit E-1 attached hereto. The portion of Landlord’s Work described
on Exhibit E-1 attached hereto is referred to as “Landlord’s Turnover Work”. The
“Post Delivery Condition” means the condition of the Premises which satisfies
the criteria set forth on Exhibit E-2 attached hereto. The portion of Landlord’s
Work described on Exhibit E-2 attached hereto is referred to as “Landlord’s Post
Turnover Work”. Attached hereto as Exhibit T is a list of the current working
drawings for the Base Building Work (the “Base Building Working Drawings”). A
copy of the Base Building Working Drawings have been made available to Tenant.
The Base Building Working Drawings may be modified by Landlord from time to time
without Tenant’s consent; provided, that after giving effect to such
modifications, the portion of the Base Building Working Drawings that was so
modified (A) shall continue to be materially consistent with the original Base
Building Working Drawings to the extent necessary to avoid any materially
adverse effect on the Premises or any common areas of the Building which Tenant
will be entitled to use during the Term and (B) shall not decrease or increase
the rentable area of any of the floors comprising the Premises by more than 5%
or materially alter the configuration of any of the floors comprising the
Premises. Reasonably promptly after Tenant’s written request, Landlord shall
make available to Tenant any updates to the Base Building Working Drawings.
Notwithstanding the foregoing, Landlord shall have the right to substitute any
materials to be used as finishes in the construction of the Building, the
Building lobbies, any common areas of the Building, and/or the facade of the
Building which are described in the Base Building Working Drawings for materials
of substantially similar quality; provided, that such materials are consistent
with the standards of a First Class Office Building. The Base Building Work (as
hereinafter defined) shall be performed by Landlord in compliance with all
applicable Laws.

 

(ii)         “Substantial Completion” or “Substantially Complete” means that the
work in question has been completed, or would have been completed but for any
Tenant Delay, except for (a) minor or insubstantial details of construction,
decoration and mechanical adjustments, the non-completion of which will not
materially and adversely interfere with Tenant’s performance of Tenant’s Work
and (b) any work which, in accordance with good construction practice, should be
completed after the completion of other work to be performed by Tenant (the
items described in clauses (a) and (b) are, collectively, the “Punch List
Items”).

 

(iii)        “Tenant Delay” means any actual delay which Landlord may encounter
in the performance of Landlord’s Work or other obligations of Landlord under
this Lease by reason of any act, negligence, failure to act (where the
provisions of this Lease or Laws impose a duty to act) or omission of Tenant or
any Tenant’s Contractors or any of such parties’ agents, employees or
contractors, including, without limitation, delays due to changes in or
additions to Landlord’s Work requested by Tenant, delays by Tenant in submission
of information or giving authorizations or approvals or delays due to the
postponement of any Landlord’s Work at the request of Tenant; provided however,
that all simultaneous delays which constitute a Tenant Delay hereunder shall be
deemed to run concurrently and not consecutively and shall not be “double”
counted. Tenant shall pay to Landlord any additional costs or expenses actually
incurred by Landlord by reason of any Tenant Delay. Notwithstanding anything to
the contrary contained in this Agreement, except to the extent Tenant has (or is
deemed to have) knowledge of a Tenant Delay as evidenced by job minutes,
correspondence (which may be via email), memoranda or other writings furnished
to or issued by Tenant (which job minutes, correspondence, memoranda or other
writings specifically refer to such circumstances giving rise to a Tenant Delay
and to the fact of a Tenant Delay), Landlord shall notify Tenant of any Tenant
Delay within 5 Business Days after Landlord actually becomes aware of such
Tenant Delay (and such notice shall specify in reasonable detail the cause of
the delay), failing which such delay shall constitute a Tenant Delay only from
and after the date Landlord notifies Tenant thereof. In addition and
notwithstanding any other provision of this Lease to the contrary, in the event
of any simultaneous occurrence of Tenant Delay and Unavoidable Delay, for the
duration of any such simultaneous occurrence such Tenant Delay shall be deemed
to be Unavoidable Delay; provided, that Landlord does not incur any additional
costs or expenses by reason of such Tenant Delay that Landlord would not have
otherwise incurred as a result of such simultaneous Unavoidable Delay.

 

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(iv)         When Landlord believes that Landlord’s Turnover Work and/or
Landlord’s Post Turnover Work (or any item thereof set forth on Exhibit E-2
attached hereto), as applicable, is, or is about to be, Substantially Complete,
Landlord shall deliver a notice to Tenant (a “Substantial Completion Notice”)
stating that Landlord believes that such applicable portion of Landlord’s Work
is, or is about to be, Substantially Complete, and setting forth a date (the
“Walk-Through Date”), not less than 5 Business Days after the giving of such
notice, for the parties to conduct a joint inspection of such portion of
Landlord’s Work. On the Walk-Through Date, Landlord and Tenant and their
respective consultants shall jointly inspect such portion of Landlord’s Work to
determine if such portion of Landlord’s Work is Substantially Complete. Within 3
Business Days after such walk-through, Tenant shall deliver a written notice to
Landlord (the “Tenant Inspection Notice”), which notice shall either (x) confirm
Tenant’s agreement that Landlord’s Work is Substantially Complete and specify in
reasonable detail any Punch List Items yet to be completed, or (y) dispute the
occurrence of Substantial Completion of Landlord’s Work, specifying in
reasonable detail all items of work asserted to be incomplete which result in
Landlord’s Work not being Substantially Complete (provided that the mere fact
that Tenant concludes that Substantial Completion has not occurred shall not
mean that Substantial Completion has not occurred). If, in the Tenant Inspection
Notice, (i) Tenant concurs that Landlord’s Work is Substantially Complete,
Tenant shall be deemed to have accepted delivery of possession of the Premises
and Landlord’s Work therein and Landlord shall have no further obligation to
perform any work, supply any materials, or make any alterations or improvements
to prepare the Premises for Tenant’s occupancy, subject to Landlord’s completion
of any Punch-List Items, which Landlord shall proceed with reasonable diligence
to complete and any Latent Defects, which Landlord shall proceed with reasonable
diligence to remedy in accordance with the further provisions of this Section
4.01(a)(iv), or (ii) Tenant concludes that Landlord’s Work is not Substantially
Complete, Tenant shall be deemed to concur that any item of work not specified
and listed as incomplete in the Tenant Inspection Notice is completed for all
purposes of this Section 4.01 and this Lease. If Tenant fails to appear on the
Walk-Through Date, or if the parties conduct a joint inspection of Landlord’s
Work and Tenant fails within two (2) Business Days after such inspection to
deliver to Landlord the Tenant Inspection Notice containing the information
required pursuant to clauses (x) or (y) of this Section 4.01(a)(iv) (as
applicable), then in either such case Tenant shall be deemed to have concurred
that Landlord’s Work has been fully completed as of the date set forth as the
date of Substantial Completion in the Substantial Completion Notice and Tenant
shall be deemed to have accepted delivery of possession of the Premises and
Landlord’s Work therein and Landlord shall have no further obligation to perform
any work, supply any materials, or make any alterations or improvements to
prepare the Premises for Tenant’s occupancy. For the purposes of this Lease,
“Latent Defects” shall mean defects in the construction of Landlord’s Work that
are not observable by visible inspection at the time the Punch List is prepared.
Landlord shall remedy any Latent Defects in Landlord’s Work affecting the
Premises of which Tenant notifies Landlord within the Warranty Period for the
relevant item of work. Landlord shall commence to perform such work promptly
following such notice from Tenant and shall thereafter diligently perform the
same. “Warranty Period” means, with respect to any item of work, the period for
which such item is covered by any warranty Landlord receives from a contractor
or subcontractor. Landlord agrees that each contract with contractor(s) and
subcontractor(s) for all items of Landlord’s Work shall contain customary
warranties with respect to the applicable item of work consistent with good
construction practice.

 

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(b)          Tenant’s Early Access.         (i)          Tenant and any of
Tenant’s architects, engineers and contractors (collectively, “Tenant’s
Contractors”) shall have access to the Premises prior to the Possession Date,
but only from and after the Access Date, for the sole purpose of (i) performing
visual inspections, (ii) preparing surveys and drawings, taking measurements and
preparing plans and specifications and (iii) verifying field conditions
(“Pre-Construction Activities”), in the Premises. The “Access Date” shall be the
date determined by Landlord in good faith after which, in accordance with good
construction practice, it is feasible for Tenant to commence Pre-Construction
Activities in the Premises. Such early access shall not interfere with or delay
completion of (x) the work performed by or on behalf of Landlord relating to
construction of the Building (the “Base Building Work”) or (y) the work
performed by or on behalf of other tenants or occupants. Landlord shall in all
events have priority with respect to (A) the use of systems and facilities of
the Building, and (B) the scheduling and performance of any work in the
Building.

 

(ii)         If, in Landlord’s sole discretion, the Pre-Construction Activities
shall interfere with or delay the performance of the Base Building Work or the
work of other tenants or occupants, then upon Landlord’s request, all
Pre-Construction Activities shall immediately cease and Tenant shall cause all
Tenant’s Contractors to immediately cease any Pre-Construction Activities and
leave the Building. In connection with the Pre-Construction Activities, Tenant
shall comply, and cause Tenant’s Contractors to comply, promptly with all
procedures and regulations reasonably prescribed by Landlord from time to time
for coordinating the Base Building Work and Pre-Construction Activities each
with the other and with any other activity or work in the Building, including,
without limitation, the use of compatible union labor.

 

(iii)        Any access to or entry on the Building by Tenant prior to the
Possession Date, pursuant to the provisions of this Section 4.01(b) or
otherwise, shall be subject to and upon all of the applicable provisions of this
Lease, including, without limitation, the provisions set forth herein governing
insurance to be carried by Tenant and Tenant’s indemnification of Landlord;
provided, that there shall be no obligation on the part of Tenant solely because
of such access to pay any Fixed Rent or Recurring Additional Charges for any
period prior to the time such payments shall commence to be payable pursuant to
the provisions of Article 2 of this Lease.

 

 - 45 - 

 

 

(iv)         If Tenant fails or refuses to comply or to cause Tenant’s
Contractors to comply with any of the obligations described or referred to in
this Section 4.01(b), then, without limiting any of Landlord’s other rights and
remedies, Landlord may require Tenant immediately to cease the performance of
any Pre-Construction Activities until such failure or refusal is cured.

 

(v)          Without limiting the generality of any other provision of this
Section 4.01, Tenant shall pay to Landlord as Additional Charges, within 30 days
after receipt of an invoice therefor, any incremental costs actually incurred by
Landlord by reason of Tenant’s early access pursuant to this Section 4.01(b)
(including, without limitation, due to any delay in the performance of the Base
Building Work or by reason of the consumption of utilities)).

 

(c)          Tenant’s Initial Work. (i)          Tenant’s Initial Work shall
constitute an Alteration and shall be subject to all provisions of this Lease
applicable to Alterations, including, without limitation, the provisions of
Section 4.02. In addition to such provisions relating to all Alterations, the
provisions of this Section 4.01(c) shall apply to Tenant’s Initial Work.

 

(ii)         Tenant shall cause Tenant’s Contractors to perform Tenant's Initial
Work in a manner that does not interfere with, impede or adversely affect
(including due to the impact of noise, smoke or pollutants) (i) the performance
of the Base Building Work, (ii) the performance of construction by or on behalf
of other tenants and occupants or (iii) from and after the date the first tenant
or occupant of the Building occupies any portion of its premises for the normal
conduct of its business, the use and enjoyment of any tenant or occupant of the
Building of its premises or access to its premises or any common areas which
such tenant or occupant is entitled to use or access. Tenant shall take all
reasonable steps requested by Landlord to protect the Base Building Work from
and against damage arising out of the performance of Tenant's Initial Work.

 

(iii)        Tenant acknowledges that Landlord and Landlord’s contractors shall
have priority (with respect to use of facilities, access to Building areas, use
of the hoist(s) and elevators, etc.) at all times over Tenant’s Contractors.
Notwithstanding the preceding sentence, Landlord shall use reasonable efforts to
accommodate Tenant’s Contractors so long as the same does not interfere with the
performance of the Base Building Work or work performed by or on behalf of any
existing or future tenants or occupants of the Building; provided, that Landlord
agrees to reasonably cooperate with Tenant in order to provide Tenant with
reasonably adequate elevator and/or hoist service to the Premises during the
performance of Tenant’s Initial Work. Landlord and Tenant agree to reasonably
cooperate and discuss such elevator and/or hoist services and the logistics for
access to the Premises with respect thereto during the performance of Tenant’s
Initial Work at the quarterly meetings described in Section 4.01(d) below and
Landlord and Tenant agree that the following shall apply with respect to
Tenant’s use of the elevator and hoist services during the performance of
Tenant’s Initial Work:

 

 - 46 - 

 

 

(A)         Hoists. (I)         From and after the Possession Date, Landlord
shall provide Tenant access to the hoists, subject to and in accordance with
this Section 4.01(c). The hoists shall remain available for Tenant’s use until
at least one of the Building freight elevators serving the Premises is
operational and available for use by Tenant in lieu of the hoists. Tenant shall
have the right to a pro rata allocation of usage of the hoists during Business
Hours on Business Days for deliveries of materials and equipment, subject to
Landlord’s absolute priority in using the hoists for the performance of the Base
Building Work during Business Hours on Business Days. Tenant shall also have the
right to a reasonable allocation of reserved usage of the hoists for such
deliveries on a “first to reserve” basis during times other than Business Hours
on Business Days. All such usage of the hoists shall be subject to Landlord’s
non-discriminatory procedures for the allocation or reservation of use of the
hoists. So long as Landlord is operating the hoists during Business Hours on
Business Days, Tenant’s use of such hoists during Business Hours on Business
Days shall be at no cost to Tenant. If Landlord is no longer operating one or
more of the hoists, but such hoist(s) has not yet been removed, Tenant may use
such hoist during Business Hours and on Business Days at Tenant’s cost (as
prorated among the tenants if more than one tenant is using the hoists at a
particular time). Tenant shall pay for the use of the hoists at Landlord’s
actual cost for such service plus a Landlord fee and overhead charge of 5% of
such costs. Tenant shall pay its proportionate share of the cost (as prorated
among the tenants and/or Landlord if more than one tenant and/or Landlord is
using the Hoists at a particular time) of any use of the hoists during times
other than Business Hours on Business Days. The Hoist Impacted Area Work (as
hereinafter defined) shall be Substantially Completed by Landlord, at Landlord’s
sole cost and expense, no later than December 31, 2018, it being agreed that
Tenant’s sole and exclusive remedy for Landlord’s failure to Substantially
Complete the Hoist Impacted Area Work on or before December 31, 2018 is set
forth in sub-clause (II) below.

 

(II)        Notwithstanding anything to the contrary contained herein, if the
Hoist Impacted Area Work is not Substantially Complete (or is not deemed
Substantially Complete) with respect to any floor of the Premises on or before
the date upon which Tenant first occupies the Premises for the ordinary conduct
of business, other than by reason of Tenant Delay, then, as Tenant’s sole and
exclusive remedy therefor and without duplication of any penalties described in
Section 1.03(c), the Fixed Rent shall be abated in the proportion that the Hoist
Impacted Area bears to the total rentable square footage of the Premises until
the Hoist Impacted Area Work is Substantially Complete or would have been
Substantially Complete but for any Tenant Delay. “Hoist Impacted Area” means the
area of the Premises shown on Exhibit Z and which Hoist Impacted Area shall be
deemed to contain the rentable square footage shown on Exhibit Z as of the date
hereof. “Hoist Impacted Area Work” means the removal of the hoist, Temporary
Hoist Enclosure and all related equipment in the Hoist Impacted Area, including
all tie-backs, and the Substantial Completion of Landlord’s Work in the Hoist
Impacted Area, including, without limitation, completion of the curtain wall
within the Hoist Impacted Area. Landlord shall use commercially reasonable
efforts to maintain the Temporary Hoist Enclosure and Hoist Impacted Area in
such a manner so as to minimize any interference with Tenant’s use and occupancy
of the Premises and Landlord and Tenant shall reasonably cooperate in connection
with the Substantial Completion of the Hoist Impacted Area Work by Landlord so
as to reasonably minimize any interference with Tenant’s use and occupancy of
the Premises. “Temporary Hoist Enclosure” means a “weather tight” code compliant
temporary enclosure enclosing the Hoist Impacted Area.

 

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(B)         Freight Elevator(s). Tenant shall have the right to a pro rata
allocation of usage of the freight elevators during Business Hours on Business
Days for deliveries of materials and equipment, subject to Landlord’s absolute
priority in using the freight elevators for the performance of the Base Building
Work during Business Hours on Business Days. Tenant shall also have the right to
a pro rata allocation of reserved usage of the freight elevators for such
deliveries on a “first to reserve” basis during times other than Business Hours
on Business Days. All such usage of the freight elevators shall be subject to
Landlord’s non-discriminatory procedures for the allocation or reservation of
use of the freight elevators. So long as Landlord is operating the freight
elevators during Business Hours on Business Days, Tenant’s use of such freight
elevators during Business Hours on Business Days shall be at no cost to Tenant.
If Landlord is no longer operating one or more of the freight elevators, Tenant
may use such freight elevator during Business Hours and on Business Days at
Tenant’s cost (as prorated among the tenants if more than one tenant is using
the freight elevators at a particular time). Tenant shall pay for the use of the
freight elevators at Landlord’s actual cost for such service plus a Landlord fee
and overhead charge of 5% of such costs. Tenant shall pay its proportionate
share of the cost (as prorated among the tenants and/or Landlord if more than
one tenant and/or Landlord is using the freight elevator at a particular time)
of any use of the freight elevators during times other than Business Hours on
Business Days.

 

(C)         Passenger Elevators. Tenant shall have the right to use 2 of the
Elevators for transportation of personnel, equipment or materials in connection
with the performance of Tenant’s Initial Work from and after the Possession
Date, and until the issuance of the TCO. So long as Landlord is operating such
passenger elevators during Business Hours on Business Days (i.e., Landlord is
already paying for an operator), Tenant’s use of such passenger elevators during
Business Hours on Business Days shall be at no cost to Tenant. In all other
cases, if Tenant elects to so use such passenger elevators, Tenant shall use an
operator hired by Landlord and Tenant shall pay the cost of hiring such operator
at Landlord’s actual cost for such service plus a Landlord fee and overhead
charge of 5% of such costs. Tenant, at its sole cost and expense, shall protect
such passenger elevators from and against damage arising out of such use and
promptly repair and restore any damage to such elevators arising from such use
by Tenant, its contractors and agents. All such usage of the passenger elevators
shall be subject to Landlord’s non-discriminatory procedures for the allocation
or reservation of use of the passenger elevators.

 

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(iv)         In performing Tenant’s Initial Work, Tenant shall comply with all
reasonable procedures prescribed by Landlord for the coordination of Tenant’s
Initial Work with the Base Building Work and any other work in the Building;
provided that such procedures shall not be applied in a discriminatory manner.
Without limiting the generality of the provisions of Section 4.01(c)(i), the
provisions of Section 4.02(e) shall apply with respect to the performance of
Tenant’s Initial Work. Tenant shall ensure that Tenant’s Initial Work shall be
performed in a manner which shall not create a labor dispute. Tenant shall
immediately stop performing Tenant’s Initial Work if Landlord notifies Tenant
that continuing such work has created, or would create, a labor dispute.

 

(v)          Landlord shall provide, and Tenant shall make arrangements with
Landlord for, temporary water, power, heat and air and connections therefor
during the period when Tenant's Initial Work is being constructed, and Tenant
shall pay any costs actually incurred by Landlord by reason of Tenant’s use of
any thereof in connection with the performance of Tenant's Initial Work or
otherwise until such time as Landlord is to provide such services pursuant to
Section 3.01. The foregoing costs actually incurred by Landlord shall either be
based on submeters measuring Tenant’s use of such services or shall be
reasonably determined by Landlord based on Tenant’s pro-rata share of the use of
such services based on the total square footage of construction being undertaken
by Tenant at the Building versus the total square footage of all construction
being undertaken at the Building. Tenant shall be responsible, at Tenant’s sole
cost and expense, for the removal of trash and construction debris resulting
from the construction of Tenant’s Initial Work. To the extent not otherwise
covered herein, Tenant shall pay to Landlord the incremental cost of General
Conditions to the extent attributable to the performance of Tenant's Initial
Work, including, without limitation, the use of the hoist(s), loading docks and
elevators as more particularly described in Section 4.01(c)(iii) above. “General
Conditions” means, without limitation, the actual cost of field labor, field
supervision, cleanup, removal of waste and debris, protection of work in
progress or completed, insurance and security with respect to the Project,
maintenance and operation of temporary facilities and services, construction
barricades, ventilation, taxes, operation of loading docks, elevator and hoist
operators, teamsters, operating and hoist engineers, master mechanic(s),
maintenance mechanic(s), teamster foreman, and other support and security
personnel, permit and similar fees and other out-of-pocket expenses incurred in
connection therewith and similar costs included in general conditions in
accordance with good construction practice in New York City. If more than one
tenant of the Building is performing Alterations at the same time then any
incremental additional General Conditions incurred by landlord shall be
equitably apportioned among all such Tenants without duplication. If, prior to
the date upon which Landlord removes the hoist(s) from the Project, Tenant shall
request from Landlord the right to use such hoist(s) in connection with the
performance of Tenant’s Initial Work, then Landlord shall (subject to Landlord
having priority in accordance with the provisions of Section 4.01(c)(iii) and
the use of the hoist by other tenants and occupants) permit Tenant to use the
same. Tenant shall pay all reasonable incremental costs incurred by Landlord by
reason of Tenant’s use of the hoist(s), loading docks and elevators as more
particularly described in Section 4.01(c)(iii) above, except to the extent that
any such use of such hoist is required as a result of the Building’s passenger
elevators not being unavailable for Tenant’s use in accordance with Section
4.01(c)(iii)(C) above. Without limiting the generality of the foregoing, if, as
a result of Tenant’s approved usage of the hoist(s), Landlord determines that it
is necessary for Landlord to use said hoist(s) on an overtime basis, then after
reasonable advance notice to Tenant, Landlord may do so and any incremental
costs (without profit or mark-up) actually incurred by Landlord by reason of
such overtime usage shall be paid for by Tenant. All amounts payable by Tenant
under this Section 4.01(c)(v) shall constitute Additional Charges and shall be
paid by Tenant to Landlord within 30 days of Tenant’s receipt from Landlord of
an invoice and reasonable back-up documentation therefor.

 

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(vi)         If Landlord incurs any incremental costs due to any delay in the
performance or completion of the Base Building Work which delay results from any
Tenant Delay, Tenant shall pay such costs to Landlord within 30 days after
receipt of an invoice and reasonable supporting documentation therefor. If more
than one tenant of the Building is performing Alterations at the same time then
any incremental additional General Conditions incurred by Landlord shall be
equitably apportioned among all such tenants without duplication.

 

(d)          Violations and Landlord Delay. (i)          From and after the
Possession Date, in the event that Tenant is unable to obtain any building
permits or other permits, approvals, certificates or sign-offs from any
governmental authority required for the performance of Tenant’s Initial Work or
the legal occupancy by Tenant of the Premises for the purposes expressly
permitted under this Lease and to the extent such failure results from the
existence of any violations of Law affecting the Building resulting from the
performance of any work by Landlord or other actions or failure(s) to act of
Landlord (“Violations”), but specifically excluding any violations caused by or
resulting from the action(s) or failure(s) to act of Tenant, Tenant’s
contractors or any Tenant Indemnified Party or any other tenant, then following
written notice thereof from Tenant, Landlord shall proceed reasonably diligently
and in good faith to cure and cause each such Violation to be discharged of
record. If there is any violation caused by the acts or omissions of other
tenants or occupants of the Building, Landlord will use commercially reasonable
efforts to cause such tenant or occupant to comply with the provisions of its
lease but Landlord shall not be required to institute litigation, arbitration or
any other proceeding against such tenant or occupant of the Building, send a
default notice, seek to terminate any lease or incur any expenses (other than de
minimis expenses) in connection therewith.

 

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(ii)         From and after the Possession Date, in the event that Tenant is
unable to perform Tenant’s Initial Work to the extent resulting from any
Landlord Delay (as hereinafter defined), but specifically excluding any
interference caused by or resulting from Unavoidable Delay or any action(s) or
failure(s) to act of Tenant, Tenant’s contractors or any Tenant Indemnified
Party, then following written notice thereof from Tenant, Landlord shall proceed
reasonably diligently and in good faith to cure such Landlord Delay. “Landlord
Delay” means any actual delay which Tenant shall encounter in the performance of
Tenant’s Initial Work to the extent resulting from Landlord’s default of its
obligations under Sections 4.01(c)(iii), 4.01(c)(v) and 4.06(b) of this Lease,
but specifically excluding any Landlord Delay that is caused by Unavoidable
Delay (e.g., the failure of a utility company to provide services shall not be
deemed a default by Landlord under the aforementioned provisions).
Notwithstanding anything contained in this Lease to the contrary, Tenant shall
notify Landlord of any such Landlord Delay (a “Landlord Delay Notice”) within 3
Business Days after Tenant actually becomes aware of such Landlord Delay,
failing which such delay shall constitute a Landlord Delay only from and after
the date Tenant notifies Landlord thereof. In addition and notwithstanding any
other provision of this Lease to the contrary, in the event of any simultaneous
occurrence of Landlord Delay and Unavoidable Delay, for the duration of any such
simultaneous occurrence such Landlord Delay shall be deemed to be Unavoidable
Delay and shall not constitute Landlord Delay; provided, that Tenant does not
suffer any actual delay in the performance of Tenant’s Initial Work by reason of
such Landlord Delay that Tenant would not have otherwise incurred as a result of
such simultaneous Unavoidable Delay. No Landlord Delay shall be deemed to have
occurred unless Tenant is actually delayed in performing Tenant’s Initial Work
and opening for the conduct of business as a result of the occurrence of a
Landlord Delay. Landlord shall have 7 Business Days from Landlord’s receipt of
such Landlord Delay Notice from Tenant to deliver written notice to Tenant that
Landlord disputes, in good faith, the determinations by Tenant that a Landlord
Delay has occurred, together with a reasonably detailed explanation of the
reasons therefor. If Landlord fails to deliver such written notice to Tenant
within such 7 Business Day period, Landlord shall be deemed to have accepted
Tenant’s determination that a Landlord Delay has occurred. In the event Landlord
does deliver such written notice to Tenant within such 7 Business Day period as
provided above, the parties shall, in good faith, resolve such dispute(s) in a
timely manner. Either party may submit a dispute regarding a Landlord Delay that
remains unresolved for more than 30 days to arbitration in accordance with the
provisions of Section 8.09. Any simultaneous delays which constitute a Landlord
Delay hereunder shall be deemed to run concurrently and not consecutively to the
extent of Tenant’s actual delay caused by such simultaneous delays and shall not
be “double” counted.

