Exhibit 10.35


LEASE


between


20 BROAD COMPANY L.L.C.,


Landlord,


and


PENTHOUSE MEDIA GROUP INC.,


Tenant.


20 Broad Street

New York, New York 10005


as of May 6, 2008






TABLE OF CONTENTS

 

	
 

	
 

	
 

	
 

	
 

	
 


	
Article/Section

	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 1 DEMISE, TERM, FIXED RENT

	
 

	
1


	
 

	
1.1.

	
 

	
Demise

	
 

	
1


	
 

	
1.2.

	
 

	
Commencement
 Date

	
 

	
1


	
 

	
1.3.

	
 

	
Rent
 Commencement Date

	
 

	
2


	
 

	
1.4.

	
 

	
Fixed Rent

	
 

	
2


	
 

	
1.5.

	
 

	
Payments of
 Fixed Rent

	
 

	
2


	
 

	
1.6.

	
 

	
Termination
 Rights

	
 

	
3


	
 

	
1.7.

	
 

	
Certain
 Definitions

	
 

	
3


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 2
 ESCALATION RENT

	
 

	
5


	
 

	
2.1.

	
 

	
Operating
 Expense Definitions

	
 

	
5


	
 

	
2.2.

	
 

	
Calculation
 of Operating Expenses

	
 

	
9


	
 

	
2.3.

	
 

	
Operating
 Expense Payment

	
 

	
12


	
 

	
2.4.

	
 

	
Auditing of
 Operating Expense Statements

	
 

	
14


	
 

	
2.5.

	
 

	
Tax
 Definitions

	
 

	
15


	
 

	
2.6.

	
 

	
Tax Payment

	
 

	
17


	
 

	
2.7.

	
 

	
Tax
 Reduction Proceedings

	
 

	
19


	
 

	
2.8.

	
 

	
Building
 Additions

	
 

	
20


	
 

	
 

	
 


	
ARTICLE 3 USE

	
 

	
21


	
 

	
3.1.

	
 

	
Permitted
 Use

	
 

	
21


	
 

	
3.2.

	
 

	
Limitations

	
 

	
21


	
 

	
3.3.

	
 

	
Rules

	
 

	
22


	
 

	
3.4.

	
 

	
Promotional
 Displays

	
 

	
22


	
 

	
3.5.

	
 

	
Core
 Toilets

	
 

	
22


	
 

	
3.6.

	
 

	
Wireless
 Internet Service

	
 

	
23


	
 

	
3.7.

	
 

	
Telecommunications

	
 

	
23


	
 

	
 

	
 


	
ARTICLE 4 SERVICES

	
 

	
23


	
 

	
4.1.

	
 

	
Certain
 Definitions

	
 

	
23


	
 

	
4.2.

	
 

	
Elevator
 Service

	
 

	
23


	
 

	
4.3.

	
 

	
Heat,
 Ventilation and Air-Conditioning

	
 

	
24


	
 

	
4.4.

	
 

	
Cleaning

	
 

	
25


	
 

	
4.5.

	
 

	
Water

	
 

	
26


	
 

	
4.6.

	
 

	
Directory

	
 

	
26


	
 

	
4.7.

	
 

	
No Other
 Services

	
 

	
26


	
 

	
4.8.

	
 

	
Labor
 Harmony

	
 

	
26


	
 

	
 

	
 


	
ARTICLE 5 ELECTRICITY

	
 

	
27


	
 

	
5.1.

	
 

	
Capacity

	
 

	
27


	
 

	
5.2.

	
 

	
Electricity
 for the Building

	
 

	
27


	
 

	
5.3.

	
 

	
Submetering

	
 

	
27


	
 

	
5.4.

	
 

	
Termination
 of Electric Service

	
 

	
30


	
 

	
 

	
 


	
ARTICLE 6 INITIAL CONDITION OF THE PREMISES

	
 

	
30


	
 

	
6.1.

	
 

	
Condition of
 Premises

	
 

	
30





i





 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
6.2.

	
 

	
Landlord’s
 Work.

	
 

	
31


	
 

	
 

	
 


	
ARTICLE 7 ALTERATIONS

	
 

	
34


	
 

	
7.1.

	
 

	
General

	
 

	
34


	
 

	
7.2.

	
 

	
Basic
 Alterations

	
 

	
35


	
 

	
7.3.

	
 

	
Approval
 Process

	
 

	
35


	
 

	
7.4.

	
 

	
Performance
 of Alterations

	
 

	
36


	
 

	
7.5.

	
 

	
Financial
 Integrity

	
 

	
37


	
 

	
7.6.

	
 

	
Effect on
 Building

	
 

	
38


	
 

	
7.7.

	
 

	
Time for
 Performance of Alterations

	
 

	
38


	
 

	
7.8.

	
 

	
Removal of
 Alterations and Tenant’s Property

	
 

	
39


	
 

	
7.9.

	
 

	
Contractors
 and Supervision

	
 

	
39


	
 

	
7.10.

	
 

	
Landlord’s
 Expenses

	
 

	
39


	
 

	
7.11.

	
 

	
Pantry

	
 

	
40


	
 

	
7.12.

	
 

	
Window
 Coverings

	
 

	
40


	
 

	
7.13.

	
 

	
Air-Cooled HVAC
 Installations

	
 

	
40


	
 

	
 

	
 


	
ARTICLE 8 REPAIRS

	
 

	
40


	
 

	
8.1.

	
 

	
Landlord’s
 Repairs

	
 

	
40


	
 

	
8.2.

	
 

	
Tenant’s
 Repairs

	
 

	
40


	
 

	
8.3.

	
 

	
Certain
 Limitations

	
 

	
41


	
 

	
8.4.

	
 

	
Overtime

	
 

	
41


	
 

	
 

	
 


	
ARTICLE 9 ACCESS; LANDLORD’S CHANGES

	
 

	
42


	
 

	
9.1.

	
 

	
Access

	
 

	
42


	
 

	
9.2.

	
 

	
Landlord’s
 Obligation to Minimize Interference

	
 

	
43


	
 

	
9.3.

	
 

	
Reserved
 Areas

	
 

	
43


	
 

	
9.4.

	
 

	
Ducts, Pipes
 and Conduits

	
 

	
43


	
 

	
9.5.

	
 

	
Keys

	
 

	
44


	
 

	
9.6.

	
 

	
Landlord’s
 Changes

	
 

	
44


	
 

	
 

	
 


	
ARTICLE 10 UNAVOIDABLE DELAYS AND INTERRUPTION OF
 SERVICE

	
 

	
45


	
 

	
10.1.

	
 

	
Unavoidable
 Delays

	
 

	
45


	
 

	
10.2.

	
 

	
Interruption
 of Services

	
 

	
45


	
 

	
10.3.

	
 

	
Rent Credit

	
 

	
46


	
 

	
 

	
 


	
ARTICLE 11 REQUIREMENTS

	
 

	
46


	
 

	
11.1.

	
 

	
Tenant’s
 Obligation to Comply with Requirements

	
 

	
46


	
 

	
11.2.

	
 

	
Landlord’s
 Obligation to Comply with Requirements

	
 

	
47


	
 

	
11.3.

	
 

	
Tenant’s
 Right to Contest Requirements

	
 

	
48


	
 

	
11.4.

	
 

	
Certificate
 of Occupancy

	
 

	
48


	
 

	
 

	
 


	
ARTICLE 12 QUIET ENJOYMENT

	
 

	
49


	
 

	
12.1.

	
 

	
Quiet
 Enjoyment

	
 

	
49


	
 

	
 

	
 


	
ARTICLE 13 SUBORDINATION

	
 

	
49


	
 

	
13.1.

	
 

	
Subordination

	
 

	
49


	
 

	
13.2.

	
 

	
Attornment

	
 

	
49


	
 

	
13.3.

	
 

	
Amendments
 to this Lease

	
 

	
51


	
 

	
13.4.

	
 

	
Tenant’s
 Estoppel Certificate

	
 

	
51





ii





 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
13.5.

	
 

	
Rights to
 Cure Landlord’s Default

	
 

	
52


	
 

	
13.6.

	
 

	
Zoning Lot
 Merger Agreement

	
 

	
52


	
 

	
13.7.

	
 

	
Tenant’s
 Financial Statements

	
 

	
52


	
 

	
13.8.

	
 

	
EBITDA
 Certificate

	
 

	
53


	
 

	
 

	
 


	
ARTICLE 14 INSURANCE

	
 

	
53


	
 

	
14.1.

	
 

	
Tenant’s
 Insurance

	
 

	
53


	
 

	
14.2.

	
 

	
Landlord’s
 Insurance

	
 

	
54


	
 

	
14.3.

	
 

	
Mutual
 Waiver of Subrogation

	
 

	
55


	
 

	
14.4.

	
 

	
Evidence of
 Insurance

	
 

	
56


	
 

	
14.5.

	
 

	
No
 Concurrent Insurance

	
 

	
56


	
 

	
14.6.

	
 

	
Tenant’s
 Obligation to Comply with Landlord’s Fire and Casualty Insurance

	
 

	
56


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 15 CASUALTY

	
 

	
56


	
 

	
15.1.

	
 

	
Notice

	
 

	
56


	
 

	
15.2.

	
 

	
Landlord’s
 Restoration Obligations

	
 

	
56


	
 

	
15.3.

	
 

	
Rent
 Abatement

	
 

	
57


	
 

	
15.4.

	
 

	
Landlord’s
 Termination Right

	
 

	
58


	
 

	
15.5.

	
 

	
Tenant’s
 Termination Right

	
 

	
58


	
 

	
15.6.

	
 

	
Termination
 Rights at End of Term

	
 

	
59


	
 

	
15.7.

	
 

	
No Other
 Termination Rights

	
 

	
60


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 16 CONDEMNATION

	
 

	
60


	
 

	
16.1.

	
 

	
Effect of
 Condemnation

	
 

	
60


	
 

	
16.2.

	
 

	
Condemnation
 Award

	
 

	
61


	
 

	
16.3.

	
 

	
Temporary
 Taking

	
 

	
61


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 17 ASSIGNMENT AND SUBLETTING

	
 

	
62


	
 

	
17.1.

	
 

	
General
 Limitations

	
 

	
62


	
 

	
17.2.

	
 

	
Landlord’s
 Expenses

	
 

	
63


	
 

	
17.3.

	
 

	
Recapture
 Procedure

	
 

	
64


	
 

	
17.4.

	
 

	
Certain
 Transfer Rights

	
 

	
68


	
 

	
17.5.

	
 

	
Transfer
 Taxes

	
 

	
71


	
 

	
17.6.

	
 

	
Transfer
 Profit

	
 

	
71


	
 

	
17.7.

	
 

	
Permitted
 Transfers

	
 

	
72


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 18 LANDLORD’S RIGHT TO RELOCATE TENANT

	
 

	
74


	
 

	
18.1.

	
 

	
Landlord’s
 Rights

	
 

	
74


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 19 DEFAULT

	
 

	
75


	
 

	
19.1.

	
 

	
Events of
 Default

	
 

	
75


	
 

	
19.2.

	
 

	
Termination

	
 

	
76


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 20 TENANT’S INSOLVENCY

	
 

	
76


	
 

	
20.1.

	
 

	
Assignments
 pursuant to the Bankruptcy Code

	
 

	
76


	
 

	
20.2.

	
 

	
Replacement
 Lease

	
 

	
78


	
 

	
20.3.

	
 

	
Insolvency
 Events

	
 

	
78


	
 

	
20.4.

	
 

	
Effect of
 Stay

	
 

	
79


	
 

	
20.5.

	
 

	
Rental for
 Bankruptcy Purposes

	
 

	
80





iii





 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 


	
ARTICLE 21 REMEDIES AND DAMAGES

	
 

	
80


	
 

	
21.1.

	
 

	
Certain
 Remedies

	
 

	
80


	
 

	
21.2.

	
 

	
No
 Redemption

	
 

	
81


	
 

	
21.3.

	
 

	
Calculation
 of Damages

	
 

	
81


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 22 LANDLORD’S EXPENSES AND LATE CHARGES

	
 

	
82


	
 

	
22.1.

	
 

	
Landlord’s
 Costs

	
 

	
82


	
 

	
22.2.

	
 

	
Interest on
 Late Payments

	
 

	
83


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 23 SECURITY

	
 

	
83


	
 

	
23.1.

	
 

	
Security
 Deposit

	
 

	
83


	
 

	
23.2.

	
 

	
Landlord’s
 Rights

	
 

	
84


	
 

	
23.3.

	
 

	
Return of
 Security

	
 

	
84


	
 

	
23.4.

	
 

	
Transfer of
 Letter of Credit

	
 

	
85


	
 

	
23.5.

	
 

	
Renewal of
 Letter of Credit

	
 

	
85


	
 

	
23.6.

	
 

	
Reduction of
 Security

	
 

	
85


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 24 END OF TERM

	
 

	
86


	
 

	
24.1.

	
 

	
End of Term

	
 

	
86


	
 

	
24.2.

	
 

	
Holdover

	
 

	
86


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 25 NO WAIVER

	
 

	
86


	
 

	
25.1.

	
 

	
No
 Surrender

	
 

	
86


	
 

	
25.2.

	
 

	
No Waiver by
 Landlord

	
 

	
87


	
 

	
25.3.

	
 

	
No Waiver by
 Tenant

	
 

	
87


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 26 JURISDICTION

	
 

	
88


	
 

	
26.1.

	
 

	
Governing
 Law.

	
 

	
88


	
 

	
26.2.

	
 

	
Submission
 to Jurisdiction

	
 

	
88


	
 

	
26.3.

	
 

	
Waiver of
 Trial by Jury; Counterclaims

	
 

	
88


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 27 NOTICES

	
 

	
88


	
 

	
27.1.

	
 

	
Addresses;
 Manner of Delivery

	
 

	
88


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 28 BROKERAGE

	
 

	
90


	
 

	
28.1.

	
 

	
Broker

	
 

	
90


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 29 INDEMNITY

	
 

	
90


	
 

	
29.1.

	
 

	
Tenant’s
 Indemnification of the Landlord Indemnitees

	
 

	
90


	
 

	
29.2.

	
 

	
Landlord’s
 Indemnification of the Tenant Indemnitees

	
 

	
91


	
 

	
29.3.

	
 

	
Indemnification
 Procedure

	
 

	
92


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 30 LANDLORD’S CONSENTS; ARBITRATION

	
 

	
93


	
 

	
30.1.

	
 

	
Certain
 Limitations

	
 

	
93


	
 

	
30.2.

	
 

	
Expedited
 Arbitration

	
 

	
93


	
 

	
 

	
 

	
 

	
 

	
 


	
ARTICLE 31 ADDITIONAL PROVISIONS

	
 

	
94


	
 

	
31.1.

	
 

	
Tenant’s
 Property Delivered to Building Employees

	
 

	
94


	
 

	
31.2.

	
 

	
Not Binding
 Until Execution

	
 

	
95


	
 

	
31.3.

	
 

	
No Third
 Party Beneficiaries

	
 

	
95


	
 

	
31.4.

	
 

	
Extent of
 Landlord’s Liability

	
 

	
95


	
 

	
31.5.

	
 

	
Extent of
 Tenant’s Liability

	
 

	
95





iv





 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
31.6.

	
 

	
Survival

	
 

	
95


	
 

	
31.7.

	
 

	
Recording

	
 

	
95


	
 

	
31.8.

	
 

	
Entire
 Agreement

	
 

	
96


	
 

	
31.9.

	
 

	
Counterparts

	
 

	
96


	
 

	
31.10.

	
 

	
Exhibits

	
 

	
96


	
 

	
31.11.

	
 

	
Gender;
 Plural

	
 

	
96


	
 

	
31.12.

	
 

	
Divisibility

	
 

	
96


	
 

	
31.13.

	
 

	
Vault Space

	
 

	
96


	
 

	
31.14.

	
 

	
Adjacent
 Excavation

	
 

	
96


	
 

	
31.15.

	
 

	
Captions

	
 

	
97


	
 

	
31.16.

	
 

	
Parties
 Bound

	
 

	
97


	
 

	
31.17.

	
 

	
Authority

	
 

	
97


	
 

	
31.18.

	
 

	
Rent
 Control

	
 

	
98


	
 

	
31.19.

	
 

	
Consequential
 Damages

	
 

	
98


	
 

	
31.20.

	
 

	
Tenant’s
 Advertising

	
 

	
98


	
 

	
31.21.

	
 

	
Specially
 Designated Nationals; Blocked Persons; Embargoed Persons

	
 

	
98





v






DEFINED TERMS


	
 

	
 

	
 


	
Term

	
 

	
Page


	
 

	
 

	
 


	
Actual
 Reading Statement

	
 

	
28


	
Affiliate

	
 

	
3


	
Alterations

	
 

	
34


	
Alterations
 Notice

	
 

	
35


	
Amortized
 Transfer Expenses

	
 

	
64


	
Applicable
 Rate

	
 

	
3


	
Assessed
 Valuation

	
 

	
15


	
Average Cost
 per Kilowatt Hour

	
 

	
11


	
Average Cost
 per Peak Demand Kilowatt

	
 

	
11


	
Bank Rating

	
 

	
84


	
Bankruptcy
 Code

	
 

	
76


	
Base
 Electrical Capacity

	
 

	
27


	
Base
 Operating Expense Year

	
 

	
5


	
Base
 Operating Expenses

	
 

	
5


	
Base Rate

	
 

	
4


	
Base Tax
 Year

	
 

	
16


	
Base Taxes

	
 

	
16


	
Basic
 Alteration

	
 

	
35


	
Basic
 Sublease Provisions

	
 

	
71


	
Broker

	
 

	
90


	
Building

	
 

	
1


	
Building
 Change

	
 

	
38


	
Building
 Hours

	
 

	
23


	
Building
 Standard Materials

	
 

	
33


	
Building
 Systems

	
 

	
23


	
Business
 Days

	
 

	
4


	
Cash
 Security Deposit

	
 

	
83


	
Casualty
 Statement

	
 

	
59


	
Claim

	
 

	
92


	
Claim
 Against Landlord

	
 

	
90


	
Claim
 Against Tenant

	
 

	
91


	
Commencement
 Date

	
 

	
1


	
Compliance
 Challenge

	
 

	
48


	
Consumer
 Price Index

	
 

	
4


	
Control

	
 

	
4


	
Decorative
 Alterations

	
 

	
34


	
Deficiency

	
 

	
81


	
EBITDA

	
 

	
53


	
EBITDA
 Certificate

	
 

	
53


	
Electricity
 Additional Rent

	
 

	
27


	
Electricity
 Inclusion Charge

	
 

	
29


	
Embargoed
 Person

	
 

	
99


	
Escalation
 Rent

	
 

	
4





vi





 

	
 

	
 

	
 


	
Event of
 Default

	
 

	
75


	
Excluded
 Amounts

	
 

	
16


	
Expedited
 Arbitration Proceeding

	
 

	
94


	
Expiration
 Date

	
 

	
1


	
Fixed
 Expiration Date

	
 

	
1


	
Fixed Rent

	
 

	
2


	
General
 Contractors

	
 

	
32


	
Governmental
 Authority

	
 

	
47


	
Holidays

	
 

	
4


	
HVAC

	
 

	
23


	
HVAC Systems

	
 

	
23


	
Indemnitee

	
 

	
92


	
Indemnitor

	
 

	
92


	
Initial
 Alterations

	
 

	
34


	
Insolvency
 Events

	
 

	
79


	
Insolvency
 Party

	
 

	
76


	
Landlord

	
 

	
1


	
Landlord
 Indemnitees

	
 

	
91


	
Landlord’s
 Property Policy

	
 

	
55


	
Landlord’s Termination
 Date

	
 

	
3


	
Landlord’s
 Work

	
 

	
31


	
Lessor

	
 

	
49


	
Letter of
 Credit

	
 

	
83


	
List

	
 

	
98


	
Long Lead
 Work

	
 

	
33


	
Monthly
 Electricity Payment Amount

	
 

	
28


	
Monthly
 Operating Expense Payment Amount

	
 

	
12


	
Monthly Tax
 Payment Amount

	
 

	
17


	
Mortgage

	
 

	
49


	
Mortgagee

	
 

	
49


	
New Premises

	
 

	
74


	
Occupancy
 Agreement

	
 

	
62


	
OFAC

	
 

	
98


	
Old Premises

	
 

	
74


	
Operating
 Expense Payment

	
 

	
9


	
Operating
 Expense Statement

	
 

	
9


	
Operating
 Expense Year

	
 

	
9


	
Operating
 Expenses

	
 

	
5


	
Out-of-Pocket
 Costs

	
 

	
5


	
Overtime
 Periods

	
 

	
23


	
Permitted
 Party

	
 

	
62


	
Person

	
 

	
5


	
Predecessor
 Tenant

	
 

	
78


	
Premises

	
 

	
1


	
Property
 Management Charge

	
 

	
5


	
Proposed
 Transfer Terms

	
 

	
64





vii





 

	
 

	
 

	
 


	
Prospective
 Electricity Statement

	
 

	
28


	
Prospective
 Operating Expense Statement

	
 

	
12


	
Prospective
 Tax Statement

	
 

	
17


	
Real
 Property

	
 

	
1


	
Recapture
 Date

	
 

	
65


	
Recapture
 Procedure

	
 

	
64


	
Recapture
 Space

	
 

	
64


	
Recapture
 Sublease

	
 

	
65


	
Recapture
 Sublease Notice

	
 

	
65


	
Recapture
 Subtenant

	
 

	
65


	
Recapture
 Termination

	
 

	
66


	
Recapture
 Termination Notice

	
 

	
66


	
Relocation
 Date

	
 

	
74


	
Relocation
 Notice

	
 

	
74


	
Relocation
 Option

	
 

	
74


	
Rent
 Commencement Date

	
 

	
2


	
Rentable
 Area

	
 

	
5


	
Rental

	
 

	
1


	
Requirements

	
 

	
47


	
Reserved
 Areas

	
 

	
43


	
Rules

	
 

	
22


	
Second Bite
 Date

	
 

	
59


	
Security
 Deposit Date

	
 

	
85


	
Settlement

	
 

	
92


	
Short- Term
 Sublease

	
 

	
65


	
Specialty
 Alterations

	
 

	
34


	
Substantial
 Completion

	
 

	
34


	
Successor

	
 

	
49


	
Superior
 Lease

	
 

	
49


	
Supplemental
 Unit

	
 

	
31


	
Tax Payment

	
 

	
17


	
Tax
 Statement

	
 

	
17


	
Tax Year

	
 

	
17


	
Taxes

	
 

	
16


	
Tenant

	
 

	
1


	
Tenant Extra
 Work

	
 

	
32


	
Tenant
 Indemnitees

	
 

	
91


	
Tenant
 Obligor

	
 

	
79


	
Tenant Work
 Delays

	
 

	
33


	
Tenant’s
 Final Plans

	
 

	
31


	
Tenant’s
 Liability Policy

	
 

	
54


	
Tenant’s
 Operating Expense Share

	
 

	
9


	
Tenant’s
 Property

	
 

	
35


	
Tenant’s
 Property Policy

	
 

	
53


	
Tenant’s
 Statements

	
 

	
53


	
Tenant’s Tax
 Share

	
 

	
17





viii





 

	
 

	
 

	
 


	
Tenant’s
 Termination Date

	
 

	
3


	
Tenant’s
 Worker’s Compensation Policy

	
 

	
54


	
Term

	
 

	
1


	
Transfer

	
 

	
62


	
Transfer
 Date

	
 

	
64


	
Transfer
 Expenses

	
 

	
64


	
Transfer
 Inflow

	
 

	
71


	
Transfer
 Notice

	
 

	
64


	
Transfer
 Outflow

	
 

	
71


	
Transfer
 Profit

	
 

	
71


	
Transferee

	
 

	
64


	
Transferor

	
 

	
64


	
Usable Area

	
 

	
5


	
Utility
 Company

	
 

	
11


	
Work Access

	
 

	
42


	
Work Deposit

	
 

	
37


	
Work Letter

	
 

	
31





ix






EXHIBITS


Exhibit “A” –
Premises


Exhibit “3.3”
– Rules


Exhibit “4.2”
– Landlord’s Charges


Exhibit “4.4”
– Cleaning Specifications


Exhibit “6.2”
– 1 – Tenant’s Preliminary Plan


Exhibit “6.2”
– 2 – Work Letter


x






          THIS
LEASE, dated as of the 6 day of May, 2008, by and between 20 BROAD COMPANY
L.L.C., a New York limited liability company, having an address c/o Vornado
Office Management LLC, 888 Seventh Avenue, New York, New York 10019, as
landlord, and PENTHOUSE MEDIA GROUP INC., a Nevada corporation, having an
address at Two Penn Plaza, New York, New York 10121, as tenant (the Person that
holds the interest of the landlord hereunder at any particular time being
referred to herein as “Landlord”; subject to Section 17.1(F)
hereof, the Person that holds the interest of the tenant hereunder at any
particular time being referred to herein as “Tenant”).


W I T N E S S E T H:


          WHEREAS,
Landlord wishes to demise and let unto Tenant, and Tenant wishes to hire and
take from Landlord, on the terms and subject to the conditions set forth
herein, the premises as shown on Exhibit “A” attached hereto and made a part
hereof on the fourteenth (14th) floor of the building that is known by the
street address of 20 Broad Street, New York, New York 10005 (such premises
being collectively referred to herein as the “Premises”; such building
being referred to herein as the “Building”; the Building, together with
the plot of land on which the Building is constructed, being collectively
referred to herein as the “Real Property”).


          NOW,
THEREFORE, in consideration of the premises, and other good and valuable
consideration, the mutual receipt and legal sufficiency of which the parties
hereto hereby acknowledge, Landlord and Tenant hereby agree as follows:


ARTICLE 1

DEMISE, TERM, FIXED RENT


          1.1.  
Demise.


          Subject
to the terms hereof, Landlord hereby demises and lets to Tenant and Tenant
hereby hires and takes from Landlord the Premises for the term to commence on
the Commencement Date and to end on the last day of the calendar month during
which occurs the day immediately preceding the date that is ten (10) years
after the Rent Commencement Date (the “Fixed Expiration Date”; the Fixed
Expiration Date, or such earlier date that the term of this Lease terminates
pursuant to the terms hereof or pursuant to law, being referred to herein as
the “Expiration Date”; the term commencing on the Commencement Date and
ending on the Expiration Date being referred to herein as the “Term”).


          1.2.  
Commencement Date.


                   (A)  
The term of this Lease shall commence on the date that Landlord delivers vacant
and exclusive possession of the Premises to Tenant with Landlord’s Work
Substantially Complete (such date that Landlord delivers vacant and exclusive
possession of the Premises to Tenant being referred to herein as the “Commencement
Date”).


                   (B)  
The term “Rental” shall mean, collectively, the Fixed Rent, the
Escalation Rent and the additional rent payable by Tenant to Landlord
hereunder. 






          1.3.  
Rent Commencement Date.


          The
term “Rent Commencement Date” shall mean the ninetieth (90th) day after
the Commencement Date.


          1.4.  
Fixed Rent.


                   (A)  
The annual fixed rent for the Premises (the annual fixed rent payable hereunder
for the Premises at any particular time being referred to herein as the “Fixed
Rent”) shall be:


                            (1)
  Six Hundred Twenty-Four Thousand Three Hundred Seventy-Eight Dollars and No
Cents ($624,378.00) ($52,031.50 per month) for the period commencing on the
Rent Commencement Date and ending on the last day of the month in which the day
immediately preceding the fifth (5th) anniversary of the Rent Commencement Date
occurs; and 


                            (2)
  Seven Hundred Six Thousand Five Hundred Thirty-Three Dollars and No Cents
($706,533.00) ($58,877.50 per month) for the period commencing on the first day
of the month after the month in which the day immediately preceding the fifth
(5th) anniversary of the Rent Commencement Date occurs and ending on
the Fixed Expiration Date.


          1.5.  
Payments of Fixed Rent.


                   (A)
  Subject to Section 1.5(D) hereof, Tenant shall pay the Fixed Rent in lawful
money of the United States of America that is legal tender in payment of all
debts and dues, public and private, at the time of payment, in equal monthly
installments, in advance, on the first (1st) day of each calendar month
during the Term commencing on the Rent Commencement Date, at the office of
Landlord or such other place as Landlord may designate from time to time on at
least thirty (30) days of advance notice to Tenant, without any set-off,
offset, abatement or deduction whatsoever (except to the extent otherwise
expressly set forth herein).


                   (B)
  Tenant shall have the right to pay the Fixed Rent and any other items of Rental
by wire transfer of immediately available funds to an account that Landlord
designates from time to time on at least thirty (30) days of advance notice to
Tenant. Landlord shall so designate an account within thirty (30) days after
Tenant’s request therefor from time to time.


                   (C)  
If the Rent Commencement Date is not the first (1st) day of a calendar month,
then (x) the Fixed Rent due hereunder for the calendar month during which the
Rent Commencement Date occurs shall be adjusted appropriately based on the
number of days in such calendar month, and (y) subject to Section 1.5(D)
hereof, Tenant shall pay to Landlord such amount (adjusted as aforesaid for
such calendar month) on the Rent Commencement Date. If the Expiration Date is
not the last day of a calendar month, then the Fixed Rent due hereunder for the
calendar month during which the Expiration Date occurs shall be adjusted appropriately
based on the number of days in such calendar month.


                   (D)  
Tenant shall pay to Landlord on the date hereof an amount equal to Fifty-Two
Thousand Thirty-One Dollars and Fifty Cents ($52,031.50), which Landlord shall


2






apply to the
Fixed Rent that first comes due hereunder from and after the Rent Commencement
Date until such amount is exhausted.


