Exhibit 10.1

 

1411 IC-SIC PROPERTY LLC

 

LANDLORD

 

AND

 

CRA INTERNATIONAL, INC.

 

TENANT

 

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OFFICE LEASE

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Entire thirty-fifth (35th) floor

1411 Broadway

New York NY 10018

 

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OFFICE LEASE AGREEMENT

 

TABLE OF CONTENTS

 

Article

 

Title

 

Page No.

 

 

 

 

 

1.

 

BASIC LEASE DEFINITIONS, EXHIBITS AND ADDITIONAL DEFINITIONS

 

1

 

 

 

 

 

2.

 

GRANT OF LEASE

 

6

 

 

 

 

 

3.

 

TERM

 

6

 

 

 

 

 

4.

 

RENT

 

8

 

 

 

 

 

5.

 

CONDITION OF PREMISES

 

17

 

 

 

 

 

6.

 

USE AND OCCUPANCY

 

20

 

 

 

 

 

7.

 

SERVICES AND UTILITIES

 

23

 

 

 

 

 

8.

 

ELECTRIC

 

27

 

 

 

 

 

9.

 

REPAIRS AND MAINTENANCE OF PREMISES; ACCESS TO PREMISES BY LANDLORD

 

30

 

 

 

 

 

10.

 

ALTERATIONS

 

32

 

 

 

 

 

11.

 

LIENS

 

35

 

 

 

 

 

12.

 

INSURANCE

 

36

 

 

 

 

 

13.

 

DAMAGE OR DESTRUCTION

 

37

 

 

 

 

 

14.

 

WAIVERS AND INDEMNITIES

 

40

 

 

 

 

 

15.

 

CONDEMNATION

 

42

 

 

 

 

 

16.

 

ASSIGNMENT AND SUBLETTING

 

43

 

 

 

 

 

17.

 

PERSONAL PROPERTY

 

51

 

 

 

 

 

18.

 

ESTOPPEL CERTIFICATES

 

51

 

 

 

 

 

19.

 

TRANSFER OF LANDLORD’S INTEREST; LIMITATIONS ON LANDLORD’S LIABILITY

 

52

 

 

 

 

 

20.

 

RULES AND REGULATIONS

 

52

 

 

 

 

 

21.

 

DEFAULT AND REMEDIES

 

53

 

 

 

 

 

22.

 

ENFORCEMENT OF REASONABLE CONSENT

 

57

 

 

 

 

 

23.

 

SECURITY DEPOSIT

 

58

 

 

 

 

 

24.

 

BROKERS

 

60

 

 

 

 

 

25.

 

SUBORDINATION

 

60

 

 

 

 

 

26.

 

NOTICES

 

62

 

 

 

 

 

27.

 

MISCELLANEOUS

 

62

 

 

 

 

 

28.

 

OPTION TO EXTEND

 

66

 

 

 

 

 

29.

 

RIGHT OF FIRST OFFER

 

68

 

 

 

 

 

30.

 

SUPPLEMENTAL HVAC

 

69

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

31.

 

DETERMINATION OF DISPUTES ARISING UNDER ARTICLE 22

 

70

 

 

 

 

 

Exhibit A

 

Reserved

 

A-1

Exhibit B

 

Land Description

 

B-1

Exhibit C

 

Landlord’s Work

 

C-1

Exhibit C-1

 

Landlord’s Additional Work

 

C-2

Exhibit D

 

HVAC Specifications

 

D-1

Exhibit E

 

Cleaning Specifications

 

E-1

Exhibit F

 

Reserved

 

F-1

Exhibit G

 

Rules and Regulations

 

G-1

Exhibit H

 

Letter of Credit

 

H-1

 

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LEASE AGREEMENT
1411 BROADWAY
NEW YORK, NEW YORK

 

THIS LEASE AGREEMENT (“Lease”) is entered into as of the Date (as defined in
Section 1.1 below), and by and between the Landlord and Tenant (as defined in
Section 1.1 below).

 

1.             BASIC LEASE DEFINITIONS, EXHIBITS AND ADDITIONAL DEFINITIONS

 

1.1          Basic Lease Definitions

 

In this Lease, the following defined terms shall have the meanings indicated.

 

(a)           “Date” means the date of full execution of this Lease, which is
July    , 2015.

 

(b)           “Landlord” means 1411 IC-SIC PROPERTY LLC, a Delaware limited
liability company.

 

(c)           “Tenant” means CRA INTERNATIONAL, INC., a Massachusetts
corporation.

 

(d)           “Premises” means the entire thirty-fifth (35th) floor of the
Building.

 

(e)           “Area of the Premises” means, for purposes of this Lease, the
equivalent of 25,261 rentable square feet.  Landlord and Tenant hereby agree
that in no event shall Tenant have the right to contest the size or square
footage of the Premises, the amount of the Base Rent, Additional Rent and or
other charges hereunder or other provisions of this Lease based on the size or
square footage of the Premises.

 

(f)            “Use” means administrative, executive and general office use for
the conduct of Tenant’s business and for any lawful use incidental thereto that
is in keeping with the character, reputation and appearance of a first class
office building and no other use, but subject to the provisions of this Lease
and the certificate of occupancy for the Building.

 

(g)           “Term” means the duration of this Lease, which shall be
approximately ten (10) years and ten (10) months, beginning on the “Commencement
Date” (as defined in Section 3.1 below) and ending on the “Expiration Date” (as
defined in this Section 1.1), unless terminated or canceled earlier pursuant to
the provisions of this Lease or by law.

 

(h)           The “Expiration Date” means: (i) if the Rent Commencement Date is
the first day of a calendar month, the date immediately preceding the tenth
(10th) anniversary of the Rent Commencement Date, or (ii) if the Rent
Commencement Date is any day other than the first day of a calendar month, the
last day of the month in which occurs the tenth (10th) anniversary of the Rent
Commencement Date, as may be modified by any Extension Term as contemplated in
Section 28.1 below.

 

(i)            “Base Rent” means the Rent payable pursuant to Section 4.1, which
shall be as follows:

 

(i)            for the period commencing on the Commencement Date, through and
including one day preceding the fifth (5th) anniversary of the Rent

 

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Commencement Date, $1,844,053.00 per annum, payable at the rate of $153,671.08
per month; and

 

(ii)           for the period commencing on the fifth (5th) anniversary of the
Rent Commencement Date, through and including the Expiration Date, $1,995,619.00
per annum, payable at the rate of $166,301.58 per month.

 

(j)            “Rent Commencement Date” means June 1, 2016, subject to
adjustment as expressly provided in this Lease.

 

(k)           “Tenant’s Expense Share” means 2.219%.

 

(l)            “Tenant’s Tax Share” means 2.054%.

 

(m)          “Base Expense Year” means the average of the Operating Expenses
payable in respect of the Fiscal Year ending December 31, 2015 and the Fiscal
Year ending December 31, 2016.

 

(n)           “Base Tax Year” means the July 1, 2015 — June 30, 2016 tax fiscal
year.

 

(o)           “Landlord’s Building Address” means:

 

1411 IC-SIC Property LLC

1411 Broadway, 29th Floor
New York, New York 10018
Attention:  Building Manager

 

(p)           “Landlord’s General Address” means:

 

1411 IC-SIC Property LLC

1411 Broadway, 29th Floor
New York, New York 10018
Attention:  Building Manager

 

with a copy to:

 

1411 IC-SIC Property LLC
c/o Callahan Capital Properties LLC
10 S. Riverside Plaza, Suite 1250
Chicago, Illinois  60606
Attention:  Bansari Shah, General Counsel

 

And

 

1411 IC-SIC Property LLC
c/o Callahan Capital Properties LLC
1411 Broadway, 29th Floor
New York, New York 10018
Attention:  SVP — Asset Management

 

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and

 

Tarter Krinsky & Drogin LLP

1350 Broadway, 11th Floor

New York, New York 10018

Attention: Alan Tarter and Arthur Zagorsky

 

(q)           “Tenant’s Notice Address” means:

 

for notices given before the Commencement Date:

 

Charles River Associates

200 Clarendon Street

Boston, MA  02116

Attention:  Maxine Jacobs

 

and for notices given after the Commencement Date:

 

Charles River Associates

200 Clarendon Street

Boston, MA  02116

Attention:  Paul Maleh, CEO

 

with a copy to:

 

Charles River Associates

200 Clarendon Street

Boston, MA  02116

Attention: Maxine Jacobs, Real Estate Director

 

(r)            “Tenant’s Invoice Address” means:

 

Charles River Associates

200 Clarendon Street

Boston, MA  02116

Attention Accounts Payable

accountspayable@crai.com

 

(s)            “Broker(s)” means the following broker or brokers:  CBRE, Inc.,
for both Landlord and Tenant.

 

(t)            “Liability Insurance Amount” means $5,000,000.00.

 

(u)           “Security Deposit” means $922,026.50.

 

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1.2          Exhibits

 

The Exhibits listed below are attached to and incorporated in this Lease.  In
the event of any inconsistency between such Exhibits and the terms and
provisions of this Lease, the terms and provisions of the Exhibits shall
control.  The Exhibits to this Lease are:

 

Exhibit A        -        Reserved

 

Exhibit B        -        Land Description

 

Exhibit C        -        Landlord’s Work

 

Exhibit D        -        Reserved

 

Exhibit E        -        Cleaning Specifications

 

Exhibit F        -        Reserved

 

Exhibit G        -        Rules and Regulations

 

Exhibit H        -        Letter of Credit

 

1.3          Additional Definitions

 

In addition to the terms defined in Section 1.1 and other Sections of this
Lease, the following defined terms when used in this Lease shall have the
meanings indicated:

 

(a)           “Additional Rent” means the rent payable under the provisions of
Section 4.2, Section 4.4, Article 8 and Article 30, and all other amounts
required to be paid by Tenant under this Lease other than Base Rent.

 

(b)           “Alteration(s)” means any and all improvements, installations,
changes, additions, renovations, replacements and/or restorations made in, to or
upon the Premises.

 

(c)           “Building” means the office and retail building commonly known as
1411 Broadway, New York, New York 10018 located on the Land and in which the
Premises are located.

 

(d)           “Building Systems” means the central heating, ventilating, air
conditioning, plumbing, electric, life safety, mechanical, wiring, sprinkler,
Class E, sewerage, water, mechanical, elevator and other systems installed by
Landlord in the core and shell of the Building, and all other fixtures,
equipment and appurtenances and systems installed by Landlord in the core and
shell of the Building.

 

(e)           “Business days” means all weekdays and excludes Saturdays, Sundays
and Holidays.

 

(f)            “Common Areas” means certain interior and exterior common and
public areas located on the Land and in the Building as may be designated by
Landlord for the non-exclusive use in common by Tenant, Landlord and other
tenants, and their employees, guests, customers, agents and invitees.

 

(g)           “Fiscal Year” means Landlord’s fiscal year, which ends on
December 31st of each calendar year and may be changed for all or most tenants
at Landlord’s discretion, provided that Landlord shall make appropriate
accounting adjustments in connection with any change, it being the intent that
there be no duplicate payments.

 

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(h)           “Force Majeure” means any acts of God, governmental restriction,
requirements of Law, strikes, labor disturbances, shortages of, or inability to
obtain, materials or supplies, or any other cause or event beyond Landlord’s or
Tenant’s reasonable control by which such party shall be hindered, delayed or
prevented from performance of any act under this Lease.

 

(i)            “Holidays” shall mean all Federal, State, City and banking
holidays and Building Service Employees and Operating Engineer’s Union contract
holidays now or hereafter in effect.

 

(j)            “Insurance Boards” shall mean and include the National Board of
Fire Underwriters and any other body having similar jurisdiction (whether at the
Federal, State or local level), and the New York Fire Insurance Exchange, and
any other body establishing insurance premium rates.

 

(k)           “Land” means the real property known as 1411 Broadway, New York,
New York is located, as more particularly described in Exhibit B hereto.

 

(l)            “Laws” means any and all present and future laws, rules, orders,
ordinances, regulations, statutes, requirements, codes, executive orders,
rules of common law, and any judicial interpretations thereof, extraordinary as
well as ordinary, of (i) all Governmental Authorities, including but not limited
to the Americans With Disabilities Act (42 U.S.C.  § 12,101 et seq.) (the
“ADA”), New York City Local Law 58 of 1987 and any law of like import, and all
rules, regulations and government orders with respect thereto, and any of the
foregoing relating to Hazardous Substances, asbestos, environmental matters,
public health and safety matters, and landmarks preservation, (ii) any
applicable fire rating bureau or other body exercising similar functions, of
general applicability or affecting the Real Property or any portion thereof,
including the Building or the maintenance, use or occupation thereof, or any
street or sidewalk comprising a part of, or in front thereof, or any vault in or
under the Building, and (iii) all insurance bodies affecting the Premises.

 

(m)          “Prime Rate” means the rate of interest announced from time to time
by Citibank, N.A., or any successor to it, as its prime rate.  If Citibank, N.A.
or any successor to it ceases to announce a prime rate, Landlord shall designate
a reasonably comparable financial institution for purposes of determining the
Prime Rate.

 

(n)           “Rent” means the Base Rent and the Additional Rent.

 

(o)           “Tax Year” means every twelve (12) consecutive month period, all
or any part of which occurs during the Term, commencing each July 1 or such
other date as shall be the first day of the fiscal tax year of the City of New
York or other governmental agency responsible for the collection of Taxes.

 

(p)           “Taxes” shall mean (whether represented by one or more bills) the
total of all real estate taxes, levies, license fees and assessments (including
water rates and sewer rents), whether general or special, foreseen or
unforeseen, ordinary or extraordinary, of any nature whatsoever, now or
hereafter levied, confirmed, charged or imposed upon or attributable to, the
Land, the Building and/or Landlord’s interest therein, and payable by Landlord. 
Any special assessment or levy (including, without limitation, any “Business
Improvement District” assessments) which is imposed upon the Land, the Building
or Landlord’s interest therein shall be deemed to be included in the term
“Taxes”; and if, due to a future change in or addition to the method of
taxation, a gross receipts, capital, capital stock or other tax shall be levied
against Landlord or the owner of the Building and/or the Land in substitution
for or in lieu of or as an

 

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additional part of any tax in the nature of real estate tax or assessment, such
gross receipts, capital, capital stock or other tax (whether or not directly
imposed upon, or based upon, the assessed valuation of the Building, the Land or
Landlord’s interest therein) shall be deemed to be included in the term “Taxes”,
but only to the extent of the amount thereof that would be levied if Landlord’s
interest in the Land and Building were the only assets of Landlord.  “Taxes”
shall not include income taxes, excess profit taxes, franchise taxes, estate
taxes, inheritance taxes or documentary transfer taxes or penalties or late
charges due as a result of Taxes being paid after their due date (if such
lateness is not attributable to Tenant), except to the extent any such taxes are
in the nature of or in substitution for or are a recharacterization or
replacement of Taxes.

 

(q)           “Tenant Delay” shall mean any delay that Landlord may encounter in
the completion of such work by reason of any act, neglect, failure or omission
of Tenant, its agents, servants, contractors, architects or employees.

 

2.             GRANT OF LEASE

 

2.1          Demise

 

Subject to the terms, covenants, conditions and provisions of this Lease,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises, together with the non-exclusive right to use the Common Areas for the
Term.

 

2.2          Quiet Enjoyment

 

Landlord covenants that during the Term, so long as Tenant shall not be in
default under this Lease beyond any applicable cure period, Tenant shall have
quiet and peaceable possession of the Premises, subject to the terms, covenants,
conditions and provisions of this Lease, and Landlord shall not disturb such
possession except as expressly provided in this Lease.

 

2.3          Landlord and Tenant Covenants

 

Landlord covenants to observe and perform all of the terms, covenants and
conditions to be observed or performed by Landlord under this Lease.  Tenant
covenants to pay the Rent when due and to observe and perform all of the other
terms, covenants and conditions to be observed or performed by Tenant under this
Lease.

 

3.             TERM

 

3.1          Commencement Date

 

“Commencement Date” shall mean August 1, 2015.

 

3.2          Early Occupancy

 

Tenant shall have no right to enter the Premises prior to the Commencement Date,
unless Tenant shall obtain Landlord’s prior written consent to such entry.  If
Tenant shall take possession of all or any part of the Premises with Landlord’s
prior written consent for any purpose prior to the Commencement Date, then all
of the covenants and conditions of this Lease shall bind both parties with
respect to all of the Premises, except that Tenant shall not be obligated to pay
Base

 

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Rent, Tenant’s Tax Payment or Tenant’s Operating Expense Excess in respect of
such early occupancy period.  No early occupancy under this Section 3.2 shall
change the Expiration Date.

 

3.3          Delayed Occupancy

 

3.3.1       If Landlord shall be unable to give possession of the Premises to
Tenant on the Commencement Date by reason of the fact that the Premises are not
ready for occupancy, or by reason of the failure of a prior tenant or occupant
thereof to vacate the Premises or deliver possession of the Premises to
Landlord, or for any other reason, Landlord shall not be subjected to any
damages or other liability, or be deemed in default under this Lease, for the
failure to give possession of the Premises on such date.  No such failure to
give possession of the Premises on any specific date shall affect the validity
of this Lease or the obligations of Tenant hereunder or be deemed to extend the
Term, but the Rent Commencement Date shall be postponed one (1) day for each day
after the Commencement Date that possession of the Premises is not delivered to
Tenant; provided, however, that if such failure to give possession has been
caused by any act or omission of Tenant, there shall be no corresponding
abatement of Rent or postponement of the Rent Commencement Date.  Subject to the
foregoing, Landlord shall not be subject to any liability for any delay in
completing any repairs, improvements or decorations expressly required to be
made to the Premises by Landlord.

 

3.3.2       Tenant hereby waives any rights to rescind this Lease which Tenant
might otherwise have pursuant to Section 223-a of the Real Property Law of the
State of New York or any other law of like import now or hereafter in force, and
the provisions of this Section 3.3 are intended to constitute an “express
provision to the contrary” within the meaning of such Section of the Real
Property Law of the State of New York.

 

3.4          Surrender

 

Upon the Expiration Date or earlier cancellation or termination of the Term
(such date, as applicable, being hereinafter referred to as the “Surrender
Date”), Tenant shall immediately vacate and surrender possession of the Premises
to Landlord broom clean and in good order, repair and condition, except for
ordinary wear and tear, casualty and condemnation.  Upon the expiration or other
termination of the Term, Tenant shall (a) remove all Specialty Alterations (as
defined in Section 10.1.5), and restore the Premises to the condition existing
prior to the installation of such Alterations (which removal and restoration
shall be performed pursuant to the provisions of Article 10 of this Lease), and
(b) remove all of Tenant’s trade fixtures, office furniture, office equipment
and other personal property from the Premises.  Tenant shall immediately repair
any damage caused by such removal or, at Landlord’s option, pay Landlord on
demand the reasonable cost of repairing any damage to the Premises or Building
caused by the removal of any such items.  Any of Tenant’s property remaining in
the Premises after the Surrender Date shall be conclusively deemed to have been
abandoned by Tenant and may be appropriated, stored, sold, destroyed or
otherwise disposed of by Landlord without further notice to or demand upon
Tenant, and without liability or obligation to account to or compensate Tenant,
and Tenant shall pay Landlord, as Additional Rent, on demand, all costs incurred
by Landlord to store and dispose of such abandoned property.

 

3.5          Holding Over

 

3.5.1       Tenant shall not hold over after the Surrender Date and Landlord may
exercise any and all remedies at law or in equity to recover possession of the
Premises, as well as any damages incurred by Landlord (but not consequential
damages, unless such holdover exceeds

 

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thirty (30) days), due to Tenant’s failure to vacate the Premises and deliver
possession to Landlord as required by this Lease.  If Tenant fails to surrender
the Premises to Landlord on the Surrender Date in accordance with the provisions
of Section 3.4 above, Tenant shall pay to Landlord, as use and occupancy for
each month or fraction thereof during which Tenant continues to occupy the
Premises after the Surrender Date (the “Continued Occupancy Period”), an amount
of money (the “Occupancy Payment”) equal to (1) one hundred fifty percent (150%)
for the first thirty (30) days of the Continued Occupancy Period, and (2) two
hundred percent (200%) thereafter of the sum of (i) the monthly Base Rent plus
(ii) one twelfth (1/12) of the annual Additional Rent during the last year of
the term.  Tenant shall make the Occupancy Payment, without notice or demand, on
the first day of each and every month during the Continued Occupancy Period. 
The receipt and acceptance by Landlord of all or any portion of the Occupancy
Payment shall not be deemed a waiver or acceptance by Landlord of Tenant’s
breach of Tenant’s covenants and agreements under Section 3.4 or this
Section 3.5, or a waiver by Landlord of Landlord’s right to institute any
summary holdover proceedings against Tenant, or a waiver by Landlord of any
other of Landlord’s rights or remedies against Tenant in such event as provided
for in this Lease or under Law.

 

3.5.2       In addition to making all required Occupancy Payments, Tenant shall,
in the event of Tenant’s failure to surrender the Premises on the Surrender Date
in accordance with the provisions of Section 3.4 above, also indemnify and hold
Landlord harmless from and against any and all loss or liability resulting from
any delay by Tenant in so surrendering the Premises, including any special
damages or claims Landlord may suffer by reason of any claims made by any
succeeding occupant founded on such delay (but not consequential damages, unless
such holdover exceeds thirty (30) days), and any reasonable attorneys’ fees,
disbursements and court costs incurred by Landlord in connection with all of the
foregoing.

 

3.5.3       Tenant expressly waives, for itself and for any person claiming by,
through or under Tenant, any rights which Tenant or any such persons 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 summary holdover proceedings which Landlord may institute to enforce the
provisions of this Article 3.

 

3.5.4       Tenant’s obligation to observe or perform each and every one of the
covenants set forth in Section 3.4 and this Section 3.5 shall survive the
expiration or other termination of the Term.

 

4.             RENT

 

4.1          Base Rent; Rent Abatement

 

4.1.1       Commencing on the Commencement Date and continuing throughout the
Term, Tenant shall pay to Landlord the Base Rent in accordance with the
provisions of this Lease at the annual rate(s) set forth in
Section 1.1(i) above, in equal monthly installments in advance, on or before the
first day of each and every month during the Term.  However, if the Term
commences on other than the first day of a month or ends on other than the last
day of a month, Base Rent for such month shall be appropriately prorated. 
Tenant shall pay the first monthly installment of Base Rent becoming due under
this Lease upon execution of this Lease by Tenant.

 

4.1.2       Notwithstanding anything to the contrary contained in Section 4.1.1
above, provided that this Lease shall then be in full force and effect and no
Event of Default shall have occurred or be continuing (meaning that Tenant shall
have failed to cure the underlying default

 

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giving rise to such Event of Default within the applicable cure period under
this Lease, if any), Tenant shall be entitled to an abatement of Base Rent in
the amount of $153,671.08 per month from the Commencement Date through the Rent
Commencement Date (the “Base Rent Abatement Period”). During any Base Rent
Abatement Period, only Base Rent to the extent set forth above shall be abated
(the “Abated Base Rent”), and the electric charges as well as all Additional
Rent and other costs and charges payable under this Lease shall remain due and
payable pursuant to the terms hereof. Notwithstanding the foregoing, if Tenant
cures any such Event of Default after the applicable notice and cure period set
forth in Section 21.1 and if such cure is accepted by Landlord, then Tenant
shall again be entitled to the Abated Base Rent, it being the intent that under
such circumstances Tenant will receive the full benefit of the Abated Base Rent
subject to the terms of this Lease.

 

4.2          Taxes

 

4.2.1       Tenant shall pay to Landlord, as Additional Rent, for each Tax Year
subsequent to the Base Tax Year that contains any part of the Term, an amount
(“Tenant’s Tax Payment”) equal to Tenant’s Tax Share of the amount by which
Taxes for such Tax Year exceed Taxes for the Base Tax Year.  Prior to or as soon
as practicable after the beginning of each Tax Year subsequent to the Base Tax
Year, Landlord shall submit a statement to Tenant (the “Tax Statement”) setting
forth Tenant’s Tax Payment.  Tenant’s Tax Payment shall be payable in two
(2) equal installments, the first of which shall be due and payable on the
June 1 immediately preceding the commencement of the Tax Year with respect to
which a Tax Statement shall be rendered and the second of which shall be due and
payable on the December 1 immediately preceding the second half of such Tax
Year, provided, however, that if Landlord shall render any Tax Statement after
or less than ten (10) days prior to the date on which a Tax Payment would
otherwise be due, then such payment shall be due thirty (30) days after Landlord
shall have rendered such Tax Statement.

 

4.2.2       If, following the delivery of any Tax Statement, Landlord shall
receive a refund of Taxes with respect to a Tax Year for which Tenant has paid
any Additional Rent under the provisions of this Section 4.2, Tenant’s Tax Share
of the net proceeds of such refund, after deduction of legal fees, appraiser’s
fees and other expenses incurred in obtaining such refund and collecting the
same (and after deduction of such expenses for previous Tax Years which were not
offset by tax refunds for such Tax Years) shall be applied and allocated to the
periods for which the refund was obtained and, if no Event of Default shall be
continuing, Landlord shall, at Landlord’s option, refund or credit to Tenant,
Tenant’s Tax Share of the net proceeds of such refund.  In no event shall any
refund or credit due to Tenant hereunder exceed Tenant’s Tax Payment paid by
Tenant for such particular Tax Year.  In no event shall Tenant have the right to
seek from the taxing authority any refund or reduction of Taxes.  If, prior to
the delivery of a Tax Statement to Tenant with respect to a particular Tax Year,
Landlord shall obtain a reduction in Taxes for that Tax Year, then Tenant shall
pay to Landlord, within thirty (30) days following the issuance to Tenant of a
bill therefor, an amount equal to Tenant’s Tax Share of all reasonable costs and
expenses (including legal, appraisal and other expert fees) incurred by Landlord
in obtaining such reduction.

 

4.2.3       If there shall be a reduction or refund of Taxes for the Base Tax
Year, Landlord shall furnish to Tenant a revised statement indicating the Taxes
payable for the Base Tax Year as so finally determined and all prior and future
payments of Tenant’s Tax Share of increases in Taxes provided for in this
Section 4.2 shall be recalculated accordingly.  Any additional payment due for
any Tax Year shall be made by Tenant within thirty (30) days after the
furnishing to Tenant of the revised Tax Statement.

 

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4.3                               Other Taxes; Tax and Energy Incentive Programs

 

4.3.1       Other Taxes. In the event that any taxes upon or measured by Rent or
upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion of the Premises which are typically payable by tenants of comparable
office buildings in midtown Manhattan (e.g., commercial rent tax) are allocated
by Law to be payable by Landlord, Tenant shall reimburse Landlord upon demand
for any and all such taxes payable by Landlord.  If it is not lawful for Tenant
to reimburse Landlord, the Base Rent payable to Landlord under this Lease shall
be revised to yield to Landlord the same net rental after the imposition of any
such tax upon Landlord as would have been payable to Landlord prior to the
imposition of any such tax.

 

4.3.2       Tax and Energy Incentive Programs.  Should Landlord, in its sole
discretion, elect to apply for benefits under the Industrial & Commercial
Abatement Program (the “ICAP”), and/or any other incentive programs in which
Landlord shall, in its discretion, elect to participate (the “Incentive
Programs”), the parties hereto agree that:

 

(a)           Tenant shall, in order to assist Landlord in obtaining any
incentives, abatements, exemptions, subsidies, energy discounts, refunds or
payments that may be available to Landlord in connection with the Incentive
Programs with respect to the entire Building or any portion thereof, including,
without limitation, the Premises, (i) promptly execute and file any necessary
applications, certifications or other documents, and (ii) follow all required
procedures within any applicable time limitations, and Tenant shall provide
Landlord with such further cooperation as may reasonably be requested by
Landlord; provided, however, that Tenant shall not be obligated to incur any
additional out of pocket costs or expenses in connection with such cooperation
beyond a de minimis extent (such as, e.g., completion of forms, making of copies
and mailing of letters).

 

(b)           Tenant and Landlord hereby acknowledge that, notwithstanding
anything to the contrary contained herein, all or any portion of the benefit
from any such Incentive Program actually received by or credited to Landlord in
connection with this Lease and any amounts that shall be required to be
forwarded to Tenant pursuant to such Incentive Program shall be the property of
Landlord (regardless of whether or not such benefits are larger or smaller than
anticipated).

 

(c)           Notwithstanding anything to the contrary contained herein or in
the Incentive Programs, Landlord has made no representations to Tenant with
respect to the Incentive Programs, and Landlord shall have no liability or
responsibility to Tenant if all or any portion of any benefits from any
Incentive Program are not received by or credited to Landlord or are received by
or credited to Landlord and are thereafter revoked for any reason other than
Landlord’s failure to comply with the provisions of this Section 4.3.2.

 

(d)           With respect to any Alterations, and in connection with Landlord’s
ICAP application, Tenant, at its sole cost and expense, shall be obligated to
timely and fully comply with the requirements of (i) Executive Order No. 159;
(ii) Executive Order No. 108 of 1986; (iii) Section 11-260 of the Administrative
Code of the City of New York; (iv) omitted; (v) the New York City Charter; and
(vi) any amendments or modifications thereto or other additional or successor
executive orders, statutes, rules or regulations bearing on Landlord’s ICAP
application.  Such compliance shall include the filing with the Department of
Labor Services (“DLS”) of Construction Employment Reports, Supply and Service
Construction Employment Reports, Less Than $750,000 Subcontract Certificates,
and certified payroll records.  Tenant shall also be solely

 

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responsible for the compliance of any contractor, subcontractor, consultant,
agent or party employed by Tenant in connection with Alterations.  Copies of all
such filings shall be sent by Tenant to Landlord.  Tenant, as well as any
contractor, subcontractor, construction manager, general contractor, consultant,
agent or any party employed by Tenant in connection with any Alterations, shall
cooperate with Landlord and shall supply such information and comply with such
reporting requirements as Landlord indicates to Tenant are reasonably necessary
to comply with the ICAP, and Tenant shall assist Landlord in connection with
maintaining its eligibility under the ICAP.  Tenant also agrees that at the
commencement of any Alterations, and as such Alterations progress, Tenant (or
its agent) shall provide Landlord with the names of all contractors or
subcontractors retained by Tenant with respect to the Alterations, as well as
the dollar value of each contract or subcontract.  Tenant further agrees that
with respect to any contractors performing work pursuant to a contract with a
value of $1,000,000 or more or subcontractors performing work pursuant to a
subcontract with a value of $750,000 or more, a retainage in the amount of ten
percent (10%) of the value of said contract or subcontract shall be withheld
until DLS gives written approval that final payment may be released to said
contractor or subcontractor.

