**Exhibit 10.1**

 

**CONFIDENTIAL TREATMENT REQUESTED**

 

 

PARAMOUNT GROUP, INC.

as Agent for

 

 

1177 AVENUE OF THE AMERICAS, L.P.

 

Landlord,

 

 

-and-

 

 

 

ARCHIPELAGO HOLDINGS, INC.

 

 

Tenant.

 

 

**L E A S E**

 

 

Dated: November 3, 2004

 

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TABLE OF CONTENTS

 
| **Article**                             |   |   |
|-----------------------------------------|--------|--------|
|                                    |   |
| ARTICLE 1                               |   |
| Premises,  Term, Purposes and Rent      |   |
|                                    |   |
| ARTICLE 2                               |   |
| Completion and Occupancy                |   |
|                                    |   |
| ARTICLE 3                               |   |
| Use  of Premises                        |   |
|                                    |   |
| ARTICLE 4                               |   |
| Appurtenances,  Etc., Not to be Removed |   |
|                                    |   |
| ARTICLE 5                               |   |
| Various Covenants                       |   |
|                                    |   |
| ARTICLE 6                               |   |
| Changes or Alterations by Landlord      |   |
|                                    |   |
| ARTICLE 7                               |   |
| Damage by Fire, Etc.                    |   |
|                                    |   |
| ARTICLE 8                               |   |
| Condemnation                            |   |
|                                    |   |
| ARTICLE 9                               |   |
| Compliance with Laws                    |   |
|                                    |   |
| ARTICLE 10                              |   |
| Accidents to Plumbing and Other Systems |   |
|                                    |   |
| ARTICLE 11                              |   |
| Notices and Service of Process          |   |
|                                    |   |
| ARTICLE 12                              |   |
| Conditions of Limitation                |   |
|                                    |   |
| ARTICLE 13                              |   |
| Re-entry by Landlord                    |   |
|                                    |   |
| ARTICLE 14                              |   |
| Damages                                 |   |

 

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| ARTICLE 15                                                      |   |
|-----------------------------------------------------------------|--------|
| Waivers  by Tenant                                              |   |
|                                                            |   |
| ARTICLE 16                                                      |   |
| Waiver of Trial by Jury                                         |   |
|                                                            |   |
| ARTICLE 17                                                      |   |
| Elevators, Cleaning, Heating, Air  Conditioning, Services, Etc. |   |
|                                                            |   |
| ARTICLE 18                                                      |   |
| Lease Contains All Agreements—No Waivers                   |   |
|                                                            |   |
| ARTICLE 19                                                      |   |
| Parties Bound                                                   |   |
|                                                            |   |
| ARTICLE 20                                                      |   |
| Curing Tenant’s Defaults—Additional Rent              |   |
|                                                            |   |
| ARTICLE 21                                                      |   |
| Inability to Perform                                            |   |
|                                                            |   |
| ARTICLE 22                                                      |   |
| Adjacent Excavation—Shoring                                |   |
|                                                            |   |
| ARTICLE 23                                                      |   |
| Article Headings                                                |   |
|                                                            |   |
| ARTICLE 24                                                      |   |
| Electricity and Water                                           |   |
|                                                            |   |
| ARTICLE 25                                                      |   |
| Assignment, Mortgaging, Subletting, Etc.                        |   |
|                                                            |   |
| ARTICLE 26                                                      |   |
| Escalations                                                     |   |
|                                                            |   |
| ARTICLE 27                                                      |   |
| Subordination                                                   |   |
|                                                            |   |
| ARTICLE 28                                                      |   |
| Miscellaneous                                                   |   |
|                                                            |   |
| ARTICLE 29                                                      |   |
| Layout  and Finish                                              |   |

 

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| ARTICLE 30                                                |   |
|-----------------------------------------------------------|--------|
| Insurance                                                 |   |
|                                                      |   |
| ARTICLE 31                                                |   |
| Security Deposit                                          |   |
|                                                      |   |
| ARTICLE 32                                                |   |
| Extension Option                                          |   |
|                                                      |   |
| ARTICLE 33                                                |   |
| Right of First Offering                                   |   |
|                                                      |   |
| ARTICLE 34                                                |   |
| Telecommunications Conduit                                |   |
|                                                      |   |
| ARTICLE 35                                                |   |
| Quiet Enjoyment                                           |   |
|                                                      |   |
| SIGNATURES                                                |   |
|                                                      |   |
| RULES AND REGULATIONS                                     |   |
|                                                      |   |
| EXHIBIT A                                                 |   |
| RENTAL PLAN                                               |   |
|                                                      |   |
| EXHIBIT B                                                 |   |
| OPERATING EXPENSES                                        |   |
|                                                      |   |
| EXHIBIT C                                                 |   |
| HEATING, VENTILATING AND AIR-CONDITIONING  SPECIFICATIONS |   |
|                                                      |   |
| EXHIBIT D                                                 |   |
| CLEANING AND JANITORIAL SERVICES                          |   |
|                                                      |   |
| EXHIBIT E                                                 |   |
| FORM OF LETTER OF CREDIT                                  |   |
|                                                      |   |
| EXHIBIT F                                                 |   |
| FIRST OFFERING SPACE                                      |   |

 

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**LEASE**

 

LEASE, dated as of November 3, 2004 between PARAMOUNT GROUP, INC., asAgent for 1177 AVENUE OF THE AMERICAS, L.P. (Landlord), having offices at 1633Broadway, Suite 1801, New York, NY 10019 and ARCHIPELAGO HOLDINGS, INC.(Tenant), an Illinois corporation, having an office at 100 South Wacker Drive,Suite 1800, Chicago, IL 60606(Lease).

 

WITNESSETH:

 

**ARTICLE1**

 

**Premises****, Term, Purposes and Rent**

 

Section 1.01           Landlord does hereby lease to Tenant,and Tenant does hereby lease from Landlord, subject to any ground and/orunderlying leases and/or mortgages as herein provided, and upon and subject tothe covenants, agreements, terms, provisions and conditions of this Lease, forthe term herein stated, the entire 16th floor substantially as shown on therental plan annexed hereto as Exhibit A, in the building known as and locatedat 1177 Avenue of the Americas, New York, New York (Building).  Said leased premises, together with allAppurtenances, as herein defined, (except Tenant’s Property, herein defined)are herein called the “Premises”.  Theplot of land on which the Building is located is herein called the “Land”.

 

Section 1.02           The term of this Lease shall commenceon the date Landlord delivers possession of the Premises to Tenant withLandlord’s Work (as hereinafter defined) substantially complete (subject toSection 2.02 hereof) (Term Commencement Date) and shall end *** (***) years and***(****) months thereafter (Expiration Date) or on such earlier date uponwhich said term may expire or be terminated as herein provided or pursuant tolaw.

 

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*** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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Section 1.03           The Premises shall be used for thefollowing, but no other purpose, namely: executive and general offices (and customary ancillary uses associatedtherewith, including securities trading and related activities thereto(provided such related activities are consistent with the character of theBuilding as a first-class office building), provided the same do not otherwiseviolate the Certificate of Occupancy for the Building or the remaining termsand conditions of this Lease).

 

Section 1.04           The rent reserved under this Leasefor the term hereof shall be and consist of the following fixed rent (FixedRent), namely:  $*** per annum,commencing on the Term Commencement Date and continuing for *** (***) years and*** (***) months thereafter; and $**** per annum through the balance of theLease term.  The Fixed Rent shall bepayable in equal monthly installments in advance on the first day of each andevery calendar month during said term, plus such additional rent and othercharges as shall become due and payable hereunder, which additional rent andother charges shall be payable as herein provided; all to be paid to Landlordat Post Office Box 11180, New York, NY 10286-1180, or such other place asLandlord may designate, in lawful money of the United States of America.

 

Section 1.05           Tenant does hereby covenant and agreepromptly to pay the Fixed Rent, additional rent and other charges hereinreserved as and when the same shall become due and payable, without demandtherefor, and without any setoff or deduction whatsoever, and to keep, observeand perform, and permit no violation of, each of Tenant’s obligationshereunder.  If the Fixed Rent shallcommence on any date other than the first day of a calendar month, the FixedRent for such calendar month shall be prorated.

 

Section 1.06           The parties hereby agree that for allpurposes of this Lease the rentable area of the Premises is deemed to be 23,980square feet.  Neither party shall makeany claim for either an increase or decrease in Fixed Rent or additional rentbased on the rentable area of the Premises or any

 

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*** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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portion thereof being other than as set forth in the precedingsentence.

 

Section 1.07           In the event that the Term or RentCommencement Date or Expiration Date is not a date certain, then each partyagrees to execute, within ten (10) days after the other makes a requesttherefor, an agreement setting forth such dates, provided, however,that either party’s failure to execute said agreement shall in no way affectsuch dates or the validity of this Lease, nor shall same constitute a defaultunder this Lease.

 

Section 1.08           If any of the Fixed Rent oradditional rent payable under this Lease shall be or become uncollectible,reduced or required to be refunded because of any legal requirements, Tenantshall enter into such agreement(s) and take such other legally permissiblesteps as Landlord may reasonably request to permit Landlord to collect themaximum rents which from time to time during the continuance of such legalrequirements may be legally permissible and not in excess of the amountsreserved therefor under this Lease.  Uponthe termination of such legal requirements, (a) the rents hereunder shall bepayable in the amounts reserved herein for the periods following suchtermination and (b) Tenant shall pay to Landlord, to the maximum extent legallypermissible, an amount equal to (i) the rents which would have been paidpursuant to this Lease but for such legal requirements less (ii) the rents paidby Tenant during the period such legal requirements were in effect.

 

Section 1.09           To the extent permitted under applicablelaw, in the event any of the conditions hereinafter set forth in Sections12.01(a), 12.01(b) or 12.01(c) of this Lease occur at any time prior to theTerm Commencement Date, then notwithstanding anything in this Lease or in anybankruptcy or insolvency law to the contrary, this Lease shall thereuponautomatically become null and void abinitio.

 

Section 1.10           Provided that Tenant is not then inmonetary default beyond the expiration of any applicable notice and cure periodof any of the terms, conditions, covenants or agreements of this Lease on itspart to be performed, the Fixed Rent only shall be abated for the first ***(***) months commencing on the Term Commencement Date.  The date immediately

 

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*** Certain information on thispage has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to theomitted portions.

 

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following such *** (****) month period shall herein be called the “RentCommencement Date.”

 

**ARTICLE2**

 

**Completion and Occupanc****y**

 

Section 2.01           Tenant acknowledges that it hasinspected the Premises and agrees to accept possession of same in its “as-is”physical condition on the Term Commencement Date, it being understood andagreed that Landlord shall not be obligated to perform any alterations,improvements or repairs to the Premises or furnish to or remove from thePremises any alterations, improvements, fixtures, materials or any otherproperty whatsoever except that Landlord shall, at its sole expense *** (Landlord’sWork) which shall be performed substantially in accordance with the demolitionplan for the 15th floor of the Building previously furnished by Landlord toTenant (existing ADA bathroom to remain). In the event that Landlord is delayed in substantially completingLandlord’s Work and such delay was caused in any way by Tenant, then Landlord’sWork shall be deemed substantially complete on the day it otherwise would havebeen substantially completed but for Tenant-caused delays, and the TermCommencement Date shall be deemed to be said date despite the fact thatLandlord’s Work was not substantially complete on said date.  For purposes of Sections 1.02 and 2.01, theterm “substantially complete” shall mean that only minor details ofconstruction, mechanical adjustment or decoration remain to be performed, whichwill not prevent Tenant from performing the construction required to preparethe Premises for Tenant’s initial occupancy. Tenant further acknowledges thatit shall not be entitled to any free rent, concessions, credits orcontributions of money from Landlord with respect to the Premises (except asprovided for in Sections 1.10 and 29.02 hereof).

 

Section 2.02           Tenant shall occupy the Premises assoon as the same are available for occupancy. Landlord and Tenant agree that any failure to have the Premisesavailable to Tenant for its occupancy on a date certain shall in no way affectthe

 

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**** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

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validity of this Lease or the obligations of Tenant hereunder nor shallthe same be construed in any wise to extend the term of this Lease or imposeany liability on Landlord.  Theprovisions of this Section 2.02 are intended to constitute “an expressprovision to the contrary” within the meaning of Section 223-a of the New YorkReal Property Law and any other similar law hereafter in force.  The Fixed Rent reserved and covenanted to bepaid under this Lease shall commence on the Rent Commencement Date.  Tenant, by entering into occupancy of anypart of the Premises, shall be conclusively deemed to have agreed thatLandlord, up to the time of such occupancy, had performed all of itsobligations hereunder with respect to such part and that such part was insatisfactory condition as of the date of such occupancy unless within ten (10)days after such date Tenant shall give written notice to Landlord specifyingthe respects in which the same was not in such condition.  In the event Landlord fails to deliverpossession of the Premises to Tenant on or before May 31, 2005, unless suchfailure is due to strikes or labor troubles, acts of God, or the acts oromissions, negligence or otherwise of Tenant or its agents or employees, thenTenant, as its sole and exclusive remedy, shall have the one-time right toterminate this Lease, provided Landlord receives written notice of Tenant’selection to terminate this Lease on or before June 15, 2005 (time being of theessence).  In the event (i) Landlord doesnot receive said notice on or before June 15, 2005, or (ii) Landlord deliverspossession of the Premises to Tenant prior to receiving said notice, Tenant’sright to terminate this Lease shall lapse and be of no further force andeffect.  Upon such termination, neitherparty shall have any liability to the other under this Lease.  In the event Landlord fails to deliverpossession of the Premises to Tenant on or before December 31, 2005, unlesssuch failure is due to the acts or omissions, negligence or otherwise of Tenantor its agents or employees, then Tenant, as its sole and exclusive remedy,shall have the one-time right to terminate this Lease, provided Landlordreceives written notice of Tenant’s election to terminate this Lease on orbefore January 15, 2006 (time being of the essence).  In the event (i) Landlord does not receivesaid notice on or before January 15, 2006, or (ii) Landlord delivers possessionof the Premises to Tenant prior to receiving said notice, Tenant’s right toterminate this Lease shall lapse and be of no further force and effect.  Upon such termination, neither party shallhave any liability to the other under this Lease.

 

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**ARTICLE3**

 

**Use of Premises**

 

Section 3.01           Tenant shall not use the Premises orany part thereof, or permit the Premises or any part thereof to be used in anymanner which would violate the Certificate of Occupancy for the Building or,for any purpose other than the use hereinbefore specifically mentioned.  Those portions, if any, of the Premises, identifiedas toilets and utility areas shall be used by Tenant only for the purposes forwhich they are designed.

 

Section 3.02           Tenant shall not use or permit theuse of the Premises or any part thereof in any way which would violate any ofthe covenants, agreements, terms, provisions and conditions of this Lease orfor any unlawful purposes or in any unlawful manner and Tenant shall not sufferor permit the Premises or any part thereof to be used in any manner or anythingto be done therein or anything to be brought into or kept therein which, in thereasonable judgment of Landlord, shall in any way materially impair thecharacter, reputation or appearance of the Building as a high quality officebuilding, impair or interfere with any of the Building services or the properand economic heating, cleaning, air conditioning or other servicing of theBuilding or Premises, or impair or interfere with the use of any of the otherareas of the Building by, or occasion discomfort, inconvenience or annoyanceto, any of the other tenants or occupants of the Building.  No property other than such as might normallybe brought upon or kept in the Premises as an incident to the reasonable use ofthe Premises for the purposes specified in this Lease shall be brought upon orkept in the Premises.

 

Section 3.03           If any governmental license or permitshall be required for the proper and lawful conduct of Tenant’s business orother activity carried on in the Premises, and if the failure to secure suchlicense or permit might or would, in any way, adversely affect Landlord, thenTenant, at Tenant’s expense, shall duly procure and thereafter maintain suchlicense or permit and submit the same to inspection by Landlord.  Tenant, at Tenant’s expense, shall at alltimes comply with the requirements of each such license or permit.

 

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**ARTICLE4**

 

**Appurtenan****ces, Etc., Not to be Removed**

 

Section 4.01           (a)           Allalterations, additions, decorations, fixtures, equipment, improvements,installations and appurtenances attached to, or built into the Premises priorto, at the commencement of or during the term hereof (Appurtenances), whetheror not furnished or installed at the expense of Tenant or by Tenant, includingwithout limitation, Tenant’s Changes as defined in Section 5.01(e) hereof, shallbe and remain part of the Premises and be deemed the property of Landlord andshall not be removed by Tenant, except as otherwise expressly provided in thisLease.  Without limiting the generalityof the immediately preceding sentence, all electric, plumbing, heating,sprinkler, dumbwaiter, elevator, telephone, telegraph, communication, radio andtelevision systems, fixtures and outlets, venetian blinds, partitions,railings, gates, doors, stairs, paneling, cupboards (whether or not recessed inpaneling), molding, shelving, radiator enclosures, cork, rubber, tile andcomposition floors, and ventilating, silencing, air conditioning and coolingequipment shall be deemed included in such Appurtenances, if attached to orbuilt into the Premises.  Appurtenancesshall also include, without limitation, all wiring, cables, risers and similarinstallations appurtenant thereto installed by Tenant in the risers or othercommon areas of the Building. Notwithstanding anything contained in this Section 4.01 to the contrary,any Appurtenances furnished and installed in any part of the Premises at thesole expense of Tenant and all of Tenant’s personal property (suchAppurtenances as referred to in this sentence and Tenant’s personal propertycollectively “Tenant’s Property”) may be removed from the Building by Tenantprior to the Expiration Date, provided however, if and to the extent requestedby Landlord prior to the Expiration Date, all Appurtenances, Tenant’s Propertyand Tenant’s Changes so requested by Landlord shall be removed from theBuilding by Tenant prior to such Expiration Date.  Tenant shall repair, restore, replace and/orrebuild (as the circumstances may require), in a good and workmanlike mannerany damage to the Premises or the Building caused by such removal.  At the time of installing any Appurtenance,Tenant’s Property or Tenant’s Changes, Tenant may request Landlord to waiveTenant’s obligation to remove in writing. Tenant shall not be obligated to remove any such Appurtenance, Tenant’sProperty or Tenant’s Changes which are the subject of any such written waiversigned by Landlord but must provide a copy of such written waiver in the

 

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event that a dispute arises. Failure to provide a copy of any such waiver shall be presumptiveevidence that a waiver was not granted. If any of the Appurtenances, Tenant’s Property or Tenant’s Changes whichare required to be removed from the Building by Tenant are not so removedwithin the time above specified, then Landlord (in addition to all other rightsand remedies to which Landlord may be entitled at any time) may at its electiondeem that the same has been abandoned by Tenant to Landlord, but no suchelection shall relieve Tenant of Tenant’s obligation to pay the actualout-of-pocket expenses of removing the same from the Premises or the expense ofrepairing, restoring, replacing and/or rebuilding (as the circumstances mayrequire) damage to the Premises or to the Building arising from such removal,which obligation shall survive the Expiration Date.

(b)           Notwithstandinganything contained in this Section 4.01 to the contrary, Tenant shall not berequired to remove any Tenant’s Changes which Tenant may perform to thePremises pursuant to and in accordance with the terms of this Lease which arenon-structural, do not involve the perforation of a floor slab or the exteriorfacade, and are otherwise consistent with customary office usage.  Tenant shall (if designated by Landlord atthe time Landlord approves the plans for Tenant’s Changes) be required toremove overstandard and/or structural alterations, including, withoutlimitation, structural steel installed below existing members, raised flooring,and any bathrooms other than the base Building core area bathrooms, providedhowever, as to the said items Tenant may be required to remove Landlord willspecify such items on Landlord’s approval of the plans and specifications forTenant’s Changes (Tenant being obligated to remove only such items as itinstalls within the Premises and are so specified by Landlord).  Tenant shall also be required to remove anywires, cabling or other installations within any conduits or riser space withinthe Building.

 

Section 4.02           All the perimeter walls and doors ofthe Premises, any balconies, terraces or roofs adjacent to the Premises, andany space in and/or adjacent to the Premises used for shafts, stairways,stacks, pipes, vertical conveyors, mail chutes, pneumatic tubes, conduits,ducts, electric or other utilities, rooms containing elevator or airconditioning machinery and equipment, sinks, or other similar or dissimilarBuilding facilities, and the use thereof, as well as access thereto (includingthe right to secure same) through the Premises for the purpose of such use andthe operation, improvement, alteration, replacement, addition, repair,cleaning,

 

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maintenance, safety, security, and/or decoration thereof, are expresslyreserved to Landlord.

 

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**ARTICLE5**

 

**Various Covenants**

 

Section 5.01           Tenant covenants and agrees thatTenant will:

 

(a) Except for Landlord’s obligations under Section 10.02 hereof, takegood care of and maintain in good order, condition and repair the Premises andAppurtenances, and, at Tenant’s sole cost and expense, make all non-structuralrepairs, restorations and/or replacements thereto as may be required to keepthe Premises and Appurtenances in good order and condition.  Tenant shall also be responsible for the costof all repairs, interior and exterior, structural and non-structural, ordinaryand extraordinary, foreseen or unforeseen, in and to the Building and thefacilities and systems thereof, the need for which arises out of (i) theperformance or existence of Tenant’s Changes (herein defined), (ii) theinstallation, use or operation of Tenant’s Property, (iii) the moving of Tenant’sProperty into or out of the Premises or the Building, (iv) Tenant’s complianceor non-compliance with any legal and/or insurance requirements or (v) the act,omission, misuse or neglect of Tenant or any of its subtenants or its or theiragents, licensees or invitees.  Anyrepairs in or to the Building and/or the facilities and systems thereof forwhich Tenant is so responsible shall be performed by Landlord at Tenant’sexpense and Tenant shall pay Landlord’s charge therefor as additional renthereunder within ten (10) days after Landlord gives Tenant an invoicetherefor.  All repairs and replacementsmade by or on behalf of Tenant or any person claiming through or under Tenantshall be made in conformity with the provisions of this Lease and shall be atleast equal in quality and class to the original work or installation or thethen standards for the Building established by Landlord.

 

(b) Observe and comply (and cause its agents, employees, invitees andlicensees to observe and comply) with the rules and regulations annexed heretoand such additional reasonable rules and regulations as Landlord hereafter atany time or from time to time may make and may communicate in writing toTenant, provided, however, that in the case of any conflict between theprovisions of this Lease and such rule or regulation, the provisions of thisLease shall control; and provided further that nothing contained in this Leaseshall be construed to impose upon Landlord any duty or obligation to enforcethe rules and regulations or the terms, covenants or conditions in any other

 

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lease as against any other tenant and; provided further that Landlordshall not be liable to Tenant for violation of the same by any other tenant,its employees, agents, visitors, invitees, subtenants or licensees.  In enforcing the rules and regulations,Landlord agrees to treat similarly situated tenants in a similar fashion.

 

(c) Subject to Section 5.02(a) hereof, permit Landlord and anymortgagee of the Building and/or the Land or of the interest of Landlordtherein and any lessor under any ground or underlying lease, and theirrepresentatives, to enter the Premises at all reasonable hours upon reasonable(24-hours) prior written (fax being acceptable) notice (except in the case ofan emergency when no notice will be required) for the purposes of inspection,or of making repairs, replacements or improvements in or to the Premises or theBuilding or equipment, or of complying with all laws, orders and requirementsof governmental or other authority or of fulfilling any obligation orexercising any right reserved to Landlord by this Lease (including the rightduring the progress of such repairs, replacements or improvements or whileperforming work and furnishing materials in connection with compliance with anysuch laws, orders or requirements, to keep and store within the Premises (incompliance with all insurance and legal requirements) all necessary materials,tools and equipment).

 

(d)  Make no claim againstLandlord, or any lessor under any ground or underlying lease, or any mortgageeunder any mortgage or trust indenture (collectively herein the “Indemnitees”)for any damage to property entrusted to employees of Landlord or for any lossof or damage to any property by theft (including damage resulting from theft orattempted theft) or any injury or damage to Tenant or other persons or propertyresulting from fire, explosion, falling plaster, steam, gas, electricity,water, rain or snow or leaks from any part of the Building or from the pipes,appliances or plumbing works or from the roof, street or subsurface or from anyother place or by dampness, or caused by other tenants or persons in theBuilding, or by any other cause of whatsoever nature (including, withoutlimitation, damage or injury caused by any hazardous or dangerous condition,waste, material and/or substance (as the same may be defined in any local,state or federal rule, regulation or statute)), unless caused by or due to thenegligence or willful misconduct of Landlord, its agents, servants oremployees, but subject to the Sections 7.03 and 7.04 hereof.