          1.6.  
Termination Rights.


                   (A)  
Subject to the terms of this Section 1.6(A), Tenant shall have the right to
terminate this Lease during the Term effective on any date from and after the
last day of the calendar month during which occurs the day immediately
preceding the date that is seven (7) years after the Rent Commencement Date
(the date that Tenant designates as the date that the Term terminates pursuant
to this Section 1.6(A) being referred to herein as “Tenant’s Termination
Date”). Tenant shall have the right to terminate this Lease as provided in
this Section 1.6(A) effective as of Tenant’s Termination Date only by giving
notice thereof to Landlord not later than the date that is two hundred seventy
(270) days before Tenant’s Termination Date (as to which date time shall be of
the essence). If Tenant exercises Tenant’s right to terminate this Lease as of
Tenant’s Termination Date as provided in this Section 1.6(A), then Tenant, on
Tenant’s Termination Date, shall vacate the Premises and surrender the Premises
to Landlord in accordance with the terms of this Lease that govern Tenant’s
obligations upon the expiration or earlier termination of the Term. Tenant
shall not have the right to exercise Tenant’s right to terminate this Lease as
provided in this Section 1.6(A) if Landlord has theretofore exercised
Landlord’s right to terminate this Lease as otherwise provided in this Section
1.6(A).


                   (B)  
Subject to the terms of this Section 1.6(B), Landlord shall have the right to
terminate this Lease during the Term effective on any date from and after the
last day of the calendar month during which occurs the day immediately
preceding the date that is seven (7) years after the Rent Commencement Date
(the date that Landlord designates as the date that the Term terminates
pursuant to this Section 1.6(B) being referred to herein as “Landlord’s
Termination Date”). Landlord shall have the right to terminate this Lease
as provided in this Section 1.6(B) effective as of Landlord’s Termination Date
only by giving notice thereof to Tenant not later than the date that is two
hundred seventy (270) days before Landlord’s Termination Date (as to which date
time shall be of the essence). If Landlord exercises Landlord’s right to
terminate this Lease as of Landlord’s Termination Date as provided in this
Section 1.6(B), then Tenant, on Landlord’s Termination Date, shall vacate the
Premises and surrender the Premises to Landlord in accordance with the terms of
this Lease that govern Tenant’s obligations upon the expiration or earlier
termination of the Term. Landlord shall not have the right to exercise
Landlord’s right to terminate this Lease as provided in this
Section 1.6(B) Tenant has theretofore exercised Tenant’s right to
terminate this Lease as otherwise provided in this Section 1.6.


          1.7.  
Certain Definitions.


                   (A)  
The term “Affiliate” shall mean a Person that (1) Controls, (2) is under
the Control of, (3) is under common Control with, the Person in question, or
(4) is a Person under the Control of Marc Bell Capital Partners.


                   (B)  
The term “Applicable Rate” shall mean, at any particular time, the lesser
of (x) four hundred (400) basis points above the Base Rate at such time, and
(y) the maximum rate permitted by applicable law at such time.


3






                   (C)  
The term “Base Rate” shall mean the rate of interest announced publicly
from time to time by Citibank, N.A., or its successor, as its “prime lending
rate” (or such other term as may be used by Citibank, N.A. (or its successor),
from time to time, for the rate presently referred to as its “prime lending
rate”).


                   (D)  
The term “Business Days” shall mean all days, excluding Saturdays,
Sundays and Holidays.


                   (E)  
The term “Consumer Price Index” shall mean the Consumer Price Index for
All Urban Consumers published by the Bureau of Labor Statistics of the United
States Department of Labor, All Items (1982-84 = 100), seasonally adjusted, for
the most specific area that includes the location of the Building (which the
parties acknowledge is currently New York-Northern New Jersey – Long Island, NY
– NJ – CT – PA), or any successor index thereto. If the Consumer Price Index is
converted to a different standard reference base or otherwise revised, then the
determination of adjustments provided for herein shall be made with the use of
such conversion factor, formula or table for converting the Consumer Price
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
does not publish such conversion factor, formula or table, then with the use of
such conversion factor, formula or table as may be published by Prentice-Hall,
Inc. or any other nationally recognized publisher of similar statistical
information. If the Consumer Price Index ceases to be published, and there is
no successor thereto, then Landlord and Tenant shall use diligent efforts, in
good faith, to agree upon a substitute index for the Consumer Price Index.
Either party shall have the right to submit the issue of the designation of
such substitute index to an Expedited Arbitration Proceeding.


                   (F)  
The term “Control” shall mean direct or indirect ownership of more than
fifty percent (50%) of the outstanding voting stock of a corporation or other
majority equity interest if not a corporation and the possession of power to
direct or cause the direction of the management and policy of such corporation
or other entity, whether through the ownership of voting securities, by statute
or by contract.


                   (G)  
The term “Escalation Rent” shall mean the Rental payable to Landlord
under Article 2 hereof.


                   (H)  
The term “Holidays” shall mean all days observed as legal holidays by
either (x) the State of New York, (y) the United States of America, or (z) the
labor unions that service the Building; provided, however, that if (x) all of
the labor unions that service the Building do not observe a particular day as a
holiday, and (y) the State of New York or the United States of America do not
otherwise observe such day as a holiday, then such day shall constitute a
Holiday for purposes hereof only to the extent that Landlord requires the
services that are provided by members of the particular labor union to perform
the corresponding service for Tenant hereunder (so that if, for example, (x)
the labor union for office cleaning personnel observes a particular day as a
holiday but the labor union for the engineers that operate the HVAC System does
not observe such day as a holiday, and (y) the State of New York or the United
States of America does not otherwise observe such day as a holiday, then such
day shall constitute a Holiday for purposes of determining whether Landlord is
required to provide office cleaning services on such day, but such day shall
not constitute a Holiday for purposes of determining whether Landlord is
required to provide HVAC services on such day).


4






                   (I)  
The term “Out-of-Pocket Costs” shall mean costs that a Person pays to a
third party that is not an Affiliate of such Person (and, accordingly,
Out-of-Pocket Costs shall not include (i) the costs that such Person incurs in
compensating its own employees to perform a service or supervise work within
the scope of their employment, or (ii) the administrative costs that such
Person incurs in operating its own offices).


                   (J)  
The term “Person” shall mean any natural person or persons or any legal
form of association, including, without limitation, a partnership, a limited
partnership, a corporation, and a limited liability company.


                   (K)  
The term “Rentable Area” shall mean, with respect to a particular floor
area, the area thereof (expressed as a particular number of square feet), as
determined in accordance with the standards that the parties used to calculate
that the area of the Premises is sixteen thousand four hundred thirty-one
(16,431) square feet in the aggregate.


                   (L)  
The term “Usable Area” shall mean, with respect to a particular floor
area, the usable area thereof, as determined in accordance with The Recommended
Method of Floor Measurement of Office Buildings, Effective January 1, 1987, as
published by The Real Estate Board of New York, Inc.


ARTICLE 2

ESCALATION RENT


          2.1.  
Operating Expense Definitions.


                   (A)  
The term “Base Operating Expenses” shall mean the Operating Expenses for
the Base Operating Expense Year.


                   (B)  
The term “Base Operating Expense Year” shall mean the 2008 calendar
year.


                   (C)  
The term “Operating Expenses” shall mean, subject to the terms of this
Section 2.1 and to Section 2.2(F) hereof, the expenses paid or incurred by or
on behalf of Landlord in insuring, maintaining, repairing, managing and
operating the Real Property (and employing personnel therefor) as reflected on
Landlord’s books (which Landlord shall keep in accordance with generally
accepted accounting principles, consistently applied). Landlord shall have the
right to include in Operating Expenses for a particular Operating Expense Year
a property management charge in an amount not to exceed the product obtained by
multiplying (i) three percent (3%), by (ii) the gross rents that Landlord
collects from Tenant and the other tenants in the Building during such
Operating Expense Year (such amount being referred to herein as the “Property
Management Charge”). Operating Expenses shall exclude: 


                         (1)  
Taxes,


                         (2)  
Excluded Amounts,


5






                         (3)  
subject to Section 2.2(F) hereof, payments of interest or principal in respect
of Landlord’s debt (including, without limitation, any debt that is secured by
Mortgages),


                         (4)  
expenses that relate to leasing space in the Building (including, without
limitation, the cost of tenant improvements (or allowances that Landlord
provides to a tenant therefor), the cost of performing improvements to prepare
a particular portion of the Building for occupancy by a tenant, the cost of
rent concessions, advertising expenses, leasing commissions and similar fees,
the cost of lease buy-outs, takeovers or rental assumption obligations,
accounting and appraisal fees relating to determinations of fair market rent,
and architectural costs, engineering fees and other similar professional costs
and legal fees in connection with lease negotiations),


                         (5)  
expenses that Landlord incurs in selling, purchasing, financing or refinancing
the Real Property,


                         (6)  
the cost of any repairs, replacements or improvements to the Building that are
required to be capitalized by generally accepted accounting principles
(including, without limitation, lease obligations that are required to be capitalized
under generally accepted accounting principles) (except in each case as
otherwise provided in Section 2.2(F) hereof),


                         (7)  
depreciation or amortization expense (subject, however, to Section 2.2(F)
hereof),


                         (8)  
the cost of electricity that is furnished to the portions of the Building that
Landlord has leased, that Landlord is offering for lease, or that otherwise
constitutes leasable space that is not used for the general benefit of the
occupants the Building (it being understood that Operating Expenses shall
include the cost of electricity that is required to operate the Building
Systems as provided in Section 2.2(B) hereof),


                         (9)  
wages, salaries, and the cost of benefits in either case for personnel above
the grade of building manager,


                         (10)  
charges for the general overhead costs that Landlord incurs in managing,
operating, maintaining, or staffing its offices that are not located at the
Building,


                         (11)  
rent paid or payable under Superior Leases (except to the extent that (I) such
rent that is paid or payable under Superior Lease is for Taxes or Operating
Expenses, and (II) Landlord has not otherwise included such Taxes or Operating
Expenses in the calculation of Escalation Rent under this Article 2),


                         (12)  
subject to Section 2.2 hereof, any expense for which Landlord is otherwise
compensated, whether by virtue of insurance proceeds, condemnation proceeds,
claims under warranties, Tenant or other tenants in the Building making payment
directly to Landlord for Landlord’s services in the Building or otherwise
(other than by virtue of other tenants in the Building making payments to
Landlord for Operating Expenses as escalation rental),


6






                         (13)  
the cost of providing any level of service that exceeds the level of service
that Landlord furnishes to Tenant hereunder,


                         (14)  
legal or arbitration fees and disbursements that are paid or incurred in
connection with the negotiation of, or disputes arising out of, any lease for
space in the Real Property,


                         (15)  
costs that Landlord incurs in restoring the Building after the occurrence of a
fire or other casualty or after a partial condemnation thereof,


                         (16)  
costs that Landlord incurs in performing, or correcting defects in, Landlord’s
Work;


                         (17)  
advertising, entertainment and promotional costs that are paid or incurred for
the Building,


                         (18)  
management fees that Landlord pays to a property manager (it being understood,
however, that nothing in this clause (18) limits Landlord’s right to include in
Operating Expenses the Property Management Charge),


                         (19)  
any fee or expenditure that is paid or payable to any Affiliate of Landlord to
the extent that such fee or expenditure exceeds the amount that would be
reasonably expected to be paid in the absence of such relationship,


                         (20)  
interest, penalties and late charges that in either case are paid or incurred
as a result of late payments made by Landlord or by reason of Landlord’s
failure to comply with Requirements (to the extent that Landlord is required to
comply with such Requirements pursuant to the terms hereof),


                         (21)  
costs incurred in operating any sign or other similar device designed
principally for advertising or promotion to the extent that Landlord leases or
licenses to a third party such sign or device, or the portion of the Building
where such sign or device is installed,


                         (22)  
the cost of any judgment, settlement, or arbitration award resulting from any
liability of Landlord (other than liability for amounts otherwise includible in
Operating Expenses hereunder) and all expenses incurred in connection
therewith,


                         (23)  
amounts payable by Landlord for withdrawal liability or unfunded pension
liability to a multi-employer pension plan (under Title IV of the Employee
Retirement Income Security Act of 1974, as amended),


                         (24)  
costs incurred by Landlord which result from Landlord’s breach of this Lease or
Landlord’s negligence or willful misconduct,


                         (25)  
costs that Landlord incurs to correct a representation made by Landlord in this
Lease,


7






                         (26)  
fines or penalties that are assessed against Landlord by a Governmental
Authority by virtue of violations at the Building of applicable Requirements,


                         (27)  
fees, dues or contributions that Landlord pays voluntarily to civic
organizations, charities, political parties or political action committees,


                         (28)  
the cost of providing HVAC during Overtime Periods to portions of the Building
that Landlord has leased, that Landlord is offering for lease, or that
otherwise constitutes leasable space that is not used for the general benefit
of the occupants the Building (except that Landlord shall have the right to
include in Operating Expenses the cost of providing HVAC during Overtime
Periods that Landlord ordinarily supplies to the Building generally as opposed
to individual tenants of the Building in accordance with good management
practices),


                         (29)  
the cost of providing freight elevator or loading dock service during Overtime
Periods (except that Landlord shall have the right to include in Operating
Expenses the cost of providing freight elevator or loading dock service during
Overtime Periods that Landlord ordinarily supplies to the Building generally as
opposed to individual tenants of the Building in accordance with good
management practices),


                         (30)  
the cost of objects of fine art that Landlord installs in the Building (with
the understanding, however, that (x) Landlord shall have the right to include
in Operating Expenses the cost of fine art that Landlord installs in the
Building to the extent that such installation is required by applicable
Requirements (subject, however, to Section 2.2(F) hereof), and (y) nothing
contained in this clause (30) precludes Landlord from including in Operating
Expenses the cost of maintaining and repairing objects of fine art that
Landlord installs in the common areas of the Building),


                         (31)  
costs associated with the construction, installation, repair or operation of
any broadcasting facility, conference center, luncheon club, athletic facility,
child care facility, auditorium, cafeteria, or any other similar specialty
facility, except to the extent that any such facility exists in the Building as
of the date hereof for the general benefit of tenants in the Building,


                         (32)  
costs that Landlord incurs in operating an ancillary services in the Building
in respect of which users pay a separate charge (such as a shoe shine stand, a
newsstand, a stationery store or a parking facility),


                         (33)  
costs that are duplicative of any other cost that is included in Operating
Expenses,


                         (34)  
costs that Landlord incurs in organizing or maintaining in good standing the
entity that constitutes Landlord, or in authorizing Landlord to do business in
the jurisdiction where the Building is located,


                         (35)  
the portion of any costs that are properly allocable to any building other than
Building,


8






                            (36)  
costs incurred in connection with the acquisition or sale of air rights,
transferable development rights, easements or other real property interests,


                            (37)  
costs incurred in connection with expanding the Rentable Area of the Building,
and


                            (38)  
the cost of removing or encapsulating asbestos or asbestos containing
materials, except to the extent the same shall be brought to the Real Property
by Tenant, Tenant’s agents, employees, contractors, invitees or licensees.


                   (D)  
The term “Operating Expense Payment” shall mean, with respect to any
Operating Expense Year, the product obtained by multiplying (i) the excess (if
any) of (A) the Operating Expenses for such Operating Expense Year, over (B)
the Base Operating Expenses, by (ii) Tenant’s Operating Expense Share.


                   (E)  
The term “Operating Expense Statement” shall mean a statement that shows
the Operating Expense Payment for a particular Operating Expense Year.


                   (F)  
The term “Operating Expense Year” shall mean the Base Operating Expense
Year and each subsequent calendar year.


                   (G)  
The term “Tenant’s Operating Expense Share” shall mean, subject to the
terms hereof, three and three thousand seven hundred twenty-four
ten-thousandths percent (3.3724%).


          2.2.  
Calculation of Operating Expenses.


                   (A)


                    (1)
  Subject to the terms of this Section 2.2(A), if the entire Rentable Area of the
Building is not occupied by Persons conducting business therein for the entire
Operating Expense Year, including Base Operating Expenses, then, for purposes
of calculating the Operating Expense Payment, including the Base Operating
Expenses. Landlord shall have the right to increase Operating Expenses that
vary based on the extent to which the Building is so occupied by the amount
that Landlord would have included in Operating Expenses if the entire Rentable
Area of the Real Property (other than the retail portion thereof) was occupied
by Persons conducting business therein for the entire Operating Expense Year,
including the Base Operating Expense Year.


                   (2)
  Subject to the terms of this Section 2.2(A), if (i) for any particular period,
Landlord performs a particular service or a particular level of service for the
benefit of Tenant in operating the Real Property, (ii) Tenant does not
otherwise pay to Landlord additional rent for the costs incurred by Landlord in
performing such service or such level of service, (iii) Landlord includes
the cost of performing such service or such level of service in Operating
Expenses for purposes of calculating the Operating Expense Payment for the
applicable Operating Expense Year, including the Base Operating Expense Year,
and (iv) Landlord does not perform such service or such level of service for
the benefit of all of the other portions of the Real Property that are occupied
by Persons conducting business therein for the applicable period,


9






then, for
purposes of calculating the Operating Expense Payment, Landlord shall increase
Operating Expenses that vary based on the extent to which Landlord performs
such service or such level of service for the benefit of occupants of the
Building by the amount that Landlord would have included in Operating Expenses
if Landlord performed such service or such level of service for the entire
Rentable Area of the Real Property (other than the retail portion thereof) that
is occupied by Persons conducting business therein for the applicable period.


                    (3)  
Subject to the terms of this Section 2.2(A), if Landlord, during a particular
Operating Expense Year (or a portion thereof), including the Base Operating
Expense Year, does not perform repair and maintenance on a particular element
of the Building because such element of the Building is out of service or not
fully in use, then Landlord shall have the right to increase Operating Expenses
to reflect the amount of expenses that Landlord would have incurred if Landlord
had performed such repair and maintenance for the entire Operating Expense
Year, including the Base Operating Expense Year. Accordingly, if, for example,
during a particular Operating Expense Year, Landlord does not incur costs to
repair and maintain the finishes in the lobby of the Building because the lobby
is not in service for such Operating Expense Year, then Landlord shall have the
right to include in Operating Expenses for such Operating Expense Year the
costs that Landlord would have incurred in repairing and maintaining the
finishes in the lobby of the Building for the entire Operating Expense Year.


                    (4)  
Landlord shall increase the Operating Expenses for the Base Operating Expense
Year as described in this Section 2.2(A). For purposes of calculating the
Operating Expenses for the Base Operating Expense Year, any fee or expenditure
that otherwise constitutes an Operating Expense and that is paid or payable to
any Affiliate of Landlord shall not be less than the amount that would be
reasonably expected to be paid in the absence of such relationship.


                   (B)  
Landlord shall have the right to include in Operating Expenses (and Landlord
shall include in Base Operating Expenses), for the electricity supplied to the
Building Systems and other common elements of the Building, an amount equal to
one hundred percent (100%) of the sum of:


                    (1)  
the product obtained by multiplying (i) the Average Cost per Peak Demand
Kilowatt, by (ii) the number of kilowatts that constituted the peak demand for
electricity for the Building Systems and the other common elements of the
Building for the applicable period (as registered on a submeter or submeters,
or, at Landlord’s option, as determined from time to time by a survey prepared
by an independent and reputable electrical consultant) (it being understood
that such number of kilowatts as described in clause (ii) above shall not
include the number of kilowatts that are attributable to the operation of the
Building Systems to the extent that Tenant (or other tenants in the Building)
make separate payment to Landlord therefor), and


                    (2)  
the product obtained by multiplying (i) the Average Cost per Kilowatt Hour, by
(ii) the number of kilowatt hours of electricity used by the Building Systems
and the other common elements of the Building for the applicable period (as
registered on a submeter or submeters, or, at Landlord’s option, as determined
by a survey prepared by an independent and reputable electrical consultant) (it
being understood that such number of kilowatt hours as described in clause (ii)
above shall not include the number of kilowatt hours


10






that are
attributable to the operation of the Building Systems to the extent that Tenant
(or other tenants in the Building) make separate payment to Landlord therefor).


                   (C)  
The term “Average Cost per Peak Demand Kilowatt” shall mean, with
respect to any particular period, the quotient obtained by dividing (x) the
aggregate charge imposed by the Utility Company on Landlord for the Utility
Company’s making available electricity that satisfies the Building’s peak
demand for electricity during such period, by (y) the number of kilowatts that
constituted such peak demand, as reflected on the electric meter or meters for
the Building.


                   (D)  
The term “Average Cost per Kilowatt Hour” shall mean, with respect to
any particular period, the quotient obtained by dividing (x) the aggregate
charge imposed by the Utility Company on Landlord for the electricity supplied
to the Building for such period (other than the aggregate charge imposed by the
Utility Company on Landlord for the Utility Company’s making available
electricity that satisfies the Building’s peak demand for electricity during
such period), by (y) the number of kilowatt hours of electricity used in the
Building during such period, as reflected on the electric meter or meters for
the Building.


                   (E)  
The term “Utility Company” shall mean, collectively, the local
electrical energy distribution company and the competitive energy provider with
which Landlord has made arrangements to obtain electric service for the
Building; provided, however, that if Landlord makes arrangements to produce
electricity to satisfy all or a portion of the requirements of the Building,
then (I) Utility Company shall also refer to the producer of such electricity,
and (II) the charges imposed by such producer shall be included in the
calculation of Average Cost per Kilowatt Hour and Average Cost per Peak Demand
Kilowatt.


                   (F)  
If (i) Landlord makes an improvement to the Real Property or a replacement of
equipment at the Real Property in either case in connection with the
maintenance, repair, management or operation thereof, (ii) generally accepted
accounting principles require Landlord to capitalize the cost of such
improvement or such replacement, and (iii) such improvement or replacement is
made (a) to comply with a Requirement first promulgated after the date hereof
or enforced after the date hereof in a manner that is materially different than
enforcement thereof prior to the date hereof, (b) in lieu of repairs, or (c)
for the purpose of saving or reducing Operating Expenses (such as, for example,
an improvement that reduces labor costs), then Landlord shall have the right to
include in Operating Expenses for each Operating Expense Year the amount that
amortizes the cost of such improvement or such replacement, together with
interest thereon calculated at two hundred (200) basis points in excess of the
Base Rate, in equal annual installments over the useful life of such
improvement or such equipment as determined in accordance with generally
accepted accounting principles (until the cost of such improvement or such
equipment is amortized fully); provided, however, that (I) for any such
improvement or replacement that Landlord makes for the purpose of saving or
reducing Operating Expenses (and that Landlord does not make to comply with a
Requirement or in lieu of a repair), the aforesaid amount that Landlord includes
in Operating Expenses for any particular Operating Expense Year shall not
exceed the amount of the reduction in other Operating Expenses for such
Operating Expense Year that derives from such improvement or such replacement,
and (II) for any such improvement or replacement that Landlord makes in lieu of
a repair (and that Landlord does not make to comply with a Requirement or for
the purpose of saving or reducing Operating


11






Expenses), the
aforesaid amount that Landlord includes in Operating Expenses for any
particular Operating Expense Year shall not exceed the cost of the repairs that
Landlord would have otherwise made if Landlord did not make such improvement or
replacement.


          2.3.  
Operating Expense Payment.


                   (A)  
Tenant shall pay the Operating Expense Payment to Landlord in accordance with
the terms of this Section 2.3.


                   (B)  
Landlord shall have the right to give a statement to Tenant from time to time
pursuant to which Landlord sets forth Landlord’s good faith estimate of the
Operating Expense Payment for a particular Operating Expense Year (any such
statement that Landlord gives to Tenant being referred to herein as a “Prospective
Operating Expense Statement”; one-twelfth (1/12th) of the Operating Expense
Payment shown on a Prospective Operating Expense Statement being referred to
herein as the “Monthly Operating Expense Payment Amount”). If Landlord
gives to Tenant a Prospective Operating Expense Statement (or Landlord is
deemed to have given to Tenant a Prospective Operating Expense Statement
pursuant to Section 2.3(C) hereof), then Tenant shall pay to Landlord, as
additional rent, on account of the Operating Expense Payment due hereunder for
such Operating Expense Year, the Monthly Operating Expense Payment Amount, on
the first (1st) day of each subsequent calendar month for the remainder of such
Operating Expense Year, in the same manner as the monthly installments of the
Fixed Rent hereunder (it being understood that Tenant shall not be required to
commence such payments of the Monthly Operating Expense Payment Amount (x)
before the first (1st) day of the Operating Expense Year to which relates the
applicable Monthly Operating Expense Payment Amount, or (y) earlier than the
thirtieth (30th) day after the date that Landlord gives the Prospective
Operating Expense Statement to Tenant). If Landlord gives (or is deemed to have
given) to Tenant a Prospective Operating Expense Statement after the first
(1st) day of the applicable Operating Expense Year, then Tenant shall also pay
to Landlord, within thirty (30) days after the date that Landlord gives
the Prospective Operating Expense Statement to Tenant, an amount equal to the
excess of (I) the product obtained by multiplying (x) the Monthly Operating
Expense Payment Amount, by (y) the number of calendar months that have
theretofore elapsed during such Operating Expense Year, over (II) the aggregate
amount theretofore paid by Tenant to Landlord on account of the Operating
Expense Payment for such Operating Expense Year. If Landlord gives (or is
deemed to have given) to Tenant a Prospective Operating Expense Statement for a
particular Operating Expense Year, then Landlord shall also provide to Tenant,
within one hundred eighty (180) days after the last day of such Operating
Expense Year, an Operating Expense Statement for such Operating Expense Year.


                   (C)  
Tenant shall pay to Landlord an amount equal to the excess (if any) of
(i) the Operating Expense Payment as reflected on an Operating Expense
Statement that Landlord gives to Tenant, over (ii) the aggregate amount that
Tenant has theretofore paid to Landlord on account of the Operating Expense
Payment (if any) as contemplated by Section 2.3(B) hereof, within thirty
(30) days after the date that Landlord gives such Operating Expense Statement
to Tenant. Tenant shall have the right to credit against the Rental thereafter
coming due hereunder an amount equal to the excess (if any) of (i) the
aggregate amount that Tenant has theretofore paid to Landlord on account of the
Operating Expense Payment as contemplated by Section 2.3(B) hereof, over
(ii) the Operating Expense Payment as reflected on


12






such Operating
Expense Statement; provided, however, that if the Expiration Date occurs prior
to the date that such credit is exhausted, then Landlord shall pay to Tenant
the unused portion of such credit on or prior to the thirtieth (30th) day after
the Expiration Date (it being understood that Landlord’s obligation to make
such payment to Tenant shall survive the Expiration Date). If Landlord gives
Tenant an Operating Expense Statement, then, unless Landlord otherwise
specifies in such Operating Expense Statement, Landlord shall be deemed to have
given to Tenant a Prospective Operating Expense Statement for the Operating
Expense Year immediately succeeding the Operating Expense Year that is covered
by such Operating Expense Statement, that reflects an Operating Expense Payment
for such immediately succeeding Operating Expense Year in an amount equal to
the Operating Expense Payment for such Operating Expense Year that is covered
by such Operating Expense Statement.


                   (D)  
If the Rent Commencement Date occurs later than the first (1st) day of the
Operating Expense Year that immediately succeeds the Base Operating Expense
Year, then the Operating Expense Payment for the Operating Expense Year during
which the Rent Commencement Date occurs shall be an amount equal to the product
obtained by multiplying (X) the Operating Expense Payment that would have been
due hereunder if the Rent Commencement Date was the first (1st) day of such
Operating Expense Year, by (Y) a fraction, the numerator of which is the number
of days in the period beginning on the Rent Commencement Date and ending on the
last day of such Operating Expense Year, and the denominator of which is three
hundred sixty-five (365) (or three hundred sixty-six (366), if such Operating
Expense Year is a leap year). Notwithstanding anything to the contrary
contained herein, Tenant shall not be obligated to make an Operating Expense
Payment until the first anniversary of the Rent Commencement Date.


                   (E)  
If the Expiration Date is not the last day of an Operating Expense Year, then
the Operating Expense Payment for the Operating Expense Year during which the
Expiration Date occurs shall be an amount equal to the product obtained by
multiplying (X) the Operating Expense Payment that would have been due
hereunder if the Expiration Date was the last day of such Operating Expense
Year, by (Y) a fraction, the numerator of which is the number of days in the
period beginning on the first (1st) day of such calendar year and ending on the
Expiration Date, and the denominator of which is three hundred sixty-five (365)
(or three hundred sixty-six (366), if such Operating Expense Year is a leap
year).


                   (F)  
Landlord’s failure to give Tenant an Operating Expense Statement or a
Prospective Operating Expense Statement for any Operating Expense Year shall
not impair Landlord’s right to give Tenant an Operating Expense Statement or a
Prospective Operating Expense Statement for any other Operating Expense Year;
provided that, Tenant shall not be responsible for any Operating Expense
Payment for which an Operating Expense Statement is first provided to Tenant more
than two (2) years after the Fixed Expiration Date.


                   (G)  
Landlord shall have the right to give to Tenant an Operating Expense Statement
at any time after the last day of the Base Operating Expense Year that reflects
the Base Operating Expenses (regardless of whether such Operating Expense
Statement reflects a payment that is due from Tenant on account of the
Operating Expense Payment).


13






                   (H)  
If the Operating Expenses for the Base Operating Expense Year are redetermined
at any time after the date that Landlord gives an Operating Expense Statement
to Tenant for an Operating Expense Year, then Landlord shall give to Tenant a
revised Operating Expense Statement that recalculates the Operating Expense
Payment for an Operating Expense Year (using the Operating Expenses that
reflects such redetermination for the Base Operating Expense Year). If such
revised Operating Expense Statements indicates that Tenant has underpaid the
Operating Expense Payment for any Operating Expense Year, then Tenant shall pay
to Landlord an amount equal to the amount of such underpayment within thirty
(30) days after Landlord gives such revised Operating Expense Statement to
Tenant. If such revised Operating Expense Statement indicates that Tenant has overpaid
the Operating Expense Payment for any Operating Expense Year, then Tenant shall
have the right to credit against the Rental thereafter coming due hereunder an
amount equal to the amount of such overpayment; provided, however, that if the
Expiration Date occurs prior to the date that such credit is exhausted, then
Landlord shall pay to Tenant the unused portion of such credit on or prior to
the thirtieth (30th) day after the Expiration Date (it being understood that
(I) Landlord’s obligation to make such payment to Tenant shall survive the
Expiration Date, and (II) nothing contained in this Section 2.3(H) limits
Tenant’s rights under Section 2.4 hereof).