 

(e)           Notwithstanding anything to the contrary contained herein, the
provisions related to ICAP and/or any other Incentive Programs set forth in this
Section 4.3.2 shall not be included in and shall not affect Tenant’s Tax Payment
and/or the Taxes for the Base Tax Year, including, without limitation, the
amount of any refund, abatement or exemption of Taxes, if any, received by or
credited to Landlord pursuant to the ICAP and/or any other Incentive Programs.

 

(f)            Tenant shall not be obligated to perform any of the foregoing
covenants unless and until Landlord notifies Tenant in writing that Landlord has
elected to participate in any such Incentive Programs.  Additionally,
notwithstanding anything contained herein to the contrary, Tenant shall not be
obligated to incur any additional out-of-pocket costs or expenses in connection
with the foregoing covenants beyond a de minimis extent (such as, e.g.,
completion of forms, making of copies and mailing of letters).

 

4.4                               Operating Expenses

 

4.4.1       For purposes of this Section 4.4, the term “Operating Expenses”
means the aggregate of all costs and expenses (other than those expressly
excluded below) incurred or accrued by Landlord or any contractor employed by
Landlord in each Fiscal Year, in accordance with reasonable and customary
practices for comparable buildings in mid-town Manhattan, in connection with
operating, repairing, managing, equipping, securing, protecting, maintaining,
replacing (subject to the express exclusions below), renewing, cleaning,
decorating and inspecting the Building, the Land and/or Landlord’s interest
therein.  Without limiting the generality of the foregoing, “Operating Expenses”
shall include the following items, wither directly incurred or through separate
contract therefor:

 

(a)           all labor and labor related costs, including wages, salaries,
fees, bonuses, taxes, insurance, uniforms, training, retirement plans, pension
plans and other employee benefits and compensation;

 

(b)           management fees (which shall not exceed three percent (3%) of
annual gross rents generated for the Building in any given Fiscal Year),
provided that nothing herein shall preclude Landlord from engaging an affiliated
entity as manager of the Building;

 

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(c)           the cost of equipping, staffing and operating an on-site and/or
off-site management office for the Building, provided if the management office
services one or more other buildings or properties, the shared costs and
expenses of equipping, staffing and operating such management office(s) shall be
equitably prorated and apportioned between the Building and the other buildings
or properties;

 

(d)           costs and fees for accounting, bookkeeping, auditing, consulting,
legal and other professional services;

 

(e)           the cost of services and items provided to and for the Common
Areas;

 

(f)            rental and purchase cost of parts, supplies, tools and equipment
used for any items permitted to be included as Operating Expenses;

 

(g)           insurance premiums and deductibles to the extent the applicable
insurance is required to be carried by Landlord by the terms of any Encumbrance,
or, if not so required, would be carried by prudent landlords or owners of
buildings in mid-town Manhattan comparable to the Building;

 

(h)           utilities supplied to, or used in connection with services
rendered to, the Building and the Common Areas for the benefit of all tenants of
the Building including Tenant, including but not limited to electricity, power,
gas, steam, chilled water, oil or other fuel, water, sewer, lighting, heating,
air conditioning and ventilating;

 

(i)            permits, licenses and certificates necessary to operate, manage
and lease the Building and the Land;

 

(j)            the cost of any amenities provided for the benefit of all tenants
of the Building;

 

(k)           payments under any easement, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs in any
planned development;

 

(l)            janitorial service, cleaning service, alarm and security service,
window cleaning, trash removal, elevator maintenance, cleaning of walks, parking
facilities and building walls, removal of ice and snow, replacement of wall and
floor coverings, ceiling tiles and fixtures in lobbies, corridors, Building
restrooms (as opposed to restrooms in a particular tenant’s premises) and other
Common Areas, maintenance and replacement of shrubs, trees, grass, sod and other
landscaped items, irrigation systems, drainage facilities, fences, curbs, and
walkways, and roof repairs (as opposed to roof replacements, which shall be
included in Operating Expenses as capital expenditures),

 

(m)          costs to comply with Laws and governmental requirements of general
applicability to the Building other than those Laws or governmental requirements
(i) in effect prior to the Commencement Date (ii) with which it is Landlord’s
obligation to comply and (iii) which, under present judicial or administrative
interpretation, are being violated on the Commencement Date, and

 

(n)           capital expenditures:  (1) made primarily to reduce Operating
Expenses (which costs shall not exceed, over the Term, the reduction realized),
or to comply with any Laws or other governmental requirements other than those
Laws or governmental requirements in effect

 

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prior to the Commencement Date with which it is Landlord’s obligation to comply
and which, under present judicial or administrative interpretation, are being
violated on the Commencement Date, or (2) for replacements (as opposed to
additions or new improvements) of items located in the Common Areas and required
to keep such areas in good condition; provided, all such permitted capital
expenditures (together with reasonable financing charges) shall be amortized for
purposes of this Lease over the shorter of:  (a) their useful lives or (b) in
the case of an item made primarily to reduce Operating Expenses, the period
during which the reasonably estimated savings in Operating Expenses equals the
expenditures.  The amortized portion of any capital expenditure shall be
included in Operating Expenses for the Base Expense Year if the same were so
incurred in the Base Expense Year.

 

4.4.2       Operating Expenses shall not include:  (1) Taxes (or any items
expressly excluded from Taxes under Section 1.3(o) above); (2) the cost of
capital improvements (except as set forth in Section 4.4.1(n) above);
(3) depreciation; (4) principal or interest payments of mortgage and other
non-operating debts of Landlord, including any ground lease rents; (5) the cost
of repairs, replacements or other work to the extent Landlord is reimbursed by
insurance or condemnation proceeds or third party guarantees, warranties or
indemnity agreements (net of applicable deductibles and other costs to obtain
benefit of same); (6) costs in connection with leasing space in the Building,
including, without limitation, marketing expenses such as brochures and signs
(but advertising expenses may be included as Operating Expenses), brokerage
commissions, initial construction work or alterations performed on behalf of
particular Building tenants or occupants or painting or decorating any area on
behalf or of occupied by particular Building tenants or occupants; (7) lease
concessions, rental abatements and construction allowances granted to specific
tenants; (8) costs incurred in connection with the sale, financing or
refinancing of the Building, the Land or any air development rights; (9) fines,
interest and penalties incurred due to the late payment of Taxes or Operating
Expenses; (10) organizational expenses associated with the creation and
operation of the entity which constitutes Landlord; (11) any penalties or
damages that Landlord pays to Tenant under this Lease or to other tenants in the
Building under their respective leases; (12) salaries, fringe benefits and other
compensation of personnel above the grade of the Building’s general manager;
(13) the cost of electricity provided exclusively to Tenant or exclusively to
other particular tenants of the Building; (14) the cost of items, including
overtime HVAC, which are required to be reimbursed by Tenant (other than
pursuant to this Article 4) or which are provided exclusively to particular
other tenants of the Building; (15) legal and other professional fees incurred
in disputes with Building tenants (except to the extent that Tenant is involved
in such disputes) or with respect to negotiating leases of premises in the
Building; (16) lease takeover costs and expenses; (17) the cost of removing,
encapsulating or otherwise abating any asbestos or other Hazardous Substances in
the Building; (18) franchise, income, transfer gains, inheritance, personal
property or other tax imposed on Landlord; (19) the cost of performing work or
furnishing services at Landlord’s expense to or for any particular tenant of the
Building other than Tenant to the extent such work or service is in excess of
any work or service Landlord is obligated to provide to Tenant or generally to
all tenants of the Building at Landlord’s expense; (20) any costs, fines or
penalties incurred due to Landlord’s violation of any Laws or governmental
regulations or requirements; (21) expenses in connection with services or other
benefits of a type which are not provided to Tenant but which are provided to
another tenant or occupant of the Building; (22) costs of installing any special
facilities, such as an observatory, broadcasting facility, luncheon club or
athletic or recreational club; (23) cost of any fine art, such as paintings and
sculptures; and (24) any costs which are above arm’s length market prices for
goods or services and are paid to any firm or person related to or affiliated
with Landlord or any member of Landlord.

 

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4.4.3       If at any time during a Fiscal Year the Building is not at least
100% occupied or Landlord is not supplying services to at least 100% of the
Building, those Operating Expenses that vary with the level of occupancy shall,
at Landlord’s option, be determined as if the Building had been 100% occupied
and Landlord had been supplying services to 100% of the Building during that
Fiscal Year.  If Operating Expenses for a Fiscal Year are determined as provided
in the prior sentence, Operating Expenses for the Base Expense Year shall also
be determined in such manner.

 

4.4.4       Payments.

 

(a)           Tenant shall pay, as Additional Rent, Tenant’s Expense Share of
the amount, if any, by which Operating Expenses for each Fiscal Year, or the
applicable portion of the Fiscal Year during the Term, exceed Operating Expenses
for the Base Expense Year (the “Operating Expense Excess”).  If Operating
Expenses in any Fiscal Year decrease below the amount of Operating Expenses for
the Base Expense Year, Tenant’s Expense Share of the Operating Expense Excess
for that Fiscal Year shall be deemed to be $0.  Landlord shall maintain books
and records necessary for computation of Operating Expenses.  Solely for
purposes of calculating the Operating Expense Excess, as soon as is practical
following the end of Fiscal Year 2015, Landlord shall furnish to Tenant a
statement of the actual Operating Expenses for the Base Expense Year, which
shall include an estimate of the Operating Expenses for Fiscal Year 2016 for
purposes of calculating the Operating Expenses for the Base Expense Year. As
soon as is practical after the beginning of each Fiscal Year during the Term
subsequent to Fiscal Year 2015, Landlord shall provide Tenant with a good faith
estimate of the Operating Expense Excess for such Fiscal Year or the applicable
portion of such Fiscal Year within the Term.  On or before the first day of each
month of any Fiscal Year or portion thereof within the Term following Fiscal
Year 2015, Tenant shall pay to Landlord a monthly installment equal to
one-twelfth (1/12) of Tenant’s Expense Share of Landlord’s estimate of the
Operating Expense Excess.  If at any time Landlord determines that its good
faith estimate of the Operating Expense Excess was incorrect by a material
amount, Landlord may provide Tenant with a revised estimate.  After its receipt
of any revised estimate, Tenant’s monthly payments shall be based upon, and
modified in accordance with, the revised estimate.  Tenant shall continue to pay
monthly installments based on the previous Fiscal Year’s estimate(s) until
Landlord provides Tenant with a new estimate of the Operating Expense Excess for
any new Fiscal Year.  Upon delivery of the new estimate applicable to the then
Fiscal Year, an adjustment shall be made for any month in such Fiscal Year for
which Tenant has paid monthly installments based on the previous Fiscal Year’s
estimate.  Tenant shall pay Landlord the amount of any underpayment within 30
days after receipt of the new estimate.  Any overpayment shall be refunded to
Tenant within 30 days or credited against the next due future installment(s) of
Additional Rent.

 

(b)           As soon as is practical following the end of each Fiscal Year,
Landlord shall furnish to Tenant a statement of the actual Operating Expenses
and Operating Expense Excess for the prior Fiscal Year (each, an “Annual Expense
Statement”). Landlord will endeavor to furnish the Annual Expense Statement
within one hundred twenty (120) days after the end of each Fiscal Year.  If the
estimated Operating Expense Excess for the prior Fiscal Year is more than the
actual Operating Expense Excess for the prior Fiscal Year, Landlord shall
either, at Landlord’s option, provide Tenant with a prompt refund or apply any
overpayment by Tenant against Additional Rent next becoming due.  If the
estimated Operating Expense Excess for the prior Fiscal Year is less than the
actual Operating Expense Excess for such prior Fiscal Year, Tenant shall pay
Landlord, within 30 days after its receipt of the statement of Operating
Expenses, any underpayment for the prior Fiscal Year.

 

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(c)           The Annual Expense Statements furnished by Landlord to Tenant as
provided in Section 4.4.4(b) shall be binding on Tenant as to the determination
of Operating Expenses for the Base Expense Year and/or any subsequent Fiscal
Year; provided, however, Tenant may question the correctness of such Annual
Expense Statement or statement of the Operating Expenses for each of Fiscal Year
2015 and Fiscal Year 2016, by written notice delivered to Landlord within ninety
(90) days after receipt of (i) Landlord’s first Annual Expense Statement
relating to Fiscal Year 2015 and Landlord’s second Annual Expense Statement
relating to Fiscal Year 2016, with respect to the Operating Expenses for the
Base Expense Year, and/or (ii) any Annual Expense Statement for a comparison
Fiscal Year, with respect to Operating Expenses for such comparison Fiscal Year,
time being of the essence in each of (i) and (ii) above.  Within sixty (60) days
following Tenant’s notice to Landlord, Tenant shall send a second notice to
Landlord specifying each of Landlord’s books and records required to be made
available to Tenant pursuant to this Section relevant to Tenant’s inquiry that
Tenant would like to review in its audit of Operating Expenses.  Tenant may
alternatively specify such items in its original notice to Landlord questioning
the correctness of a statement.  Landlord shall permit Tenant or Tenant’s
independent and licensed certified public accountants (“CPA”), who shall not
work on a contingency basis, to have access to the books and records utilized to
compute Operating Expenses timely requested by Tenant, during normal business
hours upon reasonable notice for a period of sixty (60) days after Landlord
makes such items available to Tenant or its CPA, and during no other time. 
Landlord shall cooperate in good faith with Tenant to provide access to the
books and records Tenant is permitted to access pursuant to this Section. 
Pending determination of any such dispute, and as a condition to Tenant’s right
to review Landlord’s books and records in accordance with this Section, Tenant
shall pay Additional Rent in accordance with the Annual Expense Statement that
Tenant is disputing, without prejudice to Tenant’s position.  Tenant shall
notify Landlord in reasonable detail and with reasonable specificity of any
claim by Tenant of overpayment of Operating Expenses within the aforesaid sixty
(60) day review period, or Tenant shall be deemed to have waived any claims not
asserted within said sixty (60) day period.  If such audit uncovers any
overpayment or underpayment by Tenant, then within thirty (30) days after such
determination, Landlord shall pay Tenant the amount of any overpayment, or
Tenant shall pay Landlord the amount of any underpayment, as the case may be. 
No copying of any of Landlord’s books and records shall be allowed.  Tenant
agrees that Tenant shall not disclose the contents of such books and records to
any other party unless (i) Tenant is compelled to disclose the information
pursuant to court order or applicable law; (ii) such disclosure is in connection
with any proceeding enforcing any remedies of Tenant as to the computation of
Operating Expenses or (iii) such disclosure is to any officer, employee, or CPA
of Tenant, all of whom shall be bound by such this non-disclosure requirement. 
Landlord may require Tenant, any officer, employee, and/or any CPA employed by
Tenant to execute a confidentiality agreement in form reasonably satisfactory to
Landlord, Tenant and the CPA employed by Tenant prior to reviewing any books and
records of Landlord.  Tenant hereby waives any rights Tenant may have to review
any books and records of Landlord (including, without limitation, any rights by
law) except as expressly set forth in this Section 4.4.4(c).

 

4.5                               Adjustments of and Revisions to Payments of
Additional Rent

 

If this Lease shall commence on a day other than the first day of a Tax Year or
Fiscal Year, or shall terminate on a day other than the last day of a Tax Year
or Fiscal Year, then Tenant’s Tax Payment and/or Tenant’s Expense Share of the
Operating Expense Excess allocable to the Tax Year and/or Fiscal Year in which
such commencement or termination shall occur shall be prorated on the basis of
the number of days within such Tax Year and/or Fiscal Year is within the Term. 
Tenant’s obligation to pay Additional Rent which has accrued but not been paid
allocable to periods prior to the expiration or earlier termination of the Term,
and Landlord’s obligation to

 

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refund Taxes or any overpayment of Tenant’s Expense Share of the Operating
Expense Excess under this Article 4, shall survive the expiration or earlier
termination of the Term.  Landlord shall have the right to render a corrected or
revised Tax Statement or Annual Expense Statement at any time and from time to
time during and within three (3) years after the Term, and Landlord’s failure to
render any Tax Statement Annual Expense Statement or revision or correction
thereto during the Tax Year or Fiscal Year to which such statement shall relate
shall not prejudice Landlord’s right to render any such statement at any later
time.

 

4.6                               Terms of Payment

 

All Base Rent, Additional Rent and other Rent shall be paid to Landlord in
lawful money of the United States of America, at Landlord’s Building Address, or
to such other person or at such other place as Landlord may from time to time
designate in writing, without notice or demand and without right of deduction,
abatement or setoff, except as otherwise expressly provided in this Lease. 
Tenant shall be permitted to pay Rent by Automated Clearing House (ACH) wire
transfers to such account designated by Landlord which may change on notice to
Tenant.

 

4.7                               Interest on Late Payments

 

All amounts payable under this Lease by Tenant to Landlord, if not paid when
due, shall bear interest from the due date until paid at the lesser of the
highest interest rate permitted by law or 8% in excess of the then-current Prime
Rate, and Tenant shall pay a late fee of 5% of the amount due.  Notwithstanding
the foregoing, Landlord agrees that it shall not charge the late fee unless
Tenant fails to cure any such delinquent payment within five (5) days after
written notice from Landlord, provided, however, that Landlord shall only be
obligated to provide such written notice for the first two (2) delinquent
payments during any rolling twelve (12) month period.

 

4.8                               Right to Accept Payments

 

No receipt by Landlord of an amount less than Tenant’s full amount due shall be
deemed to be other than payment “on account,” nor shall any endorsement or
statement on any check or any accompanying letter effect or evidence an accord
and satisfaction.  Landlord may accept such check or payment without prejudice
to Landlord’s right to recover the balance or pursue any right of Landlord.  No
payments by Tenant to Landlord after the expiration or other termination of the
Term, or after the giving of any notice (other than a demand for payment of
money) by Landlord to Tenant, shall reinstate, continue or extend the Term or
make ineffective any notice given to Tenant prior to such payment. After notice
or commencement of a suit, or after final judgment granting Landlord possession
of the Premises, Landlord may receive and collect any sums of Rent due under
this Lease, and such receipt shall not void any notice or in any manner affect
any pending suit or any judgment obtained.

 

4.9                               Insufficient Funds

 

If any check delivered to Landlord in full or partial payment of any amounts due
to Landlord pursuant to the terms of this Lease shall not be honored by reason
of insufficient or uncollected funds or for any other reason, then Tenant shall
pay to Landlord a service charge on account thereof in the amount of Two Hundred
Dollars ($200.00), which charge shall be due and payable as Additional Rent with
the next monthly installment of Base Rent.

 

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4.10                        Lockbox

 

If Landlord shall direct Tenant to pay Base Rent or Additional Rent to a
“lockbox” or other depository whereby checks issued in payment of Base Rent
and/or Additional Rent are initially cashed or deposited by a person or entity
other than Landlord (albeit on Landlord’s authority), then, for any and all
purposes under this Lease:  (i) Landlord shall not be deemed to have accepted
such payment until ten (10) days after the date on which Landlord shall have
actually received such funds, and (ii) Landlord shall be deemed to have accepted
such payment if (and only if) within said ten (10) day period, Landlord shall
not have refunded (or attempted to refund) such payment to Tenant.  Nothing
contained in the immediately preceding sentence shall be construed to place
Tenant in default of Tenant’s obligation to pay Rent if and for so long as
Tenant shall timely pay the Rent required pursuant to this Lease in the manner
designated by Landlord.

 

5.                                      CONDITION OF PREMISES

 

5.1                               By taking possession of any part of the
Premises hereunder, Tenant shall be deemed to have accepted the Premises as
being in good order, condition and repair, and otherwise in its then existing
“as is” and “where is” condition as of the Commencement Date, other than for
latent defects in Landlord’s Work of which Tenant notifies Landlord promptly
following discovery thereof, but in no event later than one (1) year following
the Commencement Date. The foregoing, however, shall not be deemed or construed
to release Landlord from any of its obligations set forth in this Lease,
including its obligation to provide services and utilities under Article 7
below, or to repair, maintain and operate the Building in a manner consistent
with comparable office buildings in midtown Manhattan (subject, in each case, to
the terms and provisions of this Lease). Landlord shall not be obligated to
perform any work whatsoever to prepare the Premises for Tenant, except that,
prior to the Commencement Date, Landlord shall have substantially completed the
work set forth on Exhibit C hereto (“Landlord’s Work”) in a good and workmanlike
manner, with Building standard materials and at Landlord’s cost.  Tenant
acknowledges that, except as may otherwise be expressly provided in this Lease,
neither Landlord, nor any employee, agent nor contractor of Landlord has made
any representation or warranty concerning the Land, Building, Common Areas or
Premises, or the suitability of any for the conduct of Tenant’s business. 
Landlord reserves, for Landlord’s use, any of the following (other than those
installed by or for Tenant’s exclusive use) that may be located in the Premises:
janitor closets, stairways and stairwells; fans, mechanical, electrical,
telephone and similar rooms; and elevator, pipe and other vertical shafts, flues
and ducts. In connection with Landlord’s Work, “Substantial Completion” or
“substantially completed” or “substantially complete” means that Landlord’s Work
has been completed in accordance with (i) the provisions of this Lease
applicable thereto, (ii) the plans and specifications for such Landlord’s Work,
and (iii) all applicable Laws and other requirements, except for minor and
immaterial details of construction, decoration and mechanical adjustments, if
any, the non-completion of which do not materially interfere with Tenant’s use
of the Premises, or which, in accordance with good construction practice, should
be completed after the completion of other work to be performed in the Premises
(“Punch List Items”), completion of which shall not materially interfere with
Tenant’s ability to perform the Initial Installations.

 

Following the Commencement Date, Landlord shall perform the work set forth on
Exhibit C-1 hereto (“Landlord’s Additional Work”).  Tenant shall permit Landlord
access to the Premises to perform Landlord’s Additional Work, and Landlord and
Tenant shall cooperate with one another to minimize interference with, as
applicable, the performance of the Initial Improvements and Landlord’s
Additional Work.

 

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Landlord and its employees, contractors and agents shall have access to the
Premises at all reasonable times for the performance and completion of
Landlord’s Work, Landlord’s Additional Work and Punch List Items, and for the
storage of materials reasonably required in connection therewith, and Tenant
will use all reasonable efforts to avoid any interference with the performance
of Landlord’s Work, Landlord’s Additional Work, and Punch List Items.   Landlord
shall use reasonable efforts to complete Punch List Items within thirty (30)
days for Landlord’s Work and forty-five (45) days for Landlord’s Additional Work
after its receipt of the “punch list” from Tenant, subject to Tenant Delay.
There shall be no rent abatement or allowance to Tenant for a diminution of
rental value, no actual or constructive eviction of Tenant, in whole or in part,
no relief from any of Tenant’s other obligations under the Lease, and no
liability on the part of Landlord, by reason of inconvenience, annoyance or
injury to business arising from the performance of Landlord’s Additional Work or
Punch List Items or the storage of any materials in connection therewith,
provided, however, Landlord will take all commercially reasonable actions to
minimize any disruption to Tenant’s business activities as Landlord completes
the Punch List Items.  Notwithstanding anything to the contrary contained
herein, if Tenant has obtained all necessary plans (as approved by Landlord
pursuant to the applicable sections of this Lease), permits, New York City
Department of Buildings (DOB) and other applicable agency approvals, Tenant has
executed contracts in place in order to commence the Initial Improvements and is
actually ready to commence the Initial Improvements, and any delay in the
Substantial Completion of Landlord’s Additional Work is actually delaying and
preventing Tenant from commencing the Initial Improvements as a result thereof,
the Rent Commencement Date shall be deferred by one (1) day for each day until
the earlier of Substantial Completion of Landlord’s Additional Work or when the
remainder of Landlord’s Additional Work is no longer delaying Tenant from
commencing the Initial Improvements.

 

5.2                               Tenant intends to undertake renovations in the
Premises to prepare the same for Tenant’s occupancy (the “Initial
Improvements”).  As soon as is reasonably practical after the Date of this
Lease, Tenant shall deliver to Landlord, for Landlord’s approval, construction
drawings for the Initial Improvements.  Landlord shall not unreasonably withhold
its approval of such construction drawings provided that the requirements
(a) through (e) of the following sentence shall be satisfied.  Such construction
drawings shall reflect Alterations that would not (a) alter the exterior of the
Building in any way or affect the exterior appearance of the Building,
(b) exceed or adversely affect the capacity, maintenance, expenses or integrity
of the Building’s structure or any of its components, (c) affect or alter any
Building Systems (other than to a de minimis extent), (d) affect the certificate
of occupancy for the Building or necessitate the performance of any work by
Landlord in the Building (other than Landlord’s Work) or (e) adversely affect
the premises of any other tenants or occupants of the Building.  Within fifteen
(15) business days following Landlord’s receipt of such construction drawings,
Landlord shall notify Tenant, either approving such construction drawings or
specifying for Tenant, in reasonable detail, Landlord’s reasons for withholding
approval of any required modifications.  Within five (5) business days following
receipt of Landlord’s response to the construction drawings, if the same were
not approved, Tenant shall revise such construction drawings to reflect
Landlord’s responses.  Such process shall continue, with each party responding
to the other within five (5) business days after such party’s receipt of the
revised construction drawings or response thereto, as applicable, until Landlord
approves such construction drawings.  If Landlord fails to respond to Tenant’s
initial request for approval within the aforesaid fifteen (15) business day
period, or to a resubmission within five (5) business days (which five
(5) business day period shall be extended by one (1) day for each day beyond the
five (5) business days provided for response that Tenant fails to revise such
construction drawings to reflect Landlord’s responses), and if thereafter
Landlord in either case also fails to respond to Tenant within five (5) business
days after receipt from Tenant of a notice (a “Plan Notice”) seeking a response
to Tenant’s request for approval of the construction

 

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drawings, Landlord shall be deemed to have approved the construction drawings
provided that Tenant shall have stated in capitalized letters and bold type
(a) on the envelope of the Plan Notice:  “SECOND NOTICE REGARDING CONSTRUCTION
DRAWINGS” and (b) on the first page of the Plan Notice:  “LANDLORD’S FAILURE TO
RESPOND TO TENANT REGARDING THE CONSTRUCTION DRAWINGS WITHIN FIVE (5) BUSINESS
DAYS AFTER RECEIPT OF THIS NOTICE SHALL BE DEEMED TO BE LANDLORD’S APPROVAL OF
SUCH CONSTRUCTION DRAWINGS.”  Notwithstanding the foregoing, Landlord’s failure
to approve or disapprove the construction drawings within five (5) business days
following the Plan Notice shall not be deemed Landlord’s approval of the
construction drawings provided that Landlord has responded to Tenant that
Landlord needs more time than provided to review the construction drawings, and
provided that such additional time shall be for a legitimate purpose related to
review, which Landlord shall have set forth, in reasonable detail, in its
response to Tenant.  Landlord shall not charge Tenant a supervisory or
construction management fee for Landlord’s review of the construction drawings
as described in this Section 5.2, but Tenant shall reimburse Landlord for
Landlord’s actual, reasonable out-of-pocket costs in reviewing such construction
drawings.  As part of the Initial Improvements, Tenant shall remove the
temporary sprinkler loop installed as a component of Landlord’s Work, and shall
install a sprinkler system within the Premises compliant with applicable Law.

 

5.3                               Tenant shall perform the Initial Improvements
at Tenant’s own cost and expense, in compliance with Laws and the provisions of
this Lease (including without limitation Article 10), and in accordance with the
approved construction drawings developed as set forth in Section 5.2 above. 
Notwithstanding the foregoing sentence, provided that no Event of Default has
previously occurred and/or shall be continuing at the time of any disbursement,
Landlord shall contribute up to $2,060,880.00 (“Landlord’s Contribution”) to the
cost of the Initial Improvements, of which up to: (x) $40,000.00 must be applied
to the cost of the installation by Tenant during the Initial Improvements of an
ADA-compliant unisex restroom servicing the Premises (and if not so applied,
shall not be payable to, and forfeited by, Tenant); and (y) $303,132.00 may be
used for Tenant’s “soft costs,” including architectural, engineering, permits,
filing fees, and telecom/data cabling costs directly related to the Initial
Improvements, but not for any trade fixtures, equipment, furniture or
furnishings).  Landlord shall pay the Landlord’s Contribution to Tenant as
follows:  Landlord shall pay up to ninety percent (90%) of Landlord’s
Contribution in installments no more frequently than thirty (30) days apart
throughout the course of performance of the Initial Improvements, each within
thirty (30) days after Tenant submits to Landlord (a) copies of paid invoices
for the applicable work performed or materials used, (b) partial lien waivers
covering all work for which payment is being requested, (c) an architect’s
certification that the portion of the Initial Improvements for which payment is
being requested has been performed in accordance with the approved construction
drawings, and certifying as to the amount due and owing to contractors for which
reimbursement is sought, and (d) such other evidence that the services performed
have been rendered with respect to, and materials used have been incorporated
into, the Initial Improvements, as Landlord may reasonably request consistent
with the practices of other prudent landlords of comparable office buildings in
mid-town Manhattan.  Landlord shall pay the remaining ten percent (10%) balance
of Landlord’s Contribution following completion of the Initial Improvements and
within thirty (30) days after Tenant submits to Landlord (i) copies of paid
invoices for the applicable work performed or materials used, (ii) final lien
waivers with respect to the Initial Improvements, (iii) an architect’s
certification on AIA forms G702 and G703 (or, if such documents are no longer in
existence, such other form as Landlord shall reasonably approve), that the
Initial Improvements have been completed, substantially in accordance with the
approved construction drawings, and certifying as to the amount due and owing to
contractors, (iv) final inspections, permits and sign offs from all governmental
agencies having jurisdiction over the Initial Improvements, (v) final as-built
plans,

 

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and (vi) such other evidence that the services performed have been rendered with
respect to, and materials used have been incorporated into, the Initial
Improvements, as Landlord may reasonably request consistent with the practices
of other prudent landlords of comparable office buildings in mid-town
Manhattan.  Tenant must request and utilize Landlord’s Contribution in
accordance with the foregoing prior to the Rent Commencement Date.  Any costs
and expenses of the Initial Improvements in excess of Landlord’s Contribution
shall be paid by Tenant.  Tenant shall not be entitled to receive any portion of
Landlord’s Contribution if such funds are not timely requested or are not
actually expended by Tenant in the performance of the Initial Improvements, nor
shall Tenant have any right to apply any unexpended portion of Landlord’s
Contribution as a credit against Rent or any other obligation of Tenant
hereunder.