 

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(e)           (i)            Make no alterations, decorations,installations, repairs, additions, improvements or replacements includingTenant’s initial work in the Premises necessary for Tenant’s occupancy thereof(herein collectively called “Tenant’s Changes”) in, to or about the Premiseswithout Landlord’s prior written consent; provided, however, Landlord agrees(1) that Tenant shall not be required to obtain Landlord’s prior writtenconsent to Tenant’s Changes which (a) are non-structural and decorative innature and/or do not involve the perforation of any floor slab, (b) do notconnect to or adversely affect any of the Building’s systems, (c) are notvisible from outside the Premises, (d) do not cost in excess of $*** in the aggregatein any twelve (12) month period, (e) do not affect, nor are visible from, theexterior of the Building, and (f) do not affect the common corridor of anyfloor on which the Premises are located (if any) or any other common areas ofthe Building, provided that Tenant gives Landlord (x) no less than ten (10)business days’ prior written notice of its intention to so perform such Tenant’sChanges along with copies of the plans and specifications related thereto (or adetailed sketch for those Tenant’s Changes for which plans and specificationsare not customarily prepared) and (y) such other information which Landlordreasonably requests with respect thereto within five (5) business days’ afterthe same is requested, and (2) to be reasonable in granting or withholding itsconsent to Tenant’s Changes which meet the criteria set forth in (a), (b), (c),(e), and (f) but cost in excess of $*** in the aggregate in any twelve (12)month period.  Tenant’s Changes shallonly be performed by contractors, subcontractors or mechanics approved byLandlord provided Landlord’s approval with respect thereto shall be reasonableif the Tenant’s Changes involved meet the criteria set forth in (a), (b), (c),(e), and (f).  Tenant’s Changes shall bedone at Tenant’s sole expense and at such times and in such manner as Landlordmay from time to time reasonably designate. Landlord shall not unreasonably withhold its consent to Tenant’s Changesinvolving floor reinforcements, subject to Tenant’s compliance with allapplicable provisions of this Lease.

 

(ii)           Prior to thecommencement of any Tenant’s Changes, Tenant shall submit to Landlord, (1) forLandlord’s

 

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*** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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written approval, three (3) complete sets of the plans andspecifications (to be prepared by and at the expense of Tenant) of suchproposed Tenant’s Changes in detail satisfactory to Landlord, and (2) uponLandlord’s request and for Tenant’s Changes estimated to cost in excess of $***,at Tenant’s sole cost and expense, either (i) a completion bond, issued by asurety company acceptable to Landlord in an amount at least equal to theestimated cost of such Tenant’s Changes or (ii) at Tenant’s option, anirrevocable letter of credit (the combined sum under this letter of credit andthe letter of credit held as the security deposit hereunder shall never exceedthe total amount of the security deposit required hereunder at the time of theTenant’s Change), drawn on a bank which is a member of The New York ClearingHouse Association and otherwise satisfactory to Landlord, in an amount equal to*** percent (***%) of Landlord’s estimate of the cost of performing such Tenant’sChanges, in each case guaranteeing to Landlord the completion of such Tenant’sChanges within a reasonable time, as follows: (A) free and clear of all liens, conditional bills of sale, securityagreements and other claims, charges and encumbrances (other than securityagreements or other encumbrances in favor of any mortgagee of Landlord) and (B)in accordance with the requirements of this Lease.  Landlord shall respond to Tenant’s requestfor approval of Tenant’s plans within ten (10) business days after Landlord’sreceipt of such plans.  In no event shallany material or equipment be incorporated in or to the Premises in connectionwith any such Tenant’s Changes which is subject to any lien, securityagreement, charge, mortgage or other encumbrance of any kind whatsoever or issubject to any conditional sale or other similar or dissimilar title retentionagreement.  Any mechanic’s lien filedagainst the Premises or the Building for work done for, or claimed to have beendone for, or materials furnished to, or claimed to have been furnished to,Tenant shall be discharged by Tenant within thirty (30) days thereafter, atTenant’s expense, by filing the bond required by law or otherwise.

 

(iii)          All Tenant’sChanges shall at all times comply with (x) all applicable laws, rules, ordersand regulations of governmental authorities having jurisdiction thereover andall applicable insurance requirements, (y) the

 

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*** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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rules and regulations of Landlord for tenant alterations, and (z) theplans and specifications submitted to and approved by Landlord and Tenant’sconstruction contract incorporating such plans and specifications.  In connection with any Tenant’s Changes,Tenant shall pay to Landlord, as additional rent, within ten (10) days afterdemand a fee equal to the reasonable actual out-of-pocket costs incurred by Landlordin connection with, or relating to, any such Tenant’s Changes.  Except as otherwise provided in this Section 5.01,no Tenant’s Changes shall be undertaken, started or begun by Tenant or by itsagents, employees, contractors or anyone else acting for or on behalf of Tenantuntil Landlord has approved such plans and specifications, and no amendments oradditions to such plans and specifications shall be made without the priorwritten consent of Landlord.  Unless allof the conditions contained in this Section 5.01(e) are fully satisfied,Landlord shall have the right, in Landlord’s sole and absolute discretion, to withholdits consent to any Tenant’s Changes. Landlord’s consent to such plans and specifications shall create noresponsibility or liability on the part of Landlord with respect to theircompleteness, design sufficiency or compliance with all applicable laws and/orinsurance requirements; nor shall Landlord’s execution of any documentsrequired to be filed with any governmental authority in connection with Tenant’sinstallations or changes create any responsibility or liability on the part ofLandlord to take remedial measures to bring any Tenant’s installations orchanges into compliance with applicable legal and/or insurance requirements(such responsibility or liability being allocated hereunder to Tenant).  If any Tenant’s Changes are made or installedin violation of this Section 5.01(e), Landlord may, at Tenant’s sole cost andexpense, without incurring any liability to Tenant whatsoever, enter upon thePremises and remove such illegitimate Tenant’s Changes and repair any damagecaused by the installation and/or removal of the same.

 

(iv)          In connection withthe completion of Tenant’s Changes or in the performance of any otheractivities within the Building by or on behalf of Tenant:  (a) neither Tenant nor its agents,contractors or subcontractors shall interfere with the operations of theBuilding or any work being done by Landlord or its agents, contractors orsubcontractors in the Building; (b) Tenant shall comply with any reasonablework schedule, rules and regulations proposed by Landlord or its agents; (c)Tenant shall conform to all of Landlord’s labor regulations and shall not do orpermit anything to be done that might create any work stoppage, picketing orother labor

 

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disruption or dispute; and (d) the labor employed or contracted for byTenant shall be harmonious and compatible with the labor employed or contractedfor by Landlord in the Building, it being agreed that, if in Landlord’sreasonable judgment Tenant’s labor is incompatible, Tenant shall forthwith uponLandlord’s demand withdraw Tenant’s labor from the Premises.  If Tenant fails to take any such actionsregarding labor matters, Landlord shall have the right, in addition to anyother rights and remedies available to it under this Lease or pursuant to lawor equity, to seek immediate injunctive relief. Tenant further agrees that itwill, prior to the commencement of any work in the Premises, deliver toLandlord certificates of insurance evidencing worker’s compensation, publicliability, property damage and such other insurance coverages in such amountsas are reasonably acceptable to Landlord in connection with Tenant’sChanges.  Tenant shall keep records ofTenant’s Changes costing in excess of $**** and of the cost thereof for a periodof two (2) years.  Tenant shall, withinforty-five (45) days after demand by Landlord, furnish to Landlord copies ofsuch records.

 

(f)  Not do or permit to be doneany act or thing in the Premises which will invalidate or be in conflict withfire insurance policies issued for office buildings in the Borough ofManhattan, City of New York, and not do anything or permit anything to be done,or keep anything or permit anything to be kept, in the Premises which wouldincrease the fire or other casualty insurance rate on the Building or theproperty therein, or which would result in insurance companies of good standingrefusing to insure the Building or any such property in amounts and againstrisks as reasonably determined by Landlord, or otherwise result innon-compliance with the requirements and recommendations of the National Boardof Fire Underwriters or similar organizations promulgating requirements andrecommendations with respect to the Premises. If by reason of failure of Tenant to comply with the provisions of thisparagraph including, but not limited to, the mere use to which Tenant puts thePremises, the fire insurance rate payable by Landlord shall at the beginning ofthis Lease or at any time thereafter be higher than it otherwise would be, thenTenant shall reimburse Landlord, as additional rent hereunder, for that part ofall fire

 

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**** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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insurance premiums thereafter paid by Landlord which shall have beencharged because of such failure or use by Tenant, and shall make suchreimbursement upon the first day of the month following such outlay byLandlord.  In any action or proceedingwherein Landlord and Tenant are parties, a schedule or “make up” rate for theBuilding or Premises issued by the New York Fire Insurance Rating Organization,or other body making fire insurance rates for the Premises, shall be conclusiveevidence of the facts therein stated and of the several items and charges inthe fire insurance rate then applicable to the Premises.  That the Premises are being used for thepurpose set forth in Article 3 hereof, shall not relieve Tenant from theforegoing duties, obligations and expenses (except that if premiums are beingraised generally for office buildings then such increase shall be reflected aspart of Operating Expenses, as herein defined).

 

(g)  Permit Landlord, atreasonable times upon reasonable (48-hours) prior written (fax beingacceptable) notice, to show the Premises to any lessor under any ground orunderlying lease, or any lessee or mortgagee, or any prospective purchaser, lessee,mortgagee, or assignee of any mortgage of the Building and/or the Land or ofLandlord’s interest therein, and their representatives, and during the periodof twelve (12) months immediately preceding the Expiration Date with respect toany part of the Premises similarly show any part of the Premises to any personcontemplating the leasing of all or a portion of the same.

 

(h)  At the end of the term, quitand surrender to Landlord the Premises “broom clean” and in good order andcondition, reasonable wear and tear excepted, and Tenant shall remove Tenant’sChanges as required by Section 4.01(b) hereof and/or Tenant’s Property asLandlord elects to have Tenant remove. If the last day of the term of this Lease falls on Sunday or a legalholiday, this Lease shall expire on the business day immediatelypreceding.  Tenant expressly waives, foritself and for any person claiming through or under Tenant, any rights whichTenant or such person may have under the provisions of Section 2201 of the NewYork Civil Practice Law and Rules and any similar successor law of the sameimport then in force, in connection with any holdover proceedings whichLandlord may institute to enforce the provisions of this paragraph (h).  If the Premises shall not be surrendered withinthirty (30) days after the Expiration Date, Tenant hereby indemnifies Landlordagainst liability resulting from delay by Tenant in so surrendering thePremises, including any claims made by any

 

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succeeding tenant or prospective tenant founded upon such delay, aswell as for any and all loss, liability, damages, costs and expenses (includingreasonable counsel fees and disbursements) incurred in connectiontherewith.  If Tenant shall remain inpossession of the Premises after the Expiration Date without the execution of anew lease (whether or not with the consent or acquiescence of Landlord), Tenant’soccupancy shall be deemed to be that of a tenancy-at-will, and in no event frommonth-to-month or from year-to-year, and it shall be subject to all of theother terms of this Lease applicable thereto, including those set forth in thisparagraph (h).  In the event that Tenantdefaults or remains in possession of the Premises or any part thereof after theexpiration of the tenancy-at-will created hereby then Tenant’s occupancy shallbe deemed a tenancy-at sufferance and not a tenancy-at-will.  Nothing contained herein shall be construedto constitute Landlord’s consent to Tenant holding over after the ExpirationDate or to give Tenant the right to hold over after the Expiration Date.  During the period in which Tenant holds over,Tenant shall pay rent to Landlord at a monthly rental equal to the greater of(i) 1.5 times the monthly Fixed Rent, plus all additional rent and othercharges last payable by Tenant hereunder, or (ii) the fair market rental valueof the Premises on a monthly basis, provided however, and on the conditionLandlord and Tenant are then engaged in good-faith negotiations to extend orrenew the term of this Lease, the holdover rent payable by Tenant hereundershall not increase during the first thirty (30) days after the ExpirationDate.  Tenant’s obligations under thisparagraph (h) shall survive the expiration of this Lease.

 

(i)  At any time and from time totime upon not less than ten (10) business days’ prior notice by Landlord toTenant, execute, acknowledge and deliver to Landlord, or to anyone elseLandlord shall designate, a statement of Tenant (or if Tenant is a corporation,an appropriate officer of Tenant) in writing certifying to Landlord or toanyone else Landlord shall designate that this Lease is unmodified and in fullforce and effect (or if there have been modifications, that the same is in fullforce and effect as modified and stating the modifications), specifying thedates to which the Fixed Rent, additional rent and other charges have been paidin advance, if any, and stating whether or not to the best knowledge of thesigner of such certificate Landlord is in default in performance of anyprovision of this Lease and, if so, specifying each such default of which thesigner may have knowledge, and further stating such other items or informationas Landlord or Landlord’s designee may reasonably request, including

 

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without limitation, Tenant’s undertaking not to pay any rent or othercharges for more than a specified period in advance of the due dates thereforset forth herein; it being intended that any such statement so delivered may berelied upon by the person to whom the statement is given.  If Tenant fails to execute and deliver thestatement as and when required by this Section 5.01(i), then:  (1) notwithstanding any other provision ofthis Lease, such failure (if same continues for more than five (5) businessdays after Landlord notifies Tenant of such failure) shall constitute a defaultunder this Lease beyond any applicable cure period entitling Landlord to thesame rights and remedies as if such default was with respect to nonpayment ofFixed Rent, and (2) Tenant shall thereupon constitute and appoint Landlordand/or its successors in interest as Tenant’s attorney-in-fact to execute anddeliver any such statement or statements for and on behalf of Tenant.

 

(j)  Not move any safe, heavymachinery, heavy equipment, freight, bulky matter or fixtures into or out ofthe Building without Landlord’s prior written consent not to be unreasonablywithheld, conditioned or delayed.  Ifsuch safe, machinery, equipment, freight, bulky matter or fixtures requirespecial handling, Tenant agrees to employ only persons holding a Master Rigger’sLicense to do said work, and that all work in connection therewith shall complywith the Administrative Code of the City of New York.  Notwithstanding said consent of Landlord,Tenant shall defend and indemnify Landlord for, and hold Landlord harmless andfree from, all loss, costs, liabilities and damages sustained by person orproperty, as well as for all expenses and reasonable attorneys’ fees incurredin connection therewith, and all costs incurred in repairing any damage to theBuilding or Appurtenances (including, without limitation, Landlord’s reasonablecharge for any repairs performed by Landlord’s employees).

 

(k)  To the extent not prohibitedby applicable law, indemnify, defend and save harmless, the Indemnitees, andtheir respective officers, directors, contractors, agents and employees, fromand against any and all liability (statutory or otherwise), claims, actions,suits, demands, damages, judgments, costs, interest and expenses of any kind ornature of anyone whomsoever (including, but not limited to, reasonable counselfees and disbursements incurred in the defense of any action or proceeding), towhich they may be subject or which they may suffer by reason of any claim for,any injury to, or death of, any person or persons, theft or damage to property(including any

 

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loss of use thereof) or damage to the Building or Appurtenances or otherwisearising from or in connection with the use of or from any work, installation orthing whatsoever done (other than by Landlord or its agents or employees) in orabout the Premises and/or the Building during or subsequent to (in the case ofa holdover) the term of this Lease, or arising from any condition of thePremises and/or the Building due to or resulting from any default by Tenant inthe performance of Tenant’s obligations under this Lease or from any act,omission or negligence of Tenant or any of Tenant’s officers, directors,agents, contractors, employees, subtenants, licensees or invitees.  Where not prohibited by applicable law, noworkers’ compensation claim by any of Tenant’s employees will be subrogatedagainst Landlord.  Tenant’s obligationsunder this paragraph shall survive the Expiration Date, subject to anyapplicable statutes of limitations.

 

(l)  Not do or permit to be doneany act or thing which would cause any hazardous or dangerous condition, waste,material and/or substance (as the same may be defined in any local, state orfederal rule, regulation or statute) to be used, stored, transported, released,handled, produced, created, disposed of, or installed in, on, from, or at thePremises and/or the Building, except for small amounts of standard office andcleaning supplies; provided that all such materials and/or substances (i) shallat all times be used, stored, transported, released, handled, produced,created, disposed of, and/or installed in compliance with all applicable legaland/or insurance requirements, (ii) shall not create any additional burden onLandlord to notify other tenants, the public or any governmental authority ofthe existence of such materials and/or substances and (iii) shall not cause anyincrease in Landlord’s insurance rates. Landlord shall not be deemed responsible for and Tenant agrees toindemnify and defend Landlord for, and hold Landlord harmless and free from,any and all loss, liability, damages, costs and expenses sustained by person orproperty and any and all loss, liability, damages, costs and expenses incurredby Landlord with respect to or in settlement of any claims or judgments broughtin connection with any environmental condition in the Premises or the Buildingcreated or caused by Tenant or its agents, including reasonable counsel feesand disbursements incurred in connection therewith.  Tenant shall be responsible for all adverseaffects of backflow, backfeed, harmonics and other like-type conditions,whether to, in, at, or outside the Building, which emanate from, are caused by,or relate to the Premises and/or the systems serving the Premises and/or the

 

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equipment, machinery, fixtures, furnishings, products and lightinglocated in the Premises.

 

Section 5.02           Landlord covenants and agrees thatLandlord will:

 

(a)  use reasonable efforts notto interfere with Tenant’s business during such times as Landlord exercises itsrights under the various provisions of this Lease which permit Landlord toperform work, repairs, improvements, maintenance and/or alterations to theBuilding (including the Premises) but Landlord shall not be required to performthe same on an overtime or premium pay basis; and

 

(b)  give Tenant reasonable priorwritten (fax being acceptable) notice of all entry into the Premises (except inthe case of an emergency when no such notice shall be required).

 

**ARTICLE6**

 

**Changes or Alterations by Landlord**

 

Section 6.01           Landlord reserves the right to makesuch changes, alterations, additions, improvements, repairs or replacements inor to the Building (including the Premises) and the fixtures and equipmentthereof, as well as in or to the street entrances, halls, passages, elevators,escalators, stairways and other parts thereof, and to erect, maintain and usepipes, ducts and conduits in and through the Premises, all as Landlord may deemnecessary or desirable; provided, however, Landlord agrees thatthe end result of any of the foregoing shall not materially interfere withTenant’s use of the Premises or access thereto. Nothing contained in this Article 6 shall relieve Tenant of any duty,obligation or liability of Tenant with respect to making any repair,replacement or improvement or complying with any law, order or requirement ofany governmental or other authority.

 

Section 6.02           Landlord reserves the right to namethe Building and to change the name or address of the Building at any time andfrom time to time upon no less than thirty (30) days prior notice.  Neither this Lease nor any use by Tenantshall give Tenant any easement or other right in or to the use of any door orany passage or any concourse or any plaza connecting the Building with anysubway or any other building or to any public conveniences, and the use of suchdoors, passages, concourses,

 

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plazas and conveniences may, without notice to Tenant be regulated ordiscontinued at any time by Landlord.  Ifat any time any windows of the Premises are (i) broken, temporarily darkened(which shall not be construed as encompassing any solar-tinting and/or blindsthat Landlord may require) or obstructed incident to or by reason of repairs,replacements, maintenance and/or cleaning in, on, to or about the Building orany part or parts thereof or (ii) permanently darkened (which shall not beconstrued as encompassing any solar-tinting and/or blinds that Landlord mayrequire) for any reason whatsoever beyond Landlord’s control or (iii)temporarily or permanently closed or rendered inoperable for any reasonwhatsoever including, but not limited to, Landlord’s own acts, Landlord shallnot be liable for any damage Tenant may sustain thereby and Tenant shall not beentitled to any compensation therefor or abatement of rent nor shall the samerelease Tenant from its obligations hereunder or constitute an eviction andLandlord shall use commercially reasonable efforts to diligently correct suchcondition to the extent practical and to the extent within Landlord’s control.

 

Section 6.03           Except as provided in Article 7 andSection 17.05 of this Lease, there shall be no allowance to Tenant for adiminution of rental value, the same shall not constitute an eviction of Tenantin whole or in part and Landlord shall incur no liability whatsoever by reasonof inconvenience, annoyance, or injury to business arising from Landlord,Tenant or others making any changes, alterations, additions, improvements,repairs or replacements in or to any portion of the Building or the Premises orin the Appurtenances thereof or in the taking or storing of material in thePremises in connection therewith and no liability shall be incurred by Landlordfor failure of Landlord or others to make any changes, alterations, additions,improvements, repairs or replacements in or to any portion of the Building orthe Premises, or in the Appurtenances.

 

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**ARTICLE7**

 

**Damage****by Fire,Etc.**

 

Section 7.01           Subject to Section 7.02, if any partof the Premises shall be damaged by fire or other casualty, Tenant shall giveprompt written notice thereof to Landlord and Landlord shall proceed withreasonable diligence, and in a manner consistent with the reasonable provisionsof any ground or underlying lease and any mortgage affecting the same or theLand and/or the Building or Landlord’s interest therein, to repair such damage,and if any part of the Premises shall be rendered untenantable by reason ofsuch damage, the annual Fixed Rent payable hereunder shall be abated to theextent that such Fixed Rent relates to such part of the Premises for the periodfrom the date of such damage to the date when such part of the Premises shallhave been made tenantable or to such earlier date upon which the full term ofthis Lease with respect to such part of the Premises shall expire orterminate.  If Landlord or any holder ofany superior mortgage (as herein defined) or any lessor under any superiorlease (as herein defined) shall be unable to collect the insurance proceeds(including rent insurance) applicable to such damage solely because of some badfaith action or inaction on the part of Tenant or Tenant’s agents, contractors,employees, guests, invitees or licensees, then Landlord’s charge for repairingsuch damage shall be paid by Tenant and there shall be no abatement ofrent.  Landlord shall use commerciallyreasonable efforts to avoid any inconvenience or annoyance to Tenant or injuryto the business of Tenant resulting in any way from such damage or the repairthereof.  Tenant acknowledges and agreesthat Landlord shall not:  (i) carryinsurance of any kind on any Appurtenances, Tenant’s Property, or Tenant’sChanges or (ii) be obligated to repair any damage thereto or replace any ofsame, which obligation shall be the sole responsibility of Tenant.

 

Section 7.02           If substantial alteration orreconstruction of the Building shall, in the reasonable opinion of Landlord, berequired as a result of damage by fire or other casualty (whether or not thePremises shall have been damaged by such fire or other casualty) and ifLandlord does not act in a manner discriminatory to Tenant, or if more thanfifty percent (50%) of the Premises shall be damaged by fire or other casualtyduring the last two (2) years of the term of this Lease, then this Lease andthe term and estate hereby granted may be terminated by Landlord by its givingto Tenant within one hundred

 

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twenty (120) days after the date of such damage written noticespecifying a date, not less than thirty (30) days after the giving of suchnotice, for such termination.

 

Section 7.03           Landlord and Tenant shall each securean appropriate clause in, or an endorsement upon, each all risk property damagepolicy obtained by it and covering the Building, the Premises or Tenant’sProperty pursuant to which the respective insurance companies waive subrogationor permit the insured, prior to any loss, to waive any claim it might haveagainst the other.  Provided the terms ofthe applicable insurance policy will not be violated or rendered unenforceable,the waiver of subrogation or permission for waiver of any claim hereinbeforereferred to shall extend to the agents of each party.

 

Section 7.04           Notwithstanding any other provisionof this Lease to the contrary (other than the second sentence of Section 7.01)with respect to any property whether insured or not, each party hereby releasesthe other and its partners, agents and employees with respect to any claim(including a claim for negligence) which it might otherwise have against theother party for loss, damage or destruction with respect to its property byfire or other casualty (including rental value or business interruption, as thecase may be) occurring during the term of this Lease.  Nothing in this Section 7.04 shall relieveTenant or Landlord of its obligations to make repairs to the Premises inaccordance with the terms of this Lease.

