Exhibit 10.39

 

SEVENTH LEASE MODIFICATION AGREEMENT

 

Seventh Lease Modification Agreement made as of April 8, 2014, (this
“Agreement”) by and between Moklam Enterprises, Inc., a New York corporation
with an address at c/o Yuco Management, Inc., 200 Park Avenue, 11th Floor, New
York, New York 10166 (hereinafter referred to as “Owner”), and Take-Two
Interactive Software, Inc., a Delaware corporation with an address at 622
Broadway, New York, New York 10012 (hereinafter referred to as “Tenant”).

 

W I T N E S S E T H:

 

Whereas, Owner is the lessor and Tenant is the lessee under that certain lease
agreement dated as of July 1, 2002, as amended by agreement dated July 1, 2002
(the “First Modification”), agreement dated as of November 15, 2002 (the “Second
Modification”), agreement dated as of October 14, 2003 (the “Third
Modification”), agreement dated as of May 11, 2004 (the “Fourth
Modification”),agreement dated as of March 26, 2010 (the “Fifth Modification”)
and agreement dated as of January 18, 2012 (the “Sixth Modification”) (such
lease agreement, as modified by the First Modification, the Second Modification,
the Third Modification, the Fourth Modification, the Fifth Modification and the
Sixth Modification is hereinafter referred to as the “Original Lease”) covering
the entire third, fourth, fifth and sixth floors and the roof deck in the
building known as 622 Broadway, New York, New York (the “Building”), having a
term expiring on March 31, 2023; and

 

Whereas Owner and Tenant desire to further modify and supplement the Original
Lease as set forth below, upon and subject to the terms and conditions
hereinafter set forth.

 

Now, therefore, in consideration of the premises and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree to
further modify and supplement the Original Lease as follows:

 

1.                                      Definition of Lease.  For purposes of
this Agreement, the term “Lease” shall mean the Original Lease as amended by
this Agreement, except as may otherwise be specifically indicated in this
Agreement or as the context may otherwise require.

 

2.                                      Tenant’s Additional Restoration
Obligations in Lobby and at Sixth Floor.  Effective as of the date hereof
(hereinafter, the “Seventh Modification Effective Date”), the following
provisions shall be added to and made part of the Lease as Article 103 thereof:

 

“103.                  Tenant’s Additional Restoration, Maintenance and Repair
Obligations in Lobby and at Sixth Floor.

 

103.1                 Tenant hereby covenants and agrees that, not less than
fifteen (15) days prior to the expiration or earlier termination of the term of
this Lease, time being of the essence, Tenant shall perform the following
restoration work in and to the Premises and the lobby of the Building at
Tenant’s sole cost and expense, in a good and workmanlike fashion to Owner’s
reasonable satisfaction (hereinafter collectively referred to as “Tenant’s
Seventh Modification Restoration Work”): (i)

 

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patch and repair or replace, as necessary, to match the original wood flooring,
any wood flooring on the sixth (6th) floor portion of the Premises which shall
be damaged or removed in connection with construction and wiring work to be
performed by Tenant in or to the Premises subsequent to April 3, 2014
(hereinafter, the “Seventh Modification Tenant’s Work”).  Such restoration work
shall include the sanding and application of two (2) coats of polyurethane and
sealer to all such patched, repaired and replaced wood flooring;
(ii) reconstruct the staircase leading from the sixth (6th) floor portion of the
Premises to the exterior roof deck of the Building to its original configuration
as it existed prior to the commencement of the Seventh Modification Tenant’s
Work, and repair and restore the portions of the Premises and the Building
affected by such reconstruction; and (iii) remove all of Tenant’s signage and
related lighting in the lobby of the Building and replace the affected wall
panels with new wall panels to match the adjacent wall panels, in order to
ensure a uniform appearance.  Without limitation of Owner’s other rights and
remedies, if Tenant shall fail or refuse to timely perform any of Tenant’s
Seventh Modification Restoration Work, Tenant shall immediately be liable to pay
to Owner, on demand (whether such demand shall be made prior to, upon or after
the expiration or earlier termination of the term of this Lease), as Additional
Rent, an amount equal to the sum of (i) the estimated cost of Tenant’s Seventh
Modification Restoration Work, as shall be reasonably determined by Owner, plus
(ii) an amount equal to fifteen (15) days of Fixed Rent at the rate payable
during the last year of the term of this Lease, multiplied by twenty-five (25%)
percent.  Further, Tenant’s Plans in respect of the Seventh Modification
Tenant’s Work shall incorporate all of the review comments from Bong Yu, P.C. -
Engineers & Architects set forth in the Transmittals dated January 9, 2014,
February 14, 2014 (revised February 19, 2014) (for 6th Floor) and February 14,
2014 (revised March 12, 2014) (for lobby) which are annexed to this Agreement in
Exhibit C.