 

5.4                               In the event that any violation noted of
record against the Building or the Premises prior to the Commencement Date
prevents Tenant from obtaining any permits or “sign-offs” required for the
Initial Improvements, Landlord shall promptly cure such violation, at Landlord’s
sole cost and expense, following Tenant’s notice to Landlord of such violation. 
In addition, if during the course of the Initial Improvements pursuant to the
approved construction drawings, Tenant uncovers ACM in the Premises the
existence or condition of which is not in compliance with applicable Law,
Landlord shall remediate or encapsulate such ACM to the extent required by Law.

 

5.5                               Subject to Tenant Delay and Force Majeure, the
Rent Commencement Date shall be postponed one (1) day for each day of Landlord
Delay.  The term “Landlord Delay” as used in this Lease shall mean any actual
delay in the substantial completion of the Initial Improvements by Tenant due
to: (a) a delay of Landlord in responding to requests for authorizations or
approvals within the time frames required by Section 5.2 above for Landlord to
respond thereto, (b) a denial of access to the Premises after possession thereof
has been delivered to Tenant, which denial results from a negligent or willful
act or omission of Landlord (where Landlord had a duty to act) (it being
expressly understood that any delays experienced by Tenant as a result of the
unreserved, first come-first served basis of freight elevator and service
entrance usage shall in no wise be deemed a denial of access), or (c) any other
interference with the performance by Tenant of the Initial Improvements which
interference results from a negligent or willful act or omission of Landlord
(where Landlord had a duty to act).  No Landlord Delay shall be deemed to have
occurred unless Tenant has provided written notice to Landlord specifying the
negligent or willful act or omission of Landlord resulting in a Landlord Delay,
except in cases where Landlord has not acted within response time frames
pursuant to the express terms hereof, for which no additional notice shall be
required of Tenant.  If such action or inaction is not cured within two
(2) business days after receipt of such notice, then a Landlord Delay as set
forth in such notice shall be deemed to have occurred commencing as of the date
such notice is received by Landlord.

 

5.6                               Landlord shall deliver to Tenant an ACP-5 in
connection with Tenant’s Initial Improvements within a reasonable period of time
after Tenant’s plans for the Initial Improvements have been approved by Landlord
in accordance with the applicable provisions of this Lease.

 

6.                                      USE AND OCCUPANCY

 

6.1                               Use

 

6.1.1       Tenant agrees to use and occupy the Premises only for the Use
described in Section 1.1 and no other use.

 

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6.1.2       The use of the Premises permitted under Section 6.1(a) shall not
include, and Tenant shall not use, or permit the use of, the Premises or any
part thereof for:  (i) the offices or business of a governmental or
quasi-governmental bureau, department or agency, foreign or domestic, including
an autonomous governmental corporation or diplomatic or trade mission; or
(ii) the conduct or maintenance of any gambling or gaming activities (but the
foregoing shall not prohibit general office use of the Premises by entities in
the gambling or gaming industry, it being the intent that only actual gambling
or gaming activities are prohibited in the Premises); or any political
activities or any club activities; or a school; or employment or placement
agency that may result in increased foot traffic into the Premises (it being the
intent that general office use by firms such as an executive search firm are not
be prohibited); or messenger service; or for the manufacturing, storage,
shipping or receiving of goods; or for retail sales; or for the cooking or
distribution of food.

 

6.2                               Compliance

 

6.2.1       Tenant shall use the Premises in a safe, careful and proper manner,
and, at Tenant’s expense, and shall comply with all Laws now or hereafter
existing (including, without limitation, the certificate of occupancy for the
Premises and/or the Building, the Americans with Disabilities Act of 1990, NYC
Local Laws No. 5 of 1973, No. 16 of 1984 and No. 58 of 1988, each as amended
from time to time, and all Laws then in effect relating to asbestos and all
orders, rules and regulations of Insurance Boards) that shall impose upon
Landlord or Tenant any obligation, order or duty (including, without limitation,
the performance of any Alterations), whether ordinary or extraordinary, foreseen
or unforeseen, with respect to:

 

(a)           the Premises, including, without limitation, any improvements or
Alterations in the Premises (other than Landlord’s Work and other work in the
Premises performed by or on behalf of Landlord) and Tenant’s occupancy, use and
manner of use of the Premises; or

 

(b)           any part of the Building other than the Premises if such
obligation, order or duty shall arise from (i) the specific use or manner of any
use or occupancy of the Premises (other than permitted general office uses) by
Tenant or any person claiming through or under Tenant, or (ii) a condition
created by Tenant or any person claiming under or through Tenant or any of their
respective agents, contractors, employees or licensees (including, without
limitation, any Alteration or improvement in the Premises made by Tenant), or
(iii) a breach of Tenant’s obligations under this Lease or the negligence of
Tenant or its agents, contractors, employees or licensees.

 

Notwithstanding anything to the contrary set forth in this Lease, in no event
shall Tenant be obligated to make any structural Alterations to the Premises
unless the need therefor arises from Tenant’s specific use or specific manner of
use of the Premises, as opposed to the mere use thereof for the Use.

 

6.2.2       If any Insurance Boards or Laws shall require or recommend
installation of fire extinguishers or of a “sprinkler system” or any other fire
protection devices or any changes, modifications, alterations or additions
thereto for any reason, or if any such installation or equipment becomes
necessary to prevent the imposition of a penalty or charge against the full
allowance for a sprinkler or fire extinguishing system in the fire insurance
rate as fixed by Insurance Boards, or by any fire insurance company, then
Landlord, at Landlord’s expense, shall promptly make such installation within
the Premises and supply such changes, modifications, alterations, additions or
other equipment in the Premises in connection with such installation.

 

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Notwithstanding the foregoing, in the event such changes, modifications,
alterations or additions are required as a result of any Alterations performed
by Tenant, the location of Tenant’s partitions or modular office systems or
Tenant’s use of the Premises for other than permitted general office uses, then
the cost thereof shall be borne by Tenant.

 

6.2.3       Tenant shall not cause or permit any Hazardous Substances (hereafter
defined) to be used, stored, released, disposed, handled, produced or installed
in or about the Premises or Building, except that Tenant may use and store in
the Premises Hazardous Substances which are typically used and stored in the
ordinary course of business of an office tenant using its office for the Use in
a building comparable to the Building, provided that the use, storage and
disposal of such Hazardous Substances is at all times in strict compliance with
all Laws and in such quantities that are no larger than those customarily used
by office tenants in a building comparable to the Building for office use.
Tenant shall not be responsible for any of the foregoing activities related to
Hazardous Substances (use, storage, release, disposal, handling, production or
installation) by Landlord or any of Landlord’s agents, employees or contractors,
or by other third parties not acting under or at the direction of Tenant. 
Without limiting the generality of the foregoing or any other provisions of this
Lease, during the Term, Tenant shall comply with all Laws governing, and all
procedures reasonably established by Landlord for, the use, abatement, removal,
storage, disposal or transport of any Hazardous Substances, and any required or
permitted Alteration, repair, maintenance, restoration, removal or other work in
or about the Premises, Building or Land that involves or affects any Hazardous
Substances.  For purposes of this Lease, “Hazardous Substances” shall mean any
element, compound, chemical mixture, contaminant, pollutant, material, waster or
other substance with is defined, determined or identified as a “hazardous
substance,” “hazardous waste,” or “hazardous material” under any Laws including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (codified in scattered sections of 26 U.S.C., 33 U.S.C.,
42 U.S.C. and 42 U.S.C. Sec. 9601 et seq.), the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. 6901 et seq.),) the Hazardous Materials
Transportation Act (49 U.S.C. Sec. 1801 et seq.), (iv) the Toxic Substances
Control Act (15 U.S.C. Sec. 2601 et seq.),  (v) the Clean Water Act (33 U.S.C.
Sec. 1251 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the Safe
Drinking Water Act (21 U.S.C. 349; 42 U.S.C. 201 and Sec. 300f et seq., the
National Environmental Policy Act of 1969 (42 U.S.C.3421), the Superfund
Amendment and Reauthorization Act of 1986 (codified in scattered sections of 10
U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C., Title III of the Superfund Amendment
and Reauthorization Act (40 U.S.C. Sec. 1101 et seq.) and the Environmental
Conservation Law of the State of New York (codified in Volume 17 ½ of McKinney’s
1984).  In the event of a default under this Section, in addition to any and all
other rights and remedies of Landlord under this Lease or at law, Tenant shall,
at the option of Landlord, require Tenant to either remove or to reimburse
Landlord for Landlord’s out-of-pocket cost to remove such Hazardous Substances. 
The provisions of this Section shall survive the expiration or earlier
termination of this Lease.

 

6.3                               Occupancy

 

Tenant shall not do or permit anything to be done which obstructs or interferes
with other tenants’ rights or with Landlord’s providing Building services, or
which injures or unreasonably annoys other tenants.  Tenant shall not cause,
maintain or permit any nuisance in or about the Premises and shall keep the
Premises free of debris (following the completion of the Initial Improvements),
and anything of a dangerous, noxious, toxic or offensive nature or which could
create a fire hazard or undue vibration, heat or noise. Tenant shall not make or
permit any use of the Premises which may jeopardize any insurance coverage for
the Building or Premises, increase the cost of insurance or require additional
insurance coverage for the Building or Premises or which shall

 

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invalidate or be in conflict with the terms of the New York State standard form
of fire insurance with extended coverage.  If by reason of Tenant’s failure to
comply with the provisions of this Section 6.3, any insurance premiums shall be
increased, then Landlord may require Tenant to immediately pay Landlord as
Additional Rent the amount of the increase in insurance premiums.

 

6.4                               Covenants

 

Tenant expressly acknowledges that irreparable injury shall result to Landlord
in the event of a breach of any of the covenants made by Tenant in this
Article 6, and it is agreed that, in the event of such breach, Landlord shall be
entitled, in addition to any other remedies available, to an injunction to
restrain the violation thereof.  Breach of any of Tenant’s covenants under this
Article shall also constitute an Event of Default pursuant to the provisions of
Article 21 hereof (after notice and lapse of the applicable cure period).

 

6.5                               Window Washing

 

Tenant shall not clean, or permit, suffer or allow to be cleaned, any windows in
the Premises from the outside in violation of Section 202 of the Labor Law or
any other Laws.

 

7.                                      SERVICES AND UTILITIES

 

7.1                               Landlord’s Operation of the Building

 

During the Term, subject to the provisions of this Lease, Landlord shall
operate, repair and maintain the Building (including the Common Areas and the
Building Systems) as a first-class office building in accordance with the
standards from time to time prevailing for comparable first-class office
buildings in midtown Manhattan and in accordance with applicable Laws.

 

7.2                               Services

 

Subject to the provisions of this Lease, Landlord shall provide the following
services during the Term:

 

(a)           Maintain and make all necessary repairs and replacements to the
Common Areas of the Building, all structural elements of the Building and the
Building Systems, but excluding those portions of the Premises and the Building
required to be repaired or maintained by Tenant pursuant to Article 9 of this
Lease.  There shall be no allowance to Tenant for a diminution of rental value
or interruption of business, and no liability on the part of Landlord, by reason
of inconvenience, annoyance or injury to business arising from Landlord, Tenant
or others making any repairs in or to any portion of the Building or Building
Systems or the Premises.  Landlord shall use reasonable efforts to minimize
interference with the conduct of Tenant’s business in the Premises during the
performance of any repairs (without incurring overtime or premium labor
charges).

 

(b)           Provide Building standard elevator service on usual business days
(but in no event on Saturdays or Sundays), except for holidays, from 8:00
A.M. to 6:00 P.M., and have one elevator on call at all other days and times. 
Tenant shall be permitted to use the Building’s freight elevator on an “as
available” basis between the hours of 8:00 A.M. to 4:45 P.M. on business days
(i.e., all days other than Saturdays, Sundays and Holidays) at no charge to
Tenant, and at any other days or times on an “as available” basis at Landlord’s
then current Building standard rate for such freight elevator usage (and in each
case Tenant shall be required to pay for

 

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a minimum of four (4) hours of usage, unless such overtime use is continuing
immediately from the standard staffing shift in which case there shall be no
four hour minimum usage charge, provided the foregoing is in compliance with and
reflective of standard union charges). The Building’s standard rate for overtime
freight elevator usage is currently $100.00 per hour, which shall be subject to
increase from time to time on a Building-wide basis.  Notwithstanding the
foregoing, Landlord agrees to provide to Tenant, free of charge, up to
thirty-six (36) hours of overtime freight usage as requested by Tenant in
conjunction with Tenant’s performance of the Initial Improvements and initial
move into the Premises.

 

(c)           Operate the central air-conditioning, heating and ventilating
system installed by Landlord in the Building (“HVAC”) during the applicable
seasons on usual business days (but in no event on Saturdays, Sundays or
Holidays) from 8:00 A.M. to 6:00 P.M in accordance with applicable Law including
the New York State Energy Conservation Code and the New York City Energy
Conservation Code and meeting the specifications attached hereto as Exhibit D. 
Landlord agrees to deliver the HVAC to Tenant in good working order on the
Commencement Date. Tenant expressly acknowledges that the windows are
hermetically sealed and will not open and Landlord makes no representation as to
the habitability of the Premises at any time the HVAC is not in operation. 
Tenant hereby expressly waives any claims against Landlord arising out of the
cessation of operation of the HVAC, or the suitability of the Premises when same
is not in operation or due to normal scheduling or for the reasons set forth in
Section 7.3. Landlord shall not be liable for the failure of the HVAC if such
failure results from the occupancy of the Premises or the operation of office
equipment beyond a customary heat load.  If Tenant shall request heating,
ventilation or air conditioning at any times other than those set forth above,
Landlord shall provide the same, subject to the provisions of this Lease,
provided that Tenant shall give written notice requesting such after-hours
service to Landlord’s Building manager or other representative in charge of the
Building at least one (1) business day in advance of the day on which Tenant
shall desire such after-hours service (however Landlord will endeavor to
accommodate “last-minute” requests made within such time frame without any
liability for failure to so provide).  Tenant shall pay to Landlord, for such
after-hours service, as Additional Rent, then current Landlord’s Building
standard charge therefor (which is currently $800 per floor per hour), within
ten (10) days after demand.  If Tenant shall request such overtime service for
Saturday, Sunday or a holiday for a period of less than four (4) hours, Tenant
shall pay for a minimum of four (4) hours of such overtime service.  If any
other tenants of the Building whose premises are served by the same HVAC as the
Premises shall request overtime service for any of the same hours as Tenant, the
charge to Tenant for such common use shall be pro-rated based upon the rentable
area of the Premises and the premises of such other tenant(s) requesting such
service.  However, nothing herein contained shall obligate Landlord to pro-rate
such charge based upon other tenants who may receive the benefit of such service
but who shall not have so requested such service.

 

(d)           Furnish New York City water for ordinary lavatory and drinking and
office cleaning purposes.  If Tenant requires, uses or consumes water for any
other purpose, or installation becomes required by Laws, Tenant shall install
(or, at Landlord’s election, Landlord may install, at Tenant’s cost) a meter or
meters or other means to measure Tenant’s water consumption, and Tenant further
agrees to pay for the cost of the meter or meters and the installation thereof,
and to pay for the maintenance of said meter equipment and/or to pay Landlord’s
cost of other means of measuring such water consumption by Tenant.  In the event
that such meter or meters are installed, Tenant shall reimburse Landlord for the
cost of all water consumed (including costs of generating hot water, if Landlord
shall at any time furnish hot water to the Premises) as measured by said meter
or meters or as otherwise measured, including sewer rents, as Additional Rent
within thirty (30) days after bills are rendered.

 

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(e)           Provide, either directly or through the Building cleaning
contractor, which Tenant hereby approves, standard office cleaning service in
the Premises on usual business days (but in no event on Saturdays or Sundays),
holidays excepted, in accordance with the cleaning specifications attached
hereto as Exhibit E and made a part hereof, or such other reasonably comparable
specifications designated by Landlord from time to time.  Any above standard
office cleaning requirements as a result of Tenant’s use of the Premises other
than for general office use, or required because of (i) misuse or neglect by
Tenant or its employees or business visitors, (ii) use of portions of the
Premises for preparation, serving or consumption of food or beverages or other
special purposes requiring greater or more difficult cleaning work than office
areas, (iii) unusual quantity of interior glass surfaces, (iv) non-Building
standard materials or finishes installed by Tenant or at Tenant’s request,
(v) any refuse or rubbish from eating facilities requiring special handling (so
called “wet garbage”), shall be at Tenant’s sole cost and expense and Tenant
shall pay Landlord for the cost of such additional service on a monthly basis as
Additional Rent hereunder.  Tenant shall have the right to contract directly, at
Tenant’s option and at Tenant’s sole cost and expense, with Landlord’s cleaning
contractor for cleaning services additional to those set forth in Exhibit E. 
Landlord and its cleaning contractor and their employees shall have after-hours
access to the Premises and the free use of light, power and water facilities in
the Premises as shall be reasonably required for the purpose of cleaning the
Premises in accordance with Landlord’s obligations hereunder.

 

(f)            Provide access to the Building for Tenant and its employees 24
hours per day, 7 days per week, subject to the terms of this Lease and such
protective services or monitoring systems, if any, as Landlord may reasonably
impose, including, without limitation, sign-in procedures and/or presentation of
identification cards.  Tenant shall have the right, at Tenant’s sole cost, to
install its own card access system for entry into and within the Premises, each
in accordance with plans and specifications to be provided by Tenant to Landlord
together with (or incorporated into) the construction drawings and
specifications for the Initial Improvements and approved by Landlord, which
approval shall be in accordance with and subject to Section 5.2, provided that,
in addition, such installation and operation would not adversely affect the
rights of any of the other tenants or occupants of the Building or the rights of
Landlord pursuant to Section 9.4 of this Lease, and further provided that any
such system(s) shall be installed and operated in accordance with the provisions
of this Lease, including, without limitation, Article 10, and shall connect to
the Building’s “Class E” fire safety system, if required by Landlord or Law.  If
Tenant installs any such card access system, Tenant shall simultaneously with
the installation of such system, furnish Landlord with any applicable keys,
cards, access codes and all other modes of access to the Premises and all areas
thereof in connection with Landlord’s rights under this Lease.  Tenant shall
indemnify Landlord from and against all liability, loss, claims, demands,
damages or expenses (including reasonable attorneys’ fees, disbursements and
court costs) due to or arising out of the installation of any such card access
system.

 

(g)           List Tenant on the alphabetical directory board or other such
directory device listing Building tenants, provided that Landlord maintains the
same in the main lobby of the Building.  Tenant may install up to three
(3) signs within the elevator lobby of the floor(s) on which the Premises is
located or on the entry to the Premises suite, in a location and otherwise
subject to the approval of Landlord, which approval shall not be unreasonably
withheld.

 

(h)           If, at Tenant’s request, Landlord or Landlord’s affiliate shall at
any time during the Term furnish any services to Tenant other than the Building
standard services to be furnished to Tenant pursuant to the provisions of this
Section 7.2 without separate charge to Tenant, then Tenant shall pay to
Landlord, or, at Landlord’s option, to Landlord’s designated affiliate, as
Additional Rent, within thirty (30) days after demand, Landlord’s then current
Building standard

 

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charge for such services.  Such additional services may include, as an example
only, condenser water, additional electric power or cleaning services.

 

7.3                               Interruption of Services

 

Landlord reserves the right to stop the furnishing of any Building services and
the service of any of the Building Systems to perform repairs or Alterations
which, in Landlord’s judgment, shall be necessary or desirable or when necessary
by reason of accident or emergency.  If any of the Building Systems or services
required to be provided by Landlord pursuant to this Article 7 or Article 8
below shall be interrupted, curtailed or stopped, Landlord shall use reasonable
efforts with due diligence to resume such service; provided, however, that
Landlord shall have no liability whatsoever by reason of any such interruption,
curtailment or stoppage of any of such services (whether the same shall be
interrupted, curtailed or stopped while Landlord shall be performing any repairs
or Alterations or when Landlord shall be prevented from supplying or furnishing
the same by reason of Laws, the failure of any public utility or governmental
authority serving the Building to supply electricity, water, steam, oil or other
fuel, strikes, lockouts, the difficulty of obtaining materials after the use of
due diligence, accidents or by any other cause beyond Landlord’s reasonable
control or for any other reason), including, without limitation, any liability
for damages to Tenant’s personal property or for interruption of business caused
by any such interruption or stoppage, nor shall the same constitute an actual or
constructive eviction or entitle Tenant to any abatement or diminution of the
Rent payable under this Lease or in any manner or for any purpose relieve Tenant
from any of its obligations under this Lease.  Notwithstanding the foregoing, to
the extent that any such interruption or stoppage is not required by Law, is not
caused by the negligence or willful act of Tenant or its employees, agents,
contractor or subcontractors and is caused by a factor within Landlord’s
reasonable control, and causes Tenant’s inability to conduct business in at
least fifty percent (50%) of the rentable area of the Premises for a period of
ten (10) consecutive business days, and Tenant does not actually occupy or
conduct its business in such portion of the Premises during such period, for
each subsequent business day on which Tenant is unable to, and does not
actually, so conduct business in such portion of the Premises as a result
thereof, there shall be an abatement of Rent in proportion to the area Tenant is
unable to and does not actually use.  In any event, Landlord shall use
commercially reasonable, good faith efforts to restore any interrupted services
as soon as possible.

 

7.4                               Changes in Laws

 

In the event any governmental entity promulgates or revises any law, or issues
mandatory controls relating to the use or conservation of energy, water, light
or electricity, or the provision of any other utility or service furnished by
Landlord in the Building, Landlord may take any appropriate action consistent
with actions taken by prudent landlords of comparable buildings in midtown
Manhattan to comply with such provision of law or mandatory controls, including
the making of alterations to the Building.  Neither Landlord’s actions nor its
failure to act shall entitle Tenant to any damages, abate or suspend Tenant’s
obligation to pay Base Rent, Additional Rent and other Rent or constitute or be
construed as a constructive or other eviction of Tenant except as otherwise
specifically set forth herein.

 

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8.                                      ELECTRIC

 

8.1                               Electric Capacity

 

From and after the Commencement Date, Landlord shall furnish to the Premises for
Tenant’s use therein, upon and subject to the terms and conditions set forth in
this Article 8, up to six (6) watts demand load per usable square foot of
electric current (exclusive of use for the HVAC System).  Tenant covenants and
agrees that at all times its use of electric current shall not exceed such
capacity of existing feeders or risers to, or wiring installations serving, the
Premises.  Tenant’s consumption of electrical energy at the Premises shall be
measured by submeters (capable of reading demand and KW hours to measure the
demand and consumption of electric energy) (the “Submeters”) installed by
Landlord, at Landlord’s expense.

 

8.2                               Submeters

 

Commencing on the date on which the Submeters shall have been installed and
shall be operational with respect to the Premises, Tenant shall purchase all
electric current for use in the Premises from Landlord or Landlord’s designated
agent, and on account thereof shall pay to Landlord one hundred five percent
(105%) of the sum of Landlord’s Average Cost Per Kilowatt and Landlord’s Average
Cost Per Kilowatt Hour (as such terms are hereinafter defined) (the “Electricity
Charge”), each as applied to the kilowatts of demand and the kilowatt hours of
consumption of all electricity used in or in connection with the Premises during
the applicable billing period, both based on readings from time to time during
the Term of the Submeters measuring Tenant’s consumption of electricity in the
Premises.  “Landlord’s Average Cost Per Kilowatt” shall be determined by
dividing (a) the total dollar amount billed to Landlord by the public utility
company or other service provider serving the Building (the “Utility Company”)
for kilowatts of demand used by the Building for the relevant billing period
(including fuel, taxes, adjustments, surcharges, “on-peak” and “off-peak” usage,
“time of day” usage, rate adjustment changes and any other factors used by the
Utility Company in computing the charges to Landlord for electric energy
furnished to the Building) by (b) the total kilowatts of demand used by the
Building for such time period.  “Landlord’s Average Cost Per Kilowatt Hour”
shall be determined by dividing (c) the total dollar amount billed to Landlord
by the Utility Company for kilowatt hours of consumption used by the Building
for the relevant billing period (including fuel, taxes, adjustments, surcharges,
“on-peak” and “off-peak” usage, “time of day” usage, rate adjustment changes and
any other factors used by the Utility Company in computing the charges to
Landlord for electric energy furnished to the Building) by (d) the total
kilowatt hours of consumption used by the Building for such time period.

 

8.3                               Additional Rent

 

The Electricity Charge shall be payable within thirty (30) days after demand
without set-off, defense, counterclaim, deduction or abatement whatsoever, as
Additional Rent.  All Submeters shall be read by an electrical consultant
retained by Landlord.  Where more than one (1) Submeter measures the electricity
supplied to the Premises, the electricity rendered through each meter shall be
aggregated and computed as if the entire Premises were served by one (1) meter. 
Tenant shall furnish and install all lighting tubes, lamps, bulbs and ballasts
required in the Premises, at Tenant’s expense, or shall pay Landlord’s
reasonable charges therefor within thirty (30) days after demand.

 

8.4                               Submeter Maintenance

 

Landlord shall maintain, repair and replace, as reasonably necessary, the
Submeters, at Tenant’s expense, and Tenant shall pay any such reasonable expense
within thirty (30) days after being billed therefor.  If during any time during
the Term, it shall be determined that one or more of the submeters servicing the
Premises were malfunctioning, then Tenant shall pay Landlord an

 

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amount based on the most recent comparable period as the Electricity Charge that
would have been payable by Tenant had such malfunction not occurred.

 

8.5                               Electric Usage; Equipment

 

Landlord shall not in any way be liable or responsible to Tenant for any loss,
damage or expense which Tenant may sustain or incur if either the quantity or
character of electric service is changed or is no longer available or suitable
for Tenant’s requirements unless due to Landlord’s negligence or wrongful acts
(but in no event shall Landlord be liable for consequential damages and in no
event shall Landlord voluntarily reduce the amount of power supplied to the
Premises to less than six (6) watts connected load per usable square foot,
exclusive of use for the HVAC System).  If Tenant determines that it requires
additional electric capacity, and installation of additional riser or risers to
supply Tenant’s electrical requirements, Landlord shall not unreasonably
withhold its consent to making available such capacity, or to the installation
of additional riser or risers, provided that any such capacity is available in
the Building to serve the Premises, the same is necessary for Tenant’s proposed
use and will not cause adverse damage or injury to the Building or the operation
thereof or the Premises, cause or create a dangerous or hazardous condition,
entail excessive or unreasonable alterations, repairs or expense or interfere
with or disturb other tenants or occupants or adversely affect the distribution
of electricity thereto, and provided that Tenant pays Landlord, on demand, for
all costs and expenses of Landlord to provide such additional capacity and/or
risers.  Any additional riser or risers to supply Tenant’s electrical
requirements that satisfy the conditions above will upon written request of
Tenant, be installed by Landlord at the sole cost and expense of Tenant and, in
addition to the installation of such riser or risers, Landlord will also, at the
sole cost and expense of Tenant, install all other equipment which, in
Landlord’s reasonable judgment, is proper and necessary in connection therewith,
subject to the aforesaid terms and conditions.  All of such cost and expense
shall be paid by Tenant to Landlord upon Landlord’s demand.

 

8.6                               Alterations

 

Tenant shall not, without Landlord’s prior written consent in each instance,
connect any fixtures, machinery, appliances or equipment to the Building
electric distribution system or make any alteration or addition to Tenant’s
appliances or equipment or the electric distribution system of the Premises
(other than ordinary and normal equipment, machinery and appliances that do not
exceed the capacity of six (6) watts connected load per usable square foot,
exclusive of use for the HVAC System and are reasonable for and consistent with
the Use of the Premises permitted by Section 6.1 and do not violate any other
provisions of this Lease).  Should Landlord grant such consent, all additional
risers or other equipment required therefor shall be provided by Landlord and
the cost thereof shall be paid by Tenant upon Landlord’s demand.  As a condition
to undertaking said work, Landlord may require Tenant to furnish Landlord with
security satisfactory to Landlord securing payment of the cost of said work.