 

Section 7.05           This Lease shall be considered anexpress agreement governing any case of damage to or destruction of theBuilding or any part thereof by fire or other casualty, and Section 227 of theReal Property Law of the State of New York providing for such a contingency inthe absence of express agreement, and any other law of like import now orhereafter in force, shall have no application in such case.

 

Section 7.06           Notwithstanding the above to thecontrary, in the event that more than fifty percent (50%) of the Premises shallbe damaged by fire or other casualty and restoration is not substantiallycompleted by Landlord within one (1) year after the occurrence of saidcasualty, subject to extension for circumstances beyond Landlord’s reasonablecontrol (the “Restoration Period”), then Tenant shall be entitled to terminatethis Lease provided Landlord receives a written termination notice (which shallbe deemed irrevocable) from

 

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Tenant within forty-five (45) days after the expiration of theRestoration Period, time being of the essence. In the event that Landlord does not receive said notice within saidforty-five (45) day period, then Tenant’s right to terminate pursuant to thisSection 7.06 shall be void and of no further force or effect.

 

**ARTICLE8**

 

**Condemnation**

 

Section 8.01           In the event that the whole of thePremises shall be lawfully condemned or taken in any manner for any public orquasi-public use, this Lease and the term and estate hereby granted shallforthwith cease and terminate as of the date of vesting of title.  In the event that only a part of the Premisesshall be so condemned or taken, then, effective as of the date of vesting oftitle, the Fixed Rent hereunder shall be abated in an amount thereofapportioned according to the area of the Premises so condemned or taken.  In the event that a material part of theBuilding shall be so condemned or taken, then Landlord (whether or not the Premisesbe affected) may, at Landlord’s option, terminate this Lease and the term andestate hereby granted as of the date of such vesting of title by notifyingTenant in writing of such termination within one hundred twenty (120) daysfollowing the date on which Landlord shall have received notice of vesting oftitle.  If Landlord does not elect toterminate this Lease, as aforesaid, this Lease shall be and remain unaffectedby such condemnation or taking, except that the Fixed Rent payable hereundershall be abated to the extent, if any, hereinbefore provided in this Article8.  In the event that only a part of thePremises shall be so condemned or taken and this Lease and the term and estatehereby granted with respect to the remaining portion of the Premises are notterminated as hereinbefore provided, Landlord will, with reasonable diligenceand at its expense, restore the remaining portion of the Premises as nearly aspracticable to the same condition as it was in prior to such condemnation ortaking.   However, Landlord shall not beobligated to repair any damage to Tenant’s Property or replace the same.

 

Section 8.02           In the event of a termination of thisLease pursuant to Section 8.01 of this Article 8, this Lease and the term andestate hereby granted shall expire as of the date of such termination with thesame effect as if that were the date hereinbefore set for the expiration of thefull term of this

 

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Lease, and the Fixed Rent payable hereunder shall be apportioned as ofsuch date.

 

Section 8.03           In the event of any condemnation ortaking hereinbefore mentioned of all or a part of the Building, Landlord shallbe entitled to receive the entire award in the condemnation proceeding,including any award made for the value of the estate vested by this Lease inTenant, and Tenant hereby expressly assigns to Landlord any and all right,title and interest of Tenant now or hereafter arising in or to any such awardor any part thereof, and Tenant shall be entitled to receive no part of suchaward.  The foregoing shall not prohibitTenant’s independent claim for the value of Tenant’s trade fixtures and movingexpenses and any other claim permitted under law so long as any award made toTenant based upon such claim does not reduce the award otherwise payable toLandlord.

 

Section 8.04           Notwithstanding anything hereinabovecontained in this Article, if all or any portion of the Premises shall belawfully condemned or taken for any temporary public or quasi-public use not toexceed one consecutive year, this Lease shall not terminate and Tenant shallcontinue to perform or observe all of Tenant’s obligations hereunder as thoughsuch condemnation or taking had not occurred, except only as Tenant may beprevented from so doing by reason of the lawful use and occupancy of thePremises or portion thereof affected by such condemnation or taking during suchtemporary period.  In the event of anysuch condemnation or taking, Tenant shall be entitled to receive the award withrespect to the Premises or portion thereof covered by such condemnation ortaking (whether paid as damages, rent or otherwise), unless the period ofoccupancy extends beyond the termination of this Lease, in which case Landlordshall be entitled to such part of such award as shall be properly allocable tothe cost of restoration of the Premises and the balance of said award shall beapportioned between Landlord and Tenant as of the scheduled ExpirationDate.  If such condemnation or takingshall end before the Expiration Date, Tenant shall, at its sole cost andexpense, restore the Premises as nearly as possible to the condition in whichthey were prior to such condemnation or taking.

 

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**ARTICLE9**

 

**Compliance with Laws**

 

Section 9.01           Tenant, at Tenant’s expense, shallcomply with all laws and ordinances, and all rules, orders and regulations ofall governmental authorities and of all insurance bodies, at any time dulyissued or in force, applicable to the Premises or any part thereof or to Tenant’suse or alteration thereof, except that Tenant shall not hereby be under anyobligation to comply with any law, ordinance, rule, order or regulationrequiring any structural alteration of or in connection with the Premises,unless such alteration is required by reason of a condition which has beencreated by, or at the instance of Tenant, or is attributable to the specificmanner of use (as opposed to mere office use) to which Tenant puts thePremises, or Tenant’s alteration thereof, or is required by reason of a breachof any of Tenant’s covenants and agreements hereunder.  Where any structural alteration of or inconnection with the Premises is required by any such law, ordinance, rule,order or regulation, and, by reason of the express exception hereinabove contained,Tenant is not under any obligation to make such alteration, then Landlord shallmake such alteration and, subject to Section 26.04, pay the cost thereof.

 

Section 9.02           Subject to Section 26.04, Landlordshall, within a reasonable period of time after Tenant notifies Landlord of thesame or Landlord obtains knowledge of same, comply with all laws andordinances, and all rules, orders and regulations of all governmentalauthorities and of all insurance bodies, at any time duly issued or in force,applicable to the Land and the Building or any part thereof (excluding thePremises) which are not the obligation of Tenant under this Lease, to theextent that non-compliance would adversely affect, by more than a *de minimis* amount, Tenant’s ability to useand occupy the Premises for the uses permitted under this Lease.

 

**ARTICLE10**

 

**Accidents to Plumbing and Other Systems**

 

Section 10.01         Tenant shall give to Landlord promptwritten notice of any damage to, or defective condition in, any part orappurtenance of the Building’s plumbing, electrical, heating, air conditioning(excluding any supplemental air conditioning units and equipment servicing thePremises which shall be Tenant’s responsibility to repair, maintain andreplace)  or other systems serving,located in, or passing through the Premises (collectively, the “Systems”).  Following such notice, any such damage to ordefective condition of the Systems shall be

 

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remedied by Landlord with reasonable diligence, but if such damage ordefective condition was caused by, or resulted from the use by, Tenant or bythe employees, agents, licensees or invitees of Tenant, Landlord’s actualout-of-pocket cost for the remedy thereof shall be paid by Tenant.  Tenant shall not be entitled to claim anydamages arising from any such damage or defective condition unless the sameshall have been caused by the negligence or willful misconduct of Landlord, itsagents or employees in the operation or maintenance of the Premises or Buildingand the same shall not have been remedied by Landlord with reasonable diligenceafter written notice thereof from Tenant to Landlord; nor shall Tenant beentitled to claim any eviction by reason of any such damage or defectivecondition.  Notwithstanding anythingcontained in this Lease to the contrary, Landlord shall not be responsible forrepairing any portion of the Systems serving the Premises (whether locatedwithin or outside the Premises) which were installed by or on behalf of Tenant.

 

Section 10.02         Landlord shall, at its sole cost andexpense (except as otherwise provided herein), keep and maintain in good repairand working order and make all repairs to and perform necessary maintenanceupon the Building and all parts thereof, including structural elements,life-safety, plumbing, electrical and HVAC systems within the Building whichgenerally service the Building and are required in the normal maintenance andoperation of the Building.  Notwithstandinganything in this Section 10.02 or elsewhere in this Lease to the contrary, itis agreed that Landlord is not obligated hereunder to maintain the Building inany better repair or working order than as would be expected for a first-classoffice building in midtown Manhattan.

 

**ARTICLE11**

 

**Notices and Service of Process**

 

Section 11.01         (a) Except as otherwise set forthbelow, any notice, consent, approval, demand or statement hereunder by eitherparty to the other party shall be in writing and shall be deemed to have beenduly given only if sent by (i) registered or certified mail, return receiptrequested, or (ii) by messenger or recognized overnight courier (requiringsigned receipt), in either event addressed to such other party, which addressfor Landlord shall be the address as hereinbefore set forth, Attention:  Senior Vice President - Office Buildings,with copies to the Vice President of Property Management, at the address as

 

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hereinbefore set forth, and to the Building Manager, in care of theBuilding Office, 1177 Avenue of the Americas, New York, NY 10036, and forTenant shall be the Premises (or Tenant’s address as hereinbefore set forth ifmailed prior to Tenant’s occupancy of the Premises), or if the address of suchother party for notices shall have been duly changed as herein provided, ifmailed, as aforesaid, to such other party at such changed address.  Either party may at any time change theaddress for such notices, consents, approvals, demands or statements bymailing, as aforesaid, to the other party a notice stating the change andsetting forth the changed address.  Ifthe term “Tenant”, as used in this Lease, refers to more than one person, anynotice, consent, approval, demand or statement given as aforesaid to any one ofsuch persons shall be deemed to have been duly given to Tenant.  Any notice, consent, approval, demand orstatement given pursuant to the above shall be deemed received on the day ofdelivery (with signed receipt) or rejection, as the case may be.

 

(b) Tenant acknowledges and agrees that all disputes arising, directlyor indirectly, out of or relating to this Lease should be dealt with byapplication of the laws of the State of New York and adjudicated in the statecourts of the State of New York sitting in New York County or the Federalcourts sitting in the State of New York in New York County; and herebyexpressly and irrevocably submits Tenant to the jurisdiction of such courts inany suit, action or proceeding arising, directly or indirectly, out of or relatingto this Lease.  So far as is permittedunder the applicable law, this consent to personal jurisdiction shall beself-operative and no further instrument or action, other than service ofprocess in one of the manners permitted by law, shall be necessary in order toconfer jurisdiction upon Tenant in any such court.  Provided that service of process is effectedupon Tenant in one of the manners permitted by law, Tenant irrevocably waives,to the fullest extent permitted by law, and agrees not to assert, by way ofmotion, as a defense or otherwise, (i) any objection which it may have, or mayhereafter have to the laying of the venue of any such suit, action orproceeding brought in such a court as is mentioned in the previous paragraph,(ii) any claim that any such suit, action or proceeding brought in such a courthas been brought in an inconvenient forum, or (iii) any claim that it is notpersonally subject to the jurisdiction of the above-named courts.  Tenant hereby further irrevocably consents tothe service of process in any suit, action or proceeding by the mailing ordelivery of the appropriate documents (e.g., process

 

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or summons) by Landlord to the Premises and delivered in one of themanners set forth in 11.01(a) above. Nothing herein shall in any way be deemed to limit the ability ofLandlord to serve any such papers in any other manner permitted by applicablelaw.

 

(c)           Notwithstandinganything contained in this Lease to the contrary, bills for additional rentshall be deemed to have been duly given if sent to Tenant only (and no otherparty need receive it in order for the same to be deemed duly given) at thePremises (or Tenant’s address as hereinbefore set forth if mailed prior toTenant’s occupancy of the Premises) by first class mail (and which need not beregistered, certified or return receipt requested) or by messenger orrecognized overnight courier without, in any case, the requirement of a signedreceipt.

 

Section 11.02         Any notice which Landlord gives toTenant (or any other party) prior to being notified of the assignment of thisLease (or the transfer of any interest in any portion of the Premises) shall bebinding upon any such assignee (or party acquiring the interest) notwithstandingthe fact that said assignee (or party acquiring the interest) did not receiveany such notice.  Any action thatLandlord may institute against Tenant (or any other party) prior to beingnotified of the assignment of this Lease (or the transfer of any interest inany portion of the Premises) shall be binding upon any such assignee (or partyacquiring the interest) notwithstanding the fact that said assignee (or partyacquiring the interest) is not named in any such action.  This Section 11.02 shall not be construed asnegating the requirement of obtaining Landlord’s prior written consent underArticle 25 in those instances where the same is required.

 

**ARTICLE12**

 

**Conditions of Limitation**

 

Section 12.01         This Lease and the term and estatehereby granted are subject to the limitation that:

 

(a)  in case Tenant shall make anassignment of its property for the benefit of creditors or shall file avoluntary petition under any bankruptcy or insolvency law, or an involuntarypetition under any bankruptcy or insolvency law shall be filed against Tenantand such involuntary petition is not dismissed within sixty (60) days after thefiling thereof,

 

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(b)  in case a petition is filedby or against Tenant under the reorganization provisions of the United StatesBankruptcy Code or under the provisions of any law of like import, unless suchpetition under said reorganization provisions be one filed against Tenant whichis dismissed within sixty (60) days after its filing,

 

(c)  in case a receiver, trusteeor liquidator shall be appointed for Tenant or of or for the property ofTenant, and such receiver, trustee or liquidator shall not have been dischargedwithin sixty (60) days from the date of his appointment,

 

(d)  in case Tenant shall defaultin the payment of any Fixed Rent or additional rent or any other charge payablehereunder by Tenant to Landlord on any date upon which the same becomes due,and such default shall continue for ten (10) business days’ after Landlord shallhave given to Tenant a written notice specifying such default,

 

(e)  in case Tenant shall defaultin the due keeping, observing or performance of any covenant, agreement, term,provision or condition of Article 3 hereof on the part of Tenant to be kept, observedor performed and if such default shall continue and shall not be remedied byTenant within five (5) business days after Landlord shall have given to Tenanta written notice specifying the same,

 

(f)  in case Tenant shall defaultin the due keeping, observing or performance of any of Tenant’s obligationshereunder (other than a default of the character referred to in clauses (d) or(e) of this Section 12.01), and if such default shall continue and shall not beremedied by Tenant within twenty-five (25) days after Landlord shall have givento Tenant a written notice specifying the same, or, in the case of such adefault which for causes beyond Tenant’s control (which shall not includeinsufficiency of funds) cannot with due diligence be cured within said periodof twenty-five (25) days, if Tenant (i) shall not, promptly upon the giving ofsuch notice, advise Landlord in writing of Tenant’s intention to take all stepsnecessary to remedy such default with due diligence, (ii) shall not dulyinstitute and thereafter diligently prosecute to completion all steps necessaryto remedy the same, (iii) shall not remedy the same within a reasonable timeafter the date of the giving of said notice by Landlord, or

 

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(g)  in case any event shalloccur or any contingency shall arise whereby this Lease or the estate herebygranted or the unexpired balance of the term hereof would, by operation of lawor otherwise, devolve upon or pass to any firm, association, corporation,person or entity other than Tenant except as expressly permitted under Article25 hereof, or whenever Tenant shall desert or abandon the Premises or the sameshall become vacant (whether the keys be surrendered or not and whether therent be paid or not),

 

then, in any of said cases, Landlord may give to Tenant a notice ofintention to end the term of this Lease at the expiration of three (3) daysfrom the date of the giving of such notice, and, in the event such notice isgiven, the expiration of said three (3) day period shall become the ExpirationDate, but Tenant shall remain liable for damages as provided in this Lease orpursuant to law.  The specifiedconditions of limitation in this Article 12 are not intended to be exclusiveand Landlord may invoke any additional remedies and/or rights which it may haveat law or in equity, including, without limitation, the right to bring a “chronicnon-payment” action.  If the term “Tenant”,as used in this Lease, refers to more than one person, then as used in clauses(a), (b) and (c) of this Section 12.01, said term shall be deemed to includeall such persons or any one of them; if any of the obligations of Tenant underthis Lease is guaranteed, the term “Tenant”, as used in said clauses, shall bedeemed to include also the guarantor or, if there be more than one guarantor,all or any one of them; and, if this Lease shall have been assigned, the term “Tenant”,as used in said clauses, shall be deemed to include the assignee and theassignor or either of them under any such assignment unless Landlord shall, inconnection with such assignment, release the assignor from any furtherliability under this Lease, in which event the term “Tenant”, as used in saidclauses, shall not include the assignor so released.

 

**ARTICLE13**

 

**Re-entry by Landlord**

 

Section 13.01         If this Lease shall terminate asprovided in Article 12 hereof provided, Landlord or Landlord’s agents mayimmediately or at any time thereafter re-enter into or upon the Premises, orany part thereof, in the name of the whole, either by summary dispossessproceedings or by any suitable

 

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action or proceeding at law, or by force or otherwise (to the extentpermitted by New York law), without being liable to indictment, prosecution ordamages therefor, and may repossess the same, and may remove any personstherefrom, to the end that Landlord may have, hold and enjoy the Premises againas and of its first estate and interest therein.  The words “re-enter”, “re-entry” and “re-entering”as used in this Lease are not restricted to their technical legal meanings.

 

Section 13.02         In the event of any termination of thisLease under the provisions of Article 12 hereof or in the event that Landlordshall re-enter the Premises under the provisions of this Article 13 or in theevent of the termination of this Lease (or of re-entry) by or under any summarydispossess or other proceeding or action or other measure undertaken byLandlord for the enforcement of its aforesaid right of re-entry or anyprovision of law (any such termination of this Lease being herein called a “DefaultTermination”), Tenant shall thereupon pay to Landlord the Fixed Rent,additional rent and any other charge payable hereunder by Tenant to Landlord upto the time of such Default Termination or of such recovery of possession ofthe Premises by Landlord, as the case may be, and shall also pay to Landlorddamages as provided in Article 14 hereof or pursuant to law.  Also, in the event of a Default Termination Landlordshall be entitled to retain all moneys, if any, paid by Tenant to Landlord,whether as advance rent, security or otherwise, but such moneys shall becredited by Landlord against any Fixed Rent, additional rent or any othercharge due from Tenant at the time of such Default Termination or, at Landlord’soption, against any damages payable by Tenant under Article 14 hereof orpursuant to law.

 

Section 13.03         In the event of a breach or threatenedbreach on the part of Tenant with respect to any of Tenant’s obligationshereunder, Landlord shall also have the right of injunction.  The specified remedies to which Landlord mayresort hereunder are cumulative and are not intended to be exclusive of anyother remedies or means of redress to which Landlord may lawfully be entitledat any time and Landlord may invoke any remedy allowed at law or in equity asif specific remedies were not herein provided for.

 

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**ARTICLE14**

 

**Damages**

 

Section 14.01         In the event of a Default Terminationof this Lease, Tenant will pay to Landlord as damages, at the election of theLandlord, either:

 

(a)  a sum which at the time ofsuch Default Termination represents the then value of the excess, if any, ofthe Present Value, as herein defined, of (1) the aggregate of the Fixed Rentand the additional rent under Article 26 (if any) which would have been payablehereunder by Tenant for the period commencing with the day following the dateof such Default Termination and ending with the scheduled Expiration Date, over(2) the aggregate fair rental value of the Premises for the same period asdetermined by an independent real estate appraiser (experienced in midtownManhattan first-class office buildings) named by Landlord and employed at Tenant’sexpense, in which case such liquidated damages shall be accelerated to be dueand payable to Landlord in one lump sum on demand at any time commencing withthe day following the date of such Default Termination and shall bear interestat the Default Rate, as herein defined, until paid, or

(b)  sums equal to the aggregateof the Fixed Rent and the additional rent under Article 26 (if any) which wouldhave been due and payable by Tenant during the remainder of the term had thisLease not terminated by such Default Termination, in which case such liquidateddamages shall be computed and payable in monthly installments, in advance, onthe first day of each calendar month following Default Termination of thisLease and continuing until the scheduled Expiration Date but for such DefaultTermination; provided, however, that if Landlord shall relet all or any part ofthe Premises for all or any part of said period, Landlord shall credit Tenantwith the net rents received by Landlord from such reletting until the scheduledExpiration Date, such net rents to be determined by first deducting from thegross rents as and when received by Landlord from such reletting the expensesincurred or paid by Landlord in terminating this Lease and of re-entering thePremises and of securing possession thereof, as well as the expenses ofreletting, including altering and preparing the Premises for new tenants,brokers’ commissions and all other expenses properly chargeable against thePremises and the rental therefrom in connection with such reletting, it beingunderstood that any such reletting may be for a period equal to or shorter orlonger than said period; provided, further that (i) in no event shall Tenant beentitled to receive any excess of such net rents over the sums payable byTenant to Landlord hereunder, (ii) in no event shall Tenant be entitled,in any suit for the collection of damages pursuant to this clause

 

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(b), to a credit in respect of any net rents from a reletting except tothe extent that such net rents are actually received by Landlord prior to thecommencement of each suit, and (iii) if the Premises or any part thereof shouldbe relet in combination with other space, then appropriate apportionment on a squarefoot rentable area basis shall be made of the rent received from such relettingand of the expenses of reletting. Landlord shall, after such Default Termination, use commerciallyreasonable efforts to relet the Premises or any part thereof, provided (y) thatthe prospective tenant or tenants shall be, in Landlord’s sole discretion, of acharacter and engaged in a business such as is in keeping with the standards ofthe Building and its occupancy and (z) such reletting shall be on such termsand conditions as shall be satisfactory to Landlord in its sole discretion.

 

For the purposes of subdivision (a) of this Section 14.01, the amountof additional rent which would have been payable by Tenant under Article 26hereof, for each Tax Year and/or Operating Year (as herein defined) endingafter such Default Termination, shall be deemed an amount equal to the amountof such additional rent payable by Tenant for the Tax Year and/or OperatingYear (as the case may be) ending immediately preceding such Default Termination.  Suit or suits for the recovery of suchdamages, or any installments thereof, may be brought by Landlord from time totime at its election commencing at any time following a Default Termination,and nothing contained herein shall be deemed to require Landlord to postponesuit until the scheduled Expiration Date. “Present Value” shall be computed bydiscounting such amount to present value at a discount rate equal to the mostrecent GNP Deflator as released monthly by the United States Department ofCommerce, Bureau of Economic Analysis.  “DefaultRate” shall mean the lesser of (i) the prime rate of interest as publishedby The Wall Street Journal (or its successor) plus *** percent (***%) per annumor (ii) the highest rate of interest permitted by New York State law.

 

Section 14.02         Nothing herein contained shall beconstrued as limiting or precluding the recovery by Landlord against Tenant ofany sums or damages to which, in addition to the damages particularly providedabove, Landlord may lawfully be entitled by reason of any default hereunder onthe part of

 

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*** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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Tenant.  Tenant hereby waives anyclaim for money damages wherever in this Lease it is provided that Landlordshall not unreasonably withhold or delay any consent or approval, in the eventthat Landlord shall unreasonably withhold or delay such consent or approval,nor shall Tenant claim any such money damages by way of setoff, counterclaim ordefense unless there is a specific judicial finding that Landlord has acted notonly unreasonably but also with malice and in bad faith.

 

Section 14.03         Notwithstanding any provision of thisLease to the contrary, in no event shall Landlord or Tenant be liable forconsequential damages in connection with any claimed or actual breach of thisLease.

 

**ARTICLE15**

 

**Waivers by Tenant**

 

Section 15.01         Tenant, for Tenant, and on behalf ofany and all firms, corporations, associations, persons or entities claimingthrough or under Tenant, including creditors of all kinds, does hereby waiveand surrender all right and privilege which they or any of them might haveunder or by reason of any present or future law to redeem the Premises or tohave a continuance of this Lease for the full term hereby demised after Tenantis dispossessed or ejected therefrom by process of law or under the terms ofthis Lease or after the termination of this Lease as herein provided orpursuant to law.  Tenant also waives theprovisions of any law relating to notice and/or delay in levy of execution incase of an eviction or dispossess.  IfLandlord commences any summary proceeding, Tenant agrees that Tenant will notinterpose any counterclaim of whatever nature or description in any suchproceeding (except compulsory counterclaims).