 

103.2.              Notwithstanding anything to the contrary set forth in this
Lease, and in addition to and without limitation of Tenant’s obligations under
the Lease to make, as and when needed, all necessary repairs and improvements to
the Premises and the fixtures, appurtenances, equipment and facilities that
serve the Premises, Tenant shall also be obligated, at Tenant’s sole cost and
expense, to make all necessary repairs and replacements to the new flooring to
be installed by Tenant in the lobby and in the Broadway side passenger elevator
cabs of the Building as part of the Lobby and Elevator Alterations in order to
keep such flooring in good repair, appearance and condition at all times
throughout the term of this Lease, such repairs and improvements to be equal in
quality to the original work as provided in Section 45.1 of this Lease.

 

103.3.              The provisions of this Article 103 shall survive the
expiration or earlier termination of the term of this Lease.”

 

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3.                                      Tenant Improvement Allowance.  The
provisions of paragraph 5 of the Sixth Modification are hereby amended and
restated in their entirety, as follows:

 

“5.                                Tenant Improvement Allowance.

 

5.1.  During the period commencing on the date this Agreement shall be executed
and delivered by the parties and expiring on September 30, 2014 (the
“Alterations Outside Completion Date”), subject to extension by reason of Force
Majeure (as such term is defined below), Tenant shall perform and substantially
complete extensive alterations and improvements constituting Tenant’s Work in
and to (i) the Premises and (ii) the Broadway side lobby and passenger elevator
cabs in the Building which shall include new wall finishes, new lobby attendant
reception desk, new interior lighting, new stainless steel stair doors, new
paint finishes, new flooring and installation of pre-positioned electrical and
computer cabling to allow for a new digital tenant directory to be installed in
the lobby at a later date, and new paneling, new flooring and new lighting in
the elevator cabs (all of such alterations and improvements in and to the
Premises and the Broadway side lobby and passenger elevator cabs in the Building
are hereinafter collectively referred to as “Tenant’s Alterations”, and the
portion of Tenant’s Alterations consisting of such alterations and improvements
to the Broadway side lobby and passenger elevator cabs in the Building which are
expressly specified and set forth above are hereinafter collectively referred to
as the “Lobby and Elevator Alterations”), costing not less than a minimum of
$3,500,000.00 for all of Tenant’s Alterations. Such minimum required cost of
Tenant’s Alterations in the amount of $3,500,000.00 shall be inclusive of
(a) reasonable costs incurred by Tenant to perform the Lobby and Elevator
Alterations at a minimum cost of $350,000.00 and (b) so-called “soft costs” such
as costs for architectural fees and engineering fees (limited for purposes of
meeting such required minimum cost to the sum of $270,000.00). The reasonable
cost of the Lobby and Elevator Alterations, performed at a minimum cost of
$350,000.00, together with soft costs not exceeding the sum of $270,000.00, are
hereinafter collectively referred to as the “Included Costs”.  In accordance
with the applicable provisions of the Lease, Tenant shall submit to Owner, for
Owner’s review and approval, proposed complete and detailed architectural,
electrical, plumbing, mechanical and engineering plans and specifications in
respect of Tenant’s Alterations.  Tenant shall not commence Tenant’s Alterations
unless and until Tenant shall have received Owner’s final written approval of
Tenant’s plans and specifications in respect thereof in accordance with the
applicable provisions of the Lease.  Tenant’s contractors for the performance of
Tenant’s Alterations shall be reputable, licensed, third party contractors
reasonably satisfactory to Owner.

 

5.2.  Owner shall contribute up to, but not more than, the aggregate sum of
$2,250,000.00  in connection with the performance by Tenant of Tenant’s
Alterations, by payment to Tenant of a tenant improvement allowance commencing
after the completion of Tenant’s Alterations, as more particularly set forth in
Section 5.3 below.  Notwithstanding anything set forth herein to the contrary,
Owner shall not be obligated to pay or contribute more than $2,250,000.00 on
account of any of Tenant’s Alterations, except as expressly set

 

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forth in, and subject to the terms and conditions set forth in, Sections 5.7 and
5.8 below.