 

(iii)        Subject to the provisions of this Section 4.01(d), if Tenant is
unable to perform Tenant’s Initial Work or open for the conduct of business to
the extent resulting from any Violation, and (1) Landlord fails to cure such
Violation within 10 days (or within 20 days if such Violation is not one which
is reasonably susceptible of cure and removal of record within such 10 day
period) after notice thereof from Tenant indicating the specific Violation,
together with reasonable evidence demonstrating that such Violation is the sole
reason Tenant is unable to perform Tenant’s Initial Work or open for the conduct
of business and (2) Landlord does not dispute, in good faith, such determination
by Tenant (or, if Landlord does dispute such determination, and Tenant’s
position in such dispute ultimately prevails), then the Rent Commencement Date
shall be extended 1 day for each day such inability continues until the earlier
to occur of (x) such Violation is cured and (y) the date Tenant is able to
perform Tenant’s Initial Work or open for the conduct of business.

 

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(iv)         Subject to the provisions of this Section 4.01(d), if Tenant is
unable to perform Tenant’s Initial Work or open for the conduct of business to
the extent resulting from any Landlord Delay other than a Landlord Delay
resulting from a Violation, and (1) Landlord fails to cure such Landlord Delay
within 5 Business Days after notice thereof from Tenant indicating the specific
cause of such Landlord Delay, together with reasonable evidence demonstrating
that such Landlord Delay is the sole reason Tenant is unable to perform Tenant’s
Initial Work or open for the conduct of business and (2) Landlord does not
dispute, in good faith, such determination by Tenant (or, if Landlord does
dispute such determination, and Tenant’s position in such dispute ultimately
prevails), then the Rent Commencement Date shall be extended 1 day for each day
such inability continues until the earlier to occur of (x) such Landlord Delay
is cured and (y) the date Tenant is able to perform Tenant’s Initial Work or
open for the conduct of business. Any simultaneous delays under this clause (iv)
relating to a Landlord Delay other than a Landlord Delay resulting from a
Violation and under clause (iii) above relating to a Violation shall be deemed
to run concurrently and not consecutively to the extent of Tenant’s actual delay
in performing Tenant’s Initial Work caused by such simultaneous delays and shall
not be “double” counted.

 

(e)          Following the execution of this Lease, Landlord and Tenant shall
reasonably cooperate to meet quarterly to discuss the progress of the Base
Building Work and Landlord’s Work. At such quarterly meetings the parties shall
discuss, among other things, the design elements of Tenant’s Initial Work.

 

(f)          Notwithstanding anything to the contrary contained herein, Landlord
shall have the right to install rated partitions around the core of the Building
substantially as shown on Exhibit X in connection with the performance of the
Base Building Work and/or Landlord’s Work. Tenant shall have the right to
perform Tenant’s Initial Work within the partitioned area subject to Section
4.01(c), provided that Tenant shall not remove such partitions, or connect or
attempt to connect to, disconnect, move, disturb or interfere with in any way,
the base building systems located within the partitioned area, or seek any Sign
Offs with respect to Tenant’s systems connecting to any base building systems,
until Landlord has obtained all Sign Offs with respect to such base building
systems and given notice thereof to Tenant; provided, further, that Landlord
agrees to reasonably cooperate with Tenant to allow Tenant to perform work
behind such rated partitions to the extent necessary in connection with Tenant’s
Initial Work. Upon the issuance of all Sign Offs with respect to the base
building systems, Landlord shall promptly deliver notice thereof to Tenant and
thereafter Tenant may remove such partitions (it being agreed that Tenant may
elect to either remove such partitions and Landlord shall reimburse Tenant for
the reasonable out-of-pocket costs incurred by Tenant in connection with such
removal or to have Landlord remove such partitions at Landlord’s cost and
expense) and connect to base building systems. “Sign Offs” means any applicable
sign-offs from any applicable governmental authority required for the
performance the Base Building Work, Landlord’s Work, Tenant’s Initial Work or to
obtain the TCO, as applicable.

 

(g)          Any dispute between Landlord and Tenant arising under this Section
4.01 shall be resolved by arbitration conducted in accordance with the
provisions of Section 8.09.

 

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4.02         Alterations. (a)  Except as hereinafter expressly provided, Tenant
shall make no improvements, changes or alterations in or to the Premises
(“Alterations”) without Landlord’s prior approval, which approval shall not be
unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoing,
Landlord’s approval shall not be required for (x) minor Alterations which are
purely decorative in nature such as wallpapering, millwork, painting and
carpeting (collectively, “Decorative Alterations”) and (y) Non-Material
Alterations; provided, that (A) with respect to Decorative Alterations and
Non-Material Alterations, Tenant shall deliver notice thereof to Landlord at
least 10 Business Days prior to the commencement thereof, including detailed
plans and specifications for any Non-Material Alteration (except to the extent
the relevant Non-Material Alteration is of such a minor nature that it would not
be customary industry practice for landlords of First Class Office Buildings to
require their tenants to prepare plans and/or specifications for such work) and
(B) Tenant shall adhere to the other applicable requirements of this Section
4.02. “Non-Material Alteration” means Alterations that (i) are limited to the
interior of the Premises and do not affect the exterior (including the
appearance) of the Building or any portion thereof, (ii) are not structural and
do not adversely affect the strength of the Building or any portion thereof,
(iii) do not affect the usage or the functioning of any of the Building systems,
(iv) do not affect other tenants or occupants of the Building, (v) do not
require a change to the Building’s certificate of occupancy, (vi) do not require
a permit from the New York City Department of Buildings and (vii) do not exceed
the Non-Material Alterations Cap. The “Non-Material Alterations Cap” means an
aggregate of $100,000 per full floor of the Premises for all Non-Material
Alterations performed by Tenant in any rolling 12-month period, Subject to CPI
Increases (as hereinafter defined).

 

(b)          Tenant, in connection with any Alteration, shall comply with the
Rules and Regulations, the Tenant Design Standards annexed hereto as Exhibit I-1
and the Construction Rules annexed hereto as Exhibit I-2, as such Tenant Design
Standards and/or Construction Rules may be amended by Landlord from time to
time; provided, that Tenant shall not be bound by any such amendment that (i)
imposes, except to a de minimis extent, any new or increased costs or financial
obligations on Tenant (unless any such cost or financial obligation is the
result of compliance with any Laws) or (ii) unreasonably affects the conduct of
Tenant’s business in the Premises. Tenant shall not proceed with any Alteration
(other than Decorative Alterations) unless and until Landlord approves Tenant’s
plans and specifications therefor. In such instances in which Landlord’s
approval shall be required with respect to the performance of any Alteration,
Landlord shall, within 15 Business Days following receipt of Tenant’s plans for
the performance of such Alteration (or (i) with respect to Tenant’s plans for
the performance of Tenant’s Initial Work, within 25 Business Days and (ii) in
the event of a resubmission of Tenant’s Plans not involving material changes,
within 10 Business Days with respect to Tenant’s plans for the performance of
Tenant’s Initial Work and within 5 Business Days with respect to Tenant’s plans
for the performance of any other Alteration), advise Tenant of Landlord’s
approval or disapproval of such plans or any part thereof. If Landlord shall
fail to approve or disapprove Tenant’s plans or any part thereof within such 15
Business Day period (or such 25 Business Day period for plans for Tenant’s
Initial Work or such 10 Business Day or 5 Business Day period, as applicable,
for resubmissions not involving material changes), Tenant may give to Landlord a
notice of such failure, which notice shall contain a legend in not less than 14
point font bold upper case letters as follows: “FAILURE TO APPROVE OR DISAPPROVE
TENANT’S PLANS WITHIN 5 BUSINESS DAYS SHALL RESULT IN LANDLORD’S DEEMED APPROVAL
OF TENANT’S PLANS”, and if Landlord shall fail to approve or disapprove such
Tenant’s plans within such 5 Business Day period, Landlord shall be deemed to
have approved such plans. If Landlord shall disapprove such plans (or any part
thereof), Landlord shall set forth its reasons for such disapproval in writing
and in reasonable detail and identify those portions of the plans so
disapproved. Any review or approval by Landlord of plans and specifications with
respect to any Alteration is solely for Landlord’s benefit, and without any
representation or warranty to Tenant with respect to the adequacy, correctness
or efficiency thereof, its compliance with Laws or otherwise.

 

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(c)          Tenant shall pay to Landlord within 30 days following demand
Landlord’s reasonable, actual third-party out-of-pocket costs and expenses
(including, without limitation, the reasonable fees of any architect or engineer
employed by Landlord for such purpose) for reviewing plans and specifications
and inspecting Alterations, in addition to any incremental cost incurred by
Landlord as a result of the use of any standby personnel reasonably required as
a result of any Alteration. Landlord shall not be entitled to charge (nor shall
any Affiliate of Landlord charge) a supervisory or other review fee, except as
expressly provided in this Lease.

 

(d)          Before proceeding with any Alteration (other than Tenant’s Initial
Work) that will cost more than $500,000.00, Subject to CPI Increases (exclusive
of the costs of decorating work and items constituting Tenant’s Property), as
estimated by a reputable contractor designated by Landlord, Tenant shall furnish
to Landlord one of the following (as selected by Tenant): (i) a cash deposit,
(ii) a performance bond and a labor and materials payment bond (issued by a
corporate surety licensed to do business in New York reasonably satisfactory to
Landlord) or (iii) an irrevocable, unconditional, negotiable letter of credit,
issued by a bank and in a form satisfactory to Landlord; each to be equal to
110% of the cost of the Alteration, estimated as set forth above. Any such
letter of credit shall be for one year and shall be renewed by Tenant each and
every year until the Alteration in question is completed and shall be delivered
to Landlord not less than 30 days prior to the expiration of the then current
letter of credit, failing which Landlord may present the then current letter of
credit for payment. Upon (A) the completion of the Alteration in accordance with
the terms of this Section 4.02 and (B) the submission to Landlord of (x) proof
evidencing the payment in full for said Alteration and (y) written unconditional
lien waivers of mechanics’ liens and other liens on the Project from all
contractors performing said Alteration, the security deposited with Landlord (or
the balance of the proceeds thereof, if Landlord has drawn on the same) shall be
returned to Tenant. Upon Tenant’s failure properly to perform, complete and
fully pay for any Alteration, as determined by Landlord, Landlord may, upon
notice to Tenant, draw on the security deposited under this Section 4.02(d) to
the extent Landlord deems necessary in connection with said Alteration, the
restoration and/or protection of the Premises or the Project and the payment of
any costs, damages or expenses resulting therefrom; provided however that
Landlord shall not draw upon such security if Tenant is then contesting in good
faith its obligation to make payment and Tenant has so notified Landlord of same
unless Landlord determines in its sole discretion that same is necessary for
Landlord to pay any costs or expenses so that Landlord will not be subject to
criminal penalty or any other fine or charge or so that the Premises or any part
thereof or the Project, or any part thereof, shall not be subjected to any lien
or encumbrance or otherwise adversely affected, by reason of Tenant’s failure to
so properly perform, complete and/or fully pay for such Alteration.
Notwithstanding the foregoing, the provisions of this Section 4.02(d) shall not
apply with respect to any Alteration by Tenant so long as Tenant is (1) the
original named Tenant, (2) an entity created by merger, reorganization or
recapitalization of or with the original named Tenant, (3) a purchaser of all or
substantially all of the original named Tenant’s stock or assets or (4) an
Affiliate of the original named Tenant (each, an “Intercept Tenant”).

 

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(e)          Tenant shall obtain (and furnish copies to Landlord of) all
necessary governmental permits and certificates for the commencement and
prosecution of Alterations and for final approval thereof upon completion, and
shall cause Alterations to be performed in compliance therewith, and in
compliance with all Laws (including, without limitation, Section 5 of the New
York State Lien Law) and with the plans and specifications approved by Landlord.
At Tenant’s request, Landlord shall execute all required permit forms prior to
the submission of plans by Tenant and/or Landlord’s review of such plans, but
the execution of such forms by Landlord shall not constitute approval of the
Alterations in question. Alterations shall be diligently performed in a good and
workmanlike manner, using new materials and equipment at least equal in quality
and class to the then standards for the Building established by Landlord.
Alterations shall be performed by architects, engineers and contractors first
approved by Landlord (which approval shall not be unreasonably withheld or
delayed); provided, that any Alterations which involve a connection(s) or a
tie-in to the systems of the Building shall be performed only by the
contractor(s) designated by Landlord (provided, further, that the charges of
such contractor(s) shall be reasonably competitive with the charges of
contractor(s) providing similar services to other First Class Office Buildings).
Landlord hereby agrees that the contractors, subcontractors, architects,
engineers and/or expeditors listed on Exhibit K attached hereto are hereby
approved by Landlord on the date hereof; provided, that Landlord may, from time
to time, reasonably remove or add one or more contractors, subcontractors,
architects, engineers and/or expeditors from or to Exhibit K in Landlord’s
reasonable discretion. The performance of any Alteration or any other work in
the Project shall not be carried out in a manner which would violate the
construction rules and regulations set forth in Exhibit I-2. Tenant shall
immediately stop the performance of any work or service by any party if Landlord
notifies Tenant that continuing such performance would violate the construction
rules and regulations set forth in Exhibit I-2, and Tenant shall not resume the
performance of such work or service until such time as the same may be performed
in a manner which shall not violate such rules and regulations.

 

(f)          Throughout the performance of Alterations, Tenant and Tenant’s
Contractors (as defined in Exhibit J) shall carry insurance meeting the
requirements set forth in Sections (B) and (C) of Exhibit J attached hereto and
Section 7.02 of this Lease. Tenant shall furnish Landlord with evidence that
such insurance is in effect no less than 10 days prior to the commencement of
any Alterations and, on request, at reasonable intervals thereafter during the
continuance of Alterations. Tenant shall require that all insurance policies
carried by any Tenant’s Contractors include clauses providing that each
insurance underwriter shall waive all of its rights of recovery by subrogation,
or otherwise, against Landlord, The Related Companies, L.P., Oxford Hudson Yards
LLC, Mitsui Fudosan America, Inc., MFA 55 HY LLC, 55 Hudson Yards Member LLC and
any of such entities’ officers, agents, or employees. A waiver of subrogation
shall be effective as to any individual or entity even if such individual or
entity (a) would otherwise have a duty of indemnification, contractual or
otherwise, (b) did not pay the insurance premium directly or indirectly, and (c)
whether or not such individual or entity has an insurable interest in the
property damaged. In the event that Tenant or any of Tenant’s Contractors fails
to maintain the coverages or limits as required herein, Landlord may obtain such
insurance as an agent of such party without prior notice. Any premiums paid by
Landlord to effect such coverages together with interest thereon at the Interest
Rate from the date paid by Landlord until the date reimbursed by Tenant shall be
payable by Tenant to Landlord; provided however that to the extent such
insurance shall be cancelable, then such premiums shall be pro-rated and
reimbursed to the extent funds are returned to Landlord by the insurance company
as soon as Tenant or any of Tenant’s Contractors places the appropriate
insurance coverage.

 

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(g)          Should any mechanics’ or other liens be filed against any portion
of the Project by reason of the acts or omissions of, or because of a claim
against, Tenant or anyone claiming under or through Tenant, Tenant shall cause
the same to be canceled or discharged of record by bond or otherwise within 30
days after notice from Landlord. If Tenant shall fail to cancel or discharge
said lien or liens within said 30 day period, or if Landlord is required to
discharge any of said liens prior to the end of said 30 day period pursuant to
any Superior Mortgage or Superior Lease, Landlord may cancel or discharge the
same and, upon Landlord’s demand, Tenant shall reimburse Landlord for all actual
out-of-pocket costs incurred in canceling or discharging such liens, together
with interest thereon at the Interest Rate from the date incurred by Landlord to
the date of payment by Tenant, such reimbursement to be made within 30 days
after receipt by Tenant of a written statement from Landlord as to the amount of
such costs. Tenant shall indemnify and hold Landlord harmless from and against
all actual out-of-pocket costs (including, without limitation, reasonable
attorneys’ fees and disbursements and costs of suit), losses, liabilities or
causes of action arising out of or relating to any Alteration, including,
without limitation, any mechanics’ or other liens asserted in connection with
such Alteration.

 

(h)          Tenant shall deliver to Landlord, within 30 days after the
completion of an Alteration, “as-built” drawings thereof using the AutoCAD
Computer Assisted Drafting and Design System, Version 12 or later or such other
system or medium as Landlord may accept. During the Term, Tenant shall keep
records of Alterations costing in excess of $50,000 including plans and
specifications, copies of contracts, invoices, evidence of payment and all other
records customarily maintained in the real estate business relating to
Alterations and the cost thereof and shall, within 30 days after demand by
Landlord, furnish to Landlord copies of such records.

 

(i)          All Alterations to and Fixtures installed by Tenant in the Premises
shall be fully paid for by Tenant in cash and shall not be subject to
conditional bills of sale, chattel mortgages, or other title retention
agreements.

 

(j)          Landlord shall design the Building with the intent of achieving a
“Gold” level LEED certification with respect thereto. All Alterations shall be
designed and performed by Tenant in compliance with the requirements set forth
on Exhibit P attached hereto. Landlord shall cooperate with Tenant, at no cost
to Landlord, by providing to Tenant and Tenant’s consultants any necessary and
pertinent documentation reasonably requested by Tenant which relates to Building
systems, materials, and site characteristics required for Tenant to apply for
LEED certification for the Premises.

 

(k)          Any dispute between Landlord and Tenant arising under this Section
4.02 shall be resolved by arbitration conducted in accordance with the
provisions of Section 8.09.

 

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4.03         Landlord’s and Tenant’s Property. (a)  Subject to Section 4.03(d),
all fixtures (other than movable trade fixtures constituting Tenant’s Property),
equipment (other than movable equipment constituting Tenant’s Property),
improvements and appurtenances attached to or built into the Premises, whether
or not at the expense of Tenant, and all fixtures, equipment, improvements and
appurtenances attached to or built into any other area of the Building by or on
behalf of Tenant (collectively, “Fixtures”), shall be and remain a part of the
Building and shall not be removed by Tenant except as expressly provided to the
contrary in this Lease. All Fixtures shall be the property of Tenant during the
Term and, upon expiration or earlier termination of this Lease, unless expressly
provided otherwise in this Lease, shall become the property of Landlord.

 

(b)          All movable partitions, business and trade fixtures, machinery and
equipment, and all furniture, furnishings and other articles of movable personal
property owned by Tenant and located in the Premises or elsewhere in the
Building (collectively, “Tenant’s Property”) shall be and shall remain the
property of Tenant and may be removed by Tenant at any time during the Term;
provided, that if any Tenant’s Property is removed, Tenant shall repair any
damage to the Premises or to the Building resulting from the installation and/or
removal thereof. Notwithstanding the foregoing, subject to Section 4.03(d), any
equipment or other property paid for with any allowance or credit granted by
Landlord to Tenant shall not be considered Tenant’s Property and shall be and
remain a part of the Premises or such other location in the Building in which
such equipment or other property is located, shall, upon the expiration or
earlier termination of this Lease, be the property of Landlord and shall not be
removed by Tenant.

 

(c)          At or before the Expiration Date, or within 30 days after any
earlier termination of this Lease, Tenant, at Tenant’s expense, shall remove
Tenant’s Property from the Building (except such items thereof as Landlord shall
have expressly permitted in writing to remain, which shall become the property
of Landlord), and Tenant shall repair any damage to the Premises or the Building
resulting from any installation and/or removal of Tenant’s Property. Any items
of Tenant’s Property which remain in the Building after the Expiration Date, or
more than 30 days after an earlier termination of this Lease, may, at the option
of Landlord, be deemed to have been abandoned, and may be retained by Landlord
as Landlord’s property or disposed of by Landlord, without accountability, in
such manner as Landlord shall determine, at Tenant’s expense.

 

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(d)          Landlord, by notice given to Tenant at any time prior to or within
60 days after the Expiration Date or any earlier termination of this Lease, may
require Tenant, notwithstanding Section 4.03(a), to remove all or any Specialty
Installations. If Landlord shall give such notice, then Tenant, at Tenant’s
expense, on or prior to the later of (x) the Expiration Date and (y) the date
that is 30 days after the giving of such notice by Landlord, shall either (i)
remove the Specialty Installations from the Premises and the Building, repair
and restore the Premises and the Building to the condition existing prior to
installation thereof and repair any damage to the Premises or to the Building
due to such removal (such removal and repair work is collectively hereinafter
referred to as the “Restoration Work”) or (ii) elect by written notice to
Landlord for Landlord to perform the Restoration Work, in which event Tenant
shall pay or reimburse Landlord for the costs thereof within 30 days after
demand therefor. Notwithstanding the foregoing, Tenant, at the time Tenant
submits to Landlord Tenant’s plans and specifications for any Alterations, may
request in writing that Landlord specifically identify any Specialty
Installations shown on Tenant’s plans and specifications which Tenant must
remove at the end of the Term (and restore the Premises and the Building to its
condition existing prior to the installation of such Specialty Installations).
The term “Specialty Installations” shall mean installations consisting of
vaults, safes, poured concrete or similar raised flooring, internal staircases,
vertical and horizontal risers, dumbwaiters, vertical transportation systems,
roof equipment, supplemental HVAC equipment, kitchen facilities (but not pantry
facilities), private bathrooms, other installations which penetrate the slabs of
the Premises, Alterations which affect the Building’s curtain wall (provided
that Restoration Work in connection with any such Alterations affecting the
Building’s curtain wall shall be performed by Landlord at Tenant’s expense),
installations in areas of the Building other than the Premises and any other
installations which are not customary installations for tenants occupying
premises comparable to the Premises for general, administrative and executive
office use as permitted under this Lease. The provisions of this Section 4.03(d)
shall survive the expiration or other termination of this Lease.

 

4.04         Access and Changes to Building. (a)  Landlord reserves the right,
at any time, to make changes in or to the Project as Landlord may deem necessary
or desirable, and Landlord shall have no liability to Tenant therefor, provided
any such change does not deprive Tenant of access to the Premises through a
Building lobby and the Elevators and does not affect the first-class nature of
the Project. Landlord may install and maintain pipes, fans, ducts, wires and
conduits within or through the walls, floors or ceilings of the Premises;
provided, that the same (i) are installed within the interior of the walls of
the Premises or the floors or ceilings thereof, at Landlord’s sole cost and
expense or, if installed adjacent to the interior walls of the Premises or the
floors or ceilings of the Premises, if appropriate, shall be located in boxed
enclosures and adequately furred and (ii) shall not, except to a de minimis
extent, reduce the rentable square footage of the Premises or the ceiling
height, provided, however, that to the extent there are alternative locations
for the pipes and conduits outside of the Premises that provide the same
service, do not cost more (by more than a de minimis amount, unless Tenant,
after being advised of the incremental cost, agrees to pay such cost to
Landlord) and do not inconvenience or otherwise adversely affect Landlord or
other existing or future tenants of the Building, Tenant shall have the right to
require Landlord to use such alternative locations. Landlord shall restore, at
Landlord’s cost, to substantially the same condition existing prior to such work
by Landlord, any damage to any Fixtures or Tenant’s Property caused by the
performance of any such installation or maintenance work by Landlord. In
exercising its rights under this Section 4.04, Landlord shall use reasonable
efforts to minimize any interference with Tenant’s use of the Premises for the
ordinary conduct of Tenant’s business (but without any obligation to utilize
overtime or premium pay labor except as otherwise provided under Section
3.02(e), applied mutatis mutandis). Tenant shall not have any easement or other
right in or to the use of any door or any passage or any concourse or any plaza
connecting the Building with any other building or to any public conveniences,
and the use of such doors, passages, concourses, plazas and conveniences may,
without notice to Tenant, be regulated or discontinued at any time by Landlord;
provided, that Tenant shall at all times have reasonable access to the Premises
through the Elevators and the applicable Building lobby.

 

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(b)          Except for the space within the inside surfaces of all walls, hung
ceilings, floors, windows and doors bounding the Premises, all of the Building,
including, without limitation, exterior Building walls, core corridor walls and
doors and any core corridor entrance, any terraces or roofs adjacent to the
Premises, and any space in or adjacent to the Premises used for shafts, stacks,
pipes, conduits, fan rooms, base building telecommunications or technical rooms,
electrical closets, ducts, electric or other utilities, sinks or other Building
facilities, and the use thereof, as well as access thereto through the Premises,
are reserved to Landlord and are not part of the Premises. Subject to Section
12.04, Landlord reserves the right to change the name or address of the Project
or any portion thereof at any time and from time to time. Upon reasonable prior
notice to Landlord, Landlord will reasonably cooperate with Tenant (at no cost
or liability to Landlord) to coordinate access to floors immediately above and
below the Premises during Tenant’s Initial Work and during the performance of
any subsequent Alteration so that Tenant may perform certain aspects of Tenant’s
Initial Work (e.g., installing certain plumbing, duct or cabling work) or such
subsequent Alteration, as applicable. Any such access shall be subject to the
express terms and conditions of each tenant’s lease relating to such space
immediately above and/or below the Premises and any requirements imposed by any
such tenant pursuant to such tenant’s lease in connection with such access and
the indemnity provisions set forth in Section 6.12(b) shall apply in connection
therewith.

 

(c)          Landlord shall have no liability to Tenant if at any time any
windows of the Premises are either temporarily darkened or obstructed by reason
of any repairs, improvements, maintenance and/or cleaning in or about the
Building (or permanently darkened or obstructed if required by Law) or covered
by any translucent material for the purpose of energy conservation, or if any
part of the Project, other than the Premises, is temporarily or permanently
closed or inoperable; provided that the same does not deprive Tenant of access
to the Premises through a Building lobby and the Elevators. If at any time the
windows of the Premises are temporarily darkened or obstructed as permitted in
the immediately preceding sentence, Landlord shall, to the extent permitted by
Law or applicable governmental authority, perform such repairs, maintenance,
alterations or improvements as reasonably promptly as practicable and as
reasonably necessary to re-open the same, and, Landlord shall use commercially
reasonable efforts to minimize the period of time during which such windows are
temporarily darkened or obstructed.