                   (I)  
If, during any particular Operating Expense Year, Landlord receives a reimbursement,
rebate or refund of an Operating Expense that Landlord incurred in a prior
Operating Expense Year that occurs after the Base Operating Expense Year, then
Landlord shall (x) adjust the Operating Expenses for such Operating Expense
Year retroactively, and (y) give promptly to Tenant a revised Operating Expense
Statement for such Operating Expense Year. If such revised Operating Expense
Statement indicates that Tenant overpaid the Operating Expense Payment for such
Operating Expense Year, then Tenant shall be entitled to credit the amount of
such overpayment of the Operating Expense Payment against the Rental thereafter
coming due hereunder, together with interest thereon calculated at the Base
Rate from the date that Tenant paid such overpayment to Landlord to the date
that Tenant uses such credit. If (x) Tenant is entitled to a credit against
Rental pursuant to this Section 2.3(I), and (y) the Expiration Date occurs
prior to the date that such credit is exhausted, then Landlord shall pay to
Tenant the unused portion of such credit on or prior to the thirtieth (30th)
day after the Expiration Date (and Landlord’s obligation to make such payment
shall survive the Expiration Date).


          2.4.  
Auditing of Operating Expense Statements.


                   (A)  
Any Operating Expense Statement, including the Operating Expense Statement for
the Base Operating Year that Landlord gives to Tenant shall be binding upon
Tenant conclusively unless, within one hundred eighty (180) days after the date
that Landlord gives Tenant such Operating Expense Statement, Tenant gives a
notice to Landlord objecting to such Operating Expense Statement. Tenant’s
right to give such notice (and conduct the audit contemplated by this Section
2.4(A)) shall survive the Expiration Date (to the extent that the Expiration
Date occurs earlier than the ninetieth (90th) day after the date that Landlord
gives the applicable Operating Expense Statement to Tenant). Tenant shall have
the right to audit the Base Operating Expenses as contemplated by this Section
2.4(A) only after receiving the first Operating Expense Statement that sets
forth the Base Operating Expenses (including, without limitation, an Operating
Expense Statement that Landlord gives to Tenant as described in
Section 2.3(G) hereof), and, accordingly, once Tenant’s right to so audit
Base Operating


14






Expenses
lapses, Tenant shall not have the right to thereafter audit Base Operating
Expenses, notwithstanding that Base Operating Expenses is included in the
calculation of the Operating Expense Payment for subsequent Operating Expense
Years). If Tenant gives such notice to Landlord, then, subject to the terms of
this Section 2.4(A), Tenant may examine Landlord’s books and records relating
to such Operating Expense Statement to determine the accuracy thereof, provided
that Tenant uses Tenant’s diligent efforts to consummate such examination
within a reasonable period after the date that Tenant gives such notice to
Landlord. Tenant may perform such examination on reasonable advance notice to Landlord,
at reasonable times, in Landlord’s office or, at Landlord’s option, at the
office of Landlord’s managing agent or accountants. Tenant shall have the right
to conduct such examination using Tenant’s own employees. Tenant, in performing
such examination, shall also have the right to be accompanied by a certified
public accountant from one of the “big-4” firms of certified public accountants
(or their successors), or, at Tenant’s option, a certified public accountant
from a reputable firm of at least one hundred fifty (150) certified public
accountants that is reasonably acceptable to Landlord; provided, however, that
Tenant shall not be entitled to be so accompanied by any certified public
accountant unless Tenant and such certified public accountant certify to
Landlord in a written instrument that is reasonably satisfactory to Landlord
that the compensation being paid by Tenant to such certified public accountant
is not conditioned or otherwise contingent (in whole or in part) on the extent
of any reduction in the Operating Expense Payment that derives from such
examination. Tenant shall not have the right to conduct any such audit unless
Tenant delivers to Landlord a statement, in a form reasonably designated by
Landlord, signed by Tenant and Tenant’s certified public accountant to which
such books and records are proposed to be disclosed, pursuant to which Tenant
and such certified public accountants agree to maintain the information
obtained from such examination in confidence (subject, however, to the
disclosure of the information that Tenant or Tenant’s certified public
accountant derive from such examination as required by law or to Tenant’s
counsel or other professional advisors that in either case agree to maintain
such information in confidence).


                   (B)  
If it is determined ultimately that (i) Landlord, in an Operating Expense
Statement, overstated the Operating Expense Payment, and (ii) Tenant overpaid
the Operating Expense Payment for a particular Operating Expense Year, then
Tenant shall be entitled to credit the amount of such overpayment of the
Operating Expense Payment against the Rental thereafter coming due hereunder.
If (x) Tenant is entitled to a credit against Rental pursuant to this
Section 2.4(B), and (y) the Expiration Date occurs prior to the date that
such credit is exhausted, then Landlord shall pay to Tenant the unused portion
of such credit on or prior to the thirtieth (30th) day after the Expiration
Date (and Landlord’s obligation to make such payment shall survive the Expiration
Date). Any dispute hereunder may be submitted by either party to an Expedited
Arbitration Proceeding.


                   (C)  
Nothing contained in this Section 2.4 shall constitute an extension of the date
by which Tenant is required to pay the Operating Expense Payment to Landlord
hereunder.


          2.5.  
Tax Definitions.


                   (A)  
The term “Assessed Valuation” shall mean the amount for which the Real
Property is assessed pursuant to applicable provisions of the New York City
Charter and of the 


15






Administrative
Code of The City of New York, in either case for the purpose of calculating all
or any portion of the Taxes.


                   (B)  
The term “Base Taxes” shall mean the Taxes for the Base Tax Year.


                   (C)  
The term “Base Tax Year” shall mean the fiscal year commencing on
July 1, 2008 and ending on June 30, 2009.


                   (D)  
The term “Excluded Amounts” shall mean (w) any taxes imposed on
Landlord’s income, (x) franchise, estate, inheritance, capital stock, excise,
excess profits, gift, payroll or stamp taxes, late charges and penalties
imposed on Landlord, (y) any transfer taxes or mortgage taxes that are imposed
on Landlord in connection with the conveyance of the Real Property or granting
or recording a mortgage lien thereon, and (z) any other similar taxes imposed
on Landlord.


                   (E)  
Subject to the terms of this 2.5(E), the term “Taxes” shall mean the
aggregate amount of real estate taxes and any general or special assessments
that in each case are imposed upon the Real Property, including, without
limitation, (i) any fee, tax or charge imposed by any Governmental Authority
for any vaults or vault spaces that in either case are appurtenant to the Real
Property (except that Taxes shall not include such fee, tax or charge to the
extent that Landlord leases or licenses such vaults or vault spaces to a third
party), and (ii) any taxes or assessments levied, in whole or in part, for
public benefits to the Real Property (including, without limitation, any business
improvement district taxes and assessments). Taxes shall be calculated without
taking into account (a) any discount that Landlord receives by virtue of any
early payment of Taxes, (b) any penalties or interest that the applicable
Governmental Authority imposes for the late payment of such real estate taxes
or assessments, (c) any Excluded Amounts, (d) any real estate taxes that are
separately assessed against a sign or billboard that is affixed to the Building
or otherwise located on the Real Property, and (e) any exemption or deferral of
Taxes to which the Real Property is entitled under any program that a
Governmental Authority adopts to promote the improvement or redevelopment of
real property. If, because of any change in the taxation of real estate, any
other tax or assessment, however denominated (including, without limitation,
any franchise, income, profits, sales, use, occupancy, gross receipts or rental
tax), is imposed upon the Real Property, the owner thereof, or the occupancy,
rents or income derived therefrom, in substitution for any of the Taxes (to the
extent that such substitution is evidenced by either the terms of the
legislation imposing such tax or assessment, the legislative history thereof,
or other documents or evidence that reasonably demonstrate that the applicable
Governmental Authority intended for such tax or assessment to constitute a
substitution for any Taxes), then such other tax or assessment to the extent
substituted shall be included in Taxes for purposes hereof (assuming that the
Real Property is Landlord’s sole asset and the income therefrom is Landlord’s
sole income). If any such real estate taxes or assessments are payable in
installments without interest, premium or penalty, then Landlord shall include
in Taxes for any particular Tax Year only the installment of such real estate
taxes or assessments that the applicable Governmental Authority requires
Landlord to pay (and that Landlord actually pays) during such Tax Year.


16






                   (F)  
The term “Tax Payment” shall mean, with respect to any Tax Year, the
product obtained by multiplying (i) the excess of (A) Taxes for such Tax Year,
over (B) the Base Taxes, by (ii) Tenant’s Tax Share.


                   (G)  
The term “Tax Statement” shall mean a statement that shows the Tax
Payment for a particular Tax Year.


                   (H)  
The term “Tax Year” shall mean the Base Tax Year and each subsequent
period from July 1 through June 30 (or such other period as hereinafter may be
duly adopted by the Governmental Authority then imposing Taxes as its fiscal
year for real estate tax purposes).


                   (I)  
The term “Tenant’s Tax Share” shall mean, subject to the terms hereof,
three and one thousand four hundred sixty ten-thousandths percent (3.1460%).


          2.6.  
Tax Payment.


                   (A)  
Subject to the provisions of this Section 2.6, Tenant shall pay to Landlord, as
additional rent, the Tax Payment.


                   (B)  
Landlord shall have the right to give a statement to Tenant from time to time
pursuant to which Landlord sets forth Landlord’s good faith estimate of the Tax
Payment for a particular Tax Year (any such statement that Landlord gives to
Tenant being referred to herein as a “Prospective Tax Statement”;
one-twelfth (1/12th) of the Tax Payment shown on a Prospective Tax Statement
being referred to herein as the “Monthly Tax Payment Amount”). If
Landlord gives (or is deemed to have given) to Tenant a Prospective Tax
Statement, then, subject to the terms of this Section 2.6(B), Tenant shall pay
to Landlord, as additional rent, on account of the Tax Payment due hereunder
for such Tax Year, the Monthly Tax Payment Amount, on the first (1st) day of
each subsequent calendar month until Tenant has paid to Landlord, pursuant to
this Section 2.6(B), the full amount of the Tax Payment as so estimated in the
Prospective Tax Statement. Tenant shall pay the Monthly Tax Payment Amount to
Landlord in the same manner as the monthly installments of the Fixed Rent
hereunder. Landlord shall not have the right to require Tenant to commence
Tenant’s payment of the Monthly Tax Payment Amount for a particular Tax Year
earlier than the one hundred fiftieth (150th) day of the immediately preceding
Tax Year. If Landlord gives (or is deemed to have given) to Tenant a
Prospective Tax Statement after the one hundred fiftieth (150th) day of the
immediately preceding Tax Year, then Tenant shall also pay to Landlord, within
thirty (30) days after the date that Landlord gives the Prospective Tax
Statement to Tenant, an amount equal to the excess of (I) the product obtained
by multiplying (x) the Monthly Tax Payment Amount, by (y) the number of
calendar months that have theretofore elapsed since the one hundred fiftieth
(150th) day of the immediately preceding Tax Year, over (II) the aggregate
amount theretofore paid by Tenant to Landlord on account of the Tax Payment for
the Tax Year to which the Prospective Tax Statement relates. Landlord shall not
have the right to use this Section 2.6(B) to collect more than fifty percent
(50%) of the Tax Payment shown on a particular Prospective Tax Statement
earlier than the thirtieth (30th) day before the date that the first
installment of Taxes is due to the applicable Governmental Authority for a
particular Tax Year. If Landlord gives (or is deemed to have given) to Tenant a
Prospective Tax Statement for a particular Tax Year, then Landlord shall also
provide to Tenant, within one hundred twenty (120) days after the last day of
such Tax Year, a Tax Statement for such Tax Year.


17






                   (C)  
Tenant shall pay to Landlord an amount equal to the excess (if any) of
(i) the Tax Payment as reflected on a Tax Statement that Landlord gives to
Tenant, over (ii) the aggregate amount that Tenant has theretofore paid to
Landlord on account of the Tax Payment (if any) as contemplated by Section
2.6(B) hereof, within thirty (30) days after the date that Landlord gives such
Tax Statement to Tenant. Tenant shall have the right to credit against the
Rental thereafter coming due hereunder an amount equal to the excess (if any)
of (i) the aggregate amount that Tenant has theretofore paid to Landlord on
account of the Tax Payment as contemplated by Section 2.6(B) hereof, over (ii)
the Tax Payment as reflected on such Tax Statement; provided, however, that if
the Expiration Date occurs prior to the date that such credit is exhausted,
then Landlord shall pay to Tenant the unused portion of such credit on or prior
to the thirtieth (30th) day after the Expiration Date (it being understood that
Landlord’s obligation to make such payment to Tenant shall survive the
Expiration Date). If Landlord gives Tenant a Tax Statement, then, unless
Landlord otherwise specifies in such Tax Statement, Landlord shall be deemed to
have given to Tenant a Prospective Tax Statement, for the Tax Year immediately
succeeding the Tax Year that is covered by such Tax Statement, that reflects a
Tax Payment for such immediately succeeding Tax Year in an amount equal to the
Tax Payment for such Tax Year that is covered by such Tax Statement.


                   (D)  
If the Rent Commencement Date occurs later than the first (1st) day of the Tax
Year that immediately succeeds the Base Tax Year, then the Tax Payment for the
Tax Year during which the Rent Commencement Date occurs shall be an amount
equal to the product obtained by multiplying (X) the Tax Payment that would
have been due hereunder if the Rent Commencement Date was the first (1st) day
of such Tax Year, by (Y) a fraction, the numerator of which is the number of
days in the period beginning on the Rent Commencement Date and ending on the
last day of such Tax Year, and the denominator of which is three hundred
sixty-five (365) (or three hundred sixty-six (366), if such Tax Year includes
the month of February in a leap year). Notwithstanding anything to the contrary
contained herein, Tenant shall not be obligated to make a Tax Payment until the
first anniversary of the Rent Commencement Date.


                   (E)  
If the Expiration Date is not the last day of a Tax Year, then the Tax Payment
for the Tax Year during which the Expiration Date occurs shall be an amount
equal to the product obtained by multiplying (X) the Tax Payment that would
have been due hereunder if the Expiration Date was the last day of such Tax
Year, by (Y) a fraction, the numerator of which is the number of days in the
period beginning on the first (1st) day of such Tax Year and ending on the
Expiration Date, and the denominator of which is three hundred sixty-five (365)
(or three hundred sixty-six (366), if such Tax Year includes the month of February
in a leap year).


                   (F)  
The Tax Payment shall be computed initially on the basis of the Assessed
Valuation in effect on the date that Landlord gives the applicable Tax
Statement to Tenant (as the Taxes may have been settled or finally adjudicated
prior to such time) regardless of any then pending application, proceeding or
appeal to reduce the Assessed Valuation, but shall be subject to subsequent
adjustment as provided in Section 2.7 hereof.


                   (G)  
Tenant shall pay the Tax Payment regardless of whether Tenant is exempt, in
whole or part, from the payment of any Taxes by reason of Tenant’s diplomatic
status or otherwise.


18






                   (H)  
If Taxes are required to be paid on any date or dates other than as presently
required by the Governmental Authority imposing Taxes, then the due date of the
installments of the Tax Payment shall be adjusted so that each such installment
is due from Tenant to Landlord thirty (30) days prior to the date that the
corresponding payment is due to the Governmental Authority (with the
understanding, however, that Tenant shall not be required to pay a Tax Payment
to Landlord earlier than the thirtieth (30th) day after the date that Landlord
gives the applicable Tax Statement to Tenant).


                   (I)  
Landlord’s failure to give to Tenant a Tax Statement for any Tax Year shall not
impair Landlord’s right to give to Tenant a Tax Statement for any other Tax
Year. Notwithstanding anything contained in this Section 2.6 to the contrary,
Tenant shall not be responsible for any Taxes for which a Tax Statement is
first delivered to Tenant more than two (2) years after the Fixed
Expiration Date.


                   (J)  
Landlord shall give to Tenant a copy of the relevant tax bill for each Tax Year
(to the extent that the applicable Governmental Authority has issued such tax
bill to Landlord) promptly after Tenant’s request therefor from time to time.


          2.7.  
Tax Reduction Proceedings.


                   (A)  
Landlord (and not Tenant) shall be eligible to institute proceedings to reduce
the Assessed Valuation.


                   (B)  
If, after a Tax Statement has been sent to Tenant, an Assessed Valuation that
Landlord used to compute the Tax Payment for a Tax Year is reduced, and, as a
result thereof, a refund of Taxes is actually received by, or credited to,
Landlord, then Landlord, promptly after Landlord’s receipt of such refund (or
such refund is credited to Landlord, as the case may be), shall send to Tenant
a Tax Statement adjusting the Taxes for such Tax Year and setting forth, based
on such adjustment, the portion of such refund for which Tenant is entitled a
credit as set forth in this Section 2.7(B). Landlord shall have the right to
deduct from such refund the Out-of-Pocket Costs that Landlord incurs in obtaining
such refund (so that Landlord, in calculating the adjusted Tax Payment, takes
into account only the net proceeds of such refund that Landlord receives (or
that is credited to Landlord)). Landlord shall credit the portion of such
refund to which Tenant is entitled against the Rental thereafter coming due
hereunder. If (x) Tenant is entitled to a credit against Rental pursuant
to this Section 2.7(B), and (y) the Expiration Date occurs prior to the date
that such credit is exhausted, then Landlord shall pay to Tenant the unused
portion of such credit on or prior to the thirtieth (30th) day after the
Expiration Date (and Landlord’s obligation to make such payment shall survive
the Expiration Date). If (i) Landlord receives such refund (or a credit therefor)
after the Expiration Date, and (ii) Tenant is entitled to a portion thereof as
contemplated by this Section 2.7(B), then Landlord shall pay to Tenant an
amount equal to Tenant’s share of such refund (or such credit) within thirty
(30) days after the date that such refund is paid to Landlord (or such refund
is credited to Landlord, as the case may be) (and Landlord’s obligation to make
such payment shall survive the Expiration Date).



19






                   (C)  



                            (1)  
If the Assessed Valuation for the Base Tax Year is reduced at any time after
the date that Landlord gives a Tax Statement to Tenant for a Tax Year, then
Landlord shall have the right to give to Tenant a revised Tax Statement that
recalculates the Tax Payment for a Tax Year (using the Taxes that reflect such
reduction in such Assessed Valuation). Tenant shall pay to Landlord an amount
equal to the excess of (i) the Tax Payment as reflected on such revised Tax
Statement, over (ii) the Tax Payment as reflected on the prior Tax Statement,
within thirty (30) days after Landlord gives such revised Tax Statement to
Tenant.


                            (2)  
If the Assessed Valuation for the Base Tax Year is increased at any time after
the date that Landlord gives a Tax Statement to Tenant for a Tax Year, then
Landlord shall give to Tenant a revised Tax Statement that recalculates the Tax
Payment for a Tax Year (using the Taxes that reflect such increase in such
Assessed Valuation). Landlord, at Tenant’s option, shall either credit against
the Rental thereafter coming due hereunder or reimburse an amount equal to
Tenant’s overpayment of the Tax Payment (calculated as aforesaid using such
increased Assessed Valuation). If (x) Tenant is entitled to a credit against
Rental pursuant to this Section 2.7(C)(2), and (y) the Expiration Date
occurs prior to the date that such credit is exhausted, then Landlord shall pay
to Tenant the unused portion of such credit on or prior to the thirtieth (30th)
day after the Expiration Date (and Landlord’s obligation to make such payment
shall survive the Expiration Date). If (i) such increase in such Assessed
Valuation occurs after the Expiration Date, and (ii) Tenant is entitled to a
credit against Rental as contemplated by this Section 2.7(C)(2), then
Landlord shall pay to Tenant an amount equal to such credit within
thirty (30) days after the date that such increase in such Assessed
Valuation occurs (and Landlord’s obligation to make such payment shall survive
the Expiration Date).


          2.8.  
Building Additions.


                   (A)  
If Landlord makes improvements to the Building to expand the Rentable Area
thereof, then, with respect to the period from and after the date that Taxes
are assessed on the Building to reflect such improvements, (I) Tenant’s Tax
Share shall be recalculated as of the date that Taxes are so assessed as the
quotient (expressed as a percentage) that is obtained by dividing (x) the
number of square feet of Rentable Area in the Premises, by (y) the number of
square feet of Rentable Area in the Building (after taking into account such
expansion of the Rentable Area thereof) and (II) Base Taxes shall be an amount
equal to the product obtained by multiplying (x) Base Taxes immediately prior
to the date that Taxes are assessed on the Building to reflect such
improvements, by (y) a fraction, the numerator of which is the Taxes that are
assessed against the Building (after taking such improvements into account),
and the denominator of which is the Taxes that are assessed against the
Building (before taking such improvements into account).


                   (B)  
If Landlord makes improvements to the Building to expand the Rentable Area
thereof, then, with respect to the period from and after the date that such
improvements are Substantially Completed, (I) Tenant’s Operating Expense Share
shall be recalculated as of the date that such improvements are Substantially
Completed as the quotient (expressed as a percentage) that is obtained by
dividing (x) the number of square feet of Rentable Area in the Premises, by (y)
the number of square feet of Rentable Area in the Building (after taking such
expansion into account) and (II) Base Operating Expenses shall be deemed to be
an amount equal to the product obtained by multiplying (x) Base Operating
Expenses prior to the date that


20






such
improvements are Substantially Completed, by (y) a fraction, the numerator of
which is the Operating Expenses for the Building (after such improvements are
Substantially Completed), and the denominator of which is the Operating
Expenses for the Building (prior to such improvements being Substantially
Completed). 


ARTICLE 3 

USE 


          3.1.  
Permitted Use. 


                   (A)  
Subject to Section 3.2 hereof, Tenant shall use the Premises, and Tenant shall
cause any other Person claiming by, through or under Tenant to use the
Premises, in either case only as general, administrative and executive offices
and for uses reasonably incidental thereto. 


                   (B)  
Landlord acknowledges that the following items qualify as uses that are
incidental to Tenant’s use of the Premises as general, administrative and
executive offices (provided that Tenant’s use of the Premises for such purposes
supports Tenant’s primary use of the Premises as general, administrative and
executive offices): 


                            (1)  
pantries and vending machines; 


                            (2)  
conference rooms and board rooms; 


                            (3)  
data processing centers; 


                            (4)  
duplicating and photographic reproduction facilities; 


                            (5)  
mailroom and messenger facilities; and 


                            (6)  
secured storage facilities for Tenant’s Property, including, without
limitation, equipment, records and files. 


Nothing
contained in this Section 3.1(B) impairs Tenant’s obligation to perform
Alterations in accordance with the provisions of Article 7 hereof. Landlord and
Tenant acknowledge that the parties’ description of particular incidental uses
in this Section 3.1(B) does not impair Tenant’s right to use the Premises for
other uses that are otherwise reasonably incidental to Tenant’s use of the
Premises as general, administrative and executive offices as provided in this
Section 3.1. 


          3.2.  
Limitations. 


          Tenant
shall not use the Premises or any part thereof, or permit the Premises or any
part thereof to be used: 


                    (1)  
for the conduct of “off-the-street” retail trade; 


                    (2)  
by any Governmental Authority or any other Person having sovereign or
diplomatic immunity (it being understood, however, that this clause (2) shall
not 


21






prohibit a
Permitted Party from permitting representatives of a Governmental Authority to
enter a portion of the Premises temporarily to perform audits or other similar
regulatory review of such Permitted Party’s business); 


                    (3)  
for the sale, storage, preparation, service or consumption of food or beverages
in any manner whatsoever (except that a Permitted Party has the right to store,
prepare, and serve food and beverages, by any reasonable means (including,
without limitation, by means of customary vending machines), for consumption by
such Permitted Party’s personnel and business guests in the Premises); 


                    (4)  
as an employment agency, executive search firm or similar enterprise, labor
union, school, or vocational training center (except for the training of
employees of a Permitted Party who are employed at the Premises); or 


                    (5)  
for gaming or gambling. 


          3.3.  
Rules. 


          Subject
to the terms of this Section 3.3, Tenant shall comply with, and Tenant shall
cause any other Person claiming by, through or under Tenant to comply with, the
rules set forth in Exhibit “3.3” attached hereto and made a part hereof, and
other reasonable rules that Landlord hereafter adopts from time to time on
reasonable advance notice to Tenant, including, without limitation, rules that
govern the performance of Alterations (such rules that are attached hereto, and
such other rules, being collectively referred to herein as the “Rules”).
Landlord shall not have any obligation to enforce the Rules or the terms of any
other lease against any other tenant, and Landlord shall not be liable to
Tenant for violation thereof by any other tenant. Landlord shall not enforce
any Rule against Tenant (i) that Landlord is not then enforcing against all
other office tenants in the Building, or (ii) in a manner that differs in any
material respect from the manner in which Landlord is enforcing the applicable
Rule against other office tenants in the Building. If a conflict or
inconsistency exists between the Rules and the provisions of the remaining
portion of this Lease, then the provisions of the remaining portion of this
Lease shall control. 


          3.4.  
Promotional Displays. 


          Tenant
shall not have the right to use any window in the Premises for any sign or
other display that is designed principally for advertising or promotion. 


          3.5.  
Core Toilets. 


          Tenant
shall have the right to use the toilets that are located in the core area of
the Building on any floor of the Building where the Premises is located and
where the Premises does not include the entire Rentable Area of such floor (in
common with the other occupants of such floor of the Building). 


22






          3.6.  
Wireless Internet Service. 


          Subject
to the terms of this Section 3.6, Tenant shall have the right to install
wireless Internet service in the Premises. Tenant shall not solicit other
occupants of the Building to use wireless Internet service that emanates from
the Premises. Tenant shall not permit the signals of Tenant’s wireless Internet
service (if any) to emanate beyond the Premises in a manner that interferes in
any material respect with any Building Systems or with any other occupant’s use
of other portions of the Building. Nothing contained in this Section 3.6
diminishes Tenant’s obligation to perform Alterations in accordance with the
provisions of Article 7 hereof. 


          3.7.  
Telecommunications. 


          Landlord
shall permit Tenant and Tenant shall have the right to gain access to the
facilities of the telecommunications provider that services the Building from
time to time through the telecommunication closet on the floor of the Building
where the Premises is located (it being understood that Landlord’s granting
such access to Tenant shall not constitute Landlord’s agreement to provide
telecommunications services to Tenant or to otherwise have responsibility for
the operation or security thereof). 


ARTICLE 4 

SERVICES


          4.1.  
Certain Definitions. 


                   (A)  
The term “Building Hours” shall mean the period from 8:00 am to 6:00 pm
on Business Days. 


                   (B)  
The term “Building Systems” shall mean the service systems of the
Building, including, without limitation, the mechanical, gas, steam,
electrical, sanitary, HVAC, elevator, plumbing, and life-safety systems of the
Building (it being understood that the Building Systems shall not include any
systems that Tenant installs in the Premises as an Alteration). 


                     (C)  
    The term “HVAC” shall mean heat, ventilation and air-conditioning.
    


                   (D)  
The term “HVAC Systems” shall mean the Building Systems that provide
HVAC. 


                   (E)  
The term “Overtime Periods” shall mean any times that do not constitute
Building Hours. 


          4.2.  
Elevator Service. 


                   (A)  
Subject to the terms of Section 9.6(C) hereof, Article 10 hereof and this
Section 4.2, Landlord shall provide Tenant with passenger elevator service for
the Premises using the Building Systems therefor. Tenant’s use of the passenger
elevators shall be in common with other occupants of the Building. Tenant shall
have the use of the passenger elevators that service the Premises at all times,
except that Landlord, during Overtime Periods, shall have the right to limit
reasonably the passenger elevators that Landlord makes available to service the
Premises 


23






(provided that
there is available to Tenant on a non-exclusive basis at all times at least one
(1) passenger elevator that services the Premises). Tenant shall use the
passenger elevators only for purposes of transporting persons to and from the
Premises. 


                   (B)  
Subject to the terms of Section 9.6(C) hereof, Article 10 hereof and this
Section 4.2, Landlord shall provide Tenant with freight elevator service for
the Premises using the Building Systems therefor. Tenant’s use of the freight
elevator shall be in common with other occupants of the Building. Landlord
shall have the right to prescribe reasonable rules from time to time regarding
the rights of the occupants in the Building (including, without limitation,
Tenant) to use the freight elevator (governing, for example, the responsibility
of occupants of the Building to reserve freight elevator use in advance, particularly
for Overtime Periods). Tenant shall use the freight elevator in accordance with
applicable Requirements. If Tenant uses the freight elevator during Overtime
Periods, then Tenant shall pay to Landlord, as additional rent, an amount
calculated at the reasonable hourly rate that Landlord charges from time to
time therefor, within thirty (30) days after Landlord’s giving to Tenant an
invoice therefor; provided, however, that Tenant shall not be required to pay
for Tenant’s use of the freight elevator for the first forty (40) hours that
Tenant uses same during Overtime Periods in connection with Tenant’s initial
move into the Premises. Landlord’s charges therefor as of the date hereof are
attached hereto as Exhibit “4.2”. Landlord shall have the right to charge
Tenant for a particular minimum number of hours of usage of the freight
elevator during Overtime Periods to the extent that the applicable union
contract or service contract requires Landlord to engage the necessary
personnel (including, without limitation, a freight elevator operator and
loading dock attendant) for such minimum number of overtime hours. If (x)
Tenant requests Landlord to provide Tenant with freight elevator service during
Overtime Periods as provided in this Section 4.2(B), and (y) another tenant in
the Building also uses, or other tenants in the Building also use, the
applicable freight elevator during such Overtime Period, then Landlord shall
allocate equitably the charges described in this Section 4.2(B) among Tenant
and such other tenant or tenants. 