 

**ARTICLE16**

 

**Waiver of Trial by Jury**

 

Section 16.01         It is mutually agreed by and betweenLandlord and Tenant that, except in the case of any action, proceeding orcounterclaim brought by either of the parties against the other for personalinjury or property damage, the respective parties hereto shall, and they herebydo, waive trial by jury in any action, proceeding or counterclaim brought byeither of the parties hereto against the other on any matters whatsoeverarising out of or in any way connected with this

 

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Lease, the relationship of landlord and tenant, Tenant’s use oroccupancy of the Premises, and any emergency or any other statutory remedy.

 

**ARTICLE17**

 

**Elevators****, Cleaning, Heating, Air Conditioning, Services, Etc.**

 

Section 17.01         Landlord will provide passengerelevator facilities during Business Hours and have one passenger elevatorsubject to call during the other hours.  “BusinessHours”, as used in this Lease, means the hours of 8:00 A.M. to 6:00 P.M. ofdays other than Saturdays, Sundays and holidays observed by the State orFederal Government as legal holidays. Landlord will clean the Premises in accordance with the specificationsattached hereto as Exhibit D provided the same are kept in order by Tenant,except any private/executive bathrooms and/or any portions of the Premiseswhich may be used for the preparation, dispensing or consumption of food orbeverages or for storage, shipping room, classroom or similar purposes or forthe operation of computer, data processing or similar equipment, all of whichportions Tenant shall cause to be kept clean at Tenant’s own expense.  Landlord agrees that its maintenance andcleaning obligations under this Lease shall extend to the public ADA bathroom.

 

Section 17.02         Landlord shall, through the airconditioning system, furnish to, and distribute in, the Premises airconditioning, heat and ventilation during Business Hours and from 8:00 A.M. to1:00 P.M. on Saturdays (except holidays) so as to meet the specifications ofExhibit C referred to below; provided, however, that Landlordshall not be liable for uncomfortable conditions in the Premises if the causeof the uncomfortable conditions is due to the fact that Tenant’scooling/heating needs are over and above the capacity/ specifications of theBuilding’s heating, ventilation and air conditioning (HVAC) system attachedhereto as Exhibit C.  Tenant agrees tolower and close the blinds when necessary because of the sun’s positionwhenever said HVAC system is in operation, and Tenant agrees at all times tocooperate fully with Landlord and to abide by all the regulations andrequirements which Landlord may prescribe for the proper functioning andprotection of said HVAC system.  Landlordshall at all times have free and unrestricted access to any and all HVACfacilities in the Premises subject to Section 5.02 hereof.

 

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Section 17.03         Landlord will, when and to the extentreasonably requested by Tenant furnish freight elevator or additional elevator,HVAC, or cleaning services (collectively “Additional Services”) upon such termsand conditions as shall be determined by Landlord in its reasonable discretion;and Tenant shall pay to Landlord promptly on demand as additional rent Landlord’sthen Building Standard charge for such Additional Services.  Landlord shall not be required to furnish,and Tenant shall not be entitled to receive, any Additional Services during anyperiod wherein Tenant shall be in default in the payment of Fixed Rent oradditional rent beyond the expiration of any applicable notice and cure periodas specified in this Lease.  Withoutlimiting the generality of the immediately preceding sentence, Tenant shall payto Landlord Landlord’s reasonable charge for (a) any cleaning of the Buildingor any part thereof required because of the carelessness or indifference ofTenant or the cleaning of any stains from floors or walls caused by any food orbeverages, (b) any cleaning done at the request of Tenant of any portions ofthe Premises which may be used for private/executive bathrooms and/or thepreparation, dispensing or consumption of food or beverages or for storage,shipping room, classroom or similar purposes or for the operation of computer,data processing or similar equipment, and (c) the removal of any of Tenant’srefuse and rubbish from the Building, except refuse and rubbish arising fromordinary cleaning by Landlord as specified in Section 17.01 hereof.  Tenant shall pay to Landlord an amount equalto any actual increase in the cost to Landlord for cleaning the Premises ifsuch actual increase shall be due to (i) the use of the Premises by Tenantduring hours other than Business Hours or (ii) the installation in thePremises, at the request of or by Tenant, of any items, materials or finishesother than those which are of the standard adopted by Landlord for the Buildingor which may require additional or special care.  Tenant understands that all (i) deliveriesand removals of construction tools, materials, equipment etc. in connectionwith Tenant’s Changes or surrender of the Premises and/or (ii) deliveries andremovals of furniture and personal property in connection with Tenant’s move-into and vacating of the Premises, shall be done during non-Business Hours.Subject to Building rules and regulations and mutually agreeable scheduling,Landlord agrees to provide Tenant with up to 40 hours of free overtime freightelevator usage only for Tenant’s initial construction and move-in to thePremises.  Tenant agrees at all times toexclusively utilize the rubbish contractor which Landlord from

 

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time to time designates as the Building’s rubbish contractor, providedsuch contractor’s charges are reasonably competitive.

 

Section 17.04         At any time or times all or any of theelevators in the Building may, at the option of Landlord, be manual and/orautomatic elevators, and Landlord shall be under no obligation to furnish anelevator operator for any automatic elevator. If Landlord shall at any time or times furnish any elevator operator forany automatic elevator, Landlord may discontinue furnishing such elevatoroperator without any diminution, reduction or abatement of rent.

 

Section 17.05         Landlord reserves the right, withoutliability to Tenant and without constituting any claim of constructiveeviction, to stop or interrupt any HVAC, elevator, escalator, lighting, gas,steam, plumbing, power, electricity, water, condenser water, cleaning or otherservice and to stop or interrupt the use of any Building facilities at suchtimes as may be necessary and for as long as may reasonably be required byreason of accidents, strikes, or the making of repairs, alterations orimprovements, or inability to secure a proper supply of fuel, gas, steam,water, electricity, labor or supplies, or by reason of any other similar ordissimilar cause beyond the reasonable control of Landlord.  To the extent within the reasonable controlof Landlord, Landlord agrees to give Tenant reasonable prior notice of suchstoppage or interruption.  No suchstoppage or interruption shall entitle Tenant to any diminution or abatement ofrent or other compensation nor shall this Lease or any of the obligations ofTenant be affected or reduced by reason of any such stoppage or interruption; provided,however, if the entire Premises or any substantial portion thereof shallbe rendered untenantable or inaccessible for a period in excess of five (5)consecutive business days by reason of any circumstance within Landlord’sreasonable control, then Tenant shall, as its sole and exclusive remedy, beentitled to an abatement of the Fixed Rent and Article 26 additional rentpayable hereunder (on a prorata square foot basis) commencing on the sixth(6th)) business day and continuing until the day upon which the entire Premisesor the substantial portion of the Premises, as the case may be, becomes tenantable/accessible;provided, further, if the entire Premises or any substantialportion thereof shall be rendered untenantable or inaccessible for a period inexcess of twenty (20) consecutive business days by reason of any circumstancebeyond Landlord’s reasonable control, then Tenant shall, as its sole andexclusive remedy, be entitled to an abatement of the Fixed Rent and Article 26 

 

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additional rent payable hereunder (on a prorata square foot basis)commencing on the twenty-first (31st) business day and continuing until the dayupon which the entire Premises or the substantial portion of the Premises, asthe case may be, becomes tenantable/accessible. Tenant shall not be entitled to the abatement provided in this Section17.05 at any time (and for the length of time) that Tenant is in default beyondany applicable cure period of any of the terms or conditions of this Leaseand/or if Tenant’s breach of this Lease, negligence or wilful misconduct causedthe circumstances which gave rise to the inaccessibility oruntenantability.  Landlord agrees to makereasonable efforts to limit the duration of any such stoppage or interruptionbut shall not be required to perform the same on an overtime or premium paybasis.

 

Section 17.06         Tenant acknowledges that the operationof elevators and HVAC equipment will cause some vibration, noise, heat or coldwhich may be transmitted to other parts of the Building and Premises.  Landlord shall be under no obligation toendeavor to reduce such vibration, noise, heat or cold beyond what is customaryin current good building practice for buildings of the same first-class natureas the Building in the midtown area of the Borough of Manhattan.

 

Section 17.07         Use of the term “Building Standard” orsimilar terminology in this Lease or in the exhibits attached hereto, shallmean Landlord’s standard criteria, requirements or specifications (qualitativelybased or quantitatively based) used in connection with maintenance, work orimprovements in the Building.

 

Section 17.08         In the event that the Building standbypower generation system is used or operated at any time during the term of thisLease (and Tenant shall have sixty (60) days after the date hereof in which toelect whether it shall tie-in to such standby power generation system), Tenantshall, from time to time within twenty (20) days after demand, pay to LandlordTenant’s prorata share (which prorata share will be based on the proportion therentable area of the Premises bears to the rentable square feet of space in theBuilding then being occupied by other tenants pursuant to effective leases) ofthe cost of operating the Building standby power generation system and allcosts incidental thereto (Standby Generator Cost).  The Standby Generator Cost shall not beincluded in Operating Expenses to the extent Landlord is paid or reimbursed forsame.  Landlord will make up to four (4)watts per usable square foot of the Premises

 

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available to Tenant from the Building’s standby power generationsystem.

 

Section 17.09         Subject to the other terms andconditions of this Lease and such reasonable security regulations as Landlordmay promulgate from time to time, Landlord agrees that Tenant shall havetwenty-four (24) hours per day, three hundred and sixty-five (365) days perannum access to the Premises.

 

**ARTICLE18**

 

**Lease Contains All Agreements—No Waivers**

 

Section 18.01         This Lease contains all the covenants,agreements, terms, provisions and conditions relating to the leasing of thePremises hereunder, and Tenant acknowledges that neither Landlord nor Landlord’sagents have made, and Tenant in executing and delivering this Lease is notrelying upon, any warranties, representations, promises or statements, exceptto the extent that the same may expressly be set forth in this Lease.

 

Section 18.02         The failure of Landlord to insist inany instance upon the strict performance of any provision of this Lease or toexercise any election herein contained shall not be construed as a waiver orrelinquishment for the future of such provision or election, but the same shallcontinue and remain in full force and effect. No waiver or modification by either party of any provision of this Leaseor other right or benefit shall be deemed to have been made unless expressed inwriting and signed by the party against whom enforcement is sought.  No surrender of the Premises or of any partthereof or of any remainder of the term of this Lease shall be valid unlessaccepted by Landlord in writing.  Anyclaim which Tenant may have against Landlord for default in performance of anyof the obligations herein contained to be kept and performed by Landlord shallbe deemed waived by Tenant unless such claim is asserted by written notice toLandlord within ninety (90) days after the commencement of the allegeddefault.  Any breach by Tenant of anyprovision of this Lease shall not be deemed waived by (a) the receipt andretention by Landlord of Fixed Rent or additional rent from anyone other thanTenant or (b) the acceptance of such other person as a tenant or (c) a releaseof Tenant from the further performance by Tenant of the provisions of thisLease or (d) the receipt and retention by Landlord of Fixed Rent or additionalrent with

 

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knowledge of the breach of any provision of this Lease.  No payment by Tenant or receipt or retentionby Landlord of a lesser amount than any Fixed Rent or additional rent hereinstipulated shall be deemed to be other than on account of the earlieststipulated rent, nor shall any endorsement or statement of any check or anyletter accompanying any check or payment as such rent be deemed an accord andsatisfaction, and Landlord may accept such check or payment without prejudiceto Landlord’s right to recover the balance of such rent or pursue any otherremedy in this Lease provided.  Noexecutory agreement hereafter made between Landlord and Tenant shall beeffective to change, modify, waive, release, discharge, terminate or effect anabandonment of this Lease, in whole or in part, unless such executory agreementis in writing, refers expressly to this Lease and is signed by the partyagainst whom enforcement of the change, modification, waiver, release,discharge or termination or effectuation of the abandonment is sought. 

 

**ARTICLE19**

 

**Parties Bound**

 

Section 19.01         The covenants, agreements, terms,provisions and conditions of this Lease shall bind and benefit the respectivesuccessors, assigns and legal representative of the parties hereto with thesame effect as if mentioned in each instance where a party hereto is named orreferred to, except that no violation of the provisions of Article 25 hereofshall operate to vest any rights in any successor, assignee or legalrepresentative of Tenant and that the provisions of this Article 19 shall notbe construed as modifying the conditions of limitation contained in Article 12hereof.  It is understood and agreed,however, that the covenants and obligations on the part of Landlord under thisLease shall not be binding upon Landlord herein named with respect to anyperiod subsequent to the transfer of its interest in the Building (providedLandlord’s transferee assumes all such subsequent obligations), that in theevent of such a transfer said covenants and obligations shall thereafter bebinding upon each transferee of such interest of Landlord herein named providedsuch transferee assumes all of such covenants and obligations, but only withrespect to the period ending with a subsequent transfer of such interest, andthat a lease of the entire interest shall be deemed a transfer within themeaning of this Article 19.

 

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Section 19.02         If Tenant is or becomes a partnership(or is or becomes comprised of two (2) or more persons, individually and/or asco-partners of a partnership) or if Tenant’s interest in this Lease shall beassigned to a partnership (or to two (2) or more persons, individually and/oras co-partners of a partnership) (any such partnership and such persons arereferred to in this Section as “Partnership Tenant”), the following provisionsof this Section shall apply to such Partnership Tenant:  (a) the liability of each of the partiescomprising Partnership Tenant shall be joint and several, and (b) each of theparties comprising Partnership Tenant hereby consents in advance to, and agreesto be bound by, any written instrument which may hereafter be executed,changing, modifying or discharging this Lease, in whole or in part, orsurrendering all or any part of the Premises to Landlord or renewing orextending this Lease and by any notices, demands, requests or othercommunications which may hereafter be given, by Partnership Tenant or by any ofthe parties comprising Partnership Tenant, and (c) any bills, statements,notices, demands, requests or other communications given or rendered toPartnership Tenant or to any of the parties comprising Partnership Tenant shallbe deemed given or rendered to Partnership Tenant and to all such parties andshall be binding upon Partnership Tenant and all such parties, and (d) ifPartnership Tenant shall admit new partners, all of such new partners shall, bytheir admission to Partnership Tenant, be deemed to have assumed performance ofall the terms, covenants and conditions of this Lease on Tenant’s part to beobserved and performed, and (e) Partnership Tenant shall give prompt notice toLandlord of the admission of any such new partners, and upon demand ofLandlord, shall cause each such new partner to execute and deliver to Landlordan agreement in form satisfactory to Landlord, wherein each such new partnershall assume performance of all of the terms, covenants and conditions of thisLease on Tenant’s part to be observed and performed (but neither Landlord’sfailure to request any such agreement nor the failure of any such new partnerto execute or deliver any such agreement to Landlord shall vitiate theprovisions of subdivision (d) of this Section).

 

Section 19.03         If Tenant is or becomes a professionalcorporation or if Tenant is or becomes a Partnership Tenant which containsprofessional corporations as partners, then the shareholders of suchprofessional corporation and/or the shareholder of any professional corporationwhich is a partner of a Partnership Tenant, as the case may be, shall havejoint and several personal liability for the full performance of the terms

 

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and conditions of this Lease. Tenant shall, from time to time and within five (5) days after Landlordmakes a request therefor, cause (i) each shareholder of Tenant, if Tenant is aprofessional corporation and/or (ii) the shareholder of any professionalcorporation which is a partner of a Partnership Tenant to execute suchdocuments as Landlord requires to create and confirm the personal liability ofsuch shareholder(s).

 

Section 19.04         If Tenant is a limited liabilitycompany/partnership, then the members/partners of such limited liabilitycompany/partnership, shall have joint and several personal liability for thefull performance of the terms and conditions of this Lease.  Tenant shall, from time to time and withinfive (5) days after Landlord makes a request therefor, cause eachmember/partner of Tenant (and if a member/partner is a professional corporationor similar entity Tenant shall cause the shareholder/equity holder thereof) toexecute such documents as Landlord requires to create and confirm the personalliability of such member(s)/shareholder(s)/equity holder(s).

 

**ARTICLE20**

 

**Curing Tenant’s****Defaults—Additional Rent**

 

Section 20.01         If Tenant shall default in the keeping,observance or performance of any provision or obligation of this Lease,Landlord, without thereby waiving such default, may perform the same for theaccount (and Tenant shall pay Landlord’s charge therefor) of Tenant, withoutnotice in a case of emergency and in any other case if such default continuesafter twenty (20) days from the date of the giving by Landlord to Tenant ofwritten notice of intention so to do. Bills for any expense incurred or charged by Landlord in connection withany such performance by Landlord for the account of Tenant, and bills for allcosts, charges, expenses and disbursements of every kind and nature whatsoever,including, but not limited to, reasonable counsel fees and disbursements,involved in collecting or endeavoring to collect the Fixed Rent or additionalrent or other charge or any part thereof or enforcing or endeavoring to enforceany rights against Tenant, under or in connection with this Lease, or pursuantto law, including (without being limited to) any such cost, expense anddisbursement involved in instituting and prosecuting any action or proceeding(including any summary dispossess proceeding), as well as bills for anyproperty, material, labor or services provided, furnished or rendered, orcaused to be provided, furnished, or rendered, by Landlord to

 

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Tenant including (without being limited to) electric lamps and otherequipment, construction work done for the account of Tenant, water, towel andother services, as well as for any charges for any additional elevator,heating, air conditioning or cleaning services incurred under Article 17 hereofand any charges for other similar or dissimilar services incurred under thisLease, may be sent by Landlord to Tenant monthly, or immediately, at Landlord’soption, and shall be due and payable within ten (10) days after demand asadditional rent under this Lease.  If anyFixed Rent, additional rent or any other costs, charges, expenses ordisbursements payable under this Lease by Tenant to Landlord are not paidwithin seven (7) business days after the same is due, the same shall bearinterest at the Default Rate from the due date thereof until paid and theamount of such interest shall be additional rent.

 

Section 20.02         In the event that Tenant is in arrearsin payment of Fixed Rent or additional rent or any other charge, Tenant waivesTenant’s right, if any, to designate the items against which any payments madeby Tenant are to be credited, and Tenant agrees that Landlord may apply anypayments made by Tenant to any items Landlord sees fit, irrespective of andnotwithstanding any designation or request by Tenant as to the items againstwhich any such payments shall be credited. Landlord reserves the right, without liability to Tenant without constitutingany claim of constructive eviction, to suspend furnishing or rendering toTenant any overtime/overstandard property, material, labor, utility or otherservice, wherever Landlord is obligated to furnish or render the same at theexpense of Tenant, in the event that (but only so long as) Tenant is in arrearsin paying Fixed Rent or additional rent due under this Lease.  In addition, Landlord may (without releasingTenant from any liability under this Lease) suspend furnishing to Tenantfreight elevator service at the time Tenant desires or is obligated to vacateor remove any property from the Premises in the event that Tenant is in arrearsin paying any Fixed Rent or additional rent due under this Lease unless Tenantprepays Landlord for such freight elevator service.

 

**ARTICLE21**

 

**Inability to Perform**

 

Section 21.01         This Lease and the obligations ofTenant to pay rent hereunder and perform all the other covenants, agreements,terms, provisions and conditions hereunder on the

 

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part of Tenant to be performed shall in no way be affected, impaired orexcused because Landlord is unable to fulfill any of its obligations under thisLease or is unable to supply or is delayed in supplying any service expressly orimplicitly to be supplied or is unable to make or is delayed in making anyrepairs, replacements, additions, alterations or decorations or is unable tosupply or is delayed in supplying any equipment or fixtures if Landlord isprevented or delayed from so doing by reason of strikes or labor troubles orany other similar or dissimilar cause whatsoever beyond Landlord’s reasonablecontrol, including, but not limited to, governmental preemption in connectionwith a national emergency or by reason of any rule, order or regulation of anydepartment or subdivision thereof of any governmental agency or by reason ofthe conditions of supply and demand which have been or are affected by war,hostilities or other similar or dissimilar emergency.  If this Lease specifies a time period for theperformance of an obligation by Landlord, that time period shall be extended bythe period of delay caused by any of the aforementioned causes beyond Landlord’sreasonable control.

 

**ARTICLE22**

 

**Adjacent Excavation—Shoring**

 

Section 22.01         If an excavation shall be made uponland adjacent to or under the Building, or shall be authorized to be made,Tenant shall afford to the person causing or authorized to cause suchexcavation, license to enter upon the Premises for the purpose of doing suchwork as said person shall deem necessary or desirable to preserve the Buildingfrom injury or damage and to support the same by proper foundations without anyclaim for damages or indemnity against Landlord, or diminution or abatement ofrent.

 

**ARTICLE23**

 

**Article Headings**

 

Section 23.01         The Article headings of this Lease arefor convenience only and are not to be considered in construing the same.

 

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**ARTICLE24**

 

**Electricity and Water**

 

Section 24.01         For the purpose of this Article, theterm “Electric Rate” shall mean an amount equal to the actual cost to Landlord,including all applicable taxes, demand charges, fuel factors, transferadjustment factors, or any other charges of the utility, of all electricitypurchased for the Building plus *** percent (***%) of the total amount thereofas an administrative charge to Landlord. Subject to the provisions of this Article 24, Landlord shallfurnish electric energy to the Premises on a submetering basis for the purposespermitted under this Lease and Tenant shall purchase the same from Landlord atthe Electric Rate as applied to the electric energy consumed in the Premises,as measured by a meter or meters, maintained and installed by Landlord atLandlord’s expense (which installation may include the addition of, or themodification of the existing, risers, feeders, wiring and other conductors andequipment, any and all of which shall be paid for by Tenant) at such locationor locations as Landlord shall determine, it being understood that the metersso installed may include a meter relating to the demand factor aspect of suchconsumption of electric energy.

 

Section 24.02         Tenant covenants and agrees that at notime will the connected electrical load in the Premises exceed 8.2 watts perusable square foot which 8.2 watts are to be used only for Tenant’s lighting,supplemental air conditioning and any other power requirements, but not theBuilding’s air conditioning or other base Building systems.  Landlord shall furnish and install, at Tenant’sreasonable expense, all replacement lighting tubes, lamps, bulbs and ballastsrequired in the Premises.

 

Section 24.03         Tenant’s use of electric energy in thePremises and/or the Building’s telephone network shall not at any time exceedthe capacity of any of the equipment in or otherwise serving the Premises.  In order to ensure that such capacities arenot exceeded and to avert possible adverse effect upon the Building’s electricservice and/or the Building’s telephone network, Tenant shall not, withoutLandlord’s prior consent in each instance (i) connect any fixtures, appliancesor equipment to the Building’s electric distribution system or make anyalteration or addition to the electric system of the Premises existing on theTerm Commencement Date other than personal computers, typewriters, lamps, deskcalculators, photocopier and similar small office appliances or (ii) connectany

 

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*** Certain information on this page has been omitted and filedseparately with the Securities and Exchange Commission. Confidential treatmenthas been requested with respect to the omitted portions.

 

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telecommunication devices to the Building’s telephone network in excessof that which an ordinary office installation would connect.  Should Landlord grant such consent(s), alladditional risers or other equipment required therefor shall be provided byLandlord and Landlord’s charge therefor (as well as any charge for any futuremaintenance or repair thereof) shall be paid by Tenant to Landlord within ten(10) days after demand.  As part ofTenant’s Changes, Tenant shall, at its sole expense, have the right to runwithin the Premises local distribution of electrical power in BX cable as maybe permitted under all applicable laws, rules, regulations and codes.

 

Section 24.04         Provided Landlord does not act in amanner discriminatory to Tenant, Landlord reserves the right to discontinuefurnishing electric energy to Tenant in the Premises at any time upon not lessthan 90 days’ notice to Tenant.  IfLandlord exercises such right, this Lease shall continue in full force andeffect and shall be unaffected thereby, except that from and after theeffective date of such termination Landlord shall not be obligated to furnishelectric energy to Tenant and Tenant shall not be obligated to pay Landlord forany electric energy furnished to the Premises. If Landlord so discontinuesfurnishing electric energy to Tenant, Tenant shall arrange to obtain electric energydirectly from the public utility company furnishing electric energy to theBuilding.  Such electric energy may befurnished to Tenant by means of the then existing building system feeders,risers and wiring to the extent that the same are available, suitable and safefor such purpose.  All meters andadditional panel boards, feeders, risers, wiring and other conductors andequipment which may be required to obtain electric energy directly from suchpublic utility company shall be furnished and installed by Landlord at Landlord’sexpense.