 

(d)          Landlord and persons authorized by Landlord shall have the right,
upon reasonable prior notice to Tenant (except in an emergency and which, in the
case of non-emergency inspections or work to be performed by Landlord within the
Premises, shall be at least 24 hours in advance), to enter the Premises
(together with any necessary materials and/or equipment), to inspect or perform
such work as Landlord may reasonably deem necessary or to exhibit the Premises
to prospective purchasers or, during the last 18 months of the Term, to
prospective tenants, or for any other purpose as Landlord may reasonably deem
necessary or desirable. Notwithstanding the foregoing, Landlord shall not bring
and/or store more materials and equipment in the Premises to perform such work
than are reasonably necessary at any time. Tenant shall have the right to have a
representative of Tenant accompany Landlord on any entry into the Premises, but
Landlord’s rights to conduct any such entry, and the timing of such entry, shall
not be affected if Tenant shall fail to make such representative available.
Landlord shall have no liability to Tenant by reason of any such entry. Landlord
shall not be required to make any improvements or repairs of any kind or
character to the Premises during the Term. In connection with any access to the
Premises by Landlord and persons authorized by Landlord, Landlord and such
persons shall exercise commercially reasonable efforts to minimize interference
with Tenant’s access to, and use of, the Premises for the normal conduct of
Tenant’s business therein.

 

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(e)          Tenant shall have the right to reasonably designate, by written
notice to Landlord, certain areas of the Premises, not to exceed 3,000 rentable
square feet, in the aggregate, as secure areas (each, a “Secure Area”) to which
Landlord shall not have access without being accompanied by a representative of
Tenant (except in the case of an emergency or when Tenant does not make a
representative available upon 2 Business Days’ prior written notice); provided,
that the Secured Area does not block access to base building systems or other
areas of the Building to which Landlord requires regular access. Landlord shall
not be required to provide cleaning services or other services which require
entry to such Secure Area. Landlord shall not have liability to Tenant for any
failure of Landlord to perform any of its obligations hereunder by reason of
Landlord’s inability to enter any Secure Area. Notwithstanding anything in this
Lease to the contrary, in no event shall the obligations of Landlord under this
Section 4.04(e) in any way be construed to obligate Landlord to pay overtime or
premium rates for work, materials or access to the Secured Area or any other
area of the Premises, and in no event shall Landlord be deemed to be obligated
to spend any greater sums of money to perform any work than it would have had to
pay if Landlord, and its agents, employees and contractors had obtained access
to the Secured Area.

 

4.05         Repairs. (a)  Tenant shall keep the Premises (including, without
limitation, all Fixtures) in good condition and, upon expiration or earlier
termination of the Term, shall surrender the same to Landlord in the same
condition as when first occupied, reasonable wear and tear excepted and
otherwise in the condition required under Section 4.03(c). Tenant’s obligation
shall include, without limitation (and notwithstanding the provisions of Section
4.05(b) below), the obligation to repair all damage caused by Tenant, its
agents, employees, invitees and licensees to the equipment and other
installations in the Premises or anywhere in the Building. Any maintenance,
repair or replacement to the windows, the Building systems, the Building’s
structural components or any areas outside the Premises and which is Tenant’s
obligation to perform shall be performed by Landlord at Tenant’s reasonable
expense. Tenant shall not commit or allow to be committed any waste or damage to
any portion of the Premises or the Project.

 

(b)          Subject to the second sentence of Section 4.05(a), Landlord, at
Landlord’s expense (but subject to reimbursement by way of Operating Expenses to
the extent includable therein), shall operate, maintain, repair and replace, if
necessary, (i) all structural portions of the Building, such as, by way of
example only, the roof, foundation, footings, exterior walls, load-bearing
columns, ceiling and floor slabs, windows, window sills and sashes, (ii) all
common and public service areas of the Building, including, without limitation,
all common elevators, (iii) all Building systems serving the common and public
service areas and the Premises and (iv) all fixtures located in the core
restrooms in the Premises, throughout the Term, and in such a manner as is
consistent with the maintenance, operation and repair standards of First Class
Office Buildings; provided, that Landlord’s obligations under this Section
4.05(b) shall be limited to areas of, and installations within, the Building
which Tenant is entitled to use or which otherwise serve the Premises and
Landlord shall have no liability to Tenant for any failure to maintain such
standards except to the extent such failure materially and adversely affects
Tenant’s use and enjoyment of the Premises. Notwithstanding the foregoing, if
any damage repaired by Landlord under this Section 4.05(b) is caused by Tenant
or any of Tenant’s agents, employees, invitees and licensees, such repair shall
be performed by Landlord at Tenant’s reasonable expense.

 

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4.06         Compliance with Laws; Hazardous Materials. (a)  Tenant shall comply
with all laws, ordinances, rules, orders and regulations (present, future,
ordinary, extraordinary, foreseen or unforeseen) of any governmental, public or
quasi-public authority and of the New York Board of Fire Underwriters and any
other entity performing similar functions, at any time duly in force
(collectively “Laws”), the application of which is attributable to, any work,
installation, occupancy, use or manner of use by Tenant of the Premises or any
part thereof, except as expressly set forth in the next sentence. Nothing
contained in this Section 4.06 shall require Tenant to make any (i) structural
changes or changes to the base building systems or (ii) changes to the core
bathrooms (but not any private, executive or other bathrooms installed by
Tenant, with respect to which Tenant shall be responsible for compliance with
Laws as set forth in the first sentence of this paragraph) in the Premises,
unless, in the case of either of clauses (i) or (ii), the same are necessitated
by reason of Tenant’s performance of any Alterations, Tenant’s manner of use of
the Premises or the use by Tenant of the Premises for purposes other than normal
and customary ordinary office purposes. Tenant shall procure and maintain all
licenses and permits required for its business. Notwithstanding the provisions
of Section 4.06(a), Tenant, at its own cost and expense, may contest, in any
manner permitted by Law, the validity or the enforcement of any Laws with which
Tenant is required to comply pursuant to this Lease; provided that (A) any such
contest and/or Tenant’s non-compliance with any such Laws shall not (I) subject
any Landlord Indemnified Party to (x) criminal prosecution, (y) material fine or
(z) any other civil liability that would adversely affect the operation of the
Building or the rights of other tenants or occupants of the Building, (II)
subject the Building (or any portion thereof) to lien or sale or cause, or be
reasonably likely to cause, the same to be condemned or vacated or (III) be in
violation of any Superior Mortgage or Superior Lease; (B) Tenant shall first
deliver to Landlord a surety bond issued by a surety company of recognized
responsibility, or other security reasonably satisfactory to Landlord,
indemnifying and protecting Landlord and any Superior Mortgagee or Superior
Lessor against any loss, cost, liability, damage or expenses (including, without
limitation, interest and penalties and reasonable attorneys’ fees and
disbursements) which could arise by reason of such non-compliance, which bond or
other security (or the balance of the proceeds thereof, if Landlord has drawn on
the same) shall be released by Landlord promptly upon resolution of such
contest; and (C) Tenant shall promptly, diligently and continuously prosecute
such contest and shall keep Landlord informed, on a regular basis, of the status
of such contest.

 

(b)          Landlord, at Landlord’s expense (but subject to reimbursement by
way of Operating Expenses to the extent includable therein), shall comply or
cause compliance with all Laws affecting the public and common areas of the
Building, the Building systems or the Premises or the use and occupancy thereof
(except (x) as expressly set forth in Section 4.06(a) above and (y) that
Landlord shall have no liability to Tenant for any failure to so comply or cause
compliance except to the extent such failure materially and adversely affects
Tenant’s use and enjoyment of the Premises) subject to Landlord’s right to
contest and defer compliance with such Laws pursuant to appropriate proceedings,
provided that Landlord shall not have the right to defer such compliance if (i)
such non-compliance or contest shall prevent Tenant from lawfully occupying the
Premises for the use permitted hereunder or (ii) noncompliance threatens the
safety of persons or property. On the Possession Date, Landlord shall deliver
the Premises to Tenant in substantial compliance with all applicable Laws
(including Laws with respect to Hazardous Materials) and free of Hazardous
Materials (as hereinafter defined). If, during the Term, Landlord or its
employees, contractors or agents install, use, release, store or place any
Hazardous Materials in or about (1) the Premises or (2) to the extent same
materially and adversely affects Tenant’s use and enjoyment of the Premises, the
Building or the Project, in any case in violation of applicable Laws, then
Landlord shall be obligated to remove and dispose of such Hazardous Materials in
compliance with all Laws (including, without limitation, any Laws with respect
to Hazardous Materials).

 

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(c)          (i)          Tenant shall not cause or permit Hazardous Materials
to be used, transported, stored, released, handled, produced or installed in, on
or from the Premises or the Building other than customary office, cleaning
and/or maintenance and/or construction supplies brought into, used in and/or
kept upon the Premises or the Building if and to the extent permitted pursuant
to Laws and in addition, with respect to construction supplies, if and to the
extent used in accordance with good construction practices. The term “Hazardous
Materials” means any substance or material defined by any Law that is now or may
hereafter be applicable, as “hazardous,” “toxic” or words of similar import.

 

(ii)         In the event of a breach of the provisions of this Section 4.06(c),
Landlord shall, in addition to all of its rights and remedies under this Lease
and pursuant to Laws, require Tenant to remove any such Hazardous Materials from
the Premises or the Building in the manner prescribed for such removal by
applicable Laws, and the indemnity provisions set forth in Section 6.12(b) shall
apply in connection therewith.

 

4.07         Tenant Advertising. Tenant shall not use, and shall cause each of
its affiliates not to use, the name or likeness of the Building or the Project
in any advertising (by whatever medium) without Landlord’s consent (not to be
unreasonably withheld or delayed), provided, however, that Tenant may use the
name and address of the Building on its stationary and in advertisements for
identification purposes only.

 

4.08         Right to Perform Tenant Covenants. If Tenant fails to perform any
of its obligations under this Lease, Landlord, any Superior Lessor or any
Superior Mortgagee (each, a “Curing Party”) may perform the same at the expense
of Tenant (a) immediately and without notice in the case of emergency or in case
such failure may result in a violation of any Law or in a cancellation of any
insurance policy maintained by Landlord; provided, that Landlord agrees to
provide such notice as is reasonably practicable under the circumstances (which
the parties agree may be no notice) in the event of the circumstances described
in this clause (a) and (b) in any other case if such failure continues beyond
any applicable notice and grace period. If a Curing Party performs any of
Tenant’s obligations under this Lease, Tenant shall pay to Landlord (as
Additional Charges) the costs thereof (including all reasonable fees and costs,
including reasonable legal fees and disbursements, incurred by such Curing Party
in connection therewith), together with interest at the Interest Rate from the
date incurred by the Curing Party until paid by Tenant, within 30 days after
receipt by Tenant of a statement as to the amounts of such costs, accompanied by
invoices or other reasonable supporting documentation. If the Curing Party
effects such cure by bonding any lien which Tenant is required to bond or
otherwise discharge (after the giving of any required notice and the expiration
of any applicable grace periods), Tenant shall obtain and substitute a bond for
the Curing Party’s bond and shall reimburse the Curing Party for the cost of the
Curing Party’s bond. “Interest Rate” means the lesser of (i) the base rate from
time to time announced by Citibank, N.A. (or, if Citibank, N.A. shall not exist
or shall cease to announce such rate, such other bank in New York, New York, as
shall be designated by Landlord in a notice to Tenant) to be in effect at its
principal office in New York, New York plus 3% and (ii) the maximum rate
permitted by law.

 

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4.09         Telecommunications; Shaft Space. (a)  Tenant shall be responsible,
at its sole cost and expense, for bringing telecommunication service, data
wiring service and cable television service to the Premises. Landlord shall
provide two separate points of entry for Tenant’s telecommunications
requirements from such point of entry to the Premises and from the Premises to
the roof of the Building. Each separate sleeve within the Building core shall
accommodate two (2) 2” conduits for Tenant’s telecommunications requirements as
shown on Exhibit U. At Tenant’s request, Landlord shall install two (2) 2”
conduits in each sleeve and Tenant shall reimburse Landlord for the
out-of-pocket costs actually incurred by Landlord in connection with such
installation within 30 days after rendition of a bill therefor. Any installation
made by Tenant in such shaft space, including core drilling and the installation
of any conduit or wiring, shall be performed at Tenant’s sole cost and expense,
in accordance with all Laws and the Rules and Regulations, and shall constitute
an Alteration under this Lease. Tenant shall indemnify and save harmless
Landlord from and against all loss, damage, liability, cost and expense of any
nature (including, without limitation, reasonable attorneys’ fees and expenses)
by reason of accidents, damage, injury or loss to any and all persons and
property, or either, whosoever or whatsoever to the extent resulting from or
arising in connection with Tenant’s installation, use, maintenance and removal
of the equipment that Tenant installs in the shaft space and Tenant’s insurance
in respect of the Premises shall include coverage for any losses incurred in
connection with such installation, use, operation, maintenance and removal. Upon
the expiration of the Term, all of such fixtures and equipment installed in the
shaft space by Tenant shall be removed by Tenant at its sole cost and expense.

 

(b)          Tenant shall have the right, at Tenant’s sole cost and expense, to
contract for telecommunications service from any reputable carrier which serves
the area, subject to Landlord’s reasonable consent (which consent may include,
without limitation, the condition that such service provider enter into a
license agreement with Landlord which is reasonably satisfactory to Landlord),
and Landlord shall reasonably cooperate with Tenant and any such service
provider to whom Landlord consents in connection therewith (including, without
limitation, by providing to any such service provider reasonable access to the
Building and reasonably direct routes of travel within the Building), without
out-of-pocket cost, expense or liability to Landlord. Landlord shall not charge
Tenant for any service provider’s entry into the Building or use of shaft space.
Subject to the terms of this Lease, any cable or satellite television company
with whom Tenant contracts in accordance with the provisions of this Section
4.09(b) may provide television services to all floors of the Premises.

 

(c)          Landlord shall not be responsible for any delays occasioned by
failure of a telecommunications company to furnish any such services.

 

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ARTICLE 5

 

Assignment and Subletting

 

5.01         Assignment; Etc.   (a)  Subject to the further provisions of this
Article 5, neither this Lease nor the term and estate hereby granted, nor any
part hereof or thereof, shall be assigned, mortgaged, pledged, encumbered or
otherwise transferred voluntarily, involuntarily, by operation of law or
otherwise, and neither the Premises, nor any part thereof, shall be subleased,
be licensed, be used or occupied by any person or entity other than Tenant or be
encumbered in any manner by reason of any act or omission on the part of Tenant,
and no rents or other sums receivable by Tenant under any sublease of all or any
part of the Premises shall be assigned or otherwise encumbered, without the
prior consent of Landlord. Notwithstanding any provision of this Article 5 to
the contrary, but subject nevertheless to the provisions of Sections 5.01(b) and
(c) below, in no event shall Tenant be entitled to sublease any portion of the
Premises or assign this Lease or license any of Tenant’s rights hereunder (other
than to Affiliates of Tenant) prior to the earlier of (i) the date upon which
initial leases have been entered into for 92.5% of the space in the Building and
(ii) the date that is 18 months after the Rent Commencement Date (the “Initial
Lease-Up Restriction”); provided, that (1) the Initial Lease-Up Restriction
shall only apply to the extent Landlord then has available or reasonably expects
within the next 4 months to have available, comparable space in the Building for
a comparable term and (2) the Initial Lease-Up Restriction shall not apply to an
Excluded Sublease (as hereinafter defined). Landlord agrees to endeavor to
notify Tenant reasonably promptly after initial leases have been entered into
for 92.5% of the space in the Building. Except as hereinafter expressly
provided, the dissolution or direct or indirect transfer of control of Tenant
(however accomplished including, by way of example, the addition of new partners
or members or withdrawal of existing partners or members, or transfers of
interests in distributions of profits or losses of Tenant, issuance of
additional stock, redemption of stock, stock voting agreement, or change in
classes of stock) shall be deemed an assignment of this Lease regardless of
whether the transfer is made by one or more transactions, or whether one or more
persons or entities hold the controlling interest prior to the transfer or
afterwards. An agreement under which another person or entity becomes
responsible for all or a portion of Tenant’s obligations under this Lease shall
be deemed an assignment of this Lease. No assignment or other transfer of this
Lease and the term and estate hereby granted, and no subletting of all or any
portion of the Premises shall relieve Tenant of its liability under this Lease
or of the obligation to obtain Landlord’s prior consent to any further
assignment, other transfer or subletting. Any attempt to assign this Lease or
sublet all or any portion of the Premises in violation of this Article 5 shall
be null and void. Notwithstanding anything to the contrary contained in this
Section 5.01(a), the direct or indirect transfer of shares or other equity
interests in Tenant shall not constitute an assignment of this Lease and shall
not require Landlord’s consent if accomplished through a recognized stock
exchange or through the public “over-the-counter” securities market.

 

(b)          Notwithstanding Section 5.01(a), without the consent of Landlord or
application of the Initial Lease-Up Restriction or Section 5.05, this Lease may
be assigned to (i) an entity created by merger, reorganization or
recapitalization of or with Tenant or (ii) a purchaser of all or substantially
all of Tenant’s membership interests, stock or assets; provided, in the case of
both clause (i) and clause (ii), that (A) Landlord shall have received a notice
of such assignment from Tenant, (B) the assignee assumes by written instrument
satisfactory to Landlord all of Tenant’s obligations under this Lease, (C) such
assignment is for a valid business purpose and not to avoid any obligations
under this Lease, and (D) the assignee is a reputable entity of good character
and, immediately after giving effect to such assignment, shall have an aggregate
net worth (computed in accordance with GAAP) at least equal to $300,000,000.00.

 

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(c)          Notwithstanding Section 5.01(a), without the consent of Landlord or
application of the Initial Lease-Up Restriction or Section 5.05, Tenant may
assign this Lease or sublet all or any part of the Premises to an Affiliate of
Tenant; provided, that (i) Landlord shall have received a notice of such
assignment or sublease from Tenant; and (ii) in the case of any such assignment,
(A) the assignment is for a valid business purpose and not to avoid any
obligations under this Lease, and (B) the assignee assumes by written instrument
satisfactory to Landlord all of Tenant’s obligations under this Lease.
“Affiliate” means, as to any designated person or entity, any other person or
entity which controls, is controlled by, or is under common control with, such
designated person or entity. “Control” (and with correlative meaning,
“controlled by” and “under common control with”) means ownership or voting
control, directly or indirectly, of 35% or more of the voting stock, partnership
interests or other beneficial ownership interests of the entity in question.

 

(d)          Tenant may from time to time, subject to all of the provisions of
this Lease but without the consent of Landlord or application of the Initial
Lease-Up Restriction, permit portions of the Premises to be used or occupied
under so-called “desk sharing” arrangements by a Desk Space User; provided, that
(i) any such use or occupancy of desk or office space shall be without the
installation of demising walls separating such desk or office space, any
separate entrance or any signage identifying such Desk Space User, (ii) at any
time during the Term, the aggregate of the rentable square footage then used by
Desk Space Users pursuant to this Section 5.01(d) shall not exceed 10% of the
rentable square feet of the Premises, (iii) each Desk Space User shall use the
Premises in accordance with all of the provisions of this Lease, and only for
the use expressly permitted pursuant to this Lease, (iv) in no event shall the
use of any portion of the Premises by a Desk Space User create or be deemed to
create any right, title or interest of such Desk Space User in any portion of
the Premises or this Lease, (v) any such “desk sharing” arrangement shall
terminate automatically upon the termination of this Lease, (vi) Tenant shall
receive no rent or other payment or consideration for the use or occupancy of
any space in the Premises by any Desk Space User in excess of an allocable share
of the Rent reserved hereunder, (vii) each Desk Space User shall be engaged in a
business or activity which is in keeping with standards of the Building and
(viii) any such desk sharing arrangement is for a valid business purpose and not
to circumvent the provisions of this Article 5. Upon request of Landlord, Tenant
shall advise Landlord of any Desk Space Users in the Premises, and shall provide
(A) a description of the nature and character of the business being conducted in
the Premises by such Desk Space User and (B) the rentable square feet of the
Premises occupied by such Desk Space User, together with a copy of the
agreement, if any, relating to the use or occupancy of such portion of the
Premises by such Desk Space User. “Desk Space User” means a bona fide client,
service provider, or other person or entity with which Tenant has a significant,
ongoing business relationship.

 

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5.02         Landlord’s Right of First Offer. (a)  If Tenant desires to assign
this Lease or sublet all or part of the Premises for all or substantially all of
the then-remaining Term (other than in accordance with Sections 5.01(b) or (c)
or pursuant to an Excluded Sublease), Tenant shall give to Landlord notice
(“Tenant’s Offer Notice”) thereof, specifying (i) in the case of a proposed
subletting, the location of the space to be sublet (including the specific area
to be demised for sublet on any floor of the Premises) and the term of the
subletting of such space, (ii) (A) in the case of a proposed assignment,
Tenant’s good faith offer of the consideration Tenant desires to receive or pay
for such assignment (including any concessions Tenant desires to offer to the
proposed assignee) or (B) in the case of a proposed subletting for all or
substantially all of the then-remaining Term, Tenant’s good faith offer of the
rent which Tenant desires to receive for such proposed subletting (including
fixed rent, additional rent including proportionate shares, base years and/or
base amounts for any escalation rent to be paid on account of PILOT,
Impositions, taxes and operating expenses, electricity charges and other
pass-through expenses and the amount of any work allowance, rent abatement or
other tenant inducement, and any other proposed terms required by Landlord to
calculate the Net Effective Rental Tenant desires to receive for such proposed
subletting) and (iii) the proposed assignment or sublease commencement date. An
“Excluded Sublease” means Tenant’s right to sublease up to one (1) full floor of
the Premises at any time in one or more transactions.

 

(b)          Tenant’s Offer Notice shall be deemed an offer from Tenant to
Landlord whereby Landlord (or Landlord’s designee) may, at Landlord’s option,
(i) sublease such space from Tenant (if the proposed transaction is a sublease
of all or part of the Premises for all or substantially all of the
then-remaining Term), (ii) terminate this Lease (if the proposed transaction is
an assignment or a sublease of all or substantially all of the Premises or a
sublease of a portion of the Premises which, when aggregated with other
subleases then in effect, covers all or substantially all of the Premises, in
either case, for substantially all of the then-remaining Term), or (iii)
terminate this Lease with respect to the space covered by the proposed sublease
(if the proposed transaction is a sublease of part of the Premises for all or
substantially all of the then-remaining Term). Said option may be exercised by
Landlord by notice to Tenant within 30 days after a Tenant’s Offer Notice,
together with all information required pursuant to Section 5.02(a), has been
given by Tenant to Landlord. For the purposes of this Section 5.02
“substantially all of the then-remaining Term” shall mean that the term of the
proposed subletting shall expire within the last twelve (12) months of the then
Term.

 

(c)          If Landlord exercises its option under Section 5.02(b)(ii) to
terminate this Lease, then this Lease shall terminate on the later of (i) the
date that is 60 days after Landlord’s receipt of the applicable Tenant’s Offer
Notice and (ii) the proposed assignment or sublease commencement date specified
in the applicable Tenant’s Offer Notice, and all Rent shall be paid and
apportioned to such termination date.

 

(d)          If Landlord exercises its option under Section 5.02(b)(iii) to
terminate this Lease with respect to the space covered by a proposed sublease
for all or substantially all of the then-remaining Term, then (i) this Lease
shall terminate with respect to such part of the Premises on the later of (x)
the date that is 60 days after Landlord’s receipt of the applicable Tenant’s
Offer Notice and (y) the proposed sublease commencement date specified in the
applicable Tenant’s Offer Notice; (ii) from and after such termination date the
Rent shall be adjusted, based upon the proportion that the rentable area of the
Premises remaining bears to the total rentable area of the Premises prior to
such termination and (iii) Tenant shall pay to Landlord, within 30 days after
demand and completion, the reasonable costs incurred by Landlord in demising
separately such part of the Premises and in complying with any Laws relating to
such demise.

 

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(e)          If Landlord exercises its option under Section 5.02(b)(i) to sublet
the space Tenant desires to sublet, such sublease to Landlord or its designee
(as sublessee) shall be in form and substance reasonably satisfactory to
Landlord at the lower of (i) the rental rate per rentable square foot of Fixed
Rent and Additional Charges then payable pursuant to this Lease or (ii) the
rental rate per rentable square foot set forth in the applicable Tenant’s Offer
Notice with respect to such sublet space, and shall be for the term set forth in
the applicable Tenant’s Offer Notice (except that such term shall commence on
the date that is 60 days after Landlord’s receipt of the applicable Tenant’s
Offer Notice if such date is later than the proposed commencement date set forth
in such Tenant’s Offer Notice), and:

 

(A)         shall be subject to all of the terms and conditions of this Lease
except such as are irrelevant or inapplicable, and except as otherwise expressly
set forth to the contrary in this Section 5.02(e);

 

(B)         shall be upon the same terms and conditions as those contained in
the applicable Tenant’s Offer Notice (including all rent abatements and other
tenant inducements set forth therein) and otherwise on the terms and conditions
of this Lease, except such as are irrelevant or inapplicable and except as
otherwise expressly set forth to the contrary in this Section 5.02(e);

 

(C)         shall permit the sublessee, without Tenant’s consent, freely to
assign such sublease or any interest therein or to sublet all or any part of the
space covered by such sublease and to make any and all alterations and
improvements in the space covered by such sublease; provided, that (1) Tenant
shall have no removal, restoration or repair obligations under Section 4.03
hereof with respect to such alterations and improvements in such space made by
such sublessee and (2) the sublessee shall be subject to such restoration
obligations as are set forth in the applicable Tenant’s Offer Notice;

 

(D)         shall provide that any assignee or further sublessee of Landlord or
its designee may, at the election of Landlord, make alterations, decorations and
installations in such space or any part thereof, any or all of which may be
removed, in whole or in part, by such assignee or sublessee, at its option,
prior to or upon the expiration or other termination of such sublease, provided
that (1) such assignee or sublessee, at its expense, shall repair any damage
caused by such removal, (2) Tenant shall have no removal, restoration or repair
obligations under Section 4.03 hereof with respect to such alterations,
decorations and installations in such space made by such assignee or sublessee
and (3) Landlord or its designee shall remain subject to such restoration
obligations as are set forth in the applicable Tenant’s Offer Notice; and

 

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(E)         shall provide that (1) 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, (2) any assignment or subletting by
Landlord or its designee (as the sublessee) may be for any purpose or purposes
that Landlord shall deem appropriate, (3) Landlord, at Tenant’s expense, may
make such alterations as may be required or deemed necessary by Landlord to
demise separately the subleased space and to comply with any Laws relating to
such demise, and (4) at the expiration of the term of such sublease, Tenant
shall accept the space covered by such sublease in its then existing condition,
subject to the obligations of the sublessee to make such repairs thereto as may
be necessary to preserve such space in good order and condition and to such
restoration obligations as are set forth to be imposed on such sublessee in the
applicable Tenant’s Offer Notice. If Landlord is unable to give Tenant
possession of the space covered by such sublease at the expiration of the term
of the sublease by reason of the holding over or retention of possession of any
tenant or other occupant through Landlord, then, provided Tenant otherwise has
surrendered the balance of the Premises to Landlord as required under this
Lease, Tenant shall be deemed to have delivered possession of the Premises to
Landlord upon the Expiration Date and shall not be deemed a holdover under this
Lease.