 

5.3.  Subject to and conditioned upon Tenant’s substantial completion by the
Alterations Outside Completion Date, time being of the essence, of Tenant’s
Alterations costing not less than a minimum of $3,500,000.00, inclusive of the
Included Costs, and otherwise in accordance with all of the applicable
provisions of the Lease including, without limitation, all of the provisions of
this Section 5, an amount (“Tenant’s Improvement Allowance”) equal to
$2,250,000.00, shall be paid to Tenant in nine (9) equal, consecutive, monthly
installments of $250,000.00 each on or about the tenth (10th) day of each
calendar month commencing as of the date (hereinafter, the “Tenant’s Improvement
Allowance Commencement Date”)  which shall be the tenth (10th) day of the
calendar month (but in no event earlier than October 10, 2014) immediately
following the date that Owner shall have received all of the following documents
from Tenant (collectively, the “Alterations Completion Documents”): (i) a
certificate signed by Tenant and Tenant’s architect certifying (1) that Tenant’s
Alterations have been completed in accordance with the plans and specifications
approved by Owner, (2) the aggregate amount paid by Tenant for the performance
of Tenant’s Alterations and (3) that Tenant has paid in full for all costs
incurred in connection with Tenant’s Alterations; (ii) subject to the provisions
of Section 5.4 below, lien waivers and paid receipts from all contractors,
subcontractors, materialmen and other persons with respect to all work done or
supplies or equipment furnished in respect of Tenant’s Alterations as set forth
in the aforementioned certification, and evidence reasonably satisfactory to
Owner to the effect that there has not been, and shall not be, filed with
respect to the Building or any part thereof or any improvement thereon, any
mechanic’s or other like liens arising out of Tenant’s Alterations; and
(iii) all approvals, certificates and sign-offs required by any and all
governmental and municipal entities having or asserting jurisdiction over the
Building or the performance of Tenant’s Alterations.  The Alterations Completion
Documents must be reasonably satisfactory to Owner in form and substance;
provided, that if Tenant shall have delivered all of the Alterations Completion
Documents to Owner prior to the Alterations Outside Completion Date but Owner
gives notice to Tenant that any of the Alterations Completion Documents which
shall have been submitted by Tenant prior to the Alterations Outside Completion
Date has not been properly executed or is not in the proper form, then Tenant
shall have a reasonable period of time after receipt of such notice (not to
exceed 30 days) to deliver a replacement for such document which shall be
reasonably satisfactory to Owner, and the Alterations Outside Completion Date
shall be extended for such reasonable period of time (not to exceed 30 days
after Tenant’s receipt of such notice) solely for purposes of permitting Tenant
to submit such replacement document.  In no event shall Tenant be entitled to
more than one (1) notice from Owner nor shall the Alterations Outside Completion
Date be extended more than one (1) time pursuant to the provisions of the
preceding sentence.  The monthly payments of the Tenant’s Improvement Allowance
by Owner to Tenant shall be subject to and conditioned upon Tenant being current
in the payment of all Fixed Rent and Additional Rent under the Lease and upon
Tenant not being in default under any provision of the Lease.  Notwithstanding

 

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anything to the contrary in the Lease or this Section 5, if by the Alterations
Outside Completion Date, time being of the essence, Tenant shall fail to
(i) substantially complete Tenant’s Alterations costing not less than a minimum
of $3,500,000.00, inclusive of the Included Costs, (ii) deliver to Owner all of
the Alterations Completion Documents or (iii) pay in full for all costs incurred
by Tenant in connection with Tenant’s Alterations, then in any such event,
Tenant hereby waives Tenant’s Improvement Allowance or any other consideration
with regard to Tenant’s Alterations.  The cost, on an itemized basis, incurred
by Tenant for the performance of each of the various components or items of
Tenant’s Alterations shall be limited to a commercially reasonable amount to the
extent such amount is included in the aggregation of costs for purposes of
meeting the minimum required aggregate cost of $3,500,000.00.  Further,
notwithstanding anything to the contrary in the Lease or this Section 5, if the
reasonable cost of the Lobby and Elevator Alterations which shall be completed
and paid for by Tenant by the Alterations Outside Completion Date, time being of
the essence, shall be less than $350,000.00, then the amount by which the
reasonable cost of the Lobby and Elevator Alterations which shall be completed
and paid for by Tenant by the Alterations Outside Completion Date, time being of
the essence, shall be less than $350,000.00 (such amount is hereinafter referred
to as the “Lobby and Elevator Alterations Shortfall”) shall be deducted from
Tenant’s Improvement Allowance, and Tenant hereby waives any and all rights to
receive any payment or other consideration with regard to the Lobby and Elevator
Alterations Shortfall.  Owner and Tenant hereby acknowledge and confirm that, as
of September 30, 2013: (i) Tenant has completed Tenant’s Alterations costing
$2,025,618.54, as reflected in Exhibit B to the Seventh Lease Modification
Agreement dated as of April 8, 2014 between Owner and Tenant in respect of the
Lease; and (ii) none of the Tenant’s Alterations which have been completed as of
September 30, 2013, as reflected on said Exhibit B, constitute Lobby and
Elevator Alterations.