 

Section 24.05         Where water is furnished to thePremises by Landlord for purposes other than for (i) normal office use, (ii)Landlord’s air conditioning equipment during Business Hours, and (iii)drinking, lavatory or toilet facilities in the core area of the Premises,Tenant shall pay a reasonable amount (not to exceed that charged by comparablefirst-class midtown Manhattan office buildings) for the same and for anyrequired pumping and heating thereof as well as any taxes, sewer rents or othercharges which may be imposed by the city or other governmental authority oragency thereof based on the quantity of water so used by Tenant.  In no event shall Landlord be obligated toprovide hot water to the Premises, only warm water to the core publicbathrooms.  Tenant shall also pay toLandlord on demand,

 

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as additional rent, Landlord’sthen-existing Building charge, plus any taxes or other charges which may beimposed by any governmental authority thereon, for such condenser water as maybe requested (irrespective of actual use) by Tenant within sixty (60) daysafter the date hereof (up to 30 tons per annum) for any supplemental (aboveBuilding Standard) air conditioning units servicing the Premises.  Tenant shall also pay Landlord’s one-timethen Building Standard tap-in charge for such condenser water, which is agreedto be $**** per ton.

 

Section 24.06         Subjectto Section 17.05, Landlord shall in no way be liable or responsible to Tenantfor any loss or damage or expense which Tenant may sustain or incur by reasonof any failure, inadequacy or defect in the character, quantity or supply ofelectricity, water or telephone network access and/or service furnished to thePremises unless caused by the negligence or willful misconduct of Landlord.

 

Section 24.07         Tenantshall pay to Landlord, as additional rent, the amounts from time to time billedby Landlord pursuant to the provisions hereof, each such bill to be paid withinten (10) business days after the same has been rendered.  If any tax is imposed upon Landlord’sreceipts from the sale or resale of electric energy to Tenant under federal,state, municipal or other law, such tax may, to the extent permitted by law, bepassed on by Landlord to Tenant and be included as additional rent, in thebills payable by Tenant hereunder.

 

Section 24.08         Notwithstandinganything contained in this Article 24 to the contrary (a) if the lawor utility servicing the Building requires Tenant to convert the method bywhich it receives electricity, then the cost to so convert shall be splitequally between Landlord and Tenant and (b) if the conversion is requiredby Landlord and not the law or the utility servicing the Building, then thecost to so convert shall be paid by Landlord.

 

Section 24.09         Tenantacknowledges that Landlord may now, or in the future, have the right to selectthe entity or entities which will provide electrical power to the Building

 

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**** Certain information onthis page has been omitted and filed separately with the Securities andExchange Commission. Confidential treatment has been requested with respect tothe omitted portions.

 

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(including, the Premises).  Landlord shall have the right, in its solediscretion, to select any entity or entities which it desires to have as theelectrical service provider to the Building (including, the Premises) andTenant shall not have the right to select the same or participate in theselection of the same except and unless applicable law requires that Tenanthave any such right(s) (and then only to the extent applicable law requires).

 

**ARTICLE25**

 

**Assignment****, Mortgaging, Subletting, Etc**

 

Section 25.01         Tenantshall not, whether directly, indirectly, voluntarily, involuntarily, or byoperation of law or otherwise (a) assign or otherwise transfer this Lease orthe term and estate hereby granted or any interest herein or offer or advertiseto do so, (b) sublet the Premises or any part thereof, or offer or advertise todo so, or allow the same to be used, occupied or utilized by anyone other thanTenant, or (c) mortgage, pledge, encumber, grant a security interest in orotherwise hypothecate this Lease or the Premises or any interest therein or anypart thereof in any manner whatsoever, without in each instance obtaining theprior written consent of Landlord.

 

Section 25.02         IfTenant is a corporation, partnership or other entity, the provisions ofsubdivision (a) of Section 25.01 shall apply to (i) a transfer of anypercentage interest of the stock or beneficial ownership interest, as the casemay be, of Tenant (at any level and however accomplished, whether in a singletransaction or in a series of related or unrelated transactions); (ii) atransfer by operation of law or otherwise, of Tenant’s interest in this Lease;and/or (iii) any increase in the amount of issued and/or outstanding shares ofcapital stock of any corporate Tenant (or partnership interests of anypartnership Tenant) and/or the creation of one or more additional classes ofcapital stock of any corporate Tenant (or partnership interests of anypartnership Tenant) (however accomplished, whether in a single transaction orin a series of related or unrelated transactions), with the result that theTenant shall no longer be controlled by the beneficial and record owners of thecapital stock of such corporate Tenant (or partnership interests in the case ofa partnership) as of the date Tenant executed this Lease.  Notwithstanding the above, the provisions ofsubdivision (a) of Section 25.01 shall not apply to transactions with acorporation or other entity into or with which Tenant is merged

 

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or consolidated or to which allor substantially all of Tenant’s assets are transferred or to any corporationor other entity which controls or is controlled by Tenant or is under commoncontrol with Tenant, provided that in any of such events the successor toTenant has a net worth computed in accordance with generally acceptedaccounting principles equal to or greater than the net worth of Tenantimmediately prior to such merger, consolidation or transfer and Tenant isultimately controlled by the same persons who controlled Tenant immediatelyprior to such merger, consolidation or transfer and Tenant provides Landlordwith satisfactory evidence of the same at least thirty (30) days prior to suchmerger, consolidation or asset transfer; provided, however, thisexception shall not apply in the situation where Tenant is a shell corporation(i.e., either Tenant has no or minimal assets or all or substantiallyall of Tenant’s assets are located at the Premises and it derives all orsubstantially all of its income from operations at the Premises).  In the event that Tenant is a shellcorporation, any such merger, consolidation or asset transfer shall be subjectto Section 25.01.  Notwithstandinganything contained in this Article 25 to the contrary, ARCHIPELAGO HOLDINGS,INC. (“ARCHIPELAGO”) may assign this Lease and/or sublease the Premises or anyportion thereof to any entity which controls ARCHIPELAGO, ARCHIPELAGO controlsand/or is under common control with ARCHIPELAGO, without having to obtainLandlord’s prior written consent (and shall not be subject to Section 25.06)provided that (a) ARCHIPELAGO is not in default beyond the expiration of anyapplicable notice and cure period of any of the terms or conditions of thisLease at the time of the making of such assignment or sublease or the time suchassignment or sublease is to take effect or commence, as the case may be, (b)ARCHIPELAGO provides Landlord with ten (10) business days’ prior written noticethereof along with a fully executed copy of the assignment or sublease, (c)ARCHIPELAGO provides Landlord, from time to time (initially as well as any timethereafter), within five (5) business days’ after Landlord requests the same,such evidence and/or affidavits as Landlord may require in order to confirmwhether the above-described control test is satisfied, (d) ARCHIPELAGO and theassignee or subtenant, as the case may be, executes Landlord’s then standardform of consent to assignment or sublease, as the case may be, and Tenantreimburses Landlord for Landlord’s legal and administrative fees in connectiontherewith and (e) said assignee or subtenant continues at all times thereafterto satisfy the above-described control test.

 

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Section 25.03         Ifthis Lease be assigned, whether or not in violation of the provisions of thisLease, Landlord may, after default by Tenant, and expiration of Tenant’s timeto cure such default, collect rent from the assignee.  If the Premises or any part thereof aresublet or used or occupied by anybody other than Tenant, whether or not inviolation of this Lease, Landlord may, after default by Tenant, and expirationof Tenant’s time to cure such default, collect rent from the subtenant oroccupant.  In either event, Landlord mayapply the net amount collected to the Fixed Rent and additional rent hereinreserved, but no such assignment, subletting, occupancy or collection shall bedeemed a waiver of any of the provisions of Section 25.01, or the acceptance ofthe assignee, subtenant or occupant as tenant, or as a release of Tenant fromthe performance by Tenant of Tenant’s obligations under this Lease.  The consent by Landlord to assignment,mortgaging, subletting or use or occupancy by others shall not in any way beconsidered to relieve Tenant from obtaining the express written consent ofLandlord to any other or further assignment, mortgaging, subletting or use oroccupancy by others not expressly permitted by this Article.  References in this Lease to use or occupancyby others, that is anyone other than Tenant, shall not be construed as limitedto subtenants and those claiming under or through subtenants but as includingalso licensees and others claiming under or through Tenant, immediately orremotely.

 

Section 25.04         Anyassignment or transfer, whether made with or without Landlord’s consentpursuant to Section 25.01 or Section 25.02, shall be made only if, and shallnot be effective until, the assignee shall execute, acknowledge and deliver toLandlord an agreement in form and substance satisfactory to Landlord wherebythe assignee shall assume the obligations of this Lease on the part of Tenantto be performed or observed and whereby the assignee shall agree that theprovisions in Section 25.01 shall, notwithstanding such assignment or transfer,continue to be binding upon it in respect of all future assignments andtransfers. Tenant covenants that, notwithstanding any assignment or transfer(including by way of asset transfer), whether or not in violation of theprovisions of this Lease, and notwithstanding the acceptance of Fixed Rentand/or additional rent by Landlord from an assignee, transferee, or any otherparty, Tenant shall remain fully liable for the payment of the Fixed Rent andadditional rents and for the other obligations of this Lease on the part ofTenant to be performed or observed.

 

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Section 25.05         Thejoint and several liability of Tenant and any immediate or remotesuccessor-in-interest of Tenant and the due performance of the obligations ofthis Lease on Tenant’s part to be performed or observed shall not bedischarged, released or impaired in any respect by any agreement or stipulationmade by Landlord extending the time of, or modifying any of the obligations of,this Lease, or by any waiver or failure of Landlord to enforce any of theobligations of this Lease.

 

Section 25.06         Notwithstandinganything contained to the contrary in Sections 25.01 or 25.02 of this Article,if Tenant shall at any time or times during the term of this Lease desire toassign this Lease (other than an assignment or sublease to be made pursuant toSection 25.02 without Landlord’s consent) or sublet all or part of thePremises, Tenant shall give notice thereof to Landlord, which notice shall beaccompanied by (a) a conformed or photostatic copy of the proposed assignmentor sublease, or a term sheet in lieu thereof, the effective or commencementdate of which shall be at least thirty (30) days after the giving of suchnotice, (b) a statement setting forth in reasonable detail the identity of theproposed assignee or sub-tenant, the nature of its business and its proposeduse of the Premises, and (c) current financial information with respect to theproposed assignee or subtenant, including without limitation, its most recentfinancial report.  Such notice shall bedeemed an offer from Tenant to Landlord whereby Landlord (or Landlord’sdesignee) may, at its option, (i) sublease such space from Tenant upon theterms and conditions herein set forth (if the proposed transaction is asublease of part of the Premises for a term, including renewal options, whichdoes not extend into the last two years of the Lease), (ii) terminate thisLease (if the proposed transaction is an assignment or a sublease of all thePremises), or (iii) terminate this Lease with respect to the space covered bythe proposed sublease (if the proposed transaction is a sublease of part of thePremises other than a sublease referred to in clause (i) hereof).  Said option may be exercised by Landlord bynotice to Tenant at any time within thirty (30) days after such notice has beengiven by Tenant to Landlord; and during such thirty (30) day period Tenant shallnot assign this Lease or sublet such space to any person.

 

Section 25.07         IfLandlord exercises its option to terminate this Lease in the case where Tenantdesires either to assign this Lease or sublet all the Premises, then, the

 

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Expiration Date shall be thedate that such assignment or sublet was to be effective or commence, as thecase may be.

 

Section 25.08         IfLandlord exercises its option to terminate this Lease in part, in any casewhere Tenant desires to sublet part of the Premises, then, (a) the ExpirationDate with respect to such part of the Premises shall be the date that theproposed sublease was to commence; (b) from and after such Expiration Date theFixed Rent and additional rent shall be adjusted, based upon the proportionthat the rentable area of the Premises remaining bears to the total rentablearea of the Premises; and (c) Tenant shall pay to Landlord, upon demand,Landlord’s reasonable charge for physically separating such part of thePremises from the balance of the Premises.

 

Section 25.09         IfLandlord exercises its option to sublet the portion(s) of the Premises whichTenant desires to sublet, such sublease to Landlord or its designee (assubtenant) shall be at the lower of (i) the rental rate per rentable squarefoot of Fixed Rent and additional rent then payable pursuant to this Lease or(ii) the rentals set forth in the proposed sublease, and shall be for the sameterm as that of the proposed subletting, and:

 

(a)  The sublease shall be expressly subject toall the covenants, agreements, terms, provisions and conditions of this Leaseexcept such as are irrelevant or inapplicable, and except as otherwiseexpressly set forth to the contrary in this Section;

 

(b)  Such sublease shall be upon the same termsand conditions as those contained in the proposed sublease, except such as areirrelevant or inapplicable and except as otherwise expressly set forth to thecontrary in this Section;

 

(c)  Such sublease shall give the sublessee the unqualifiedand unrestricted right, without Tenant’s permission, to assign such sublease orany interest therein and/or to sublet the space covered by such sublease or anypart or parts of such space;

 

(d)  Such sublease shall provide that thesublessee or any assignee or further subtenant of Landlord or its designee may,at the election of Landlord, be permitted to make alterations, decorations, andinstallations in such space or any part thereof and shall also provide insubstance that any such alterations, decorations and installations in suchspace made

 

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therein by the sublessee or anyassignee or subtenant of Landlord or its designee shall be removed by suchsublessee, assignee or subtenant prior to or upon the expiration or othertermination of such sublease and the subleased space shall be restored to itscondition immediately prior to such sublease and that such sublessee, assigneeor subtenant, at its expense, shall repair any damage and injury to such spaceso sublet caused by such removal or restoration; and

 

(e)  Such sublease shall also provide that (i) theparties to such sublease expressly negate any intention that any estate createdunder such sublease be merged with any other estate held by either of saidparties, (ii) any assignment or subletting by Landlord or its designee (as thesubtenant) may be for any purpose or purposes that Landlord, in Landlord’suncontrolled discretion, shall deem suitable or appropriate (but no such useshall constitute a default by Tenant), (iii) Tenant, at Tenant’s expense, shalland will at all times provide and permit reasonably appropriate means ofingress to and egress from such space so sublet by Tenant to Landlord or itsdesignee, (iv) Landlord, at Tenant’s reasonable expense, may make suchalterations as may be required or deemed necessary by Landlord to physicallyseparate the subleased space from the balance of the Premises, and (v) that atthe expiration of the term of such sublease, Tenant will accept the spacecovered by such sublease in its then existing condition, subject to theobligations of the sublessee to restore and make such repairs thereto as may benecessary to preserve the Premises demised by such sublease in good order andcondition and subject to subdivision (d) above.

 

Section 25.10         Inthe event Landlord does not exercise its options pursuant to Section 25.06 toso sublet the Premises or terminate this Lease in whole or in part andproviding that Tenant is not in default of any of Tenant’s obligations underthis Lease, Landlord’s consent (which must be in writing and in formsatisfactory to Landlord) to the proposed assignment or sublease shall not beunreasonably withheld, or delayed, provided and upon condition that all of thefollowing are satisfied:

 

(a)  Tenant shall have complied with theprovisions of Section 25.06 and Landlord shall not have exercised any of itsoptions under said Section 25.06 within the time permitted therefor;

 

(b)  In Landlord’s reasonable judgment theproposed assignee or subtenant is engaged in a business, and its proposed 

 

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use of the Premises (or aportion thereof) is, appropriate for and in keeping with the then standards ofthe Building and consistent with the character and quality of the existingtenancies thereof; and the proposed use (i) is limited to the use expresslypermitted under Section 1.03 and (ii) will not violate any negative covenant asto use contained in any other lease of space in the Building;

 

(c)  The financial condition and the generalreputation of the proposed assignee or subtenant is commensurate with:  (i) the responsibility involved in theproposed assignment or sublease and (ii) the character and dignity of theBuilding and the existing tenancies thereof, and Landlord has been furnishedwith reasonable proof of all of the foregoing;

 

(d)  Neither (i) the proposed assignee orsubtenant nor (ii) any person which, directly or indirectly, controls, iscontrolled by, or is under common control with, the proposed assignee orsubtenant, is then an occupant of any part of the Building, provided Landlordthen has available for lease in the Building (or will have available within thenext three (3) months) comparable space in terms of size, location and term;

 

(e)  The proposed assignee or subtenant is not aperson with whom Landlord is then negotiating to lease space in the Building;nor a person, entity or business subject to compliance with any legalrequirements beyond those requirements applicable to Tenant; nor will thenature of its occupancy cause an excessive density of employees or trafficwithin the Building, or make excessive demands on the Building’s services orfacilities, or in any other way lessen the character or dignity of the Building;

 

(f)  The form of the proposed assignment orsublease shall comply with the applicable provisions of this Article andotherwise be reasonably acceptable to Landlord; and Tenant and the proposedassignee or subtenant shall execute a Consent to Assignment or Subletting inform acceptable to Landlord;

 

(g)  There shall not be more than two (2)subtenants per floor (including Landlord or its designee) of the Premises;

 

(h) The rentaland other terms and conditions of the sublease are the same as those containedin the proposed sublease furnished to Landlord pursuant to Section 25.06hereof;

 

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(i)  Tenant shall pay to Landlord on demandLandlord’s then Building Standard legal and administrative fees in connectionwith said assignment or sublease, including, without limitation, the costs ofmaking investigations as to the acceptability of the proposed assignee orsubtenant;

 

(j)  Tenant shall not have (i) advertised orpublicized in any way the availability of the Premises or any part thereofwithout prior notice to and reasonable approval by Landlord (except Tenant maylist the same with a broker(s)), nor shall any advertisement state the name (asdistinguished from the address) of the Building or the proposed rental, or (ii)listed the Premises for subletting, whether through a broker, agent,representative, or otherwise at a rental rate less than the rate that is thenbeing asked for direct space in the Building; and

 

(k)           The proposed assignee or subtenantshall not be (x) entitled, directly or indirectly, to diplomatic or sovereignimmunity and shall be subject to the service of process in, and thejurisdiction of the courts of, the State of New York nor (y) a charitable,religious, union or other not-for-profit organization or any tax exempt entitywithin the meaning of the Internal Revenue Code or any successor or substitutestatute, or rule or regulation.

 

Except for anysubletting by Tenant to Landlord or its designee pursuant to the provisions ofthis Article, each subletting pursuant to this Article shall be subject to allthe covenants, agreements, terms, provisions and conditions contained in thisLease.  Notwithstanding any suchsubletting to Landlord or any such subletting to any other subtenant and/oracceptance of rent or additional rent by Landlord from any subtenant, Tenantshall and will remain fully liable for the payment of the Fixed Rent andadditional rent due and to become due hereunder and for the performance of allthe covenants, agreements, terms, provisions and conditions contained in thisLease on the part of Tenant to be performed and all acts and omissions of anylicensee or subtenant or anyone claiming under or through any subtenant whichshall be in violation of any of the obligations of this Lease, and any suchviolation shall be deemed a violation by Tenant.  Tenant further agrees that notwithstandingany such subletting, no other and further subletting of the Premises by Tenantor any person claiming through or under Tenant (except as provided in Section25.09) shall or will be made except upon compliance with and subject to theprovisions of this Article.  If Landlordshall decline to give its consent to any proposed

 

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assignment or subtenant or ifLandlord shall exercise any of its options under Section 25.06, Tenant shallindemnify, defend and hold harmless Landlord against and from any and all loss,liability, damages, costs and expenses (including reasonable counsel fees and disbursements)resulting from any claims that may be made against Landlord by the proposedassignee or subtenant or by any brokers or other persons claiming a commissionor similar compensation in connection with the proposed assignment or sublease.

 

Section 25.11         Inthe event that (a) Landlord fails to exercise any of its options under Section25.06 and consents to a proposed assignment or sublease, and (b) Tenant failsto execute and deliver the assignment or sublease to which Landlord consentedwithin ninety (90) days after the giving of such consent, then, Tenant shallagain comply with all the provisions and conditions of Section 25.06 beforeassigning this Lease or subletting all or part of the Premises.

 

Section 25.12         Withrespect to each and every sublease or subletting authorized by Landlord underthe provisions of this Lease, it is further agreed:

 

(a)  The subletting shall be for a term endingprior to the Expiration Date.

 

(b)  No sublease shall be valid, and no subtenantshall take possession of the Premises or any part thereof, until an executedcounterpart of such sublease has been delivered to Landlord.

 

(c)  Each sublease shall be deemed to provide thatit is subject and subordinate to this Lease and to the matters to which thisLease is or shall be subordinate, and that Section 27.04 shall govern in theevent of termination, re-entry or dispossess by Landlord or successor landlordunder this Lease.

 

Section 25.13         IfLandlord shall give its consent to any assignment of this Lease or to any sublease,Tenant shall in consideration therefor pay to Landlord as additional rent:

 

(a) in thecase of an assignment, an amount equal to *** percent (***%) of all sums andother considerations paid to 

 

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Tenant by the assignee for orby reason of such assignment and after deducting reasonable legal fees, thecost of reasonable alterations and reasonable brokerage and advertising fees;and

 

(b) in thecase of a sublease, *** percent (***%) of any rents, additional rent or otherconsideration payable under the sublease to Tenant by the subtenant in excessof the Fixed Rent and additional rent accruing during the term of the subleasein respect of the subleased space (at the rate per square foot payable byTenant hereunder) pursuant to the terms hereof (including, but not limited to,sums paid for the sale or rental of Tenant’s Property, less, in the case of thesale thereof, the then depreciated cost thereof determined on the basis ofTenant’s federal income tax returns) and after deducting (on an amortized basisover the term of the sublease) reasonable legal fees, the cost of reasonablealterations and reasonable brokerage and advertising fees.  The sums payable under this Section 25.13(b)shall be paid to Landlord as and when received by Tenant.

 

Section 25.14         (a)           Landlord may, at the request ofTenant, maintain listings on the Building directory (to the extent the sameexists) of the names of Tenant and any other person, firm, association orcorporation in occupancy of the Premises or any part thereof as permittedhereunder, and the names of any officers or employees of any of the foregoing;provided, however, that the number of names so listed shall be in no greaterproportion to the capacity of the Building directory as the aggregate number ofsquare feet of rentable area of the Premises is to the aggregate number ofsquare feet of rentable area of the Building. The listing of any name other than that of Tenant, whether on the doorsof the Premises, on the Building directory, or otherwise, shall not operate tovest in said person or entity any right or interest in the Lease or in thePremises or any portions thereof or be deemed to be the consent of Landlord(written or otherwise) mentioned in this Article 25.  It is expressly understood that any suchlisting is a privilege extended by Landlord revocable at will by written noticeto Tenant.

 

(b)           Subject to compliance with all legalor insurance requirements and the provisions of Section 5.01(e) of this Lease,Tenant may install, at Tenant’s cost and expense, one (1) sign identifyingTenant on the floor in which it is in occupancy, the location, size, design andappearance of any such sign shall be subject to Landlord’s reasonableapproval.  Tenant, at its cost andexpense, shall maintain, repair and replace such sign in

 

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compliance with all applicablelaws and such standards for the Building as Landlord in its sole discretion maydetermine.  Upon the Expiration Date orsooner termination of this Lease, Tenant, at its cost and expense, shall removesuch sign and repair any damage caused by such removal.

 

**ARTICLE26**

 

**Escalations**

 

Section 26.01         Asused in this Lease, the words and terms which follow mean and include thefollowing:

 

(a)  “Tax Year” shall mean each period of twelve(12) months, commencing on the first day of July of each such period, in whichoccurs any part of the term of this Lease or such other period of twelve (12)months occurring during the term of this Lease as hereafter may be duly adoptedas the fiscal year for real estate tax purposes of the City of New York.

 

(b)  “Operating Year” shall mean each calendaryear of twelve consecutive months.

 

(c)  “Tenant’s Proportionate Share” shall bedeemed to be ****% for the purposes of this Lease.  Tenant acknowledges that such agreed-uponpercentage shall change only if the area of the Premises is increased ordecreased pursuant to a writing signed by Landlord and Tenant or if Landlordphysically constructs additional rentable space in the Building;

 

(d)  “Operating Expenses” shall include thoseexpenses which have the meaning set forth in Exhibit B, annexed hereto and madea part hereof.

 

(e)  “Base Year Operating Expenses” shall mean theOperating Expenses for the Operating Year ending December 31, ***.