 

If Landlord shall enter into a sublease pursuant to its option under Section
5.02(b)(i), Tenant shall be released from all obligations and liabilities under
this Lease to the extent pertaining to the space subleased by Landlord that
accrue from and after the commencement date of such sublease through the
expiration date or earlier termination date of such sublease to the extent, and
only to the extent, Landlord is obligated to perform such obligations or
Landlord has assumed such liabilities, as the case may be, pursuant to the terms
of such sublease to Landlord.

 

(f)          In the case of a proposed sublease, Tenant shall not sublet any
space to a third party (i) at a Net Effective Rental which is less (on a per
rentable square foot basis) than 90% of the Net Effective Rental (on a per
rentable square foot basis) specified in Tenant’s Offer Notice with respect to
such space or (ii) on terms which include different proportionate shares, base
years and/or base amounts for any escalation rent or (iii) for a term commencing
later than 9 months after the date of the proposed commencement date set forth
in Tenant’s Offer Notice, without, in any such case, complying once again with
all of the provisions of this Section 5.02 and re-offering such space to
Landlord at such lower rental or on such terms. In the case of a proposed
assignment, Tenant shall not assign this Lease to a third party (i) on economic
terms (including any consideration paid or received by Tenant and any
concessions granted by Tenant) that differ, on a net effective basis, by more
than 10% from the economic terms (including any consideration paid or received
by Tenant and any concessions granted by Tenant) specified in Tenant’s Offer
Notice or (ii) on terms including an effective date occurring later than 9
months after the date of the proposed effective date set forth in Tenant’s Offer
Notice, without, in either case, complying once again with all of the provisions
of this Section 5.02 and re-offering to assign this Lease to Landlord on such
terms. “Net Effective Rental” means, with respect to any desired or actual
sublease, one year’s worth of the amortized cash flow which would be derived
from such sublease, determined by spreading the Net Present Rent Value of such
sublease ratably on a monthly basis over the term of such desired or actual
sublease using the Interest Rate in effect as of the date of Tenant’s Offer
Notice. “Net Present Rent Value” means, with respect to any such sublease, the
net present value, determined as of the desired or actual commencement date of
such desired or actual sublease, using a discount rate of the Interest Rate in
effect as of the date of Tenant’s Offer Notice, of the aggregate of all rent and
additional rent (other than any escalation rent calculated by determining
increases over a base year or base amount, which shall be addressed pursuant to
clause (ii) above of this Section 5.02(f)) payable to Tenant under the desired
or actual sublease, discounted from the date that any such payment would have
been made under such desired or actual sublease to the commencement date of such
desired or actual sublease, after deducting therefrom the amount of all tenant
inducements (such as, by way of example only, direct payments, work allowances,
work letters and rent abatements) that are (or will be) granted to the subtenant
thereunder, discounted from the date that such tenant inducements were to have
been given to the commencement date of such desired or actual sublease.

 

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(g)          If Landlord does not timely exercise any of Landlord’s options
under this Section 5.02, and if Tenant has not within 270 days after the giving
of the applicable Tenant’s Offer Notice entered into a binding agreement to
sublease or assign (which sublease or assignment shall be conditioned upon
Landlord’s consent thereto), then Tenant shall not sublet any space to a third
party or assign this Lease to a third party (other than pursuant to Sections
5.01(b) or (c)) without complying once again with all of the provisions of this
Section 5.02 and re-offering such space to Landlord.

 

5.03         Assignment and Subletting Procedures. (a)  If (x) Tenant delivers
to Landlord a Tenant’s Offer Notice with respect to any proposed assignment of
this Lease or subletting of all or part of the Premises and Landlord does not
timely exercise any of its options under Section 5.02, and Tenant thereafter
desires to assign this Lease or sublet the space specified in Tenant’s Offer
Notice or (y) Tenant desires to enter into an Excluded Sublease, Tenant shall
notify Landlord (a “Transfer Notice”) of such desire, which notice shall be
accompanied by (i) a copy of the proposed general form of assignment or sublease
and all related agreements, or an agreed term sheet which does not have to be
signed by Tenant and the proposed subtenant or assignee, (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 assignee or
subtenant, including without limitation, its most recent financial statements
and (iv) such other information as Landlord may reasonably request, and
Landlord’s consent to the proposed assignment or sublease shall not be
unreasonably withheld or delayed, provided that:

 

(i)          In Landlord’s reasonable judgment the proposed assignee or
subtenant will use the Premises in a manner that (A) is in keeping with the then
standards of the Building, (B) is limited to the use expressly permitted under
this Lease, and (C) will not violate any negative covenant as to a particular
use contained in any other lease of space in the Building notice of which has
been previously delivered to Tenant (and provided that general office uses may
not be so prohibited).

 

(ii)         The proposed assignee or subtenant is, in Landlord’s judgment, a
reputable person or entity with sufficient financial worth considering the
responsibility involved.

 

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(iii)        To the extent Landlord then has available or reasonably expects
within the next 5 months to have available, comparable space in the Building for
a comparable term, neither the proposed assignee or sublessee, nor any affiliate
of such assignee or sublessee, is then a tenant or occupant of any part of the
Building, provided, that this clause (iii) shall not apply to an Excluded
Sublease.

 

(iv)         To the extent Landlord then has available or reasonably expects
within the next 5 months to have available, comparable space in the Building for
a comparable term, the proposed assignee or sublessee is not a person with whom
Landlord is then negotiating or has within the prior 6 months negotiated to
lease space in the Building, provided, that this clause (iv) shall not apply to
an Excluded Sublease.

 

(v)          There shall not be more than (A) 4 occupants (including Tenant) on
each full floor of the Premises, or more than one subtenant on any partial floor
included in the Premises and (B) 6 occupants in the entire Premises.

 

(vi)         Tenant shall reimburse Landlord within 30 days after demand for any
reasonable costs 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 legal costs
incurred in connection with the granting of any requested consent.

 

(b)          Landlord shall, within 30 days following receipt of a Transfer
Notice from Tenant, advise Tenant of Landlord’s approval or disapproval of such
proposed assignment or sublease. If Landlord shall fail to approve or disapprove
such proposed assignment or sublease within such 30 day period, Tenant may give
to Landlord a notice of such failure which shall contain a legend in not less
than 14 point font bold upper case letters as follows: “FAILURE TO APPROVE OR
DISAPPROVE THE PROPOSED [ASSIGNMENT/SUBLEASE] WITHIN 5 BUSINESS DAYS SHALL
RESULT IN LANDLORD’S DEEMED APPROVAL OF SUCH [ASSIGNMENT/SUBLEASE]”, and, if
Landlord shall fail to approve or disapprove such proposed assignment or
sublease within such 5 Business Day period, Landlord shall be deemed to have
consented to the assignment or sublease in question. If Landlord consents to a
proposed assignment or sublease and Tenant fails to execute and deliver the
assignment or sublease to which Landlord consented within 90 days after the
giving of such consent, then Tenant shall again comply with this Article 5
before assigning this Lease or subletting all or part of the Premises.

 

5.04         General Provisions. (a)  If this Lease is assigned, whether or not
in violation of this Lease, Landlord may collect rent from the assignee. If the
Premises or any part thereof are sublet or occupied by anybody other than
Tenant, whether or not in violation of this Lease, Landlord may, after default
by Tenant, and expiration of Tenant’s time to cure such default, collect rent
from the subtenant or occupant. In either event, Landlord may apply the net
amount collected against Rent, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver of any of the provisions of Section 5.01(a),
or the acceptance of the assignee, subtenant or occupant as tenant, or a release
of Tenant from the performance of Tenant’s obligations under this Lease.

 

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(b)          No assignment or transfer shall be effective until the assignee
delivers to Landlord an agreement in form and substance satisfactory to Landlord
whereby the assignee assumes Tenant’s obligations under this Lease effective as
of the date of such assignment. Prior to the effective date of such assignment,
the assignee shall deliver to Landlord evidence that the assignee, as Tenant
hereunder, has complied with the requirements of Sections 7.02 and 7.03.

 

(c)          Notwithstanding any assignment or transfer, whether or not in
violation of this Lease, and notwithstanding the acceptance of any Rent by
Landlord from an assignee, transferee, or any other party, the original named
Tenant and each successor Tenant shall remain fully liable for the payment of
the Rent and the performance of all of Tenant’s other obligations under this
Lease. The joint and several liability of Tenant and any immediate or remote
successor in interest of Tenant shall not be discharged, released or impaired in
any respect by any agreement made by Landlord extending the time to perform, or
otherwise modifying, any of the obligations of Tenant under this Lease, or by
any waiver or failure of Landlord to enforce any of the obligations of Tenant
under this Lease; provided, that in the case of any modification of this Lease
made after the date of an assignment or transfer (other than pursuant to Section
5.01(b) or Section 5.01(c)), if such modification increases or enlarges the
obligations of Tenant, other than to a de minimis extent, then any prior Tenant
under this Lease shall not be liable under or bound by such increase or
enlargement to which it has not consented (but shall continue to be liable under
this Lease as though such modification were never made).

 

(d)          Each subletting by Tenant shall be subject to the following:

 

(i)          No subletting shall be for a term (including any renewal or
extension options contained in the sublease) ending later than one day prior to
the Expiration Date.

 

(ii)         No sublease shall be valid, and no subtenant shall take possession
of the Premises or any part thereof, until there has been delivered to Landlord,
both (A) an executed counterpart of such sublease, and (B) a certificate of
insurance evidencing that (x) Landlord is an additional insured under the
insurance policies required to be maintained by occupants of the Premises
pursuant to Section 7.02, and (y) there is in full force and effect, the
insurance otherwise required by Sections 7.02 and 7.03.

 

(iii)        Subject to Section 5.06, each sublease shall provide that it is
subject and subordinate to this Lease, and that in the event of termination,
reentry or dispossess 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 be liable for, subject to or bound by any item or matter of
the type that a Successor Landlord is not so liable for, subject to or bound by
in the case of an attornment by Tenant to a Successor Landlord under Section
6.01(a).

 

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(e)          Each sublease shall provide that the subtenant may not assign its
rights thereunder or further sublet the space demised under the sublease, in
whole or in part, without Landlord’s consent and without complying with all of
the terms and conditions of this Article 5, including, without limitation,
Section 5.04, which for purposes of this Section 5.04(e) shall be deemed to be
appropriately modified to take into account that the transaction in question is
an assignment of the sublease or a further subletting of the space demised under
the sublease, as the case may be. Notwithstanding the foregoing, any direct
subtenant of Tenant (but not an indirect subtenant of Tenant (i.e., a subtenant
of a subtenant)) subleasing at least 50% of the rentable square footage of any
floor of the Premises shall be permitted to further sublease the portion of the
Premises sublet by such subtenant, in whole or in part, or to assign its
sublease, under the same terms and conditions as Tenant would be subject to
under this Lease, except that the rights granted to Tenant under Section 5.06
shall not be available to any subtenant.

 

(f)           Tenant shall not publicly advertise the availability of the
Premises or any portion thereof as sublet space or by way of an assignment of
this Lease, without first obtaining Landlord’s consent (but Tenant may list with
reputable brokers or include in trade or industry computerized listing services
the Premises without Landlord’s approval), which consent shall not be
unreasonably withheld or delayed provided that Tenant shall in no event
advertise a proposed rental rate for all or any portion of the Premises or any
description of such a rental rate.

 

5.05       Assignment and Sublease Profits.   (a)  If the aggregate of the
amounts payable as fixed rent and as additional rent on account of PILOT,
Additional Tax Payments, Impositions, Taxes, Operating Expenses and electricity
by a subtenant under a sublease of any part of the Premises (excluding a
sublease made pursuant to Sections 5.01(c)) and the amount of any Other Sublease
Consideration payable to Tenant by such subtenant, whether received in a
lump-sum payment or otherwise, shall be in excess of Tenant’s Basic Cost
therefor at that time then, promptly after the collection thereof, Tenant shall
pay to Landlord in monthly installments as and when collected, as Additional
Charges, 50% of such excess. Tenant shall deliver to Landlord within 60 days
after the end of each calendar year and within 60 days after the expiration or
earlier termination of this Lease a statement specifying each sublease in effect
during such calendar year or partial calendar year, the rentable area demised
thereby, the term thereof and a computation in reasonable detail showing the
calculation of the amounts paid and payable by the subtenant to Tenant, and by
Tenant to Landlord, with respect to such sublease for the period covered by such
statement. “Tenant’s Basic Cost” for sublet space at any time means the sum of
(i) the portion of the Fixed Rent and Recurring Additional Charges which is
attributable to the sublet space, plus (ii) the amount payable by Tenant on
account of electricity in respect of the sublet space, plus (iii) the amount of
any costs reasonably incurred by Tenant in making changes in the layout and
finish of the sublet space for the subtenant and any work allowance granted by
Tenant to the subtenant, plus (iv) the amount of any actual reasonable brokerage
commissions (it being agreed that 150% of one full standard commission on a
sublease transaction involving co-brokers is a reasonable commission) and
reasonable legal fees or any other marketing costs associated with subleasing
the space paid by Tenant in connection with the sublease. “Other Sublease
Considerations” means all sums paid for the furnishing of services by Tenant and
the sale or rental of Tenant’s fixtures, leasehold improvements, equipment,
furniture or other personal property (excluding any of the same which were part
of Tenant’s Initial Work) less, in the case of the sale thereof, the then net
unamortized or undepreciated cost thereof, amortized or depreciated in
accordance with GAAP.

 

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(b)          Upon any assignment of this Lease (other than an assignment made
pursuant to Sections 5.01(b) or (c)), Tenant shall pay to Landlord 50% of the
Assignment Consideration received by Tenant for such assignment, after deducting
therefrom customary and reasonable closing expenses. “Assignment Consideration”
means an amount equal to all sums and other considerations paid to Tenant by the
assignee for or by reason of such assignment (including, without limitation,
sums paid for the furnishing of services by Tenant and the sale or rental of
Tenant’s fixtures, leasehold improvements, equipment, furniture, furnishings or
other personal property (excluding any of the same which were part of Tenant’s
Initial Work), less, in the case of a sale thereof, the then net unamortized or
undepreciated cost thereof, amortized or depreciated in accordance with GAAP).

 

(c)          At Landlord’s option, exercisable by written notice to Tenant at
any time, the provisions of Section 5.05(a) and Section 5.05(b) shall be
automatically null and void.

 

5.06        Eligible Subtenant; Non-Disturbance.   (a)  Landlord shall, within
30 days after Tenant’s written request (which request shall be accompanied by a
fully executed counterpart of the Eligible Sublease and such other information
and certifications as Landlord may reasonably request in order to determine that
the conditions of this Section 5.06 have been satisfied), deliver to Tenant and
the subtenant under the Eligible Sublease (the “Eligible Subtenant”) a
non-disturbance agreement substantially in the form attached hereto as Exhibit V
(a “Landlord’s Non-Disturbance Agreement”). Following the subtenant’s execution
and delivery of the Landlord’s Non-Disturbance Agreement, Landlord shall
promptly execute and deliver a counterpart to the subtenant. Landlord’s actual
reasonable out-of-pocket costs and expenses in connection with the foregoing
(including, without limitation, reasonable attorney’s fees) shall be paid by
Tenant within 30 days after receipt of an invoice therefor.

 

(b)        As used herein, “Eligible Sublease” shall mean a direct sublease
which (A) is between Tenant and a subtenant which is not an affiliate of Tenant,
and, as of the execution of the Eligible Sublease, has a net worth, computed in
accordance with GAAP, equal to or greater than 30 times the sum of the annual
Fixed Rent then payable hereunder and all of the Additional Charges payable for
the preceding calendar year, in each case, allocable to the portion of the
Premises that is the subject of the Eligible Sublease (without giving effect to
any free rent or rent abatement), (B) demises at least one full floor of the
Building that is part of the Premises (x) of contiguous space beginning with
(and which must include) the highest or lowest full floor of the Premises, (C)
if a Landlord Non-Disturbance Agreement has theretofore been delivered by
Landlord with respect to an Eligible Sublease which is then in effect, (x)
demises at least one (1) or more full floors of the Premises which are
contiguous to the floors demised pursuant to such existing Eligible Sublease and
(y) has a stated expiration date which is the same day as such existing Eligible
Sublease and (D) has an initial sublease term (i.e., not including any renewals)
of at least 5 years (or, if less than 5 years remain in the Term, the remaining
balance of the Term less one day).

 

Notwithstanding anything to the contrary herein contained, it is understood and
agreed that Landlord shall have no obligation to deliver a Landlord’s
Non-Disturbance Agreement during the continuance of any default which continues
beyond applicable notice and cure periods.

 

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5.07       Disputes. Any dispute between Landlord and Tenant arising under this
Article 5 shall be resolved by arbitration conducted in accordance with the
provisions of Section 8.09.

 

ARTICLE 6

Subordination; Default; Indemnity

 

6.01       Subordination.   (a)  Subject to the provisions of Section 6.01(c),
this Lease is subject and subordinate to each mortgage (a “Superior Mortgage”)
and each underlying lease (a “Superior Lease”) which may now or hereafter affect
all or any portion of the Project or any interest therein and to each document
or instrument to which any such Superior Mortgage or Superior Lease is
subordinate. The lessor under a Superior Lease is called a “Superior Lessor” and
the mortgagee under a Superior Mortgage is called a “Superior Mortgagee”. Tenant
shall execute, acknowledge and deliver any commercially reasonable instrument
reasonably requested by Landlord, a Superior Lessor or Superior Mortgagee to
evidence such subordination, but no such instrument shall be necessary to make
such subordination effective (provided, that such instrument shall not violate
the conditions described in clauses (i) through (iv) of the immediately
succeeding sentence). Tenant shall execute any amendment of this Lease requested
by a Superior Mortgagee or a Superior Lessor, provided such amendment shall not
(i) reduce or extend the Term, (ii) increase the Rent, (iii) reduce the area of
the Premises, or (iv) other than to a de minimis extent, increase Tenant’s
obligations or decrease Tenant’s rights under this Lease. In the event of the
enforcement by a Superior Mortgagee of the remedies provided for by law or by
such Superior Mortgage, or in the event of the termination or expiration of a
Superior Lease, Tenant, upon request of such Superior Mortgagee, Superior Lessor
or any person succeeding to the interest of such mortgagee or lessor (each, a
“Successor Landlord”), shall automatically become the tenant of such Successor
Landlord without change in the terms or provisions of this Lease (it being
understood that Tenant shall, if requested, enter into a new lease on terms
identical to those in this Lease); provided, that any Successor Landlord shall
not be (i) liable for any act, omission or default of any prior landlord
(including, without limitation, Landlord), except to the extent that any such
non-monetary default of an obligation of Landlord under this Lease continues
after the date that Successor Landlord succeeds to Landlord’s interest in the
Project and Successor Landlord has been given written notice and a reasonable
opportunity to cure same; (ii) liable for the return of any moneys paid to or on
deposit with any prior landlord (including, without limitation, Landlord),
except to the extent such moneys or deposits are delivered to such Successor
Landlord; (iii) subject to any offset, claims or defense that Tenant might have
against any prior landlord (including, without limitation, Landlord); (iv) bound
by any Rent which Tenant might have paid for more than the current month to any
prior landlord (including, without limitation, Landlord); (v) bound by any
covenant to perform or complete any construction in connection with the Project
or the Premises or to pay any sums to Tenant in connection therewith; (vi) bound
by any obligation to make any payment to Tenant; or (vii) bound by any waiver or
forbearance under, or any amendment, modification, abridgment, cancellation or
surrender of, this Lease made without the consent of such Successor Landlord.
Upon request by such Successor Landlord, Tenant shall execute and deliver an
instrument or instruments, reasonably requested by such Successor Landlord (at
no out-of-pocket cost to Tenant other than any legal fees Tenant may incur in
connection therewith), confirming the attornment provided for herein, but no
such instrument shall be necessary to make such attornment effective.

 

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(b)          Tenant shall give each Superior Mortgagee and each Superior Lessor
a copy of any notice of default served upon Landlord, provided that Tenant has
been notified of the address of such mortgagee or lessor. If Landlord fails to
cure any default as to which Tenant is obligated to give notice pursuant to the
preceding sentence within the time provided for in this Lease, then each such
mortgagee or lessor shall have an additional 30 days after receipt of such
notice within which to cure such default or, if such default cannot be cured
within that time, then such additional time as may be necessary if, within such
30 days, any such mortgagee or lessor has commenced and is diligently pursuing
the remedies necessary to cure such default (including, without limitation,
commencement of foreclosure proceedings or eviction proceedings, if necessary to
effect such cure), in which event this Lease shall not be terminated and Tenant
shall not exercise any other rights or remedies under this Lease or otherwise
while such remedies are being so diligently pursued. Nothing herein shall be
deemed to imply that Tenant has any right to terminate this Lease or any other
right or remedy, except as may be otherwise expressly provided for in this
Lease. Notwithstanding the foregoing, to the extent that any of the provisions
of this Section 6.01(b) are inconsistent with or contradictory to any term or
provision of an SNDA Tenant shall have entered into with any Superior Mortgagee
or Superior Lessor, the terms and provisions of such SNDA shall govern with
respect to such Superior Mortgagee or Superior Lessor.

 

(c)          Notwithstanding the provisions of Section 6.01(a), (i) Tenant’s
obligation to subordinate its interest in this Lease to any future Superior
Mortgage is expressly conditioned upon Tenant’s receipt from the Superior
Mortgagee of a subordination, non-disturbance and attornment agreement
substantially in the form annexed hereto as Exhibit M-1 or, with respect to a
Superior Mortgage in favor of the IDA or otherwise in connection with financing
relating to the PILOT Agreement, substantially in the form annexed hereto as
Exhibit M-3 and (ii) Tenant’s obligation to subordinate its interest in this
Lease to any future Superior Lease is expressly conditioned upon Tenant’s
receipt from the Superior Lessor of a recognition, non-disturbance and
attornment agreement substantially in the form annexed hereto as Exhibit M-2 or,
with respect to a Superior Lease with the IDA or otherwise in connection with
financing relating to the PILOT Agreement, substantially in the form annexed
hereto as Exhibit M-3 (any such agreement with a Superior Mortgagee or a
Superior Lessor substantially in the form annexed hereto as Exhibit M-1, Exhibit
M-2 or Exhibit M-3, as applicable, an “SNDA”). If such Superior Mortgagee or
Superior Lessor executes and delivers an SNDA, and Tenant either fails or
refuses to execute and deliver such SNDA within 10 Business Days following
Landlord’s delivery of such SNDA, this Lease shall be subject and subordinate to
such Superior Mortgage or Superior Lease and Landlord shall have no further
obligation to obtain an SNDA from such Superior Mortgagee or Superior Lessor.

 

(d)          Landlord represents to Tenant that, as of the date of this Lease,
there are no Superior Mortgages or Superior Leases affecting the Project except
for Superior Mortgages and Superior Leases in connection with a financing
arrangement with the IDA.

 

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6.02       Estoppel Certificate. Each party shall, at any time and from time to
time, within 10 Business Days after request by the other party, execute and
deliver to the requesting party (or to such person or entity as the requesting
party may designate) a statement certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), certifying the
Possession Date, the Rent Commencement Date, Expiration Date, the rentable
square footage of each floor and each partial floor of the Premises as
determined in accordance with Article 1 of this Lease, and the dates to which
the Fixed Rent and Additional Charges have been paid and stating whether or not,
to the actual knowledge of the party signing such statement, the other party is
in default in performance of any of its obligations under this Lease, and, if
so, specifying each such default of which such party has knowledge, it being
intended that any such statement shall be deemed a representation and warranty
to be relied upon by the party to whom such statement is addressed. Each party
also shall include or confirm in any such statement such other information
concerning this Lease as the other party may reasonably request.

 

6.03         Default. This Lease and the term and estate hereby granted are
subject to the limitation that:

 

(a)          if Tenant defaults in the payment of any Rent, and such default
continues for (i) with respect to Fixed Rent and/or Additional Tax Payments,
Impositions Payments, Operating Payments and either PILOT Payments or Tax
Payments, as applicable, 5 Business Days after Landlord gives to Tenant a notice
specifying such default or (ii) with respect to Additional Charges other than
those described in clause (i) above, 10 Business Days after Landlord gives to
Tenant a notice specifying such default, or

 

(b)          if Tenant defaults in the keeping, observance or performance of any
covenant or agreement contained in this Lease (other than a default of the
character referred to in Sections 6.03(a), (c), (d), or (e)), and if such
default continues and is not cured within 30 days after Landlord gives to Tenant
a notice specifying the same, or, in the case of a default which for causes
beyond Tenant’s reasonable control cannot with due diligence be cured within
such period of 30 days, if Tenant shall not during such period, (i) advise
Landlord of Tenant’s intention duly to institute all steps necessary to cure
such default and (ii) institute and thereafter diligently prosecute to
completion all steps necessary to cure the same, or

 

(c)          if this Lease or the estate hereby granted would, by operation of
law or otherwise, devolve upon or pass to any person or entity other than
Tenant, except as expressly permitted by Article 5, or

 

(d)          if Tenant shall abandon the Premises (and the fact that any of
Tenant’s Property remains in the Premises shall not be evidence that Tenant has
not abandoned the Premises), or

 

(e)          if a default shall occur and have been cured, and if a similar
default shall occur and have been cured, then if a third similar default shall
occur within 365 days after the occurrence of the first such default, whether or
not such third default is cured within the applicable grace period, or

 

(f)           if Tenant fails to deliver to Landlord the Letter of Credit within
30 days of the date of this Lease in accordance with Section 2.11(a),

 

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then, in any of such cases, in addition to any other remedies available to
Landlord at law or in equity, Landlord shall be entitled to give to Tenant a
notice of intention to terminate this Lease at the expiration of 5 Business Days
from the date of the giving of such notice, and, in the event such notice is
given, this Lease and the term and estate hereby granted shall terminate upon
the expiration of such 5 Business Days with the same effect as if the last of
such 5 Business Days were the Expiration Date, but Tenant shall remain liable
for damages as provided herein or pursuant to law. Landlord agrees that any
notice of default required to be delivered under clauses (a) and (b) above shall
(i) specify the applicable default and (ii) if monetary in nature, specify the
amount required to be paid to cure such default.