 

5.4                               If during the period that Tenant’s Alterations
shall be performed, Tenant shall have a good faith bona fide dispute with any
contractor, subcontractor or materialman who or which has performed services or
provided materials in connection with Tenant’s Alterations (hereinafter
collectively referred to as the “Disputing Contractors” and individually as a
“Disputing Contractor”)  and, by reason of such dispute and notwithstanding
Tenant’s exercise of Tenant’s best efforts and Tenant’s written offer to tender
to such Disputing Contractor the appropriate amount due to such Disputing
Contractor, Tenant shall be unable to obtain a lien waiver for the appropriate
amount due from such Disputing Contractor by the Alterations Outside Completion
Date, then subject to the terms and conditions hereinafter set forth in this
Section 5.4, Tenant shall have the right to deliver to Owner, prior to the
Alterations Outside Completion Date, in lieu of such lien waiver, a cash deposit
(hereinafter, the “Lien Deposit”) to be held `by Owner as an additional cash
security deposit under the Lease (except that no interest shall accrue or be
paid thereon).  The Lien Deposit shall be in an amount to be determined by
Owner, in its sole judgment exercised in good faith, based upon Owner’s review
of true and complete copies of all pertinent documentation relating to such
dispute with the Disputing Contractor which shall be provided by Tenant to
Owner, equal to the product of

 

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(i) the aggregate amount which such Disputing Contractor shall claim is owed to
such Disputing Contractor by Tenant multiplied by (ii) 125%.  The Lien Deposit
may be used and applied by Owner in the same manner as the cash security
deposit(s) and the proceeds of the letter(s) of credit currently maintained as
security under the Lease pursuant to the terms of the Lease including, without
limitation, in payment of the costs necessary for Owner to discharge any
mechanics lien(s) which may at any time be filed against the Premises or the
Building by the Disputing Contractor.  The unapplied portion of the Lien Deposit
shall be returned to Tenant within forty-five (45) days after Owner shall have
determined, in its sole judgment exercised in good faith, that (i) a final
waiver of lien in the appropriate form and amount from such Disputing Contractor
has been duly executed and delivered to Owner and (ii) any and all mechanics
liens which shall have been filed by such Disputing Contractor arising out of
Tenant’s Alterations have been duly discharged of record, without application of
the Lien Deposit, and at no cost or expense to Owner.  However, nothing set
forth in the immediately preceding sentence or elsewhere in this Agreement shall
be deemed to waive, impair or otherwise affect Owner’s right to apply all or any
portion of the Lien Deposit in accordance with the provisions of the Lease
including, without limitation, in accordance with the provisions of this
Section 5.4.  Notwithstanding the foregoing provisions of this Section 5.4 or
anything to the contrary in the Lease, (i) in no event shall Tenant have the
right to deliver a Lien Deposit in lieu of a lien waiver as hereinabove provided
if the amount of such Lien Deposit, as shall be determined by Owner in Owner’s
sole, good faith judgment as provided above, shall exceed the sum of
$50,000.00,  (ii) in no event shall Tenant have the right to deliver more than
one (1) Lien Deposit for any Disputing Contractor and (iii) in no event shall
Tenant have the right to deliver Lien Deposits for more than two (2) Disputing
Contractors.

 

5.5                               If Tenant shall exercise its right to deliver
a Lien Deposit in lieu of a lien waiver as provided in Section 5.4 above, then
notwithstanding the provisions of Section 5.3 above, the Tenant’s Improvement
Allowance Commencement Date shall be extended to the date which shall be the
first day of the calendar month immediately following the date that Tenant shall
become entitled to a return of the Lien Deposit(s) pursuant to the provisions of
Section 5.4 above, as shall be determined by Owner in Owner’s sole judgment,
exercised in good faith; provided, however, that in no event shall the Tenant’s
Improvement Allowance Commencement Date ever be earlier than the date thereof
determined in accordance with the provisions of Section 5.3 above without regard
to the provisions of this Section 5.5.

 

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5.6                               For the avoidance of doubt, Owner and Tenant
hereby acknowledge and agree that Tenant may satisfy its restoration obligations
with respect to the wood flooring on the third floor of the Premises under
Article 102 of the Lease at the time Tenant performs Tenant’s Alterations or at
any other time which is not less than ten (10) days prior to the expiration or
earlier termination of the term of the Lease; provided, however, that upon the
expiration or earlier termination of the term of the Lease, Tenant shall
nevertheless be obligated to deliver the wood flooring on the third floor of the
Premises in its original, “like-new” condition regardless of when Tenant shall
satisfy such restoration obligations.