 

(f)  “Real Estate Taxes” shall mean the aggregateamount of real estate taxes and assessments imposed upon the Land and Buildingand payable by Landlord (including, without limitation, (i) real estate taxesupon any “air rights” payable

 

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by the Landlord; and (ii) anyassessments levied after the date of this Lease for public benefits to Landand/or Building, or special assessments levied on the Land and/or Building,which assessments, if payable in installments shall be deemed payable in themaximum number of permissible installments), in the manner in which such taxesand assessments are imposed as of the date hereof, excluding any franchise orincome tax of Landlord; provided, that if because of any change in the taxationof real estate, any other tax or assessment of any kind or nature (including,without limitation, any occupancy, gross receipts or rental tax but excludinginheritance, gift and excise taxes ) is imposed upon Landlord or the owner ofthe Land and/or Building, or upon or with respect to the Land and/or Buildingor the occupancy, rents or income therefrom, in substitution for, or inaddition to, any of the foregoing Real Estate Taxes, such other taxes orassessment shall be deemed part of the Real Estate Taxes.  With respect to any Tax Year, all expenses,including legal fees, experts’ and other witnesses’ fees, incurred incontesting the validity or amount of any Real Estate Taxes (whether or notsuccessful in lowering the amount of Real Estate Taxes), shall be considered aspart of the Real Estate Taxes for such Tax Year.  Landlord shall have the exclusive right, butnot the obligation, to contest or appeal any assessment of Real Estate Taxeslevied upon the Land and the Building by any governmental or quasi-governmentaltaxing agency.  Tenant shall have no rightor power to contest or appeal any assessment of Real Estate Taxes.

 

(g)  “Real Estate Tax Base” shall mean the amountwhich is equal to the Real Estate Taxes for the Tax Year ending onJune 30, ***.

 

(h)  “Escalation Statement” shall mean a statementin writing signed by Landlord, setting forth the amount payable by Tenant for aspecified Tax Year or Operating Year, as the case may be, pursuant to thisArticle 26, setting forth in reasonable detail the computation of anyadditional rent payable pursuant to this Article.

 

Section 26.02         Ifthe Real Estate Taxes for any Tax Year shall be greater than the Real EstateTax Base, Tenant shall pay to Landlord as additional rent pursuant to Sections26.05 and 26.06 for the Premises for such Tax Year an amount (herein called the“Tax Payment”) equal to Tenant’s Proportionate Share of the amount by which theReal Estate Taxes for such Tax Year are greater than the Real Estate TaxBase.  In the event that any

 

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Tenant’s Changes result in anincrease in Real Estate Taxes and Landlord receives a separate tax bill whichspecifically delineates the tax increase as it relates to the Tenant’s Changein question, then Tenant shall pay ****% of such tax increase.

 

Section 26.03         Foreach Operating Year commencing during the term of this Lease, Tenant shall paypursuant to Sections 26.05 and 26.06 an amount (Operating Payment) equal toTenant’s Proportionate Share of the amount by which the Operating Expenses forsuch Operating Year are greater than the Base Year Operating Expenses.

 

Section 26.04         If,in any Operating Year (any part or all of which falls within the Lease term),Landlord shall incur any cost for a capital improvement made or purchased incompliance with any law or governmental regulation enacted after the datehereof including amendments to existing laws and regulations (as, for example,respecting fire safety, in compliance with New York City Local Law #5-73 and/orthe cost to purchase the Building’s telephone network in the event that the lawrequires the same to be purchased from the utility serving the Building), thenTenant shall pay to Landlord as additional rent for the Premises for the nextsucceeding Operating Year and continuing thereafter for each succeeding year(and any fraction thereof) during the balance of the Lease term (to the extentthat such improvement is being amortized during the balance of the Lease termand Landlord agrees to amortize the cost of any such improvement over a periodof not less than ten (10) years) an amount equal to Tenant’s ProportionateShare of the reasonable annual amortization of such cost (together withreasonable interest thereon).

 

Section 26.05         Landlordshall furnish to Tenant, prior to the commencement of each Operating Year orTax Year, as the case may be, a written statement setting forth Landlord’sreasonable estimate of the Tax Payment or the Operating Payment, as the casemay be, and in the case of any Operating Year, pursuant to Section 26.03hereof, and, in case of any Tax Year, pursuant to Section 26.02 hereof.  Tenant shall pay to Landlord on the first dayof each month during such Operating Year or Tax Year, as the case may be, anamount equal to one-twelfth of Landlord’s reasonable estimate of the OperatingPayment for such Operating Year or the Tax Payment for such Tax Year.  If,

 

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however, Landlord shall furnishany such estimate for an Operating Year or a Tax Year subsequent to thecommencement thereof, then (a) until the first day of the month following themonth in which such estimate is furnished to Tenant, Tenant shall pay toLandlord on the first day of each month an amount equal to the monthly sumpayable by Tenant to Landlord under this Section in respect of the last monthof the preceding Operating Year or Tax Year; (b) promptly after such estimateis furnished to Tenant, Landlord shall give notice to Tenant stating whetherthe installments of the Operating Payment or Tax Payment previously made forsuch Operating Year or Tax Year, as the case may be, were greater or less thanthe installments of the Operating Payment or Tax Payment to be made for suchOperating Year or Tax Year in accordance with such estimate, and (i) if thereshall be a deficiency, Tenant shall pay the amount thereof within ten (10)business days after demand therefor, or (ii) if there shall have been anoverpayment, Landlord shall refund within ten (10) business days to Tenant theamount thereof; and (c) on the first day of the month following the month inwhich such estimate is furnished to Tenant, and monthly thereafter throughoutthe remainder of such Operating Year or Tax Year, as the case may be, Tenantshall pay to Landlord an amount equal to one-twelfth (1/12th) of the OperatingPayment or Tax Payment, as the case may be, shown on such estimate.

 

Section 26.06         Landlordshall furnish to Tenant an Escalation Statement for each Operating Year and foreach Tax Year.  If the EscalationStatement shall show that the sums paid by Tenant under Section 26.05 exceededthe Tax Payment or Operating Payment to be paid by Tenant for such Tax Year orOperating Year, as the case may be, Landlord shall refund within ten (10)business days to Tenant the amount of such excess; and if the EscalationStatement for such Tax Year or Operating Year, as the case may be, shall showthat the sums so paid by Tenant were less than the Tax Payment or OperatingPayment, as the case may be, to be paid by Tenant for such Tax Year orOperating Year, Tenant shall pay the amount of such deficiency within ten (10)business days after demand therefor.

 

Section 26.07         Incase the Real Estate Taxes for any Tax Year or part thereof shall be reducedduring the term hereof after Tenant shall have paid Tenant’s ProportionateShare of any increase thereof in respect of such Tax Year pursuant to Section26.06 hereof, Landlord shall credit or refund (upon Tenant’s request) to TenantTenant’s Proportionate Share of the refund of such taxes received byLandlord.  If, after an Escalation

 

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Statement has been sent toTenant during the term hereof, the assessed valuation which had been utilizedin determining the Real Estate Base Tax is reduced (as a result of settlement,final determination of legal proceedings or otherwise), then, and in such event(a) the Real Estate Tax Base shall be retroactively adjusted to reflect suchreduction and (b) all retroactive additional rent resulting from suchretroactive adjustment shall be forthwith payable when billed by Landlord.  Landlord shall send to Tenant a statementsetting forth the basis for such retroactive adjustment and additional rentpayments.

 

Section 26.08         Intentionallydeleted.

 

Section 26.09         Paymentsshall be made pursuant to this Article 26 notwithstanding the fact that anEscalation Statement is furnished to Tenant within twenty-four (24) monthsafter the Expiration Date and any delay or failure of Landlord in billing anyadditional rent provided for in this Article 26 shall not constitute a waiverof or in any way impair the continuing obligation of Tenant to pay suchadditional rent hereunder.

 

Section 26.10         Providedthat Tenant is not in default hereunder, if Tenant’s Operating Paymentincreases by more than *** percent (****%) from one Operating Year to the nextOperating Year, then, within sixty (60) days after the submission of theEscalation Statement indicating such increase, Landlord shall allow Tenant orTenant’s agents, upon ten (10) business days advance notice to Landlord, toexamine, during Business Hours at Landlord’s office where such records arekept, such books purchase orders, invoices, payrolls and other records inLandlord’s possession as may be reasonably necessary in order to permit Tenantto verify the information set forth in such Escalation Statement with respectto Operating Expenses (an “Audit”).  Anysuch Audit may only be conducted by an independent accounting firm approved byLandlord that is not being compensated by Tenant on a contingency feebasis.  Tenant and its agents shall keepall information which they are shown in connection with any Audit confidentialand shall not reveal the same to any third party except as may be required bylaw.  Landlord shall have the right toprecondition any verification right provided hereunder upon the execution byTenant and the person conducting such Audit of a confidentiality agreement insuch form as required by Landlord. Tenant shall deliver to

 

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Landlord a copy of the resultsof such Audit within fifteen (15) days after completion or receipt by Tenant ofsuch results.  In the event that Tenantfails to initiate such Audit within said sixty (60) day period, Tenant shallhave no further right to challenge or contest the accuracy of the applicableEscalation Statement.  No assignee of theTenant named herein (except assignees permitted without Landlord’s consentpursuant to Section 25.02 hereof)shall have any right to conduct an Audit forany period during which such assignee was not in possession of the Premises andno subtenant shall have any right to conduct an Audit.  Within ten (10) days after demand therefor,Tenant shall reimburse Landlord for the reasonable and actual out-of-pocketcosts of Landlord’s personnel and representatives who are involved in suchAudit.

 

Section 26.11         Inno event shall (x) the Fixed Rent under this Lease (exclusive of the additionalrent under this Article) be reduced by virtue of this Article or (y) Tenant beentitled to a credit against the payment of any additional rent that may be dueunder this Lease (including this Article 26) by reason of the fact that (i)Operating Expenses in any Operating Year are less than Base Year OperatingExpenses and/or (ii) Real Estate Taxes for any Tax Year are less than the RealEstate Tax Base.

 

**ARTICLE27**

 

**Subordination**

 

Section 27.01         ThisLease is subject and subordinate in all respects to all ground leases and/orunderlying leases now or hereafter covering the real property or any portionthereof of which the Premises form a part and to all mortgages and trustindentures which may now or hereafter be placed on or affect such leases and/orthe real property of which the Premises form a part, or any part or parts ofsuch real property, and/or Landlord’s interest therein, and to each advancemade and/or hereafter to be made under any such mortgages, or indentures and toall renewals, modifications, consolidations, increases, recastings, replacements,extensions and substitutions of and for such ground leases and/or underlyingleases and/or mortgages or indentures (each lease or mortgage to which thisLease shall be subject and subordinate pursuant to the provisions hereof beingrespectively herein called a “superior lease” or a “superior mortgage”).  This Section 27.01 shall be self-operativeand no further instrument of subordination shall be required.  In

 

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confirmation of suchsubordination, Tenant shall execute, at its sole cost and expense, and deliverpromptly any certificate that Landlord and/or any lessor under any superiorlease and/or any holder of any superior mortgage and/or their respectivesuccessors in interest may request. Tenant hereby constitutes and appoints Landlord and/or any lessor underany superior lease and/or any holder of any superior mortgage and/or theirrespective successors in interest as Tenant’s attorney-in-fact to execute anddeliver any such certificate or certificates for and on behalf of Tenant.  Landlord agrees to obtain a subordination,non-disturbance and attornment agreement in favor of Tenant from the currentholder of any superior mortgage in substantially the same form as such holder’scustomary form.  Landlord shall usereasonable efforts to cause the holder of any future superior mortgage toexecute and exchange with Tenant, a non-disturbance agreement in such holder’scustomary form, but neither this Lease nor any of Tenant’s obligations underthis Lease shall in any way be affected or modified if such future holderdeclines to execute and exchange such non-disturbance agreement with Tenant.

 

Section 27.02         Inthe event of any act or omission of Landlord that would give Tenant the right,immediately or after lapse of a period of time, to cancel or terminate thisLease, or to claim a partial or total eviction, Tenant shall not be entitled toexercise such right:

 

(a)  unless and until Tenant has given promptwritten notice of such act or omission to the lessor under each superior leaseand the holder of each superior mortgage, whose name and address shallpreviously have been furnished to Tenant in writing; and

 

(b)  unless such act or omission shall be onewhich is not capable of being remedied by Landlord or such lessor or suchholder within a reasonable period of time, until a reasonable period forremedying such act or omission shall have elapsed following the giving of suchnotice and following the time when the lessor under such superior lease or the holderof such superior mortgage shall have become entitled under such lease or suchmortgage, as the case may be, to remedy the same (which reasonable period shallin no event be less than the period to which Landlord would be entitled underthis Lease or otherwise, after similar notice, to effect such remedy), providedsuch lessor or such holder shall with due diligence give Tenant written noticeof intention to, and commence and continue to remedy such act or omission.

 

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Section 27.03         Tenantcovenants that neither the termination of any superior lease or any superiormortgage, nor the institution of any suit, action or other proceeding by the lessorunder any such superior lease or the holder of any such superior mortgage torecover possession of the Premises leased or mortgaged under any such superiorlease or any such superior mortgage or to realize on the mortgagor’s interestunder any such superior mortgage in any such superior lease (provided thatTenant is not otherwise disturbed by the lessor under any such superior leaseor the holder of any such superior mortgage) shall, by operation of law orotherwise, result in the cancellation or termination of this Lease (unlessspecific action is taken by the lessor under any such superior lease or theholder of any such superior mortgage to terminate this Lease) or theobligations of Tenant hereunder.  If thelessor under any superior lease or the holder of any superior mortgage, or thepurchaser upon any foreclosure sale relating to such superior mortgage, or anydesignee of such lessor or such holder shall succeed to the rights of Landlordunder this Lease, whether through possession, or any action or proceedingrelating to the termination of such superior lease, or foreclosure action ordelivery of a new lease or deed, then, at the request of such party sosucceeding to Landlord’s rights (such party being sometimes herein called a “successorlandlord”) and upon such successor landlord’s written agreement to acceptTenant’s attornment, Tenant shall attorn to and recognize such successorlandlord as Tenant’s landlord under this Lease, and shall promptly execute anddeliver, at Tenant’s sole expense, any instrument that such successor landlordmay reasonably request to evidence such attornment and none of theabove-described successions shall, by operation of law or otherwise, result inthe cancellation or termination of this Lease (unless specific action is takenby such successor landlord to terminate this Lease) or the obligations ofTenant.  In the event successor landlordrequests Tenant to execute an attornment, Tenant shall acquire no rights withrespect to said successor landlord until the attornment has been executed.  Upon such attornment, this Lease shallcontinue in full force and effect as, or as if it were, a direct lease betweenthe successor landlord and Tenant upon all of the terms, conditions andcovenants set forth in this Lease, except that the successor landlord shallnot:

 

(a)  be liable for any previous act or omission ofLandlord under this Lease;

 

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(b)  be subject to any offset, not expresslyprovided for in this Lease, which shall have theretofore accrued to Tenantagainst Landlord; or

 

(c)  be bound by any previous modification of thisLease, not expressly provided for in this Lease, or by any previous prepaymentof more than one month’s Fixed Rent or additional rent, unless suchmodification or prepayment shall have been expressly approved in writing by thelessor under the superior lease or the holder of the superior mortgage (orpermitted without such approval if permitted under the terms of the superiormortgage) through or by reason of which the successor landlord shall havesucceeded to the rights of Landlord under this Lease.

 

Section 27.04         Inthe event of termination, cancellation, re-entry or dispossess by Landlord or asuccessor landlord under this Lease Tenant shall, at Landlord’s or thesuccessor landlord’s request, execute an assignment by Tenant to Landlord orthe successor landlord of Tenant’s interest as sublessor under any subleases tothis Lease, and Tenant hereby appoints Landlord or the successor landlord asTenant’s attorney-in-fact to execute any such assignment upon Tenant’s failureor refusal to do so and shall execute any necessary documents to confirm saidappointment upon Landlord’s or the successor landlord’s request.

 

At Landlord’sor successor landlord’s option, sublessee shall attorn to Landlord or thesuccessor landlord and upon such attornment, the sublease shall continue infull force and effect as, or as if it were, a direct lease between Landlord orthe successor landlord and sublessee upon all the terms, conditions andcovenants set forth in, at Landlord’s or successor landlord’s option, the Leaseor the sublease, except that Landlord or the successor landlord shall not:

 

(a) be liablefor any previous act or omission of sublessor under the sublease;

 

(b) be subjectto any offset, which shall have theretofore accrued to sublessee againstsublessor; or

 

(c) be boundby any previous modification of the sublease, not expressly provided for in thesublease, or by any previous prepayment of more than one month’s Fixed Rent oradditional rent, unless such modification or prepayment shall

 

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have been expressly approved inwriting by the Landlord under the Lease, the lessor under the superior lease orthe holder of the superior mortgage through or by reason of which the successorlandlord shall have succeeded to the rights of sublessor under the sublease, asthe case may be.

 

In the eventthat Landlord or a successor landlord, as the case may be, does not requestTenant to assign its interest in the sublease or have sublessee attorn toLandlord or the successor landlord, as the case may be, then Landlord orsuccessor landlord, as the case may be, shall have the right to terminate thesublease immediately at any time after termination or cancellation of thisLease or re-entry or dispossess by Landlord or a successor landlord under thisLease.

 

All subleasesmade in accordance with this Lease shall be subject to the above provision.

 

Section 27.05         Inthe event the holder of any mortgage or the lessor of any lease (present or future)relating to the Premises and/or this Lease requests that (a) this Lease andTenant’s rights hereunder be made superior, rather than subordinate, to suchmortgage or lease and/or (b) Tenant enter into a subordination non-disturbanceand attornment agreement, then Tenant, within ten (10) days after writtenrequest, will execute and deliver without charge such agreement(s) in suchform(s) acceptable to the holder of such mortgage or lessor of such lease.  In any instance where the consent of anyholder of any superior lease or superior mortgage is required to be given inconnection with any matter relating to this Lease, Landlord shall not berequired to give its consent to such matter unless and until such requiredconsent is given and Landlord shall not be found to have unreasonably withheldits consent if such required consent is withheld by any superior lease orsuperior mortgage.

 

Section 27.06         IfTenant fails to execute and deliver any documents as and when required by thisArticle 27, then, notwithstanding any other provision of this Lease, withoutthe requirement of notice from Landlord such failure will constitute a defaultunder this Lease beyond any applicable grace period, entitling Landlord to thesame rights and remedies as if such default were with respect to nonpayment ofFixed Rent.

 

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**ARTICLE28**

 

**Miscellaneous**

 

Section 28.01         Notwithstandinganything contained in this Lease to the contrary, Tenant covenants and agreesthat Tenant will not use the Premises or any part thereof, or permit thePremises or any part thereof to be used,

 

(i)            for a retail banking, trust company,or safe deposit business,

 

(ii)           as a savings bank, or as a savingsand loan association, or as a loan company,

 

(iii)          for the sale of travelers checksand/or foreign exchange, or as a tourist or travel agency,

 

(iv)          as a stock brokerage office or forstock brokerage purposes or for the underwriting of securities cateringoff-the-street clientele,

 

(v)           as a newsstand, employment agency,office for a labor union, classroom or school,

 

(vi)          as a restaurant and/or bar and/or forthe sale of confectionery and/or soda and/or beverages and/or sandwiches and/orice cream and/or baked goods or for the preparation, dispensing or consumptionof food or beverages in any manner whatsoever,

 

(vii)         as offices for any government or anydepartment, commission, subdivision or agency thereof,

 

(viii)        as offices for political or lobbyingactivities (i.e., persons or organizations principally engaged in efforts toinfluence legislation or governmental action), or

 

(ix)           for any other use or purpose thatinvolves direct patronage of the general public.

 

Section 28.02         Tenanthereby represents, covenants and agrees that Tenant’s business is not photographicreproductions and/or documentary reproductions and/or offset printing.  Notwithstanding anything contained in thisLease to the contrary, Tenant covenants and agrees that Tenant will not use thePremises or any part thereof, or permit the Premises or any part thereof to beused, for the business of photographic reproductions and/or

 

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documentary reproductionsand/or offset printing.  Nothingcontained in this Section 28.02 shall preclude Tenant from using any part ofthe Premises for photographic reproductions and/or documentary reproductionsand/or offset printing in connection with, either directly or indirectly, itsown business and/or activities.

 

Section 28.03         If,in connection with obtaining financing for the Building, a banking, insuranceor other recognized institutional lender shall request reasonable modificationsin this Lease as a condition to such financing, Tenant will not unreasonablywithhold, delay or defer its consent thereto, provided that such modificationsdo not increase the obligations of Tenant hereunder or materially adverselyaffect the leasehold interest hereby created.

 

Section 28.04         If,at any time during the last month of the term of this Lease, Tenant shall haveremoved all or substantially all of Tenant’s property from the Premises,Landlord may, and Tenant hereby irrevocably grants to Landlord a license to,immediately enter and alter, renovate and redecorate the Premises, withoutlimitation, diminution or abatement of rent, or incurring liability to Tenantfor any compensation, and such acts shall have no effect upon this Lease.

 

Section 28.05         Tenantshall not place a load upon any floor of the Premises exceeding the floor loadper square foot which such floor was designed to carry and such load shall beplaced by Tenant, at Tenant’s expense, so as to properly distribute theweight.  Business machines and mechanicalequipment shall be placed and maintained by Tenant, at Tenant’s expense, insettings sufficient in Landlord’s judgment to absorb and prevent vibration,noise and annoyance.  If the Premises beor become infested with vermin as a result of the use or any misuse or neglectof the Premises by Tenant, its agents, employees, visitors or licensees, Tenantshall at Tenant’s expense cause the same to be exterminated from time to timeto the satisfaction of Landlord and shall employ such exterminators and suchexterminating company or companies as shall be approved by Landlord.

 

Section 28.06         IfLandlord shall consent to the omission or removal of any part of, or theinsertion of any door or other opening in, any wall separating the Premisesfrom adjoining space leased to another tenant, then (i) Tenant shall beresponsible for all risk of damage to, or loss or theft of, property arising asan incident to such omission or removal or

 

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the use of such door or otheropening, or because of the existence thereof, and shall indemnify and saveLandlord harmless from and against any claim, demand or action for, or onaccount of, any such loss, theft or damage, and (ii) in the event of thetermination of this Lease or the lease of said other tenant, Landlord may enterthe Premises and Landlord, at Tenant’s expense, may close up any door or otheropening by erecting a wall to match the wall separating the Premises from saidadjoining space, and Tenant shall not be entitled to any diminution orabatement of rent or other compensation by reason thereof; provided, however,that nothing herein contained shall be deemed to vest Tenant with any right orinterest in, or with respect to, said adjoining space, or the use thereof, andTenant hereby expressly waives any right to be made a party to, or to be servedwith process or other notice under or in connection with, any proceeding oraction which may hereafter be instituted by Landlord for the recovery of thepossession of said adjoining space.

 

Section 28.07         Withoutincurring any liability to Tenant, Landlord may permit access to the Premises andopen the same, whether or not Tenant shall be present, upon demand of anyreceiver, trustee, assignee for the benefit of creditors, sheriff, marshal,court officer or other person entitled to, or reasonably purporting to beentitled to, such access for the purpose of taking possession of, or removing,Tenant’s property or for any other lawful purpose (but this provision and anyaction by Landlord hereunder shall not be deemed a recognition by Landlord thatthe person or official making such demand has any right or interest in or tothis Lease, or in or to the Premises), or upon demand of any representative ofthe fire, police, building, sanitation or other department of the city, stateor federal governments.

 

Section 28.08         Tenantshall not be entitled to exercise any right of termination, cancellation, orany other option granted to it by this Lease at any time when Tenant is indefault beyond the expiration of any applicable notice and cure period in theperformance or observance of any of Tenant’s obligations hereunder.

 

Section 28.09         Tenantshall not place or permit to be placed any vending machines in the Premises,except with the prior written consent of Landlord in each instance, not to beunreasonably withheld or delayed.

 

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Section 28.10         Tenantshall not occupy any space in the Building (by assignment, sublease orotherwise) other than the Premises hereby demised, except with the priorwritten consent of Landlord in each instance.