 

8.7                               Interruption of Service

 

Without limiting any other provisions of the Lease, Landlord shall not be liable
in any way to Tenant for any failure, interruption or defect in the supply or
character of electricity furnished to the Premises by reason of any requirement,
act or omission of the Utility Company, any acts beyond the reasonable control
of Landlord or for any other reason (including, without limitation, any
interruption due to repairs or alterations made by Landlord in the Building). 
Landlord shall use commercially reasonable efforts to not cause any interruption
of the electric service required to be provided by Landlord pursuant to this
Article 8; however, notwithstanding the exercise of

 

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such efforts, if an interruption occurs, Landlord shall use commercially
reasonable efforts to minimize the duration of such interruption.  Without
limiting the foregoing, in no event shall Landlord be liable for any
consequential or special damages or damages for interruption to or loss of
business, provided that to the extent that any failure, interruption or defect
is caused by the negligence or willful act of Landlord and causes Tenant’s
inability to conduct its normal business in at least fifty percent (50%) of the
rentable area of the Premises for a period of twenty (20) consecutive business
days, and Tenant does not actually occupy or conduct its business in such
portion of the Premises during such period, for each subsequent business day on
which Tenant is unable to, and does not actually, so conduct business in such
portion of the Premises as a result thereof, there shall be an abatement of Rent
in proportion to the area Tenant is unable to use and does not actually use.

 

8.8                               Discontinuance of Service

 

Landlord reserves the right to discontinue furnishing electricity to Tenant in
the Premises at any time upon not less than sixty (60) days’ prior notice to
Tenant (unless a shorter time is required by Law).  If Landlord shall exercise
such right of discontinuation, this Lease shall continue in full force and
effect and shall be unaffected thereby, except only that, from and after the
effective date of such termination, Landlord shall not be obligated to furnish
electricity to Tenant and Tenant shall not be obligated to pay the Electricity
Charge to Landlord pursuant to the provisions of Section 8.3 above.  If Landlord
so discontinues furnishing electric energy to Tenant, Tenant shall obtain
electricity directly from the Utility Company.  Such electricity may be
furnished to Tenant by means of the then existing Building System feeders,
risers and wiring to the extent that the same are available, suitable and safe
for such purposes. If Landlord elects to discontinue furnishing electricity to
Tenant other than if required by Law or the Utility Company, Landlord shall
install, at Landlord’s expense, all meters and additional panel boards, feeders,
risers, wiring and other conductors and equipment which may be required to
obtain electricity directly from such Utility Company, and Tenant shall maintain
such installations at Tenant’s expense.  Such discontinuance shall not be deemed
a lessening or diminution of services within the meaning of any present or
future Laws.  Notwithstanding anything contained herein to the contrary,
Landlord shall not be permitted to discontinue furnishing electricity to Tenant
in the Premises unless (i) Landlord simultaneously discontinues furnishing
electricity to all or most of the other office space in the Building, and
(ii) Tenant has been given a reasonable period within which to obtain
electricity from the Utility Company, which Tenant shall diligently pursue in
good faith.

 

8.9                               Tax

 

If any tax is or shall be imposed upon Landlord’s receipt from the sale or
resale or furnishing of electric energy to Tenant, Tenant shall reimburse
Landlord therefor upon demand.

 

8.10                        Change in Laws

 

If the Utility Company or any Laws shall institute or require a change in the
manner in which electricity is to be furnished or paid for, and such change
reasonably necessitates an appropriate modification of this Article 8, Tenant
agrees to execute such modification in form reasonably satisfactory to Tenant. 
Tenant agrees to fully and timely comply with all rules and regulations of the
public utility applicable to Tenant or the Premises.

 

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8.11                        Statements

 

Landlord’s failure to render any statement under the provisions of this
Article 8 shall not prejudice Landlord’s right to render such statement at any
time thereafter or to render a statement under this Article 8 for prior or
subsequent periods.  The obligations of Tenant with respect to any payment
required to be made pursuant to the provisions of this Article 8 shall survive
the expiration or sooner termination of the Term for a period of two (2) years.

 

9.                                      REPAIRS AND MAINTENANCE OF PREMISES;
ACCESS TO PREMISES BY LANDLORD

 

9.1                               Repairs by Tenant

 

Subject to the terms of Article 6, Section 7.2(a), and Articles 13 and 15, and
except to the extent Landlord is required or elects to perform or pay for
certain maintenance or repairs in accordance with said Articles and Sections,
Tenant shall, at Tenant’s sole expense, at all times during the Term, maintain
in good order and repair and in compliance with all applicable Laws, the
Premises and all fixtures, glass, appurtenances and equipment therein (including
promptly and adequately repairing, restoring and/or replacing all portions that
are damaged or broken), including, without limitation, Tenant’s entire
distribution system for all of the Building Systems that serve the Premises up
to the point at which such distribution system connects to the Building System,
including, without limitation, (i) Tenant’s entire air distribution ceiling duct
system to the point at which the same connects to the main distribution duct for
the Premises located in the core area of the Building (but not the perimeter
heating/cooling units located around the perimeter of the Premises, which units
shall be repaired by Landlord except to the extent to which the same are damaged
by Tenant), (ii) Tenant’s entire electrical system to the panel box that
services the Premises, (iii) all water and waste lines and fixtures to the point
at which the same connect to the vertical pipes and wet columns located in the
core of the Building, (iv) the portion of the “Class E” fire safety system
within the Premises and (v) any and all supplemental and other systems located
in and/or exclusively serving the Premises.  Tenant shall also repair, restore
and/or replace all damage and injury to the Premises or to any portion of the
Building or the Building Systems outside of the Premises (including, without
limitation, the rough floor, the rough ceiling, exterior walls and load bearing
columns and other structural elements) caused by or arising from any negligent
acts or omissions of Tenant or Tenant’s agents, contractors or employees.  All
repairs and other work performed by Tenant or Tenant’s contractors (which shall
be subject to Landlord’s approval) shall (i) be performed in compliance with all
of the provisions of Article 10 of this Lease, (ii) be performed in a
first-class workmanlike manner using only grades of materials at least equal in
quality to Building standard materials and (iii) comply with all insurance
requirements and all applicable Laws.

 

9.2                               Failure to Maintain Premises; Landlord’s Right
to Cure

 

If Tenant shall fail to perform any of its obligations under Section 9.1, then
Landlord may, upon not less than ten (10) days’ prior notice to Tenant (except
in case of actual or suspected emergency, in which case no notice shall be
required) perform such obligations and Tenant shall pay as Additional Rent to
Landlord the actual, reasonable, out of pocket cost of such performance,
including an amount sufficient to reimburse Landlord for third party supervision
costs, within fifteen (15) days after written demand from Landlord.

 

9.3                               Landlord’s Right to Perform Repairs to
Building Systems

 

In any case in which Tenant shall be required or shall desire to make any
repairs or perform any Alterations or other work pursuant to this Article or
Articles 6 or 10, and such repairs, Alterations

 

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or other work shall affect the Building Systems or areas outside of the
Premises, Landlord may, in Landlord’s discretion, elect to make such repairs or
to perform such Alterations or other work for and on behalf of Tenant, but at
Tenant’s sole cost and expense.  In such event, Tenant shall reimburse Landlord,
as Additional Rent, for the reasonable cost incurred by Landlord to perform such
repairs and/or Alterations or other work in accordance with the standards of
first class office buildings in midtown Manhattan, within thirty (30) days after
Landlord shall furnish a statement to Tenant of the amount thereof.

 

9.4                               Access to Premises by Landlord

 

9.4.1       Tenant shall permit Landlord and Landlord’s agents, representatives,
contractors and employees and public utilities servicing the Building to enter
the Premises at all reasonable times upon reasonable prior notice (except in
case of actual or suspected emergency in which event no notice shall be
required), which notice may be oral, for any of the following purposes, it being
agreed that Landlord and Tenant shall use reasonable efforts to coordinate the
presence of a representative of Tenant, but that such presence shall not be
required for such entry:  (i) to examine or inspect the Premises, (ii) to show
the Premises to existing or prospective mortgagees, lenders or ground lessors or
to prospective purchasers or tenants, (iii) to comply with any Laws or the
requirements of any insurance policies or Encumbrance (as defined in
Section 25.1 below) affecting the Building, (iv) to perform any Alterations,
repairs, improvements, additions, replacements or restorations which Landlord
shall deem necessary or desirable, or to make any Renovations, (v) to comply
with any of Landlord’s obligations under this Lease, and (vi) to exercise any
right or remedy of Landlord under this Lease, including, without limitation,
Landlord’s rights to cure any default of Tenant under this Lease (provided that
any notice of default Landlord shall give to Tenant shall also serve as any
prior notice required to be given under this Section 9.4.1 and no further notice
of Landlord’s entry under this Section shall be required).  Landlord shall have
the right to take any materials and equipment into the Premises (but not store
(other than on a temporary basis as work progresses)) that may be required while
any repairs, restorations, improvements, replacements, additions or Alterations
are being performed in the Premises and such performance shall not constitute an
actual or constructive eviction in whole or in part or entitle Tenant to any
abatement of the Rent payable under this Lease (except as otherwise expressly
provided in this Section 9.4.1, Section 10.2 or Article 13) or other
compensation for interruption to or loss of business or subject Landlord to any
other liability.  Landlord shall use reasonable efforts to minimize interference
in the normal conduct of Tenant’s business during any such entry by Landlord,
provided that Landlord shall not be obligated to employ labor at overtime or
premium pay rates.  If Tenant shall not be present when any entry into the
Premises shall be necessary or desirable, Landlord and Landlord’s agents,
representatives, contractors or employees may enter the Premises without
rendering Landlord or such parties liable, provided that such parties shall use
reasonable care under the circumstances to avoid damage to Tenant’s property and
Alterations.

 

9.4.2       Without incurring any liability to Tenant, Landlord may permit
access to the Premises and open the same, whether or not Tenant shall be
present, upon demand of any representative of the fire, police, building,
sanitation or other department of the city, state or federal governments.

 

9.4.3.      Any reservation of a right by Landlord to enter upon the Premises
and to make or perform any repairs, Alterations or other work in, to or about
the Premises which, in the first instance, is the obligation of Tenant pursuant
to this Lease, shall not be deemed to: (i) impose any obligation on Landlord to
do so, (ii) render Landlord liable (to Tenant or any third party) for the

 

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failure to do so, or (iii) relieve Tenant from any obligation to indemnify
Landlord as otherwise provided elsewhere in this Lease.

 

9.5                               Notice of Damage

 

Tenant shall notify Landlord promptly after Tenant learns of (a) any fire or
other casualty in the Premises; (b) any damage to or defect in the Premises,
including the fixtures and equipment in the Premises, for the repair of which
Landlord might be responsible; and (c) any damage to or defect in any parts of
appurtenances of the Building’s sanitary, electrical, heating, air conditioning,
elevator or other systems located in or passing through the Premises.

 

9.6                               Energy Conservation

 

Tenant shall abide by all requirements which Landlord may reasonably prescribe
for the proper protection and functioning of the Building Systems and the
furnishing of the Building services.  Tenant shall keep all windows closed while
the HVAC is in operation.  Tenant further shall cooperate with Landlord in any
energy conservation effort pursuant to a program or procedure promulgated or
recommended by the USGBC, ASHRAE, the New York State Energy Conservation Code,
the New York City Energy Conservation Code or any applicable Laws; provided,
however, that Tenant shall not be obligated to incur any additional out of
pocket costs or expenses in connection with such cooperation beyond a de minimis
extent (such as, e.g., completion of forms, making of copies and mailing of
letters).

 

10.                               ALTERATIONS

 

10.1                        Alterations by Tenant

 

10.1.1     Subject to the provisions of this Article 10 and to other applicable
provisions of this Lease, Tenant may from time to time, at Tenant’s expense,
perform Alterations in and to the Premises to better adapt the same to its
business, provided that any such Alteration shall (a) not alter the exterior of
the Building in any way or affect the exterior appearance of the Building;
(b) not be structural or exceed or adversely affect the capacity, maintenance,
operating cost or integrity of the Building’s structure or any of its
components; (c) not affect or alter any Building Systems, (d) not affect the
certificate of occupancy for the Building or necessitate the performance of any
work by Landlord in the Building; (e) comply with all applicable Laws (including
the Americans with Disabilities Act of 1990, NYC Local Laws No. 5 of 1973,
No. 16 of 1984 and No. 58 of 1988, each as amended from time to time, and all
Laws then in effect relating to asbestos) and all orders, rules and regulations
of Insurance Boards; (f) be made only with the prior written consent of
Landlord; (g) not violate any agreement (including, without limitation, any
Encumbrance) which affects the Land or the Building or binds Landlord; and
(h) not be subject to any lien, encumbrance, chattel mortgage, security
interest, charge of any kind whatsoever, or any conditional sale or other
similar or dissimilar title retention agreement.  Notwithstanding item
(f) above, (i) Tenant shall have the right to make purely decorative or cosmetic
Alterations that do not require a DOB permit to perform without the consent of
Landlord (“Cosmetic Decorations”) and (ii) Landlord shall not unreasonably
withhold consent to non-structural Alterations to be performed within the
Premises costing less than $100,000.00 in the aggregate over any one (1) year
period and which otherwise comply with items (a) — (e), (g) and (h) above.

 

10.1.2     All Alterations, including the Initial Improvements, shall be
performed subject to and in compliance with all of the following terms and
conditions:

 

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(a)           Tenant shall not commence the performance of any Alteration for
which Landlord’s consent is required until Tenant shall have obtained Landlord’s
prior written approval of detailed plans and specifications for such Alteration
(“Tenant’s Plans”), other than Cosmetic Alterations.  Tenant’s Plans shall be
prepared by a professional architect or engineer licensed to practice in the
State of New York and shall be in form, content and detail sufficient (x) to
secure all required governmental permits and approvals, (y) for a contractor to
perform all work shown thereon and covered thereby and (z) sufficient to
determine (i) whether such Alteration complies with all Laws, (ii) whether such
Alteration is to be performed using materials at least equal to Building
standard and (iii) the effect such Alteration shall have on the structural
components of the Building, including the Building Systems, and the operation
and maintenance of the Building.

 

(b)           All Alterations shall be performed in compliance with all
applicable Laws.  Without limiting the generality of the foregoing, Tenant shall
not commence to perform any Alteration until Tenant shall have obtained and
delivered to Landlord originals or true and complete copies of all permits,
authorization, licenses and permits required to be obtained by applicable Laws
prior to the performance of any Alteration.  Tenant shall prosecute all
Alterations to completion with due diligence and promptly following completion
of all Alterations, Tenant shall obtain all required approvals, permits, and
other “sign-offs” from all governmental authorities having jurisdiction and
shall deliver copies thereof to Landlord.

 

(c)           All Alterations shall be performed subject to Landlord’s rules and
regulations governing the construction of Alterations in the Building, as the
same may be modified from time to time, provided that no such modifications
shall materially increase Tenant’s obligations or liabilities hereunder or
reduce Tenant’s rights hereunder.  Such rules and regulations shall be applied
in a nondiscriminatory manner as against other tenants of the Building.

 

(d)           In order to maintain and control the quality and standards of
workmanship of the Building, Tenant shall only utilize contractors and
subcontractors who shall have been approved in writing by Landlord to perform
Alterations in the Building, provided that Landlord shall not unreasonably
withhold consent to contractors proposed by Tenant if the work such contractors
are performing is not structural work or work affecting the Building Systems,
and such contractors are licensed to practice in the State of New York, are
adequately insured as required under this Lease and provide certificates
evidencing the same to Landlord, and abide by the requirements of Section 10.1.6
with respect to labor harmony.  Landlord shall at all times during the Term
maintain a list of not less than three (3) independent, responsible contractors
and subcontractors for each trade who shall be acceptable to Landlord, except
that Landlord shall have the right to designate only one (1) approved contractor
for the performance of work on the life safety systems and Building Systems of
the Building and one (1) filing agent.  Tenant shall use Landlord’s designated
contractor(s) for all work on the life safety systems and Building Systems of
the Building and Landlord’s filing agent with respect to any Tenant’s Plans
(including the construction drawings for the Initial Improvements).  Landlord
shall have the right to change the approved contractors set forth on such list
at any time and from time to time.  Landlord shall also have the right to refuse
to grant access to the Building and the Premises to any contractor or
subcontractor not approved by Landlord.

 

(e)           Tenant shall maintain, and shall cause all persons performing any 
Alterations or other work in the Building on behalf of Tenant to maintain,
worker’s compensation insurance, and commercial general liability insurance
(including, without limitation, completed operations and contractual liability
coverages), property damage insurance and such other insurance as Landlord may
reasonably require (with Landlord, Landlord’s managing agent and

 

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such other persons as Landlord shall reasonably designate named as additional
insureds), in amounts, with companies and in a form reasonably satisfactory to
Landlord, which insurance shall remain in effect during the entire period in
which such Alterations or other work shall be performed.  Prior to the
commencement of every Alteration, Tenant shall deliver to Landlord proof of all
such insurance.

 

(f)            Tenant shall perform all Alterations using materials at least
equal in quality to the original construction of the Building or Landlord’s then
current Building standard or otherwise reasonably approved by Landlord.

 

(g)           Tenant shall promptly pay, when due, the cost of all Alterations
and other work performed by or on behalf of Tenant or any person claiming
through or under Tenant, and, upon completion, Tenant shall deliver to Landlord,
to the extent not previously received by Landlord, evidence of payment,
contractors’ affidavits and full and final waivers of all liens for labor,
services or materials.

 

(h)           Upon completion of all Alterations, Tenant, at its expense, shall
promptly prepare and submit to Landlord reproducible as-built CAD plans of such
Alteration.

 

10.1.3     In the event that Landlord shall submit Tenant’s Plans to Landlord’s
independent architects or engineers for review, Tenant shall pay to Landlord, as
Additional Rent, all actual, reasonable, out-of-pocket costs incurred by
Landlord for such review, within fifteen (15) days after demand.

 

10.1.4     Reserved.

 

10.1.5     All Alterations, whether temporary or permanent in character, made or
paid for by Landlord or Tenant shall, without compensation to Tenant, become
Landlord’s property upon installation and shall be surrendered to Landlord upon
the expiration or earlier termination of the Term, in good condition, ordinary
wear and tear excepted, except that Tenant shall remove, at or prior to the
expiration or earlier termination of the Term, all Specialty Alterations (as
hereinafter defined).  Upon the removal of any Specialty Alterations, Tenant
shall restore the affected portion of the Premises to the condition existing
prior to the installation of such Specialty Alteration.  For purposes of this
Section, “Specialty Alterations” shall mean any and all vaults, cooking
kitchens, subflooring structures and raised or reinforced flooring systems,
structural reinforcements, auditoria, dumbwaiters, mainframe computer centers,
copying centers, structural components of libraries, internal staircases,
private lavatories, supplemental HVAC, medical facilities, and any other
Alterations which are not customary for build-outs of tenants of first class
office buildings in midtown Manhattan generally and/or are unusually expensive
to demolish or remove.

 

10.1.6     Tenant shall not at any time, either directly or indirectly, use any
contractors or labor or materials in the Premises if, in Landlord’s sole
discretion, the use of same would interfere or cause any conflict with other
contractors or labor engaged by Tenant or Landlord or others in the
construction, maintenance or operation of the Building or any part thereof.  In
the event of any such conflict or interference, Tenant, upon Landlord’s demand,
shall cause all contractors, mechanics or laborers causing such conflict or
interference to leave the Building immediately.

 

10.1.7     Tenant shall pay (x) any increase in property taxes on, or fire or
casualty insurance premiums for, the Building attributable to any Alteration
(provided that increased property taxes or insurance premiums attributable to
alterations by other tenants and occupants of

 

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the Building shall be excluded from Taxes and Operating Expenses) and (y) the
cost of any modifications to the Building outside the Premises that are required
to be made in order to make any Alteration to the Premises.

 

10.1.8     Landlord’s review, supervision, commenting on or approval of any
Alteration or aspect of work to be performed by or for Tenant (whether pursuant
to this Article 10 or otherwise) shall be solely for Landlord’s protection and,
except as may otherwise be expressly provided in this Lease, shall create no
warranties or duties to Tenant or to third parties.

 

10.2                        Alterations by Landlord

 

Landlord, at its cost, and without the same constituting an eviction of Tenant
and without incurring any liability to Tenant, may perform renovations,
improvements, alterations, or modifications to the Building, the Premises, the
Common Areas and/or the Building Systems (collectively, the “Renovations”).  The
Renovations may include, without limitation, (i) repairs, changes, additions,
renovations, decorations, alterations, improvements and restorations to the
Building (including the Premises) and Common Areas necessary to provide the
services described in Article 7, (ii) installing, erecting, using, maintaining,
repairing and replacing pipes, ducts, cables and conduits in and through the
Premises, provided, however, that no such action shall permanently reduce the
Area of the Premises beyond a de minimis extent and Landlord shall, to the
extent reasonably practicable, conceal or camouflage the same in or along walls,
ceilings or columns, (iii) changing the arrangement, number and/or location of
public entrances, passageways, lobbies, doors, corridors, elevators, stairs,
toilets or other public parts of the Building and (iv) imposing such controls as
Landlord deems reasonably necessary with respect to access to the Building by
Tenant’s guests and visitors.  Tenant acknowledges that the Renovations may be
performed by Landlord in the Premises during normal business hours.  Landlord
and Tenant agree to cooperate with each other in order to enable the Renovations
to be performed in a timely manner and, with respect to any Renovations in the
Premises, with as little inconvenience to the operation of Tenant’s business as
is reasonably possible.  Any inconvenience suffered by Tenant during the
performance of any Renovations shall not subject Landlord to any liability for
any loss or damage resulting therefrom or entitle Tenant to any credit,
abatement or adjustment of Rent, Additional Rent or other sums payable under the
Lease.  Notwithstanding the foregoing, Landlord shall remain liable to the
extent provided under the Lease or at law or in equity for any actual damage or
loss to persons or property resulting from the Renovations, subject to the
waiver of subrogation provisions set forth in the Lease.  Nothing contained in
this Section 10.2 shall be deemed to relieve Tenant of any duty, obligation or
liability of Tenant under this Lease to make any repair, replacement or
improvement or comply with any Laws.

 

11.                               LIENS

 

11.1        Tenant agrees to pay before delinquency all costs for work, services
or materials furnished to Tenant or any person claiming through Tenant for the
Premises, the nonpayment of which could result in any lien against the Land,
Building or Premises.  Tenant shall keep title to the Land, Building and
Premises free and clear of any such lien.  Tenant shall immediately notify
Landlord of the filing of any such lien or any pending claims or proceedings
relating to any such lien and shall indemnify and hold Landlord harmless from
and against all loss, damages and expenses (including reasonable attorneys’
fees) suffered or incurred by Landlord as a result of such lien, claims and
proceedings.  In case any such lien attaches, Tenant agrees to cause it to be
released and removed of record within thirty (30) days after the notice of the
filing of such lien shall have been given to Tenant (failing which Landlord may
do so at Tenant’s sole expense),

 

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unless Tenant has a good faith dispute as to such lien in which case Tenant may
contest such lien by appropriate proceedings so long as Tenant deposits with
Landlord a bond or other security in an amount reasonably acceptable to Landlord
which may be used by Landlord to release such lien.  Upon final determination of
any permitted contest, Tenant shall immediately pay any judgment rendered and
cause the lien to be released of record.

 

11.2        Nothing in this Lease shall be deemed or construed in any way as
constituting the consent or request of Landlord, express or implied, to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of labor or materials for the specific improvement,
alteration to or repair of the Premises or any part thereof, nor as giving
Tenant any right, power or authority to contract for or permit the rendering of
any services or the furnishing of any material that would give rise to the
filing of any liens against the Land, Building, Premises or any part thereof. 
Notice is hereby given that, except with respect to Landlord’s Work, Landlord
shall not be liable for any work performed or to be performed at the Premises
for Tenant or any subtenant, or for any material furnished or to be furnished at
the Premises for Tenant or any subtenant upon credit, and that no mechanic’s or
other lien for such work or material shall attach to or affect the estate or
interest of Landlord in and to the Land, Building or Premises.

 

12.                               INSURANCE

 

12.1                        During the Term, Tenant shall provide and keep in
force the following insurance:

 

(a)           Commercial general liability insurance relating to Tenant’s
business carried on, in or from the Premises and Tenant’s use and occupancy of
the Premises, insuring against loss due to personal or bodily injury or death
and damage to property (including, without limitation, contractual liability
insurance), with limits of not less than the Liability Insurance Amount for any
one accident or occurrence; and

 

(b)           Property insurance covering (i) all office furniture, trade
fixtures, office equipment, free-standing cabinet work, movable partitions,
merchandise, personal property and all other items of Tenant’s property in the
Premises installed by, for, or at the expense of Tenant, and (ii) any leasehold
improvements installed by or for the benefit of Tenant (items (i) and (ii),
collectively, “Tenant Insured Improvements”).  Such insurance shall be written
on a special cause of loss form for physical loss or damage, for the full
replacement cost value (subject to reasonable deductible amounts) new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance, and shall include coverage
for damage or other loss caused by fire or other peril, including vandalism and
malicious mischief, theft, water damage of any type, including sprinkler
leakage, bursting or stoppage of pipes, and explosion, and providing business
interruption coverage of $500,000.00, provided that the proceeds of such
business interruption coverage are used exclusively to pay Rent as the same
becomes due; and

 

(c)           Workers’ Compensation statutory limits and Employers’ Liability
limits of $1,000,000.

 

12.2                        The minimum limits of insurance required to be
carried by Tenant shall not limit Tenant’s liability.  Landlord makes no
representation or warranty to Tenant that the amount of insurance required to be
carried by Tenant under the terms of this Lease is adequate to fully protect
Tenant’s interests.  Tenant is encouraged to evaluate its insurance needs and
obtain whatever additional types or amounts of insurance that it may deem
desirable or appropriate.  Such insurance shall be

 

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issued by an insurance company that has an A.M. Best rating of not less than A-X
and shall be in form and content reasonably acceptable to Landlord.  Tenant’s
Commercial General Liability Insurance shall (a) name the Landlord, Callahan
Capital Properties LLC, Landlord’s managing agent, the holder of any Encumbrance
and such additional parties as Landlord shall reasonably designate (“Additional
Insured Parties”) as additional insureds (Landlord hereby notifies Tenant that
Landlord’s managing agent is, on the Date of this Lease, CBRE, Inc.); and
(a) include cross liability and severability of interests clauses, (b) be
written on an “occurrence” (and not a “claims made”) form, (c) be primary
insurance as to all claims thereunder, (d) provide that any insurance carried by
Landlord is excess and non-contributing with Tenant’s insurance and (e) comply
with the provisions of Section 14.1 below.  Landlord shall be designated as a
loss payee with respect to Tenant’s property insurance on any Tenant Insured
Improvements and trade fixtures.  Tenant shall deliver to Landlord, on or before
the Commencement Date and at least 15 days before the expiration dates thereof,
certificates from Tenant’s insurance company on the forms currently designated
“ACORD 25” (Certificate of Liability Insurance) and “ACORD 28” (Evidence of
Commercial Property Insurance) or the equivalent.  Attached to the ACORD 25 (or
equivalent) there shall be an endorsement naming the Additional Insured Parties
as additional insureds, and attached to the ACORD 28 (or equivalent) there shall
be an endorsement designating Landlord as a loss payee with respect to Tenant’s
property insurance on any Tenant Insured Improvements and trade fixtures, and
each such endorsement shall be binding on Tenant’s insurance company.  Upon
Landlord’s request, Tenant shall deliver to Landlord, in lieu of such
certificates, copies of the policies of insurance required to be carried under
Section 12.1 showing that the Additional Insured Parties are named as additional
insureds and that Landlord is designated as a loss payee with respect to
Tenant’s property insurance on any Tenant Insured Improvements and trade
fixtures.  If Tenant shall fail to maintain any required insurance or pay any
premiums thereon, or to furnish satisfactory proof of such insurance to Landlord
as required, Landlord may, upon not less than five (5) days’ notice, effect such
insurance coverage and recover from Tenant on demand any premiums paid by
Landlord.  Tenant may provide the required insurance coverages hereunder through
blanket policies as well as a combination of primary and excess or umbrella
coverages, provided that the coverage required by this Article 12 will not be
reduced or diminished by reason of the use of such umbrella or blanket policies
of insurance.

 

12.3                        Whenever Landlord’s commercially reasonable judgment
indicates a need for additional or different types of insurance coverage, Tenant
shall, upon Landlord’s request, promptly obtain such insurance coverage, at
Tenant’s expense, provided that such coverage shall not exceed the insurance
coverage then required by prudent owners of first class office buildings in
midtown Manhattan.

 

12.4                        Landlord shall maintain such “all risk” insurance
for the Building and commercial general liability insurance for the common areas
of the Building as Landlord shall determine, in its commercially reasonable
judgment, to be in an amount sufficient to repair or replace the Building in the
event of loss, and which shall be subject to such terms and conditions
(including, without limitation, deductibles and self-retention limits) as
Landlord shall determine.  Nothing contained in this Lease shall require
Landlord to maintain insurance against risks of terrorism.

 

13.                               DAMAGE OR DESTRUCTION

 

13.1                        Termination Options as a Result of Casualty

 

13.1.1     If the Premises or any other portion of the Building necessary for
Tenant’s occupancy of the Premises shall be damaged by fire or other casualty,
Landlord shall, promptly

 

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after learning of such damage, notify Tenant in writing of the time necessary to
demolish all damaged portions of the Premises and repair or restore the Premises
and such portions of the Building as are necessary for Tenant’s occupancy of the
Premises as nearly as practicable to the condition existing prior to such fire
or other casualty, excluding the repair and restoration of any and all Tenant
Insured Improvements, trade fixtures, furnishings, equipment and personal
property of Tenant in the Premises (such demolition, repair and restoration work
being hereinafter referred to as “Landlord’s Restoration Work”), as estimated by
a reputable architect, engineer or contractor selected by Landlord (the
“Estimate”).

 

13.1.2     If the Estimate shall state that Landlord’s Restoration Work cannot
be completed within one (1) year after the date of such damage (or within sixty
(60) days after the date of such damage if such damage shall have occurred
within the last twelve (12) months of the Term), then Tenant shall have the
option to terminate this Lease by giving Landlord notice thereof within ten
(10) days after Landlord shall have given Tenant the Estimate.