 

5.7.                            Provided and on condition that (i) Tenant shall
complete Tenant’s Alterations costing not less than a minimum of $3,500,000.00,
inclusive of the Included Costs, and otherwise in accordance with all of the
applicable provisions of the Lease including, without limitation, all of the
provisions of this Section 5, by the Alterations Outside Completion Date and,
consequently, Tenant shall become entitled to payment of Tenant’s Improvement
Allowance, and (ii) by the Alterations Outside Completion Date, Tenant shall
also complete additional Tenant’s Alterations costing not less than a minimum of
$250,000.00 which are limited exclusively to alterations and improvements to the
infrastructure of the Premises such as new flooring, lighting, electrical wiring
and built-in air conditioning equipment (and specifically excluding any sanding
or re-finishing of flooring, cabling, IT work, installation of audio-visual,
computer or electronic equipment, furniture or furnishings of any kind, cosmetic
work, architectural, engineering or other professional fees, or other “soft
costs”) which shall be reasonably approved by Owner (such items of additional
Tenant’s Alterations are hereinafter referred to as the “Tenant’s Additional
Alterations”), then Tenant shall be entitled to an additional tenant improvement
allowance as more particularly set forth in Section 5.8 below in respect of the
Tenant’s Additional Alterations.   In accordance with the applicable provisions
of the Lease, Tenant shall submit to Owner, for Owner’s review and approval,
proposed complete and detailed architectural, mechanical, electrical, plumbing
and engineering plans and specifications in respect of Tenant’s Additional
Alterations.  Tenant shall not commence Tenant’s Additional Alterations unless
and until Tenant shall have received Owner’s final written approval of Tenant’s
plans and specifications in respect thereof in accordance with the applicable
provisions of the Lease.  Tenant’s contractors for the performance of Tenant’s
Additional Alterations shall be reputable, licensed, third party contractors
reasonably satisfactory to Owner.

 

5.8.                            Subject to and conditioned upon Tenant’s
completion by the Alterations Outside Completion Date, time being of the
essence, of Tenant’s Additional Alterations costing not less than a minimum of
$250,000.00, and otherwise in accordance with all of the applicable provisions
of the Lease including, without limitation, all of the provisions of this
Section 5, an amount equal to $250,000.00 (“Tenant’s Additional Improvement
Allowance”) shall be paid by Owner to Tenant on or about the tenth (10th) day of
the tenth (10th) calendar month immediately following the date that Owner shall
have received all of the Alterations Completion Documents relating to the
Tenant’s Additional

 

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Alterations (but in no event earlier than April 10, 2015). All of the
Alterations Completion Documents relating to the Tenant’s Additional Alterations
must be reasonably satisfactory to Owner in form and substance; provided, that
if Tenant shall have delivered all of the Alterations Completion Documents
relating to the Tenant’s Additional Alterations to Owner prior to the
Alterations Outside Completion Date but Owner gives notice to Tenant that any of
the Alterations Completion Documents relating to the Tenant’s Additional
Alterations which shall have been submitted by Tenant prior to the Alterations
Outside Completion Date has not been properly executed or is not in the proper
form, then Tenant shall have thirty (30) days after receipt of such notice to
deliver a replacement for such document that is reasonably satisfactory to
Owner, and the Alterations Outside Completion Date shall be extended for such
reasonable period of time (not to exceed 30 days after Tenant’s receipt of such
notice) solely for purposes of permitting Tenant to submit such replacement
document.  In no event shall Tenant be entitled to more than one (1) notice from
Owner nor shall the Alterations Outside Completion Date be extended more than
one (1) time pursuant to the provisions of the preceding sentence.  The payment
of the Tenant’s Additional Improvement Allowance by Owner to Tenant shall be
subject to and conditioned upon Tenant being current in the payment of all Fixed
Rent and Additional Rent under the Lease and upon Tenant not being in default
under any provision of the Lease.  Notwithstanding anything to the contrary in
the Lease or this Section 5, if by the Alterations Outside Completion Date, time
being of the essence, Tenant shall fail to (i) complete Tenant’s Additional
Alterations costing not less than a minimum of $250,000.00, (ii) deliver to
Owner all of the Alterations Completion Documents relating to the Tenant’s
Additional Alterations, or (iii) pay in full for all costs incurred by Tenant in
connection with Tenant’s Additional Alterations, then in any such event, Tenant
hereby waives Tenant’s Additional Improvement Allowance or any other
consideration with regard to Tenant’s Additional Alterations. The cost, on an
itemized basis, incurred by Tenant for the performance of each of the various
components or items of Tenant’s Additional Alterations, shall be limited to a
commercially reasonable amount to the extent such amount is included in the
aggregation of costs for purposes of meeting the minimum required aggregate cost
of $250,000.00.”

 

5.9.                            Inasmuch as Tenant’s Alterations and Tenant’s
Additional Alterations constitute Tenant’s Work, and are accordingly subject to
the provisions of Article 44 of the Lease as well as all of the other provisions
of the Lease which are applicable to Tenant’s Work, Owner and Tenant hereby
acknowledge that the requirement set forth in Section 44.1 (a) of the Lease that
Owner provide Tenant with Owner’s comments to the proposed work set forth in
Tenant’s Plans submitted to Owner within approximately ten (10) business days
after Owner’s receipt of Tenant’s Plans shall hereafter apply to Tenant’s
submission and Owner’s review of Tenant’s Plans relating to Tenant’s Alterations
and Tenant’s Additional Alterations.