 

Section 28.11         Tenantwill not clean, nor require, permit, suffer or allow any window in the Premisesto be cleaned, in violation of Section 202 of the Labor Law of the rules of theBoard of Standards and Appeals, or of any other board or body having orasserting jurisdiction.

 

Section 28.12         Landlordand Tenant each represents that it has not dealt with any person or broker inconnection with this Lease other than CUSHMAN & WAKEFIELD, INC. AND JONESLANG LASALLE (collectively, the “Broker”) and each agrees to defend, indemnifyand hold harmless Landlord, its agents and employees, from any loss, liability,costs, damages and expenses (including without limitation attorney’s fees anddisbursements) suffered by the other through any breach of this representation,or in connection with the claim of any other person or broker alleging to havedealt with the indemnifying party with respect to this Lease.  Landlord shall compensate Broker pursuant toseparate agreement.

 

Section 28.13         Theterm “Landlord” as used in this Lease means only the owner, or the mortgagee inpossession, for the time being, of the Land and Building (or the owner of alease of the Building or the Land and Building), so that in the event of anysale or sales of the Land and Building or of said lease, or in the event of alease of the Building, or of the Land and Building, the Landlord shall be andhereby is entirely freed and relieved of all covenants and obligations ofLandlord hereunder, and it shall be deemed and construed without furtheragreement between the parties or their successors in interest, or between theparties and the purchaser, at any such sale, or the said lessee of theBuilding, or of the Land and Building, that the purchaser or the lessee of theBuilding has assumed and agreed to carry out any and all covenants andobligations of Landlord hereunder.  Nogeneral or limited partner or shareholder of Landlord (including any assigneeor successor of Landlord) or other holder of any equity interest in Landlord shallbe personally liable for the performance of Landlord’s obligations under thisLease.  The liability of Landlord(including any assignee or successor of Landlord) for Landlord’s obligationsunder this Lease shall be limited to Landlord’s interest in the Land andBuilding and Tenant shall not look to any of Landlord’s

 

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other assets in seeking eitherto enforce Landlord’s obligations under this Lease or to satisfy a judgment forLandlord’s failure to perform such obligations. Landlord reserves the right, at any time, to convert the Building and orLand to condominium ownership, and upon such conversion, (i) this Lease shallbe subject and subordinate to the applicable condominium documents and (ii) theowner of the unit or units of which the Premises forms a part shall be deemedto be the Landlord hereunder.

 

Section 28.14         Thesubmission by Landlord of the Lease in draft form shall be deemed submittedsolely for Tenant’s consideration and not for acceptance and execution.  Such submission shall have no binding forceor effect and shall confer no rights nor impose any obligations, includingbrokerage obligations, on either party unless and until both Landlord andTenant shall have executed the Lease and dupli­cate originals thereof shallhave been delivered to the respective parties.

 

Section 28.15         Intentionallydeleted.

 

Section 28.16         Tenantcovenants to pay any occupancy or rent tax now in effect or hereafter enactedif the same applies to Tenant’s leasing of the Premises.  Alternatively, Tenant shall pay to Landlordupon demand as additional rent any occupancy tax or rent tax now in effect orhereafter enacted, if payable by Landlord in the first instance or hereafterrequired to be paid by Landlord.

 

Section 28.17         Tenanthereby represents and warrants to Landlord that it is duly formed and in goodstanding, and has full corporate or partnership power and authority, as thecase may be, to enter into this Lease and has taken all corporate orpartnership action, as the case may be, necessary to carry out the transactioncontemplated herein, so that when executed, this Lease constitutes a valid andbinding obligation enforceable in accordance with its terms.  Tenant shall provide Landlord with corporateresolutions or other proof in a form acceptable to Landlord, authorizing theexecution of the Lease at the time of such execution.  Tenant hereby represents to Landlord that itis not entitled, directly or indirectly, to diplomatic or sovereign immunity.

 

Section 28.18         Tenantacknowledges that is has no rights to any development rights, “air rights” orcomparable rights appurtenant to the Land and/or Building, and consents,without further consideration, to any utilization of such rights

 

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by Landlord and agrees to promptly execute and deliver any instrumentswhich may be requested by Landlord, including instruments merging zoning lots,evidencing such acknowledgment and consent, provided same does not preventoccupancy of the Premises by Tenant in the manner provided herein.  The provisions of this Section 28.18 shall bedeemed to be and shall be construed as an express waiver by Tenant of anyinterest Tenant may have as a “party in interest” (as such quoted term isdefined in Section 12-10 Zoning Lot of the Zoning Resolution of the City of NewYork) in the Land and/or Building.

 

**ARTICLE29**

 

**Layout and Finish**

 

Section 29.01         Tenant shall, at Tenant’s sole expense,and as part of Tenant’s Changes, perform all the work (Tenant’s Work) in the Premisesnecessary for Tenant’s occupancy thereof, including, but not limited to allwork as may be necessary to comply with all applicable laws (including withoutlimitation, the Americans with Disabilities Act) or regulations and otherwise,subject to the provisions of this Lease.

 

Section 29.02         Provided Tenant is not in default ofany term or condition of this Lease beyond the expiration of any applicablenotice and cure periods, Landlord shall pay Tenant an allowance (Tenant’sAllowance), solely against the cost and expense incurred in connection with theperformance of Tenant’s Work, including without limitation, fees payable toTenant’s engineer and Tenant’s architect and the cost to file the final plansand obtain necessary permits (but excluding the costs of moving or to purchaseany personal property), Tenant’s Allowance not to exceed $****.  In the event that the cost and expense ofTenant’s Work shall exceed this amount, Tenant shall be entirely responsiblefor such excess.  In no event shall morethan the sum of $*** to be paid for fees payable to Tenant’s engineers orarchitects or for filing or permit fees. Tenant’s Allowance shall be payable to Tenant upon written requisitionin installments as Tenant’s Work progresses, but in no event more frequentlythan monthly.  The amount of eachinstallment of Tenant’s Allowance payable pursuant to any such requisitionshall be an amount equal to the actual costs paid by Tenant for

 

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completed portions of Tenant’s Work referenced in such requisition (asevidenced by the paid invoices delivered to Landlord in accordance with thenext sentence).  Prior to the payment ofany such installment, Tenant shall deliver to Landlord such written requisitionfor disbursement which shall be accompanied by (1) paid invoices for the Tenant’sWork performed since the last disbursement subject to customary retentions; (2)a certificate signed by Tenant’s architect or an officer of Tenant certifyingthat the Tenant’s Work represented by the aforesaid invoices has been satisfactorilycompleted in accordance with the final plan; (3) partial lien waivers bycontractors, subcontractors and all materialmen for all such work or, if thenavailable, for work covered by the prior disbursement; and (4) with respect tothe final disbursement of Tenant’s Allowance, all Building Departmentsign-offs, inspection certificates and any permits required to be issued by anygovernmental entities having jurisdiction thereover and a general release orfinal lien waivers from all contractors and subcontractors performing Tenant’sWork releasing Landlord from all liability for any Tenant’s Work.  At any and all times during the progress ofTenant’s Work, representatives of Landlord shall have the right of access tothe Premises and inspection thereof and shall have the right to withhold all orany portion of Tenant’s Allowance (as shall be reasonably appropriate under thecircumstances) as shall equal the cost of correcting any portions of Tenant’sWork which shall not have been performed in compliance with the provisions ofthe Lease if Tenant fails to correct same promptly after written notice fromLandlord to do so; provided, however, that Landlord shall incur no liability,obligation or responsibility to Tenant or any third party by reason of such accessand inspection except to the extent of Landlord’s negligence or willfulmisconduct.

 

**ARTICLE30**

 

**Insurance**

 

Section 30.01         Tenant covenants, at its expense, toprovide prior to entry upon the Premises and to keep in force and effect duringthe term of this Lease or Tenant’s occupancy of the Premises (whichever islonger):  (1) commercial generalliability insurance with respect to the Premises and its Appurtenances on anoccurrence basis against claims for bodily injury and property damage withminimum limits of liability in amount of **** and

 

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00/*** Dollars ($***) combined single limit for bodily injury andproperty damage (including coverage for all operations of Tenant,products/completed operations, independent contractors, broad form property damage,personal injury liability and contractual liability coverage); (2) if thenature of Tenant’s business is such as to place all or any of its employeesunder workers’ compensation or similar statutes, workers’ compensation orsimilar insurance affording statutory coverage and containing statutory limits;and (3) all-risk property damage insurance (replacement cost coverage),including theft or attempted theft of, Tenant’s Property.  Tenant agrees to deliver to Landlord, atleast thirty (30) days prior to the time such insurance is first required to becarried by Tenant, and thereafter at least thirty (30) days prior to theexpiration of any such policy, either an original policy or a certificate ofinsurance procured by Tenant in compliance with its obligations hereunder,together with evidence of payment therefor. Workers’ compensation insurance provided for in this Section may beprocured by Tenant’s contractors.  Tenantwill also furnish Landlord with evidence that Tenant’s contractors performingany Tenant’s Changes or other work in the Building are covered by insurance inamounts and of the types which are appropriate, in Landlord’s judgment, to thesize and scope of Tenant’s Changes.

 

Section 30.02         All the aforesaid insurance shall beissued in the name of Tenant and name Landlord (and any designee(s) ofLandlord) as additional insureds, and shall be written by one (1) or moreresponsible insurance companies licensed to do business in New York State; allsuch insurance may be carried under a blanket policy covering the Premises andany other of Tenant’s locations and shall contain endorsements that:  (1) Such insurance may not be canceled oramended with respect to Landlord (or its designee(s)) except upon thirty (30)days’ written notice by registered mail to Landlord (and such designee(s)) bythe insurance company; (2) Tenant shall be solely responsible for payment ofpremiums and that Landlord (or its designee(s)) shall not be required to payany premiums for such insurance; and (3) Tenant’s insurance shall be primarywith any coverage provided by Landlord as excess and non-contributory.  The minimum limits of the commercial generalliability policy of insurance shall in no way limit or diminish Tenant’sliability under Section 5.01(k) hereof.

 

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Section 30.03         The minimum limits of the commercialgeneral liability policy of insurance shall be subject to increase at any time,and from time to time, after the commencement of the fifth (5th) year of theterm hereof if Landlord in the exercise of its reasonable judgment shall deemthe same necessary for adequate protection. Within thirty (30) days after demand therefor by Landlord, Tenant shallfurnish Landlord with evidence that such demand has been complied with.  In case Tenant disputes the reasonableness ofLandlord’s demand, the parties agree to submit the question of thereasonableness of such demand for decision to the Chairman of the Board ofDirectors of the Management Division of The Real Estate Board of New York,Inc., or to such impartial person or persons as he may designate whosedetermination shall be final and conclusive upon the parties hereto.  The right to dispute the reasonableness ofany such demand by Landlord shall be deemed waived unless the same shall beasserted by Tenant by service of a notice in writing upon Landlord within ten(10) days after the giving of Landlord’s demand therefor.

 

Section 30.04         Landlord agrees to maintain both thetypes and amounts of insurance required by its mortgagee or, in the absence ofa mortgage, what would be maintained by a comparable owner/operator of acomparable first-class midtown Manhattan office building.

 

**ARTICLE31**

 

**Security Deposit**

 

Section 31.01         Simultaneously with the execution anddelivery of this Lease by Tenant, Tenant has deposited with Landlord a letterof credit (in the form required by Section 31.06 hereof) in the amount of $****,as security for the full and faithful performance by Tenant of each and everyterm, covenant, condition and agreement of this Lease or any renewals orextensions thereof on Tenant’s part to be performed; it being expresslyunderstood and agreed that Tenant shall pay rent for

 

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the last calendar month of the term hereof or of any renewals orextensions thereof promptly on the first day of such month.

 

In the event that (i) Tenant shall have been in full and faithfulcompliance since the Term Commencement Date with all of the terms, conditions,covenants and agreements of this Lease on its part to have been performed and(ii) Tenant shall have paid to Landlord all Fixed Rent and additional rentbecoming due in a timely fashion in accordance with the terms of this Lease,then on the second (2nd) anniversary of the Rent Commencement Date the securitydeposited with Landlord shall be reduced to the sum of $***.  If conditions (i) and (ii) continue to bemet, then on the fourth (4th) anniversary of the Rent Commencement Date thesecurity deposited with Landlord shall be reduced to the sum of $***.  If conditions (i) and (ii) continue to bemet, then on the sixth (6th) anniversary of the Rent Commencement Date thesecurity deposited with Landlord shall be reduced to the sum of $***; providedhowever, there shall be no further reductions in the security deposit.

 

Landlord’s and Tenant’s rights to the security deposited hereunder, asreduced in accordance with the preceding paragraph, shall be the same as ifthose sums had been provided for as the original security deposited hereunder.

 

If Tenant shall fail to perform or observe, or shall breach or violate,any of the terms, covenants, conditions or agreements of this Lease, includingbut not limited to the payment of Fixed Rent or additional rent or any othercharges beyond the expiration of any applicable notice and cure period,Landlord may use, apply or retain the whole or any part of such deposit to theextent required for the payment of any such Fixed Rent or additional rent orany other sum as to which Tenant is in default or for any sum which Landlordmay expend or may be required to expend by reason of Tenant’s non-performance,non-observance, breach or violation of any of the terms, covenants, conditionsor agreements of this Lease, including but not limited to, any damages ordeficiency in the re-letting of the Premises, whether such damages ordeficiency accrues before or after summary proceedings or other re-entry byLandlord.

 

Section 31.02         Landlord shall not be required so touse, apply or retain the whole or any part of said deposit, but if the whole orany part thereof is so used, applied or retained, Tenant shall upon demandimmediately deposit with Landlord a sum equal to the amount so used, applied orretained.  If Tenant shall fully andfaithfully comply with all the terms, covenants,

 

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conditions and agreements of this Lease, the deposit or any balancethereof remaining shall be returned to Tenant after the date fixed as the endof this Lease or of any renewal or extension thereof and after delivery ofentire possession of the Premises to Landlord. Landlord shall not be required to pay Tenant any interest on saidsecurity deposit.

 

Section 31.03         In the event of a sale, transfer orlease of the parcel of Land or a sale, transfer or lease of Land and/orBuilding or a sale or transfer of any such lease, Landlord may transfer orassign the security so deposited or any balance thereof remaining to thevendee, transferee or lessee, as the case may be, and Landlord shall thereuponbe released from all liability for the return of such security, and Tenant, ineach such instance, shall look solely to each vendee, transferee or lessee, asthe case may be, for the return of such security.  It is further agreed that the provisionshereof shall apply to every such sale, transfer or lease and to every suchtransfer or assignment made of such security.

 

Section 31.04         Tenant shall not assign or encumber orattempt to assign or encumber any security deposited hereunder and neitherLandlord nor its successors or assigns shall be bound by any such assignment,encumbrance, attempted assignment or attempted encumbrance.

 

Section 31.05         In no event shall the securitydeposited hereunder be construed as liquidated damages or in any way limitLandlord’s right to recover damages or any sum due Landlord hereunder orpermitted by law.  If this Lease shall beassigned, the security deposit shall be deemed assigned to the assignee, andLandlord shall have no liability to return the same to the assignor.

 

Section 31.06         The letter of credit required by thisArticle 31 shall be an irrevocable commercial letter of credit in the aggregateamount from time to time required in Section 31.01, which letter of creditshall be in the form attached hereto as Exhibit E and issued by a commercialbank acceptable to Landlord, payable upon the presentation by Landlord to suchbank of one or more sight drafts in form acceptable to Landlord, withoutpresentation of any other documents, statements or authorizations, which letterof credit shall provide (i) for the continuance of such credit for a period ofat least one year from the date of its issuance, (ii) for the automaticextension of such letter of credit for additional periods of one year from the

 

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initial and each future expiration date thereof (the last suchextension to provide for the continuance of such letter of credit for at leastthree months beyond the end of the term of this Lease) unless such bank givesLandlord notice by certified mail, return receipt requested, postage prepaid,of its intention not to renew such letter of credit (which notice shall beaddressed to Landlord as provided in this Lease) not less than 30 days prior tothe initial or any future expiration date of such letter of credit and (iii)that in the event such notice is given by such bank, Landlord shall have theright to draw on such bank at sight for the balance remaining in such letter ofcredit and hold and apply the proceeds thereof in accordance with theprovisions of this Article 31.  Eachletter of credit to be deposited and maintained with Landlord (or the proceedsthereof) shall be held by Landlord as security for the full and faithfulperformance and observance by Tenant of each and every term, covenant,condition and agreement of this Lease as provided in this Article 31, and inthe event that (a) Tenant is in default (x) in the performance or observance ofany of the covenants, agreements, terms, provisions or conditions on its partto be performed or observed under this Lease (except the payment of Fixed Rent,additional rent or other charges due and payable under this Lease) beyond theapplicable cure period or (y) in the payment of Fixed Rent, additional rent orother charges due and payable under this Lease after the expiration of anyapplicable grace period, or (b) Landlord transfers its right, title andinterest under this Lease to a third party and such letter of credit is nottransferable to such third party, without cost to Landlord, five (5) days afterLandlord’s request and to whom Landlord designates, or (c) notice is given bythe bank issuing such letter of credit that it does not intend to renew thesame, then, in any such event, Landlord may draw on such letter of credit andthe proceeds of such letter of credit shall then be held and applied assecurity (and be replenished, if necessary) as provided in this Article 31.

 

**ARTICLE32**

 

**Extension Option**

 

Section 32.01         (a)           Providedthat both at the time of the exercise of the Extension Option (herein defined)and at the time of the commencement of the Extended Term (as hereinafterdefined):  (i) this Lease shall be infull force and effect, (ii) Tenant shall not be in default under this Leasebeyond any applicable notice and cure period, and (iii) this Lease has not beenassigned (except as permitted pursuant to Section 25.02

 

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hereof) nor has any part of the Premises been sublet and Tenant is inoccupancy of the entire Premises, Tenant shall have the option (ExtensionOption) to unconditionally extend the term of this Lease as it relates to alland not a portion of the Premises for *** (***) ***-year period commencing onthe day after the Expiration Date (Extended Term).  Tenant shall exercise the Extension Option bywritten notice to Landlord given no later than the date which is fifteen (15)months prior to the Expiration Date (time being of the essence as to such date)and once Tenant exercises the Extension Option, Tenant may not thereafterrevoke such exercise.  If any of theconditions (i) through (iii) above are not fulfilled, the Extension Optionshall be void and of no further force or effect.

 

(b)           If Tenant does notexercise the Extension Option during the applicable time period specified inthe preceding paragraph, the Extension Option shall unconditionally lapse andbe of no further force and effect.

 

(c)           Any such ExtendedTerm shall be on the same terms and conditions as are contained in this Leasewith respect to the initial term, except that (i) Tenant shall take thePremises in “as-is” condition and Landlord shall have no obligation to make anyimprovements or alterations to the Premises or provide any improvementallowance to Tenant; and (ii) the Fixed Rent during the Extended Term shall beequal to the greater of (y) ****% of the fair market rent for the Premises asof the commencement of the Extended Term (Fair Market Rent) or (z) an amountequal to the sum of the Fixed Rent and all Article 26 additional rent payableunder this Lease for the month immediately prior to the Extended Term.  After Landlord receives Tenant’s notice thatTenant desires to exercise the Extension Option in the time period set forthabove, Landlord shall deliver to Tenant Landlord’s determination of Fair MarketRent on or before six (6) months prior to the Expiration Date and the followingshall apply thereto:

 

Within ten (10) business days after its receipt of Landlord’sdetermination of Fair Market Rent for the Premises (time being of the essence),Tenant shall notify Landlord whether it accepts or disputes suchdetermination.  Tenant’s failure tonotify Landlord of acceptance or dispute shall constitute an acceptance ofLandlord’s determination.  In the eventthat Tenant

 

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disputes Landlord’s determination of Fair Market Rent, Tenant shallinclude in such notice its determination of Fair Market Rent and in such case,Landlord and Tenant, each having made an effort to come to an agreement,nevertheless disagree as to the appropriate Fair Market Rent, then such disputeshall be resolved and Fair Market Rent shall be determined as follows:

 

Within twenty (20) days after the date of Tenant’s notice disputingLandlord’s determination, Landlord and Tenant shall each appoint an expert andsaid experts shall determine Fair Market Rent. The date upon which the second of said experts is appointed is hereinreferred to as the “Arbitration Commencement Date”.  If said experts cannot mutually agree uponFair Market Rent within fifteen (15) days after the Arbitration CommencementDate, then within twenty (20) days after the Arbitration Commencement Date,they shall jointly appoint a third expert who shall determine Fair Market Renton or before the date which is thirty (30) days after the ArbitrationCommencement Date.  If the two expertsselected by Landlord and Tenant cannot agree on a third expert within twenty(20) days after the Arbitration Commencement Date, then the third expert shallbe appointed by the American Arbitration Association or its successor (thebranch office of which is located in or closest to the City of New York), uponrequest of either Landlord or Tenant, or both, as the case may be.  Within ten (10) days after such appointment,said expert shall determine Fair Market Rent. The determination of the third expert, whether or not approved by theexperts appointed by Landlord and Tenant, shall be final;  provided, however, that the third expertshall assign a value to Fair Market Rent which falls within the range of valueestablished by the two determinations of Fair Market Rent made by the twoexperts selected by Landlord and Tenant. If, for any reason whatsoever, a written decision of the expertsappointed by Landlord and Tenant, or the third expert, as the case may be,shall not be rendered within forty-five (45) days after the ArbitrationCommencement Date, then at any time thereafter before such decision shall havebeen rendered, either Landlord or Tenant may apply to the Supreme Court of theState of New York, New York County, by action, proceeding or otherwise as maybe proper, to determine the question in dispute consistent with the provisionsof the Lease.  In determining Fair MarketRent, the experts shall give appropriate consideration to all relevantfactors.  Each party shall pay for itsown costs and expenses in connection with its selection and use of its initialexpert.  The parties shall share equallyin the costs and expenses incurred in connection with the selection and use ofthe third expert.  Each expert

 

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appointed pursuant to this paragraph shall be a licensed real estatebroker with no less than ten (10) years of commercial real estate experiencewith first class office buildings in midtown Manhattan.

 

(d)           In the event thatFair Market Rent is not established by the Expiration Date, then Tenant shallpay Fixed Rent at the rate of the annualized Fixed Rent and additional rentpayable by Tenant for the last full calendar month immediately proceeding thecommencement of the Extended Term until such Fair Market Rent determinationshall have occurred at which time there shall be an equitable adjustment of theFixed Rent payable during the Extended Term as provided for in this Lease(taking into account the Fixed Rent previously paid by Tenant during theExtended Term).

 

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**ARTICLE33**

 

**Right of First Offering**

 

Section 33.01         (a)           Forpurposes of this Lease, the “First Offering Space” shall mean the entirerentable portion of the *** (***) floor of the Building, as substantially shownand hatched on the rental plan annexed hereto as****Exhibit F.  The partiesagree that the First Offering Space comprises 23,980 rentable square feet.

 

(b)           Provided Tenant isnot in default under the terms and conditions of this Lease after notice andthe expiration of applicable cure periods either as of the date of the givingof “Tenant’s First Notice” or the “First Offering Space Inclusion Date” (assuch terms are hereinafter defined), then if Landlord desires to offer forlease the First Offering Space after it shall become available for leasing,subsequent to Landlord first leasing any of such First Offering Space to thirdparties after the date hereof (it being understood that Tenant’s rights underthis Section 33 shall not become effective with respect to any portion of suchFirst Offering Space unless and until the same has been leased to a third partyand such First Offering Space shall subsequently become vacant and availablefor leasing and then only with respect to the portion that was previouslyleased), then Landlord, before offering such First Offering Space to anyoneother than the currently existing tenant as of the Term Commencement Date ofany portion of the First Offering Space (or their successors or affiliates) ortheir assignees or subtenants (such currently existing tenant is hereinaftercalled a “Priority Tenant”), shall offer to Tenant the right to include suchFirst Offering Space which Landlord desires to offer for lease within thePremises upon all the terms and conditions of this Lease (including theprovisions of Article 26 with the base years specified therein), except that:

 

(A)          the fixed rent withrespect to such First Offering Space shall be at a rate equal to the FairMarket Rent for such First Offering Space which shall be determined by Landlordin the same manner as Article 32 hereof, as of the First Offering Space InclusionDate and shall be set forth in a written notice to Tenant.