 

6.04       Re-entry by Landlord. If Tenant defaults in the payment of any Rent
and such default continues for 5 Business Days following notice from Landlord
specifying such default, or if this Lease shall terminate as in Section 6.03
provided, Landlord or Landlord’s agents may immediately or at any time
thereafter re-enter into or upon the Premises, or any part thereof, either by
summary dispossess proceedings or by any suitable action or proceeding at law,
without being liable to indictment, prosecution or damages therefor, and may
repossess the same, and may remove any persons therefrom, to the end that
Landlord may have, hold and enjoy the Premises. The words “re-enter” and
“re-entering” as used in this Lease are not restricted to their technical legal
meanings. Upon such termination or re-entry, Tenant shall pay to Landlord any
Rent then due and owing (in addition to any damages payable under Section 6.05).

 

6.05       Damages. If this Lease is terminated under Section 6.03, or if
Landlord re-enters the Premises under Section 6.04, Tenant shall pay to Landlord
as damages, at the election of Landlord, either:

 

(a)          a sum which, at the time of such termination, represents the then
value of the excess, if any, of (1) the aggregate of the Rent which, had this
Lease not terminated, would have been payable hereunder by Tenant for the period
commencing on the day following the date of such termination or re-entry to and
including the Expiration Date over (2) the aggregate fair rental value of the
Premises for the same period (for the purposes of this clause (a) the amount of
Recurring Additional Charges shall, for each calendar year ending after such
termination or re-entry, be deemed to be an amount equal to the amount of
Recurring Additional Charges payable by Tenant for the calendar year immediately
preceding the calendar year in which such termination or re-entry shall occur),
or

 

(b)          sums equal to the Rent that would have been payable by Tenant
through and including the Expiration Date had this Lease not terminated or had
Landlord not re-entered the Premises, payable upon the due dates therefor
specified in this Lease; provided, that if Landlord shall relet all or any part
of the Premises for all or any part of the period commencing on the day
following the date of such termination or re-entry to and including the
Expiration Date, Landlord shall credit Tenant with the net rents received by
Landlord from such reletting, such net rents to be determined by first deducting
from the gross rents as and when received by Landlord from such reletting the
expenses incurred or paid by Landlord in terminating this Lease and of
re-entering the Premises and of securing possession thereof, as well as the
expenses of reletting, including, without limitation, altering and preparing the
Premises for new tenants, brokers’ commissions, and all other expenses properly
chargeable against the Premises and the rental therefrom in connection with such
reletting, it being understood that any such reletting may be for a period equal
to or shorter or longer than said period; provided, further, that (i) in no
event shall Tenant be entitled to receive any excess of such net rents over the
sums payable by Tenant to Landlord under this Lease, (ii) in no event shall
Tenant be entitled, in any suit for the collection of damages pursuant to this
Section 6.05(b), to a credit in respect of any net rents from a reletting except
to the extent that such net rents are actually received by Landlord on account
of any period that is the subject of such suit, (iii) if the Premises or any
part thereof should be relet in combination with other space, then proper
apportionment on a square foot rentable area basis shall be made of the rent
received from such reletting and of the expenses of reletting, and (iv) Landlord
shall have no obligation to so relet the Premises and Tenant hereby waives any
right Tenant may have, at law or in equity, to require Landlord to so relet the
Premises.

 

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Suit or suits for the recovery of any damages payable hereunder by Tenant, or
any installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall require Landlord to postpone suit
until the date when the Term would have expired but for such termination or
re-entry.

 

6.06       Other Remedies. (a)  Nothing contained in this Lease shall be
construed as limiting or precluding the recovery by Landlord against Tenant of
any sums or damages to which, in addition to the damages particularly provided
above, Landlord may lawfully be entitled by reason of any default hereunder on
the part of Tenant. Anything in this Lease to the contrary notwithstanding,
during the continuation of any default by Tenant, Tenant shall not be entitled
to exercise any rights or options, or to receive any funds or proceeds being
held, under or pursuant to this Lease.

 

(b)          Anything contained in this Lease to the contrary notwithstanding,
in no event shall Tenant or Landlord be entitled to claim or recover any
consequential, exemplary or punitive damages from the other in any action
arising under this Lease (except as set forth in Section 6.10).

 

6.07       Right to Injunction. In the event of any breach or threatened breach
by Tenant or Landlord of any of its obligations under this Lease, the other
party shall also have the right of injunction or, subject to the terms of this
Lease, to invoke any other right or remedy available at law or in equity. The
specified remedies to which Landlord may resort hereunder are cumulative and are
not intended to be exclusive of any other remedies or means of redress to which
Landlord may lawfully be entitled, and Landlord may invoke any remedy allowed at
law or in equity as if specific remedies were not herein provided for.

 

6.08       Certain Waivers. Tenant waives and surrenders all right and privilege
that Tenant might have under or by reason of any present or future law to redeem
the Premises or to have a continuance of this Lease after Tenant is dispossessed
or ejected therefrom by process of law or under the terms of this Lease or after
any termination of this Lease. Tenant also waives the provisions of any law
relating to notice and/or delay in levy of execution in case of any eviction or
dispossession for nonpayment of rent, and the provisions of any successor or
other law of like import. Landlord and Tenant each waive trial by jury in any
action in connection with this Lease.

 

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6.09       No Waiver. Failure by either party to declare any default immediately
upon its occurrence or delay in taking any action in connection with such
default shall not waive such default but such party shall have the right to
declare any such default at any time thereafter. Any amounts paid by Tenant to
Landlord may be applied by Landlord, in Landlord’s discretion, to any items then
owing by Tenant to Landlord under this Lease. Receipt by Landlord of a partial
payment shall not be deemed to be an accord and satisfaction (notwithstanding
any endorsement or statement on any check or any letter accompanying any check
or payment) nor shall such receipt constitute a waiver by Landlord of Tenant’s
obligation to make full payment. No act or thing done by Landlord or its agents
shall be deemed an acceptance of a surrender of the Premises, and no agreement
to accept such surrender shall be valid unless in writing and signed by Landlord
and by each Superior Lessor and Superior Mortgagee whose lease or mortgage
provides that any such surrender may not be accepted without its consent.

 

6.10       Holding Over. If Tenant holds over without the consent of Landlord
after expiration or termination of this Lease, Tenant shall pay as holdover
rental for each month of the holdover tenancy an amount equal to the Applicable
Percentage multiplied by the greater of (i) the fair market rental value of the
Premises for such month (as reasonably determined by Landlord) or (ii) the Rent
which Tenant was obligated to pay for the month immediately preceding the end of
the Term; and (c) if such holdover continues for at least 75 days, be liable to
Landlord for and indemnify Landlord against (i) any payment or rent concession
which Landlord may be required to make to any tenant obtained by Landlord for
all or any part of the Premises (a “New Tenant”) by reason of the late delivery
of space to the New Tenant as a result of Tenant’s holding over or in order to
induce such New Tenant not to terminate its lease by reason of the holding over
by Tenant, (ii) the loss of the benefit of the bargain if any New Tenant shall
terminate its lease by reason of the holding over by Tenant and (iii) any claim
for damages by any New Tenant. No holding over by Tenant after the Term shall
operate to extend the Term, and the acceptance of any rent paid by Tenant
pursuant to this Section 6.10 shall not preclude Landlord from commencing and
prosecuting a holdover or summary eviction proceeding. The provisions of this
Section 6.10 shall be deemed to be an “agreement expressly providing otherwise”
within the meaning of Section 232-c of the Real Property Law of the State of New
York. Tenant expressly waives, for itself and for any person or entity claiming
through or under Tenant, any rights which Tenant or any such person or entity
may have under the provisions of Section 2201 of the New York Civil Practice Law
and Rules and of any successor law of like import then in force, in connection
with any holdover summary proceedings which Landlord may institute to enforce
the provisions of this Lease. “Applicable Percentage” means (x) for any period
of such holdover commencing after the expiration or termination of this Lease
through the 90th such day, 150% and (y) thereafter, 200%.

 

6.11       Attorneys’ Fees. If any action or proceeding is brought by Landlord
or Tenant to enforce its rights under this Lease, the prevailing party in such
action shall be entitled to collect its reasonable attorneys’ fees and costs of
suit from the other party.

 

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6.12       Nonliability and Indemnification. (a)  Neither Landlord, any Superior
Lessor or any Superior Mortgagee, nor any partner, director, officer,
shareholder, principal, board member, agent or employee of Landlord, any
Superior Lessor or any Superior Mortgagee (whether disclosed or undisclosed),
shall be liable to Tenant for (i) any loss, injury or damage to Tenant or to any
other person, or to its or their property, irrespective of the cause of such
injury, damage or loss, nor shall the aforesaid parties be liable for any loss
of or damage to property of Tenant or of others entrusted to employees of
Landlord; provided, that, except to the extent of the release of liability and
waiver of subrogation provided in Section 7.03 hereof, the foregoing shall not
be deemed to relieve Landlord of any liability to the extent resulting from the
negligence or willful misconduct of Landlord, its agents or employees in the
operation or maintenance of the Premises or the Building, (ii) any loss, injury
or damage described in clause (i) above caused by other tenants, occupants or
persons in, upon or about the Building, or caused by operations in construction
of any private, public or quasi-public work, or (iii) even if due to negligence
or willful misconduct, consequential damages arising out of any loss of use of
the Premises or any equipment, facilities or other Tenant’s Property therein or
otherwise.

 

(b)          Subject to the provisions of Section 7.03, Tenant shall indemnify
and hold harmless Landlord, all Superior Lessors and all Superior Mortgagees and
each of their respective partners, members, directors, officers, shareholders,
principals, board members, agents and employees (each, a “Landlord Indemnified
Party”), from and against any and all claims arising from or in connection with
(i) the conduct or management of the Premises or of any business therein, or any
work or thing done, or any condition created, in or about the Premises, (ii) any
act, omission or negligence of Tenant or any person claiming through or under
Tenant or any of their respective partners, directors, officers, agents,
employees or contractors, (iii) any accident, injury or damage occurring in, at
or upon the Premises (or outside the Premises if arising from or in connection
with Tenant’s installations in, or use of, areas outside the Premises), (iv) any
default by Tenant in the performance of any of Tenant’s obligations under this
Lease, (v) the performance of Tenant’s Initial Work and (vi) any brokerage
commission or similar compensation claimed to be due by reason of any proposed
subletting or assignment by Tenant (irrespective of the exercise by Landlord of
any of the options in Section 5.02(b)); in each case, together with all costs,
expenses and liabilities incurred in connection with each such claim or action
or proceeding brought thereon, including, without limitation, all reasonable
attorneys’ fees and disbursements; provided, that the foregoing indemnity shall
not apply to the extent such claim results from the negligence (other than
negligence to which the release of liability and waiver of subrogation provided
in Section 7.03 applies) or willful misconduct of any Landlord Indemnified
Party. If any action or proceeding is brought against any Landlord Indemnified
Party by reason of any such claim, Tenant, upon notice from such Landlord
Indemnified Party shall resist and defend such action or proceeding by counsel
reasonably satisfactory to such Landlord Indemnified Party, and counsel selected
by Tenant’s insurance company to resist and defend such action or proceeding is,
absent a conflict, hereby deemed to be satisfactory to such Landlord Indemnified
Party.

 

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(c)          Subject to the provisions of Section 7.03, Landlord shall indemnify
and hold harmless Tenant and Tenant’s partners, members, directors, officers,
shareholders, principals, agents and employees (each, a “Tenant Indemnified
Party”), from and against any and all claims arising from or in connection with
(i) any negligence or willful misconduct of Landlord or its agents, servants or
employees in connection with the operation or management of the common areas of
the Building and (ii) any default by Landlord in the performance of any of
Landlord’s obligations under this Lease, in each case together with all costs,
expenses and liabilities incurred in connection with each such claim or action
or proceeding brought thereon, including, without limitation, all reasonable
attorneys’ fees and disbursements; provided, that the foregoing indemnity shall
not apply to the extent such claim results from the negligence (other than
negligence to which the release of liability and waiver of subrogation provided
in Section 7.03 applies) or willful misconduct of any Tenant Indemnified Party.
If any action or proceeding is brought against any Tenant Indemnified Party by
reason of any such claim, Landlord, upon notice from such Tenant Indemnified
Party, shall resist and defend such action or proceeding by counsel reasonably
satisfactory to such Tenant Indemnified Party, and counsel selected by
Landlord’s insurance company to resist and defend such action or proceeding is,
absent a conflict, hereby deemed to be satisfactory to such Tenant Indemnified
Party.

 

ARTICLE 7

Insurance; Casualty; Condemnation

 

7.01       Compliance with Insurance Standards. (a)  Tenant shall not violate,
or permit the violation of, any condition imposed by any insurance policy then
issued in respect of the Project and shall not do, or permit anything to be
done, or keep or permit anything to be kept in the Premises, which would subject
Landlord, any Superior Lessor or any Superior Mortgagee to any liability or
responsibility for personal injury or death or property damage, or which would
increase any insurance rate in respect of the Project over the rate which would
otherwise then be in effect or which would result in insurance companies of good
standing refusing to insure the Project in amounts reasonably satisfactory to
Landlord, or which would result in the cancellation of, or the assertion of any
defense by the insurer in whole or in part to claims under, any policy of
insurance in respect of the Project, provided, however, that in no event shall
the mere use of the Premises for customary and ordinary office purposes, as
opposed to the manner of such use, constitute a breach by Tenant of the
provisions of this Section 7.01.

 

(b)          If, by reason of any failure of Tenant to comply with this Lease,
the premium(s) on Landlord’s insurance on the Project shall be higher than they
otherwise would be, Tenant shall reimburse Landlord, within 30 days after
demand, for that part of such premium(s) attributable to such failure on the
part of Tenant. A schedule or “make up” of rates for the Project or the
Premises, as the case may be, issued by any insurance boards making rates for
insurance for the Project or the Premises, as the case may be, shall be
conclusive evidence of the facts therein stated and of the several items and
charges in the insurance rate then applicable to the Project or the Premises, as
the case may be.

 

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7.02         Tenant’s Insurance. Tenant shall maintain at all times during the
Term insurance coverage meeting the requirements set forth in Sections (A) and
(C) of Exhibit J attached hereto. The limits of such insurance shall not limit
the liability of Tenant. Tenant’s insurance shall be primary insurance and shall
not be considered contributory insurance with any insurance policies of
Landlord. Landlord’s insurance shall apply in excess of all insurance coverage
required of Tenant in accordance with this Section 7.02 and Exhibit J, whether
such insurance is primary, contingent or on any other basis, and regardless of
whether such Tenant’s insurance coverage is valid or collectible. Tenant shall
deliver to Landlord and all Additional Insureds (as defined in Exhibit J), prior
to Tenant having access to the Building (pursuant to the provisions of Section
4.01(b) or otherwise), fully paid-for policies or certificates of insurance for
all such required insurance, in form reasonably satisfactory to Landlord, issued
by the insurance company or its authorized agent. An Accord Form Certificate of
Insurance (Accord 25 for Liability and Accord 27 for Property) or its equivalent
shall be deemed reasonably satisfactory to Landlord. Tenant shall procure and
pay for renewals of such insurance from time to time before the expiration
thereof, and Tenant shall endeavor to deliver to Landlord and any Additional
Insureds such renewal policy or a certificate thereof at least 30 days before
the expiration of any existing policy. All such policies shall be issued by
companies of recognized responsibility licensed to do business in New York State
(except the Products and Completed Operations Liability policy, which shall not
be required to be issued by a company authorized to do business in New York
State) and rated by Best’s Insurance Reports or any successor publication of
comparable standing as A/VIII or better or the then equivalent of such rating,
and all such policies shall contain a provision whereby the same cannot be
canceled, allowed to lapse or modified unless Landlord and any Additional
Insureds are given at least 30 days prior written notice of such cancellation,
lapse or modification. Tenant shall cooperate with Landlord in connection with
the collection of any insurance moneys that may be due in the event of loss and
Tenant shall execute and deliver to Landlord such proofs of loss and other
instruments which may be required to recover any such insurance moneys. Landlord
may from time to time require that the amount of the insurance to be maintained
by Tenant under this Section 7.02 be increased and/or that Tenant provide
additional insurance coverage, so that the insurance maintained by Tenant
adequately protects Landlord’s interest; provided, that any such increased
amounts or additional coverage shall not be materially in excess of the amounts
and coverage landlords of similar First Class Office Buildings require their
tenants to maintain. In the event Tenant fails to maintain the limits or
coverages as required herein, Landlord may obtain such insurance as an agent of
the Tenant without prior notice. Any premiums paid by Landlord in connection
with such insurance obtained by Landlord together with interest thereon at the
Interest Rate from the date paid by Landlord until the date reimbursed by Tenant
shall be payable by Tenant to Landlord.

 

7.03       Subrogation Waiver. Landlord and Tenant shall each include in each of
its insurance policies (insuring the Building in case of Landlord, and insuring
Tenant’s Property and Fixtures in the case of Tenant, against loss, damage or
destruction by fire or other casualty) a waiver of the insurer’s right of
subrogation against the other party during the Term or, if such waiver should be
unobtainable or unenforceable, (a) an express agreement that such policy shall
not be invalidated if the insured waives the right of recovery against any party
responsible for a casualty covered by the policy before the casualty or (b) any
other form of permission for the release of the other party. A waiver of
subrogation shall be effective as to any individual or entity even if such
individual or entity (a) would otherwise have a duty of indemnification,
contractual or otherwise, (b) did not pay the insurance premium directly or
indirectly, and (c) whether or not such individual or entity has an insurable
interest in the property damaged. Each party hereby (x) releases the other party
with respect to any claim (including a claim for negligence) which it might
otherwise have against the other party for loss, damage or destruction with
respect to its property occurring during the Term to the extent to which it is,
or is required to be, insured under a policy or policies containing a waiver of
subrogation or permission to release liability and (y) waives all rights of
recovery against the other party, whether under subrogation or otherwise, for
any deductibles. Nothing contained in this Section 7.03 shall be deemed to
relieve either party of any duty imposed elsewhere in this Lease to repair,
restore or rebuild or to nullify any abatement of rents provided for elsewhere
in this Lease. All waivers and releases for the benefit of Landlord pursuant to
this Section 7.03 shall be deemed to apply to and for the benefit of, and, if
applicable, shall be obtained with respect to, The Related Companies, L.P.,
Oxford Hudson Yards LLC, Mitsui Fudosan America, Inc., MFA 55 HY LLC, 55 Hudson
Yards Member LLC and any of such entities’ and Landlord’s officers, agents, and
employees, in addition to, and with the same effect as, the application of such
provisions to Landlord.

 

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7.04       Condemnation. (a)  If there shall be a total taking of the Building
or the Premises in condemnation proceedings or by any right of eminent domain,
this Lease and the term and estate hereby granted shall terminate as of the date
of taking of possession by the condemning authority and all Rent shall be
prorated and paid as of such termination date. If there shall be a taking of any
material (in Landlord’s reasonable judgment) portion of the Building (whether or
not the Premises are affected by such taking), then Landlord may terminate this
Lease and the term and estate granted hereby by giving notice to Tenant within
60 days after the date of taking of possession by the condemning authority. If
there shall be a taking of the Premises of such scope (but in no event less than
20% thereof) that Tenant would, in Tenant’s reasonable judgment, be unable to
operate the untaken part of the Premises in a functionally equivalent manner to
the manner in which Tenant operated such untaken part of the Premises prior to
the taking then Tenant may terminate this Lease and the term and estate granted
hereby by giving notice to Landlord within 60 days after the date of taking of
possession by the condemning authority. If either Landlord or Tenant shall give
a termination notice as aforesaid, then this Lease and the term and estate
granted hereby shall terminate as of the date of such notice and all Rent shall
be prorated and paid as of such termination date. In the event of a taking of
the Premises which does not result in the termination of this Lease (i) the term
and estate hereby granted with respect to the taken part of the Premises shall
terminate as of the date of taking of possession by the condemning authority and
all Rent shall be appropriately abated for the period from such date to the
Expiration Date and (ii) Landlord shall with reasonable diligence restore the
remaining portion of the Premises (exclusive of Tenant’s Property) as nearly as
practicable to its condition prior to such taking.

 

(b)          In the event of any taking of all or a part of the Building,
Landlord shall be entitled to receive the entire award in the condemnation
proceeding, including, without limitation, any award made for the value of the
estate vested by this Lease in Tenant or any value attributable to the unexpired
portion of the Effective Period, and Tenant hereby assigns to Landlord any and
all right, title and interest of Tenant now or hereafter arising in or to any
such award or any part thereof, and Tenant shall be entitled to receive no part
of such award; provided, that nothing shall preclude Tenant from making a
separate claim in any such condemnation proceeding for the value of all
improvements, alterations and additions made to the Premises by Tenant (less the
amount of the Work Allowance), and for the value of Tenant’s furniture,
fixtures, machinery and equipment contained in the Premises and for expenses
(including moving expenses, and attorney’s fees) incurred by Tenant as a result
of such proceeding, provided the same does not include any value of the estate
vested by this Lease in Tenant or of the unexpired portion of the Effective
Period and does not reduce the amount available to Landlord or materially delay
the payment thereof.

 

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(c)          If all or any part of the Premises shall be taken for a limited
period, Tenant shall be entitled, except as hereinafter set forth, to that
portion of the award for such taking which represents compensation for the use
and occupancy of the Premises, for the taking of Tenant’s Property and for
moving expenses, and Landlord shall be entitled to that portion which represents
reimbursement for the cost of restoration of the Premises. This Lease shall
remain unaffected by such taking and Tenant shall continue to be responsible for
all of its obligations under this Lease and shall continue to pay in full all
Rent when due. If the period of temporary use or occupancy shall extend beyond
the Expiration Date, that part of the award which represents compensation for
the use and occupancy of the Premises shall be apportioned between Landlord and
Tenant as of the Expiration Date. Any award for temporary use and occupancy for
a period beyond the date to which the Rent has been paid shall be paid to, held
and applied by Landlord as a trust fund for payment of the Rent thereafter
becoming due.

 

(d)          In the event of any taking which does not result in termination of
this Lease, (i) Landlord, whether or not any award shall be sufficient therefor,
shall proceed with reasonable diligence to repair the remaining parts of the
Building and the Premises (other than those parts of the Premises which
constitute Fixtures and Tenant’s Property) to substantially their former
condition to the extent that the same may be feasible (subject to reasonable
changes which Landlord deems desirable) and so as to constitute a complete and
rentable Building and Premises and (ii) Tenant, whether or not any award shall
be sufficient therefor, shall proceed with reasonable diligence to repair the
remaining parts of the Premises which constitute Fixtures and Tenant’s Property,
to substantially their former condition to the extent that the same may be
feasible, subject to reasonable changes which shall be deemed Alterations.

 

7.05       Casualty. (a)  If the Building or the Premises shall be partially or
totally damaged or destroyed by fire or other casualty (each, a “Casualty”) and
if this Lease is not terminated as provided below, then (i) Landlord shall
repair and restore the Building and the Premises (excluding all Fixtures and
Tenant’s Property) with reasonable dispatch (but Landlord shall not be required
to perform the same on an overtime or premium pay basis) after notice to
Landlord of the Casualty and the collection of the insurance proceeds
attributable to such Casualty and (ii) Tenant shall repair and restore in
accordance with Section 4.02 all Fixtures and Tenant’s Property with reasonable
dispatch after Landlord shall have substantially completed repair and
restoration of the Building and the Premises (excluding all Fixtures and
Tenant’s Property); provided, that Tenant shall repair and restore in accordance
with Section 4.02 hereof all Tenant’s Property, Fixtures and improvements and
betterments with reasonable dispatch immediately after the Casualty to the
extent (x) such repair and restoration is necessary to permit Landlord to
commence, perform and complete repair and restoration of the Building and the
Premises or (y) in accordance with good construction practice, such work should
be performed prior to, or concurrently with, repair and restoration of the
Building and the Premises.

 

(b)          If all or part of the Premises shall be rendered Untenantable by
reason of a Casualty, the Fixed Rent and Recurring Additional Charges shall be
abated in the proportion that the Untenantable area of the Premises bears to the
total area of the Premises, for the period from the date of the Casualty to the
earlier to occur of (i) 120 days after the date on which Landlord shall have
performed its obligations under Section 7.05(a)(i), (ii) the date the
Untenantable area of the Premises (or any portion thereof) is made tenantable
(it being understood and agreed that the term “tenantable” for purposes of this
Section 7.05 shall mean that the Premises (or any portion thereof) is in a
condition which permits Tenant to occupy the same for general, administrative
and executive office uses) (provided, that if the Premises (or a portion
thereof) would have been tenantable at an earlier date but for Tenant having
failed diligently to prosecute repairs or restoration, then the Premises (or
such portion thereof) shall be deemed to have been made tenantable on such
earlier date and the abatement (with respect to such portion, if applicable)
shall cease) or (iii) the date Tenant or any subtenant reoccupies the
Untenantable area of the Premises (or a portion thereof) for the ordinary
conduct of business (in which case the Fixed Rent and the Additional Charges
allocable to such reoccupied portion shall be payable by Tenant from the date of
such occupancy). Landlord’s determination of the date the Premises (or a portion
thereof) is tenantable shall be controlling unless Tenant disputes same by
notice to Landlord within 10 Business Days after such determination by Landlord,
and pending resolution of such dispute, Tenant shall pay Rent in accordance with
Landlord’s determination. Nothing contained in this Section 7.05 shall relieve
Tenant from any liability that may exist as a result of any Casualty.

 

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(c)          If by reason of a Casualty (i) the Building shall be so damaged or
destroyed (whether or not the Premises are damaged or destroyed) that repair or
restoration thereof shall require more than 365 days or the expenditure of more
than 30% percent of the full insurable value of the Building (which, for
purposes of this Section 7.05(c), shall mean replacement cost less the cost of
footings, foundations and other structures below the street and first floors of
the Building) immediately prior to the Casualty and Landlord shall give notices
terminating leases or has terminated leases (including this Lease) for office
space in the Building affecting not less than 75% of the then leased rentable
square footage of the office space in the Building or (ii) more than 30% of the
Premises shall be damaged or destroyed (as estimated in either such case by a
reputable contractor, architect or engineer designated by Landlord), then in any
such case Landlord may terminate this Lease by notice given to Tenant within 120
days after the Casualty.