 

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4.                                      Delay Consideration.  Tenant hereby
acknowledges and confirms that, at Tenant’s request and as an accommodation to
Tenant, Owner agreed to delay the commencement by Owner of certain exterior and
facade renovation and repair work at the Building, in order to facilitate
Tenant’s work schedule in connection with the development and release of the
“Grand Theft Auto V” video game by Tenant’s Rockstar division. In consideration
for the various costs and damages which have been suffered and incurred by Owner
in connection with such delay, Tenant has agreed to pay to Owner the sum of
$840,000.00 (the “Delay Consideration”).  The Delay Consideration shall be
payable by Tenant, as Additional Rent, in accordance with the following
schedule:

 

Date of Payment

 

Amount

 

April 9, 2014

 

$

250,000.00

 

May 1, 2014

 

$

250,000.00

 

June 1, 2014

 

$

250,000.00

 

July 1, 2014

 

$

90,000.00

 

 

5.                                      Owner’s Building Improvement Work.

 

5.1.                            (a)                                 Commencing
on a date (hereinafter, the “Owner’s Improvement Commencement Date”) to be
determined by Owner (after notice to Tenant for any work involving access to the
Premises) and following Owner’s receipt of the Municipal Approvals (as such term
is hereinafter defined), Owner shall perform the work generally described on
Exhibit A attached hereto in and to the Building (“Owner’s Building Improvement
Work”).  Tenant hereby acknowledges and confirms that Tenant has authorized and
approved Owner’s Building Improvement Work in all respects.  Subject to and
conditioned upon obtaining all permits and municipal approvals which may be
necessary in order to perform Owner’s Building Improvement Work (such permits
and municipal approvals are hereinafter collectively referred to as the
“Municipal Approvals”), Owner shall perform Owner’s Building Improvement Work
with reasonable diligence following the date of Owner’s receipt of all of the
Municipal Approvals, subject to Tenant Delay and prevention or delay by reason
of Force Majeure and without any obligation to employ contractors or labor at
overtime or other premium pay rates or to incur any extraordinary or unusual
cost or expense in connection therewith.  Owner shall substantially complete
Owner’s Building Improvement Work by the date which shall be twelve (12) months
after Owner’s Improvement Commencement Date, subject to extension by reason of
Tenant Delay and Force Majeure (such outside date of substantial completion of
Owner’s Building Improvement Work, as same may be extended as aforesaid, is
hereinafter referred to as “Owner’s Improvement Outside Substantial Completion
Date”).  Owner may enter the Premises at any reasonable time(s) to perform
Owner’s Building Improvement Work, and entry by Owner, its agents, servants,
employees or contractors for such purpose shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under the
Lease, or impose any liability upon Owner, or its agents, by reason of
inconvenience or annoyance to Tenant, or injury to, or interruption of, Tenant’s
business, or otherwise.  However, Owner will provide Tenant with at least
fifteen (15) days advance notice of a forty (40) consecutive business day
construction period for the window replacement portion of Owner’s Building
Improvement Work, within

 

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which not more than ten (10) consecutive business days of access to the 4th
floor and ten (10) consecutive business days of access to the 5th floor will be
required.  Tenant will have the option to designate the specific periods of ten
(10) consecutive business days within the overall forty (40) consecutive
business day construction period that such access to each of the 4th floor and
the 5th floor will be permitted in connection with the window replacement
portion of Owner’s Building Improvement Work, it being understood that the ten
(10) consecutive business day period during which the window replacement work
shall be performed on the 4th floor cannot overlap with the ten (10) consecutive
business day period during which the window replacement work shall be performed
on the 5th floor.  The forty (40) consecutive business day period and the two
(2) ten (10) consecutive business day periods referred to hereinabove in this
Section 5.1(a) shall each be subject to extension due to occurrences of Tenant
Delay and Force Majeure.

 

(b)                                 With regard to the portion of Owner’s
Building Improvement Work relating to the installation of the new freight
elevator, Owner shall construct full plywood enclosures surrounding both doors
of the freight elevators at each of the 3rd, 4th, 5th and 6th floors of the
Premises.  The enclosures will measure approximately five (5) feet by eight
(8) feet and will run floor to ceiling.  Owner will provide Tenant with at least
fifteen (15) days advance notice of the period during which these enclosures
will be constructed and in place, which period will extend for approximately
sixteen (16) consecutive weeks, subject to extension due to occurrences of
Tenant Delay and Force Majeure.  Owner and Tenant acknowledge that no access to
any portion of the Premises should be required to perform any portion of the
freight elevator installation work after these enclosures shall be constructed
and during the period these enclosures shall be in place, since it is
anticipated that substantially all of the freight elevator installation work
requiring access to the Premises during this period (other than for the
construction of the enclosures) will be confined to the area within the
enclosures.