          4.3.  
Heat, Ventilation and Air-Conditioning. 


                   (A)  
Subject to the terms of Article 10 hereof and this Section 4.3, Landlord shall
operate the HVAC System to provide HVAC at the perimeter of the Premises in
accordance with other comparable office buildings not owned by Affiliates of
Landlord in the vicinity of the Building. Landlord shall not be required to
repair or maintain during the Term any system that is located in the Premises
on the Commencement Date that provides supplemental HVAC for the Premises (in
addition to the HVAC provided by the HVAC System). Tenant shall keep closed the
curtains, blinds, shades or screens that Tenant installs on the windows of the
Premises in accordance with the terms hereof to the extent reasonably necessary
to reduce the interference of direct sunlight with the operation of the HVAC
System. 


                   (B)  
Landlord shall operate the HVAC System for Tenant’s benefit during Overtime
Periods if Tenant so advises Landlord not later than 2:00 pm on the Business
Day immediately preceding the day on which Tenant requires HVAC during Overtime
Periods. If Landlord so provides HVAC to the Premises during Overtime Periods
(as so requested by Tenant), then Tenant shall pay to Landlord, as additional
rent, an amount calculated at the reasonable hourly rates that Landlord charges
from time to time therefor, within thirty (30) days after Landlord gives to
Tenant an invoice therefor. Landlord’s charges therefor as of the date 


24






hereof are
attached hereto as Exhibit “4.2”. If (x) Landlord so provides HVAC to the
Premises during an Overtime Period (as so requested by Tenant), and (y) another
tenant requests or other tenants request HVAC during the same Overtime Period,
then Landlord shall reduce equitably Landlord’s aforesaid charge to Tenant for
HVAC during such Overtime Period to reflect such other tenant’s use, or such
other tenants’ use, of HVAC during such Overtime Period. Landlord shall have
the right to charge Tenant for a particular minimum number of hours of usage of
the HVAC System during Overtime Periods to the extent that the applicable union
contract or service contract requires Landlord to engage the necessary
personnel (including, without limitation, a building engineer) for such minimum
number of overtime hours. 


          4.4.  
Cleaning. 


                   (A)  
Subject to the terms of Article 10 hereof and this Section 4.4, Landlord shall
cause the Premises to be cleaned substantially in accordance with the standards
set forth in Exhibit “4.4” attached hereto and made a part hereof. Landlord
shall not be required to clean the portions of the Premises (if any) (x) that
Tenant uses for the storage, preparation, service or consumption of food or
beverages, (y) in which Tenant is performing Alterations, or (z) in which the
interior installation has been demolished in all material respects. Tenant
shall pay to Landlord, as additional rent, the reasonable costs incurred by
Landlord in removing from the Building any of Tenant’s refuse and rubbish to
the extent exceeding the amount of refuse and rubbish usually generated by a
tenant that uses the Premises for ordinary office purposes. Tenant shall make
such payments to Landlord not later than the thirtieth (30th) day after the
date that Landlord gives to Tenant an invoice therefor from time to time. 


                   (B)  
Tenant, at Tenant’s expense, shall exterminate the portions of the Premises
that Tenant uses for the storage, preparation, service or consumption of food
against infestation by insects and vermin regularly and, in addition, whenever
there is evidence of infestation. Tenant shall engage Persons to perform such
exterminating that are approved by Landlord, which approval Landlord shall not
unreasonably withhold, condition or delay. Tenant shall cause such Persons to
perform such exterminating in a manner that is reasonably satisfactory to
Landlord. Landlord hereby advises Tenant that, to the best of Landlord’s
knowledge, on the date hereof, the Premises is not infested with insects or
vermin. 


                   (C)  
Tenant, at Tenant’s expense, shall clean daily all portions of the Premises
used for the storage, preparation, service or consumption of food or beverages.
Tenant shall not have the right to perform any cleaning services (or any other
similar facilities management services such as, for example, matron services or
handyman services) in the Premises using any Person other than the cleaning
contractor that Landlord has engaged from time to time to perform cleaning
services in the Building for Landlord; provided, however, that (x) Landlord
shall not have the right to require Tenant to use such cleaning contractor
unless the rates that such cleaning contractor agrees to charge Tenant for such
additional cleaning services are commercially reasonable, and (y) subject to
Section 4.8 hereof, Tenant shall have the right to use Tenant’s own employees
for such additional cleaning services. If such cleaning contractor does not
agree to charge Tenant for such additional cleaning services (or such similar
services) at commercially reasonable rates, then Tenant may employ to perform
such additional cleaning services (or such similar services) another cleaning
contractor that Landlord approves, which approval Landlord shall not
unreasonably withhold, condition or delay. 


25






                   (D)  
Tenant shall comply with any refuse disposal program (including, without
limitation, any waste recycling program) that Landlord imposes reasonably after
having given Tenant reasonable advance notice of the effectiveness thereof or
that is required by Requirements. 


                   (E)  
Tenant shall not clean any window in the Premises, nor require, permit, suffer
or allow any window in the Premises to be cleaned, in either case from the
outside in violation of Section 202 of the New York Labor Law, any other
Requirement, or the rules of the Board of Standards and Appeals, or of any
other board or body having or asserting jurisdiction. 


          4.5.  
Water. 


          Landlord
shall provide, through the Building Systems, cold water at one (1) connection
point at the perimeter of the Premises only for ordinary drinking, pantry,
cleaning and lavatory purposes. Subject to Landlord’s obligations under Section
6.2 hereof, Landlord shall not be required to make any installations in the
Premises to distribute water within the Premises. Landlord
shall not be required to repair or maintain during the Term any installations
that exist in the Premises on the Commencement Date that distribute water in
the Premises. Nothing contained in this Section 4.5 limits the provisions of
Article 10 hereof. 


          4.6.  
Directory. 


          Landlord
shall make available for Tenant’s use, from and after the Commencement Date,
Tenant’s Operating Expense Share of listings on the lobby directory for the
Building for purposes of listing the names of the personnel of Permitted
Parties. Landlord shall modify such directory to add or delete names of the
personnel of Permitted Parties promptly after Tenant’s request from time to
time, except that Tenant shall not have the right to make any such request more
frequently than once in any particular period of ninety (90) days. Tenant shall
pay to Landlord, as additional rent, a reasonable charge for any such
modifications requested by Tenant, within thirty (30) days after the date that
Landlord gives to Tenant an invoice therefor (it being understood that Tenant
shall not be required to pay such charge for Tenant’s initial listings on such
directory). If Landlord replaces such directory with a computerized directory
in the lobby of the Building, then Tenant shall be entitled to use such
directory for purposes of listing the names of the personnel of Permitted
Parties as provided in this Section 4.6. 


          4.7.  
No Other Services. 


          Landlord
shall not be required to provide any services to support Tenant’s use and
occupancy of the Premises, except to the extent expressly set forth herein. 


          4.8.  
Labor Harmony. 


          If
(i) Tenant employs, or permits the employment of, any contractor, mechanic or
laborer in the Premises, whether in connection with any Alteration or
otherwise, (ii) such employment interferes or causes any conflict with other
contractors, mechanics or laborers engaged in the maintenance, repair, management
or operation of the Building or any adjacent property owned or managed by
Landlord, and (iii) Landlord gives Tenant notice thereof (which notice may be
given 


26






verbally to
the person employed by Tenant with whom Landlord’s representative ordinarily
discusses matters relating to the Premises), then Tenant shall cause all
contractors, mechanics or laborers causing such interference or conflict to
leave the Building promptly and shall take such other action as may be
reasonably necessary to resolve such conflict. 


ARTICLE 5 

ELECTRICITY


          5.1.  
Capacity. 


          Tenant,
during the Term, shall use electricity in the Premises only in such manner that
complies with the requirements of the Utility Company. Tenant shall not permit
the demand for electricity in the Premises to exceed 6.6 watts (demand load),
exclusive of the electricity for the HVAC Systems per square foot of Usable
Area of the Premises which is the electrical capacity that serves the Premises
on the Commencement Date and shall serve the Premises during the Term (such
electrical capacity being referred to herein as the “Base Electrical
Capacity”). 


          5.2.  
Electricity for the Building. 


          Landlord
shall arrange with a Utility Company to provide electricity for the Building.
Landlord shall not be liable to Tenant for any failure or defect in the supply
or character of electricity furnished to the Building, except to the extent
that such failure or defect results from Landlord’s negligence or willful
misconduct. Subject to Landlord’s obligation under Section 6.2 hereof, Landlord
shall not be required to make any installations in the Premises to distribute
electricity within the Premises. Landlord shall not be required to maintain or
repair during the Term any installations that exist in the Premises on the
Commencement Date that distribute electricity within the Premises. 


          5.3.  
Submetering. 


                   (A)  
Subject to the provisions of this Section 5.3, Landlord shall measure Tenant’s
demand for and consumption of electricity in the Premises using a submeter that
is, or submeters that are, installed and maintained by Landlord. Landlord shall
pay the cost of installing such submeter or submeters. If, at any time during
the Term, Tenant performs Alterations that require modifications to the
aforesaid submeter or submeters that Landlord installs, or that require a
supplemental submeter or supplemental submeters, then Tenant shall perform such
modification, or the installation of such supplemental submeter or submeters,
at Tenant’s cost, as part of the applicable Alteration. 


                   (B)  
Tenant shall pay to Landlord, as additional rent, an amount (the “Electricity
Additional Rent”) equal to one hundred five percent (105%) of the sum of: 


                            (1)  
the product obtained by multiplying (x) the Average Cost per Peak Demand
Kilowatt, by (y) the number of kilowatts that constituted the peak demand for
electricity in the Premises for the applicable billing period, as registered on
the submeter or submeters for the Premises, and 


27






                            (2)  
the product obtained by multiplying (x) the Average Cost per Kilowatt Hour, by
(y) the number of kilowatt hours of electricity used in the Premises for the
applicable billing period, as registered on the submeter or submeters for the
Premises. 


                   (C)  
Subject to Section 5.3(D) hereof, Landlord shall give Tenant an invoice for the
Electricity Additional Rent from time to time (but no less frequently than
quarter annually). Tenant shall pay the Electricity Additional Rent to Landlord
on or prior to the thirtieth (30th) day after the date that Landlord gives to
Tenant each such invoice. Tenant shall not have the right to object to
Landlord’s calculation of the Electricity Additional Rent unless Tenant gives
Landlord notice of any such objection on or prior to the ninetieth (90th) day
after the date that Landlord gives Tenant the applicable invoice for the
Electricity Additional Rent. If Tenant gives Landlord a notice objecting to
Landlord’s calculation of the Electricity Additional Rent, as aforesaid, then
Tenant shall have the right to review Landlord’s submeter readings and
Landlord’s calculation of the Electricity Additional Rent, at Landlord’s
offices or, at Landlord’s option, at the offices of Landlord’s managing agent,
in either case at reasonable times and on reasonable advance notice to
Landlord. Either party shall have the right to submit a dispute regarding the
Electricity Additional Rent to an Expedited Arbitration Proceeding. 


                   (D)  
Landlord shall have the right to give a statement to Tenant from time to time
pursuant to which Landlord sets forth Landlord’s good faith estimate of the
Electricity Additional Rent for a particular calendar year (any such statement
that Landlord gives to Tenant being referred to herein as a “Prospective
Electricity Statement”; one-twelfth (1/12th) of the Electricity Additional
Rent shown on a Prospective Electricity Statement being referred to herein as
the “Monthly Electricity Payment Amount”). If Landlord gives to Tenant a
Prospective Electricity Statement (or Landlord is deemed to have given to
Tenant a Prospective Electricity Statement pursuant to Section 5.3(E) hereof),
then Tenant shall pay to Landlord, as additional rent, on account of the
Electricity Additional Rent due hereunder for such calendar year, the Monthly
Electricity Payment Amount, on the first (1st) day of each subsequent calendar
month for the remainder of such calendar year, in the same manner as the
monthly installments of the Fixed Rent hereunder (it being understood that
Tenant shall not be required to commence such payments of the Monthly
Electricity Payment Amount (x) before the first (1st) day of the calendar year
to which relates the applicable Monthly Electricity Payment Amount, or (y)
earlier than the thirtieth (30th) day after the date that Landlord gives the
Prospective Electricity Statement to Tenant). If Landlord gives (or is deemed
to have given) to Tenant a Prospective Electricity Statement after the first (1st)
day of the applicable calendar year, then Tenant shall also pay to Landlord,
within thirty (30) days after the date that Landlord gives the Prospective
Electricity Statement to Tenant, an amount equal to the excess of (I) the
product obtained by multiplying (x) the Monthly Electricity Payment Amount, by
(y) the number of calendar months that have theretofore elapsed during such
calendar year, over (II) the aggregate amount theretofore paid by Tenant to
Landlord on account of the Electricity Additional Rent for such calendar year.
If Landlord gives (or is deemed to have given) to Tenant a Prospective
Electricity Statement for a particular calendar year, then Landlord shall also
provide to Tenant, within one hundred eighty (180) days after the last day of such
calendar year, an invoice for the Electricity Additional Rent for such calendar
year based on an actual reading of the submeter or submeters (such invoice that
is based on an actual reading of the submeter or submeters being referred to
herein as an “Actual Reading Statement”). 


28






                   (E)  
Tenant shall pay to Landlord an amount equal to the excess (if any) of (i) the
Electricity Additional Rent as reflected on the Actual Reading Statement that
Landlord gives to Tenant, over (ii) the aggregate amount that Tenant has
theretofore paid to Landlord on account of the Electricity Additional Rent (if
any), within thirty (30) days after the date that Landlord gives such Actual
Reading Statement to Tenant. Tenant shall have the right to credit against the
Rental thereafter coming due hereunder an amount equal to the excess (if any)
of (i) the aggregate amount that Tenant has theretofore paid to Landlord on
account of the Electricity Additional Rent, over (ii) the Electricity
Additional Rent as reflected on such Actual Reading Statement; provided,
however, that if the Expiration Date occurs prior to the date that such credit
is exhausted, then Landlord shall pay to Tenant the unused portion of such
credit on or prior to the thirtieth (30th) day after the Expiration Date (it
being understood that Landlord’s obligation to make such payment to Tenant
shall survive the Expiration Date). If Landlord gives Tenant an Actual Reading
Statement, then, unless Landlord otherwise specifies in such Actual Reading
Statement, Landlord shall be deemed to have given to Tenant a Prospective
Electricity Statement, for the calendar year immediately succeeding the
calendar year that is covered by such Actual Reading Statement, that reflects
Electricity Additional Rent for such immediately succeeding calendar year in an
amount equal to the Electricity Additional Rent for such calendar year that is
covered by such Actual Reading Statement. 


                   (F)  
If a submeter measuring Tenant’s electrical demand and consumption in the
Premises has not been installed in the Premises, or the submeters measuring
Tenant’s electrical demand and consumption in the Premises have not been
installed in the Premises, in either case on or prior to the date hereof, then
(x) Landlord shall order such submeter or such submeters promptly after the
date hereof, and (y) Landlord shall install such submeter or such submeters
promptly after the Commencement Date. Landlord and Tenant shall cooperate with
each other in good faith to coordinate the installation of such submeter or
such submeters with Landlord’s performance of the Landlord’s Work. Landlord, in
installing such submeter or such submeters, shall have the right to interrupt
electrical service to the Premises temporarily and in accordance with good
construction practice. 


                   (G)  
Subject to the terms of this Section 5.3(G), if, prior to Landlord’s installing
a submeter or submeters in the Premises, Tenant occupies all or any portion of
the Premises for the conduct of business, then Tenant shall pay to Landlord, as
additional rent, a fee for electricity service in an amount equal to the
product obtained by multiplying (I) $0.0041, by (II) the number of square feet
of Rentable Area in the Premises (or the portion thereof that Tenant is occupying
for the conduct of business), by (III) the number of days in the period
commencing on the date that Tenant occupies the Premises (or the applicable
portion thereof) for the conduct of business and ending on the date immediately
preceding the date that the submeter for the Premises or the applicable portion
thereof is operational or that the submeters for the Premises or the applicable
portion thereof are operational (such fee being referred to herein as the “Electricity
Inclusion Charge”). Landlord shall give Tenant an invoice for the
Electricity Inclusion Charge from time to time (but not less frequently than
monthly). Tenant shall pay the Electricity Inclusion Charge to Landlord on or
prior to the thirtieth (30th) day after the date that Landlord gives each such
invoice to Tenant. If (I) the monthly amount that Tenant would have paid to
Landlord as the Electricity Additional Rent for the period that Tenant occupies
the Premises or the applicable portion thereof for the conduct of business
prior to the date that the submeter is, or the submeters are, operational (as
determined using the average monthly submeter readings for 


29






the period of
three (3) months after the date that the submeter is, or the submeters are,
operational), exceeds (II) the Electricity Inclusion Charge for any particular
period of one (1) month, then Tenant shall pay to Landlord an amount equal to
such excess for each such month within thirty (30) days after Landlord gives to
Tenant an invoice therefor. If (I) the Electricity Inclusion Charge for any
particular period of one (1) month, exceeds (II) the monthly amount that Tenant
would have paid to Landlord as the Electricity Additional Rent for the period
that Tenant occupies the Premises or the applicable portion thereof for the conduct
of business prior to the date that the submeter is, or the submeters are,
operational (as determined using the average monthly submeter readings for the
period of three (3) months after the date that the submeter is, or the
submeters are, operational), then Landlord, at Landlord’s option, shall either
(x) refund promptly to Tenant an amount equal to such excess for each such
month, or (y) credit such excess for each such month against the monthly
installments of Rental next becoming due and payable hereunder (together with
interest on such excess calculated at the Base Rate from the date that Tenant
is entitled to such credit). If Landlord gives Tenant such credit for such
excess, and the Expiration Date occurs before the date that such credit is exhausted,
then Landlord shall pay to Tenant the unused portion of such credit on or prior
to the thirtieth (30th) day after the Expiration Date (and Landlord’s
obligation to make such payment shall survive the Expiration Date). 


          5.4.  
Termination of Electric Service. 


                   (A)  
If Landlord is required by any Requirement to discontinue furnishing
electricity to the Premises as contemplated by this Lease, then this Lease
shall continue in full force and effect and shall be unaffected thereby, except
that from and after the effective date of any such Requirement, (x) Landlord
shall not be obligated to furnish electricity to the Premises, and (y) Tenant
shall not be obligated to pay to Landlord the charges for electricity as
described in this Article 5. 


                   (B)  
If Landlord discontinues Landlord’s furnishing electricity to the Premises
pursuant to a Requirement, then Tenant shall use Tenant’s diligent efforts to
obtain electricity for the Premises directly from the Utility Company. Tenant
shall pay directly to the Utility Company the cost of such electricity. Tenant
shall have the right to use the electrical facilities that then exist in the
Building to obtain such direct electric service (without Landlord having any
liability or obligation to Tenant in connection therewith). Nothing contained
in this Section 5.4 shall permit Tenant to use electrical capacity in the
Building that exceeds the Base Electrical Capacity. Tenant, at Tenant’s
expense, shall make any additional installations that are required for Tenant
to obtain electricity from the Utility Company. 


                   (C)  
Landlord shall not discontinue furnishing electricity to the Premises as
contemplated by this Section 5.4 (to the extent permitted by applicable
Requirements) until Tenant obtains electric service directly from the Utility
Company. 


30






ARTICLE 6

INITIAL CONDITION OF THE PREMISES


          6.1.  
Condition of Premises. 


          Subject
to Section 8.1 hereof and Section 6.2 hereof, (a) Tenant shall accept possession
of the Premises in the condition that exists on the Commencement Date “as is,”
excluding, however, any latent defects for which Landlord shall be responsible
and (b) Landlord shall have no obligation to perform any work or make any
installations in order to prepare the Building or the Premises for Tenant’s
occupancy. Except as expressly set forth herein, Landlord has made no
representations or promises with respect to the Building, the Real Property or
the Premises. Promptly following the Commencement Date, Landlord shall deliver
to Tenant a Form ACP-5 covering the Premises. 


          6.2.  
Landlord’s Work. 


                   (A)  
Landlord shall perform the work necessary to construct the Premises in
accordance with Tenant’s Final Plans (such work being collectively referred to
herein as “Landlord’s Work”). Tenant shall prepare, at Landlord’s
expense, detailed plans fully complete, ready for construction and suitable for
bidding of a standard office build out based on the preliminary lay out plan
attached hereto as Exhibit “6.2”-1 and made a part hereof and the work letter
(the “Work Letter”) attached hereto as Exhibit “6.2”-2 and made a part
hereof (such detailed plans to the extent finally approved by Landlord subject
to the terms of Section 7.3 hereof, “Tenant’s Final Plans”); it being
understood, however, that Landlord shall perform all applicable portions of
Landlord’s Work, including without limitation, those specific items of
Landlord’s Work set forth in the Work Letter, using Building Standard
Materials. It being agreed that Landlord shall pay the cost of engineering of a
supplemental air conditioning unit to be installed in the Premises (the “Supplemental
Unit”). Notwithstanding the foregoing to the contrary, Landlord’s Work
shall not include the installation of any supplemental air conditioning system,
furniture or built-ins or telecommunication wiring or equipment even if same
are shown on Tenant’s Final Plans; provided, however, Landlord shall install
the Supplemental Unit. 


                   (B)  
Tenant shall deliver Tenant’s Final Plans to Landlord by the thirtieth (30th)
day following the date hereof. In the event that Landlord requires any
modifications to such plans Tenant shall make such modifications within two (2)
Business Days of Landlord’s request therefor. 


                   (C)  
Landlord shall perform Landlord’s Work in accordance with all applicable
Requirements. Landlord shall perform Landlord’s Work in a good and workmanlike
manner. Landlord shall Substantially Complete Landlord’s Work on or prior to
the Commencement Date. Landlord shall provide notice to Tenant at least ten
(10) days prior to the anticipated date of Substantial Completion of Landlord’s
Work. Landlord, at Landlord’s expense, prior to the performance of Landlord’s
Work, shall obtain all permits, approvals and certificates required by any
Governmental Authorities in connection therewith. 


                   (D)  
On or prior to thirty (30) days after Landlord’s rendition of a statement
therefor, Tenant shall pay Landlord for Landlord’s actual, out-of-pocket costs
to perform (i) any portion of Landlord’s Work using any above Building Standard
Materials (to the extent the hard and soft costs incurred in connection
therewith exceed the hard and soft costs which Landlord would have incurred in performing
such portion of Landlord’s Work using Building Standard Materials), and (ii)
any portion of Landlord’s Work that is denoted on Tenant’s Final Plans
(including, without limitation, the “Note” and “Legends” sections of Tenant’s
Final Plans) as 


31






“Alternate
Pricing”, “Alt. Pricing” or similar language denoting any alternatives from the
Preliminary Plan (any above Building Standard Materials (to the extent the hard
and soft costs incurred in connection therewith exceed the hard and soft costs
which Landlord would have incurred in performing the applicable portion of
Landlord’s Work using Building Standard Materials) and any portion of
Landlord’s Work so denoted as “Alternate Pricing”, “Alt. Pricing” or similar
language denoting any such alternative being collectively referred to herein as
“Tenant Extra Work”), which statement shall have annexed thereto
documentation that reasonably substantiates the charges set forth thereon.
Landlord shall submit to at least three (3) reputable general contractors (collectively,
the “General Contractors”) as reasonably designated by Landlord, with
reasonable promptness after receipt of Tenant’s Final Plans, a bid package that
describes Landlord’s Work and Tenant’s Extra Work. Landlord shall use
Landlord’s diligent efforts to obtain from each of the General Contractors a
bona fide bid to perform Landlord’s Work and Tenant’s Extra Work. Landlord
shall have the right to request that the construction companies submit
alternative bids, assuming, for example, that (a) the General Contractor acts
as a general contractor for a fixed price, and (b) the General Contractor acts
as a construction manager for a construction management fee and provides a
guaranteed maximum price. Landlord shall advise Tenant of that date on and time
at which Landlord shall open the bids from the aforesaid construction companies
and Tenant shall have the right to be present when the bids are opened
provided, however, Landlord shall not be obligated to reschedule such opening
for Tenant and in such event Landlord shall furnish Tenant with a copy of all
bids. On or prior to five (5) Business Days after Landlord gives Tenant a copy
of such bids, Tenant shall notify Landlord if Tenant (x) elects for Landlord
not to perform a particular item of Tenant Extra Work and instead elect to have
Landlord perform the particular item of work at Landlord’s cost using Building
Standard Materials, (y) elects to choose a finish or specification that costs
less than the original estimated price given by Landlord to Tenant but for
which Tenant would pay Landlord pursuant to the terms of this Section 6.2(C),
or (z) elects, at Tenant’s cost and expense, to perform such item of Tenant
Extra Work itself, in which event Tenant shall perform such item as an
Alteration. If Tenant elects the immediately preceding clause (z), then such
item of work shall be performed by Tenant as an Alteration, in accordance with
the applicable terms and provisions of this Lease governing Alterations except
that such item of Tenant Extra Work shall be deemed to be approved by Landlord
to the extent Tenant performs such item or work in accordance with Tenant’s
Final Plans. In the event that any item of Tenant Extra Work creates a field
condition that requires a change to Landlord’s Work resulting in an increase of
the cost of Landlord’s Work, Landlord shall have the right before proceeding
with such change to require Tenant (x) to agree in writing to such increase in
cost within two (2) Business Days from the date of Landlord’s request (which
request may be provided by email to James Sullivan at jsullivan@pmgi.com,
Anthony L. Previte at aprevite@pmgi.com, Paul Asher at pasher@marcbell.com,
and Kenneth Salzman at ksalzman@newmarkkf.com) and (y) to pay such
increase within thirty (30) days of Landlords invoice therefor; it being
understood, however, that Landlord shall not have the aforesaid right unless
such field condition arises as a result of any item of Tenant Extra Work. If
Tenant shall fail or refuse to so agree to and/or pay for such increase then Landlord
shall have the right (but not the obligation) to either refuse to perform such
Tenant Extra Work, and continue the performance of Landlord’s Work without
making the changes thereto contemplated by such Tenant Extra Work or to revise
the scope of Landlord’s Work so as not to require a change resulting from a
field condition. 


32






                   (E)  
Landlord shall have the right to delegate Landlord’s obligations to perform all
or any portion of the Landlord’s Work to an Affiliate of Landlord (it being
understood, however, that Landlord’s delegating such obligations to an
Affiliate of Landlord shall not diminish Landlord’s liability for the
performance of Landlord’s Work in accordance with the terms of this Section
6.2). Landlord shall also have the right to assign to such Affiliate of
Landlord the rights of Landlord hereunder to receive from Tenant the payments
for the performance of the portions of Landlord’s Work denoted as “Alternate
Pricing”, “Alt. Pricing” or similar language denoting alternates as aforesaid
(it being understood that if (i) Landlord so assigns such rights to such
Affiliate of Landlord, and (ii) Landlord gives Tenant notice thereof, then
Tenant shall pay directly to such Affiliate any such amounts otherwise due and
payable to Landlord hereunder). Landlord shall not be required to maintain or
repair during the Term any items of Landlord’s Work except as otherwise
expressly provided in this Lease, it being agreed that Landlord shall make
available to Tenant all guaranties or warranties received by Landlord in
connection with Landlord’s Work to the extent such guaranties and warranties
shall not be rendered invalid thereby. Tenant shall have the right to provide
notice to Landlord within one (1) year after the Commencement Date of any items
of Landlord’s Work which were not satisfactorily completed or which contained
latent defects. Landlord shall use commercially reasonable efforts to repair
such items of Landlord’s Work within thirty (30) days after Tenant’s notice of
the same to Landlord. Landlord shall have the right to enter the Premises
subsequent to the Commencement Date to repair such items, and the payment of
Rental shall not be affected thereby. 


                   (F)  
The following terms shall have the following meanings as used herein: 


                            (i)  
“Building Standard Materials” shall mean a comparable quality and type
of material, fixtures and finishes as those currently being used by Landlord
and its Affiliates in the construction of prebuilt units throughout its commercial
office leasing portfolio in New York City. 


                            (ii)  
“Long Lead Work” shall mean any item which is not a stock item and must
be specially manufactured, fabricated or installed or is of such an unusual,
delicate or fragile nature that there is a substantial risk that (i) there will
be a delay in its manufacture, fabrication, delivery or installation, or (ii)
after delivery of such item will need to be reshipped or redelivered or
repaired so that, in Landlord’s reasonable judgment, the item in question
cannot be completed when the standard items are completed even though the items
of Long Lead Work in question are (1) ordered together with the other items
required and (2) installed or performed (after the manufacture or fabrication
thereof) in order and sequence that such Long Lead Work and other items are
normally installed or performed in accordance with good construction practice.
In addition, Long Lead Work shall include any standard item, which in
accordance with good construction practice should be completed after the
completion of any item of work in the nature of the items described in the
immediately preceding sentence. 


                             (iii)  
“Tenant Work Delays” shall mean act or omissions of Tenant or its agents
or employees (including, without limitation, failure to deliver Tenant’s Final
Plans within the time periods set forth herein), Landlord’s required changes to
Tenant’s plans provided that any such changes are reasonable taking into the
account the criteria set forth in Section 7.2(A) hereof, changes or change
orders to plans and finishes, or delay or failure to notify Landlord 


33






within the
aforementioned time periods of Tenant’s decisions in connection with Tenant’s
Extra Work) that actually delay Landlord in the performance of Landlord’s Work.



ARTICLE 7

ALTERATIONS


          7.1.  
General. 


                   (A)  
Except as otherwise provided in this Article 7, Tenant shall not make any
Alterations without Landlord’s prior consent. 


                   (B)  
Tenant may make Decorative Alterations without Landlord’s prior consent. 