 

(d)          (i) Supplementing the foregoing provisions of this Section 7.05,
within 90 days after Landlord has actual knowledge of any Casualty rendering 50%
or more of the Premises Untenantable, Landlord shall deliver to Tenant an
estimate prepared by a reputable contractor selected by Landlord, having at
least 10 years’ experience in such matters, setting forth such contractor’s
estimate as to the time and cost reasonably required to repair such damage in
order to make the Premises (or the Untenantable portion thereof) no longer
Untenantable. If the period set forth in any such estimate exceeds 365 days from
the date of such Casualty, Tenant may terminate this Lease by notice to Landlord
given not later than 30 days following Tenant’s receipt of such estimate (time
being of the essence). If Tenant shall timely exercise such election, this Lease
and the term and estate granted hereby shall terminate on the 60th day after
notice of such election is given by Tenant, and Tenant shall vacate the Premises
and surrender the same to Landlord in accordance with the terms of this Lease.
If the time period set forth in said estimate exceeds 365 days from the date of
such Casualty and Tenant has not elected to terminate this Lease as set forth
above, and for any reason whatsoever (other than Unavoidable Delay or delay
caused by Tenant or Tenant’s employees, agents or contractors) Landlord shall
not complete the repair and restoration that Landlord is obligated to perform
hereunder within 90 days after the date set forth in the estimate as the date by
which the repair and restoration should reasonably be completed, then Tenant
shall have the further right to terminate this Lease by notice to Landlord given
not later than 30 days following the last day of such 90-day period after the
date set forth in the estimate (time being of the essence) and this Lease shall
terminate on the 30th day after such notice is given by Tenant.

 

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(ii)         Notwithstanding the foregoing, if a Casualty rendering 50% or more
of the Premises Untenantable occurs during the last 18 months of the Term and
Landlord’s restoration work would take more than 180 days to substantially
complete (excluding restoration of any of Tenant’s Property, Fixtures or
Tenant’s improvements and betterments), either party may terminate this Lease by
notice given to the other within 60 days after the date of the Casualty (time of
the essence), in which event this Lease shall terminate on the date specified in
such notice. If either party timely gives such notice, the Term shall expire
upon 30 days after such notice is given, and Tenant shall vacate the Premises
and surrender the same to Landlord in accordance with the provisions of this
Lease. If a party fails timely to deliver such notice as aforesaid, such party
shall be deemed to have waived its right to give such termination notice and
such party shall have no further right to terminate this Lease under this
Section 7.05(d).

 

(e)          Landlord shall not carry any insurance on any Tenant’s Property or
Fixtures and shall not be obligated to repair or replace Tenant’s Property or
Fixtures. Tenant shall look solely to Tenant’s insurance for recovery of any
damage to or loss of Tenant’s Property or Fixtures. Tenant shall notify Landlord
promptly of any Casualty in the Premises.

 

(f)           Any dispute between Landlord and Tenant arising under this Article
7 shall be resolved by arbitration conducted in accordance with the provisions
of Section 8.09.

 

(g)          This Section 7.05 shall be deemed an express agreement governing
any damage or destruction of the Premises by fire or other casualty, and Section
227 of the New York Real Property Law providing for such a contingency in the
absence of an express agreement, and any other law of like import now or
hereafter in force, shall have no application.

 

7.06       Landlord’s Insurance. Landlord shall obtain and keep in full force
and effect throughout the Term insurance against loss or damage by fire and
other casualty to the Building as may be insurable under then available standard
forms of “all-risk” insurance policies, with limits consistent with property
insurance maintained by prudent owners of First Class Office Buildings. Landlord
shall obtain and keep in full force and effect a commercial general liability
insurance policy in respect of the Building and the conduct or operation of
business therein, with limits consistent with liability insurance maintained by
prudent owners of First Class Office Buildings.

 

ARTICLE 8

Miscellaneous Provisions

 

8.01       Notice. All notices, demands, consents, approvals, advices, waivers
or other communications which may or are required to be given by either party to
the other under this Lease (each, “Notice”) shall be in writing and shall be
delivered by (a) personal delivery, (b) the United States mail, certified or
registered, postage prepaid, return receipt requested, or (c) a nationally
recognized overnight courier, in each case addressed as follows:

 

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If to Landlord:

 

One Hudson Yards Owner LLC

c/o The Related Companies, L.P.

60 Columbus Circle, 19th Floor

New York, New York 10023

Attention:  L. Jay Cross and Andrew L. Cantor

 

with a copy to each of the following:

 

Oxford Hudson Yards LLC

450 Park Avenue, Suite 900

New York, New York 10022

Attention:  Dean J. Shapiro

 

Oxford Properties Group*

Royal Bank Plaza, North Tower

200 Bay Street, Suite 900

Toronto, Ontario M5J 2J2 Canada

Attention: Chief Legal Counsel

*and, if different than the address set forth above, to the address posted from
time to time as the corporate head office of Oxford Properties Group on the
website www.oxfordproperties.com to the attention of the Chief Legal Officer

 

The Related Companies, L.P.

60 Columbus Circle, 19th Floor

New York, New York 10023

Attention:  Amy Arentowicz, Esq.

 

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10022

Attention:  Robert J. Sorin, Esq.

 

Mitsui Fudosan America

1251 Avenue of the Americas

New York, New York 10020

Attention: Ian J. Bentata and Sean McSweeney

 

If to Tenant:

 

prior to the date on which Tenant occupies its demised premises at 10 Hudson
Yards, New York, New York:

 

Intercept Pharmaceuticals, Inc.

450 West 15th Street, Suite 505

New York, New York 10011

Attention: Bryan Yoon, Esq.

 

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after the date on which Tenant occupies its demised premises at 10 Hudson Yards,
New York, New York but prior to the date on which Tenant occupies the Premises:

 

Intercept Pharmaceuticals, Inc.

10 Hudson Yards

37th Floor

New York, New York 10001

Attention: Bryan Yoon, Esq.

 

after the date on which Tenant occupies the Premises:

 

Intercept Pharmaceuticals, Inc.

55 Hudson Yards

550 West 34th Street, 23rd Floor

New York, New York 10001

Attention: Bryan Yoon, Esq.

 

in each case, with a copy to:

 

Thompson Hine LLP

335 Madison Avenue (12th Floor)

New York, New York 10017

Attention: Mario J. Suarez, Esq.

 

Either party may designate a different or an additional address or addresses for
notices intended for such party from time to time by at least 5 days’ notice to
the other party. Notices from Landlord may be given by Landlord’s managing
agent, if any, or by Landlord’s attorney. Notices from Tenant may be given by
Tenant’s attorney. Each Notice shall be deemed to have been given on the date
such Notice is actually received as evidenced by a written receipt therefor, and
in the event of failure to deliver by reason of changed address of which no
Notice was given or refusal to accept delivery, as of the date of such failure.

 

8.02       Rules and Regulations. Tenant shall comply with, and Tenant shall
cause its licensees, employees, contractors, agents and invitees to comply with,
the rules of the Building set forth in Exhibit C, as the same may be reasonably
modified or supplemented by Landlord from time to time for the safety, care and
cleanliness of the Premises and the Building and for preservation of good order
therein (the “Rules and Regulations”). Notwithstanding anything to the contrary
contained in this Lease, Tenant shall not be bound by any such modification or
supplement to the Rules and Regulations that (i) imposes, except to a de minimis
extent, any new or increased costs or financial obligations on Tenant (unless
any such cost or financial obligation is the result of compliance with any Laws)
or (ii) unreasonably affects the conduct of Tenant’s business in the Premises.
Landlord shall not be obligated to enforce the Rules and Regulations against
Tenant or any other tenant or occupant of the Building or any other party, and
Landlord shall have no liability to Tenant by reason of the violation by any
tenant or other party of the Rules and Regulations; provided, that Landlord
shall not enforce the Rules and Regulations in a manner which discriminates
against Tenant. If any provision of the Rules and Regulations shall conflict
with any provision of this Lease, such provision of this Lease shall govern.

 

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8.03       Severability. If any term or provision of this Lease, or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected, and each provision of this
Lease shall be valid and shall be enforceable to the extent permitted by law.

 

8.04       Certain Definitions.   (a)  “Landlord” means only the owner, at the
time in question, of the Building or that portion of the Building of which the
Premises are a part, or of a lease of the Building or that portion of the
Building of which the Premises are a part, so that in the event of any transfer
or transfers of title to the Building or of Landlord’s interest in a lease of
the Building or such portion of the Building, the transferor shall be and hereby
is relieved and freed of all obligations of Landlord under this Lease accruing
after such transfer, and it shall be deemed, without further agreement, that
such transferee has assumed all obligations of Landlord during the period it is
the holder of Landlord’s interest under this Lease.

 

(b)          “Landlord shall have no liability to Tenant” or words of similar
import mean that Tenant is not entitled to terminate this Lease, or to claim
actual or constructive eviction, partial, or total, or to receive any abatement
or diminution of Rent, or to be relieved in any manner of any of its other
obligations under this Lease, or to be compensated for loss or injury suffered
or to enforce any other right or kind of liability whatsoever against Landlord
under or with respect to this Lease or with respect to Tenant’s use or occupancy
of the Premises.

 

(c)          “Unavoidable Delay” means Landlord’s inability to fulfill or delay
in fulfilling any of its obligations under this Lease to be performed by
Landlord or Landlord’s inability to make or delay in making any repairs,
additions, alterations, improvements or decorations or Landlord’s inability to
supply or delay in supplying any equipment or fixtures, if Landlord’s inability
or delay is due to or arises by reason of accident, strikes or labor troubles,
or weather conditions that render the performance of any such obligation or work
unsafe or impracticable, or any cause whatsoever beyond Landlord’s reasonable
control, including, without limitation, governmental preemption in connection
with a national emergency or other actions of a governmental or
quasi-governmental authority, Laws, shortages of materials, unavailability of
labor, fuel, water, electricity or materials, or delays caused by tenants or
other occupants, mechanical breakdown, acts of God, enemy action, civil
commotion, fire or other casualty, but “Unavoidable Delay” shall not include any
inability or delay resulting from insufficient funds.

 

(d)          Whenever any provision of this Lease refers to a specified amount
“Subject to CPI Increases”, such amount shall be adjusted as of each anniversary
of January 1, 2017. Each such adjustment shall be made by multiplying the
applicable amount by the greater of (a) 1.0, or (b) a fraction, the numerator of
which shall be the CPI as most recently published prior to the date of such
adjustment and the denominator of which shall be the CPI for January, 2016. The
term “CPI” shall mean Consumer Price Index for All Urban Consumers, New
York-Northern New Jersey-Long Island, NY-NJ-CT-PA, 1982-84=100, or any successor
to such index, appropriately adjusted, or if no such index or successor index
shall be published, such similar index, appropriately adjusted, as shall
reasonably be designated by Landlord and consented to by Tenant, such consent
not to be unreasonably withheld, conditioned or delayed.

 

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8.05       Quiet Enjoyment. Tenant shall and may peaceably and quietly have,
hold and enjoy the Premises, subject to the other terms of this Lease and to
Superior Leases and Superior Mortgages, provided that this Lease is in effect.

 

8.06       Limitation of Landlord’s and Tenant’s Personal Liability. (a)  Tenant
shall look solely to Landlord’s interest in the Building (including, without
limitation, the rents and profits arising therefrom) for the recovery of any
judgment against Landlord, and no other property or assets of Landlord or
Landlord’s members, partners, shareholders, principals, officers or directors,
direct or indirect, disclosed or undisclosed, shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant’s
remedies under or with respect to this Lease. In no event shall Tenant bring any
action against any of Landlord’s members, managers, limited partners,
shareholders, directors, officers and principals, direct and indirect, for any
claims arising out of the Lease.

 

(b)          No property or assets of Tenant’s members, partners, shareholders,
principals, officers or directors, direct or indirect, disclosed or undisclosed,
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Landlord’s remedies under or with respect to this Lease. In no
event shall Landlord bring any action against any of Tenant’s members, managers,
limited partners, shareholders, directors, officers and principals, direct and
indirect, for any claims arising out of the Lease.

 

8.07       Counterclaims. If Landlord commences any summary proceeding or action
for nonpayment of Rent or to recover possession of the Premises, Tenant shall
not interpose any counterclaim of any nature or description in any such
proceeding or action, unless Tenant’s failure to interpose such counterclaim in
such proceeding or action would result in the waiver of Tenant’s right to bring
such claim in a separate proceeding under applicable law.

 

8.08       Survival. All obligations and liabilities of Landlord or Tenant to
the other which accrued before the expiration or other termination of this Lease
and all such obligations and liabilities which by their nature or under the
circumstances can only be, or by the provisions of this Lease may be, performed
after such expiration or other termination, shall survive the expiration or
other termination of this Lease for a period of 3 years, except as expressly
provided in this Lease. Without limiting the generality of the foregoing, the
rights and obligations of the parties with respect to any indemnity under this
Lease, and with respect to Recurring Additional Charges and any other amounts
payable under this Lease, shall survive the expiration or other termination of
this Lease.

 

8.09       Certain Remedies; Arbitration. (a)  If Tenant requests Landlord’s
consent and Landlord fails or refuses to give such consent, except where
Landlord acted in bad faith and in an arbitrary and capricious manner in failing
or refusing to give such consent, Tenant shall not be entitled to any damages
for any withholding by Landlord of its consent, it being intended that Tenant’s
sole remedy shall be an action for specific performance or injunction or
arbitration in accordance with the provisions of Section 8.09(b), and that such
remedy shall be available only in those cases where this Lease provides that
Landlord shall not unreasonably withhold its consent.

 

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(b)          (i) No dispute relating to this Lease or the relationship of
Landlord and Tenant under this Lease shall be resolved by arbitration unless
this Lease expressly provides for such dispute to be resolved by arbitration.
Either party shall have the right to submit a dispute relating to (x) the
reasonableness of the grant or denial of a consent or other determination by the
other party when, pursuant to the provisions of this Lease, such other party’s
consent was not to be unreasonably withheld or (y) any other matter for which
arbitration is expressly provided as a means of dispute resolution pursuant to
the terms of this Lease (except for matters for which a different arbitration
procedure is expressly provided), to final and binding arbitration in New York,
New York administered by JAMS in accordance with JAMS Streamlined Arbitration
Rules and Procedures in effect at that time (or, if JAMS is no longer in
existence, then administered by National Arbitration and Mediation (“NAM”), in
accordance with NAM’s Comprehensive Dispute Resolution Rules and Procedures; and
if NAM is no longer in existence, then administered by the American Arbitration
Association under the Expedited Procedures of its Commercial Arbitration Rules
in effect at that time; and if none of the preceding remains in existence, by
the expedited arbitration procedures of any succeeding or substantially similar
dispute resolution organization). A single arbitrator will be selected pursuant
to such rules and procedures (the “JAMS Arbitrator”). The parties agree that:
(1) the unsuccessful party in such arbitration will pay to the successful party
all reasonable attorneys’ fees and disbursements incurred by the successful
party in connection with such arbitration, and will pay any fees and
disbursements due to JAMS (or the organization administering the arbitration)
and the JAMS Arbitrator and, to the extent the “successful” party cannot be
clearly identified, each party will bear its own costs and expenses and the
parties will pay their equal share of any fees and disbursements due to JAMS (or
the organization administering the arbitration) and the JAMS Arbitrator; (2)
arbitration pursuant to this Section 8.09(b)(i) is intended to be the sole and
exclusive method of arbitration to be utilized by the parties and the sole and
exclusive dispute resolution method to be utilized by the parties concerning any
dispute described in clauses (x) or (y) of this Section 8.09(b); (3) judgment
may be had on the decision and award of the arbitrator so rendered in any court
of competent jurisdiction (each party hereby consenting to the entry of such
judgment in any such court); (4) the JAMS Arbitrator shall have no right to
award damages (though the foregoing shall not preclude the JAMS Arbitrator from
issuing a determination that results in the payment or credit from one party to
the other if such payment or credit is the subject matter of such arbitration);
and (5) any decision or award rendered in such arbitration, whether or not such
decision or award has been entered for judgment, shall be final and binding upon
Landlord and Tenant and shall constitute an “award” by the JAMS Arbitrator
within the meaning of the applicable arbitration rules and Laws. The JAMS
Arbitrator will be bound by the provisions of this Lease and will not have the
power to add to, subtract from or otherwise modify such provisions, and will
have the authority to, and may, order specific performance to remedy any breach
of the terms of this Lease. The JAMS Arbitrator will consider only the specific
issues submitted to him/her for resolution, and will be directed to make a
determination as to the “successful” party or a specific determination that
there is no prevailing party. If any party fails to appear at a duly scheduled
and noticed hearing, the JAMS Arbitrator is hereby expressly authorized to enter
judgment for the appearing party. The JAMS Arbitrator shall be directed by both
parties to issue a determination that provides an explanation of his/her
decision with reasonable specificity. Landlord and Tenant shall each have the
right to appear and be represented by counsel before said JAMS Arbitrator and to
submit such data and memoranda in support of their respective positions in the
matter in dispute as may be reasonably necessary or appropriate under the
circumstances. Neither party shall have ex parte communications with any
arbitrator selected under this Section 8.09(b) following his or her selection
and pending completion of the arbitration hereunder.

 

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(ii)         Any JAMS Arbitrator acting under this Section 8.09 in connection
with any matter shall (1) be experienced in the field to which the dispute
relates, (2) have been actively engaged in such field for a period of at least
10 years before the date of his or her appointment as a JAMS Arbitrator
hereunder, (3) be sworn fairly and impartially to perform his or her respective
duties as a JAMS Arbitrator hereunder, (4) not be an employee or past employee
of Landlord or Tenant or of any other person, partnership, corporation or other
form of business or legal association or entity that controls, is controlled by
or is under common control with Landlord or Tenant and (5) never have
represented or been retained for any reason whatsoever by Landlord or Tenant or
any other person, partnership, corporation or other form of business or legal
association or entity that controls, is controlled by or is under common control
with Landlord or Tenant.

 

(iii)        Landlord and Tenant agree to sign all documents and to do all other
things necessary to submit any such matter to arbitration and further agree to,
and hereby do, waive any and all rights they or either of them may at any time
have to revoke their agreement hereunder to submit to arbitration and to abide
by the decision rendered thereunder. For such period, if any, as this agreement
to arbitrate is not legally binding or the arbitrator’s award is not legally
enforceable, the provisions requiring arbitration shall be deemed deleted and
matters to be determined by arbitration shall be subject to litigation.

 

(iv)        The provisions of this Section 8.09(b) shall survive the expiration
or sooner termination of this Lease.

 

8.10       No Offer; Counterparts. The submission by Landlord of this Lease in
draft form shall be solely for Tenant’s consideration and not for acceptance and
execution. Such submission shall have no binding force or effect and shall
confer no rights nor impose any obligations, including brokerage obligations, on
either party unless and until both Landlord and Tenant shall have executed a
lease and duplicate originals thereof shall have been delivered to the
respective parties. This Lease may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, even where such
executed counterpart is delivered via facsimile or Portable Document Format, but
all of which together shall constitute one and the same instrument.

 

8.11       Captions; Construction. The table of contents, captions, headings and
titles in this Lease are solely for convenience of reference and shall not
affect its interpretation. This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Lease to be drafted. Each covenant, agreement, obligation or other provision of
this Lease on Tenant’s part to be performed, shall be deemed and construed as a
separate and independent covenant of Tenant, not dependent on any other
provision of this Lease.

 

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8.12       Amendments. This Lease may not be altered, changed or amended, except
by an instrument in writing signed by the party to be charged.

 

8.13       Broker. Each party represents to the other that such party has dealt
with no broker other than CBRE, Inc. (representing Landlord) and Newmark &
Company Real Estate, Inc., d/b/a Newmark Grubb Knight Frank (representing
Tenant) (collectively, the “Broker”) in connection with this Lease or, with
respect to Tenant only, the Project, and each party shall indemnify and hold the
other harmless from and against all loss, cost, liability and expense
(including, without limitation, reasonable attorneys’ fees and disbursements)
arising out of any claim for a commission or other compensation by any broker
other than Broker who alleges that it has dealt with the indemnifying party in
connection with this Lease or the Project. Landlord shall enter into separate
agreements with Broker which provide that, if this Lease is executed and
delivered by both Landlord and Tenant, Landlord shall pay to Broker any
commission that Broker may be entitled to in connection with this Lease, subject
to, and in accordance with, the terms and conditions of such agreement.

 

8.14       Merger. Tenant acknowledges that Landlord has not made and is not
making, and Tenant, in executing and delivering this Lease, is not relying upon,
any warranties, representations, promises or statements, except to the extent
that the same are expressly set forth in this Lease. This Lease embodies the
entire understanding between the parties with respect to the subject matter
hereof, and all prior agreements, understanding and statements, oral or written,
with respect thereto are merged in this Lease.

 

8.15       Successors. This Lease shall be binding upon and inure to the benefit
of Landlord, its successors and assigns, and shall be binding upon and inure to
the benefit of Tenant, its successors, and to the extent that an assignment may
be approved by Landlord or is otherwise expressly permitted under the terms of
this Lease, Tenant’s assigns.

 

8.16       Applicable Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
principles of conflicts of laws.

 

8.17       No Development Rights. Tenant acknowledges that it has no rights to
any development rights, air rights or comparable rights appurtenant to the
Project or any portion thereof, and consents, without further consideration, to
any utilization of such rights by Landlord. Tenant shall promptly execute and
deliver, at no out-of-pocket cost to Tenant, any instruments which may be
requested by Landlord, including instruments merging zoning lots, evidencing
such acknowledgment and consent. The provisions of this Section 8.17 shall be
construed as an express waiver by Tenant of any interest Tenant may have as a
“party in interest” (as such term is defined in Section 12-10 Zoning Lot of the
Zoning Resolution of the City of New York) in the Project.

 

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8.18       Condominium. This Lease and all rights of Tenant hereunder are and
shall be subject and subordinate in all respects to any condominium declaration
and any other documents (collectively, the “Declaration”) which are or shall be
recorded in order to convert the Land and the improvements erected thereon to a
condominium form of ownership in accordance with the provisions of Article 9-B
of the Real Property Law, or any successor thereto, provided the Declaration
does not include any terms which increase Tenant’s monetary or non-monetary
obligations (other than to a de minimis extent) or decrease Tenant’s rights
(other than to a de minimis extent) or materially interfere with Tenant’s use of
the Premises for executive, administrative and general office purposes. If any
such Declaration is to be recorded, Tenant, upon the request of Landlord, shall
enter into an amendment of this Lease (at no out-of-pocket costs to Tenant other
than any legal fees incurred by Tenant in connection with same) reasonably
acceptable to Tenant confirming such subordination and modifying the Lease in
such respects as shall be necessary to conform to such condominiumization,
including, without limitation, appropriate adjustments to Tenant’s Share and
appropriate reductions in the Base Operating Amount, the Base PILOT Amount and
the Base Impositions Amount; provided, that, Landlord provides to Tenant a
subordination, non-disturbance and attornment agreement duly executed by the
board of such condominium in a form reasonably acceptable to Tenant.

 

8.19       Embargoed Person. Tenant represents that as of the date of this
Lease, and Tenant covenants that throughout the Effective Period: (a) Tenant is
not, and shall not be, an Embargoed Person, (b) none of the funds or other
assets of Tenant are or shall constitute property of, or are or shall be
beneficially owned, directly or indirectly, by any Embargoed Person; (c) no
Embargoed Person shall have any interest of any nature whatsoever in Tenant,
with the result that the investment in Tenant (whether directly or indirectly)
is or would be blocked or prohibited by law or that this Lease and performance
of the obligations hereunder are or would be blocked or in violation of law and
(d) none of the funds of Tenant are, or shall be derived from, any activity with
the result that the investment in Tenant (whether directly or indirectly) is or
would be blocked or in violation of law or that this Lease and performance of
the obligations hereunder are or would be in violation of law. “Embargoed
Person” means a person, entity or government (i) identified on the Specially
Designated Nationals and Blocked Persons List maintained by the United States
Treasury Department Office of Foreign Assets Control and/or any similar list
maintained pursuant to any authorizing statute, executive order or regulation
and/or (ii) subject to trade restrictions under United States law, including,
without limitation, the International Emergency Economic Powers Act, 50 U.S.C. §
1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Orders or regulations promulgated under any such laws, with the result
that the investment in Tenant (whether directly or indirectly), is or would be
prohibited by law or this Lease is or would be in violation of law and/or (iii)
subject to blocking, sanction or reporting under the USA Patriot Act, as
amended; Executive Order 13224, as amended; Title 31, Parts 595, 596 and 597 of
the U.S. Code of Federal Regulations, as they exist from time to time; and any
other law or Executive Order or regulation through which the U.S. Department of
the Treasury has or may come to have sanction authority. If any representation
made by Tenant pursuant to this Section 8.19 shall become untrue Tenant shall
within 10 days give written notice thereof to Landlord, which notice shall set
forth in reasonable detail the reason(s) why such representation has become
untrue and shall be accompanied by any relevant notices from, or correspondence
with, the applicable governmental agency or agencies.

 

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8.20       Dining Facility; Wet Installations. (a)  Tenant shall be permitted to
use a portion of the Premises for the operation of a Dining Facility provided
(i) Tenant obtains (at its cost and expense) any and all required permits,
licenses and certificates therefor (including, without limitation, any necessary
amendment to the certificate of occupancy for the Building which shall be
subject to the provisions of Section 1.04(c)), (ii) Tenant shall perform and pay
for any necessary extermination, ventilation and cleaning (in excess of normal
office ventilation and cleaning) necessitated by the use of such space as a
Dining Facility (it being understood that Landlord's provision of cleaning
services shall not be extended beyond that provided for herein by reason of
Landlord’s approval of the use of such space as a Dining Facility), (iii) Tenant
shall cause the Dining Facility to be properly ventilated so that no odor will
emanate from the Premises to other portions of the Building and so as to impose
no additional loads and have no other adverse effect on the Building HVAC system
(including, without limitation, by replacing and/or upgrading filters) and (iv)
Tenant shall otherwise maintain and operate each Dining Facility consistent with
the standards of a First Class Office Building.

 

(b)          In connection with Tenant’s use of portion(s) of the Premises for
the operation of a Dining Facility, the parties agree as follows:

 

(i)         Tenant acknowledges that if any smoke or odors are released by
Tenant from the Premises, Tenant, at its expense, upon and subject to all of the
terms of this Lease, upon Landlord’s request, shall perform any work or
Alteration reasonably requested by Landlord to remedy such problem.

 

(ii)        Tenant, at its expense, upon and subject to all of the terms of this
Lease shall keep its equipment and appliances reasonably clean at all times.