 

13.1.3     If all or any part of the Premises or the Building is damaged or
destroyed by fire or other casualty, and (a) the Building is so damaged (whether
or not the Premises shall have been damaged) that Landlord shall elect not to
restore or repair such damage to the Building, or (b) the Estimate shall state
that Landlord’s Restoration Work cannot be completed within one (1) year after
the date of such damage, or (c) such damage shall have occurred within the last
twelve (12) months of the Term and the Estimate shall state that the repair or
restoration of the damage to the Premises or to any other portion of the
Building necessary for Tenant’s occupancy cannot be completed within sixty (60)
days from the date of such damage, then, in any of such events, Landlord shall
have the right, at its option, to terminate this Lease by giving notice thereof
to Tenant within ninety (90) days after the date on which such fire or other
casualty shall have occurred or Landlord’s receipt of the Estimate, whichever is
later.

 

13.1.4     If either party shall exercise its option to terminate this Lease
pursuant to the provisions of this Section 13.1, the Term shall expire and this
Lease shall terminate thirty (30) days after Landlord or Tenant, as the case may
be, shall have given the other party such notice of termination, as if such date
were the Expiration Date (provided, however, that Rent payable for the period
commencing on the date of such damage and ending on the date on which this Lease
shall terminate shall be subject to any abatement provided for in Section 13.3
below) and Landlord shall be entitled to all proceeds of the insurance policy
applicable to any damaged Tenant Insured Improvements in the Premises.

 

13.2                        Repair Obligations as a Result of Casualty

 

If the Premises or the Building are damaged by fire or other casualty and
neither party shall terminate this Lease pursuant to the provisions of
Section 13.1, then Landlord shall promptly commence and diligently prosecute
Landlord’s Restoration Work, subject to delays for insurance adjustments and
delays caused by matters beyond Landlord’s reasonable control.  Landlord shall
perform Landlord’s Restoration Work in a workmanlike manner using grades of
materials at least equal in quality to the materials adopted as a standard for
the Building.  Landlord shall have no liability to Tenant, including any
liability for inconvenience or annoyance or injury to the business of Tenant,
resulting in any way from damage from fire or other casualty or the repair
thereof.  Tenant shall not be entitled to terminate this Lease if any required
repairs or restoration are not in fact completed within the time period set
forth in the Estimate, provided that Landlord promptly commences and diligently
pursues such repairs and restoration to completion, subject to the provisions of
this Article 13.  In no event shall Landlord be obligated to repair, restore or
replace any of the Tenant Insured Improvements; Tenant agrees to repair, restore
or replace such

 

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Tenant Insured Improvements as soon as possible after the date of such fire or
other casualty, to at least the condition existing prior to its damage, using
materials at least equal to Building standard.  However, in connection with the
performance of Landlord’s Restoration Work, Landlord may, if elected by both
Landlord and Tenant, repair and restore the damage, if any, caused to any or all
Tenant Insured Improvements.  If Landlord and Tenant shall make such election,
Landlord shall be entitled to all proceeds of the insurance policy described in
Section 12.1(b) applicable to the Tenant Insured Improvements Landlord so elects
to repair or restore.  Landlord and Tenant shall cooperate with each other in
their respective efforts to collect insurance proceeds.

 

13.3                        Rent Abatement as a Result of Casualty

 

If all of the Premises shall be damaged or destroyed or rendered untenantable or
inaccessible by any fire or other casualty, then the Rent shall abate in its
entirety, and if only a portion of the Premises shall have been damaged or
destroyed or rendered untenantable or inaccessible, the Rent shall be reduced by
an amount which bears the same ratio to the total amount of Rent otherwise
payable under this Lease as the portion of the Premises which shall have been
damaged or rendered untenantable or inaccessible bears to the entire Premises,
in either case for the period beginning on the date of such damage and ending on
(x) if Landlord shall have elected to repair and restore any Tenant Insured
Improvements pursuant to the provisions of Section 13.2, fifteen (15) days
following the date on which Landlord shall have substantially completed both of
Landlord’s Restoration Work and such Tenant Insured Improvements or (y) if
Landlord shall not have elected to repair and restore the Tenant Insured
Improvements pursuant to the provisions of Section 13.2, the earlier of the date
on which (i) Tenant shall have substantially completed the repair and
restoration of such Tenant Insured Improvements as nearly as practicable to the
condition existing immediately prior to such fire or other casualty, or (ii) the
thirtieth (30th) day after the date on which Landlord shall have substantially
completed Landlord’s Restoration Work.  In no event shall Landlord be liable for
any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from damage caused by fire or other casualty or the repair
of such damage, provided however that, to the extent Tenant remains in
possession of a portion of the Premises, Landlord will take all reasonable steps
to minimize the disruption to Tenant’s business and use of such portion of the
Premises during the period of repair (other than using labor at overtime or
premium pay rates).

 

13.4                        Fire Wardens

 

Tenant shall throughout the Term provide fire wardens and searchers as required
under NYC Local Law No. 5. of 1973, as heretofore and/or hereafter amended.

 

13.5                        Express Agreement Regarding Casualty

 

This Lease shall be considered an express agreement governing any case of damage
to or destruction of the Building or any part thereof by fire or other casualty,
and Section 227 of the Real Property Law of the State of New York providing for
a contingency in the absence of express agreement and any other law of like
import now or hereafter in force, shall have no application in such case.

 

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14.                               WAIVERS AND INDEMNITIES

 

14.1                        Mutual Waiver of Subrogation Rights

 

14.1.       Landlord shall cause each property insurance policy carried by
Landlord insuring the Building against loss, damage, or destruction by fire or
other casualty, and Tenant shall cause each property insurance policy carried by
Tenant and insuring the Premises and Tenant Insured Improvements against loss,
damage, or destruction by fire or other casualty, to be written in a manner so
as to provide that the insurance company waives all rights of recovery by way of
subrogation against Landlord or Tenant in connection with any loss or damage
covered by any such policy, even though such loss, damage or destruction might
have been occasioned by the negligence of Landlord, Tenant or their respective
agents, employees, contractors, invitees and/or permitted subtenants or other
occupants.  Neither party shall be liable to the other for the amount of such
loss or damage which is in excess of the applicable deductible, if any, caused
by fire or any of the risks enumerated in its policies, provided that such
waiver was obtainable at the time of such loss or damage.  However, if such
waiver cannot be obtained, or shall be obtainable only by the payment of an
additional premium charge above that which is charged by companies carrying such
insurance without such waiver of subrogation, then the party undertaking to
obtain such waiver shall notify the other party of such fact and such other
party shall have a period of ten (10) days after the giving of such notice to
agree in writing to pay such additional premium if such policy is obtainable at
additional cost (in the case of Tenant, pro rata in proportion of the rentable
square feet in the Area of the Premises to the total rentable area covered by
such insurance); and if such other party does not so agree or the waiver shall
not be obtainable, then the provisions of this Section 14.1 shall be null and
void as to the risks covered by such policy for so long as either such waiver
cannot be obtained or the party in whose favor a waiver of subrogation is
desired shall refuse to pay the additional premium.  If the release of either
Landlord or Tenant, as set forth in the second sentence of this Section 14.1,
shall contravene any law with respect to exculpatory agreements, the liability
of the party in question shall be deemed not released, but no action or rights
shall be sought or enforced against such party unless and until all rights and
remedies against the other’s insurer are exhausted and the other party shall be
unable to collect such insurance proceeds.  The waiver of subrogation set forth
in this Section 14.1 shall extend to the benefit of the agents, Affiliated
Parties (as defined in Section 14.2 below) and employees of each party, but only
if and to the extent that such waiver can be obtained without additional charge
(unless the party to be benefited shall pay such charge).  Nothing contained in
this Section 14.1 shall be deemed to relieve either party from any duty imposed
elsewhere in this Lease to repair, restore and rebuild.  In the event of any
permitted sublease or occupancy (by a person other than Tenant) of all or a
portion of the Premises, all of Tenant’s covenants and obligations set forth in
this Section 14.1 shall bind and be fully applicable to the subtenant or
occupant (as if such subtenant or occupant were Tenant hereunder) for the
benefit of Landlord and Landlord’s agents.

 

14.2                        Definition of Affiliated Parties

 

For purposes of this Article 14, the term “Affiliated Parties” shall mean a
party’s parent, subsidiaries and affiliated corporations and its and their
partners, ventures, members, directors, officers, shareholders, agents, servants
and employees.

 

14.3                        Tenant’s Waivers

 

Except to the extent caused by the willful or negligent act or omission or
breach of this Lease by Landlord or anyone for whom Landlord is legally
responsible, Landlord, its Affiliated Parties and

 

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the holder of any Encumbrance shall not be liable or in any way responsible for,
and Tenant waives all claims against Landlord, its Affiliated Parties and the
holder of any Encumbrance for any loss, injury or damage suffered by Tenant or
others relating to (a) loss or theft of, or damage to, property of Tenant or
others; (b) injury or damage to persons or property resulting from fire,
explosion, falling plaster, escaping steam or gas, electricity, water, rain or
snow, or leaks from any part of the Building or from any pipes, appliances or
plumbing, or from dampness; or (c) damage caused by other tenants, occupants or
persons in the Premises or other premises in the Building, or caused by the
public or by construction of any private or public work.  Tenant’s waivers under
this Section 14.3 shall survive the expiration or early termination of the Term.

 

14.4                        Indemnity

 

14.4.1     Subject to Section 14.1 and except to the extent caused by the
willful or negligent act or omission or breach of this Lease by Landlord or
anyone for whom Landlord is legally responsible, Tenant shall defend, indemnify
and hold Landlord, Callahan Capital Properties LLC, Landlord’s managing agent,
the holder of any Encumbrance and such additional parties as Landlord shall
reasonably designate, together with each of their respective partners,
principals, managers, members, directors, officers, shareholders, agents,
servants and employees (any or all of the foregoing hereinafter referred to as
the “Indemnified Parties”) harmless from and against any and all liability,
loss, claims, demands, damages or expenses (including reasonable attorneys’
fees, disbursements and court costs) due to or arising out of: (a) any accident,
injury or damage occurring on or about the Premises (including, without
limitation, accidents, injury or damage resulting in injury to persons, death,
property damage or theft) during the Term or during any period of time prior to
or after the Term that Tenant shall have been in possession of the Premises;
(b) any act or omission or negligence of Tenant or any one claiming through or
under Tenant and any of their agents, contractors, employees, servants,
licensees, invitees or visitors, (c) any accident, injury or damage whatsoever
caused to any person or to the property of any person outside of the Premises
but anywhere within or about the Building, where such accident, injury or damage
results or is claimed to have resulted from any negligent act or omission of
Tenant or any one claiming through or under Tenant or any of their respective
contractors, licensees, agents, servants, employees, invitees or visitors;
and/or (d) any breach, violation or non-performance of any of the terms,
covenants or conditions to be observed or performed by Tenant under this Lease. 
Tenant’s obligations under this Section 14.4.1 shall survive the expiration or
earlier termination of the Term.

 

14.4.2     If any claim, action or proceeding shall be brought against any of
the Indemnified Parties for a matter covered by the indemnity set forth in this
Section, Tenant, upon notice from the Indemnified Party, shall defend such
claim, action or proceeding by counsel reasonably acceptable to the Landlord
Indemnified Party, at Tenant’s expense.  Counsel for Tenant’s insurer is hereby
approved. Notwithstanding the foregoing, the Indemnified Party may retain its
own counsel to assist in the defense of any claim having a potential liability
in excess of $1,000,000, and Tenant shall pay the reasonable fees of such
attorneys.  No such claim, action or proceeding shall be settled by Tenant
without the consent of Landlord unless such settlement shall be at no cost to
Landlord.

 

14.4.3     Subject to Section 14.1 and except to the extent caused by the
willful or negligent act or omission or breach of this Lease by Tenant or anyone
for whom Tenant is legally responsible, Landlord shall defend, indemnify and
hold Tenant, its respective partners, principals, members, directors, officers,
shareholders, agents, servants and employees (any or all of the foregoing
hereinafter referred to as the “Tenant Indemnified Parties”) harmless from and
against any and all liability, loss, claims, demands, damages or expenses
(including reasonable

 

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attorneys’ fees, disbursements and court costs) due to or arising out of: 
(a) any act, omission or negligence of Landlord or any one claiming through or
under Landlord and any of their agents, contractors, employees, servants,
licensees or visitors; (b) any accident, injury or damage whatsoever caused to
any person or to the property of any person outside of the Premises but anywhere
within the Building, where such accident, injury or damage results or is claimed
to have resulted from the negligence of Landlord or any one claiming through or
under Landlord or any of their respective contractors, licensees, agents,
servants, employees, invitees or visitors; and/or (c) any breach, violation or
non-performance of any of the terms, covenants or conditions to be observed or
performed by Landlord under this Lease.  Landlord’s obligations under this
Section 14.4.3 shall survive the expiration or earlier termination of the Term.

 

14.4.4     If any claim, action or proceeding shall be brought against any of
the Tenant Indemnified Parties for a matter covered by the indemnity set forth
in this Section, Landlord, upon notice from the Tenant Indemnified Party, shall
defend such claim, action or proceeding by counsel reasonably acceptable to the
Tenant Indemnified Party, at Landlord’s expense.  Counsel for Landlord’s insurer
is hereby approved.  Notwithstanding the foregoing, the Tenant Indemnified Party
may retain its own counsel to assist in the defense of any claim having a
potential liability in excess of $1,000,000.00, and Landlord shall pay the
reasonable fees of such attorneys.  No such claim, action or proceeding shall be
settled by Landlord without the consent of Tenant unless such settlement shall
be at no cost to Tenant.

 

15.                               CONDEMNATION

 

15.1                        Full Taking

 

If all or substantially all of the Building or Premises are taken for any public
or quasi-public use under any applicable Laws or by right of eminent domain, or
are sold to the condemning authority in lieu of condemnation, then this Lease
shall terminate as of the earlier of the date on which the condemning authority
takes physical possession of or title to the Building or Premises.

 

15.2                        Partial Taking

 

15.2.1     Landlord’s Termination of Lease.  If only part of the Building or
Premises is thus taken or sold in lieu of condemnation, and if after such
partial taking, in Landlord’s reasonable judgment, alteration or reconstruction
is not economically justified, then Landlord (whether or not the Premises are
affected) may terminate this Lease by giving written notice to Tenant within
sixty (60) days after the taking.

 

15.2.2     Tenant’s Termination.  If over twenty-five percent (25%) of the
Premises is thus taken or sold and Landlord is unable to provide Tenant with
comparable replacement premises in the Building, Tenant may terminate this Lease
if in Tenant’s reasonable judgment the Premises cannot be operated by Tenant in
an economically viable fashion because of such partial taking.  Such termination
by Tenant shall be exercised by written notice to Landlord given not later than
sixty (60) days after Tenant is notified of the taking.

 

15.2.3     Effective Date of Termination.  Termination by Landlord or Tenant
shall be effective as of the date when physical possession of the applicable
portion of the Building or Premises is taken by the condemning authority.

 

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15.2.4     Election to Continue Lease.  If neither Landlord nor Tenant elects to
terminate this Lease upon a partial taking of a portion of the Premises, the
Rent payable under this Lease shall be diminished by an amount allocable to the
portion of the Premises which was so taken, sold or rendered unusable.  If this
Lease is not terminated upon a partial taking of the Building or Premises,
Landlord shall, at Landlord’s sole expense, promptly restore and reconstruct the
Building and Premises to substantially their former condition to the extent the
same is feasible.  However, Landlord shall not be required to spend for such
restoration or reconstruction an amount in excess of the net amount received by
Landlord as compensation or damages for the part of the Building or Premises so
taken.

 

15.3                        Awards

 

As between the parties to this Lease, Landlord shall be entitled to receive, and
Tenant assigns to Landlord, all of the compensation awarded upon taking of any
part or all of the Building or Premises, including any award for the value of
the unexpired Term.  However, Tenant may assert a claim in a separate proceeding
against the condemning authority for the value of Tenant’s trade fixtures or
personal property, the cost of moving and other business relocation expenses and
damages to Tenant’s business incurred as a result of such condemnation provided
that the foregoing shall not reduce the award payable to Landlord.

 

16.                               ASSIGNMENT AND SUBLETTING

 

16.1                        Limitation

 

Except as otherwise expressly provided in this Article 16, without Landlord’s
prior written consent, Tenant shall not assign, mortgage, pledge, encumber or
otherwise transfer all or any of its interest under this Lease, sublet all or
any part of the Premises or permit the Premises to be used or occupied by any
party other than Tenant and its employees.

 

16.2                        Notice of Proposed Transfer; Landlord’s Options

 

16.2.1     (a)  If Tenant shall desire to (x) sublet all or any portion of the
Premises or (y) assign Tenant’s interest in this Lease, Tenant shall submit to
Landlord a notice (the “Notice of Intention”) of Tenant’s intention to sublet
all or a portion of the Premises or assign this Lease, as the case may be, which
notice shall set forth the effective date of the proposed assignment or
subletting, and which shall be accompanied by the items set forth in
16.3.1(a) below.

 

(b)           Landlord shall have the right, by notice (the “Termination
Notice”) given to Tenant within thirty (30) days following Landlord’s receipt of
the Notice of Intention, in respect of (x) a proposed assignment of this Lease,
or (y) a proposed subletting resulting in at least 75% of the rentable area of
the Premises (whether individually or collectively with all prior sublettings
affecting the Premises) being subleased to one or more third parties, to
terminate this Lease on a date to be specified in the Termination Notice, which
date (the “Termination Date”) shall be the later of (i) the effective date of
the proposed subletting or assignment, or (ii) the thirtieth (30th) day after
the date on which Tenant shall have given Landlord the Notice of Intention,
whereupon the term of this Lease shall expire on the Termination Date with the
same force and effect as if such date were originally provided herein as the
Expiration Date of the Term.  If Tenant’s Notice of Intention requests consent
to a sublease of a portion of the Premises, then Landlord’s right to terminate
this Lease shall be with respect only to the Space (hereinafter defined).

 

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16.2.2     If, within thirty (30) days following Landlord’s receipt of a Notice
of Intention, Landlord shall not have exercised the foregoing right to terminate
this Lease, then Landlord’s right to so terminate this Lease pursuant to this
Section 16.2 shall be deemed waived, but only with respect to the particular
sublet or assignment referred to in such Notice of Intention.

 

16.2.3     If Tenant shall not consummate an assignment of this Lease or a
subletting of any portion or all of the Premises, as the case may be, as shall
have been specified in Tenant’s Notice of Intention, within ninety (90) days
following receipt of Tenant’s Notice of Intention, Tenant shall not have the
right to consummate the subletting of the Premises or the assignment of this
Lease, as the case may be, without again requesting Landlord’s consent thereto
and otherwise complying with all of the provisions of this Section 16.2.

 

16.3                        Consent Not To Be Unreasonably Withheld

 

16.3.1     If Landlord shall not exercise its applicable option under
Section 16.2, or if such option is not applicable to the proposed transaction,
then, provided that no Event of Default shall be continuing, Landlord shall not
unreasonably withhold its consent to a proposed assignment or subletting,
provided that each of the following conditions shall be satisfied:

 

(a)           Tenant’s Notice of Intention shall have been accompanied by (i) a
statement setting forth the name and address of the proposed assignee or
subtenant and the nature of its business, (ii) in the case of a sublease of a
portion of the Premises, a reasonably accurate floor plan indicating the portion
of the Premises intended to be sublet (the “Space”), (iii) a reasonably detailed
statement describing the proposed use of the Premises, (iv) financial statements
prepared by an independent certified public accountant containing the opinion of
such accountant reflecting the proposed assignee’s or subtenant’s current
financial condition and income and expenses for the past two (2) years, or other
evidence satisfactory to Landlord of the financial condition of the proposed
assignee or subtenant, and (v) a term sheet or letter of intent summarizing the
material terms of the assignment or subletting, and a copy of the proposed
assignment (which shall contain an assumption agreement complying with the
provisions of Section 16.4 below) or proposed form of sublease, as the case may
be.  Tenant shall deliver a copy of the executed assignment or sublease promptly
after execution.  Tenant shall also deliver to Landlord such other or additional
information as Landlord may reasonably request consistent with the practices of
other prudent landlords of comparable buildings in mid-town Manhattan;

 

(b)           The proposed subtenant or assignee, in Landlord’s reasonable
opinion, shall have sufficient financial capacity and business experience to
perform its obligations under the proposed sublease or, in the case of an
assignment, this Lease;

 

(c)           The use of the Premises by the proposed assignee or subtenant
shall only be for purposes which, in Landlord’s reasonable opinion, (i) are
lawful, (ii) are limited to the permitted Use of the Premises permitted under
Section 6.1 of this Lease, (iii) are consistent with the general character of
business carried on by tenants of a first-class office buildings in midtown
Manhattan and with a majority of the tenants of the Building, (iv) do not
conflict with any exclusive rights or covenants not to compete in favor of any
other tenant or proposed tenant of the Building (provided that Landlord has
given Tenant notice of such conflicting rights upon request of Tenant),
(v) shall not increase the likelihood of damage or destruction to the Building,
(vi) shall not cause an increase in insurance premiums for insurance policies
applicable to the Building, (vii) shall not require new tenant improvements
incompatible with the then-existing Building Systems and components and
(viii) shall not impose any additional burdens or costs on Landlord in the
operation of the Building;

 

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(d)           In Landlord’s reasonable opinion consistent with the practices of
prudent landlords of comparable buildings in mid-town Manhattan, the proposed
assignee or subtenant shall not have a poor business reputation or reputation as
being an undesirable tenant in the general business community;

 

(e)           The proposed assignee or subtenant, or any person who directly or
indirectly controls, is controlled by, or is under common control with, the
proposed assignee or subtenant, at the time Tenant requests Landlord’s consent
and at the time of the proposed transfer, shall not be a tenant or occupant in
the Building, nor a party with whom Landlord is then negotiating or has within
the past six (6) months negotiated for the leasing of space in the Building; and

 

(f)            The form of the proposed assignment or sublease shall comply with
the provisions of this Section 16 and shall be reasonably satisfactory to
Landlord in form and substance.

 

16.4                        Form of Transfer

 

16.4.1     All subleases shall be subject to the following provisions, and
Landlord’s consent to a proposed sublease shall not be effective or binding upon
Landlord unless and until Tenant shall have delivered to Landlord an original
duly executed sublease that shall comply with the following provisions:

 

(a)           The term of the sublease shall end no later than one (1) day prior
to the Expiration Date of this Lease;

 

(b)           Each sublease shall provide that (i) the sublease shall be subject
and subordinate to this Lease and to all matters to which this Lease is or shall
be subordinate and (ii) upon any termination of this Lease prior to the date
fixed as the Expiration Date, re-entry or repossession of the Premises by
Landlord under this Lease or surrender of the Premises with Landlord’s written
consent, Landlord may, at its option, take over any of the right, title and
interest of Tenant, as sublessor, under such sublease, and such subtenant shall,
at Landlord’s option, attorn and agree to be bound to Landlord in accordance
with the provisions of this Section 16, it being agreed that Landlord shall
nevertheless not be (1) liable for any previous act or omission of Tenant
(including any negligence of Tenant) as sublandlord under the sublease,
(2) subject to any credit, defense, offset, claim or demand which may have
previously accrued to the subtenant against Tenant, (3) bound by any previous
modification or amendment of such sublease not consented to by Landlord or by
any previous prepayment of more than one (1) month’s rent, (4) be obligated to
perform any repairs or other work beyond Landlord’s obligations under this Lease
or (5) liable for the return of any security deposit except to the extent such
sums have actually been paid over to Landlord; it being understood and agreed
that the provisions of this Section 16.4.1(b) shall be self-operative, and that
no further instruments shall be required to give effect to this provision, but
that upon the request of Landlord, Tenant shall execute and deliver such
instruments to Landlord as Landlord shall reasonably request to confirm the
foregoing provisions;

 

(c)           Each sublease shall contain a provision requiring the subtenant to
comply with the provisions of Section 14.1 of this Lease, which provisions shall
be applicable to such subtenant as if such subtenant were the Tenant under this
Lease; and

 

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(d)           If Landlord requires that this Lease be terminated as to the Space
pursuant to Section 16.2.1(b), and the Space is less than the entire Premises,
then (i) Tenant, at Tenant’s cost, shall (a) erect all partitions required to
separate the Space from the remainder of the Premises and (b) install all doors
that Landlord determines are required for independent access from the Space to
the elevators, lavatories and stairwells on the floor and install all equipment
and facilities (including, without limitation, men’s and women’s toilets)
required to comply with all applicable Laws and to enable Landlord to maintain
and service the Space and permit the Space to be used as an independent unit,
(ii) Landlord and Tenant shall execute and deliver a supplementary agreement
modifying this Lease by eliminating the Space from the Premises for the term
specified in Tenant’s Notice of Intention commencing, at Landlord’s option, on
(a) the commencement date set forth in Tenant’s Notice of Intention, or (b) a
date designated by Landlord which shall not be more than thirty (30) days after
the date of Landlord’s Termination Notice, and, for such period, reducing the
Base Rent and Additional Rent payable under this Lease on a pro rata basis and
(iii) at Landlord’s election, Tenant shall, at its sole cost, prior to the end
of the Term, restore the Premises to the condition existing immediately prior to
the commencement of the sublease term, including any demolition of partitions
and doors erected or installed pursuant to subsection (i) above and related
repair and restoration of the Premises.

 

16.4.2     No assignment shall be binding on Landlord, and Landlord’s consent to
any proposed assignment of this Lease shall not be effective until Tenant shall
have delivered to Landlord a duly executed and acknowledged original assignment
and assumption agreement which shall contain an assumption by the transferee of
all of the terms, covenants, conditions and agreements to be observed or
performed by the Tenant under this Lease, in form and substance reasonably
satisfactory to Landlord.

 

16.4.3     A fully executed copy of any sublease or assignment of this Lease
shall be delivered to Landlord within ten (10) days after the execution thereof.

 

16.5                        Payments to Landlord

 

16.5.1     If Landlord shall not exercise any of its options under Section 16.2
and shall give its consent to any sublease of the Premises, Tenant shall, in
consideration therefor, pay to Landlord, as Additional Rent, fifty (50%) percent
of the amount by which any and all rents, additional charges or other
consideration payable to Tenant by the subtenant under the sublease or any other
agreement entered into in connection therewith exceeds the Base Rent and
Additional Rent payable under this Lease (prorated with respect to the Space as
appropriate) accruing during the term of the sublease (including all sums paid
for the sale or rental of Tenant’s fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property, less, in the case of the sale
of any of Tenant’s furniture, fixtures or equipment, the then net unamortized or
undepreciated cost of any such fixtures, equipment, furniture, furnishings or
other personal property which were provided and installed in the subleased
premises at the sole cost and expense of Tenant and for which Landlord has not
given an allowance or other credit, determined on the basis of Tenant’s federal
income tax returns), but after deducting from such rents, additional charges or
other consideration any Sublease Transaction Costs (hereafter defined) actually
incurred by Tenant.  The sums payable under this Section 16.5.1 shall be payable
to Landlord as and when the same shall be paid by the subtenant to Tenant.  As
used in this Section, “Sublease Transaction Costs” shall mean all commercially
reasonable costs and expenses incurred by Tenant in connection with the
sublease, including, without limitation any of the following sums actually
incurred by Tenant to consummate such sublease:  (i) up to one and one half
brokerage commissions at customary rates, (ii) reasonable attorneys’ fees and
disbursements and (iii) any reasonable costs incurred by Tenant to prepare the
subleased premises for the subtenant’s

 

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occupancy thereof.  Notwithstanding the foregoing, the sale of any movable
personal property (other than furniture) up to its depreciated value may be
excluded from the computation of profits.

 

16.5.2     If Landlord shall not exercise any of its options under Section 16.2
above and shall give its consent to any assignment of Tenant’s interest in this
Lease, Tenant shall, in consideration of such assignment, pay to Landlord, as
Additional Rent, fifty (50%) percent of any and all sums and other consideration
payable to Tenant by the assignee for or by reason of such assignment
(including, but not limited to, all sums paid for the sale or rental of Tenant’s
fixtures, leasehold improvements, equipment, furniture, furnishings or other
personal property less, in the case of the sale of any of Tenant’s furniture,
fixtures or equipment, the then net unamortized or undepreciated cost of any
such fixtures, equipment, furniture, furnishings or other personal property
which were provided and installed in the Premises at the sole cost and expense
of Tenant and for which Landlord has not given an allowance or other credit,
determined on the basis of Tenant’s federal income tax returns), but after
deducting from such sums or other consideration any Assignment Transaction Costs
(hereafter defined) actually incurred by Tenant.  The sums payable under this
Section 16.5.2 shall be payable to Landlord as and when the same shall be paid
by the assignee to Tenant.  As used in this Section, “Assignment Transaction
Costs” shall mean all commercially reasonable costs and expenses incurred by
Tenant in connection with the assignment, including, without limitation any of
the following sums actually incurred by Tenant to consummate such assignment: 
(i) up to one and one half brokerage commission at customary rates,
(ii) reasonable attorneys’ fees and disbursements, and (iii) any reasonable
construction costs incurred by Tenant to prepare the Premises for the assignee. 
Notwithstanding the foregoing, the sale of any movable personal property (other
than furniture) up to its depreciated value may be excluded from the computation
of profits.

 

16.6                        Change of Ownership

 

Any change by Tenant in the form of its legal organization (such as, for
example, a change from a general to a limited partnership), any transfer of 50%
or more of Tenant’s assets or of Tenant’s stock, membership, partnership or
other equity interests (including any transfer by operation of law or by a
series of transfers), and any other direct or indirect transfer of interest
effecting a change in the identity of the persons exercising effective control
of Tenant, shall be deemed an “assignment” of this Lease requiring Landlord’s
prior written consent.  The transfer of any outstanding capital stock of a
corporation whose stock is publicly-traded shall not, however, be deemed a
“transfer of interest” under this Section 16.6.  This Section 16.6, however, is
subject to Tenant’s rights under Section 16.7 below.