                   (C)  
The term “Alterations” shall mean alterations, installations,
improvements, additions or other physical changes in each case in or to the
Premises that are made by or on behalf of Tenant or any other Person claiming
by, through or under Tenant; provided, however, that Alterations shall not
include Landlord’s Work. 


                   (D)  
The term “Decorative Alterations” shall mean Alterations that constitute
merely decorative changes to the Premises (such as, for example, the
installation of carpeting or other customary floor coverings or painting or the
installation of customary wall coverings) that in each case do not involve
electrical, plumbing or mechanical connections. 


                   (E)  
The term “Initial Alterations” shall mean the Alterations to prepare the
Premises for Tenant’s initial occupancy, not including Landlord’s Work. 


                   (F)  
The term “Specialty Alterations” shall mean Alterations that (i)
perforate a floor slab in the Premises or a wall the encloses the core of the
Building, (ii) require the reinforcement of a floor slab in the Premises, (iii)
consist of the installation of a raised flooring system, (iv) consist of the
installation of a vault or other similar device or system that is intended to
secure the Premises or a portion thereof in a manner that exceeds the level of security
that a reasonable Person uses for ordinary office space, or (v) involve
material plumbing connections (such as kitchens and executive bathrooms outside
of the Building core). 


                   (G)  
The term “Substantial Completion” or words of similar import shall mean
that the applicable work has been substantially completed in accordance with
the applicable plans and specifications, if any, it being agreed that (i) such
work shall be deemed substantially complete notwithstanding the fact that minor
or insubstantial details of construction or demolition, mechanical adjustment
or decorative items remain to be performed, (ii) with respect to work that is
being performed in the Premises, such work shall be deemed substantially
complete only if the incomplete elements thereof do not interfere materially
with Tenant’s use and occupancy of the Premises for the conduct of business and
(iii) with respect to any delays in the applicable work caused by Long Lead
Work or Tenant Work Delays, the applicable work shall be deemed substantially
completed (for purposes of determining the Rent Commencement Date only) upon
the date such work would have been completed but for such delays. 


34






                   (H)  
The term “Tenant’s Property” shall mean Tenant’s personal property
(other than fixtures), including, without limitation, Tenant’s movable
fixtures, movable partitions, telephone equipment, computer equipment,
furniture, furnishings and decorations. 


          7.2.  
Basic Alterations. 


                   (A)  
Subject to terms of Section 7.1(B) hereof, Landlord shall not unreasonably
withhold, condition or delay its consent to any proposed Alteration, provided
that such Alteration (i) does not materially affect the external aesthetic
appearance of the Building at street level, (ii) does not affect adversely any
part of the Building other than the Premises, (iii) does not require any
alterations, installations, improvements, additions or other physical changes
to be performed in or made to any portion of the Building other than the
Premises, (iv) does not affect adversely the proper functioning of any Building
System, (v) does not reduce the value or utility of the Building, (vi) does not
affect adversely the structure of the Building, (vii) does not impede
Landlord’s access to Reserved Areas in any material respect, and (viii) does
not violate or render invalid the certificate of occupancy for the Building or
any part thereof (any Alteration that satisfies the requirements described in
clauses (i) through (viii) above being referred to herein as a “Basic
Alteration”). 


                   (B)  
Nothing contained in this Section 7.2 limits the provisions of Section 7.12
hereof. 


          7.3.  
Approval Process. 


                   (A)  
Tenant shall not perform any Alteration (other than Decorative Alterations)
unless Tenant first gives to Landlord a notice thereof (an “Alterations
Notice”) that (i) refers specifically to this Section 7.3, (ii) includes
six (6) copies of the plans and specifications for the proposed Alteration
(including, without limitation, layout, architectural, mechanical and
structural drawings, to the extent applicable) in CADD format that contain
sufficient detail for Landlord and Landlord’s consultants to reasonably assess
the proposed Alteration, and (iii) indicates whether Tenant considers the
proposed Alterations to constitute a Basic Alteration. 


                   (B)  
Landlord shall have the right to object to a proposed Alteration only by giving
notice thereof to Tenant, and setting forth in such notice a statement in reasonable
detail of the grounds for Landlord’s objections. 


                   (C)  
Landlord shall have the right to (a) disapprove any plans and specifications
for a particular Alteration in part, (b) reserve Landlord’s approval of items
shown on such plans and specifications pending Landlord’s review of other plans
and specifications that Tenant is otherwise required to provide to Landlord
hereunder, and (c) condition Landlord’s approval of such plans and
specifications upon Tenant’s making revisions to the plans and specifications
or supplying additional information (which Landlord shall have the right to
request only reasonably if the applicable Alteration constitutes a Basic
Alteration). Nothing contained in this Section 7.3(C) limits the provisions of
Section 7.2 hereof or Section 7.3(B) hereof. 


                   (D)  
Tenant acknowledges that (i) the review of plans or specifications for an
Alteration by or on behalf of Landlord, or (ii) the preparation of plans or
specifications for an 


35






Alteration by
Landlord’s architect or engineer (or any architect or engineer designated by
Landlord), is solely for Landlord’s benefit, and, accordingly, Landlord makes
no representation or warranty that such plans or specifications comply with any
Requirements or are otherwise adequate or correct. 




          7.4.  
Performance of Alterations. 


                   (A)  
Tenant, at Tenant’s expense, prior to the performance of any Alteration, shall
obtain all permits, approvals and certificates required by any Governmental
Authorities in connection therewith. Landlord shall have the right to require
Tenant to make all filings with Governmental Authorities to obtain such
permits, approvals and certificates using an expeditor designated reasonably by
Landlord (provided that the charges imposed by such expeditor are commercially
reasonable). Landlord shall execute any applications for any permits, approvals
or certificates required to be obtained by Tenant in connection with any
permitted Alteration (provided that the applicable Requirement requires
Landlord to execute such application) within ten (10) Business Days after
Tenant’s request from time to time and shall otherwise cooperate reasonably
with Tenant in connection therewith. Tenant shall not have the right to require
Landlord to so execute such applications prior to the date that Landlord
approves the applicable Alteration. Tenant shall reimburse Landlord for any
reasonable Out-of-Pocket Costs, including, without limitation, reasonable
attorneys’ fees and disbursements, that Landlord incurs in so executing such
applications and cooperating with Tenant, within thirty (30) days after the
date that Landlord gives to Tenant an invoice therefor from time to time. 


                   (B)  
Prior to performing any Alteration, Tenant shall also furnish to Landlord
duplicate original policies of, or, at Tenant’s option, certificates of, (1)
worker’s compensation insurance in amounts not less than the statutory limits
(covering all persons to be employed by Tenant, and Tenant’s contractors and subcontractors,
in connection with such Alteration), and (2) commercial general liability
insurance (including property damage and bodily injury coverage), in each case
in customary form, and in amounts that are not less than Five Million Dollars
($5,000,000) with respect to general contractors and One Million Dollars
($1,000,000) with respect to subcontractors, naming the Landlord Indemnitees as
additional insureds; provided, however, that on each anniversary of the
Commencement Date, the aforesaid amounts shall be adjusted to reflect the
percentage increase in the Consumer Price Index from the Consumer Price Index
that is in effect on the Commencement Date. Landlord acknowledges that Tenant’s
contractors and subcontractors may satisfy the liability insurance requirements
as set forth in this Section 7.4(B) with an umbrella insurance policy if such
umbrella insurance policy contains an aggregate per location endorsement that
provides the required level of protection for the Premises. 


                   (C)  
Within thirty (30) days after the Substantial Completion of each Alteration
(other than Decorative Alterations), Tenant, at Tenant’s expense, shall (1)
obtain certificates of final approval for each Alteration to the extent
required by any Governmental Authority, (2) furnish Landlord with copies of
such certificates, and (3) give to Landlord copies of the “asbuilt” plans and
specifications for such Alterations in CADD format. 


                   (D)  
All Alterations (other than Decorative Alterations) shall be made and performed
substantially in accordance with the plans and specifications therefor as
approved by 


36






Landlord. All
Alterations shall be made and performed in accordance with all Requirements and
the Rules. All materials and equipment incorporated in the Premises as a result
of any Alterations shall be first-quality. 


          7.5.  
Financial Integrity. 


                   (A)  



                            (1)  
Tenant shall not permit any materials or equipment that are incorporated as
fixtures into the Premises in connection with any Alterations to be subject to
any lien, encumbrance, chattel mortgage or title retention or security
agreement. 


                            (2)  
Subject to the terms of Section 7.5(A)(3) hereof, Tenant shall not make any
Alteration at a cost for labor and materials (as reasonably estimated by
Landlord’s architect, engineer or contractor) in excess of Two Hundred Fifty
Thousand Dollars ($250,000), either individually or in the aggregate with any
other Alterations constructed in any particular period of twelve (12)
consecutive months, prior to Tenant’s delivering to Landlord a performance bond
and a payment bond that covers Tenant’s obligation to pay the applicable
contractor and the applicable contractor’s obligation to pay its subcontractors
(in either case issued by a surety company and in form reasonably satisfactory
to Landlord), each in an amount equal to one hundred ten percent (110%) of such
estimated cost; provided, however, that on each anniversary of the Commencement
Date, the aforesaid amount of Two Hundred Fifty Thousand Dollars ($250,000)
shall be adjusted to reflect the percentage increase in the Consumer Price
Index from the Consumer Price Index that is in effect on the Commencement Date.




                            (3)  
If Tenant is obligated to deliver a performance bond and a payment bond to
Landlord as provided in Section 7.5(A)(2) hereof, then Tenant shall have the
right to deposit with Landlord an amount in cash equal to the amount of such
bonds that is otherwise required by Section 7.5(A)(2) hereof (such amount in
cash being referred to herein as the “Work Deposit”). If Tenant deposits the
Work Deposit with Landlord, then (i) Tenant shall not have the obligation to
deliver to Landlord the performance bond and the payment bond as provided in
Section 7.5(A)(2) hereof for the applicable Alteration, and (ii) Landlord shall
disburse the Work Deposit (or the applicable portion thereof) to Tenant or
Tenant’s designee from time to time, within ten (10) days after Tenant’s
request therefor (but in no event more frequently than once during any
particular calendar month), provided that Tenant delivers to Landlord,
simultaneously with each such disbursement, waivers of lien from all
contractors, subcontractors, materialmen, architects, engineers and other
Persons who may file a lien against the Real Property for material theretofore
supplied, or labor or services theretofore performed, in connection with the
applicable Alterations. If any mechanic’s lien is filed against the Real
Property for work claimed to have been done for, or for materials claimed to
have been furnished to, Tenant (or any Person claiming by, through or under
Tenant), then Landlord shall have the right (but not the obligation) beyond the
applicable notice and cure period set forth in Section 7.5(A)(4) hereof to use
the Work Deposit to discharge such mechanic’s lien. Nothing contained in this
Section 7.5(A)(3) diminishes Tenant’s obligations under Section 7.5(A)(4)
hereof. Landlord shall pay to Tenant any remaining balance of the Work Deposit
for a particular Alteration within ten (10) days after the date that (x) Tenant
has Substantially Completed the applicable Alteration, and (y) Tenant has
delivered to Landlord waivers of lien from all contractors, subcontractors,
materialmen,  


37






architects,
engineers and other Persons who may file a lien against the Real Property in
connection with such Alterations. 


                            (4)  
Tenant shall discharge of record any mechanic’s lien that is filed against the
Real Property for work claimed to have been done for, or for materials claimed
to have been furnished to, Tenant (or any Person claiming by, through or under
Tenant) within twenty (20) days after Tenant has received notice thereof, at
Tenant’s expense, by payment or filing the bond required by law. Nothing
contained in this Section 7.5(A)(4) (x) limits Tenant’s right to challenge the
claim that is made by the Person that files a mechanic’s lien, provided that
Tenant discharges such lien of record as aforesaid, or (y) obligates Tenant to
discharge of record any mechanic’s lien that derives from Landlord’s acts or
omissions. 


                   (B)  
Subject to the terms of this Section 7.5(B), within thirty (30) days after the
Substantial Completion of any Alterations (other than Decorative Alterations),
Tenant shall deliver to Landlord: (i) waivers of lien from all contractors,
subcontractors, materialmen, architects, engineers and other Persons who may
file a lien against the Real Property in connection with such Alterations, and
(ii) a certificate from a licensed architect that Tenant engages in accordance
with the terms of this Article 7 certifying that, in his or her opinion, the
Alterations have been Substantially Completed in substantial accordance with
the final detailed plans and specifications for such Alterations as approved by
Landlord. Tenant shall not be required to deliver to Landlord any waiver of
lien if Tenant is disputing in good faith the payment which would otherwise
entitle Tenant to such waiver, provided that (x) Tenant keeps Landlord advised
in a timely fashion of the status of such dispute and the basis therefor, and
(y) Tenant delivers to Landlord the waiver of lien promptly after the date that
the dispute is settled. Nothing contained in this Section 7.5(B), however,
shall relieve Tenant from complying with the provisions of Section 7.5(A)(4)
hereof. 


            7.6.  
    Effect on Building. 


          If
(i) as a result of any Alterations, any alterations, installations,
improvements, additions or other physical changes are required to be performed
in or made to any portion of the Building other than the Premises in order to
comply with any Requirements (any such alterations, installations,
improvements, additions or changes being referred to herein as a “Building
Change”), and (ii) such Building Change would not otherwise have had to be
performed or made pursuant to applicable Requirements at such time, then (x)
Landlord may perform such Building Change, and (y) Tenant shall pay to Landlord
the reasonable Out-of-Pocket Costs thereof, as additional rent, within thirty
(30) days after Landlord gives to Tenant an invoice therefor together with
reasonable supporting documentation for the charges set forth therein. Landlord
shall seek to accomplish any such Building Change that minimizes the cost
thereof to the extent reasonably practicable. Landlord shall give Tenant
reasonable advance notice of Landlord’s performance of the Building Change, and
shall consult reasonably from time to time with Tenant in connection therewith
(with the understanding that such consultations shall include, without
limitation, Landlord’s providing Tenant with the information that Landlord has
in its possession regarding the expected cost of such Building Change). 



38






          7.7.  
Time for Performance of Alterations. 


          If
the performance of any Alteration by or on behalf of Tenant, or any other
Person claiming by, through or under Tenant, during Building Hours interferes
with or interrupts the maintenance, repair, management or operation of the
Building in any material respect or interferes with or interrupts the use and
occupancy of the Building by other tenants in the Building in any material
respect, then Landlord shall have the right to require Tenant to perform such
Alteration at other times that Landlord reasonably designates from time to
time. 


          7.8.  
Removal of Alterations and Tenant’s Property. 


          On
or prior to the Expiration Date, Tenant, at Tenant’s expense, shall remove
Tenant’s Property from the Premises, and, at Tenant’s option, Tenant also may
remove, at Tenant’s expense, all Alterations made by or on behalf of Tenant or
any other Person claiming by, through or under Tenant; provided, however, in
any case, that Tenant shall repair and restore in a good and workmanlike manner
to good condition any damage to the Premises or the Building caused by such
removal. Landlord, upon notice to Tenant given together with Landlord’s
approval thereof, provided that Tenant so requested Landlord to give such
notice to Tenant at the time that Tenant gave Landlord an Alterations Notice
for such Specialty Alteration, may require Tenant to remove any Specialty
Alterations from the Premises, and to repair and restore in a good and
workmanlike manner to good condition any damage to the Premises or the Building
caused by such removal. If Tenant failed to request that Landlord give such
notice to Tenant at the time that Tenant gave an Alterations Notice for such
Specialty Alterations and (x) the Expiration Date is not the Fixed Expiration Date,
and (y) Landlord gives a notice to Tenant on or prior to the thirtieth (30th)
day after the Expiration Date to the effect that Landlord does not wish to
retain a particular Specialty Alteration, then Tenant shall pay to Landlord the
reasonable Out-of-Pocket Costs that are incurred by Landlord in so removing
such Specialty Alterations, and in so repairing and restoring any such damage
to the Building or the Premises, within thirty (30) days after Landlord submits
to Tenant an invoice therefor together with reasonable supporting documentation
for the charges set forth therein. Any Alterations that remain in the Premises
after the Expiration Date shall be deemed to be the property of Landlord (with
the understanding, however, that Tenant shall remain liable to Landlord for any
default of Tenant in respect of Tenant’s obligations under this Section 7.8). 


          7.9.  
Contractors and Supervision. 


                   (A)  
All Alterations (other than Decorative Alterations) shall be performed only
under the supervision of a licensed architect that Landlord approves, which
approval Landlord shall not unreasonably withhold, condition or delay. 


                   (B)  
Subject to the provisions of this Section 7.9(B), Tenant shall perform all
Alterations (other than Decorative Alterations) using contractors,
subcontractors, engineers and mechanics that in each case Landlord designates
from time to time and charge commercially reasonable prices. Landlord shall
give Tenant a notice containing a list of such contractors, such subcontractors
and such engineers that Landlord designates promptly after Tenant’s request
therefor from time to time (it being understood that Landlord shall include in
such list the names of at least three (3) subcontractors for each trade and at
least three (3) general contractors). 


          7.10.  
Landlord’s Expenses. 


39






          Tenant
shall pay to Landlord, from time to time, as additional rent, the reasonable
Out-of-Pocket Costs incurred by Landlord in connection with an Alteration
(other than Decorative Alterations) (including, without limitation, the
reasonable Out-of-Pocket Costs that Landlord incurs in reviewing the plans and
specifications for such Alterations, and inspecting the progress of such
Alterations), within thirty (30) days after Landlord gives Tenant an invoice
therefor together with reasonable supporting documentation for the charges set
forth therein. 


          7.11.  
Pantry. 


          Landlord
shall not unreasonably withhold, condition or delay Landlord’s approval of an
Alteration consisting of the installation of a pantry in the Premises for the
purpose of warming food for Tenant’s personnel and business guests (but not for
use as a public restaurant). Any vending machines that Tenant installs in the
Premises and that involve plumbing connections shall have a waterproof pan
located thereunder, connected to a drain. 


          7.12.  
Window Coverings. 


          Tenant
shall install on the windows of the Premises the curtains, blinds, shades, or
screens that Landlord designates reasonably. 


          7.13.  
Air-Cooled HVAC Installations. 


          Tenant
shall only have the right to install a supplementary HVAC system for the
Premises that requires vents or louvers if such vents or louvers are installed
on the exterior of the Building that faces Exchange Place and New Street. 


ARTICLE 8

REPAIRS


          8.1.  
Landlord’s Repairs. 


          Subject
to the terms of this Article 8 and to Article 15 hereof and Article 16 hereof,
Landlord shall maintain and make all necessary repairs to and replacements of
(i) the Building Systems that service the Premises, (ii) the structural
portions of the Building (including the structural portions of the Building
located within the Premises), (iii) the roof of the Building, (iv) the
sidewalks that are adjacent to the Building, (v) the exterior walls of the
Premises, (vi) the windows of the Premises, (vii) the public portions of the
Building, and (viii) the Premises (to the extent that the necessity for such
repair derives from a Work Access) in each case in conformity with the
standards that are customary for first-class office buildings in the vicinity
of the Building. Nothing contained in this Section 8.1 requires Landlord to
maintain or repair the systems within the Premises that distribute within the
Premises electricity or water. 


          8.2.  
Tenant’s Repairs. 


                   (A)  
Subject to the terms of this Article 8 and to Article 15 hereof and Article 16
hereof, Tenant, at Tenant’s expense, shall take good care of the Premises
(including, without limitation, (i) the fixtures and equipment that are
installed in the Premises on the Commencement Date, (ii) the Alterations, and
(iii) the systems within the Premises that 


40






distribute
within the Premises electricity or water). Tenant shall make all repairs to the
Premises as and when needed to preserve the Premises in good condition, except
for reasonable wear and tear, obsolescence and damage for which Tenant is not
responsible pursuant to the provisions of Article 15 hereof. Nothing contained in
this Section 8.2(A) shall require Tenant to perform any repairs to the Premises
that are Landlord’s obligation to perform under Section 8.1 hereof. All repairs
made by Tenant as contemplated by this Section 8.2(A) shall be in conformity
with the standards that are customary for first-class office buildings in the
vicinity of the Building. Tenant shall perform such repairs in accordance with
the terms of Article 7 hereof. 


                   (B)  
Subject to the terms of this Section 8.2(B), if (a) Landlord gives Tenant a
notice that Tenant has failed to perform a repair that this Section 8.2
obligates Tenant to perform, and (b) Tenant fails to proceed with reasonable
diligence to make such repair within thirty (30) days after the date that
Landlord gives such notice to Tenant (or such shorter period that Landlord
designates in such notice to the extent reasonably required under the
circumstances to alleviate an imminent threat to persons or property), then (i)
Landlord may make such repair, and (ii) Tenant shall pay to Landlord, as
additional rent, the reasonable Out-of-Pocket Costs thereof, with interest
thereon at the Applicable Rate calculated from the date that Landlord incurs
such expenses, within thirty (30) days after Landlord gives Tenant an invoice
therefor together with reasonable supporting documentation for the charges set
forth therein. If (x) a particular repair that this Section 8.2 obligates
Tenant to perform cannot be performed with reasonable diligence during the
aforesaid period of thirty (30) days (or during such shorter period that
Landlord designates, as the case may be), and (y) Tenant commences such repair
during such period of thirty (30) days (or such shorter period that Landlord
designates), then Landlord shall not have the right to perform such repair on
Tenant’s behalf as otherwise described in this Section 8.2(B) unless Tenant
fails to pursue such repair with reasonable continuity and diligence. Nothing
contained in this Section 8.2(B) limits the remedies that are available to
Landlord after the occurrence of an Event of Default. 


          8.3.  
Certain Limitations. 


                   (A)  
Tenant, at Tenant’s expense, shall repair in accordance with the terms set
forth in Section 8.2 hereof all damage to the Premises, or to any other part of
the Building or the Building Systems, in each case to the extent resulting from
the negligence or willful misconduct of, or Alterations made by, Tenant or any
other Person claiming by, through or under Tenant; provided, however, that
Landlord shall have the right to perform any such repair to the extent that
such repair affects the structure of the Building or such repair affects any
Building System, in which case Tenant shall pay to Landlord an amount equal to
the Out-of-Pocket Costs that Landlord reasonably incurs in performing such
repair, on or prior to the thirtieth (30th) day after the date that Landlord
gives to Tenant an invoice therefor together with reasonable supporting
documentation for the charges set forth therein. Nothing contained in this Section
8.3(A) limits the provisions of Section 14.3 hereof. 


                   (B)  
Landlord, at Landlord’s expense, shall repair promptly all damage to the
Premises that results from Landlord’s negligence or willful misconduct. Nothing
contained in this Section 8.3(B) limits the provisions of Section 14.3 hereof. 



41






          8.4.  
Overtime. 


          Subject
to the provisions of this Section 8.4, Landlord shall have no obligation to
employ contractors or labor at overtime or premium pay rates in connection with
Landlord’s making repairs as contemplated by this Article 8. If Landlord’s
repair (or the condition that Landlord is required to repair) (i) denies Tenant
from having reasonable access to the Premises, (ii) threatens the health or
safety of any occupant of the Premises, or (iii) materially interferes with
Tenant’s ability to conduct its business in the Premises during Tenant’s
ordinary business hours, then Landlord shall employ contractors or labor at
overtime or premium pay rates to the extent reasonably necessary. Landlord, at
Tenant’s request, shall also perform any other repair that this Article 8
requires Landlord to perform, to the extent reasonably practicable, using
contractors or labor at overtime or premium pay rates, in which case Tenant shall
pay to Landlord, as additional rent, an amount equal to the excess of (x) the
Out-of-Pocket Costs that Landlord incurs in performing such repair (using
contractors or labor at overtime or premium pay rates), over (y) the
Out-of-Pocket Costs that Landlord would have incurred in performing such repair
without using contractors at overtime or premium pay rates, within thirty (30)
days after the date that Landlord gives to Tenant an invoice therefor together
with reasonable supporting documentation for the charges set forth therein (it
being understood that if more than one tenant requests that Landlord perform
any such repair using contractors or labor at overtime or premium pay rates,
then Landlord shall allocate such costs among such tenants equitably). 


ARTICLE 9

ACCESS; LANDLORD’S CHANGES 


          9.1.  
Access. 


                   (A)  
Subject to the terms of this Lease, Tenant, during the Term, shall have access
to the Premises at all times, twenty-four (24) hours per day, every day of the
year. 


                   (B)  
Subject to the terms of this Section 9.1(B), Landlord and Landlord’s designees
may enter the Premises at reasonable times upon reasonable prior notice to
Tenant (which notice may be given verbally to the person employed by Tenant with
whom Landlord’s representative ordinarily discusses matters relating to the
Premises) to (i) examine the Premises, (ii) show the Premises to prospective
tenants during the last twelve (12) months of the Term, (iii) show the Premises
to prospective purchasers or master lessees of Landlord’s interest in the Real
Property, (iv) show the Premises to Mortgagees or Lessors (or prospective
Mortgagees or Lessors), (v) gain access to Reserved Areas, or (vi) make
repairs, alterations, improvements, additions or restorations that (I) Landlord
is required to make pursuant to the terms of this Lease (including, without
limitation, Landlord’s Work), or (II) are reasonably necessary in connection
with the maintenance, repair, or operation of the Real Property (Landlord’s
entry upon the Premises to perform such repairs, alterations, improvements,
additions or restorations being referred to herein as a “Work Access”).
Landlord shall not be required to give Tenant advance notice of the entry by
Landlord or Landlord’s designees into the Premises as contemplated by this
Section 9.1(B) to the extent necessary by reason of the occurrence of an
emergency (with the understanding, however, that Landlord shall give Tenant
notice of such emergency access as promptly as reasonably practicable thereafter).
Landlord, in connection with a Work Access, shall have the right to bring into
the Premises, and store in the Premises in a reasonable manner for the duration
of the Work Access, the materials and tools that Landlord reasonably requires
to perform the applicable repair, alteration, improvement, addition or
restoration. Landlord shall 


42






have no
liability to Tenant for any loss sustained by Tenant by reason of Landlord’s
entry upon the Premises; provided, however, that (w) nothing contained in this
Section 9.1(B) diminishes Landlord’s obligation to repair the Premises (to the
extent that the necessity for such repair derives from a Work Access) as
provided in Section 8.1 hereof, (x) subject to Section 14.3 hereof, Landlord
shall remain liable to Tenant for personal injury or property damage that
derives from Landlord’s negligence or wilful misconduct in connection with any
such entry upon the Premises, and (y) nothing contained in this Section 9.1(B)
limits Tenant’s rights to an abatement of Rental after a fire or other casualty
as provided herein. 


          9.2.  
Landlord’s Obligation to Minimize Interference. 


                   (A)  
Subject to Section 9.2(B) hereof, Landlord shall use commercially reasonable
efforts to minimize interference with Tenant’s use of the Premises in
connection with Landlord’s accessing the Premises as contemplated by Section
9.1 hereof. 


                   (B)  
Subject to the provisions of this Section 9.2(B), Landlord shall have no
obligation to employ contractors or labor at overtime or premium pay rates in
connection with a Work Access as contemplated by this Article 8. If a Work
Access (i) denies Tenant from having reasonable access to the Premises, (ii)
threatens the health or safety of any occupant of the Premises, or (iii) materially
interferes with Tenant’s ability to conduct its business in the Premises during
Tenant’s ordinary business hours, then Landlord shall employ contractors or
labor at overtime or premium pay rates to the extent reasonably necessary.
Landlord, at Tenant’s request, shall also conduct a Work Access, to the extent
reasonably practicable, using contractors or labor at overtime or premium pay
rates, in which case Tenant shall pay to Landlord, as additional rent, an
amount equal to the excess of (x) the Out-of-Pocket Costs that Landlord incurs
in conducting such Work Access (using contractors or labor at overtime or
premium pay rates), over (y) the Out-of-Pocket Costs that Landlord would have
incurred in conducting such Work Access without using contractors at overtime
or premium pay rates, within thirty (30) days after the date that Landlord
gives to Tenant an invoice therefor together with reasonable supporting
documentation for the charges set forth therein (it being understood that if
more than one tenant requests that Landlord conduct such Work Access using
contractors or labor at overtime or premium pay rates, then Landlord shall
allocate such costs among such tenants equitably). 


          9.3.  
Reserved Areas. 


          The
Premises shall not include (i) the demising walls of the Premises (except for
the interior face thereof), (ii) the walls of the Premises that constitute the
curtain wall for the Building (except for the interior face thereof), (iii)
balconies, terraces and roofs that are adjacent to the Premises, and (iv) space
that is used for Building Systems or other purposes associated with the
operation, repair, management or maintenance of the Real Property, including,
without limitation, shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan
rooms, mechanical rooms, plumbing facilities, and service closets (the areas
described in clauses (iii) and (iv) above being collectively referred to herein
as the “Reserved Areas”). 


43






          9.4.  
Ducts, Pipes and Conduits. 



          Landlord
shall have the right to install, use and maintain ducts, cabling, pipes and
conduits in and through the Premises, provided that (a) such ducts, cabling,
pipes and conduits are concealed within or above partitioning columns, walls or
ceilings, except that if such ducts, cabling, pipes or conduits are installed
in areas that are utility areas (such as storage areas, mailrooms or mud
rooms), then such ducts, cabling, pipes or conduits may also be installed on
partitioning walls, columns or ceilings, (b) such ducts, cabling, pipes and
conduits do not reduce the usable area of the Premises by more than a de
minimis amount, and (c) Landlord installs such ducts, cabling, pipes and
conduits in a manner that minimizes, to the extent reasonably practicable, any
adverse effect on an Alteration theretofore performed in the Premises. If
Landlord requires access to the Premises to make the installations as
contemplated by this Section 9.4, then Landlord shall perform such
installations in accordance with the terms hereof that govern a Work Access and
restore the affected areas substantially to the prior existing condition. 


          9.5.  
Keys. 


          Tenant
shall provide Landlord, from time to time, with the keys to the Premises (or
with the appropriate means to access the Premises using Tenant’s electronic
security systems). 