 

(B)           effective as of theFirst Offering Space Inclusion Date, for purposes of calculating the additionalrent payable pursuant to Article 26 hereof, allocable to

 

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such First Offering Space, Tenant’s Proportionate Share shall be deemedto be ****%.

 

Such offer shall be made by Landlord to Tenant in a written notice(First Offer Notice), which offer shall designate the First Offering Space, thedate Landlord believes such space will be available for Tenant’s occupancy(Estimated Inclusion Date), and shall specify the fixed rent payable withrespect to any such First Offering Space, determined in accordance with theprovisions of Section 33.01(b)(A) hereof.

 

Section 33.02         (a)           Tenantmay accept the offer set forth in the First Offer Notice by delivering toLandlord an unconditional acceptance (Tenant’s First Notice) (subject, however,to the provisions of Section 33.04 hereof) of such offer within ten (10) daysafter delivery by Landlord of the First Offer Notice to Tenant.  The First Offering Space designated in theFirst Offer Notice shall be added to and included in the Premises on the laterto occur of (i) the day that Tenant exercises its option as aforesaid, or (ii)the date such First Offering Space shall be delivered to Tenant vacant,unleased and free of occupants (First Offering Space Inclusion Date).  Time shall be of the essence with respect tothe giving of Tenant’s First Notice.

 

(b)           If Tenant does notaccept the First Offer Notice by delivering to Landlord Tenant’s First Noticewithin the time period set forth in Section 33.02(a), Tenant shall be deemed tohave unconditionally waived its rights under this Article 33, and Landlordshall at any and all times thereafter be entitled to lease all or any portionof the First Offering Space to others at such rental and upon such terms andconditions as Landlord in its sole discretion may desire, whether such rentalis the same as that offered to Tenant or more or less favorable.  Tenant shall, within five (5) days afterLandlord’s request therefor, deliver an instrument in form reasonablysatisfactory to Landlord confirming the aforesaid, but no such instrument shallbe necessary to make the provisions hereof effective.

 

Section 33.03         If any First Offering Space shall notbe available for Tenant’s occupancy on the Estimated Inclusion Date for anyreason, including the holding over of the prior tenant, then Landlord andTenant agree that the failure to have such

 

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First Offering Space available for occupancy by Tenant shall in no wayaffect the validity of this Lease or the inclusion of such First Offering Spacein the Premises or the obligations of Landlord or Tenant hereunder, nor shallthe same be construed in any way to extend the term of this Lease or impose anyliability on Landlord, and for the purpose of this Article 33, the FirstOffering Space Inclusion Date shall be deferred to and shall be the date suchFirst Offering Space is delivered to Tenant vacant, unleased and free ofoccupants.  The provisions of thisSection 33.03 are intended to constitute “an express provision to the contrary”within the meaning of Section 223-a of the New York Real Property Law.  Notwithstanding the foregoing provisions ofthis Section 33.03, if any First Offering Space shall not be available forTenant’s occupancy for any reason on or before the first (1st) anniversary ofthe Estimated Inclusion Date, then Tenant may, as its sole remedy, rescind theexercise of its option under this Article 33 with respect thereto by givingnotice of such rescission to Landlord within fifteen (15) days after the first(1st) anniversary of the Estimated Inclusion Date.

 

Section 33.04         (a)           Inthe event that Tenant disputes the amount of the Fair Market Rent specified inthe First Offer Notice, then at any time on or before the date occurring twenty(20) days after Tenant has received the First Offer Notice, provided thatTenant shall have given Tenant’s First Notice, Tenant may initiate thearbitration process provided for in Article 32 of this Lease, and suchprovisions shall apply to the determination of Fair Market Rent for the FirstOffering Space.  If Tenant fails toinitiate the arbitration process within the aforesaid twenty (20) day period,time being of the essence, then Landlord’s determination of the fixed rent setforth in the First Offer Notice shall be conclusive.

 

(b)           In the event thatFair Market Rent is not established by the First Offering Space Inclusion Date,then Tenant shall pay Landlord’s determination of Fair Market Rent pendingfinal determination.  In the event thatthe Fair Market Rent is later determined to be less than Landlord’sdetermination of Fair Market Rent, Tenant shall thereafter pay as a Fixed Rentonly the Fixed Rent thus determined and Landlord shall promptly refund toTenant any excess previously paid by Tenant to Landlord.  In the event that the Fair Market Rent islater determined to be greater than Landlord’s determination of Fair MarketRent, Tenant shall thereafter pay as a Fixed Rent the Fixed Rent thusdetermined and Tenant shall promptly pay to

 

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Landlord any deficiency in the Fixed Rent previously paid by Tenant toLandlord.

 

Section 33.05         Tenant agrees to accept the FirstOffering Space in its condition and state of repair existing as of the FirstOffering Space Inclusion Date and understands and agrees that Landlord shallnot be required to perform any work, supply any materials or incur any expense to prepare such space forTenant’s occupancy.

 

Section 33.06         The termination of this Lease duringthe term of this Lease shall also terminate and render void all of Tenant’soptions or elections under this Article 33 whether or not the same shall havebeen exercised; and nothing contained in this Article shall prevent Landlordfrom exercising any right or action granted to or reserved by Landlord in thisLease to terminate this Lease.  None ofTenant’s options or elections set forth in this Article 33 may be severed fromthis Lease or separately sold, assigned or transferred.

 

Section 33.07         Notwithstanding any language to thecontrary contained in this Article 33, the rights granted to Tenant hereundershall be at all times subject and subordinate to the election of any currenttenant of the First Offering Space to extend the term of its lease with respectthereto, whether such election is made pursuant to any provision within itslease or otherwise.

 

**ARTICLE34**

 

**Telecommunications Conduit**

 

Section 34.01         Landlord hereby leases to Tenant, aspart of the Premises for the term of this Lease, the conduit space describedbelow (the “Conduit Space”).  Tenantshall use the Conduit Space solely for telecommunications cable to connect thePremises to the telecommunications room on the C-1 level of the Building.  The Conduit Space is and shall be containedwithin up to two (2) 4-inch conduits running from the Premises to thetelecommunications room on the C-1 level of the Building in locations asapproved by Landlord.  Tenant shall havesixty (60) days after the date hereof in which to elect what Conduit Space itshall lease from Landlord hereunder. Access to the conduit closet on each such floor shall, at Landlord’selection, be restricted so that no entry to the closet will be permitted unlessLandlord’s designated contractor or other representative

 

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is present.  Landlord may requireany installation of any conduits or any cable in the Conduit Space or anyconnection of Tenant’s cable to the Premises or, if permitted by Landlord,cable of other tenants in the Building, to be performed by contractors selectedby Tenant and approved by Landlord.  Allcosts of such running of conduit, cable, installations, connections and theongoing use and maintenance of such items shall be at Tenant’s sole cost andexpense.  Tenant shall pay Landlord anyreasonable costs reasonably incurred by Landlord in connection with suchrunning of conduit, cable, installations, connections and ongoing use andmaintenance within thirty (30) days after Landlord’s delivery to Tenant of abill for such items.  Any use by Tenantunder this Article 34 of the Conduit Space and cable, connecting lines orconduit shall comply with all applicable legal or insurance requirements, theother provisions of this Lease, and such Building rules and regulations as areadopted by Landlord from time to time, and shall not interfere in any way withthe operation of the Building or with the use by any other tenant of theBuilding of such tenant’s premises or the common areas of the Building.  All required cabling, connecting lines orconduit shall be installed out of sight. Prior to any installation of cable, connecting lines or conduit in theConduit Space, Tenant shall obtain Landlord’s written approval as set forth inSection 5.01(e) of this Lease as if the Conduit Space were part of thePremises.  In no event may any conduit,cabling or connecting lines be run to any other service provider or any othertenant or occupant of the Building, unless expressly consented to in writing byLandlord.

 

Section 34.02         Tenant agrees to pay Landlordadditional rent during the term of this Lease for the Conduit Space (as Tenantmay elect to lease hereunder) in the amount of $**** per month commencing onthe start of the installation of such conduit, subject to adjustment asprovided below.  All installments of suchadditional rent shall be due and payable to Landlord on the first day of eachmonth or portion of a month throughout the term of this Lease, together withTenant’s Fixed Rent and additional rent. The amount of such monthly conduit rent shall be adjusted annually inaccordance with the percentage increase of the “Consumer Price Index for UrbanWage Earners and

 

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Clerical Workers” (1982-84=100) specified for “All Items”, published bythe Bureau of Labor Statistics of the U.S. Department of Labor, relating to NewYork, NY and Northeastern NJ, for urban wage earners and clerical workers,between the date of such adjustment and the date such monthly conduit rent was lastadjusted (or the date of this Lease). Notwithstanding the foregoing, Landlord waives any charge for the firstconduit Tenant may elect to lease and the $**** per month charge (subject toincrease as herein provided) shall apply only to the second conduit.

 

Section 34.03         Tenant hereby agrees to defend,indemnify and hold harmless the Indemnitees from and against any and all claims(including but not limited to claims for bodily injury or property damage),actions, mechanic’s liens, losses, liabilities, and expenses (includingreasonable attorney fees and reasonable costs of defense by Landlord’s legalcounsel), which may arise from Tenant’s installation, operation, use,maintenance or removal of cable, connecting lines or conduit pursuant to thisArticle 34 and Section 5.01(k) of this Lease. Similarly, Tenant shall pay, within twenty (20) days after demand, byLandlord the reasonable costs to repair any damage to the Building caused bysuch installation, operating, use, maintenance or removal, except to the extentany such costs are caused by the negligence or willful misconduct of theIndemnitees or their agents.  Tenanthereby waives and releases the Indemnitees from any claims Tenant may have atany time (including but not limited to claims relating to interruptions inservices) arising out of or relating in any way to the installation, operating,use, maintenance or removal of cable, connecting lines, conduit or interductdescribed in this Article 34.  In no eventshall any Indemnitee by liable to Tenant for lost profits or consequential,incidental or punitive damages of any kind.

 

Section 34.04         Tenant agrees that, upon the expirationor termination of the Lease, Tenant (or, at Landlord’s election, the contractordesignated by Landlord) shall promptly remove, at Tenant’s sole cost andexpense, all cable, connecting lines, conduit and other installations installedunder this Article 34, restore (in the manner prescribed by Landlord) thoseportions of

 

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the Premises and Building to the condition existing immediately priorto their installation and repair any damage to the Premises or Building causedby such removal.  If Tenant fails toperform any of its obligations pursuant to this Section 34.04, Landlord may doso, in which case Tenant agrees, within twenty (20) days after demand, to payLandlord’s reasonable costs of performing such obligations, including Landlord’sreasonable administrative fee.  Landlordmay elect to have Tenant not remove the items pursuant to this Section 34.04.

 

Section 34.05         Except as explicitly provided otherwiseherein, Tenant’s obligations under this Article 34 for the protection of theBuilding, the Indemnitees, and third parties, including, without limitation,Tenant’s obligations regarding maintenance, repairs, mechanic liens, insurance,reasonable attorney fees and costs of suit, shall apply in the same fashionwith respect to Tenant’s use of the Conduit Space and the cable, connectinglines or conduit described in this Article 34 as they do with respect to Tenant’suse of the rest of the Premises.

 

**ARTICLE35**

 

**Quiet Enjoyment**

 

Section 35.01         Landlord covenants that if and so longas, Tenant keeps and performs each and every covenant, agreement, term,provision and condition herein contained on the part and on behalf of Tenant tobe kept and performed, Tenant shall quietly enjoy the Premises withouthindrance or molestation by Landlord or by any other person lawfully claimingthe same, subject to the covenants, agreements, terms, provisions andconditions of this Lease and to the ground leases and/or underlying leasesand/or mortgages to which this Lease is subject and subordinate, ashereinbefore set forth.

 

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IN WITNESSWHEREOF, Landlord and Tenant have duly executed this Lease as of the day andyear first above written.

 
|   | PARAMOUNT GROUP, INC., as Agent for             |
|--------|-------------------------------------------------|
|   | 1177 AVENUE OF THE AMERICAS, L.P.               |
|   | (Landlord)                                      |
|   |
|   | By:                                             |   |   |
|   | Roger S.  Newman                           |
|   | Senior Vice President                           |
|   |
|   |
|   | ARCHIPELAGO HOLDINGS, INC.                      |
|   | (Tenant)                                        |
|   |
|   |
|   | By:                                             |
|   | Name:                                           |
|   | Title:                                          |
|   |
|   | Tenant’s Federal Tax Identification Number |
|   | is:                                             |   |   |
|        |                                                 |  |  |  |  |  |

 

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State of                           )

                                   )ss.:

County of                          )

 

On the                  day of                                in the year            before me, the undersigned, a Notary Public in and for said State, personallyappeared                                                              personally known to me or proved to me on the basis of satisfactory evidence tobe the individual whose name is subscribed to the within instrument andacknowledged to me that he executed the same in his capacity, and that by hissignature on the instrument, the individual, or the person upon behalf of whichthe individual acted, executed the instrument.

 
|   |          |   |
|--------|---------------|--------|
|   | Notary Public |

 

 

SEAL

 

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RULES AND REGULATIONS

 

1.             The sidewalks,driveways, entrances, passages, courts, lobbies, esplanade areas, plazas, elevators,vestibules, stairways, corridors or halls shall not be obstructed or encumberedby any tenant or used for any purpose other than ingress and egress to and fromthe Premises and Tenant shall not permit any of its employees, agents orinvitees to congregate in or otherwise interfere with the use and enjoyment ofany of said areas.  Fire exits andstairways are to be used for emergency purposes only.  No doormat of any kind whatsoever shall beplaced or left in any public hall or outside any entry door of the Premises.

 

2.             No awnings or otherprojections shall be attached to the outside walls of the Building.  No curtains, blinds, shades or screens shallbe attached to or hung, in, or used in connection with any window or door ofthe Premises, without the prior written consent of Landlord.  Such curtains, blinds, shades or screens mustbe of a quality, type, design and color, and attached in the manner, approvedby Landlord.

 

3.             No sign, insignia,advertisement, lettering, notice or other object shall be exhibited, inscribed,painted or affixed by any tenant on any part of the outside or inside of thePremises or the Building without the prior written consent of Landlord.  In the event of the violation of the foregoingby any tenant, Landlord may remove the same without any liability, and maycharge the expense incurred in such removal to the tenant or tenants violatingthis rule.  Interior signs, and letteringon doors, elevator cabs and any Building directory shall, if and when approvedby Landlord, be inscribed, painted or affixed for each tenant by Landlord atthe expense of such tenant, and shall be of a size, color and style acceptableto Landlord.

 

4.             The sashes, sash doors, skylights,windows and doors that reflect or admit light and air into the halls,passageways or other public places in the Building shall not be covered orobstructed by any tenant, nor shall any bottles, parcels, or other articles beplaced on the window sills or on the peripheral air conditioning enclosures.

 

5.             No showcases or otherarticles shall be put in front of or affixed to any part of the exterior of theBuilding, nor placed in the halls, corridors or vestibules.

 

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6.             The water and washclosets and other plumbing fixtures and the HVAC vents or registers and otherHVAC fixtures shall not be used for any purposes other than those for whichthey were designed or constructed, and no sweepings, rubbish, rags, acids,vapors or other substances shall be thrown or deposited therein or upon anyadjoining buildings or land or the street. All damages resulting from any violation of the foregoing shall be borneby the tenant who, or whose servants, employees, agents, visitors or licenseesshall have, caused the same.  Anycuspidors or containers or receptacles used as such in the Premises, or forgarbage or similar refuse, shall be emptied, cared for and cleaned by and atthe expense of Tenant.

 

7.             Except as set forthin Article 5, Tenant shall not mark, paint, drill into, or in any way deface,any part of the Premises or the Building. No boring, cutting or stringing of wires shall be permitted, except withthe prior written consent of Landlord, and as Landlord may direct.  No telephone or other telecommunication wiresor instruments shall be introduced into the Building by any Tenant except asapproved by Landlord.

 

8.             No bicycles,vehicles, animals, fish or birds of any kind shall be brought into or kept inor about the Premises.

 

9.             No noise,including, but not limited to, music or the playing of musical instruments,recordings, radio or television which, in the sole judgment of Landlord, mightdisturb other tenants of the Building, shall be made or permitted by anytenant.  Nothing shall be done orpermitted in the Premises by any tenant which would impair or interfere withthe use or enjoyment by any other tenant of any other space in the Building.

 

10.           No tenant, nor anytenant’s servants, employees, agents, visitors or licensees, shall at any timebring or keep upon the Premises any inflammable, combustible or explosivefluid, chemical or substance.  Nothingshall be done in the Premises which shall in Landlord’s sole judgment interferewith or impair any of the Building’s equipment or systems.

 

11.           Any locks or boltsof any kind which shall not be operable by the Grand Master Key for theBuilding shall not be placed upon any of the doors or windows by any tenant,nor shall any changes be made in locks or the mechanism thereof which shallmake such locks inoperable by said Grand Master Key.  Each tenant shall, upon the termination ofits tenancy, turn over to Landlord all keys of stores, offices and toiletrooms, either furnished

 

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to, or otherwise procured by, such tenant, and in the event of the lossof any keys furnished by Landlord, such tenant shall pay to Landlord the costthereof.  Landlord shall be afforded,upon its demand, prompt access to all machine, mechanical and/or utility roomslocated within the Premises along with all keys for any locks for such rooms.

 

12.                                 Allremovals, or the carrying in, out of or within the Building of any safes,freight, furniture, packages, boxes, crates, papers, office materials, cartesor other devices used to distribute same or any other object or matter of anydescription must take place during such hours and in such elevators and throughsuch Building entrances as Landlord or its agent may determine from time totime which may involve overtime work for Landlord’s employees or agents forwhich Tenant shall reimburse Landlord. Landlord reserves the right to inspect all objects and matter to bebrought into the Building and to exclude from the Building all objects andmatter which violate any of these Rules and Regulations or the Lease of whichthese Rules and Regulations are a part. No messengers or couriers shall be permitted in any portion of theBuilding except as designated by Landlord. Landlord may require any person leaving the Building with any package orother object or matter to submit a pass, listing such package or object ormatter, from the tenant from whose Premises the package or object or matter isbeing removed, but the establishment and enforcement of such requirement shall notimpose any responsibility on Landlord for the protection of any tenant againstthe removal of property from the Premises of such tenant.  Landlord shall in no way be liable to anytenant for damages or loss arising from the admission, exclusion or ejection ofany person to or from the Premises or the Building under the provisions of thisRule 12 or of Rule 16 hereof.

 

13.                                 Tenantshall not occupy or permit any portion of the Premises to be occupied as anoffice for a public stenographer or public typist, or for the possession,storage, manufacture, or sale of liquor, narcotics, dope, tobacco in any form,or as a barber, beauty or manicure shop, or as a school, or as a hiring oremployment agency.  Tenant shall not engageor pay any employee on the Premises, except those actually working for tenanton the Premises nor advertise for laborers giving an address at thePremises.  Tenant shall not use thePremises or any part thereof, or permit the Premises or any part thereof to beused for manufacturing or for the sale at retail or auction of merchandise,goods or property of any kind.

 

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14.                                 Notenant shall obtain, purchase or accept for use in the Premises ice, drinkingwater, food, coffee cart, beverage, towel, barbering, bootblacking, cleaning,floor polishing or other similar services from any persons not authorized byLandlord in writing to furnish such services. Such services shall be furnished only at such hours, in such placeswithin the Premises, and under such regulations, as may be fixed byLandlord.  It is expressly understoodthat Landlord assumes no responsibility for the acts, omissions, misconduct orother activities of the purveyors of such services unless due to the solenegligence of Landlord or its agents, employees, officers or partners.

 

15.                                 Landlordshall have the right to prohibit any advertising or identifying sign by anytenant which, in Landlord’s sole judgment, tends to impair the reputation ofthe Building or its desirability as a building for offices, and upon writtennotice from Landlord, such tenant shall refrain from and discontinue suchadvertising or identifying sign.

 

16.                                 Landlordreserves the right to exclude from the Building during hours other thanBusiness Hours (as defined in the foregoing Lease) all persons connected withor calling upon tenant who do not present a pass to the Building signed bytenant.  Landlord also reserves the rightto exclude from the Building at any time any person whose presence in theBuilding shall in Landlord’s sole judgment be a detriment to the safety,character, security, reputation or interest of the Building.  Tenant shall furnish Landlord with afacsimile of such pass.  All personsentering and/or leaving the Building during hours other than Business Hours maybe required to sign a register.  Tenantshall be responsible for all persons to whom it issues any such pass and shallbe liable to Landlord for all acts or omissions of such persons.

 

17.                                 Tenant,before closing and leaving the Premises at any time, shall see that alloperable windows are closed and all lights are turned out.  All entrance doors in the Premises shall beleft locked by tenant when the Premises are not in use.  Entrance doors shall not be left open at anytime.

 

18.                                 Tenantshall, at tenant’s expense, provide artificial light and electric energy forthe employees of Landlord and/or Landlord’s contractors while doing janitorservice or other cleaning in the Premises and while making repairs oralterations in the Premises.

 

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19.                                 ThePremises shall not be used for lodging or sleeping or for any immoral orillegal purpose.

 

20.                                 Therequirements of tenants will be attended to only upon application at the officeof the Building.  Employees of Landlordshall not perform any work or do anything outside of their regular duties,unless under special instructions from Landlord.

 

21.                                 Canvassing,soliciting and peddling in the Building are prohibited and each tenant shallcooperate to prevent the same.

 

22.                                 Thereshall not be used in any space, or in the public halls of the Building, eitherby any tenant or by any others, in the moving or delivery or receipt of safes,freight, furniture, packages, boxes, crates, paper, office material, or anyother matter or thing, any hand trucks except those equipped with rubber tires,side guards and such other safeguards as Landlord shall require.  No hand trucks shall be used in any passengerelevators.

 

23.                                 Tenantshall not cause or permit any odors of cooking or other processes or anyunusual or objectionable odors to emanate from the Premises which would annoyother tenants or create a public or private nuisance.  No cooking (except small scale microwaving)shall be done in the Premises except as is expressly permitted in the foregoingLease.

 

24.                                 Allpaneling, doors, trim or other wood products not considered furniture shall beof fire-retardant materials and certification of the materials’ fire-retardantcharacteristics shall be submitted to and approved by Landlord, and suchmaterials shall be installed in a manner approved by Landlord.

 

25.                                 Allcontractors rendering any service to Tenant shall be referred to Landlord forapproval and supervision prior to performing such services.  This applies to all work performed in theBuilding of whatsoever nature.  Tenantshall use only the freight or service elevator for all deliveries and only athours prescribed by Landlord.  Bulkymaterials (as reasonably determined by Landlord) may not be delivered during BusinessHours but only thereafter.  Tenant’scontractors working in the Building must enter or exit only by way of thefreight or service elevator.  Any workperformed by Tenant’s contractors during

 

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non-business days or during the hours determined by the Building onbusiness days will necessitate the use of the freight or service elevator (withoperator), a security guard and a stand-by engineer, the cost of which Tenantagrees to pay Landlord.

 

26.                                 Tenantshall not at any time directly or indirectly employ, permit the employment of,or contract for any service provider, contractor, mechanic or laborer in thePremises, whether in connection with any alteration or otherwise, if suchemployment or contract will interfere or conflict with any other serviceprovider, contractor, mechanic or laborer engaged in the construction,maintenance or operation of the Building, or any part thereof, byLandlord.  Upon Landlord’s demand, Tenantshall take all measures to cause all of its service providers, contractors,mechanics or laborers causing such interference or conflict to leave theBuilding promptly, or shall take whatever action requested by Landlordnecessary to end such conflict.

 

27.                                 Landlordreserves the right to rescind, alter or waive any rule or regulation at anytime prescribed for the Building when, in its reasonable judgment, it deems itnecessary or desirable for the reputation, safety, care or appearance of theBuilding, or the preservation of good order therein, or the operation ormaintenance of the Building, or the equipment thereof, or the comfort oftenants or others in the Building.  Norescission, alteration or waiver of any rule or regulation in favor of onetenant shall operate as a rescission, alteration or waiver in favor of anyother tenant.

 

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EXHIBIT A

 

RENTAL PLAN

 

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