 

(iii)       Tenant, at its expense upon and subject to all of the terms of this
Lease, shall diligently keep the Premises at all times free and clear of rats,
mice, other rodents, pests, insects and other vermin. In furtherance thereof,
Tenant shall employ an exterminator reasonably approved by Landlord to regularly
exterminate such rats, mice, other rodents, pests, insects and other vermin,
which exterminator shall utilize a method commonly used in First Class Office
Buildings for the prevention of any infestation by, and extermination of, said
animals and insects and Tenant shall take whatever precautions Landlord deems
reasonably necessary to prevent such rats, mice, other rodents, pests, insects
and other vermin from existing in the Premises or permeating into other parts of
the Building. Any pest management conducted at the Premises shall emphasize
non-chemical methods for pest control and comply with Landlord’s reasonable
integrated pest management program, which program shall be generally applicable
to all office tenants of the Building.

 

(iv)       Tenant, at its expense, upon and subject to all of the terms of this
Lease, shall arrange for the removal of Tenant’s refuse and rubbish from each
Dining Facility at least once each day and in compliance with all Rules and
Regulations and shall retain Landlord’s contractor(s) to perform the same at
Tenant’s expense. Landlord shall not be required to furnish any services or
equipment for the removal of such refuse and rubbish except (i) Landlord shall
provide adequate space for the staging of recycling containers in freight areas
and (ii) as may otherwise be expressly provided in this Lease. Tenant further
agrees not to permit any refuse or rubbish to be collected or disposed of from a
Dining Facility during Business Hours. Tenant shall store all food-related and
beverage-related garbage in closed refrigerated units within the Premises until
collection. Tenant covenants that no supplies or deliveries, nor any of Tenant’s
refuse or rubbish, shall be kept or permitted to be kept in any area outside of
the Premises except as permitted by the applicable Rules and Regulations.

 

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(v)        Landlord, at Tenant’s reasonable expense, may install submeters to
measure Tenant’s consumption of water in connection with the use of any Dining
Facilities, in which event Tenant shall reimburse Landlord for the quantities of
water shown on such meters, within 30 days after demand, at Landlord’s then
established charges therefor, which charges as of the Effective Date are set
forth on Exhibit H attached hereto based on the actual costs to Landlord to
provide such water and shall be subject to increase to the extent of any actual
increase in the cost to Landlord of providing such water.

 

(vi)       Subject to the applicable provisions of this Lease and Landlord’s
review and approval of Tenant’s plans therefor, Tenant shall have the right, as
part of Tenant’s Initial Work or as a subsequent Alteration, at Tenant’s sole
cost and expense, to install an electric water heater, in a location in the
Premises to be designated by Landlord, to serve any Dining Facility in the
Premises.

 

(vii)      If requested by Landlord in connection with any cafeteria or similar
dining facility installed by Tenant in the Premises, Tenant, at its expense,
upon and subject to all of the terms of this Lease (including, without
limitation, Section 4.02), shall install, maintain and replace as necessary a
dehydration grinder capable of achieving at least a 75% reduction in organic
waste volume and shall run all organic waste generated by or in connection with
any such Dining Facility through such dehydration grinder prior to disposing of
such waste in accordance with the provisions of this Section 8.20.

 

8.21       Press Releases. Without the prior written consent of the other party
(which consent shall not be unreasonably withheld, conditioned or delayed),
neither party nor such party’s affiliates or their officers, shareholders,
partners, directors, employees or representatives shall make or provide any
public statement, press release or other public disclosure concerning the
transactions contemplated by, and the terms of, this Lease (including, without
limitation, by means of statements, press releases or disclosures displayed or
accessible electronically, on the internet and/or on social media, such as, by
way of example only, Facebook and Twitter), except (i) for any such public
statements or disclosures which, in the opinion of such party’s counsel, are
legally required (in which case the content of such statements or disclosures
shall be limited to what is legally required) or (ii) to the extent required by
securities laws or compliance provisions of other Laws or any securities, bond
or commodities exchange. In the event that a public announcement or disclosure
is permitted pursuant to clauses (i) or (ii) of the preceding sentence, prior to
making such disclosure, the disclosing party shall notify the other party of
such required public disclosure and use reasonable efforts to coordinate with
the other party with respect to the nature and content of such disclosure.

 

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8.22       Tenant Creditworthiness. Tenant shall, from time to time, upon
request by Landlord, a Superior Mortgagee or Superior Lessee or a prospective
Superior Mortgagee or Superior Lessee (any such party a “Requesting Party”),
cooperate with such Requesting Party in order to establish Tenant’s
creditworthiness as required by such Requesting Party (or, in the case of
Landlord, as required by Landlord or any current or prospective Superior
Mortgagee or Superior Lessee) in connection with a prospective modification of,
or new, superior lease, a prospective refinancing or modification of, or new
mortgage, or a prospective sale, assignment or financing or refinancing of
Landlord’s interest in this Lease, the Project or any interest in Landlord or
any of Landlord’s direct or indirect owners, or for any other reasonable
purpose. In connection with such cooperation, Tenant shall furnish to the
Requesting Party, within 10 Business Days after request by such Requesting
Party, all financial information regarding Tenant which is reasonably necessary
for such Requesting Party to establish Tenant’s creditworthiness, provided,
however that Tenant may withhold any information which Tenant is not permitted
to disclose under securities laws applicable to public companies. As a condition
to Tenant’s obligation to provide such financial information to any Requesting
Party other than Landlord, prior to Tenant’s delivery of such financial
information, the Requesting Party (if such party is not Landlord) shall execute
and deliver a confidentiality agreement with respect to such financial
information substantially in the form attached hereto as Exhibit N, subject to
reasonable negotiation at the request of the Requesting Party.

 

8.23       Recording. Landlord and Tenant agree not to place this Lease or any
memorandum of this Lease of record.

 

8.24       REIT/UBTI Compliance. All Rent and all sums, charges, or amounts of
whatever nature under this Lease payable to Landlord shall qualify as “rents
from real property” under both the Internal Revenue Code § 512(b)(3) and §
856(d) and all related statutes, regulations, revenue rulings, interpretations,
and other official pronouncements, all as in effect from time to time. If the
Rent or any other sum, charge, or amount of whatever nature to be paid by Tenant
to Landlord under this Lease does not so qualify, then Landlord may reasonably
adjust the Rent to achieve such qualification; provided that such adjustments,
in the aggregate, produce the economic equivalent to the Rent that would have
been payable by Tenant to Landlord without giving effect to any such
adjustments. Tenant, at no cost to Tenant, shall execute such documents as
Landlord reasonably requires to make such adjustments. If the charge or cost for
any service required or permitted to be performed by Landlord pursuant to this
Lease may be treated as “impermissible tenant service” income under the Laws
governing a real estate investment trust (“REIT”), or as unrelated business
taxable income, then, in lieu of Landlord performing such service, such service
may be performed by a taxable REIT subsidiary that is affiliated with either
Landlord or Landlord’s property manager, an independent contractor of Landlord
or Landlord’s property manager who shall perform its obligations subject to the
same requirements as are applicable to Landlord under this Lease (the “Service
Provider”). If Tenant is subject to a charge under this Lease for any such
service, then, at Landlord’s direction, Tenant shall pay such charge either to
Landlord for further payment to the Service Provider or directly to the Service
Provider, and, in either case, (a) Landlord will credit such payment against
Additional Charges due from Tenant under this Lease for such service and (b)
such payment to the Service Provider will not relieve Landlord from any
obligation under this Lease concerning the provisions of such service.

 

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8.25       Time of the Essence. Time shall be of the essence with respect to all
deadlines and time periods set forth in this Lease for the exercise of rights
under this Lease.

 

8.26       Car Service Access to Building. Subject to all applicable Laws, the
Rules and Regulations and such reasonable security procedures as may from time
to time be promulgated by Landlord, Tenant shall have the non-exclusive right to
use a curb space location to be designated by Landlord at or near the 34th
Street Building lobby for the pick-up and drop-off of its officers, employees
and visitors by any car service company or drivers employed or hired by Tenant.
Only Tenant and other Permitted Users may use such curb space, and Tenant is
expressly prohibited from licensing or otherwise assigning, in whole or in part,
the use thereof to any other entity, except in connection with a permitted
assignment of Tenant’s interest in this Lease.

 

ARTICLE 9

Renewal Right

 

9.01       Renewal Right.   (a)  Provided that (A) on the date Tenant exercises
the First Renewal Option and at the commencement of the First Renewal Term (i)
this Lease has not been terminated, (ii) Tenant occupies at least 1 full floor
of the Building and (iii) Tenant is an Intercept Tenant or an assignee of
Tenant’s interest in this Lease in accordance with the terms hereof, and (B) on
the date Tenant exercises the First Renewal Option Tenant is not in monetary or
material non-monetary default under this Lease beyond applicable notice and cure
periods, Tenant shall have the option (the “First Renewal Option”) to extend the
initial Term of this Lease, at Tenant’s sole discretion as indicated by Tenant
in the First Renewal Notice, for either an additional (x) 10 year period (the
“Ten Year Renewal Term”) or (y) 5 year period (the “First Five Year Renewal
Term”), to commence at the expiration of the initial Term.

 

(b)          The First Renewal Option shall be exercised with respect to a
Renewal Premises only and shall be exercisable by Tenant giving notice to
Landlord (the “Renewal Notice”) at least 16 months before the last day of the
initial Term. Tenant shall specify in the First Renewal Notice whether Tenant
elects the Ten Year Renewal Term or the First Five Year Renewal Term (failing
which Tenant shall have been deemed to have elected the Ten Year Renewal Term).
Time is of the essence with respect to the giving of the First Renewal Notice.

 

(c)          Provided that (A) Tenant exercised the First Renewal Option for the
First Five Year Renewal Term, (B) on the date Tenant exercises the Second
Renewal Option and at the commencement of the Second Renewal Term (i) this Lease
has not been terminated, (ii) Tenant occupies at least 1 full floor of the
Building and (iii) Tenant is an Intercept Tenant or an assignee of Tenant’s
interest in this Lease in accordance with the terms hereof, and (C) on the date
Tenant exercises the Second Renewal Option Tenant is not in monetary or material
non-monetary default under this Lease beyond applicable notice and cure periods,
Tenant shall have the option (the “Second Renewal Option”; the First Renewal
Option and Second Renewal Option are each a “Renewal Option”) to extend the term
of this Lease for an additional 5 year period (the “Second Renewal Term”; the
First Five Year Renewal Term, the Second Renewal Term and the Ten Year Renewal
Term are each a “Renewal Term”), to commence at the expiration of the First Five
Year Renewal Term. For the avoidance of doubt, if Tenant elected or is deemed to
have elected the Ten Year Renewal Option for the First Renewal Option, then
Tenant shall not have the right to the Second Renewal Option.

 

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(d)          The Second Renewal Option shall be exercised with respect to a
Renewal Premises only and shall be exercisable by Tenant giving notice to
Landlord (the “Second Renewal Notice”) at least 16 months before the last day of
the First Five Year Renewal Term. Time is of the essence with respect to the
giving of the Second Renewal Notice.

 

(e)          Each Renewal Option shall be exercised with respect to space
selected by Tenant and designated in the applicable Renewal Notice (the space as
to which Tenant exercises (or is deemed to have exercised) the Renewal Option
pursuant to this Section 9.01 is called the “Renewal Premises”); provided, that
Tenant shall only have the right to designate as the Renewal Premises either:

 

(i)          the entire Premises demised by this Lease as of the date on which
Tenant gives the applicable Renewal Notice; or

 

(ii)         a portion of the Premises demised by this Lease as of the date on
which Tenant gives the applicable Renewal Notice consisting of 1 or more
contiguous full floors of the then Premises starting, at Tenant’s option, with
either the highest or lowest office floor of the largest contiguous block of
floors in the Building then leased by Tenant.

 

If Tenant fails in any Renewal Notice to designate the Renewal Premises, then
the Renewal Premises shall be deemed to be the entire Premises demised by this
Lease as of the date on which Tenant gives such Renewal Notice.

 

9.02       Renewal Rent and Other Terms. (a)  Each Renewal Term shall be upon
all of the terms and conditions set forth in this Lease, except that (i) the
Fixed Rent shall be as determined pursuant to the further provisions of this
Section 9.02; (ii) Tenant shall accept the Renewal Premises in its “as is”
condition at the commencement of applicable Renewal Term subject, however, to
Landlord’s ongoing maintenance and repair obligations expressly set forth in
this Lease, and, except as provided in clause (xi) below, Landlord shall not be
required to perform any work, to pay the Work Allowance or any other amount or
to render any services to make the Premises ready for Tenant’s use and occupancy
or to provide any abatement of Fixed Rent or Additional Charges, in each case
with respect to the applicable Renewal Term; (iii) Tenant shall have no option
to renew this Lease beyond the expiration of the Ten Year Renewal Term or the
Second Renewal Term, as applicable; (iv) the Base PILOT Amount shall be the
PILOT Amount for the Tax Year ending immediately before the commencement of the
applicable Renewal Term (or, if the PILOT Cessation Date shall have occurred,
the Base PILOT Amount shall be the Taxes for the Tax Year ending immediately
before the commencement of the applicable Renewal Term); (v) the Base
Impositions Amount shall be the Impositions for the Tax Year ending immediately
before the commencement of the applicable Renewal Term; (vi) the Base Operating
Amount shall be the Operating Expenses for the Operating Year ending immediately
before the commencement of the applicable Renewal Term; (vii) all references in
this Lease to the “Premises” shall be deemed to refer to the Renewal Premises;
(viii) if the Renewal Premises consists of less than all of the then Premises,
Tenant’s Share shall be proportionately reduced; (ix) if the Renewal Premises
consists of less than all of the then Premises, then any space as to which this
Lease is not being renewed shall be delivered to Landlord one day before the
first day of the applicable Renewal Term vacant and free of any lien or
encumbrance and otherwise in the condition required pursuant to this Lease
(including, without limitation, Sections 4.03(c) and (d)) as if such date were
the expiration date of this Lease, (x) all references in this Lease to the
Expiration Date shall be deemed to mean the last day of the applicable Renewal
Term and (xi) Tenant shall be entitled to any rent abatement and/or work
allowance determined in accordance with Section 9.02(b) below; it being agreed
that any such work allowance will be provided to Tenant for Tenant’s Alterations
to the Renewal Premises in accordance with the provisions of Section 3.03
hereof, applied mutatis mutandis.

 

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(b)          The annual Fixed Rent for the Renewal Premises for each Renewal
Term shall be the Fair Market Rent for such Renewal Term. “Fair Market Rent”
means the fixed annual rent that a willing lessee would pay and a willing lessor
would accept for the Renewal Premises during the applicable Renewal Term, taking
into account all relevant factors (including, without limitation, any rent
abatement or work allowance to which Tenant may be entitled as determined in
accordance with the further provisions of this clause (b)). In conjunction with,
and as a component of, the determination of Fair Market Rent, Landlord and
Tenant may include the amount of any rent abatement or work allowance to which
Tenant shall be entitled for the Renewal Premises, if any, based on the amount
of any rent abatement or work allowance that a willing lessee and a willing
lessor would accept for the Renewal Premises, taking into account all relevant
factors (including, without limitation, the amount of the Fair Market Rent and
the terms set forth in Section 9.02(a)). Each party shall indicate its
determination of the amount of any rent abatement and/or work allowance to which
Tenant should be entitled in connection with the leasing of the Renewal Premises
in Landlord’s Determination or Tenant’s Determination, as applicable. The Fair
Market Rent shall be determined as of the date which is 120 days prior to the
commencement of the applicable Renewal Term.

 

(c)          If Tenant timely exercises a Renewal Option, Landlord and Tenant
shall promptly commence and diligently and in good faith seek to establish the
Fair Market Rent. If Landlord and Tenant are unable to agree (for any reason)
upon the Fair Market Rent on or prior to the date that is 120 days before the
last day of the then Term, then the Fair Market Rent shall be determined by
arbitration in the City of New York as set forth in Section 9.02(d).

 

(d)          (i) Either Landlord or Tenant shall request JAMS (or, if JAMS is
then no longer in effect, the Real Estate Board of New York) to appoint an
arbitrator who shall be impartial and both parties shall be bound by any
appointment so made. If JAMS (or the Real Estate Board of New York, as
applicable) shall fail to appoint an arbitrator within 30 days after such
request is made, either Landlord or Tenant may apply to the Supreme Court, New
York County to make such appointment. The arbitrator shall be an MAI appraiser
or a licensed real estate broker having at least 15 years of experience in
leasing of First Class Office Buildings. As soon as reasonably practicable after
the appointment of the arbitrator, the arbitrator shall meet with Landlord and
Tenant (the “Initial Meeting”). At the Initial Meeting, Landlord shall submit to
the arbitrator its determination of the Fair Market Rent (“Landlord’s
Determination”) in a sealed envelope contemporaneously with Tenant’s submission
to the arbitrator of its determination of the Fair Market Rent (“Tenant’s
Determination”) in a sealed envelope, whereupon the arbitrator shall open both
envelopes. If one party shall be ready, willing and able to submit its
determination of the Fair Market Rent at such Initial Meeting, but the other
party shall fail to submit its determination of the Fair Market Rent at such
Initial Meeting, then the party who is so ready, willing and able to submit its
determination shall not be required to do so, and the Initial Meeting shall be
rescheduled to a date which is not more than 3 Business Days following the
Initial Meeting, at which rescheduled Initial Meeting the arbitrator shall open
both envelopes. If the party that was not ready, willing and able to submit its
determination of the Fair Market Rent at the Initial Meeting shall not submit
its determination of the Fair Market Rent at such rescheduled meeting, the
determination of the party that was ready, willing and able to submit its
determination at the Initial Meeting shall constitute the Fair Market Rent. If
Landlord’s Determination and Tenant’s Determination are not the same, then the
arbitrator shall set a hearing date for arbitration, which hearing shall not
exceed two days and shall be scheduled to be held within 60 days after the
Initial Meeting.

 

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(ii)         There shall be no discovery in the arbitration. However, on
reasonable notice to the other party, Tenant may inspect any portion of the
Building relevant to its claims, and Landlord may inspect any portion of the
space occupied by Tenant on the floors in issue. On or before the date that is
30 days prior to the scheduled hearing, the parties shall exchange opening
written expert reports and opening written pre-hearing statements. Opening
written pre-hearing statements shall not exceed 20 pages in length. On or before
the date that is two weeks prior to the hearing, the parties may exchange
rebuttal written expert reports and rebuttal written pre-hearing statements.
Rebuttal written pre-hearing statements shall not exceed 10 pages in length. On
or before the date that is 10 days prior to the hearing, the parties shall
exchange written witness lists, including a brief statement as to the subject
matter to be covered in the witnesses’ testimony, and submit the same
contemporaneously to the arbitrator. On or before the date that is one week
prior to the hearing, the parties shall exchange all documents which they intend
to offer at the hearing. Other than rebuttal witnesses, only the witnesses
listed on the witness lists shall be allowed to testify at the hearings. Closing
arguments shall be heard immediately following conclusion of all testimony. The
proceedings shall be recorded by stenographic means. Each party may present live
witnesses and offer exhibits, and all witnesses shall be subject to
cross-examination. The arbitrator shall conduct the two day hearing so as to
provide each party with sufficient time to present its case, both on direct and
on rebuttal, and permit each party appropriate time for cross examination;
provided, that the arbitrator shall not extend the hearing beyond two days. Each
party may, during its direct case, present evidence in support of its position
and in opposition to the position of the opposing party.

 

(iii)        The arbitrator shall make a determination of the Fair Market Rent
by selecting either the amount set forth in Landlord’s Determination or the
amount set forth in Tenant’s Determination, whichever the arbitrator determines
is closest to Fair Market Rent. The arbitrator may not select any other amount
as the Fair Market Rent. The fees and expenses of any arbitration pursuant to
this Section 9.02(d) shall be borne by the parties equally, but each party shall
bear the expense of its own attorneys and experts and the additional expenses of
presenting its own proof. The arbitrator shall not have the power to add to,
modify or change any of the provisions of this Lease. After a determination has
been made of the Fair Market Rent, the parties shall execute and deliver an
instrument setting forth the Fair Market Rent, but the failure to so execute and
deliver any such instrument shall not effect the determination of Fair Market
Rent.

 

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(e)          If the final determination of Fair Market Rent shall not be made on
or before the first day of the applicable Renewal Term, then, pending such final
determination, Tenant shall pay, as Fixed Rent for such Renewal Term, an amount
equal to Landlord’s Determination. If, based upon the final determination of the
Fair Market Rent, the Fixed Rent payments made by Tenant for such portion of the
Renewal Term were greater than the Fair Market Rent payable for the Renewal
Term, Landlord shall credit the amount of such excess against future
installments of Fixed Rent and/or Additional Charges payable by Tenant.

 

ARTICLE 10

Intentionally Omitted

 

ARTICLE 11

Right of First Offer

 

11.01     Offer Space Option.   (a)  As used herein:

 

(i)          “Available” means, as to any space, that such space is vacant and
free of any present or future possessory right now or hereafter existing in
favor of any third party (including, without limitation, any space recaptured by
Landlord from other tenants in the Building); provided, that any space that is
not leased on the date of this Lease shall not be deemed Available unless and
until such space is first leased to another tenant and then again becomes
Available. Anything to the contrary contained herein notwithstanding, Tenant’s
right of first offer pursuant to this Section 11.01 is subordinate to (A) any
right of offer, right of first refusal, expansion right or similar right or
option in favor of any third party existing as of the date of this Lease (the
“Existing Superior Rights”), (B) any expansion right or option in favor of any
tenant of the Building (other than Tenant) which is (x) for specified space
(provided that such specified space may include more than one option for various
configurations, locations or amounts of space), (y) to be exercised on a fixed
date or within a defined window of time and (z) set forth in a lease with a
tenant of the Building, whether such right or option is existing as of the date
of this Lease or is entered into at any time hereafter and (C) Landlord’s right
to renew or extend the term of any lease or sublease to another tenant or
existing subtenant, as the case may be, whether or not pursuant to an option or
right set forth in such other tenant’s lease or sublease. The Existing Superior
Rights in effect on the date hereof are listed on Exhibit W attached hereto.
Landlord agrees to reasonably promptly provide Tenant with a list of any
superior rights described in the foregoing clauses (A) and (B) if Tenant
requests same from Landlord in writing during the Term; provided, that Landlord
shall not be obligated to provide same more than once per calendar year during
the Term.

 

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(ii)         “Offer Period” means the period commencing on the Effective Date to
and including the date that is 5 years prior to the Expiration Date (as the same
may be extended pursuant to Article 9 of this Lease).

 

(iii)        “Offer Space” means the first full or partial floor of the Building
to become Available that is serviced by the Elevators and is not part of the
Premises.

 

(b)          Provided (i) this Lease has not been terminated, (ii) Tenant is not
in default under this Lease beyond applicable notice and cure periods, (iii)
Tenant or an Intercept Tenant occupies at least 1 full floor of the Building and
(iv) Tenant is an Intercept Tenant or an assignee of Intercept Tenant’s interest
in this Lease in accordance with the terms hereof, if at any time during the
Offer Period any Offer Space either becomes, or Landlord reasonably anticipates
that within the next (x) if the Offer Space consists of more than 1 full floor,
17 months and (y) if the Offer Space consists of 1 full floor or less, 13 months
(but, in each case, not later than the last day of the Offer Period) such Offer
Space will become, Available, Landlord shall give to Tenant notice (an “Offer
Notice”) thereof, specifying (A) the rentable square footage of such Offer
Space, (B) the date or estimated date that such Offer Space has or shall become
Available (the “Anticipated Offer Space Inclusion Date”), (C) the condition in
which Landlord is willing to lease such Offer Space, including, without
limitation, any Base Building Work which Landlord is willing to perform and/or
work allowance or contribution which Landlord is willing to make towards the
cost of Tenant’s initial installation in such Offer Space and (D) such other
matters as Landlord may deem appropriate for such Offer Notice.

 

(c)          Provided that on the date that Tenant exercises the Offer Space
Option and on the applicable Offer Space Inclusion Date (i) this Lease has not
been terminated, (ii) Tenant is not in default under this Lease beyond
applicable notice and cure periods, (iii) Tenant occupies at least 1 full floor
of the Building and (iv) Tenant is an Intercept Tenant, or an assignee of
Intercept Tenant’s interest in this Lease in accordance with the terms hereof,
Tenant shall have the one-time option (the “Offer Space Option”), exercisable by
notice (an “Acceptance Notice”) given to Landlord on or before the date that is
30 days after the date the Offer Notice was given (time being of the essence) to
include (all but not less than all of) the applicable Offer Space in the
Premises.

 

(d)          If Tenant timely delivers the Acceptance Notice, then, on the date
on which Landlord delivers vacant possession of the applicable Offer Space to
Tenant in the condition specified in the Offer Notice (the “Offer Space
Inclusion Date”), such Offer Space shall become part of the Premises, upon all
of the terms and conditions set forth in this Lease, except (i) Fixed Rent shall
be increased by the Fair Offer Rent, (ii) Tenant’s Share with respect to such
Offer Space shall be calculated on the basis of the rentable square footage of
such Offer Space set forth in the applicable Offer Notice, (iii) the Base PILOT
Amount with respect to such Offer Space shall be the PILOT Amount payable by
Landlord pursuant to the PILOT Agreement for the Tax Year ending immediately
prior to Landlord’s delivery of the applicable Offer Notice (or, if the PILOT
Cessation Date shall have occurred, the Base PILOT Amount shall be the Taxes for
the Tax Year ending immediately prior to Landlord’s delivery of the applicable
Offer Notice), (iv) the Base Impositions Amount with respect to such Offer Space
shall be the Impositions for the Tax Year ending immediately prior to Landlord’s
delivery of the applicable Offer Notice, (v) the Base Operating Amount with
respect to such Offer Space shall be the Operating Expenses for the Operating
Year ending immediately prior to Landlord’s delivery of the applicable Offer
Notice, (vi) Tenant shall be entitled to any rent abatement and/or work
allowance determined in accordance with Section 11.01(e) below; it being agreed
that any such work allowance will be provided to Tenant for Tenant’s Alterations
to such Offer Space to prepare the same for initial occupancy in accordance with
the provisions of Section 3.03 hereof, applied mutatis mutandis, (vii) other
than as expressly set forth in this Section 11.01(d), Landlord shall not be
required to perform any work, to pay any other work allowance or any other
amount, or to render any services to make the Building or such Offer Space ready
for Tenant’s use or occupancy or to provide any abatement of Fixed Rent or
Additional Charges, and Tenant shall accept such Offer Space in its “as is”
condition on the applicable Offer Space Inclusion Date and (viii) as may be
otherwise set forth in the applicable Offer Notice. “Fair Offer Rent” means the
fixed annual rent that a willing lessee would pay and a willing lessor would
accept for the applicable Offer Space, taking into account all relevant factors.