          9.6.  
Landlord’s Changes. 


                   (A)  
Subject to Section 9.6(B) hereof, Tenant shall have the right to use, in common
with the other occupants of the Building, the portions of the Building that
Landlord dedicates from time to time as common area for the general use of the
occupants of the Building. 


                   (B)  
Landlord, from time to time, shall have the right to change the arrangement or
location of the public portions of the Building, including, without limitation,
lobbies, entrances, passageways, doors, corridors, stairs and toilets that in
each case are not located in the Premises, provided any such change does not
(a) unreasonably reduce or unreasonably interfere with Tenant’s access to the
Building or the Premises, (b) reduce the floor area of the Premises (except to
a de minimis extent), or (c) reduce to a material extent the level or quality
of services that are available to Tenant on the Commencement Date. 


                   (C)  
Landlord, from time to time, shall have the right to change, or reduce the
number of, the passenger or freight elevators serving the Premises, provided
that such change or reduction does not reduce to a material extent the passenger
or freight elevator service standards that the passenger and freight elevators
meet on the date hereof. 


                   (D)  
Landlord, from time to time, shall have the right to change the name, number or
designation by which the Building is commonly known. 


                   (E)  



                            (1)  
Landlord shall have the right, from time to time, to close, obstruct or darken
the windows of the Premises temporarily to the extent required to comply with a
Requirement or to perform repairs, maintenance, alterations, or improvements to
the Building. Landlord shall have the right to close, obstruct or darken the
windows of the Premises permanently to the extent required to comply with a
Requirement that does not become 


44


  

  


applicable to
the Building by virtue of Landlord’s performance of elective construction in
the Building. 


                            (2)  
If, at any time, the windows of the Premises are closed, obstructed or darkened
temporarily, as aforesaid, then Landlord shall perform (or cause to be
performed) such repairs, maintenance, alterations or improvements, or shall
comply with the applicable Requirement (or cause such Requirement to be
complied with), in each case with reasonable diligence, and otherwise take such
action as may be reasonably necessary to minimize the period during which such
windows are temporarily closed, obstructed or darkened (it being understood,
however, that subject to Section 8.4 hereof, Landlord shall not be required to
perform such repairs, maintenance, alterations or improvements using contractors
or labor at overtime or premium pay rates). 


ARTICLE 10

UNAVOIDABLE DELAYS AND INTERRUPTION OF SERVICE 


          10.1.  
Unavoidable Delays. 


          Subject
to Article 15 hereof and Article 16 hereof, this Lease and the obligation of
Tenant to pay Rental hereunder and to perform all of Tenant’s other covenants
shall not be affected, impaired or excused, and Landlord shall not have any
liability to Tenant, to the extent that Landlord is unable to perform
Landlord’s covenants under this Lease by reason of any cause beyond Landlord’s
reasonable control, including, without limitation, strikes, labor troubles,
acts of terrorism or the occurrence of an act of God; provided, however, that
Landlord shall not have the right to claim under this Section 10.1 that
Landlord’s failure to have funds available to make a payment of money
constitutes an excuse for Landlord’s performance of an obligation of Landlord
hereunder. 


          10.2.  
Interruption of Services. 


          Landlord, from
time to time, shall have the right to interrupt or curtail the level of service
provided by the Building Systems to the extent reasonably necessary to
accommodate the performance of repairs, additions, alterations, replacements or
improvements that in Landlord’s reasonable judgment are desirable or necessary.
Landlord shall give Tenant reasonable advance notice of any such interruption
or curtailment (to the extent that Landlord does not need to arrange for such
interruption or curtailment to manage an emergency) and schedule any such interruption
or curtailment at times that minimizes, to the extent reasonably practicable,
the effect of such interruption or curtailment on Tenant’s ability to conduct
its business in the Premises during Tenant’s ordinary business hours. If such
interruption or curtailment of the level of service provided by the Building
Systems (i) denies Tenant from having reasonable access to the Premises, (ii)
threatens the health or safety of any occupant of the Premises, or (iii)
materially interferes with Tenant’s ability to conduct its business in the
Premises during Tenant’s ordinary business hours, then Landlord shall employ
contractors or labor at overtime or premium pay rates to the extent reasonably
necessary. Landlord, at Tenant’s request, shall also schedule any such
interruption or curtailment, to the extent reasonably practicable, using
contractors or labor at overtime or premium pay rates, in which case Tenant
shall pay to Landlord, as additional rent, an amount equal to the excess of (x)
the Out-of-Pocket Costs that Landlord incurs in so 


45






scheduling
such interruption or curtailment (using contractors or labor at overtime or
premium pay rates), over (y) the Out-of-Pocket Costs that Landlord would have
incurred in scheduling such interruption or curtailment without using
contractors at overtime or premium pay rates, within thirty (30) days after the
date that Landlord gives to Tenant an invoice therefor together with reasonable
supporting documentation for the charges set forth therein (it being understood
that if more than one tenant requests that Landlord conduct such Work Access
using contractors or labor at overtime or premium pay rates, then Landlord
shall allocate such costs among such tenants equitably). 


          10.3.  
Rent Credit. 


          Subject
to the terms of this Section 10.3, if (I) (i) Landlord fails to perform
Landlord’s covenants hereunder, (ii) Landlord interrupts or curtails the level
of service provided by Building Systems as contemplated by Section 10.2 hereof,
or (iii) Landlord performs repairs, alterations, improvements, additions or
restorations in the Building, and (II) Tenant, by reason of the event described
in clause (I) above, is unable for at least ten (10) consecutive Business Days
to operate Tenant’s business in the Premises (or a portion thereof) in
substantially the same manner that Tenant conducted its business prior to such
event, then Tenant shall be entitled to a credit to apply against the Fixed
Rent thereafter coming due hereunder in an amount equal to the product obtained
by multiplying (A) the quotient obtained by dividing (a) the sum of the Fixed
Rent for the Premises, by (b) three hundred sixty-five (365) (or three hundred
sixty-six (366) in a leap year), by (c) the number of square feet of Rentable
Area in the Premises, by (B) the number of square feet of Rentable Area of the
portion of the Premises which is unusable, as aforesaid, by (C) the number of
days in the period commencing on (and including) the date immediately following
the date that is ten (10) Business Days after the event that is described in
clause (I) above and ending on the date that such portion of the Premises
becomes usable. If (x) Tenant is entitled to a credit against Rental pursuant
to this Section 10.3, and (y) the Expiration Date occurs prior to the date that
such credit is exhausted, then Landlord shall pay to Tenant the unused portion
of such credit on or prior to the thirtieth (30th) day after the Expiration
Date (and Landlord’s obligation to make such payment shall survive the
Expiration Date). This Section 10.3 shall not apply in respect of the
occurrence of a fire or other casualty or in respect of a condemnation. This
Section 10.3 shall not limit the provisions of Section 5.2 hereof. 


ARTICLE 11 

REQUIREMENTS


          11.1.  
Tenant’s Obligation to Comply with Requirements. 


                     (A)  
Subject to the terms of this Article 11, Tenant, at Tenant’s expense, shall
comply with all Requirements applicable to the Premises, including, without
limitation, (i) Requirements that are applicable to the performance of
Alterations, (ii) Requirements that become applicable by reason of Alterations
having been performed, and (iii) Requirements that are applicable by reason of
the specific nature or type of business operated by Tenant (or any other Person
claiming by, through or under Tenant) in the Premises. Tenant shall not be
required to make any Alteration or other changes to the structural components
of the Building or to the Building Systems in either case to comply with any
Requirement unless (a) such Alteration or other change is required by reason of
Alterations having been performed by Tenant (or another 


46






Person
claiming by, through or under Tenant), or (b) such Alteration or other change
is required by reason of the specific nature of the use of the Premises by
Tenant (or such other Person) (as opposed to the use of the Premises for the
general purposes otherwise permitted under Section 3.1 hereof). 


                   (B)  
The term “Requirements” shall mean, collectively, (i) all present and future
laws, rules, orders, ordinances, regulations, statutes, requirements, codes and
executive orders of all Governmental Authorities, and of any applicable fire
rating bureau, or other body exercising similar functions, and (ii) all
requirements that the issuer of Landlord’s Property Policy imposes (including,
without limitation, any such requirements that such issuer requires as the
basis for the premium that such issuer charges Landlord for Landlord’s Property
Policy), provided that such requirements that the issuer of Landlord’s Property
Policy imposes are reasonably consistent with the requirements imposed by
reputable insurers of comparable properties in The City of New York. 


                   (C)  
The term “Governmental Authority” shall mean the United States of
America, the State of New York, The City of New York, any political subdivision
thereof and any agency, department, commission, board, bureau or
instrumentality of any of the foregoing, or any quasi-governmental authority,
now existing or hereafter created, having jurisdiction over the Real Property
or any portion thereof. 


                   (D)  
Subject to the terms of this Section 11.1(D), if (a) Landlord gives Tenant a
notice that Tenant has failed to comply with a Requirement as required by this
Section 11.1, and (b) Tenant fails to proceed with reasonable diligence to
comply with such Requirement within thirty (30) days after the date that
Landlord gives such notice to Tenant (or such shorter period that Landlord
designates in such notice to the extent reasonably required under the
circumstances to alleviate an imminent threat to persons or property), then (i)
Landlord may perform the work and otherwise take steps that are required to
comply with such Requirement, and (ii) Tenant shall pay to Landlord, as
additional rent, the reasonable Out-of-Pocket Costs thereof, with interest
thereon at the Applicable Rate calculated from the date that Landlord incurs
such expenses, within thirty (30) days after Landlord gives Tenant an invoice
therefor together with reasonable supporting documentation for the charges set
forth therein. If (x) Tenant’s compliance with a particular Requirement as
required by this Section 11.1 cannot be accomplished with reasonable diligence
during the aforesaid period of thirty (30) days (or during such shorter period
that Landlord designates, as the case may be), and (y) Tenant commences such
compliance during such period of thirty (30) days (or such shorter period that
Landlord designates), then Landlord shall not have the right to perform the
work and otherwise take steps that are required to comply with such Requirement
on Tenant’s behalf as otherwise described in this Section 11.1(D) unless Tenant
fails to pursue such compliance with reasonable continuity and diligence.
Nothing contained in this Section 11.1(D) limits the remedies that are
available to Landlord after the occurrence of an Event of Default. 


          11.2.  
Landlord’s Obligation to Comply with Requirements. 


          Landlord
shall comply with all Requirements applicable to the Premises and the Building
(including, without limitation, Requirements in respect of which the violation
thereof impedes Tenant’s performance of Alterations in the Premises) other than
the Requirements with respect 


47






to which
Tenant is required to comply pursuant to Section 11.1 hereof, subject, however,
to Landlord’s right to contest in good faith the applicability or legality
thereof (provided that Landlord’s contesting such Requirements does not
interfere in any material respect with Tenant’s use and occupancy of the
Premises). 


          11.3.  
Tenant’s Right to Contest Requirements. 


          Subject
to the provisions of this Section 11.3, Tenant, at Tenant’s expense, may
contest by appropriate proceedings prosecuted diligently and in good faith the
legality or applicability of any Requirement affecting the Premises (any such
proceedings instituted by Tenant being referred to herein as a “Compliance
Challenge”). Tenant shall not have the right to institute a Compliance
Challenge unless Tenant first gives Landlord notice thereof. Tenant shall not
institute any Compliance Challenge if, by reason of Tenant’s delaying its
compliance with the applicable Requirement or by reason of the Compliance
Challenge, (a) Landlord (or any Landlord Indemnitee) may be imprisoned, (b) the
Real Property or any part thereof may be condemned or vacated, or (c) the
certificate of occupancy for the Premises or the Building may be suspended. If
Landlord or any Landlord Indemnitee may be subject to any civil fines or
penalties or other criminal penalties or if Landlord or any Landlord Indemnitee
may be liable to any third party in either case by reason of Tenant’s delaying
its compliance with the applicable Requirement or by reason of the Compliance
Challenge, then Tenant shall furnish to Landlord, at Tenant’s option, either
(x) a bond of a surety company that is issued by, and in form and substance,
reasonably satisfactory to Landlord, or (y) such other security that is
reasonably satisfactory to Landlord, and, in either case, in an amount equal to
one hundred twenty percent (120%) of the sum of (A) the cost of such
compliance, (B) the criminal or civil penalties or fines that may accrue by
reason of such non-compliance (as reasonably estimated by Landlord), and (C)
the amount of such liability to third parties (as reasonably estimated by
Landlord). If Tenant initiates any Compliance Challenge, then Tenant shall keep
Landlord advised regularly as to the status of such proceedings. Landlord shall
have the right to use the aforesaid bond or other security to satisfy any such
fines or penalties that are levied or assessed against a Landlord Indemnitee.
Landlord shall return to Tenant the aforesaid bond or other security (or the
unapplied portion thereof, as the case may be), promptly after Tenant completes
the Compliance Challenge. 


          11.4.  
Certificate of Occupancy. 


                     (A)  
Subject to the terms of this Section 11.4(A), Landlord covenants that from and
after the Commencement Date a temporary or permanent certificate of occupancy
covering the Premises (or such other certificate as may be required by
Requirements from time to time to lawfully occupy the Premises) shall be in
full force and effect permitting the Premises to be used for the general
purposes that are permitted under Article 3 hereof. Nothing contained herein
constitutes Landlord’s covenant, representation or warranty that the Premises
or any part thereof lawfully may be used or occupied for any particular purpose
or in any particular manner; provided, however, that Landlord shall not have
the right to amend the certificate of occupancy for the Premises (or such other
certificate as may be required by Requirements from time to time to lawfully
occupy the Premises) in a manner that limits the uses that Tenant may perform
in the Premises in accordance with Article 3 hereof. Landlord shall have no
liability to Tenant under 


48






this Section
11.4(A) to the extent such certificate of occupancy (or such other certificate)
is not in full force and effect by reason of Tenant’s default hereunder or by
reason of Alterations. 


                   (B)  
Tenant shall use the Premises only in a manner that conforms with the
certificate of occupancy that is in effect for the Premises. Tenant shall not
have the right to amend the certificate of occupancy for the Premises or the
Building without Landlord’s prior approval. 


ARTICLE 12

QUIET ENJOYMENT


          12.1.  
Quiet Enjoyment.


          Landlord
covenants that Tenant may peaceably and quietly enjoy the Premises for the
Term, subject, nevertheless, to the terms and conditions of this Lease. 


ARTICLE 13

SUBORDINATION


          13.1.  
Subordination.


                     (A)  
This Lease shall be subject and subordinate to the priority of each Superior
Lease that hereafter exists (and does not exist as of the date hereof) in
respect of which the Lessor is not an Affiliate of Landlord. This Lease shall
be subject and subordinate to the lien of each Mortgage that hereafter exists
(and does not exist as of the date hereof) in respect of which the Mortgagee is
not an Affiliate of Landlord. 


                     (B)  
The term “Lessor” shall mean a lessor under a Superior Lease. 


                     (C)  
The term “Mortgage” shall mean any trust indenture or mortgage which now
or hereafter encumbers Landlord’s estate in the Premises. 


                     (D)  
The term “Mortgagee” shall mean any trustee, mortgagee or holder of a
Mortgage. 


                     (E)  
The term “Superior Lease” shall mean any lease pursuant to which
Landlord now or hereafter obtains or retains its interest in the Premises (to
the extent that Landlord’s interest in the Premises is a leasehold estate). 


          13.2.  
Attornment. 


          If,
at any time prior to the Expiration Date, a Person succeeds to Landlord’s
interest in the Real Property by reason of a foreclosure under a Mortgage or by
reason of the termination of a Superior Lease (any such Person being referred
to herein as the “Successor”), then Tenant, at the Successor’s election,
shall attorn, from time to time, to the Successor, in either case upon the then
executory terms of this Lease, for the remainder of the Term. If the Successor
is not an Affiliate of the Person that constituted Landlord immediately prior
to such Successor’s obtaining an interest in the Premises, then the Successor
shall not be: 


49






                   (A)  
liable for any act or omission of any prior landlord (including, without
limitation, the then defaulting landlord), except to the extent that (i) such
act or omission continues after the date that the Successor succeeds to
Landlord’s interest in the Real Property, and (ii) such act or omission of such
prior landlord is of a nature that the Successor can cure by performing a
service or making a repair, or 


                   (B)  
subject to any defenses or offsets that Tenant has against any prior landlord
(including, without limitation, the then defaulting landlord) (except for any
offsets expressly permitted under this Lease), or 


                   (C)  
bound by any payment of Rental that Tenant has made to any prior landlord
(including, without limitation, the then defaulting landlord) more than thirty
(30) days in advance of the date that such payment is due (other than the
Rental that Tenant pays pursuant to Section 1.5(D) hereof), or 


                   (D)  
bound by any obligation to make any payment to or on behalf of Tenant to the
extent that such obligation accrues prior to the date that the Successor
succeeds to Landlord’s interest in the Real Property, or 


                   (E)  
bound by any obligation to perform any work or to make improvements to the
Premises, except for: 


                            (1)  
Landlord’s Work, 


                            (2)  
repairs and maintenance that Landlord is required to perform pursuant to the
provisions of this Lease and that first become necessary, or the need for which
continues, after the date that the Successor succeeds to Landlord’s interest in
the Real Property, 


                            (3)  
repairs to the Premises that become necessary by reason of a fire or other
casualty that occurs from and after the date that the Successor succeeds to Landlord’s
interest in the Real Property and that Landlord is required to perform pursuant
to Article 15 hereof, 


                            (4)  
repairs to the Premises or any part thereof that become necessary by reason of
a fire or other casualty that occurs prior to the date that the Successor
succeeds to Landlord’s interest in the Real Property and that Landlord is
required to perform pursuant to Article 15 hereof, to the extent that the
Successor can make such repairs from the net proceeds of Landlord’s Property
Policy that are actually made available to the Successor (with the understanding,
however, that if (i) a fire or other casualty occurs prior to the date that the
Successor succeeds to Landlord’s interest in the Real Property, (ii) Landlord
is required to repair the resulting damage to the Building pursuant to Article
15 hereof, and (iii) the Successor cannot make such repairs from such net
proceeds, then Tenant shall have the right to terminate this Lease by giving
notice thereof to the Successor within fifteen (15) days after the date that
the Successor gives Tenant notice that the Successor does not intend to perform
such repairs), 


                            (5)  
repairs to the Premises as a result of a partial condemnation that occurs from
and after the date that the Successor succeeds to Landlord’s interest in the
Real Property and that Landlord is required to perform pursuant to Article 16
hereof, and 


50






                            (6)  
repairs to the Premises as a result of a partial condemnation that occurs prior
to the date that the Successor succeeds to Landlord’s interest in the Real
Property and that Landlord is required to perform pursuant to Article 16
hereof, to the extent that the Successor can make such repairs from the net
proceeds of any condemnation award made available to the Successor (with the
understanding, however, that if (i) a partial condemnation occurs prior to the
date that the Successor succeeds to Landlord’s interest in the Real Property,
(ii) Landlord is required to make repairs to the Building pursuant to Article
16 hereof by reason of such partial condemnation, and (iii) the Successor
cannot make such repairs from such net proceeds, then Tenant shall have the
right to terminate this Lease by giving notice thereof to the Successor within
fifteen (15) days after the date that the Successor gives Tenant notice that
the Successor does not intend to perform such repairs), 


                   (F)  
bound by any amendment or modification of this Lease made without the consent
of the Successor after the date that Tenant is given notice of the applicable
Mortgage or the applicable Superior Lease (as the case may be), or 


                   (G)  
bound to return the Letter of Credit until the Letter of Credit has come into
the Successor’s actual possession and Tenant is entitled to the Letter of
Credit pursuant to the terms of this Lease. 


The provisions
of this Section 13.2 shall apply notwithstanding that, as a matter of law, this
Lease terminates upon the termination of any Superior Lease or the foreclosure
of a Mortgage. No further instrument shall be required to give effect to
Tenant’s attorning to a Successor as contemplated by this Section 13.2. Tenant,
however, upon demand of any Successor, shall execute, from time to time,
instruments, in a recordable form and in a form reasonably satisfactory to the
Successor, confirming the foregoing provisions of this Section 13.2. 


          13.3.  
Amendments to this Lease.


          Tenant
shall execute and deliver, from time to time, amendments to this Lease,
promptly after Landlord’s request, to the extent that (x) such amendments are
reasonably required by a Mortgagee or a Lessor that in either case is not an
Affiliate of Landlord (or are reasonably required by a proposed Mortgagee or
proposed Lessor that in either case is not an Affiliate of Landlord and that
consummates the applicable Mortgage or the applicable Superior Lease
contemporaneously with Tenant’s execution and delivery of such amendment
hereof), and (y) Landlord gives to Tenant reasonable evidence to the effect
that such Mortgagee or Lessor requires such amendments; provided, however, that
Tenant shall not be required to agree to any such amendments to this Lease that
(i) increase Tenant’s monetary obligations under this Lease, (ii) adversely
affect or diminish Tenant’s rights under this Lease (except in either case to a
de minimis extent), or (iii)
increase Tenant’s other obligations under this Lease (except to a de minimis extent).



          13.4.  
Tenant’s Estoppel Certificate.


          Tenant,
within fifteen (15) Business Days after Landlord’s request from time to time
(but not more frequently than three (3) times in any particular period of
twelve (12) months), shall deliver to Landlord a written statement executed by
Tenant, in form reasonably satisfactory to 


51






Landlord, (1)
stating that this Lease is then in full force and effect and has not been
modified (or if this Lease is not in full force and effect, stating the reasons
therefor, or if this Lease is modified, setting forth all modifications), (2)
setting forth the date to which the Fixed Rent, the Escalation Rent and other
items of Rental have been paid, (3) stating whether, to the actual knowledge of
Tenant (without having made any investigation), Landlord is in default under
this Lease, and, if Landlord is in default, setting forth the specific nature
of all such defaults, and (4) stating any other matters reasonably requested by
Landlord and related to this Lease. Tenant acknowledges that any such statement
that Tenant delivers to Landlord pursuant to this Section 13.4 may be relied
upon by (x) any purchaser or owner of the Real Property or any interest therein
(including, without limitation, any Lessor), or (y) any Mortgagee. 


          13.5.  
Rights to Cure Landlord’s Default.


          If
(x) a Superior Lease or Mortgage exists, (y) the Lessor or Mortgagee is not an
Affiliate of Landlord, and (z) Landlord gives Tenant notice thereof, then
Tenant shall not seek to terminate this Lease by reason of Landlord’s default
hereunder until Tenant has given written notice of such default to such Lessor
or such Mortgagee in either case at the address that has been furnished to
Tenant. If any such Lessor or Mortgagee notifies Tenant, within ten (10)
Business Days after the date that such Lessor or Mortgagee receives such notice
from Tenant, that such Lessor or Mortgagee intends to remedy such act or
omission of Landlord, then Tenant shall not have the right to so terminate this
Lease unless such Lessor or Mortgagee fails to remedy such act or omission of
Landlord within a reasonable period of time after the date that such Lessor or Mortgagee
gives such notice to Tenant (it being understood that such Lessor or Mortgagee
shall not have any liability to Tenant for the failure of such Lessor or
Mortgagee to so remedy such act or omission of Landlord during such period). 


          13.6.  
Zoning Lot Merger Agreement.


          Tenant
hereby waives irrevocably any rights that Tenant may have in connection with
any zoning lot merger or transfer of development rights with respect to the
Real Property, including, without limitation, any rights that Tenant may have
to be a party to, to contest, or to execute any Declaration of Restrictions (as
such term is used in Section 12-10 of the Zoning Resolution of The City of New
York effective December 15, 1961, as amended) with respect to the Real Property,
which would cause the Premises to be merged with or unmerged from any other
zoning lot pursuant to such Zoning Resolution or to any document of a similar
nature and purpose. Tenant agrees that this Lease shall be subject and
subordinate to any Declaration of Restrictions or any other document of similar
nature and purpose now or hereafter affecting the Real Property (it being
understood, however, that Landlord shall not permit such Declaration of
Restrictions or any such other document to impair Tenant’s rights hereunder, or
expand Tenant’s obligations hereunder, except, in either case, to a de minimis
extent). In confirmation of such subordination and waiver, Tenant, from time to
time, shall execute and deliver promptly any certificate or instrument that
Landlord reasonably requests. 


          13.7.  
Tenant’s Financial Statements.


          Subject
to the terms of this Section 13.7, Tenant shall provide to Landlord, upon
Landlord’s request, (a) the balance sheet of Tenant and each Predecessor Tenant
(if any) in either 


52






case dated as
of the last day of each fiscal year (to the extent that the last day of each
such fiscal year occurs during the Term), (b) the income statement of Tenant
and each Predecessor Tenant (if any) for each such fiscal year that occurs, in
whole or in part, during the Term, and (c) the statement of changes in
financial condition of Tenant and each Predecessor Tenant (if any) for each
such fiscal year that occurs, in whole or in part, during the Term, in each
case on or prior to the one hundred twentieth (120th) day after the last day of
each such fiscal year (such financial statements being collectively referred to
herein as “Tenant’s Statements”). Tenant shall cause Tenant Statements to be
prepared in accordance with generally accepted accounting principles,
consistently applied. Landlord shall not disclose Tenant’s Statements to any
third party, except that Landlord may disclose Tenant’s Statements (i) to
Persons that provide (or that propose to provide), directly or indirectly, debt
or equity capital to Landlord or Landlord’s Affiliates and that provide
Landlord with reasonable assurances that such Persons will maintain the
confidentiality of Tenant’s Statements, (ii) to Persons that purchase (or that
propose to purchase) the Real Property or any portion thereof and that provide
Landlord with reasonable assurances that such Persons will maintain the
confidentiality of Tenant’s Statements, (iii) to Lessors (or prospective
Lessors) that provide Landlord with reasonable assurances that such Lessors (or
prospective Lessors) will maintain the confidentiality of Tenant’s Statements,
(iv) to Persons that provide professional services for Landlord (such as, for
example, Landlord’s attorneys and accountants) and that provide Landlord with reasonable
assurances that such Persons will maintain the confidentiality of Tenant’s
Statements, (v) to the extent required by law, (vi) to the extent reasonably
required by Landlord in enforcing Landlord’s rights hereunder, and (vii) to the
extent that Tenant’s Statements are otherwise available to the general public.
Tenant shall not have any obligation to provide Tenant’s Statements to Landlord
as provided in this Section 13.7 during the period that (x) the stock of Tenant
is publicly traded on a recognized stock exchange, and (y) Tenant’s Statements
are available to the general public under filings that Tenant makes with the
Securities and Exchange Commission.  


          13.8.  
EBITDA Certificate.


          Tenant
shall deliver to Landlord on the Security Deposit Date a certificate executed
by Tenant’s chief financial officer which certificate shall detail Tenant’s
EBITDA for the 2008 calendar year (the “EBITDA Certificate”). The term
“EBITDA”
shall mean earnings before interest, taxes, depreciation and amortization, as
determined in accordance with generally accepted accounting principles in the
United States of America, consistently applied. 


ARTICLE 14

INSURANCE


          14.1.  
Tenant’s Insurance.


                     (A)  
Tenant, at Tenant’s expense, shall obtain and keep in full force and effect (i)
an insurance policy for Tenant’s Property and the Specialty Alterations, in
either case to the extent insurable under the available standard forms of
“all-risk” insurance policies, in an amount equal to one hundred percent (100%)
of the replacement value thereof (subject, however, at Tenant’s option, to a
reasonable deductible) (the insurance policy described in this clause (i) being
referred to herein as “Tenant’s Property Policy”), (ii) a policy of
worker’s compensation insurance, to the extent required by law (such policy
being referred to herein as “Tenant’s


53






Worker’s Compensation Policy”), and (iii) a
policy of commercial general liability and property damage insurance on an
occurrence basis, with a broad form contractual liability endorsement (the
insurance policy described in this clause (iii) being collectively referred to
herein as “Tenant’s Liability Policy”). Tenant’s Property Policy and
Tenant’s Liability Policy shall name Tenant as the insured. Tenant’s Property
Policy shall also include business interruption insurance that is sufficient in
amount to pay the Fixed Rent and the Escalation Rent due hereunder for a period
of at least one (1) year. Tenant’s Liability Policy shall name the Landlord Indemnitees
as additional insureds thereunder. 


                     (B)  
Tenant’s Liability Policy shall contain a provision that (a) no act or omission
of Tenant shall affect or limit the obligation of the insurer to pay the amount
of any loss sustained, and (b) the policy is non-cancelable with respect to the
Landlord Indemnitees unless at least thirty (30) days of advance written notice
is given to Landlord, except that Tenant’s Liability Policy may be cancelable
on no less than ten (10) days of advance written notice to Landlord for
non-payment of premium. If Tenant receives any notice of cancellation or any
other notice from the insurance carrier which may adversely affect the coverage
of the insureds under Tenant’s Property Policy or Tenant’s Liability Policy, then
Tenant shall immediately deliver to Landlord a copy of such notice. The minimum
amounts of liability under Tenant’s Liability Policy shall be a combined single
limit with respect to each occurrence in the amount of Five Million Dollars
($5,000,000) for injury (or death) to persons and damage to property, which
minimum amount Landlord may increase from time to time to the amount of
insurance that in Landlord’s reasonable judgment is then being customarily
required by prudent landlords of firstclass buildings in the vicinity of the
Building from tenants leasing space similar in size, nature and location to the
Premises. 


                     (C)  
Tenant shall cause Tenant’s Liability Policy and Tenant’s Worker’s Compensation
Policy to be issued by reputable and independent insurers that are (x)
permitted to do business in the State of New York, and (y) rated in Best’s
Insurance Guide, or any successor thereto, as having a general policyholder
rating of AA and a financial rating of at least XIII (it being understood that
if such ratings are no longer issued, then such insurer’s financial integrity
shall conform to the standards that constitute such ratings from Best’s
Insurance Guide as of the date hereof). 