 

16.7                        Permitted Transfers

 

16.7.1     Provided that no Event of Default shall be continuing, Tenant may,
upon not less than ten (10) business days’ prior notice to Landlord, but without
obtaining Landlord’s consent, assign this Lease or sublease all or any part of
the Premises to an Affiliate of Tenant (as defined in Section 16.7.3 below) for
so long as such Affiliate of Tenant shall remain an Affiliate of the Tenant
initially named herein, provided that (i) the Affiliate of Tenant shall continue
to use the Premises for the Use and for no other use, (ii) Tenant shall deliver
a duplicate original duly executed sublease or assignment and assumption
agreement evidencing such assignment or sublease to Landlord within ten
(10) days after the execution thereof, which instrument shall comply with the
provisions of Section 16.4 hereof, and (iii) in the case of an assignment, the
Affiliate of Tenant shall comply with the net worth requirements and other
provisions set forth in Section 16.7.2(i) below (and, for purposes of this
Section 16.7.1, the tangible net worth of the

 

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named Tenant may be taken into account to satisfy such net worth test). 
Notwithstanding any such assignment or subletting, Tenant shall remain fully and
primarily liable for the obligations of the Tenant under this Lease.  Any
assignment or sublease effected in accordance with the provisions of this
Section 16.7 shall be subject to all of the provisions of this Article 16
(including, without limitation, Section 16.4).  If any time following an
assignment to an Affiliate of Tenant or subletting to an Affiliate of Tenant,
such assignee or subtenant shall cease to be an Affiliate of Tenant, then Tenant
shall obtain Landlord’s consent to such assignment or subletting pursuant to
this Article 16 in the same manner as if the assignee or subtenant, as the case
may be, were not an Affiliate of Tenant, and if Landlord declines to consent to
such assignment or subletting in accordance with the provisions of this
Article 16, (x) in the event of an assignment of this Lease, Tenant shall, at
least three (3) days prior to the date such assignee shall cease to be an
Affiliate of Tenant, assign this Lease back to the Tenant named herein or to the
entity which was the Tenant immediately prior to such assignment to the
Affiliate of Tenant and (y) in the event of a sublease of all or any part of the
Premises, Tenant shall, within three (3) days prior to the date such subtenant
ceases to be an Affiliate of Tenant, terminate such sublease and, in either of
said cases, cause the assignee or subtenant, as the case may be, to vacate the
Space, and, with respect to any Space not constituting the entire Premises,
restore the Premises to the condition existing immediately prior to the
commencement of the sublease term, including any demolition of partitions and
doors erected or installed pursuant to Section 16.4.1(d) above and related
repair and restoration of the Premises.  Sections 16.2 and 16.5 shall not apply
to a sublease or assignment to an Affiliate of Tenant made pursuant to and in
accordance with this Section 16.7 (Tenant must, however, give not less than ten
(10) business days’ notice to Landlord of such sublease or assignment as
specified in this Section 16.7.1).

 

16.7.2     Provided that no Event of Default shall be continuing, Tenant may,
upon not less than ten (10) business days’ prior notice to Landlord (subject to
the last sentence of this Section), but without obtaining Landlord’s consent,
assign this Lease to any corporation or other entity into or with which Tenant
may be merged or consolidated or to which Tenant shall sell all or substantially
all of its assets (hereinafter referred to as a “Corporate Succession”),
provided that:  (i) the transferee shall have acquired all or substantially all
of the assets of Tenant and assumed all or substantially all of the liabilities
of Tenant and shall have a tangible net worth (computed in accordance with
generally accepted accounting principles) equal to or greater than the tangible
net worth of Tenant immediately prior to such transfer (and certified financial
statements evidencing the same or other proof thereof in form and substance
reasonably satisfactory to Landlord shall have been furnished to Landlord at the
time at which Tenant shall give Landlord notice of such proposed transfer),
(ii) the transferee shall continue to use the Premises for the Use and for no
other use, (iii) the principal purpose of the Corporate Succession shall not be
the acquisition of Tenant’s interest in this Lease and (iv) the transferee shall
have assumed all of the obligations of Tenant under this Lease and a duly
executed and acknowledged duplicate original counterpart of such assumption
agreement shall have been given to Landlord not later than ten (10) days after
the effective date thereof.  Any assignment effected in accordance with the
provisions of this Section 16.7 shall be subject to all of the provisions of
this Section 16 (including, without limitation, Section 16.4) other than
Sections 16.2 and 16.5.  Tenant must, however, give not less than ten
(10) business days’ notice to Landlord of such Corporate Succession as specified
in this Sections 16.7.2, unless such advance notice is in violation of any
applicable Laws, in which case Tenant shall notify Landlord thereof promptly
following the consummation of such Corporate Succession, which notice, in any
case, shall include a reasonably detailed description of the Corporate
Succession, including relevant organizational carts and transaction documents.

 

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16.7.3     As used in this Section 16.7, the term “Affiliate of Tenant” shall
mean any person, corporation or other entity controlling, controlled by or under
common control with, Tenant or in which Tenant shall own at least fifty-one
(51%) percent of the voting interests (for purposes of this definition, the word
“control” and its related terms, including “controlling,” “controlled by” and
“under common control with,” shall mean the possession of the power to direct or
cause the direction of the management and policies of a person or entity,
whether through the ownership of voting securities, by contract, or otherwise).

 

16.7.4     Provided that no Event of Default shall be continuing, Tenant may,
upon not less than ten (10) days’ prior notice to Landlord, and without being
subject to the right of recapture as provided in paragraph 16.2(b) hereof and
profit sharing as provided in paragraph 16.5.1 hereof, to permit certain
consultants, strategic partners or other professionals (collectively, “Desk
Sharing Entities”) to occupy desk space in the Premises (not to exceed ten (10%)
percent of the rentable square footage comprising the Premises, in the
aggregate) for reasonable periods of time, and for the Permitted Use only,
provided that such Desk Sharing Entities have an ongoing business relationship
with Tenant and shall not have any rights hereunder except to occupy desk space;
such occupancy shall not create a landlord/tenant relationship or any privity
with the Landlord; and, Tenant receives no material rent or compensation. 
Neither Tenant nor any Desk Sharing Entities shall be allowed to construct any
demising walls or perform any other Alterations in connection with the Desk
Sharing Entities’ use or occupancy of the Premises.

 

16.8                        Effect of Transfers

 

16.8.1     No subletting or assignment shall release Tenant from any of its
obligations under this Lease, and, in the event of a permitted assignment or
other transfer (other than a sublease), the assignee or transferee shall be
deemed to have assumed all of Tenant’s obligations under this Lease and shall be
jointly and severally liable with Tenant for all of the obligations of the
Tenant under this Lease.  Consent to one assignment or subletting shall not be
deemed a consent to any subsequent assignment or subletting.  In the event of
any default by any assignee or subtenant or any successor of Tenant in the
performance of any Lease obligation, Landlord may proceed directly against
Tenant without exhausting remedies against such assignee, subtenant or
successor.  Any act or omission of an assignee or subtenant or any person
claiming under or through any of them that violates this Lease shall be deemed a
violation of this Lease by Tenant.  If this Lease shall be assigned or if the
Premises shall be sublet or occupied by anyone other than Tenant, whether or not
in violation of the provisions of this Lease, then Landlord may collect from the
assignee or transferee or, after an Event of Default shall have occurred, from
the subtenant, and Tenant hereby authorizes and directs such party to pay to
Landlord, all rent (whether or not denominated as Base Rent, Additional Rent or
otherwise), additional rent and other charges payable pursuant to such
instrument, with the net amount so collected applied to the Base Rent,
Additional Rent and other charges payable under this Lease, but no such
acceptance of rent by Landlord from any person other than Tenant shall be deemed
a waiver by Landlord of any provision of this Article 16 or an acceptance by
Landlord of the assignee, transferee or subtenant as a tenant, or a release of
Tenant from the further performance of the covenants and agreements to be
performed by Tenant under this Lease.

 

16.8.2     The voluntary or other surrender of this Lease by Tenant or the
cancellation of this Lease by mutual agreement of Tenant and Landlord shall not
work a merger at Landlord’s option and, upon any termination of this Lease prior
to the date fixed as the Expiration Date for any reason, or any re-entry or
repossession of the Premises by Landlord under this Lease or any surrender of
the Premises with Landlord’s written consent, Landlord shall have the right, at
Landlord’s option, to take over all of the right, title and interest of Tenant,
as sublessor, in and to

 

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any and all subleases or such of them as Landlord shall elect to take over and
assume at the time of such recovery of possession or termination.  In such
event, Tenant shall, upon the request of Landlord, execute, acknowledge and
deliver to Landlord such further assignments and transfers as may be necessary
to vest in Landlord the then existing subleases and sublettings.  If Landlord
shall choose to take over any such sublease as provided above, such election
shall be exercised by notice to all known subtenants in the Premises and such
subtenants shall (a) be deemed to have waived any right to surrender possession
of the sublease space or to terminate the sublease, (b) be bound to Landlord for
the balance of the term of the sublease and (c) attorn directly to Landlord
under all of the executory terms of this Lease, except that the rent shall be
payable at the rates set forth in the sublease and except that Landlord shall
not be (i) liable for any previous act, omission or negligence of Tenant,
(ii) subject to any credit, claim, defense or offset which may have previously
accrued to the subtenant against Tenant, (iii) be bound by any previous
modification or amendment of the sublease made without Landlord’s prior consent
or by any previous prepayment of more than one month’s rent, (iv) be obligated
to perform any repairs or other work beyond Landlord’s obligations under this
Lease or (v) liable for the return of any security deposit except to the extent
such sums have actually been paid over to Landlord.  No further instruments
shall be required to give effect to this provision, but upon the request of
Landlord, Tenant shall execute and deliver such instruments to Landlord as
Landlord shall reasonably request to confirm the foregoing provisions and each
subtenant shall execute and deliver such instruments as Landlord may reasonably
request to evidence said attornment.

 

16.9                        Miscellaneous

 

16.9.1     Landlord’s consent to an assignment or a sublease shall not
constitute Landlord’s consent to any other or further assignment of this Lease
or to any further subletting of all or part of the Premises by Tenant or anyone
claiming through Tenant (or to the assignment of any sublease) and shall not
relieve Tenant from obtaining the prior written consent of Landlord to any
future assignment or sublease and otherwise complying with all of the provisions
of this Article 16.

 

16.9.2     Any modification of a sublease that extends the term of the sublease,
increases or decreases the size of the sublet premises or affects otherwise any
other material term of the sublease to which Landlord shall have consented shall
constitute a new sublease subject to the provisions of this Article 16.

 

16.9.3     Tenant shall pay to Landlord, as Additional Rent, within thirty (30)
days after demand, all reasonable out-of-pocket costs incurred by Landlord
(including reasonable legal fees and disbursements and the costs of making any
investigations as to the acceptability of any proposed assignee or subtenant and
preparing any documentation evidencing Landlord’s consent, if applicable) in
connection with a request by Tenant that Landlord consent to any proposed
assignment or sublease.

 

16.9.4     In the event of any permitted assignment of Tenant’s interest in this
Lease, the terms, covenants and conditions of this Lease may be changed, altered
or modified in any manner whatsoever by Landlord and the assignee without the
consent thereto of assignor Tenant, and no such change, alteration or
modification shall release assignor Tenant from the performance by it of any of
the terms, covenants and conditions on its part to be performed under this
Lease.

 

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17.                               PERSONAL PROPERTY

 

17.1                        Removal

 

All personal property, trade fixtures and furnishings installed in the Premises
by Tenant at Tenant’s cost, (as distinct from leasehold improvements) (a) may be
removed from the Premises from time to time in the ordinary course of Tenant’s
business or in the course of making any Alterations to the Premises permitted
under Section 10.1, and (b) shall be removed by Tenant at the end of the Term in
accordance with Section 3.4.  Tenant shall promptly repair, at its expense, any
damage to the Building resulting from the installation or removal of Tenant’s
personal property in or from the Premises.

 

17.2                        Responsibility

 

Tenant shall be solely responsible for all costs and expenses related to
personal property used or stored in the Premises.  Tenant shall pay any taxes or
other governmental impositions levied upon or assessed against such personal
property, or upon Tenant for the ownership or use of such personal property, on
or before the due date for payment.

 

18.                               ESTOPPEL CERTIFICATES

 

18.1                        Tenant shall, at any time and from time to time,
within 20 days after request by Landlord, execute, acknowledge and deliver to
Landlord a certificate indicating any or all of the following to the extent
accurate at such time:  (a) the Commencement Date, the Rent Commencement Date
and the Expiration Date; (b) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that this Lease is in full force
and effect, as modified, and stating the date and nature of each modification);
(c) the date, if any, through which Base Rent, Additional Rent and any other
Rent payable have been paid; (d) that, to Tenant’s knowledge, no default by
Landlord or Tenant exists which has not been cured, except as to defaults stated
in such certificate; (f) provided such events have occurred, that Tenant has
accepted the Premises and that all improvements required to be made to the
Premises by Landlord, including Landlord’s Work, have been completed according
to this Lease; (g) that, except as specifically stated in such certificate,
Tenant, and only Tenant, currently occupies the Premises; and (h) such other
factual matters as may be reasonably requested by Landlord, a prospective
purchaser or present or prospective mortgagee, deed of trust beneficiary or
ground lessor of all or a portion of the Building.  Any such certificate may be
relied upon by Landlord and any prospective purchaser or present or prospective
mortgagee, deed of trust beneficiary or ground lessor of all or a portion of the
Building.

 

18.2                        Landlord shall, within twenty (20) days after
Tenant’s request, but no more than once in any twelve (12) month period,
execute, acknowledge and deliver to Tenant a certificate indicating any or all
of the following to the extent accurate at such time:  (a) the Commencement
Date, the Rent Commencement Date and the Expiration Date; (b) that this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that this Lease is in full force and effect, as modified, and stating the date
and nature of each modification); (c) the date, if any, through which Base Rent,
Additional Rent and any other Rent payable have been paid; and (d) that no
default by Tenant or, to Landlord’s knowledge, Landlord exists which has not
been cured, except as to defaults stated in such certificate.  Any such
certificate may be relied upon only by Tenant or its prospective lenders or
prospective transferees (provided that nothing herein shall be deemed to permit
any such lending or transfer in contravention of Article 16 hereof).

 

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19.                               TRANSFER OF LANDLORD’S INTEREST; LIMITATIONS
ON LANDLORD’S LIABILITY

 

19.1                        Sale, Conveyance and Assignment

 

Nothing in this Lease shall be construed to restrict Landlord’s right to sell,
convey, assign or otherwise deal with the Building or Landlord’s interest under
this Lease.

 

19.2                        Effect of Sale, Conveyance or Assignment

 

The term “Landlord” as used in this Lease shall mean the Landlord at the
particular time in question, and a sale, conveyance or assignment of the
Building or Landlord’s interest therein shall automatically release Landlord
from liability under this Lease, and from and after the effective date of the
transfer Tenant shall look solely to Landlord’s transferee for performance of
Landlord’s obligations under this Lease, it being understood that from and after
the date of such transfer, the term “Landlord” shall only mean the transferee
and the covenants and agreements of Landlord shall thereafter be binding upon
such transferee.

 

19.3                        Limitations on Landlord’s Liability

 

Any liability for damages, breach or nonperformance of this Lease by Landlord,
or arising out of the subject matter of, or the relationship created by, this
Lease, shall be collectible only out of Landlord’s interest in the Building and
the rent and other proceeds thereof, and no personal liability has been assumed
by, or shall at any time be asserted against, Landlord, its parent and
affiliated corporations, its and their principals, partners, members,
shareholders, venturers, directors, officers, agents, servants and employees, or
any of its or their successors or assigns, and Tenant shall not enforce any
judgment or other judicial decree requiring the payment of money by Landlord
against any other property or assets of Landlord, and at no time shall any other
property or assets of Landlord or any of the aforesaid parties be subject to
levy, execution, attachment or other enforcement procedure; all such liability,
if any, being expressly waived and released by Tenant.  Notwithstanding anything
to the contrary contained in this Lease, to the full extent permitted by law, in
no event shall Landlord or Tenant be liable for any consequential, special or
punitive damages arising out of any breach or default in the performance or
observance of any of the terms, covenants or conditions to be observed or
performed by Landlord or Tenant, as the case may be, under this Lease, subject,
nevertheless, to Section 3.5 of this Lease respecting a holdover by Tenant.

 

20.                               RULES AND REGULATIONS

 

Tenant shall faithfully observe and comply with the Rules and Regulations set
forth in Exhibit G attached hereto and with all reasonable modifications and
additions to such Rules and Regulations (which shall be applicable to all
Building tenants) from time to time adopted by Landlord and of which Tenant is
notified in writing, provided that no such modifications or additions shall
increase Tenant’s obligations or reduce Tenant’s right’s hereunder in any
material respect.  If there shall be any conflict between the Rules and
Regulations or any such modification or addition and any right expressly granted
to Tenant under this Lease, the provisions of this Lease shall control. 
Landlord’s enforcement of the Rules and Regulations shall be nondiscriminatory
against Tenant as against other tenants of the Building, but Landlord shall have
no liability to Tenant for the failure of any person to comply with the
Rules and Regulations.

 

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21.                               DEFAULT AND REMEDIES

 

21.1                        Events of Default

 

If any one or more of the following events (individually an “Event of Default”
and collectively an “Events of Default”) shall occur:

 

(a)           Tenant shall fail to pay to Landlord the full amount of any Base
Rent or Additional Rent, or any other Rent payable under this Lease by Tenant to
Landlord, on or before the date upon which the same shall first become due and
such failure shall continue for more than five (5) business days after Landlord
shall have given Tenant written notice thereof; or

 

(b)           Tenant shall do anything or permit anything to be done, whether by
action or inaction, in breach of any covenant, agreement, term, provision or
condition of this Lease, or any Exhibit annexed hereto, on the part of Tenant to
be kept, observed or performed (other than a breach of the type referred to in
clause 21.1(a) above), and such breach shall continue and shall not be fully
remedied by Tenant within thirty (30) days after Landlord shall have given to
Tenant a notice specifying the same, except in connection with a breach which
cannot be remedied or cured within said thirty (30) day period, in which event
the time of Tenant within which to cure such breach shall be extended for such
time as shall be reasonably necessary to cure the same, but only if Tenant,
within such initial thirty (30) day period, shall promptly commence and
thereafter proceed diligently and continuously to cure such breach, and provided
further that such period of time shall not be so extended as to jeopardize the
interest of Landlord in the Land and/or the Building or so as to subject
Landlord to any liability, civil or criminal, provided however, that if such
breach or noncompliance which cannot be remedied or cured within said thirty
(30) day period shall cause or result in (i) a dangerous condition in the
Premises or Building, (ii) any insurance coverage carried by Tenant or Landlord
with respect to the Premises or Building being jeopardized or (iii) a material
disturbance to another tenant, then an Event of Default shall exist if such
breach or noncompliance shall not be cured as soon as reasonably practicable
after notice from Landlord to Tenant, and in any event within forty five (45)
days after such notice shall have been given by Landlord to Tenant; or

 

(c)           Reserved

 

(d)           If Tenant or any guarantor of this Lease (referred to herein as a
“guarantor”) shall commence or institute any case, proceeding or other action
(i) seeking relief on its behalf as debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts under any existing or future Law of any jurisdiction, relating to
bankruptcy, insolvency, reorganization or relief of debtors, or (ii) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for any part of its property; or

 

(e)           If Tenant or any guarantor shall make a general assignment for the
benefit of creditors; or

 

(f)            If any case, proceeding or other action shall be commenced or
instituted against Tenant or any guarantor (i) seeking to have an order for
relief entered against Tenant or any guarantor, as applicable, as debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts under any existing or future Law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (ii)

 

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seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any part of its property, which (x) results in any such
entry of an order for relief, adjudication of bankruptcy or insolvency or such
an appointment or the issuance or entry of any other order having a similar
effect, or (y) is not contested, in good faith, by Tenant or any guarantor, as
applicable, within 14 days of the date such case, proceeding or other action is
instituted (or such shorter time period as may be prescribed by local bankruptcy
rule, the bankruptcy court or other applicable law) or (z) is not dismissed
within 90 days;

 

then, upon the occurrence of any of said events set forth in (a) through
(f) above, Landlord may at any time thereafter give to Tenant a notice of
termination of the Term of this Lease setting forth a termination date five
(5) days after the date of the giving of such notice, and, upon the giving of
such notice, this Lease and the term and estate hereby granted (whether or not
the Term shall theretofore have commenced) shall expire and terminate upon the
expiration of said five (5) days with the same effect as if that day were the
date hereinbefore set for the expiration of the Term of this Lease, but Tenant
shall remain liable for damages as provided in Section 21.3 below.

 

21.2                        Landlord’s Remedies

 

21.2.1     If an Event of Default shall have occurred, Landlord and/or
Landlord’s agents and servants, whether or not the Term of this Lease shall have
been terminated pursuant to Section 21.1, may, without further notice to Tenant
except as may be required by applicable Law, immediately or at any time
thereafter reenter into or upon the Premises or any part thereof, either by
summary dispossess proceedings or by any suitable action or proceeding at law,
or by force or otherwise, to the extent legally permitted, without being liable
to indictment, prosecution or damages therefor, and may repossess the same, and
may remove any persons or property therefrom, to the end that Landlord may have,
hold and enjoy the Premises again as and of its first estate and interest
therein.  The words “reenter” “reentry” and “reentered” as used in this Lease
are not restricted to their technical legal meanings.  In the event of any
termination of this Lease under the provisions of Section 21.1, or in the event
that Landlord shall reenter the Premises under the provisions of Section 21.2,
or in the event of the termination of this Lease (or of reentry) by or under any
summary dispossess or other proceeding or action or any provision of law, Tenant
shall thereupon pay to Landlord the Base Rent, Additional Rent and any other
charges payable hereunder by Tenant to Landlord up to the time of such
termination of this Lease, or of such recovery of possession of the Premises by
Landlord, as the case may be, plus the expenses incurred or paid by Landlord in
terminating this Lease or of reentering the Premises and securing possession
thereof, including reasonable attorneys’ fees and costs of removal and storage
of Tenant’s property, and Tenant shall also pay to Landlord damages as provided
in Section 21.3 below.

 

21.2.2     In the event of the reentry into the Premises by Landlord under the
provisions of this Section 21.2, and if this Lease shall not be terminated,
Landlord may (but shall have absolutely no obligation to do so), not in
Landlord’s own name, but as agent for Tenant, relet the whole or any part of the
Premises for any period equal to or greater or less than the remainder of the
original term of this Lease, for any sum which Landlord may deem suitable,
including rent concessions, and for any use and purpose which Landlord may deem
appropriate.  Such reletting may include any improvements, personalty and trade
fixtures remaining in the Premises.

 

21.2.3     In the event of a breach or threatened breach on the part of Tenant
with respect to any of the covenants, agreements, terms, provisions or
conditions on the part of or on behalf of Tenant to be kept, observed or
performed, Landlord shall also have the right of injunction.

 

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21.2.4     In the event of (i) the termination of this Lease under the
provisions of this Article 21, or (ii) the reentry of the Premises by Landlord
under the provisions of this Section 21.2, or (iii) the termination of this
Lease (or reentry) by or under any summary dispossess or other proceeding or
action or any provision of law by reason of default hereunder on the part of
Tenant, Landlord shall be entitled to retain all monies, if any, paid by Tenant
to Landlord, whether as advance rent, security deposit or otherwise, but such
monies shall be credited by Landlord against any Base Rent, Additional Rent or
any other Rent due from Tenant at the time of such termination or reentry or, at
Landlord’s option, against any damages payable by Tenant under Section 21.3 or
pursuant to law.

 

21.2.5     The specified remedies to which Landlord may resort under this Lease
are cumulative and concurrent and are not intended to be exclusive of each other
or of any other remedies or means of redress to which Landlord may lawfully be
entitled at any time, and Landlord may invoke any remedy allowed under this
Lease or at law or in equity as if specific remedies were not herein provided
for, and the exercise by Landlord of any one or more of the remedies allowed
under this Lease or in law or in equity shall not preclude the simultaneous or
later exercise by the Landlord of any or all other remedies allowed under this
Lease or in law or in equity.

 

21.3                        Damages

 

21.3.1     In the event of any termination of this Lease under the provisions
hereof or under any summary dispossess or other proceeding or action or any
provision of law, or in the event that Landlord shall reenter the Premises under
the provisions of this Lease, Tenant shall pay to Landlord as damages, at the
election of Landlord, either:

 

(a)           a sum which at the time of such termination of this Lease or at
the time of any such reentry by Landlord, as the case may be, represents the
then value of the excess, if any, of (i) the aggregate of the installments of
Base Rent and the Additional Rent which would have been payable hereunder by
Tenant, had this Lease not so terminated or had Landlord not reentered the
Premises, for the period commencing with such earlier termination of this Lease
or the date of any such reentry, as the case may be, and ending with the date
set forth initially for the expiration of the full Term of this Lease pursuant
to Article 1, over (ii) the aggregate fair market rental value of the Premises
for the same period (the amounts of each of clauses (i) and (ii) being first
discounted to present value at an annual rate of three percent (3%)); or

 

(b)           sums equal to the aggregate of the installments of Base Rent and
Additional Rent which would have been payable by Tenant had this Lease not so
terminated, or had Landlord not so reentered the Premises, payable upon the due
dates therefor specified herein following such termination or such reentry and
until the Expiration Date originally set forth in this Lease for the expiration
of the Term; provided, however, that if Landlord shall relet the Premises during
said period, 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
reentering the Premises and of securing possession thereof, including reasonable
attorneys’ fees and costs of removal and storage of Tenant’s property, as well
as the expenses of reletting, including repairing, restoring and improving the
Premises for new tenants, brokers’ commissions, advertising costs, reasonable
attorneys’ fees, and all other similar or dissimilar expenses chargeable against
the Premises and the rental therefrom in connection with such reletting, it
being understood that such reletting may be for a period equal to or shorter or
longer than the remaining term of this Lease; provided further, that (1) in no
event

 

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shall Tenant be entitled to receive any excess of such net rents over the sums
payable by Tenant to Landlord hereunder, (2) in no event shall Tenant be
entitled in any suit for the collection of damages pursuant to this Subdivision
(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 prior to the
commencement of such suit, and (3) if the Premises or any part thereof should be
relet in combination with other space, then proper apportionment on a square
foot area basis shall be made of the rent received from such reletting and of
the expenses of reletting, or if relet for a period longer than the remaining
Term of this Lease, the expenses of reletting shall be apportioned based on the
respective periods.

 

21.3.2     For the purposes of Section (a)(i) of Section 21.3.1, the amount of
Additional Rent which would have been payable by Tenant under Articles 4, 7, 8
and 30 for each year ending after such termination of this Lease or such
reentry, shall be deemed to be an amount equal to the amount of such Additional
Rent payable by Tenant for the Fiscal Year and Tax Year ending immediately
preceding such termination of this Lease or such reentry.  Suit or suits for the
recovery of such damages, or any installments thereof, may be brought by
Landlord from time to time at Landlord’s election, and nothing contained herein
shall be deemed to require Landlord to postpone suit until the date when the
term of this Lease would have expired if it had not been terminated under the
provisions of this Article 21, or under any provision of law, or had Landlord
not reentered the Premises.

 

21.4                        Miscellaneous

 

21.4.1     Nothing contained in this Article 21 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 under this Lease on the part of
Tenant.  The failure or refusal of Landlord to relet the Premises or any part or
parts thereof, or the failure of Landlord to collect the rent thereof under any
reletting, shall not release or affect Tenant’s liability for damages.

 

21.4.2     Tenant, for Tenant, and on behalf of any and all persons claiming
through or under Tenant, including creditors of all kinds, does hereby waive and
surrender all right and privilege which they or any of them might have under or
by reason of any present or future law to redeem the Premises, or to have a
continuance of this Lease for the term hereby demised, after Tenant shall be
dispossessed or ejected therefrom by process of law or under the terms of this
Lease or after the expiration or termination of this Lease as herein provided or
pursuant to law.  Tenant also waives the provisions of any law relating to
notice and/or delay in levy of execution in case of an eviction or dispossess of
a tenant for non-payment of rent, and of any other law of like import now or
hereafter in effect.  In the event that Landlord shall commence any summary
proceeding for non-payment of rent or for holding over after the termination of
this Lease, Tenant shall not, and hereby expressly waives any right to,
interpose any counterclaim of whatever nature or description in any such
proceeding, except to the extent that by failing to interpose such counterclaim
Tenant would be barred from asserting such counterclaim in a separate action or
proceeding.

 

21.4.3     If Landlord shall commence any action or summary proceeding against
Tenant, Tenant shall reimburse Landlord, as Additional Rent, Landlord’s
attorneys’ fees and expenses, both if judgment is awarded for Landlord, or if
Landlord accepts the payment subsequent to service of process but prior to entry
of judgment.

 

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21.4.4     Nothing contained in this Lease shall limit or prejudice Landlord’s
right to prove and obtain as liquidated damages in any bankruptcy, insolvency,
receivership, reorganization or dissolution proceeding, an amount equal to the
maximum allowable by any Laws governing such proceeding in effect at the time
when such damages are to be proved, whether or not such amount be greater, equal
to or less than the amounts recoverable, either as damages or Rent, under this
Lease.

21.4.5     Upon the occurrence of an Event of Default, Landlord shall be
entitled to exercise all of the rights set forth in this Article 21 above
(including the right to terminate this Lease), notwithstanding that this Lease
provides that Landlord may cure the default or otherwise perform the obligation
of Tenant which gave rise to such Event of Default, and regardless of whether
Landlord shall have effected such cure or performed such obligation.