 

 - 103 - 

 

 

(e)          If Tenant timely delivers the Acceptance Notice, the Fair Offer
Rent shall be determined in accordance with Sections 9.02(c) and 9.02(d) hereof;
provided, that (i) all references in said Section 9.02(d) to “Fair Market Rent”
shall be deemed to refer to “Fair Offer Rent” and (ii) in conjunction with, and
as a component of, the determination of the Fair Offer Rent, Landlord and Tenant
shall establish the amount of any rent abatement or work allowance to which
Tenant shall be entitled for the applicable Offer Space, if any, based on the
amount of any rent abatement or work allowance that a willing lessee and a
willing lessor would accept for such Offer Space, taking into account all
relevant factors (including, without limitation, the amount of the Fair Offer
Rent and the terms set forth in Section 11.01(d)). Each party shall indicate its
determination of the amount of any rent abatement and/or work allowance to which
Tenant should be entitled in connection with the leasing of the applicable Offer
Space in Landlord’s Determination or Tenant’s Determination, as applicable. If
the Fair Offer Rent has not been finally determined in accordance with Section
11.01(e) on or before the applicable Offer Space Inclusion Date, then pending
such determination, Tenant shall pay as Fixed Rent for the applicable Offer
Space the Fair Offer Rent as determined by Landlord. If, based on the final
determination of Fair Offer Rent, the Fixed Rent payments made by Tenant for the
applicable Offer Space were greater than the Fair Offer Rent, Landlord shall
credit the amount of such excess against future installments of Fixed Rent and/
or Additional Charges payable by Tenant under this Lease.

 

(f)           If Landlord is unable to deliver possession of any Offer Space to
Tenant for any reason on or before the Anticipated Offer Space Inclusion Date,
the applicable Offer Space Inclusion Date shall be the date on which Landlord is
able to so deliver possession and Landlord shall have no liability to Tenant
therefor and this Lease shall not in any way be impaired; provided, that if
Landlord is unable to deliver possession of the Offer Space in question to
Tenant on or prior to the date which is 270 days after the Anticipated Offer
Space Inclusion Date (as such date shall be extended on a day for day basis for
each day of Tenant Delay and Unavoidable Delay), then, as Tenant’s sole and
exclusive remedy therefor, Tenant may thereafter cancel the Acceptance Notice by
giving notice to Landlord not more than 30 days after the Anticipated Offer
Space Inclusion Date (as such date may be so extended) and, if the Offer Space
Inclusion Date shall not occur on or before the 30th day after the date Tenant
gives such notice of termination, then upon such 30th day, the Acceptance Notice
shall be deemed canceled and terminated and neither party shall have any further
liabilities or obligations to the other with respect to the Acceptance Notice.
Notwithstanding the foregoing, Landlord shall use commercially reasonable
efforts to deliver possession of the Offer Space to Tenant on or before the
Anticipated Offer Space Inclusion Date, including the institution and
prosecution of holdover or other appropriate proceedings against any occupant of
the Offer Space. Landlord shall reasonably promptly inform Tenant of any delay
in the Anticipated Offer Space Inclusion Date. This Section 11.01(f) constitutes
“an express provision to the contrary” within the meaning of Section 223-a of
the New York Real Property Law and any other law of like import now or hereafter
in effect.

 

 - 104 - 

 

 

(g)          If Tenant fails timely to give an Acceptance Notice, then
(i) Landlord may enter into one or more leases of the Offer Space in question
with third parties on such terms and conditions as Landlord shall determine, the
Offer Space Option shall be null and void and of no further force and effect and
Landlord shall have no further obligation to offer any Offer Space to Tenant
under this Section 11.01, and (ii) Tenant shall, upon demand by Landlord,
execute an instrument confirming Tenant’s waiver of, and extinguishing, the
Offer Space Option, but the failure by Tenant to execute any such instrument
shall not affect the provisions of clause (i) of this Section 11.01(g).

 

(h)          Promptly after the occurrence of any Offer Space Inclusion Date,
Landlord and Tenant shall confirm the occurrence thereof and the inclusion of
the applicable Offer Space in the Premises by executing an instrument reasonably
satisfactory to Landlord and Tenant; provided, that failure by Landlord or
Tenant to execute such instrument shall not affect the inclusion of such Offer
Space in the Premises in accordance with this Section 11.01.

 

(i)           Anything in this Lease to the contrary notwithstanding, the
provisions of this Article 11 granting to Tenant the Offer Space Option shall be
null and void and of no force or effect if (i) an Intercept Tenant or an
assignee of Intercept Tenant’s interest in this Lease in accordance with the
terms hereof is no longer the Tenant under this Lease or (ii) Tenant at any time
fails to occupy at least 1 full floor of the Building.

 

ARTICLE 12

Signage

 

12.01     Premises Signage. Subject to the provisions of Article 4, Tenant shall
have the right, at Tenant’s sole cost and expense, to display Tenant
identification signage in the elevator lobby on any full floor of the Premises
which Tenant leases; provided, that any such signage has been approved by
Landlord (such approval not to be unreasonably withheld, conditioned, or
delayed) and is in compliance with applicable Laws. Subject to the provisions of
Article 4, Tenant shall have the right, at Tenant’s sole cost and expense, to
display Tenant identification signage on any door to the Premises on any partial
floor of the Premises which Tenant leases; provided, that any such signage is
consistent with Landlord’s signage criteria, has been approved by Landlord (such
approval not to be unreasonably withheld, conditioned, or delayed) and is in
compliance with applicable Laws.

 

 - 105 - 

 

 

12.02     Other Tenant Lobby Signage. Provided that (1) Tenant is not in default
under this Lease beyond applicable notice and cure periods, (2) an Intercept
Tenant occupies at least 150,000 rentable square feet in the Building and (3)
Tenant is an Intercept Tenant, then if at any time during the Term, a tenant in
the Building is granted rights to place signage inside the lobby entrance of the
Building serving the Premises (the “Lobby”), then Tenant shall have the right,
at Tenant’s sole cost and expense, to place identification signage comparable in
size and location to that of such other tenant in the Lobby subject to the
provisions of Section 12.03 below; provided, that the location, size, content,
materials and design of such identification signage shall be subject to
Landlord’s approval (such approval not to be unreasonably withheld, conditioned,
or delayed), in compliance with applicable Laws and otherwise in accordance with
Landlord’s signage criteria for the Lobby. All of Tenant’s rights pursuant to
this Section 12.02 are personal to Intercept Tenant and in no event shall Tenant
sell, assign, convey or otherwise transfer any such rights (in whole or in part)
to any third party.

 

12.03     Signage Removal. Tenant covenants and agrees that on the expiration or
sooner termination of the Term, Tenant, at its sole cost and expense, shall
promptly remove any sign or signs installed or displayed by or on behalf of
Tenant pursuant to this Article 14 or otherwise, repair in good and workmanlike
manner all damage caused by such removal and restore the affected portion of the
Building to the condition in which it existed prior to the installation of any
such sign or signs.

 

12.04     Building Directory. If Landlord installs an electronic building
directory in the Building, Tenant and Tenant’s Affiliates and any permitted
subtenants of Tenant shall be entitled, without charge (except to the extent
Landlord incurs any costs in connection with such directory which are includable
in Operating Expenses pursuant to the provisions of Section 2.07), to be listed
on such directory.

 

12.05     Naming. So long as (i) an Intercept Tenant is the Tenant under this
Lease, (ii) Tenant is not then in default under this Lease beyond the expiration
of any applicable notice and/or cure period and (iii) an Intercept Tenant
occupies at least 2 full floors in the Building, Landlord shall not name the
Building for any person or entity other than in connection with a change in the
name of the Hudson Yards Development Project. The “Hudson Yards Development
Project” means the development project in the area known as “Hudson Yards” which
is bounded by 33rd Street, 34th Street, 10th Avenue and Hudson Boulevard (a/k/a
50 Hudson Yards, New York, New York), the Eastern Rail Yards and the Western
Rail Yards.

 

 - 106 - 

 

 

ARTICLE 13

Terrace Space

 

13.01     Terrace Space.   (a) Landlord shall, as part of Landlord’s Work,
construct the Premises to include an outdoor terrace (the “Terrace Space”)
substantially similar to the drawing attached hereto as Exhibit AA on the 24th
and 25th floors (collectively, the “Terrace Space Floor”) (subject to Laws and
structural and design considerations for the Building as determined by Landlord
in its sole discretion); provided that (I) the rentable square footage of the
Terrace Space and the portion of the floor of the Building that is left out
immediately above the Terrace Space Floor in order to create the double height
volume of the Terrace Space will be included in the Premises upon remeasurement
thereof in accordance with Section 1.01 and (II) Tenant shall pay to Landlord as
Additional Charges, within 30 days after receipt of an invoice therefor, all
reasonable incremental additional out-of-pocket costs incurred by Landlord as a
result of designing, engineering and constructing the Building and the Premises
to include such Terrace Space, including any incremental out-of-pocket costs
Landlord may incur to provide appropriate structural support in any area of the
Building which support would not be required if not for the inclusion of such
Terrace Space (it being agreed that (1) Landlord’s incremental costs to include
a standard outdoor terrace in the Building are currently estimated to be
$1,100,000.00 per terrace and (2) Tenant shall be responsible for all reasonable
incremental costs described in this clause (a) even if same are higher than the
foregoing estimate). For the avoidance of doubt, the Terrace Space is a single
terrace.

 

(b)          Notwithstanding anything to the contrary contained in this Lease,
Tenant’s use of the Terrace Space shall be subject to the following
requirements: (i) Landlord shall not provide any of the Landlord Services set
forth in Section 3.01 to the Terrace Space, (ii) any Alterations in or to the
Terrace Space shall be deemed to be Alterations affecting the exterior of the
Building and shall require Landlord’s approval in accordance with Section 4.02,
(iii) Tenant shall pay any additional or increased insurance premiums incurred
by Landlord (as appropriately prorated among the tenants in the Building if more
than one tenant is using outdoor terrace space in the Building), and shall
obtain and pay for any additional insurance coverage for the benefit of Landlord
in such amount and of such type as Landlord may reasonably require in connection
with Tenant’s use of the Terrace Space, (iv) Tenant shall not cause any of
Landlord’s warranties or guaranties with respect to the Terrace Space to be
revoked, negated, impaired or limited as a result of Tenant’s Alterations to, or
use or occupancy of, the Terrace Space; provided, that if Tenant’s use of (or
Alteration to) the Terrace Space shall revoke, negate or in any manner impair or
limit any such warranty or guaranty, then Tenant shall reimburse Landlord for
any loss or damage sustained or costs or expenses incurred by Landlord as a
result thereof, (v) if at any time Landlord’s structural engineer recommends
that there be structural reinforcement of the Terrace Space in connection with
the Tenant’s use thereof, Landlord shall perform the same at Tenant’s expense,
(vi) any equipment to be installed in or on the Terrace Space (x) may not have a
height higher than the height of the top of the floor slab of the floor of the
Building on which the Terrace Space is located, (y) shall not generate an
ambient noise level greater than NC-40 within the interior of the Building and
(z) shall not emit any fumes into the interior of the Building, (vii) Tenant
acknowledges that applicable Laws may limit the amount of space on the terrace
that may be occupied by Tenant and may impose additional restrictions on Tenants
use of the Terrace Space and Landlord makes no representations to Tenant about
how much of the Terrace Space Tenant may be permitted to occupy and what other
restrictions may be applicable to the use of the Terrace Space pursuant to
applicable Laws and (viii) Tenant’s use of the Terrace Space shall be
conditioned upon Tenant or Tenant’s Affiliates or any permitted assignee or
subtenant occupying the entire Terrace Space Floor and the entire floor located
directly above the Terrace Space Floor.

 

(c)          Tenant shall be permitted, at Tenant’s expense, to landscape the
Terrace Space or any portion thereof; provided, that (i) such landscaping shall
not result in any leakage of water beyond the Terrace Space and (ii) Tenant
shall take all reasonable precautions, at Tenant’s expense, to prevent any such
leakage.

 

 - 107 - 

 

 

[SIGNATURE PAGE FOLLOWS]

 

 - 108 - 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first written above.

 

Landlord: ONE HUDSON YARDS OWNER LLC         By: /s/ Andrew Cantor     Name:
Andrew Cantor     Title: Vice President       Tenant: INTERCEPT PHARMACEUTICALS,
INC.   By: /s/ Mark Pruzanski     Name: Mark Pruzanski     Title: CEO      
Tenant’s Federal Tax I.D. No.: 22-3868459

 

 - 109 - 

 

 

EXHIBIT A

 

DESCRIPTION OF LAND

 

 - 1 - 

 

 

EXHIBIT B-1

 

FLOOR PLANS

 

These floor plans are annexed to and made a part of this Lease solely to
indicate the Premises by outlining and diagonal marking. All areas, conditions,
dimensions and locations are approximate.

 

 - 1 - 

 

 

EXHIBIT B-2

 

APPROXIMATE RENTABLE SQUARE FOOTAGE OF PREMISES

 

The following rentable square footages are approximate and subject to final
determination upon measurement in accordance with the provisions of the Lease.

 

FLOOR  APPROXIMATE RENTABLE SQUARE
FOOTAGE      23rd Floor   28,427  24th Floor   28,427  25th Floor   28,427 
TOTAL:   85,281 

 

 - 1 - 

 

 

EXHIBIT C

 

RULES AND REGULATIONS

 

 - 1 - 

 

 

EXHIBIT D

 

STANDARD CLEANING SPECIFICATIONS

 

 - 1 - 

 

 

EXHIBIT E

 

DELIVERY CONDITION

 

 - 1 - 

 

 

EXHIBIT F

 

HVAC SPECIFICATIONS

 

 - 1 - 

 

 

EXHIBIT G

 

ELEVATOR SPECIFICATIONS

 

 - 1 - 

 

 

EXHIBIT H

 

CHARGES FOR LANDLORD SERVICES AND PERSONNEL

 

 - 1 - 

 

 

EXHIBIT I-1

 

TENANT DESIGN STANDARDS

 

 - 1 - 

 

 

EXHIBIT I-2

 

CONSTRUCTION RULES

 

 - 1 - 

 

 

EXHIBIT J

 

INSURANCE MINIMUM COVERAGE AND LIMITS

 

A. Insurance to be Maintained by Tenant Pursuant to Section 4.02(f) and Section
7.02 of the Lease

 

(i) Workers Compensation Insurance: providing Statutory Benefits, as required by
applicable Law, and Employer’s Liability Insurance.

 

Coverage A Statutory Coverage B Employers Liability Bodily Injury by Accident
$1,000,000 Each Accident Bodily Injury by Disease $1,000,000 Policy Limit Bodily
Injury by Disease $1,000,000 each Employee

 

(ii) Commercial General Liability: including Contractual Liability, Broad Form
Property Damage, Personal and Advertising Injury Liability, Host Liquor Legal
Liability, written on an occurrence form, with a combined single limit of no
less than $1,000,000 each occurrence, and $2,000,000 general aggregate per
policy period and Fire Damage Liability limit of not less than $100,000 any one
fire, or such higher limits as the Landlord may from time to time request. The
policy will be on the then most current Insurance Services Office Commercial
General Liability Coverage Form No. CG 0001, or its equivalent. Policy shall
include coverage for all “pollution” hazards usual to mold.

 

(iii) Products and Completed Operations Liability: written on a claims made
form, $1,000,000 each occurrence, and $1,000,000 aggregate, or such higher
limits as the Landlord may from time to time request

 

(iv) Commercial Automobile Liability: including owned, hired, and non-owned
coverage with a limit of liability of no less than $1,000,000 per occurrence.
Such policy shall include coverage for contractual liability. This coverage must
include all automotive and truck equipment used in the performance of the work
under this Lease, and must include loading and unloading of same.

 

(v) Umbrella Liability: shall be written on no less than a follow form basis (no
more restrictive than the underlying Employer’s Liability, Commercial General
Liability and Commercial Automobile Liability) with a Limit of Liability of
$10,000,000 per occurrence and in the aggregate, or such higher limits as
Landlord may from time to time request.

 

(vi) Property Insurance: Property insurance shall be purchased, on an “All Risk”
form of policy (including coverage for acts of terrorism), for all merchandise,
equipment and other Tenant’s Property from time to time located in, on or about
the Building and all Fixtures installed by or on behalf of Tenant, under a
policy or policies in the amount of 100% of replacement cost without deduction
for depreciation of such merchandise, equipment, other Tenant’s Property and
Fixtures. Such policy or policies shall name Landlord and any Superior
Mortgagees and Superior Lessors as loss payee as their interests may appear.
Such property policy or policies shall include coverage for earthquake/earth
movement, demolition and increased cost of construction due to a change in law
or ordinance, sewer back-up, extra expense and expediting expense.

 

 - 1 - 

 

 

(vii) Business Income Insurance: Business income insurance shall be purchased,
(A) covering all risks required to be covered by the insurance provided for
Section (vi) above; (B) in the aggregate amount, for a period of 12 months
following the insured against peril, of one hundred percent (100%) of all fixed
rent and additional rent to be paid by Tenant hereunder; and (C) containing an
extended period of indemnity endorsement which provides that after the physical
loss to Tenant’s Property and Fixtures has been repaired, the continued loss of
income will be insured for 360 days or until such income returns to the same
level it was at prior to the loss, notwithstanding that the policy may expire
prior to the end of such period.

 

(viii) Boiler and Machinery: (for Boiler and Machinery used exclusively by
Tenant) At all times Tenant shall maintain boiler and machinery insurance on a
blanket basis covering the sudden breakdown of all equipment, machinery and
apparatus consisting of, but not limited to boilers, heating apparatus fired and
unfired pressure vessels, air conditioning equipment, miscellaneous electrical
apparatus and their appurtenant equipment in an amount not less than the full
replacement or functional cost thereof. Such coverage shall include business
income insurance (A) covering all risks required to be covered by the insurance
provided for in Sections (v), (vi) and (vii) above; (B) in the aggregate amount,
for a period of 12 months following the insured against peril, of one hundred
percent (100%) of all fixed rent and additional rent to be paid by Tenant
hereunder; and (C) containing an extended period of indemnity endorsement which
provides that after the physical loss to Tenant’s Property and Fixtures has been
repaired, the continued loss of income will be insured for 360 days or until
such income returns to the same level it was at prior to the loss,
notwithstanding that the policy may expire prior to the end of such period.

 

B. Insurance to be Maintained by Tenant’s Contractors Pursuant to Section
4.02(f) of the Lease

 

Any contractor, subcontractor (of any tier), design consultant, sub-consultant
(of any tier), and any other party performing work in the Building on behalf of
Tenant is a “Tenant’s Contractor” for purposes of this Lease.

 

(i) Insurance to be Maintained by Tenant’s Contractors

 

(a) Workers Compensation Insurance: providing Statutory Benefits, as required by
applicable state law and Employer’s Liability Insurance.

 

Coverage A Statutory Coverage B Employers Liability Bodily Injury by Accident
$1,000,000 Each Accident Bodily Injury by Disease $1,000,000 Policy Limit Bodily
Injury by Disease $1,000,000 each Employee

 

 - 2 - 

 

 

(b) Commercial General Liability: including Contractual Liability, Products and
Completed Operations Liability (which may be a separate policy), Broad Form
Property Damage, Personal and Advertising Injury Liability, Host Liquor Legal
Liability, written on an occurrence form, with a Combined Single Limit of no
less than $ 1,000,000 each occurrence, and $2,000,000 general aggregate per
project, per location and $2,000,000 Products Completed Operations aggregate,
Fire Damage Liability limit of not less than $100,000 any one fire, or such
higher limits as the Landlord may from time to time request. The policy will be
on the then most current Insurance Services Office Commercial General Liability
Coverage Form No. CG 0001, or its equivalent. Policy shall include coverage for
all “pollution” hazards usual to mold.

 

(c) Commercial Automobile Liability: including owned, hired, and non-owned
coverage with a Limit of Liability of no less than $1,000,000 per occurrence.
Such policy shall include coverage for contractual liability. This coverage must
include all automotive and truck equipment used in the performance of the work
under this Lease, and must include loading and unloading of same.

 

(d) Umbrella Liability: shall be written on no less than a follow form basis (no
more restrictive than the underlying Employer’s Liability, Commercial General
Liability and Commercial Automobile Liability) with a Limit of Liability of
$5,000,000 per occurrence and in the aggregate (or $25,000,000 with respect to
any Tenant’s Contractor performing structural work in the Building), or such
higher limits as Landlord may from time to time request.

 

(e) Builders Risk: Builders Risk shall be purchased (if not covered under
Tenant’s property policies) on an All Risk Policy including “Soft Costs” form
for all work performed, in amounts not less than 100% of the full completed
value of the work including materials and equipment stored on or about the job
site, while in transit to the job site and while stored away from the job site.
Policy shall include coverage for increased cost to repair or replace due to a
change in law or ordinance, earthquake, and flood.

 

(ii) Insurance to be Maintained by any Tenant’s Contractor which is an Architect
or Design Professional

 

(a) Professional Liability: Shall be purchased by all Architects and Engineers
for Professional Liability Errors and Omissions in an amount not less than
$2,000,000 each claim and annual aggregate for the lead architect or consultant
and $1,000,000 each claim and annual aggregate for all sub-consultants, per
project with a maximum deductible of $10,000, including punitive damage coverage
and contractual liability coverage, without limitations. The policy shall have a
retroactive date that precedes the start of the design services. Such Errors &
Omission policy shall be maintained in full force and effect for the lesser of 6
years or the statute of limitations from the date the relevant work is
completed. Any sub-consultant shall maintain Architects’ Errors and Omissions
Professional Liability which is no more restrictive than the prime consultant’s
policy.

 

 - 3 - 

 

 

C. Requirements Applicable to All Insurance Required Pursuant to this Lease

 

(i) Additional Insureds: The General Liability and Umbrella Liability policies
required hereunder must name Landlord, The Related Companies L.P., Oxford Hudson
Yards LLC, Mitsui Fudosan America, Inc., MFA 55 HY LLC, 55 Hudson Yards Member
LLC, any Superior Lessors, any Superior Mortgagees and any of such entities’
subsidiaries, affiliates, directors, officers, members, managers, partners,
agents, employees, and assignees, and such other entities hereafter as may be
reasonably requested by Landlord (collectively, the “Additional Insureds”), as
additional insureds. Coverage afforded to the Additional Insureds shall apply on
a primary basis. Tenant’s Contractors shall provide Endorsement form CG 20 10
11/85 (Form B) or its equivalent and must provide coverage within the Products
and Completed Operations coverage section.

 

In the event Tenant and/or any of Tenant’s Contractors, maintains limits greater
than set forth herein, Landlord and the then Additional Insureds shall be
included therein as additional insureds to the fullest extent of all such
insurance in accordance with all terms and provisions herein.

 

(ii) Self Insured Retention: Tenant shall have the right to satisfy its
insurance obligations under this Lease by means of self-insurance to the extent
of all or part of the insurance required hereunder, but only so long as: (a)
such self-insurance is permitted under all laws applicable to Tenant and/or the
Property at the time in question; (b) such self-insurance is in compliance with
any customary minimum insurance requirements imposed upon Landlord by Landlord's
lender(s); (c) Tenant maintains a net worth (as shown by its financial
statements audited in accordance with generally accepted accounting principles)
of not less than One Hundred Million Dollars ($100,000,000.00); (d) unless such
information is already generally available to the public, Tenant shall, not less
than annually, provide Landlord an audited financial statement, prepared by an
independent certified public accountant in accordance with generally accepted
accounting principles consistently applied, showing the required net worth; and
(e) such self-insurance provides for loss reserves that are actuarially derived
in accordance with accepted standards of the insurance industry and accrued
(i.e., charged against earnings) or otherwise funded. Any self-insured exposure
shall be deemed to be an insured risk under this Lease. The beneficiaries of
such insurance shall be afforded no less insurance protection than if such
self-insured portion was fully insured by an insurance company of the quality
and caliber required hereunder (including, without limitation, the protection of
a legal defense, by attorneys reasonably acceptable to beneficiaries, and the
payment of claims within the same time period that a third party insurance
carrier of the quality and caliber otherwise required hereunder would have paid
such claims). The waiver of subrogation provided for hereunder shall be
applicable to any self-insured exposure. All self insured retentions must be
acceptable to and approved in writing by Landlord prior to use and the insurance
required under this Lease must be maintained in excess of such self- insurance
retention.

 

Any and all deductibles and/or self insured retentions for the insurance
policies described in this Exhibit J shall be assumed by and for the account of
Tenant or any Tenant’s Contractor, as applicable, at the sole risk and expense
of such entity.

 

(iii) Terrorism Coverage: All coverage required herein shall include coverage
for certified acts of terrorism.

 

 - 4 - 

 

 

EXHIBIT K

 

APPROVED CONTRACTORS

 

 - 1 - 

 

 

EXHIBIT L

 

SECURITY SPECIFICATIONS

 

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EXHIBIT M-1

 

FORM OF SUPERIOR MORTGAGEE SNDA

 

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EXHIBIT M-2

 

FORM OF SUPERIOR LESSOR SNDA

 

The Superior Lessor SNDA shall be in substantially the same form and content of
Exhibit M-1 to the Lease, with reasonable and customary revisions to reflect the
fact that the Superior Lessor SNDA relates to a Superior Lease as opposed to a
Superior Mortgage.

 

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EXHIBIT M-3

 

FORM OF PILOT SNDA

 

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EXHIBIT N

 

FORM OF CONFIDENTIALITY AGREEMENT

 

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EXHIBIT O

 

FORM OF LETTER OF CREDIT

 

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EXHIBIT P

 

LEED-RELATED REQUIREMENTS FOR ALTERATIONS

 

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EXHIBIT Q

 

INTENTIONALLY OMITTED

 

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EXHIBIT R

 

INTENTIONALLY OMITTED

 

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EXHIBIT S

 

LOCATION OF CAPPED VALVED OUTLETS

 

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EXHIBIT T

 

LIST OF BASE BUILDING DRAWINGS

 

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EXHIBIT U

 

DESIGNATED SHAFT SPACE

 

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EXHIBIT V

 

FORM OF LANDLORD’S NON-DISTURBANCE AGREEMENT

 

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EXHIBIT W

 

EXISTING SUPERIOR RIGHTS

 

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EXHIBIT X

 

RATED PARTITIONS AROUND BUILDING CORE

 

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EXHIBIT Y

 

LIFE SAFETY SYSTEM

 

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EXHIBIT Z

 

HOIST IMPACTED AREA

 

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EXHIBIT AA

 

TERRACE SPACE

 

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