                     (D)  
Tenant has the right to satisfy Tenant’s obligation to carry Tenant’s Liability
Policy with an umbrella insurance policy if such umbrella insurance policy
contains an aggregate per location endorsement that provides the required level
of protection for the Premises. Tenant has the right to satisfy Tenant’s
obligation to carry Tenant’s Property Policy with a blanket insurance policy if
such blanket insurance policy provides, on a per occurrence basis, that a loss
that relates to any other location does not impair or reduce the level of
protection available for the Premises below the amount required by this Lease. 


          14.2.  
Landlord’s Insurance.


                     (A)  
Subject to the terms of this Section 14.2, Landlord shall obtain and keep in
full force and effect insurance against loss or damage by fire and other
casualty to the Building, to the extent insurable on commercially reasonable
terms under then available standard forms of “all-risk” insurance policies, in
an amount equal to one hundred percent (100%) of the 


54






replacement value
thereof or, at Landlord’s option, in such lesser amount as will avoid
coinsurance (such insurance being referred to herein as “Landlord’s Property
Policy”). Tenant acknowledges that (i) Landlord’s Property Policy may
encompass rent insurance, (ii) the risks that Landlord’s Property Policy covers
may include, without limitation, fire, war, terrorism, environmental matters,
and flood, and (iii) Landlord may also obtain a commercial general liability
insurance policy. 


                     (B)  
Landlord shall not be liable to Tenant for any failure to insure any
Alterations unless Tenant notifies Landlord of the completion of such
Alterations and the cost thereof, and maintains adequate records with respect
to such Alterations to facilitate the adjustment of any insurance claims with
respect thereto. Landlord shall have the right to provide that the coverage of
Landlord’s Property Policy is subject to a reasonable deductible. Tenant shall
cooperate with Landlord and Landlord’s insurance companies in the adjustment of
any claims for any damage to the Building or the Alterations. Landlord shall
not be required to carry insurance on Tenant’s Property or the Specialty
Alterations. Landlord shall not be required to carry insurance against any loss
suffered by Tenant due to the interruption of Tenant’s business. 


          14.3.  
Mutual Waiver of Subrogation.


                     (A)  
Subject to the provisions of this Section 14.3, Landlord and Tenant shall each
obtain an appropriate clause in, or endorsement on, Landlord’s Property Policy
or Tenant’s Property Policy (as the case may be) pursuant to which the
insurance companies waive subrogation or consent to a waiver of right of
recovery. Landlord and Tenant also agree that, having obtained such clauses or
endorsements of waiver of subrogation or consent to a waiver of right of
recovery, they shall not make any claim against or seek to recover from the
Landlord Indemnitees or the Tenant Indemnitees (as the case may be) for any
loss or damage to its property or the property of others resulting from fire or
other hazards covered by Landlord’s Property Policy or Tenant’s Property Policy
(as the case may be); provided, however, that the release, discharge,
exoneration and covenant not to sue herein contained shall be limited by and be
coextensive with the terms and provisions of the waiver of subrogation clause
or endorsements or clauses or endorsements consenting to a waiver of right of
recovery. 


                     (B)  
If the payment of an additional premium is required for the inclusion of a
waiver of subrogation provision as described in Section 14.3(A) hereof, then
each party shall advise the other party of the amount of any such additional
premiums and the other party at its own election may, but shall not be
obligated to, pay such additional premium. If (x) Tenant is the party that
elects to pay such additional premium to include such a waiver in Landlord’s
Property Policy, and (y) other tenants in the Building make concurrently a
similar election, then the aforesaid amount that Tenant is obligated to pay to
Landlord on account of such additional premium shall be only the portion
thereof that Landlord allocates equitably to Tenant. If such other party does
not elect to pay such additional premium, then the party whose insurer is charging
the additional premium shall not be required to obtain such waiver of
subrogation provision. 


                     (C)  
If either party is unable to obtain the inclusion of such waiver of subrogation
provision even with the payment of an additional premium, then such party shall
attempt to name the other party as an additional insured (but not a loss payee)
under the 


55






applicable
insurance policy. If the payment of an additional premium is required for
naming the other party as an additional insured (but not a loss payee), then
such party shall advise the other of the amount of any such additional premium
and the other party at its own election may, but shall not be obligated to, pay
such additional premium. If (x) Tenant is the party that elects to pay such
additional premium to name Tenant as an additional insured (but not as loss
payee), and (y) other tenants in the Building make concurrently a similar
election, then the aforesaid amount that Tenant is obligated to pay to Landlord
on account of such additional premium shall be only the portion thereof that
Landlord allocates equitably to Tenant. If such other party does not elect to
pay such additional premium or if it is not possible to have the other party
named as an additional insured (but not loss payee), even with the payment of
an additional premium, then (in either event) the party whose insurer refuses
to include such waiver of subrogation provision shall so notify the other party
and such party shall not have the obligation to name the other party as an
additional insured. 


          14.4.  
Evidence of Insurance.


On or prior to
the Commencement Date, each party shall deliver to the other party appropriate
certificates of insurance required to be carried by the parties pursuant to
this Article 14, including evidence of waivers of subrogation and naming of
additional insureds in either case as required by Section 14.3 hereof. Each
party shall deliver to the other party evidence of each renewal or replacement
of a policy at least twenty (20) days prior to the expiration of such policy. 


          14.5.  
No Concurrent Insurance.


          Tenant
shall not obtain any property insurance (under Tenant’s Property Policy or
otherwise) that covers the property that is covered by Landlord’s Property
Policy. 


          14.6.  
Tenant’s Obligation to Comply with Landlord’s Fire and Casualty Insurance.



          If
(i) Tenant (or any other Person claiming by, through or under Tenant) uses the
Premises for any purpose other than general office use, and (ii) the use of
the Premises by Tenant (or such other Person) causes the premium for Landlord’s
Property Policy to exceed the premium that would have otherwise applied
therefor if Tenant (or such Person) used the Premises for general office use,
then Tenant shall pay to Landlord, as additional rent, an amount equal to such
excess, on or prior to the thirtieth (30th) day after the date that Landlord
gives to Tenant an invoice therefor, together with reasonable supporting
documentation for the charges set forth therein. Nothing contained in this
Section 14.6 expands Tenant’s rights under Article 3 hereof. 


ARTICLE 15

CASUALTY


          15.1.  
Notice. 


          Tenant
shall notify Landlord promptly of any fire or other casualty that occurs in the
Premises. 


56






          15.2.  
Landlord’s Restoration Obligations. 


          Subject
to the terms of this Section 15.2, Landlord, with reasonable diligence, shall
repair the damage to (i) the Premises (including, without limitation, the
Alterations), (ii) the Building Systems that service the Premises, and (iii)
the common elements of the Building that Tenant uses to gain access to the
Premises, in each case to the extent caused by fire or other casualty. The
restoration work to be performed by Landlord shall include, without limitation,
any portion of Landlord’s Work that Landlord did not Substantially Complete on
the date that the fire or other casualty occurred. Landlord shall commence the
performance of such repairs as promptly as reasonably practicable after the
occurrence of such fire or other casualty. Landlord shall use commercially
reasonable efforts to perform such repairs diligently, in a good and
workmanlike manner, and in a manner that minimizes to the extent reasonably
practicable interference with Tenant’s use and occupancy of any portion of the
Premises that remains tenantable. Landlord shall not be required to restore
Tenant’s Property or the Specialty Alterations. Landlord shall not be required
to commence such restoration until Tenant gives Landlord the notice described
in Section 15.1 hereof (unless Landlord otherwise has received actual notice of
the fire or other casualty). Landlord shall not be obligated to restore any
Alterations unless (i) Tenant has Substantially Completed the performance
thereof, (ii) Tenant has given Landlord notice to the effect that Tenant has
Substantially Completed such Alterations, (iii) Tenant has given Landlord
notice of the cost incurred by Tenant in performing such Alterations, and (iv)
Tenant has maintained records with respect to such Alterations in a form that
allows Landlord to make a full insurance recovery therefor under Landlord’s
Property Policy. If (x) Tenant, as part of the Initial Alterations, demolishes
all or a material part of the interior installation that exists in the Premises
on the Commencement Date, and (y) the Premises (including any Alterations) is
damaged by fire or other casualty at any time prior to the date that Tenant
Substantially Completes the Initial Alterations therein, then Landlord’s
obligation to repair the Premises (and any Alterations) shall be limited to (w)
the performance of Landlord’s Work (to the extent that the performance of
Landlord’s Work remains feasible after such fire or other casualty), (x) the
part of the Building Systems serving the Premises on the Commencement Date, but
not the distribution portions of such Building Systems located within the
Premises, (y) the floor and ceiling slabs of the Premises, and (z) the exterior
walls of the Premises, all to substantially the same condition that existed on
the Commencement Date. Landlord shall have the right to adapt the restoration
of the Premises as contemplated by this Section 15.2 to comply with applicable
Requirements that are then in effect. Landlord shall not be obligated to
restore the Premises as provided in this Section 15.2 to the extent that this
Lease terminates by reason of such fire or other casualty as provided in this
Article 15. 


          15.3.  
Rent Abatement. 


                     (A)  
Subject to Section 15.3(B) hereof, the Fixed Rent and the Escalation Rent that
is otherwise due and payable hereunder shall not be reduced by reason of a fire
or other casualty (and, accordingly, Tenant shall remain obligated to pay the
Fixed Rent and the Escalation Rent that comes due hereunder during the period
that Landlord is performing the restoration work described in Section 15.2
hereof), except that if (I) the Premises (or a portion thereof) becomes
unusable or inaccessible by reason of a fire or other casualty, and (II) the
period that the Premises remains unusable or inaccessible extends for more than
one (1) year from the date of such fire or other casualty, then the Fixed Rent
and the Escalation Rent shall be reduced in the proportion that the number of
square feet of Rentable Area of the part of the Premises that is not usable or
accessible by Tenant by reason of such fire or other casualty bears 


57






to the total
Rentable Area of the Premises immediately prior to such fire or other casualty,
for the period commencing on the date that is one (1) year after the date that
the Premises (or the applicable portion thereof) first becomes unusable or
inaccessible by reason of such fire or other casualty and ending on the date
that Landlord Substantially Completes the restoration described in Section 15.2
hereof or the applicable portion of the Premises becomes accessible, as the
case may be. 


                     (B)  
If a fire or other casualty occurs in the Premises after the Commencement Date
and prior to the Rent Commencement Date, then the aggregate abatement of Fixed
Rent and the Escalation Rent to which Tenant is entitled as contemplated by
Section 15.3(A) hereof (from and after the Rent Commencement Date) shall be an
amount equal to the aggregate abatement of Fixed Rent and the Escalation Rent
to which Tenant would have been entitled under Section 15.3(A) hereof if the
Rent Commencement Date had occurred immediately prior to such fire or other
casualty. 


          15.4.  
Landlord’s Termination Right. 


          If
the Building is so damaged by fire or other casualty that, in Landlord’s
opinion, substantial alteration, demolition, or reconstruction of the Building
is required (regardless of whether the Premises have been damaged or rendered
untenantable), then Landlord may terminate this Lease by giving Tenant notice
thereof on or prior to the ninetieth (90th) day after such fire or other
casualty; provided, however, that if the Premises are not substantially damaged
or rendered untenantable by such fire or other casualty, then Landlord may not
so terminate this Lease unless Landlord elects to terminate leases, including
this Lease) affecting at least seventyG:\PCaruso\20Broad\Penthouse Lease ver
6.doc Created on 4/30/2008 12:04:00 PM five (75%) percent of the Rentable Area
of the Building (excluding any portion of the Building leased to or occupied by
Landlord or Landlord’s Affiliates). If Landlord elects to terminate this Lease
as aforesaid, then (I) the Term shall expire on a date set by Landlord that (A)
is not sooner than (i) the tenth (10th) day after the date that Landlord gives
such notice (if all or substantially all of the Premises is rendered
untenantable by such fire or other casualty), and (ii) the ninetieth (90th) day
after the date that Landlord gives such notice (if less than all or substantially
all of the Premises is rendered untenantable by such fire or other casualty),
and (B) is not later than the first (1st) anniversary of the date on which such
fire or other casualty occurs, and (II) Tenant, on such date set by Landlord,
shall vacate the Premises and surrender the Premises to Landlord in accordance
with the terms of this Lease that govern Tenant’s obligations upon the
expiration or earlier termination of the Term. Upon the termination of this
Lease under this Section 15.4, the Rental shall be apportioned and any prepaid
portion of the Rental for any period after the date that the abatement of
Rental as described in Section 15.3 hereof becomes effective shall be refunded
promptly by Landlord to Tenant (and Landlord’s obligation to make such refund
shall survive the Expiration Date). 


          15.5.  
Tenant’s Termination Right. 


                     (A)  
Landlord, within forty-five (45) days after the earlier to occur of (x) the
date that Tenant gives Landlord notice of the occurrence of a fire or other
casualty as contemplated by Section 15.1 hereof, and (y) the date that Landlord
otherwise has actual notice of such fire or other casualty, shall give to
Tenant a statement prepared by a reputable and 


58






independent
contractor setting forth such contractor’s estimate in good faith as to the
time required for Landlord to Substantially Complete the restoration described
in Section 15.2 hereof (such statement that Landlord gives to Tenant being
referred to herein as the “Casualty Statement”); provided, however, that
Landlord shall not be required to give Tenant a Casualty Statement if Landlord
has theretofore exercised Landlord’s right to terminate this Lease under
Section 15.4 hereof. If the estimated time period as set forth in the Casualty
Statement exceeds twelve (12) months from the date of the applicable fire or
other casualty, then Tenant may elect to terminate this Lease by giving notice
to Landlord not later than the thirtieth (30th) day after the date that
Landlord gives the Casualty Statement to Tenant. If Tenant makes such election
to so terminate this Lease, then the Term shall expire on the thirtieth (30th)
day after Tenant gives such notice to Landlord.  



                     (B)  
This Lease shall terminate if (i) a fire or other casualty occurs, and, by
reason thereof, Landlord has an obligation to perform a restoration as
contemplated by Section 15.2 hereof, (ii) Tenant does not exercise Tenant’s
right to terminate this Lease under Section 15.5(A) hereof in connection with
such fire or other casualty (or Tenant does not have the right to terminate
this Lease under Section 15.5(A) hereof in connection with such fire or other
casualty), (iii) Landlord fails to Substantially Complete the performance of
the restoration work that Landlord is required to perform on or prior to the
date that is thirty (30) days after the last day of the estimated time period
set forth in the Casualty Statement (the date described in this clause (iii)
being referred to herein as the “Second Bite Date”), (iv) Tenant gives Landlord
notice no earlier than the Second Bite Date to the effect that this Lease will
terminate under this Section 15.5(B) if Landlord fails to Substantially
Complete the restoration within thirty (30) days after the Second Bite Date,
and (v) Landlord fails to Substantially Complete the restoration within thirty
(30) days after the Second Bite Date.  


                     (C)  
If the Term terminates as provided in this Section 15.5, then (I) Tenant shall
vacate the Premises and surrender the Premises to Landlord on the date of such
termination “as is” and otherwise in accordance with the terms of this Lease
that govern Tenant’s obligations upon the expiration or earlier termination of
the Term, (II) any Rental due hereunder shall be apportioned as of the date of
such termination, and (III) any portion of the Rental that is then prepaid by
Tenant and relates to the period after the date that the abatement of Rental as
described in Section 15.3 hereof becomes effective shall be promptly refunded
by Landlord to Tenant (with the understanding that Landlord’s obligation to
make any such refund shall survive such termination of this Lease). 


          15.6.  
Termination Rights at End of Term. 


          If
the Premises are substantially damaged by a fire or other casualty that occurs
during the period of twelve (12) months immediately preceding the Fixed
Expiration Date, then either Landlord or Tenant may elect to terminate this
Lease by notice given to the other party within thirty (30) days after such
fire or other casualty occurs. If either party makes such election, then the
Term shall expire on the thirtieth (30th) day after the notice of such election
is given, and, accordingly, Tenant, on or prior to such thirtieth (30th) day,
shall vacate the Premises and surrender the Premises to Landlord in accordance
with the provisions of this Lease that govern Tenant’s obligation to deliver
vacant and exclusive possession of the Premises to Landlord upon the expiration
of the Term. Upon the termination of this Lease under this Section 15.6, the 


59






Rental shall
be apportioned and any prepaid portion of the Rental for any period after the
Expiration Date shall be refunded promptly by Landlord to Tenant (and
Landlord’s obligation to make such refund shall survive the Expiration Date).
For purposes of this Section 15.6, the term “substantially damaged” shall mean
that: (a) a fire or other casualty precludes Tenant from using more than
thirty-five percent (35%) of the Premises for the conduct of its business, and
(b) Tenant’s inability to so use the Premises (or the applicable portion
thereof) is reasonably expected to continue until at least the earlier to occur
of (i) the Fixed Expiration Date, and (ii) the ninetieth (90th) day after the
date that such fire or other casualty occurs. 


          15.7.  
No Other Termination Rights. 


          Tenant
shall have no right to cancel this Lease by virtue of a fire or other casualty
except to the extent specifically set forth herein. This Article 15 is intended
to constitute an “express agreement to the contrary” for purposes of Section
227 of the New York Real Property Law. 


ARTICLE 16

CONDEMNATION


          16.1.  
Effect of Condemnation. 


                     (A)  
Subject to the provisions of Section 16.2 hereof, if the entire Real Property,
the entire Building or the entire Premises is condemned or otherwise acquired
by the exercise of the power of eminent domain, then this Lease shall terminate
as of the date that such condemnation or acquisition is consummated. 


                     (B)  
If only a part of the Real Property and not the entire Premises is so acquired
or condemned, then: 


                              (1)  
except as hereinafter provided in this Section 16.1, this Lease shall remain
effective, and, from and after the date that the condemnation or acquisition is
consummated, (w) the Fixed Rent shall be reduced in the proportion that the
number of square feet of Rentable Area of the part of the Premises so acquired
or condemned bears to the total Rentable Area of the Premises immediately prior
to such acquisition or condemnation, (x) Tenant’s Tax Share shall be
redetermined based upon the proportion that the number of square feet of
Rentable Area of the Premises that is remaining after such acquisition or
condemnation bears to the number of square feet of Rentable Area of the
Building that is remaining after such acquisition or condemnation, and (y)
Tenant’s Operating Expense Share shall be redetermined based upon the
proportion that the number of square feet of Rentable Area of the Premises
remaining after such acquisition or condemnation bears to the number of square
feet of Rentable Area of the Building remaining after such acquisition or
condemnation (other than any retail portion of the Building); 


                              (2)  
on or prior to the sixtieth (60th) day after the date that the condemnation or
acquisition is consummated, Landlord shall have the right to terminate this
Lease by giving notice to Tenant if either (i) at least fifteen percent (15%)
of the usable area of the Premises is so acquired or condemned, or (ii)
Landlord terminates leases (including this Lease) for at least seventy-five
percent (75%) of the usable area of the Building (excluding any portion of the
Building leased to or occupied by Landlord or Landlord’s Affiliates); and 


60






                            (3)  
if (a) the part of the Real Property so acquired or condemned contains more
than fifteen percent (15%) of the usable area of the Premises immediately prior
to such acquisition or condemnation, or (b) by reason of such acquisition or
condemnation, Tenant no longer has reasonable means of access to the Premises,
then Tenant may elect to terminate this Lease by giving notice to Landlord on
or prior to the sixtieth (60th) day after the date that Tenant is given notice
of such acquisition or condemnation being consummated. 


The Term shall
expire on the thirtieth (30th) day after the date that Landlord or Tenant give
any such notice to terminate this Lease. 


                   (C)  
Landlord shall refund to Tenant, promptly after the date that such taking or
acquisition becomes effective, any Rental that Tenant has theretofore paid for
the Premises (or the applicable portion thereof that is so taken or acquired)
to the extent that such Rental is properly allocable to the period after the
date that such taking or acquisition becomes effective (and Landlord’s
obligation to make such refund shall survive the Expiration Date). 


                   (D)  
If this Lease terminates pursuant to the provisions of this Section 16.1, then
the Rental for the portion of the Premises that is not taken or acquired shall
be apportioned as of the termination date. Landlord shall refund promptly to
Tenant any Rental that Tenant has theretofore paid for any period after the
date that such termination becomes effective (and Landlord’s obligation to make
such refund shall survive the Expiration Date). 


                   (E)  
If a part of the Premises is so acquired or condemned and this Lease and the
Term is not terminated pursuant to the foregoing provisions of this Section
16.1, then Landlord, at Landlord’s expense, shall restore the part of the
Premises that is not so acquired or condemned to a self-contained rental unit
inclusive of Alterations that Tenant has theretofore Substantially Completed,
except that if such acquisition or condemnation occurs prior to the Substantial
Completion of the Initial Alterations, then Landlord shall only be required to
restore the part of the Premises not so acquired or condemned to a
self-contained rental unit exclusive of any Alterations. 


          16.2.  
Condemnation Award. 


          Subject
to Section 16.3 hereof, Landlord shall be entitled to receive the entire award
for any such acquisition or condemnation of all or any part of the Real
Property. Tenant shall have no claim against Landlord or the condemning
authority for the value of any unexpired portion of the Term, and, accordingly,
Tenant hereby expressly assigns to Landlord all of its right in and to any such
award. Nothing contained in this Section 16.2 shall be deemed to prevent Tenant
from making a separate claim in any condemnation proceedings for the value of
any Tenant’s Property included in such taking, for any moving expenses or for
the costs incurred by Tenant in performing the Initial Alterations (prior to
Tenant’s Substantial Completion thereof) in the portion of the Premises that is
not so condemned or acquired. 


          16.3.  
Temporary Taking. 


          If
the whole or any part of the Premises is acquired or condemned temporarily
during the Term, then (a) Tenant shall give prompt notice thereof to Landlord,
(b) the Term shall not be reduced or affected in any way, (c) Tenant shall
continue to pay in full all items of Rental 


61






payable by
Tenant hereunder without reduction or abatement, and (d) Tenant shall be
entitled to receive for itself any award or payments for such use, provided,
however, that if the acquisition or condemnation is for a period extending
beyond the Term, then such award or payment shall be apportioned equitably
between Landlord and Tenant. Tenant, at Tenant’s expense, shall make
Alterations to restore the Premises to the condition existing prior to any such
temporary acquisition or condemnation. 


ARTICLE 17 

ASSIGNMENT AND SUBLETTING


          17.1.  
General Limitations. 


                     (A)  
Subject to the terms of this Article 17, without the prior consent of Landlord
in each instance, Tenant shall not, and Tenant shall not permit any other
Permitted Party to, consummate a Transfer. The term “Transfer” shall
mean: 


                              (1)  
(a) an assignment of a Permitted Party’s rights under, or a delegation of such
Permitted Party’s duties under, the applicable Occupancy Agreement by express
assignment or by operation of law or by other means, (b) a mortgage or other
encumbrance of such Permitted Party’s interest in the applicable Occupancy
Agreement, in whole or in part, (c) a subletting, or further subletting, of the
Premises or any part thereof, or (d) the occupancy of the Premises or any part
thereof by any Person other than such Permitted Party; and 


                              (2)  
any transaction that modifies or supplements (or further modifies or
supplements) an Occupancy Agreement to decrease the rental that is payable
thereunder, to change the premises that is demised thereby, or to change the
term thereof, in either case in any material respect (it being understood that
(i) a termination or cancellation of an Occupancy Agreement shall not
constitute a Transfer for purposes hereof, and (ii) such modification or
supplement shall be treated for purposes hereof as a transaction on the terms
of such Occupancy Agreement, as so modified or supplemented, for the balance of
the term thereof). 


                     (B)  
The term “Occupancy Agreement” shall mean the lease, sublease, license
or other agreement pursuant to which a Permitted Party has the right to occupy
the Premises (or the applicable portion thereof). 


                     (C)  
The term “Permitted Party” shall mean Tenant and any other Person that
has the right to occupy the Premises (or any part thereof) in accordance with
the terms of this Article 17 (other than a Person that has the right to occupy
the Premises (or the applicable part thereof) by virtue of Landlord’s
exercising Landlord’s rights under Section 17.3 hereof). 


                     (D)  
Subject to Section 17.7 hereof, the transfer of Control in a Permitted Party,
however accomplished, whether in a single transaction or in a series of
unrelated or related transactions, shall constitute an assignment of such
Permitted Party’s interest in the applicable Occupancy Agreement for purposes
of this Article 17. 


62






                   (E)  
The consent by Landlord to any Transfer shall not relieve Tenant from its
obligation to obtain the prior consent of Landlord to any other Transfer to the
extent required by this Lease. 


                   (F)  
The assignment by any Person that constitutes Tenant of the tenant’s interest
under this Lease shall not relieve such Person of the obligations of the tenant
under this Lease. Such Person’s liability under this Lease shall continue
notwithstanding (x) the subsequent release of any other Person that constitutes
Tenant from liability under this Lease, (y) any limitation on any such other
Person’s liability hereunder by virtue of the Bankruptcy Code, or (z) any
modification or amendment of this Lease that Landlord consummates with any such
other Person that constitutes Tenant subsequently; provided, however, that if
such other Person is not an Affiliate of such Person, then any such
modification or amendment shall not expand such Person’s liability hereunder. 


                   (G)  
Notwithstanding anything to the contrary contained herein, Tenant shall not,
and Tenant shall not permit any other Permitted Party to, enter into any lease,
sublease, license, concession or other agreement for use or occupancy of the
Premises or any portion thereof which provides for a rental or other payment
for such use or occupancy based in whole or in part on the net income or
profits derived by any Person from the property leased, occupied or used, or
which would require the payment of any consideration that would not qualify as
“rents from real property,” as that term is defined in Section 856(d) of the
Internal Revenue Code of 1986, as amended. 


                   (H)  
If Tenant assigns the tenant’s interest under this Lease in violation of the
terms of this Article 17, then such assignment shall be void and of no force
and effect against Landlord; provided, however, that Landlord (x) may collect
an amount equal to the then Rental from the assignee as a fee for such
assignee’s use and occupancy, and (y) shall apply the net amount collected to
the Rental reserved in this Lease. If the Premises or any part thereof are
sublet to, occupied by, or used by any Person other than Tenant (regardless of
whether such subletting, occupancy or use violates this Article 17), then
Landlord (a) after the occurrence of an Event of Default, may collect amounts
from the subtenant, user or occupant as a fee for its use and occupancy, and
(b) shall apply the net amount collected to the Rental reserved in this Lease.
No such assignment, subletting, occupancy or use, with or without Landlord’s
prior consent, nor any such collection or application of fees for use and
occupancy, shall (i) be deemed a waiver by Landlord of any term, covenant or
condition of this Lease, (ii) be deemed the acceptance by Landlord of such
assignee, subtenant, occupant or user as tenant hereunder, or (iii) relieve
Tenant of the obligations of the tenant under this Lease. 


          17.2.  
Landlord’s Expenses. 


          Tenant
shall reimburse Landlord for a reasonable processing fee, any reasonable
Out-of-Pocket Costs that Landlord incurs in connection with any proposed
Transfer, including, without limitation, reasonable attorneys’ fees and
disbursements, and the reasonable costs of making investigations as to the
acceptability of the proposed Transferee, within thirty (30) days after
Landlord gives to Tenant an invoice therefor together with reasonable
supporting documentation for the charges set forth therein. 


63






          17.3.  
Recapture Procedure.  


                   (A)  
Tenant shall have the right to institute the procedure described in this
Section 17.3 (the “Recapture Procedure”) only by giving to Landlord
notice thereof (a “Transfer Notice”), which: 


                            (1)  
refers expressly to this Section 17.3 and indicates that such notice
constitutes a Transfer Notice, 


                            (2)  
sets forth a description of the Premises (or the portion thereof) that is
involved in the proposed Transfer (the Premises, or the portion thereof, that
is involved in the proposed Transfer being referred to herein as the “Recapture
Space”), 


                            (3)  
includes a copy of the bona fide
term sheet that sets forth the material terms of the proposed Transfer,
including, without limitation, the rental, concessions, work, and the Premises
or the portion thereof that is subject to such proposed Transfer and the term
thereof, Tenant intends to use to evidence the proposed Transfer, 


                            (4)  
identifies the Person to which Tenant proposes to make the Transfer (the Person
to which a Transfer is made being referred to herein as a “Transferee”),
and 


                            (5)  
sets forth the date on which Tenant proposes that the term of a Transfer that
constitutes a sublease, license or other similar agreement that grants
occupancy rights will commence, or that a Transfer that constitutes an
assignment will occur, as the case may be (such date being referred to herein
as the “Transfer Date”) (it being understood that the Transfer Date
shall be no sooner than sixty (60) days, and no later than two hundred seventy
(270) days, after the date that Tenant gives the Transfer Notice to Landlord)
(the material terms of a proposed Transfer as set forth in the Transfer Notice
being referred to herein as the “Proposed Transfer Terms”). 


                   (B)  
The term “Transfer Expenses” shall mean the actual Out-of-Pocket Costs
that the Permitted Party that makes the applicable Transfer (the “Transferor”)
pays solely in consummating a Transfer, including, without limitation, (i)
brokerage commissions, (ii) allowances that a Transferor makes available to the
Transferee to fund the cost of Alterations that the Transferee makes to the
Premises (or the applicable portion thereof that is involved in the Transfer),
(iii) costs that a Transferor pays in making Alterations to prepare the
Premises (or the applicable portion thereof that is involved in the Transfer)
solely for the Transferee’s initial occupancy, (iv) the amount payable to
Landlord under Section 17.2 hereof for such Transfer, (v) reasonable attorneys’
fees and disbursements that a Transferor pays in connection with consummating
such Transfer, and (vi) the transfer taxes (and other similar charges and fees)
that Tenant pays pursuant to Section 17.5 hereof. 