 

21.4.6     The failure of Landlord to enforce Landlord’s rights for violation
of, or to insist upon the strict performance of any covenant, agreement, term,
provision or condition of this Lease, or any of the rules and regulations, shall
not constitute a waiver thereof, and Landlord shall have all remedies provided
herein and by applicable law with respect to any subsequent act which would have
originally constituted a violation.  The receipt by Landlord of Base Rent,
Additional Rent and/or Rent with knowledge of the breach of any covenant,
agreement or condition of this Lease shall not be deemed a waiver of such
breach.

 

21.4.7     The provisions of this Article 21 shall survive the expiration or
sooner termination of this Lease.

 

21.5                        Landlord’s Right To Cure

 

Landlord may, but shall not be obligated to, cure any default by Tenant under
this Lease at any time after notice and the lapse of any cure period specified
within the conditional limitation to which such default relates, without giving
further notice and without waiving its remedies with respect to such default;
provided, however, that Landlord may cure any default by Tenant under this Lease
without notice to Tenant or opportunity to cure in the case of (i) actual or
suspected emergency or a dangerous condition in the Premises or the Building,
(ii) Landlord’s interest in the Land and/or the Building being jeopardized or
Landlord’s being subject to any liability, civil or criminal, (iii) any
insurance coverage carried by Tenant or Landlord with respect to the Premises or
the Building being jeopardized or (iv) any other provision of this Lease
permitting Landlord to cure a default of Tenant under such provision, in which
case such notice and cure period as shall be specified in such provision shall
control and the notice and cure period under Section 21.1 shall not be required
to be given.  Whenever Landlord so elects, all costs and expenses incurred by
Landlord in curing any such default, including reasonable attorney’s fees and
disbursements, together with interest at the lower of five percent (5%) above
the then-current Prime Rate or the highest rate permitted by law on the amount
of the costs and expenses so incurred commencing on the date such costs and
expenses are paid by Landlord, shall be paid by Tenant to Landlord as Additional
Rent within fifteen (15) days after demand.

 

22.                               ENFORCEMENT OF REASONABLE CONSENT

 

Tenant hereby waives any claim against Landlord which it may have based upon any
assertion that Landlord has unreasonably withheld or unreasonably delayed any
consent or approval that, pursuant to the terms of this Lease, is not to be
unreasonably withheld by Landlord and Tenant agrees that its sole remedy (unless
it is determined by a court of competent jurisdiction that Landlord acted
maliciously in withholding or delaying its consent or approval) shall be either
(a)

 

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an action or proceeding to enforce any such provision or for specific
performance, injunction or declaratory judgment or (b) settling such dispute
pursuant to the expedited arbitration procedure set forth in Article 31 below. 
In the event of such a determination, the requested consent or approval shall be
deemed to have been granted; provided, however, that Landlord shall have no
liability to Tenant for its refusal or failure to give such consent or approval
and the sole remedy for Landlord’s unreasonably withholding or delaying of
consent or approval shall be as provided in this Section (unless it is
determined by a court of competent jurisdiction that Landlord acted maliciously
in withholding or delaying its consent or approval).

 

23.          SECURITY DEPOSIT

 

23.1                        Letter of Credit

 

23.1.1     Upon the execution of this Lease, Tenant shall deliver to Landlord a
clean, irrevocable, transferable and unconditional letter of credit (the “Letter
of Credit”) issued by and drawn upon a commercial bank (hereinafter referred to
as the “Issuing Bank”) which shall be a member bank of the New York
Clearinghouse Association or any successor thereto (or, in the alternative,
which shall have offices for banking purposes in the Borough of Manhattan and
shall have a net worth of not less than $1,000,000,000, with appropriate
evidence thereof to be submitted by Tenant), which Letter of Credit shall: 
(i) have a term of not less than one year, (ii) be in form of Exhibit H annexed
hereto and made a part hereof, (iii) be for the account of Landlord, (iv) be in
the amount of the Security Deposit, (v) except as otherwise provided in this
Section 23.1.1, conform and be subject to International Standby Practices
(1998), International Chamber of Commerce Publication No. 590, (vi) be fully
transferable by Landlord without any fees or charges therefor (except for any
such administrative charges for which Tenant shall reimburse Landlord),
(vii) provide that Landlord shall be entitled to draw upon the Letter of Credit
upon presentation to the Issuing Bank of a sight draft only, and (viii) provide
that the Letter of Credit shall be deemed automatically renewed, without
amendment, for consecutive periods of one year each year thereafter during the
Term of this Lease, with the final expiry date being sixty (60) days after
expiration of the Lease, unless the Issuing Bank shall send notice (the
“Non-Renewal Notice”) to Landlord by registered mail, return receipt requested,
not less than sixty (60) days next preceding the then expiration date of the
Letter of Credit that the Issuing Bank elects not to renew such Letter of
Credit, in which case Landlord shall have the right, by sight draft on the
Issuing Bank, to receive the monies represented by the then existing Letter of
Credit, and to hold and/or disburse such proceeds pursuant to the terms of this
Section 23 as cash security.  All references to the “Security Deposit” in this
Article 23 shall be deemed to refer to the Letter of Credit, or any proceeds
thereof as may be drawn upon by Landlord.  Tenant acknowledges and agrees that
the Letter of Credit (or any cash Security Deposit, as applicable) shall be
delivered to Landlord as security for the faithful performance and observance by
Tenant of all of the covenants, agreements, terms, provisions and conditions of
this Lease, and that Landlord shall have the right to draw upon the entire
Letter of Credit in any instance in which Landlord would have the right to use,
apply or retain the whole or any part of any cash security deposited with
Landlord pursuant to this Section 23.

 

23.1.2     The Issuing Bank shall (a) be insured by the Federal Deposit
Insurance Corporation (b) have long-term, unsecured and unsubordinated debt
obligations rated in the highest category by at least two of Fitch Ratings Ltd.
(“Fitch”), Moody’s Investor’s Services, Inc. (“Moody’s”) and Standard and Poor’s
Ratings Services (“S&P”) or their respective successors (the “Rating Agencies”)
(which shall mean AAA from Fitch, Aaa from Moody’s and AAA from S&P) and
(c) have a short term deposit rating in the highest category from at least two
Rating Agencies (which shall mean F1 from Fitch, P-1 from Moody’s and A-1 from
S&P) (collectively,

 

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the “LC Issuer Requirements”).  If (A) at any time the LC Issuer Requirements
are not met, or if the financial condition of the Issuing Bank changes in any
other materially adverse way, as determined by Landlord in its sole discretion
or (B) the Issuing Bank is insolvent or is placed into receivership or
conservatorship by the Federal Deposit Insurance Corporation, or any successor
or similar entity, or if a trustee, receiver or liquidator is appointed for the
issuer, then Tenant shall in either case within ten (10) business days’ written
notice from Landlord, deliver to Landlord a replacement Letter of Credit which
otherwise meets the requirements of this Lease and the LC Issuer Requirements,
and Tenant’s failure to do so shall, notwithstanding anything in this Lease to
the contrary, constitute an Event of Default for which there shall be no notice
or cure periods being applicable thereto other than the aforesaid ten
(10) business day period.  Among all other rights available to it at law or in
equity, in the case of (A) above, Landlord shall have the right to immediately,
and without further notice to Tenant, draw the entire Letter of Credit and to
hold the proceeds thereof, and in the case of (B) above, Landlord shall have the
right to require Tenant, within such ten (10) business day period, to deliver
the Security Deposit in the form of cash.

 

23.1.3     On the fifth (5th) anniversary of the Rent Commencement Date, and
upon the condition that (i) an Event of Default shall not then exist and be
continuing, (ii) no Event of Default shall have occurred during the Term,
(iii) Tenant shall never have been late in the payment of any Base Rent or
Additional Rent beyond the applicable notice and grace period provided herein,
if any, and (iv) Tenant shall then have a market capitalization, as reported by
NASDAQ and as certified by Tenant’s chief financial officer, equal to or in
excess of $250,000,000.00, then the Security Deposit shall be reduced to
$614,684.32.  In such event, Tenant shall provide a replacement Letter of Credit
complying with this Section in the amount of $614,684.32 to Landlord (in which
case Landlord shall, simultaneously with Tenant’s delivery of such replacement
Letter of Credit, return the original Letter of Credit to Tenant) or deliver an
amendment to the Letter of Credit, pursuant to which the amount of the Letter of
Credit shall be reduced to $614,684.32 and Landlord agrees that Landlord shall
execute any such amendment and any other documentation reasonably required in
connection therewith by the Issuing Bank, all at no cost, expense or additional
liability to Landlord.  In the instance of such reduction, Landlord agrees to
reasonably comply with requests from Tenant or the Issuing Bank in obtaining a
replacement Letter of Credit, at no cost or expense to Landlord, which
replacement Letter of credit shall comply with this Article 23.  If, at any time
after the Security Deposit shall be reduced as provided above, (x) an Event of
Default shall occur or (y) Tenant’s market capitalization, determined as
provided above, shall fall below $250,000,000, then, subject to the following
cure right in the case of clause (y) only, Landlord shall have the right to
demand that the Security Deposit be immediately restored to its original full
amount (i.e., $922,026.50) for the balance of the Term as if such reduction
shall have never occurred, and Tenant shall so comply; provided, however, that,
in the event Landlord shall have demanded that the Security Deposit be restored
to its original full amount as a result of Tenant’s non-compliance with clause
(y) only (and not as a result of Tenant’s non-compliance with clause (x)), then
Tenant shall have the right to again seek a reduction of the Letter of Credit
(as so restored) to $614,684.32 on the condition that Tenant’s market
capitalization, determined as provided above, shall equal or exceed $250,000,000
and remain at or above such level for at least ninety (90) consecutive days,
subject, nevertheless, to Landlord’s continuing right to demand restoration of
the Security Deposit to its original full amount in accordance with the
immediately preceding sentence.

 

23.2                        Use and Restoration

 

Upon the occurrence of an Event of Default, Landlord may, at its option, use,
apply or retain all or any part of the Security Deposit for the payment of
(1) any Rent in arrears or any other sums of which Tenant shall be in default,
(2) any expenses Landlord may incur in compliance with the

 

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provisions of this Lease as a direct or indirect result of Tenant’s failure to
perform any of Tenant’s obligations under this Lease, and (3) to the extent
Landlord is entitled thereto pursuant to the provisions of this Lease, any other
losses or damages Landlord may suffer as a direct or indirect result of Tenant’s
failure to perform any of Tenant’s obligations under this Lease, including,
without limitation, any damages or deficiency in the reletting of the Premises,
whether such damages or deficiency accrued before or after summary proceedings
or other re-entry by Landlord.  Landlord shall not be required to use, apply or
retain the whole or any part of the Security Deposit, but if Landlord shall use
or apply all or any portion of the Security Deposit, Tenant shall, within ten
(10) business days after demand, deposit with Landlord a sum sufficient to
restore the Security Deposit to the amount held by Landlord immediately prior to
such use or application.  Tenant’s failure to so restore the Security Deposit
shall constitute an Event of Default.

 

23.3                        Transfers

 

Tenant shall not assign or encumber the Security Deposit without Landlord’s
express written consent.  Neither Landlord nor its successors or assigns shall
be bound by any assignment or encumbrance unless Landlord has given its
consent.  Landlord shall have the right, at any time and from time to time, at
no cost to Landlord, to transfer the Security Deposit to any purchaser or lessee
of the entire Building.  Upon any such transfer, Tenant agrees to look solely to
the new owner or lessee for the return of the Security Deposit.

 

23.4                        Refund

 

Provided that Tenant shall have fully and faithfully performed all of its
obligations under this Lease, Landlord shall refund the Security Deposit, or any
remaining balance, to Tenant or, at Landlord’s option, to the last assignee of
Tenant’s interest under this Lease, within thirty (30) days after the expiration
or earlier termination of the Term and Tenant’s vacation and surrender of
exclusive possession of the Premises to Landlord in the condition required by
the provisions of this Lease.  Landlord’s obligations under this Section 23.4
shall survive the expiration or earlier termination of the Term.

 

24.                               BROKERS

 

Landlord and Tenant represent and warrant to each other that it dealt with no
broker or agent who negotiated or was instrumental in negotiating or
consummating this Lease except Broker.  Neither party knows of any real estate
broker or agent who is or might be entitled to a commission or compensation in
connection with this Lease other than Broker.  Landlord shall pay all fees,
commissions or other compensation payable to Broker pursuant to a separate
agreement between Landlord and the Broker.  Tenant and Landlord shall indemnify
and hold each other harmless from all damages paid or incurred by the other
resulting from any claims asserted against the other party by brokers or agents
claiming through the indemnifying party.

 

25.                               SUBORDINATION

 

25.1                        Subordination

 

This Lease is and shall be subject and subordinate in all respects to any ground
lease, mortgage or deed of trust now or later encumbering the Land and/or the
Building, and to all their renewals, modifications, supplements, consolidations
and replacements (each, an “Encumbrance”).  Such subordination shall be
self-operative and shall occur automatically; nevertheless, Tenant agrees,

 

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upon request by and without cost to Landlord or any successor in interest, to
execute and deliver to Landlord or the holder of an Encumbrance such
instrument(s) as may be reasonably required by such Encumbrance holder to
evidence such subordination, on such Encumbrance holder’s standard form, within
ten (10) days after request by Landlord, subject to the following paragraph.  In
the alternative, however, the holder of an Encumbrance may unilaterally elect to
subordinate such Encumbrance to this Lease. Notwithstanding anything contained
herein to the contrary, the subordination of this Lease to any future
Encumbrance is and shall be conditioned upon Tenant and the holder of any such
Encumbrance entering into an SNDA (as hereinafter defined).

 

Landlord agrees to request, and use reasonable efforts to obtain an agreement
(an “SNDA”) from any future holder of an Encumbrance in recordable form and in
substance then customarily adopted by such Encumbrance holder, to the effect
that, in the event of any termination or foreclosure of an Encumbrance, so long
as Tenant is not in default in the payment of any Base Rent or Additional Rent
and so long as no Event of Default shall be continuing, (i) its rights as Tenant
under this Lease shall not be affected or terminated, (ii) Tenant’s possession
of the Premises shall not be disturbed, (iii) unless otherwise required by
applicable Laws, no action or proceeding shall be commenced against Tenant and
(iv) the Lease shall continue in full force and effect, all notwithstanding the
foreclosure or termination of any Encumbrance.  Tenant hereby agrees that making
one request to an Encumbrance holder in writing shall be deemed “reasonable
efforts” for purposes of this Section 25.1(b).

 

Landlord shall obtain an SNDA from Tenant’s existing lender, HSBC BANK USA,
N.A., on such lender’s standard form.

 

25.2                        Attornment

 

If the interest of Landlord is transferred to any person (a “Successor
Landlord”) by reason of the termination or foreclosure, or proceedings for
enforcement, of an Encumbrance, or by delivery of a deed in lieu of such
foreclosure or proceedings, Tenant shall, upon demand and at the election of
Successor Landlord, attorn to the Successor Landlord.  Upon attornment this
Lease shall continue in full force and effect as a direct lease between the
Successor Landlord and Tenant, upon all of the same terms, conditions and
covenants as stated in this Lease except that a Successor Landlord shall not be
(a) liable for any previous act or omission or negligence of Landlord under this
Lease, (b) subject to any counterclaim, defense or offset not expressly provided
for in this Lease and asserted with reasonable promptness, which therefore shall
have accrued to Tenant against Landlord, (c) bound by an previous modification
or amendment of this Lease or by any previous prepayment of more than one
month’s rent, unless such modification or prepayment shall have been approved in
writing by the holder of any Encumbrance through or by reason of which the
Successor Landlord shall have succeeded to the rights of Landlord under this
Lease or (d) obligated to perform any repairs or other work beyond Landlord’s
obligations under this Lease.  Tenant agrees, upon request by and without cost
to the Successor Landlord, to promptly execute and deliver to the Successor
Landlord such instrument(s) as may be reasonably required by Successor Landlord
to evidence such attornment.

 

25.3                        Cure by Encumbrance Holder

 

If any act or omission by Landlord shall give Tenant the right, immediately or
after the lapse of time, to cancel or terminate this Lease or to claim a partial
or total eviction, Tenant shall not exercise any such right until (a) it shall
have given written notice of such act or omission to each holder of any
Encumbrance and (b) a reasonable period for remedying such act or omission shall
have elapsed following such notice (which shall in no event be less than the
period to which

 

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Landlord would be entitled under this Lease to effect such remedy) provided such
holder of an Encumbrance shall, with reasonable diligence, give Tenant notice of
its intention to remedy such act or omission and shall commence and continue to
act upon such intention.

 

26.          NOTICES

 

All notices required or permitted under this Lease must be in writing and shall
only be deemed properly given and received (a) when actually given and received,
if delivered in person to a party who acknowledges receipt in writing; or
(b) one (1) business day after deposit with a private courier or overnight
delivery service, if such courier or service obtains a written acknowledgment of
receipt; or (c) three (3) business days after deposit in the United States
mails, certified or registered mail with return receipt requested and postage
prepaid or (d) when served in the same manner as a summons in a Supreme Court
action is then provided to be made under New York law.  All such notices must be
transmitted by one of the methods described above to, in the case of notices to
Landlord, both Landlord’s Building Address and Landlord’s General Address, and
in the case of notices to Tenant, to Tenant’s Notice Address, or, in either
case, at such other address(es) of which either party may notify the other in
accordance with the provisions of this Article 26 or otherwise at such
address(es) as shall be permitted under New York law for service of a summons in
a Supreme Court action.  Any notice given by the Building managing agent shall
be deemed effective as notice given by Landlord.

 

27.                               MISCELLANEOUS

 

27.1                        Binding Effect

 

Each of the provisions of this Lease shall bind and inure to the benefit of, as
the case may be, Landlord and Tenant, and their respective heirs, successors and
assigns, provided that this clause shall not be construed to permit any transfer
by Tenant in violation of the provisions of Article 16.

 

27.2                        Complete Agreement; Modification

 

All of the representations and obligations of the parties are contained in this
Lease. No modification, waiver or amendment of this Lease or of any of its
conditions or provisions shall be binding upon Landlord or Tenant unless the
same shall be in writing and shall be signed by the party against whom
enforcement shall be sought.

 

27.3                        Delivery for Examination

 

The submission of the form of this Lease for examination shall not bind Landlord
in any manner, and no obligations shall arise under this Lease until it shall be
signed and exchanged by Landlord and Tenant.

 

27.4                        No Air Rights; Obstructions of Light or View;
Closure

 

This Lease does not grant any easements or rights for light, air or view.  Any
diminution or blockage of light, air or view by any structure or condition now
or later erected shall not affect this Lease or impose any liability on
Landlord. If at any time any windows of the Building (including the Premises)
are temporarily darkened, or the light, air or view therefrom is obstructed
temporarily by reason of any repairs, improvements, maintenance or cleaning in
or about the Building or permanently by reason of a requirement of Law or the
construction of any

 

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structure that may be erected on lands in the vicinity of the Building, the same
shall be without liability to Landlord and without any reduction or diminution
of Tenant’s obligations under this Lease and shall not be deemed to constitute
an eviction.

 

27.5        Building Name

 

Tenant shall not, without Landlord’s consent, use Landlord’s or the Building’s
name, or any facsimile or reproduction of the Building, for any purpose; except
that Tenant may use the Building’s name in the address of the business to be
conducted by Tenant in the Premises.  Landlord reserves the right, upon
reasonable prior notice to Tenant, to change the name or address of the
Building.

 

27.6                        Building Standard

 

The phrase “Building standard” shall, in all instances, refer to the
then-current standard described in Landlord’s most recently adopted schedule of
Building standard or, if no such schedule has been adopted, to the standard
which commonly prevails in and for the entire Building.

 

27.7                        No Waiver

 

No waiver of any provision of this Lease shall be implied by any failure of
either party to enforce any remedy upon the violation of such provision, even if
such violation shall be continued or repeated subsequently.  No express waiver
shall affect any provision other than the provision specified in such waiver,
and only for the time and in the manner specifically stated. No provision of
this Lease shall be deemed to have been waived by Landlord, unless such waiver
shall be in a writing signed by Landlord.

 

27.8                        Recording; Confidentiality

 

Tenant shall not record this Lease, or a short form memorandum, without
Landlord’s written consent and any such recording without Landlord’s written
consent shall constitute an Event of Default.  Tenant shall keep the Lease
terms, provisions and conditions confidential and shall not disclose them to any
other person without Landlord’s prior written consent.  However, Tenant may
disclose Lease terms, provisions and conditions to Tenant’s accountants,
attorneys, managing employees and others in privity with Tenant, as reasonably
necessary for Tenant’s business purposes, including any filings with any agency
or governmental entity required by any Law or regulation applicable to Tenant,
without such prior consent.

 

27.9                        Captions

 

The captions of sections are for convenience only and shall not be deemed to
limit, construe, affect or alter the meaning of such sections.

 

27.10                 [Intentionally Omitted]

 

27.11                 Severability

 

If any provision of this Lease shall be declared void or unenforceable by a
final judicial or administrative order, this Lease shall continue in full force
and effect, except that the void or

 

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unenforceable provision shall be deemed deleted and replaced with a provision as
similar in terms to such void or unenforceable provision as may be possible and
be valid and enforceable.

 

27.12                 Jury Trial

 

LANDLORD AND TENANT EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY LANDLORD OR TENANT AGAINST THE OTHER WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, TENANT’S USE AND
OCCUPANCY OF THE PREMISES, OR THE RELATIONSHIP OF LANDLORD AND TENANT, TO THE
EXTENT PERMITTED BY LAW.

 

27.13                 Authority to Bind

 

Landlord and Tenant represent and warrant that the individuals signing this
Lease on their behalves are empowered and duly authorized to bind Landlord or
Tenant, as the case may be, to this Lease.

 

27.14                 Only Landlord/Tenant Relationship

 

Landlord and Tenant agree that neither any provision of this Lease nor any act
of the parties shall be deemed to create any relationship between Landlord and
Tenant other than the relationship of landlord and tenant.

 

27.15                 Covenants Independent

 

The parties intend that this Lease be construed as if the covenants between
Landlord and Tenant are independent and that the Rent shall be payable without
offset, reduction or abatement for any cause, except as otherwise expressly
provided in this Lease.

 

27.16                 Governing Law

 

This Lease shall be governed by and construed according to the laws of the State
of New York.  Landlord and Tenant, any subtenant, and any guarantor of Tenant’s
obligations under this Lease, hereby expressly consent to the jurisdiction of
the Civil Court of the City of New York and the Supreme Court of the State of
New York with respect to any action or proceeding between Landlord and Tenant or
such party with respect to this Lease or any rights or obligations of either
party pursuant to this Lease, and agree that venue shall lie in New York
County.  Tenant and any subtenant further waive any and all rights to commence
any such action or proceeding against Landlord before any other court.

 

27.17                 Force Majeure

 

Notwithstanding anything to the contrary contained in this Lease, the time for
performance of any obligation of Landlord or Tenant under this Lease shall be
excused during and extended by any period during which such party shall be
prevented from performing such obligation by reason of Force Majeure, provided
that lack or unavailability of funds, bankruptcy or other financial difficulty
shall not be deemed a Force Majeure or excuse or extend the time for payment of
any obligation under this Lease by either party.

 

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27.18                 No Surrender

 

No act or thing done by Landlord or Landlord’s agents (including, without
limitation, the acceptance of keys by any employee of Landlord or Landlord’s
agents) during the Term shall be deemed to constitute an acceptance of a
surrender of the Premises or the termination of this Lease, and no agreement to
accept such surrender shall be valid, unless the same shall be in writing and
shall be signed by Landlord. In the event that Tenant at any time shall desire
to have Landlord sublet the Premises for Tenant’s account, Landlord or
Landlord’s agents are authorized to receive said keys for such purposes without
releasing Tenant from any of the obligations under this Lease, and Tenant hereby
relieves Landlord of any liability for loss of or damage to any of Tenant’s
property in connection with such subletting.

 

27.19                 No Merger

 

There shall be no merger of this Lease, or the leasehold estate created by this
Lease, with any other estate or interest in the Premises, or any part thereof,
by reason of the fact that the same person may acquire or own or hold, directly
or indirectly, (i) this Lease or the leasehold estate created by this Lease, or
any interest in this Lease or in any such leasehold estate, and (ii) any such
other estate or interest in the Premises or any part thereof; and no such merger
shall occur unless and until all persons having an interest (including a
security interest) in (a) this Lease or the leasehold estate created by this
Lease and (b) any such other estate or interest in the Premises, or any part
thereof, shall join in a written instrument effecting such merger and shall duly
record the same.

 

27.20                 Counterparts

 

This Lease may be executed in counterparts and shall constitute an agreement
binding on all parties notwithstanding that all parties are not signatories to
the original or the same counterpart provided that all parties are furnished a
copy or copies thereof reflecting the signature of all parties.  Transmission of
a facsimile or by email of a PDF copy of the signed counterpart of the Lease
shall be deemed the equivalent of the delivery of the original, and any party so
delivering a facsimile or PDF copy of the signed counterpart of the Lease by
email transmission shall in all events deliver to the other party an original
signature promptly upon request.

 

27.21                 Executive Order

 

Tenant represents and warrants to Landlord, and agrees, that each individual
executing this Lease on behalf of Tenant or executing any guaranty on behalf of
any guarantor is authorized to do so on behalf of Tenant or such guarantor, as
applicable, and that the entity(ies) or individual(s) constituting Tenant or
such guarantor or which may own or control Tenant or such guarantor or which may
be owned or controlled by Tenant or such guarantor are not and at no time will
be (i) in violation of any Laws relating to terrorism or money laundering, or
(ii) among the individuals or entities identified on any list compiled pursuant
to Executive Order 13224 for the purpose of identifying suspected terrorists or
on the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website,
http://www.treas.gov/ofac/tllsdn.pdf or any replacement website or other
replacement official publication of such list.

 

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27.22                 Unrelated Business Income

 

If Landlord is advised by its counsel at any time that any part of the payments
by Tenant to Landlord under this Lease may be characterized as unrelated
business income under the United States Internal Revenue Code and its
regulations, then Tenant shall enter into any amendment proposed by Landlord to
avoid such income, so long as the amendment does not require Tenant to make more
payments or accept fewer services from Landlord, than this Lease provides.

 

27.23                 Review by Counsel

 

Each party to this Lease represents and warrants to the other that each party
and its counsel have had the opportunity to read this Lease, understand it and
intend to be bound by the terms hereof.

 

27.24                 Prevailing Party

 

Notwithstanding anything to the contrary contained in this Lease, if Tenant or
Landlord shall bring any action for any relief against the other, declaratory or
otherwise, arising out of or under this Lease, the losing party (subject to
appeals) shall reimburse the prevailing party for all reasonable attorneys’ fees
and disbursements incurred by the prevailing party in such suit.

 

28.                               OPTION TO EXTEND

 

28.1                        Provided that on the Expiration Date and on the
first day of the Extension Term (defined below) no Event of Default shall have
occurred and be continuing, provided that an Event of Default shall not have
occurred at any time after the fifth (5th) anniversary of the Rent Commencement
Date, and provided that the Tenant named herein or any Affiliate of the named
Tenant is in direct occupancy of not less than 100% of the entire usable area of
the Premises, the Tenant named herein or any Affiliate thereof only shall have
the option to extend the Term for one (1), five (5)-year period only (the
“Extension Term”).  The Extension Term shall commence on the day after the
Expiration Date and shall expire on the last day of the calendar month in which
the day immediately prior to the fifth (5th) anniversary of the Expiration Date
shall occur unless the Extension Term shall sooner end pursuant to any of the
terms, covenants or conditions of this Lease or pursuant to law.  Tenant shall
give Landlord written notice (“Tenant’s Extension Notice”) of Tenant’s intention
to exercise such option at least fifteen (15) months prior to the Expiration
Date, the time of exercise being of the essence (the date that is fifteen (15)
months prior to the Expiration Date hereinafter known as the “Exercise Date”),
and upon the giving of such notice, this Lease and the Term shall be extended
without execution or delivery of any other or further documents, with the same
force and effect as if the Extension Term had originally been included in the
Term, and the Expiration Date shall thereupon be deemed to be the last day of
the Extension Term.  All of the terms, covenants and conditions of this Lease
shall continue in full force and effect during the Extension Term, including
items of Additional Rent and escalation which shall remain payable on the terms
herein set forth (but excluding, in relation to the Extension Term, the
provisions for rent concession set forth in Section 4.1 and for Landlord’s
Contribution), except that the Base Rent for the Extension Term shall be as
determined in accordance with Section 28.2 and Tenant shall have no further
right to extend the Term.