 

(c)                                  Owner’s Building Improvement Work shall be
deemed to constitute Owner’s Renovation Work, as such term is defined in
Article 75 of the Lease.  For purposes of this Agreement, the term “Force
Majeure” shall mean prevention or delay by reason of strikes or labor troubles,
or by any cause whatsoever reasonably beyond the responsible party’s control
(other than financial condition), including but not limited to, laws,
governmental preemption in connection with a national emergency or by reason of
any requirement of any governmental authority or by reason of the conditions of
supply and demand which have been or are affected by war or other emergency.

 

5.2.                            No promise, agreement, representation or
warranty, verbal or otherwise, has been made to Tenant by Owner, its agents or
employees, and no expenditure for work or materials will be made by or on behalf
of Owner in the Premises or the Building, except as herein specifically set
forth with respect to Owner’s Building Improvement Work.  Without limitation of
the foregoing, Tenant hereby acknowledges that no representation or warranty has
been made by or on behalf of Owner as to the date or anticipated date of
substantial completion or completion of Owner’s Building Improvement Work. 
Except as expressly provided in this Section 4 and in the Lease, Owner shall
have no obligation to perform any alterations, installations or other work in or
to the Premises or the Building, and Tenant shall continue to accept the
Premises, and all fixtures, equipment and appurtenances therein, in their
current “as-is, where-is” condition.

 

5.3.                            Notwithstanding anything to the contrary set
forth in the Lease, all of Owner’s Building Improvement Work shall be performed
to “building standard”.  The term “building

 

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standard” as used herein shall mean such materials and construction and
renovation work techniques as Owner may elect to use from time to time, in
Owner’s sole and absolute discretion, as part of Owner’s standard construction
in the Building.  The term “building standard” shall also take into
consideration field conditions as they may exist from time to time and other
conditions, restrictions and limitations, whether physical, legal,
administrative or otherwise.  Without limitation of the foregoing, in no event
shall “building standard” be deemed to include any special, custom or
above-building standard work which may have previously been performed by Owner,
Tenant or any other tenant or prior tenant of the Building or which may
hereafter be performed by Owner, Tenant or any other tenant of the Building.

 

5.4.                            Subject to the terms hereof, Tenant shall pay to
Owner, by official bank check or wire transfer, the sum of eight hundred
forty-two thousand five hundred and 00/100 ($842,500.00) dollars, as a
non-refundable contribution by Tenant towards the cost of Owner’s Building
Improvement Work.  Such amount shall be payable as follows:

 

(a)                                 on Owner’s Improvement Commencement Date,
Tenant shall pay Owner the sum of four hundred twenty thousand and 00/100
($420,000.00) dollars; and

 

(b)                                 commencing on the date Owner shall achieve
substantial completion of Owner’s Building Improvement Work, as such date shall
be reasonably determined by Owner (“Owner’s Improvement Substantial Completion
Date”), and on the date which shall be one (1) month thereafter for a total of
two (2) such monthly payments, Tenant shall pay to Owner the sum of two hundred
eleven thousand two hundred fifty and 00/100 ($211,250.00) dollars per month for
a total of four hundred twenty-two thousand five hundred and 00/100
($422,500.00) dollars.

 

5.5.                            If Owner’s Improvement Substantial Completion
Date shall not occur by Owner’s Improvement Outside Substantial Completion Date,
then as Tenant’s sole and exclusive remedy, Tenant shall be entitled, as
liquidated damages, to deduct from the amount of the final monthly payment to be
made to Owner pursuant to the provisions of Section 5.4(b). above an amount
equal to the product of (i) $2,500.00 multiplied by (ii) the number of full
weeks in excess of fifty-two (52) weeks that Owner’s Improvement Substantial
Completion Date shall extend beyond Owner’s Improvement Outside Substantial
Completion Date; provided, however, that the aggregate amount of such liquidated
damages shall not exceed the amount of such final monthly payment (i.e.,
$211,500.00).

 

6.                                      The provisions of paragraph 8 of the
Sixth Modification are hereby amended to provide as follows: (i) Owner’s
obligation to perform Owner’s Interior Work is hereby waived by Tenant; and
(ii) the date by which Owner shall be obligated to substantially complete
Owner’s Exterior Work is extended until the date which shall be eleven (11)
months after the later to occur of (a) the date that the facade work currently
being performed by Owner to the Broadway side of the Building shall be completed
and the scaffolding and sidewalk bridge on the Broadway side of the Building
shall be removed and (b) the date that Tenant shall complete the Lobby and
Elevator Alterations in accordance with the provisions of paragraph 5 of the
Sixth Modification, as amended and restated pursuant to the provisions of
paragraph 3 of this Agreement.