 

28.2                        The Base Rent payable by Tenant for the Premises
during the Extension Term shall be the greater of (i) the then-existing
escalated gross Rent hereunder; and (ii) fair market rental value of the
Premises as of the day immediately preceding the commencement of the Extension
Term (“FMRV”), based on the fair market rental value of space comparable to the
Premises in midtown Manhattan, taking into account all relevant factors such as
free rent, build out,

 

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brokerage commissions, tax and operating expense base years (which shall be
adjusted during the Extension Term) and other market conditions.  The FMRV shall
be determined as follows:

 

(a)           Promptly after the delivery to Landlord of Tenant’s Extension
Notice, Landlord and Tenant shall use good faith efforts to agree upon the
FMRV.  In the event that Landlord and Tenant agree upon the FMRV, such agreed
value shall be deemed to be the FMRV.  In the event Landlord and Tenant cannot
reach agreement within thirty (30) days after the delivery of Tenant’s Extension
Notice, Landlord and Tenant shall each select a reputable qualified, licensed
real estate broker having an office in New York County with at least ten
(10) years’ experience in evaluating midtown Manhattan commercial property and
who is familiar with the rentals then being charged in the Building and in
comparable buildings and areas (respectively, “Landlord’s Broker” and “Tenant’s
Broker”) who shall confer promptly after their selection by Landlord and Tenant
and shall attempt to agree upon the FMRV.  If Landlord’s Broker and Tenant’s
Broker cannot reach agreement within sixty (60) days after their selection, then
within thirty (30) days after the lapse of such sixty (60) day period, they
shall designate a third reputable, licensed real estate broker having an office
in New York County with at least ten (10) years’ experience in evaluating
midtown Manhattan commercial property and who is familiar with the rentals then
being charged in the Building and in comparable buildings and areas (the
“Independent Broker”).  Upon the failure of Landlord’s Broker and Tenant’s
Broker to timely agree upon the designation of the Independent Broker, then the
Independent Broker shall be appointed by the President of the Real Estate Board
of New York.  The Independent Broker shall not be an individual who had
represented Landlord or Tenant as a broker nor been employed by either Landlord
or Tenant within the two (2) year period prior to appointment of the Independent
Broker, nor shall the Independent Broker be an individual who had represented
Landlord or Tenant in the determination of fair market rental value in the two
(2) year period prior to appointment of Independent Broker.  Concurrently with
such appointment, Landlord’s Broker and Tenant’s Broker shall each submit a
letter to the Independent Broker, with a copy to Landlord and Tenant, setting
forth such broker’s estimate of the FMRV, taking into consideration the duration
of the Extension Term and all other terms and conditions of this Lease which are
applicable to the Extension Term (respectively, “Landlord’s Broker’s Letter” and
“Tenant’s Broker’s Letter”).

 

(b)           The Independent Broker shall conduct such investigations and
hearings as he or she may deem appropriate and shall, within sixty (60) days
after the date of his or her designation, choose either the rental set forth in
Landlord’s Broker’s Letter or Tenant’s Broker’s Letter to be the FMRV during the
Extension Term and such choice shall be binding upon Landlord and Tenant. 
Landlord and Tenant shall each pay the fees and expenses of its respective
broker.  The fees and expenses of the Independent Broker shall be shared equally
by Landlord and Tenant.

 

28.3                        In the event the Extension Term shall commence prior
to a determination of the Base Rent during the Extension Term as herein
provided, then the Base Rent to be paid by Tenant to Landlord until such
determination has been made shall be the Base Rent for the twelve (12) month
period immediately preceding the commencement of the Extension Term plus all
escalations and Additional Rent payable under this Lease for such period.  After
such determination has been made for the Base Rent during the Extension Term,
any excess rental for the Extension Term theretofore paid by Tenant to Landlord
shall be credited by Landlord against the next ensuing monthly Base Rent payable
by Tenant to Landlord and any deficiency in Base Rent due from Tenant to
Landlord during the Extension Term shall be immediately paid to Landlord.

 

28.4                        Promptly after the Base Rent has been determined,
Landlord and Tenant shall execute, acknowledge and deliver an agreement setting
forth the Base Rent for the Extension Term, as

 

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finally determined, provided the failure of the parties to do so shall not
affect their respective rights and obligations hereunder.

 

28.5                        Anything herein to the contrary notwithstanding,
(i) Tenant’s Extension Notice shall not be valid or effective if, at the time
Tenant’s Extension Notice is given, any Event of Default shall have occurred
and/or shall be continuing and (ii) Tenant’s Extension Notice, if effectively
given, shall be voidable by Landlord if any Event of Default shall have occurred
and/or shall be continuing on the first day of the Extension Term.

 

29.                               RIGHT OF FIRST OFFER

 

29.1                        Provided that at the time of exercise of Tenant’s
option hereunder and on the first day of the term for the applicable ROFO Space
(hereinafter defined), no Event of Default shall have occurred or be continuing
and the Tenant named herein or an Affiliate of the named Tenant is in direct
occupancy of not less than 100% of the entire usable area of the Premises, then,
from and after the Date of this Lease and through and including the day
immediately preceding the seventh (7th) anniversary of the Rent Commencement
Date, the Tenant named herein or its Affiliate only shall have the one-time
right of first offer to lease the following premises in the Building:  any one
(1) offer of space by Landlord of between approximately 5,000 and 10,000
rentable square feet on the 23rd through 39th floors of the Building (the “ROFO
Space”) on the terms set forth in this Section 29.1 if and when such space
becomes “Available ROFO Space.”  “Available ROFO Space” shall mean that (a) such
ROFO Space is vacant and free of any present or future possessory right or
option existing in favor of any third party (including, but not limited to, the
current tenant or occupant of such ROFO Space and/or other occupants of the
Building) granted prior to the date of this Lease, whether by rights of first
offer, refusal, expansion, renewal, extension or otherwise, or (b) Landlord
desires to market such ROFO Space and (i) the then existing tenant or occupant
thereof has not exercised an option or negotiated to renew or extend the term of
its lease or occupancy agreement and the time by which such tenant must exercise
any such option has expired, or (ii) the then existing tenant or occupant
thereof is not negotiating with Landlord for renewal or extension of its lease
or occupancy agreement (whether or not the lease or occupancy agreement with
such existing tenant or occupant contains a renewal or extension option), or
(iii) Landlord reasonably expects that Landlord will receive vacant possession
thereof, free of any claims or rights of any third party (including, but not
limited to, other occupants of the Building) by a certain “Anticipated ROFO
Space Commencement Date.”  Notwithstanding anything to the contrary contained in
this Lease, unless Landlord elects otherwise, no ROFO Space shall be deemed to
be Available ROFO Space until after the first lease or leases entered into for
each portion of such ROFO Space following the date of this Lease expires or is
earlier terminated.

 

29.2                        If the ROFO Space becomes Available ROFO Space,
Landlord must first deliver a notice (“First Offer Notice”) to Tenant setting
forth Landlord’s commercially reasonable estimate of the FMRV of such ROFO Space
taking into account all relevant factors as specified in Section 28.2 above
(provided that for purposes of this Article 29, Landlord’s estimate of FMRV
shall be equal to the greater of then escalated gross rent hereunder and the
fair market rental value of the particular ROFO Space as of the day immediately
preceding the commencement of lease of such ROFO Space), and any abatements,
concessions and Landlord’s work to be performed to be included under the
proposed lease, and offering to lease the particular ROFO Space to Tenant at the
annual base rent equal to Landlord’s commercially reasonable estimate of FMRV,
together with such abatements and concessions as contained in the First Offer
Notice. The First Offer Notice shall designate the ROFO Space, including, to the
extent available, a floor plan or drawing showing the ROFO Space, the
approximate rentable square footage of the ROFO Space, the

 

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anticipated ROFO Space Commencement Date and such other material monetary terms
related to the ROFO Space.  Tenant shall have a period of fifteen (15) days
following receipt of the First Offer Notice (the “ROFO Acceptance Period”) to
accept such offer by notice to Landlord.  If Tenant accepts such offer within
the ROFO Acceptance Period, this Lease shall be amended to (i) add the
particular ROFO Space to the Premises at the annual base rent set forth in the
First Offer Notice, (ii) increase Tenant’s Tax Share and Tenant’s Expense Share
by the ratio of the rentable area of the particular ROFO Space to the rentable
area of the Building or office portion thereof, as applicable, and (iii) include
the terms with respect to the particular ROFO Space set forth in the First Offer
Notice not covered by this Lease.  The term of lease for the ROFO Space shall be
co-terminus with the Term of this Lease.  If Tenant fails to respond to the
First Offer Notice during the ROFO Acceptance Period, Tenant shall be deemed to
have elected to not enter into such lease, in which event (or, in the event that
Tenant elects to not enter into such lease) this Article 29 shall be deemed to
be deleted from this Lease and of no further force or effect, and Landlord may
lease such particular ROFO Space to any third party on substantially the same
terms as those set forth in the First Offer Notice (it being understood that a
decrease in the annual base rent set forth in the First Offer Notice, taking
into account rent concessions, free rent periods, and tenant allowances, by ten
percent (10%) or less shall not be deemed a substantial change to the terms set
forth in the First Offer Notice, provided that Landlord shall have no obligation
whatsoever to send a revised First Offer Notice to Tenant in the event of such
decrease later than six (6) months following its original First Offer Notice to
Tenant).

 

29.3                        Notwithstanding anything to the contrary contained
in this Lease, Landlord shall have no obligation to deliver a First Offer Notice
to Tenant, and Tenant shall have no right to lease any ROFO Space, if there is a
period of less than three (3) years remaining on the Term of this Lease, unless
Tenant has duly delivered to Landlord Tenant’s Extension Notice.

 

29.4                        If Landlord is unable to give possession of any ROFO
Space on or before the Anticipated ROFO Space Commencement Date because of the
retention of possession or otherwise of any tenant, undertenant or occupants or
for any other reason, Tenant shall have no claim against Landlord, and Landlord
shall not be subject to any liability for any failure to give possession on said
date and the validity of this Lease shall not be impaired under any
circumstances, but the commencement date of the lease for the ROFO Space shall
be postponed until such ROFO Space is actually delivered to Tenant.  Landlord
shall use its commercially reasonable efforts to deliver the ROFO Space to
Tenant on or before the anticipated ROFO Space Commencement Date and if for any
reason other than Force Majeure or delay of Tenant, Landlord is unable to
deliver possession of the ROFO Space to Tenant within one hundred eighty (180)
days after the anticipated ROFO Space Commencement Date, Tenant may elect to
terminate its notice to lease of such ROFO Space only by written notice given to
Landlord within ten (10) business days thereafter.  The provisions of this
Section are intended to constitute an “express provision to the contrary” within
the meaning of Section 223a of the New York Real Property Law.

 

30.                               SUPPLEMENTAL HVAC

 

Subject to the terms of this Article 30 and Article 10, Tenant shall be
permitted to install in the Premises, at Tenant’s cost, supplemental heating,
ventilation and air conditioning unit(s) (the “Supplemental HVAC Units”) which
shall be connected to the Building condenser water loop, for use in the
Premises.  In no event shall the size of Tenant’s Supplemental HVAC Units exceed
twenty (20) tons in the aggregate, nor shall Tenant be entitled to use more than
Tenant’s Tax Share of the Building’s excess water condenser capacity. Landlord
agrees to reserve twenty (20) tons of condenser water for Tenant’s usage in
connection with the Supplemental HVAC Units (regardless of Tenant’s actual
usage) the cost of which shall be paid by Tenant as Additional Rent

 

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in accordance with this Article 30. Within eighteen (18) months after the Date
of this Lease, Tenant shall have the one (1)-time right to advise Landlord of
the amount of condenser water Tenant requires (up to twenty (20) tons) and if
Tenant shall not require all twenty (20) tons of condenser water, Landlord shall
thereafter be entitled to use any excess tonnage as Landlord sees fit, and the
cost payable by Tenant under this Article 30 for reserved condenser water shall
be adjusted accordingly. Tenant shall be required to pay Landlord’s out of
pocket costs to effect such hook-up to the Building condenser water loop (which,
as of the date of this Lease, are approximately $1,500.00 one-time charge for
each supply and return connection to Landlord’s condenser water loop, as of the
date of this Lease) and, in addition, shall be required to pay Landlord, as
Additional Rent, an amount equal to $500.00 per ton of supplemental heating,
ventilation and air conditioning equipment to be connected to Landlord’s
condenser water loop, regardless of actual usage, and subject to Building-wide
increases from time to time.  For example, if Tenant connects two tons of
equipment to Landlord’s condenser water loop using one supply and return
connection, Tenant shall be required to pay Landlord the out of pocket hook-up
cost of approximately $1,500.00 plus usage cost of $1,000.00 per annum (2 tons x
$500.00). For purposes of clarity, Landlord shall not charge an additional
tap-in “fee” for its administrative costs, in excess of contractor costs, in
connection with such HVAC connection. All such amounts shall be payable by
Tenant to Landlord as Additional Rent in accordance with this Lease, and shall
be payable in equal monthly installments.  The size and design of the
Supplemental HVAC Unit, the manner in which the Supplemental HVAC Unit will be
vented and access outside air, if applicable, or the manner in which Tenant
connects to Landlord’s condenser water loop, including, without limitation, the
routing of any water lines, shall be subject to Landlord’s reasonable prior
written approval.  Such connections and installation shall be reflected in
Tenant’s construction drawings for the Initial Improvements.  Tenant shall be
responsible, at Tenant’s cost, for maintaining and repairing the Supplemental
HVAC Unit, and for the cost of purchasing and installing a submeter for the
Supplemental HVAC Unit to measure electricity consumed in connection with the
supplemental HVAC Unit, as well as the cost of all such electricity that is
consumed, which will be billed to and payable by Tenant in accordance with
Article 8 of this Lease.  Upon expiration or earlier termination of this Lease,
Tenant, at Landlord’s request, shall remove the Supplemental HVAC Unit, and such
removal shall be subject to the provisions of Section 10 of this Lease.

 

31.                               DETERMINATION OF DISPUTES ARISING UNDER
ARTICLE 22

 

Any dispute regarding whether Landlord has unreasonably withheld or delayed its
consent or approval that pursuant to this Lease must not be unreasonably
withheld or delayed, may be conclusively determined pursuant to the following
procedure and upon and subject to the following terms and conditions:

 

(a)           At any time during the course of such dispute, Landlord or Tenant
may designate, by notice to the other, a person as its representative to resolve
such dispute who is qualified and experienced in the issue under dispute (the
“First Representative”), whereupon, within five (5) business days thereafter,
the other party shall designate another such qualified and experienced
representative for the resolution of such dispute (the “Second Representative”).

 

(b)           The First Representative and the Second Representative shall
attempt to resolve such dispute and any agreed resolution thereby shall be
conclusive for purposes hereof.  If either Landlord or Tenant fails to timely
designate the Second Representative and again fails to do so within three
(3) business days after notice of such failure from the other party, the
resolution of such dispute by the First Representative shall be conclusive for
purposes hereof.

 

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(c)           If the First Representative and the Second Representative cannot
agree upon the resolution of such dispute within ten (10) business days after
their appointment, they shall, within five (5) business days after the
expiration of such ten (10) business day period, designate another qualified and
experienced representative (the “Third Representative”), whose resolution of
such dispute shall be conclusive for purposes hereof.

 

(d)           If the First Representative and the Second Representative do not
designate a Third Representative within such five (5) business day period,
either party, may at any time after the expiration of such five (5) business day
period, apply to the Presiding Justice of the Appellate Division, First
Department, for the appointment thereof.

 

(e)           The First Representative, the Second Representative and the Third
Representative shall, by majority vote, establish the rules and procedures for
the expeditious resolution of such dispute and shall issue their written
determination thereof within ten (10) business days after the designation of the
Third Representative.

 

(f)            Each party shall pay its own representative, and the parties
shall share equally the cost of the Third Representative.

 

[SIGNATURES ARE ON FOLLOWING PAGE]

 

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Having read and intending to be bound by the terms and provisions of this Lease,
Landlord and Tenant have signed it as of the Date.

 

 

LANDLORD:

 

 

 

1411 IC-SIC PROPERTY LLC, a Delaware limited liability company

 

 

 

 

 

By:

1411 IC-SIC Holdings LLC,

 

 

its sole member

 

 

 

 

By:

IC 1411 Broadway Manager LLC,

 

 

its sole member

 

 

 

 

By:

Callahan Capital Properties LLC,

 

 

its non-member manager

 

 

 

 

By:

/s/ Michael W. McMahon

 

 

Name:

Michael W. McMahon

 

 

Title:

SVP — Asset Management

 

 

 

 

 

TENANT:

 

 

 

CRA INTERNATIONAL INC., a Massachusetts corporation

 

 

 

By:

/s/ Chad M. Holmes

 

 

 

 

Name:

Chad M. Holmes

 

 

 

 

Title:

CFO

 

72

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EXHIBIT A

 

RESERVED

 

A-1

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EXHIBIT B

 

LAND DESCRIPTION

 

All that certain lot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York, bounded and described
as follows:

 

BEGINNING at the corner formed by the intersection of the northerly side of West
39th Street and the westerly side of Broadway;

 

RUNNING THENCE northerly along the westerly side of Broadway, 205 feet 1/8 of an
inch to the southwesterly corner of Broadway and West 40th Street;

 

THENCE westerly along the southerly side of West 40th Street, 229 feet 6-3/8
inches to the southeasterly corner of West 40th Street and Seventh Avenue;

 

THENCE southerly along the easterly side of Seventh Avenue, 197 feet 6 inches to
the northeasterly corner of Seventh Avenue and West 39th Street; and

 

THENCE easterly along the northerly side of West 39th Street, 284 feet 6-1/8
inches to the first mentioned corner, the point or place of BEGINNING.

 

B-1

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EXHIBIT C

 

LANDLORD’S WORK

 

1.              The Premises will be delivered demolished and in broom clean
condition;

 

2.              Landlord will provide Class-E availability of connection points
for Tenant’s strobes and related Class-E connections.  (Landlord, at Tenant’s
expense, shall provide all points, tie-ins and software reprogramming; and
Tenant will determine its requirements relative to the existing Class-E system.)
All fire and safety systems, including alarms, speakers and communications will
be in full service and available in the Premises;

 

3.              Landlord will deliver a temporary sprinkler loop that is fully
operational and in accordance with code for the demolished Premises;

 

4.              The HVAC system shall be delivered in good working order;

 

5.              Floors will be delivered reasonably smooth to accept Tenant’s
flooring; and

 

6.              Landlord will bring all Building Systems to the Premises for
Tenant’s tie-in and such systems will be fully operational.

 

E-1

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EXHIBIT C-1

 

LANDLORD’S ADDITIONAL WORK

 

Any items of Landlord’s Work that are not substantially completed by Landlord
prior to the Commencement Date shall be deemed items of “Landlord’s Additional
Work,” the performance of which by Landlord shall be subject to Section 5.1 of
the Lease.

 

E-2

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EXHIBIT D

 

HVAC SPECIFICATIONS

 

The base Building heating and air conditioning system is designed to perform in
accordance with the following specifications, based on occupancy of not more
than one (1) person per one hundred (100) usable square feet and total connected
electrical load of not more than four (4) watts per usable square foot.  The
operation of the base Building heating and air conditioning system is subject to
compliance with all applicable Laws.

 

Summer Conditions*

 

Outside air 95°

Wet bulb 78°

Space 73° +/-2

 

Winter Conditions*

 

Outside Air 5°

Space 73° +/-2°

 

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*All space temperature specifications are subject to requirements of the New
York State Energy Conservation Code and other applicable Laws and to the extent
that space temperature specifications set forth in this Exhibit D are in
violation of any such Laws, Landlord shall not be obligated to achieve such
specifications.

 

E-3

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EXHIBIT E

 

CLEANING SPECIFICATIONS

 

Landlord’s cleaning contractor shall perform the following services:

 

OFFICE AREAS

 

Nightly services (5 nights per week excluding Holidays):

 

1.              Empty all waste receptacles.  Clean and reline when needed. 
Remove material to designated areas.

 

2.              Remove recycling material when container is full.

 

3.              Carpet Sweep all carpeted areas, including conference rooms,
reception areas, interior stairwells, hallways and corridors, and offices.

 

4.              Wash and sanitize all drinking fountains.

 

5.              Clean conference room tables and remove any debris.

 

6.              Arrange chairs at desk and conference room tables and turn off
lights upon exiting.

 

7.              Remove scuff marks on floor as needed.

 

8.              Assure that all designated locked doors are closed after area
has been cleaned.

 

9.              Activate all alarm systems as instructed by occupant (if
applicable).

 

Weekly Services:

 

1.              Dust and wipe clean chair bases and arms, telephone, cubicle
shelves, window sills, and all other horizontal surfaces as needed to maintain
clean appearance (PAPERS WILL NOT BE MOVED).

 

2.              Vacuum all carpeted areas.

 

BASE BUILDING RESTROOMS

 

Nightly services (5 nights per week excluding Holidays):

 

1.              Clean and sanitize all mirrors, bright-work, countertops and
enameled surfaces.

 

2.              Wash and disinfect all basins, urinals, bowls (cleaning
underside of rim) and fixtures using scouring powder to remove stains.

 

E-4

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3.              Wash both sides of all toilet seats with soap and/or
disinfectant.

 

4.              Clean flushometers, piping, toilet seat hinges, and other metal.

 

5.              Empty, clean, and damp wipe all waste receptacles.

 

6.              Sweep, wet mop, and sanitize entire floor, including around
toilet seats and under urinals.

 

7.              Damp wipe all walls, partitions, doors, and outside surfaces of
all dispensers, as needed.

 

8.              Fill toilet paper, soap, towels, and sanitary napkin dispensers.

 

9.              Empty trash receptacles and replace trash liners.

 

Weekly Services

 

1.              Flush water through P-trap weekly

 

Monthly Services

 

1.              Machine scrub floors

 

WINDOW CLEANING

 

1.              Inside surface of exterior windows to be cleaned semi-annually.

 

2.              Exterior surface of exterior windows to be cleaned
semi-annually.

 

E-5

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EXHIBIT F

 

RESERVED

 

F-1

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EXHIBIT G

 

RULES AND REGULATIONS

 

1.                                      Rights of Entry

 

Tenant will have the right to enter the Premises at any time, but outside of
business hours Tenant will be required to furnish proper and verifiable
identification.  Landlord will have the right to enter the Premises at all
reasonable hours to perform janitorial services (except that the cleaning
pursuant to Section 7.2(e) shall be performed during non-business hours) or
clean windows; and also at any time during the Term, with reasonable prior
notice to Tenant, to show the Premises to prospective tenants.

 

2.                                      Right of Exclusion

 

Landlord reserves the right to require each person entering the Building to sign
a register and either (i) to present a Building pass, or (ii) to be announced to
the tenant such person is visiting and to be accepted as a visitor by such
tenant or to be otherwise properly identified.  Landlord may exclude from the
Building any person who cannot comply with such requirement.  Landlord also
reserves the right to require any person leaving the Building to sign a register
or to surrender any special entry pass given to such person.  If Landlord elects
to excise the rights reserved above, Landlord will furnish a Building pass to
all persons designated by Tenant in writing.  Finally, Landlord reserves the
right to exclude or expel from the Building any person who, in Landlord’s
judgment, is intoxicated or under the influence of alcohol or drugs.

 

3.                                      Obstruction

 

Tenant will not obstruct or place anything in or on the sidewalks or driveways
outside the Building, or in the lobbies, corridors, stairwells or other Common
Areas.  Landlord may remove, at Tenant’s expense, any such obstruction or thing
without notice or obligation to Tenant.

 

4.                                      Refuse

 

Tenant will place all refuse in the Premises in proper receptacles provided and
paid for by Tenant, or in receptacles provided by Landlord for the Building, and
will not place any litter or refuse on or in the sidewalks or driveways outside
the Building, or the Common Areas, lobbies, corridors, stairwells, ducts or
shafts of the Building.

 

5.                                      Public Safety

 

Tenant will not throw anything out of doors, windows or skylights, down
passageways or over walls.  Tenant will not use any fire exits or stairways in
the Building except in case of emergency.

 

6.                                      Keys; Locks

 

Landlord may from time to time install and change locks on entrances to the
Building, Common Areas and the Premises, and will provide Tenant a reasonable
number of keys to meet Tenant’s requirements.  If Tenant desires additional
keys, they will be furnished by Landlord and Tenant will pay a reasonable charge
for them.  Tenant will not add or change existing locks on any door in or to the
Premises without Landlord’s prior written consent, except that Tenant may
install the

 

G-1

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card access system contemplated by Section 7.2(f) in accordance with such
Section.  If with Landlord’s consent, Tenant installs lock(s) incompatible with
the Building master locking system:

 

(a)                                 Landlord, without abatement of Rent, will be
relieved of any obligation under the Lease to provide any service that requires
access to the affected areas:

 

(b)                                 Tenant will indemnify Landlord against any
expense as a result of forced entry to the affected areas which may be required
in an emergency; and

 

(c)                                  Tenant will, at the end of the Term and at
Landlord’s request, remove such lock(s) at Tenant’s expense.

 

At the end of the Term, Tenant will promptly return to Landlord all keys for the
Building and Premises which are in Tenant’s possession.

 

7.                                      Aesthetics

 

Tenant will not attach any awnings, signs, displays or projections to the
outside or inside walls or windows of the Building which are visible from
outside the Premises without Landlord’s prior written approval, which may be
withheld in Landlord’s sole discretion.  Tenant will use only Building Standard
lighting in areas where such lighting is visible from outside the Building.

 

8.                                      Window Treatment

 

If Tenant desires to attach or hang any curtains, blinds, shades or screens to
or in any window or door of the Premises, Tenant must obtain Landlord’s prior
written approval.  Tenant will not coat or sunscreen the interior or exterior of
any windows without Landlord’s express written consent.  Tenant will not place
any objects on the window sills that cause, in Landlord’s reasonable opinion, an
aesthetically unacceptable appearance.

 

9.                                      Directory Boards

 

If the Building has or will have an office directory, Landlord will make
reasonable effort to list Tenant thereon.

 

10.                               Building Control

 

Landlord reserves the right to control and operate the Common Areas as well as
facilities furnished for the common use of tenants in such manner as Landlord
deems best for the benefit of tenants generally.  Landlord reserves the right to
prevent access to the Building during an emergency by closing the doors or
otherwise, for the safety of tenants and protection of the Building and property
in the Building.

 

11.                               Engineering Consent

 

All plumbing, electrical and HVAC work for and in the Premises requires
Landlord’s prior written consent to maintain the integrity of the Building’s
electrical, plumbing and HVAC systems.

 

G-2

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12.                               HVAC Operation

 

Tenant will not place objects or other obstructions on the HVAC convectors or
diffusers and will not permit any other interference with the HVAC system. 
Whenever the HVAC system is operating, Tenant will cause the shades, blinds or
other window coverings in the Premises to be drawn as reasonably required by the
position of the sun.

 

13.                               Plumbing

 

Tenant will only use plumbing fixtures for the purpose for which they are
constructed.  Tenant will pay for all damages resulting from any misuse by
Tenant or plumbing fixtures.

 

14.                               Equipment Location

 

Landlord reserves the right to specify where Tenant’s Business machines,
mechanical equipment and heavy objects will be placed in the Premises in order
to best absorb and prevent vibration, noise and annoyance to other tenants, and
to prevent damage to the Building.  Tenant will pay the cost of any required
professional engineering certification or assistance.

 

15.                               Bicycles; Animals

 

Tenant will not bring into, or keep about, the Premises any bicycles, vehicles,
birds, animals (except seeing eye dogs) or organic Christmas decor of any kind. 
Bicycles and vehicles may only be parked in areas designated for such purpose.

 

16.                               Carpet Protection

 

In those portions of the Premises where carpet has been provided by Landlord,
Tenant will at its own expense install and maintain pads to protect the carpet
under all furniture having castors other than carpet castors.

 

17.                               Proper Conduct

 

Tenant will conduct itself in a manner which is consistent with the character of
the Building and will ensure that Tenant’s conduct will not impair the comfort
or convenience of other tenants in the Building.

 

18.                               Elevators

 

Any use of the elevators for purposes other than normal passenger use (such as
moving to or from the Building or delivering freight), whether during or after
business hours, must be scheduled through the office of the Property Manager. 
Tenant will reimburse Landlord for any extra costs incurred by Landlord in
connection with any such non-passenger use of the elevators.

 

19.                               Deliveries

 

Tenant will ensure that deliveries of materials and supplies to the Premises are
made through such entrances, elevators and corridors and at such times as may
from time to time be reasonably designated by Landlord.  Such deliveries may not
be made through any of the main entrances to the Building without Landlord’s
prior permission.  Tenant will use of cause to be used, in the Building, hand
trucks or other conveyances equipped with rubber tires and rubber side guards to

 

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prevent damage to the Building or property in the Building.  Tenant will
promptly pay Landlord the cost of repairing any damage to the Building caused by
any person making deliveries to the Premises.

 

20.                               Moving

 

Tenant will ensure that furniture and equipment and other bulky matter being
moved to or from the Premises are moved through such entrances, elevators and
corridors and at such times as may from time to time be reasonably designated by
Landlord, and by movers or a moving company reasonably approved by Landlord. 
Tenant will promptly pay Landlord the cost of repairing any damage to the
Building caused by any person moving any such furniture, equipment or matter to
or from the Premises.

 

21.                               Solicitations

 

Canvassing, soliciting and peddling in the Building are prohibited and Tenant
will cooperate in preventing the same.

 

22.                               Food

 

Only persons approved from time to time by Landlord may prepare, solicit orders
for, sell, serve or distribute food in or around the Building.  Except as may be
specified in the Lease and except for microwave cooking, Tenant will not use the
Premises for preparing or dispensing food, or soliciting of orders for sale,
serving or distribution of food.

 

23.                               Parking Rules and Regulations

 

Tenant will comply with all reasonable rules and regulations applicable to the
parking facilities serving the Building as determined by the parking facility
operator.

 

24.                               Hazardous Substances

 

Except as may be expressly permitted by Landlord in writing or as set forth in
this Lease, Tenant will not store, use, release, produce, process or dispose in,
on or about, or transport to or from, the Premises, Building or Complex any
Hazardous Substances.  Landlord has disclosed to Tenant that the Building
contains asbestos containing material (“ACM”).  Landlord has established an ACM
management program that will govern all work in the Building that could disturb
any ACM.  Regardless of any provision of the Lease to the contrary, Tenant will
not undertake any work in the Premises that could disturb any ACM.  Tenant
agrees that its failure to comply with this Paragraph 24 will constitute a
material breach of the Lease; however, such agreement will not be deemed to
limit the materiality of any other Tenant breach of the Lease for failure to
comply with any other Rules and Regulations.

 

25.                               Employees, Agents and Invitees

 

In these Rules and Regulations, “Tenant” includes Tenant’s employees, agents,
invitees, licensees and others permitted by Tenant to access, use or occupy the
Premises.

 

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26.                               Smoking

 

Smoking is prohibited anywhere in or at the Premises, the Building and any
Common Areas and within twenty five (25) feet of any entrance to the Building.

 

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EXHIBIT H

 

LETTER OF CREDIT

 

[see attached]

 

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