 

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7.                                      Brokers.  Owner and Tenant each warrant
and represents that there was no broker, finder or like agent instrumental in
consummating this Agreement and that such party had no dealings, communications,
conversations or prior negotiations with any brokers, finders or like agents
concerning the modification of the Lease pursuant to this Agreement.  Each
representing party covenants and agrees to pay, indemnify and hold the other
party harmless from and against any and all claims for all brokerage
commissions, fees or other compensation by any brokers claiming to have dealt
with such representing party in connection with this Agreement or arising out of
any conversations or negotiations had by such representing party with any
brokers concerning the modification of the Lease pursuant to this Agreement, and
for any and all costs, expenses (including, without limitation, reasonable
attorneys’ fees, disbursements and court costs), liabilities and penalties
incurred by the indemnified party in connection with or arising out of any such
claims. The provisions of this section shall survive the expiration or earlier
termination of the Lease.

 

8.                                      Negotiation and Execution.  It is
specifically acknowledged by the parties that this Agreement is the result of
substantive negotiations between the parties and that this Agreement has been
executed and delivered by each of the parties upon the advice of independent
legal counsel.  It is understood and agreed that all parties shall be deemed to
have prepared this Agreement in order to avoid any negative inference that might
be drawn against the preparer thereof.

 

9.                                      Certain Definitions.  Each of the
capitalized terms in this Agreement which are not otherwise defined herein shall
have the meaning ascribed to such term in the Original Lease.

 

10.                               Inducement to Owner and Tenant.  As a material
inducement to each of Owner and Tenant to execute this Agreement, each party
hereby acknowledges and represents to the other party that, to the best of the
representing party’s actual knowledge, the other party is not in default of any
of the terms, covenants, provisions, warranties, representations and conditions
of the Original Lease through the date hereof and that there are no offsets or
defenses thereto.

 

11.                               Ratification.  Except as may be otherwise set
forth in this Agreement, all of the terms and provisions of the Lease are hereby
ratified and confirmed and shall remain unmodified and in full force and
effect.  Additionally, the parties confirm and agree that the two revocable
license agreements between the parties dated September 11, 2006 and February 11,
2008, respectively, as amended December 31, 2012, covering additional space in
the Building (the “Licensed Premises”), are unaffected by this Agreement and are
hereby ratified and confirmed and shall remain unmodified and in full force and
effect.

 

12.                               Successors and Assigns.  The covenants,
agreements, terms, provisions and conditions contained in this Agreement shall
bind and inure to the benefit of the parties hereto and their respective
successors, legal representatives and permitted assigns, if any.

 

13.                               Waiver.  The failure of a party at any time to
enforce any provision hereunder shall in no way affect the right of that party
thereafter to enforce the same or any other provision of this Agreement; nor
shall the waiver by a party of the breach of any provision hereof be taken or
held to be a waiver of any subsequent breach of any such provision or as a
waiver of any other provision hereof.

 

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14.                               Modification.  This Agreement may not be
modified orally, but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is sought.

 

15.                               Void or Unenforceable Provisions.  If any
provision of this Agreement is found to be void or unenforceable by a court of
competent jurisdiction, the remaining provisions of this Agreement shall
nevertheless be binding upon the parties with the same force and effect as
though the void or unenforceable part had been severed and deleted.

 

16.                               Inconsistent Provisions.  It is in the intent
of the parties that this Agreement and the Original Lease are to be read and
construed together, to the extent reasonably possible.  However, in the event of
any conflict or inconsistency between the terms and provisions of this Agreement
and the terms and provisions of the Original Lease, then the terms and
provisions of this Agreement shall govern and be binding.

 

17.                               Captions.  The captions for each of the
sections of this Agreement are inserted for convenience only and shall have no
meaning or relevance to the construction or interpretation of this Agreement.

 

18.                               Conditions to Binding Agreement.  This
Agreement shall not be binding upon Owner unless and until at least two
originals hereof have been executed by Tenant and counter-executed on behalf of
Owner and at least one of such originals shall have been returned to Tenant or
Tenant’s attorneys.

 

In witness whereof, the parties hereto have executed this Agreement as of the
day and year first above written.

 

Witness:

 

Moklam Enterprises, Inc.

 

 

 

 

 

 

 

 

 

By:

/s/ Raymond H. Yu

 

 

 

Name:

Raymond H. Yu

 

 

 

Title:

President

 

 

 

 

 

 

 

 

Take-Two Interactive Software, Inc.

 

 

 

 

 

 

 

/s/ Teodora Vargas

 

By:

/s/ Karl Slatoff

 

 

 

Name: Karl Slatoff

 

 

 

Title: President

 

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