                   (C)  
The term “Amortized Transfer Expenses” shall mean, with respect to any
period, the amount of the Transfer Expenses that amortize during such period if
the Transfer Expenses are amortized, in equal monthly installments, with
interest calculated at the Base Rate, over the period that the Transferee is
obligated to make payments to a Transferor in respect of the applicable
Transfer. 


64






                   (D)  
The term “Recapture Date” shall mean the thirtieth (30th) day after the
date that Tenant gives the Transfer Notice to Landlord. 


                   (E)  


                            (1)  
If (x) Tenant gives a Transfer Notice to Landlord, and (y) the Transfer
described in the Transfer Notice constitutes a sublease for the Recapture Space
with respect to which the term thereof expires on or prior to the date that is
twelve (12) months before the Fixed Expiration Date (any sublease that expires
before such date being referred to herein as a “Short-Term Sublease”),
then Landlord shall have the right to sublease (or to cause the Recapture
Subtenant to sublease) the Recapture Space from Tenant, on the terms set forth
in this Section 17.3(E), by giving notice thereof (the “Recapture Sublease
Notice”) to Tenant not later than the Recapture Date (as to which date time
shall be of the essence) (any such sublease of the Recapture Space that
Landlord elects to consummate under this Section 17.3(E) being referred to
herein as a “Recapture Sublease”). 


                            (2)  
If Landlord gives a Recapture Sublease Notice to Tenant, then Tenant shall, and
Landlord shall (or Landlord shall cause the Recapture Subtenant to), consummate
a Recapture Sublease for the Recapture Space on the following terms: 


                                   (a)  
Landlord shall give to Tenant, within twenty (20) days after the date that
Landlord gives to Tenant the Recapture Sublease Notice, a proposed sublease
that conforms with the terms set forth in this Section 17.3(E) and is otherwise
on the terms set forth in this Lease. Tenant shall execute and deliver such
sublease promptly after Landlord’s submission thereof to Tenant. Landlord shall
execute and deliver (or cause the Recapture Subtenant to execute and deliver)
such sublease promptly after Tenant delivers to Landlord the counterpart
thereof that is executed by Tenant. 


                                   (b)  
Landlord shall have the right to designate that the subtenant under the
Recapture Sublease is a Person other than Landlord (the Person that constitutes
the subtenant under a Recapture Sublease being referred to herein as the “Recapture
Subtenant”). 


                                   (c)  
The rental payable by the Recapture Subtenant to Tenant shall be calculated on
either of the following methods, as designated by Landlord (with the
understanding that Landlord shall be deemed to have elected clause (i) below if
Landlord does not designate otherwise in the Recapture Sublease Notice): 


                                            (i)  
the excess of (I) the rental that would have been payable by the Transferee for
the applicable calendar month as contemplated by the Proposed Transfer Terms,
over (II) the Amortized Transfer Expenses for such month that would have
resulted from the Proposed Transfer Terms; or 


                                            (ii)  
the Fixed Rent and the Escalation Rent that is due under this Lease for the
Recapture Space. 


                                   (d)  
The term of the Recapture Sublease shall commence on the Transfer Date and
shall extend for the term set forth in the Transfer Notice as part of the
Proposed Transfer Terms (with the understanding that the Recapture Subtenant
shall have the 


65






right to
extend the term of the Recapture Sublease for a term that corresponds, or for
terms that correspond, to any renewal right or renewal rights that are set
forth in the Transfer Notice as part of the Proposed Transfer Terms). 


                                   (e)  
If, during the term of the Recapture Sublease (or during the period that the
Recapture Subtenant, or any Person claiming by, through or under the Recapture
Subtenant, remains in occupancy of the Recapture Space after the term of the
Recapture Sublease expires or earlier terminates), an event or circumstance
occurs that is attributable to the Recapture Subtenant (or a Person claiming
by, through or under the Recapture Subtenant), then such event or circumstance
shall not constitute a default by Tenant hereunder (and, accordingly, Tenant
shall not have liability to Landlord in connection therewith). 


                                   (f)  
Tenant shall have the right to offset against the Rental due hereunder an
amount equal to the rental that the Recapture Subtenant fails to pay when due
to Tenant. 


                                   (g)  
The Recapture Subtenant (and any Person claiming by, through or under the
Recapture Subtenant), during the term of the Recapture Sublease, shall have the
right to make alterations to the Recapture Space; provided, however, that the
Recapture Subtenant shall be required to restore the Recapture Space upon the
expiration of the term of the Recapture Sublease to the extent required by the
applicable Proposed Transfer Terms. 


                                   (h)  
If the Recapture Space does not constitute the entire Premises, then Tenant, at
Tenant’s expense, shall cause the Recapture Space to be demised separately from
the remainder of the Premises on or prior to the Transfer Date (except that
Landlord shall so demise the Recapture Space separately from the remainder of
the Premises, at Landlord’s cost, to the extent provided in the applicable
Proposed Transfer Terms). 


                                   (i)  
The Recapture Subtenant shall have the right to further sublease the Recapture
Space, or assign the Recapture Subtenant’s rights as subtenant under the
Recapture Sublease, to any third party, without Tenant having any rights to
consent thereto or to receive additional payments from the Recapture Subtenant
in connection therewith. 


                                   (j)  
The Recapture Subtenant shall not have the right to receive from Tenant any
free rent, tenant improvement allowance or other similar concession that
constitutes part of the Proposed Transfer Terms. 


                   (F)


                            (1)  
If (x) Tenant gives a Transfer Notice to Landlord, and (y) the Transfer
described in the Transfer Notice constitutes either a sublease for the
Recapture Space (other than a Short-Term Sublease) or an assignment, then
Landlord shall have the right to terminate this Lease with respect to the
Recapture Space, on the terms set forth in this Section 17.3(F), by giving
notice thereof (the “Recapture Termination Notice”) to Tenant not later
than the Recapture Date (any such termination of this Lease with respect to the
Recapture Space being referred to herein as a “Recapture Termination”). 


66






                            (2)  
If (x) Landlord gives to Tenant a Recapture Termination Notice, and (y) the
Recapture Space constitutes the entire Premises, then the Term shall terminate
on the Transfer Date. If the Term so terminates on the Transfer Date, then
Tenant, on the Transfer Date, shall vacate the Premises and deliver exclusive
possession thereof to Landlord in accordance with the terms of this Lease that
govern Tenant’s obligations upon the expiration or earlier termination of the
Term. 


                            (3)  
If (x) Landlord gives to Tenant a Recapture Termination Notice, and (y) the
Recapture Space does not constitute the entire Premises, then: 


                                   (a)  
Tenant, at Tenant’s expense, shall demise the Recapture Space separately from
the remainder of the Premises on or prior to the Transfer Date (except that
Landlord shall so demise the Recapture Space separately from the remainder of
the Premises, at Landlord’s cost, to the extent provided in the applicable
Proposed Transfer Terms), 


                                   (b)  
effective as of the Transfer Date, Tenant’s Operating Expense Share shall be
redetermined based on the ratio that (I) the number of square feet of Rentable
Area of the Premises that remains after excluding therefrom the Recapture
Space, bears to (II) the number of square feet of Rentable Area of the
Building, 


                                     (c)    effective
    as of the Transfer Date, Tenant’s Tax Share shall be redetermined based
    on the ratio that (I) the number of square feet of Rentable Area of the Premises
    that remains after excluding therefrom the Recapture Space, bears to (II)
    the number of square feet of Rentable Area of the Building (including, without
    limitation, the retail portion thereof), 


                                   (d)  
the Fixed Rent as set forth in Article 2 hereof from and after the Transfer
Date shall be reduced by an amount equal to the Fixed Rent that would have been
due under this Lease for the applicable portion of the Premises that
constitutes the Recapture Space, and 


                                   (e)  
Tenant, on the Transfer Date, shall vacate the Recapture Space and deliver
exclusive possession thereof to Landlord in accordance with the terms of this
Lease that govern Tenant’s obligations upon the expiration or earlier
termination of the Term; and 


                                   (f)  
effective as of the Transfer Date, the references in this Lease to the Premises
shall be deemed to be references to the Premises (other than the Recapture
Space). 


                          (4)  
If (x) Landlord elects to consummate a Recapture Termination, and (y) the
Transfer described in the applicable Transfer Notice constitutes a sublease or
sublicense, then Tenant shall pay to Landlord, as additional rent, on the first
day of each calendar month during the period from the Transfer Date to the date
that the term of such sublease or sublicense would have expired under the
Proposed Transfer Terms, an amount equal to the excess (if any) of: 


67






                                     (a)  
    the Fixed Rent and the Escalation Rent that would have otherwise been due
    under this Lease since the Transfer Date for the Premises (or the applicable
    portion thereof that constitutes the Recapture Space), over 


                                   (b)
  the sum of (A) the excess of (I) the rental that would have been payable by the
Transferee since the Transfer Date as contemplated by the Proposed Transfer
Terms, over (II) the Amortized Transfer Expenses under the Proposed Transfer
Terms that would have theretofore accrued, and (B) the amounts theretofore paid
by Tenant to Landlord under this Section 17.3(F)(4) in respect of such
Recapture Termination. 


Tenant’s
obligation to pay such amount to Landlord shall survive the termination of this
Lease (or the termination of this Lease only with respect to the Recapture
Space, as the case may be). 


                             (5)  
    If (x) Landlord elects to consummate a Recapture Termination, and (y) the
    Transfer described in the applicable Transfer Notice constitutes an assignment
    of Tenant’s interest under this Lease, then Tenant shall pay to Landlord
    the sum of: 


                                   (a)  
the present value of the consideration (if any) that would have been payable by
Tenant to the Transferee under the Proposed Transfer Terms (calculated as of
the Transfer Date using a discount rate equal to the Base Rate), and 


                                   (b)  
the excess, if any, of (I) the present value of the Transfer Expenses that
Tenant would have incurred under the Proposed Transfer Terms, over (II) the
present value of the consideration (if any) that would have been payable by the
Transferee to Tenant under the Proposed Transfer Terms (in either case
calculated as of the Transfer Date using a discount rate equal to the Base
Rate). 


Tenant shall
pay the amounts described in clauses (a) and (b) above on the Transfer Date.
Tenant’s obligation to pay such amounts to Landlord shall survive the
termination of this Lease (or the termination of this Lease only with respect
to the Recapture Space, as the case may be). 


          17.4.  
Certain Transfer Rights.


          Subject
to Section 17.7 hereof, Landlord shall not unreasonably withhold, condition or
delay Landlord’s consent to a Permitted Party’s consummating a Transfer,
provided that: 


                     (A)  
Tenant has theretofore instituted the Recapture Procedure for such Transfer;
provided, however, that Tenant shall not be required to have instituted the
Recapture Procedure for a Transfer that is proposed to be consummated by a
Permitted Party other than Tenant; 


                     (B)  
Landlord’s right to elect to consummate a Recapture Sublease or a Recapture
Termination (as the case may be) with respect to the proposed Transfer has
lapsed (without Landlord’s having exercised Landlord’s rights to consummate a
Recapture Sublease or a Recapture Termination (as the case may be)); provided,
however, that this Section 17.4(B) shall not apply for a Transfer that is
proposed to be consummated by a Permitted Party other than Tenant; 


68






                   (C)  
the Transfer is on terms that are at least as favorable to the Transferor as
the Proposed Transfer Terms; provided, however, that this Section 17.4(C) shall
not apply for a Transfer that is proposed to be consummated by a Permitted
Party other than Tenant; 


                   (D)  
the Transfer occurs no earlier than the thirtieth (30th) day before the Transfer
Date and no later than the thirtieth (30th) day after the Transfer Date;
provided, however, that this Section 17.4(D) shall not apply for a Transfer
that is proposed to be consummated by a Permitted Party other than Tenant; 


                   (E)  
Tenant submits to Landlord a counterpart of the documents that the Transferor
intends to use to consummate the proposed Transfer, which have been executed
and delivered by the proposed Transferor and the proposed Transferee, and which
are subject to no conditions to the effectiveness thereof (other than
Landlord’s granting Landlord’s consent thereto); 


                   (F)  
the Premises (or the applicable portion thereof) has not been listed or
otherwise publicly advertised at a rental rate that is less than the prevailing
rental rate set by Landlord for comparable space in the Building, or, if there
is no comparable space, the prevailing rental rate reasonably determined by
Landlord (it being agreed that nothing contained in this clause (F) prohibits a
Permitted Party from (I) consummating a Transfer at a rental rate that is less
than such prevailing rate, or (II) disseminating broker’s fliers or other
marketing materials that indicate that the rental rate for the Premises (or the
applicable portion thereof) is available upon request); 


                   (G)  
no Event of Default has occurred and is continuing; 


                   (H)  
the proposed Transferee has a financial standing (taking into consideration the
obligations of the Transferee under the applicable Occupancy Agreement) that is
reasonably satisfactory to Landlord; 


                   (I)  
the proposed Transferee is of a character, is engaged in a business, and
proposes to use the Premises (or the applicable portion thereof) in a manner
that in each case is in keeping with the standards of a first-class office
building in the vicinity of the Building; 


                   (J)  
the proposed Transferee, or any Affiliate of the proposed Transferee, does not
occupy any space in the Building (if Landlord has or reasonably expects to have,
within eight (8) months thereafter, space available in the Building that is
comparable to the Premises (or the applicable portion thereof); 


                   (K)  
neither the proposed Transferee, nor an Affiliate of the proposed Transferee,
is a Person with whom Landlord is then engaged in bona fide negotiations regarding the leasing or
subleasing
of space in the Building; 


                   (L)  
after taking into account the proposed Transfer, there will not exist more than
three (3) spaces in the Premises that are separately demised in any material
respect; 


69






                   (M)  
the Transferor and each other Permitted Party (if any) whose interest is
superior to the interest of the Transferor, and the Transferee, executes and
delivers to Landlord a consent to the Transfer in a form reasonably designated
by Landlord;


                   (N)  
if the Transfer constitutes an assignment of the tenant’s interest under this
Lease, the assignee has expressly assumed all of the obligations of Tenant
hereunder to the extent accruing from and after the date that the Transfer is effective;
and


                   (O)  
if the Transfer constitutes a sublease (or a further sublease), such sublease
provides expressly that (i) such sublease is subject and subordinate to the
Lease (and to the terms thereof), and (ii) if this Lease terminates, then
Landlord, at Landlord’s option, may take over all of the right, title and
interest of the Transferor under such sublease, and the Transferee, at
Landlord’s option, shall attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not be:


                            (1)  
liable for any act or omission of the Transferor under such sublease (except
for any such acts or omissions that (x) continue after the date that Landlord
succeeds to the interest of the Transferor under such sublease, and (y) may be
remedied by the providing a service or performing a repair),


                            (2)  
subject to any defense or offsets which the Transferee may have against the
Transferor that accrue prior to the date that Landlord succeeds to the interest
of the Transferor,


                            (3)  
bound by any previous payment that the Transferee made to the Transferor more
than thirty (30) days in advance of the date that such payment was due,


                            (4)  
bound by any obligation to make any payment to or on behalf of the Transferee
that accrues prior to the date that Landlord succeeds to the interest of the
Transferor under such sublease,


                            (5)  
bound by any obligation to perform any work or to make improvements to the
Premises, or the applicable portion thereof demised by such sublease (other
than the obligation to perform maintenance, repairs or restoration that in each
case first becomes necessary from and after the date that Landlord succeeds to
the interest of the Transferor under such sublease) (with the understanding,
however, that if (I) the Premises, or the applicable portion thereof, is
damaged by fire or other casualty, or affected by condemnation, prior to the
date that Landlord succeeds to the interest of the Transferor under such
sublease, (II) Landlord would have otherwise been required to perform the
restoration of the Premises, or the applicable portion thereof, that is
required by virtue of such fire or other casualty, or such condemnation, in accordance
with the terms hereof, and (III) Landlord does not elect to perform such
restoration by giving notice thereof to the subtenant on or prior to the tenth
(10th) day after the date that Landlord so succeeds, then such subtenant shall
have the right to terminate such sublease (and such subtenant’s obligation to
so attorn to Landlord, as aforesaid) by giving notice thereof to Landlord
within ten (10) days after the last day of such period of ten (10) days during
which Landlord has the right to give such notice to such subtenant),


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                            (6)  
bound by any amendment or modification of such sublease made without Landlord’s
consent, or


                            (7)  
bound to return the Transferee’s security deposit, if any, until such deposit
has come into Landlord’s actual possession and the Transferee is entitled to
such security deposit pursuant to the terms of such sublease (the requirements
of a proposed sublease as set forth in this Section 17.4(O) being collectively
referred to herein as the “Basic Sublease Provisions”).


          17.5.  
Transfer Taxes.


          Tenant
shall pay any transfer taxes (and other similar charges and fees) that any
Governmental Authority imposes in connection with any Transfer (including,
without limitation, any such transfer taxes, charges or fees that a
Governmental Authority imposes in connection with Landlord’s exercising
Landlord’s rights to consummate a Recapture Sublease or a Recapture Termination
(as the case may be)).


          17.6.  
Transfer Profit.


                     (A)  
Subject to the terms of this Section 17.6 and Section 17.7 hereof, Tenant shall
pay as additional rent to Landlord, on the first (1st) day of each calendar
month during the Term in the same manner as Fixed Rent, an amount equal to the
excess of (I) fifty percent (50%) of the Transfer Profit for each Transfer that
is determined as of the last day of the immediately preceding calendar month,
over (II) the aggregate amount of the payments that Tenant has theretofore paid
to Landlord for such Transfer under this Section 17.6(A).


                     (B)  


                            (1)  
The term “Transfer Profit” shall mean, with respect to any particular
Transfer, the excess (if any) of (x) the Transfer Inflow for such Transfer for
the period beginning on the first (1st) day of the term of the applicable
Transfer (if such Transfer is a sublease or sublicense) or the date that such
Transfer becomes effective (if such Transfer is an assignment of the tenant’s
interest under this Lease or an assignment of the subtenant’s interest under a
sublease or a sublicense (or further sublease or sublicense)) (as the case may
be), over (y) the sum of (a) the Transfer Outflow for such Transfer for such
period, and (b) the Amortized Transfer Expenses for such Transfer for such period.


                            (2)  
The term “Transfer Inflow” shall mean, with respect to any particular
Transfer for any particular period, the amount that the Transferor receives
during such period from or on behalf of the Transferee in connection with the
applicable Transfer.


                            (3)  
The term “Transfer Outflow” shall mean:


                                   (a)  
with respect to any Transfer that is a sublease or sublicense (or a further
sublease or sublicense), the aggregate amount that the Transferor pays during
the applicable period for the Premises (or the applicable portion thereof that
is involved in the Transfer) to the counterparty under the Occupancy Agreement
through which the Transferor 


71






derives its
rights to the Premises (or the applicable portion thereof that is involved in
the Transfer), and


                                   (b)  
with respect to any Transfer that is an assignment of the tenant’s interest
under this Lease or the subtenant’s interest under a sublease or sublicense (or
further sublease or sublicense), zero.


                     (C)  
If the Transferor (or an Affiliate thereof) receives in a transaction that
occurs concurrently with the applicable Transfer consideration from the
Transferee (or an Affiliate thereof) for the sale or lease of personal property
or for services that the Transferor (or an Affiliate thereof) agrees to provide
for the Transferee (or an Affiliate thereof), then (I) the Transfer Inflow
shall include (in addition to the consideration that the Transferor receives
for the Transfer) an amount equal to such other consideration, and (II) the
Transfer Outflow shall include (in addition to the items that are otherwise
includible in Transfer Outflow for purposes hereof) (a) the cost that the
Transferor (or such Affiliate thereof) incurs in acquiring the personal
property that the Transferor (or such Affiliate thereof) sells to the
Transferee (or an Affiliate thereof) in such concurrent transaction (to the
extent that such cost has not theretofore been amortized in accordance with generally
accepted accounting principles), (b) the amortization of the cost that the
Transferor (or such Affiliate thereof) incurs in acquiring any personal
property that the Transferor (or such Affiliate thereof) leases to the
Transferee, or (c) the cost that the Transferor (or an Affiliate thereof)
incurs in providing such services, as the case may be.


          17.7.   Permitted
Transfers.


                   (A)  
A Permitted Party shall have the right to assign such Permitted Party’s entire
interest under the applicable Occupancy Agreement to an Affiliate of such
Permitted Party without (x) Landlord’s prior approval, (y) Landlord’s having
the right to consummate a Recapture Termination in respect thereof, and (z)
Tenant’s being required to pay Transfer Profit to Landlord in connection
therewith, provided that in each case (i) Tenant gives to Landlord, not later
than the tenth (10th) Business Day after any such assignment is consummated, an
instrument, duly executed by such Permitted Party and the aforesaid Affiliate
of such Permitted Party, in form reasonably satisfactory to Landlord, to the
effect that such Affiliate assumes all of the obligations of such Permitted
Party under such Occupancy Agreement to the extent arising from and after the
date of such assignment, and (ii) Tenant, with such notice, provides Landlord
with reasonable evidence to the effect that the Person to which such Permitted
Party is so assigning such Permitted Party’s interest under such Occupancy
Agreement constitutes an Affiliate of such Permitted Party.


                   (B)  
The merger or consolidation of a Permitted Party into or with another Person
shall be permitted without (x) Landlord’s prior approval, (y) Landlord’s having
the right to consummate a Recapture Termination in respect thereof, and (z) Tenant’s
being required to pay Transfer Profit to Landlord in connection therewith,
provided that in each case (i) such merger or consolidation is not principally
for the purpose of transferring such Permitted Party’s interest in the
applicable Occupancy Agreement, (ii) Tenant gives Landlord notice of such
merger or consolidation not later than the tenth (10th) Business Day after the
occurrence thereof, and (iii) Tenant, within ten (10) Business Days after such
merger or consolidation, provides 


72






Landlord with
reasonable evidence that the requirement described in clause (i) above has been
satisfied,.


                   (C)  
The assignment of a Permitted Party’s entire interest under the applicable
Occupancy Agreement in connection with the sale of all or substantially all of
the assets of such Permitted Party shall be permitted without (x) Landlord’s
prior approval, (y) Landlord’s having the right to consummate a Recapture
Termination in respect thereof, and (z) Tenant’s being required to pay Transfer
Profit to Landlord in connection therewith, provided that in each case
(i) Tenant gives to Landlord, not later than the tenth (10th) Business Day
after any such assignment is consummated, an instrument, duly executed by such
Permitted Party and the Transferee, in form reasonably satisfactory to
Landlord, to the effect that such Transferee assumes all of the obligations of
such Permitted Party to the extent arising under the applicable Occupancy
Agreement from and after the date of such assignment, (ii) such sale of all or
substantially all of the assets of such Permitted Party is not principally for
the purpose of transferring such Permitted Party’s interest in such Occupancy
Agreement, and (iii) Tenant, within ten (10) Business Days after such sale,
provides Landlord with reasonable evidence that the requirement described in
clause (ii) above has been satisfied.


                   (D)  
The direct or indirect transfer of shares or equity interests in a Permitted
Party (including, without limitation, the issuance of treasury stock, or the
creation or issuance of a new class of stock, in either case in the context of
an initial public offering or in the context of a subsequent offering of equity
securities) shall be permitted without (x) Landlord’s prior approval, (y)
Landlord’s having the right to consummate a Recapture Termination in respect
thereof, and (z) Tenant’s being required to pay Transfer Profit to Landlord in
connection therewith, provided that in each case (i) such transfer is not
principally for the purpose of transferring the interest of such Permitted
Party under the applicable Occupancy Agreement, (ii) Tenant gives Landlord
notice of such transfer not later than the tenth (10th) Business Day after the
occurrence thereof, and (iii) Tenant, within ten (10) Business Days after the
date that such transfer occurs, provides Landlord with reasonable evidence that
the requirement described in clause (i) has been satisfied (except that Tenant
shall not be required to comply with this clause (iii) to the extent that such
direct or indirect transfer of shares or equity interests is accomplished
through the public “over-the-counter” securities market or through any
recognized stock exchange).


                   (E)  
A Permitted Party shall have the right to sublease or license (or further
sublease or sublicense) the Premises, or any portion thereof, to an Affiliate
of such Permitted Party, without (x) Landlord’s prior approval, (y) Landlord’s
having the right to consummate a Recapture Termination or a Recapture Sublease
in respect thereof, and (z) Tenant’s being required to pay Transfer Profit to
Landlord in connection therewith, provided that in each case (i) Tenant
gives to Landlord a copy of such sublease or license, not later than the tenth
(10th) Business Day after any such sublease or license is consummated, (ii)
Tenant, with such copy of such sublease or license, provides Landlord with
reasonable evidence to the effect that the Person to which such Permitted Party
is so subleasing or licensing the Premises or a portion thereof constitutes an
Affiliate of such Permitted Party, and (iii) such sublease includes the Basic
Sublease Provisions.


73






                   (F)  
If (I) (i) a Permitted Party assigns such Permitted Party’s entire interest
under the applicable Occupancy Agreement to an Affiliate of such Permitted
Party, or (ii) a Permitted Party subleases or licenses (or further subleases or
sublicenses) all or part of the Premises to an Affiliate of such Permitted
Party, in either case without Landlord’s consent as provided in this Section
17.7 and without paying to Landlord any Transfer Profit that derives therefrom,
and (II) the assignee or subtenant or sublicensee subsequently assigns the
interest of such assignee or such subtenant or sublicensee under the applicable
Occupancy Agreement to a third party in a Transfer that is not governed by the
provisions of this Section 17.7 or further subleases or sublicenses all or part
of the Premises to a third party in a Transfer that is not governed by the
provisions of this Section 17.7, then, for purposes of calculating the Transfer
Profit that is due to Landlord for such subsequent assignment or sublease or
sublicense, the parties shall assume that the assignment or sublease or
sublicense that the Permitted Party consummated without Landlord’s approval
under this Section 17.7 did not occur previously (and, accordingly, the
parties, in calculating Transfer Profit for such Transfer that is not governed
by this Section 17.7, shall include any Transfer Profit that resulted from the
prior Transfer from the Permitted Party to its Affiliate).


Article 18

LANDLORD’S RIGHT TO RELOCATE TENANT


          18.1.  
Landlord’s Rights.


                   (A)  
Subject to the terms of this Section 18.1, Landlord, from and after the fifth
(5th) anniversary of the Commencement Date, shall have the one time right to
relocate Tenant from the Premises (the Premises from which Tenant is being
relocated pursuant to this Section 18.1 being referred to herein as the “Old
Premises”) to other space in the Building (such other space being referred
to as the “New Premises”; Landlord’s aforesaid right to relocate Tenant
from the Old Premises to the New Premises being referred to herein as the “Relocation
Option”).


                   (B)  
Landlord shall have the right to exercise the Relocation Option only by giving
notice thereof (the “Relocation Notice”) to Tenant not later than one
hundred eighty (180) days before the date that the aforesaid relocation becomes
effective (the date that the relocation becomes effective being referred to herein
as the “Relocation Date”). A Relocation Notice shall not be effective
for purposes of this Section 18.1 unless Landlord includes therewith a floor
plan identifying the New Premises. The New Premises shall (i) be on a floor not
lower than the Old Premises, (ii) be comprised of Rentable Area equal to or
greater than the Rentable Area of the Old Premises (if the Rentable Area is
greater than that of the Old Premises, then the Fixed Rent shall remain the
same), and (ii) be similar in configuration to the Old Premises. Landlord, at
Landlord’s expense, shall construct in the New Premises, not later than the
Relocation Date, an interior installation that is as comparable as reasonably
practicable to the interior installation that then exists in the Old Premises.


                   (C)  
Tenant shall cooperate reasonably with Landlord in connection with Landlord’s
designing and performing the construction of such interior installation in the
New Premises, provided that such cooperation shall not materially interfere
with the conduct of Tenant’s business, including, but not limited to the
interruption of regularly scheduled “production dates”. Such interior
installation that Landlord constructs in the New Premises shall 


74






constitute the
same Alterations and Specialty Alterations (as the case may be) as the
corresponding Alterations and Specialty Alterations constituted in the Old
Premises (from and after the date that Landlord completes the installation
thereof in accordance with the terms of this Section 18.1). Tenant shall vacate
the Old Premises and surrender vacant and exclusive possession of the Old
Premises to Landlord on or before the Relocation Date, provided that Landlord
has theretofore delivered vacant and exclusive possession of the New Premises
to Tenant in accordance with the terms of this Section 18.1. Tenant shall not
be required to remove any Alterations from the Old Premises by virtue of
Landlord’s exercise of the Relocation Option. Landlord shall reimburse Tenant
for any reasonable moving expenses and for any other reasonable costs,
including, but not limited to telecommunications relocation expenses (including
telephone, voice and data wiring), business stationery containing a suite
number or floor different from the New Premises but only to the extent in stock
on the date of the Relocation Notice, relocation and re-wiring of furniture
systems and other reasonable expenses incurred by Tenant in so relocating to
the New Premises from the Old Premises, within thirty (30) days after Tenant’s
request therefor and Tenant’s submission to Landlord of reasonable supporting
documentation therefor.


                   (D)  
From and after the Relocation Date, all references to the Premises herein shall
mean the New Premises rather than the Old Premises.


Article 19

DEFAULT


          19.1.  
Events of Default.


          The
term “Event of Default” shall mean the occurrence of any of the
following events:


                   (A)  
Tenant fails to pay any installment of Fixed Rent when due and such failure
continues for five (5) Business Days after the date that Landlord gives notice
of such failure to Tenant;


                   (B)  
Tenant fails to pay any installment of Rental (other than Fixed Rent) when due
and such failure continues for five (5) Business Days after the date that Landlord
gives notice of such failure to Tenant;


                   (C)  
a Permitted Party’s interest under the applicable Occupancy Agreement devolves
upon or passes to any other Person, whether by operation of law or otherwise,
except as expressly permitted under Article 17 hereof, and such Transfer is not
reversed within ten (10) days after the date that such Transfer occurs;


                   (D)  
Tenant defaults in respect of Tenant’s obligations under Section 4.8 hereof,
and such default continues for more than three (3) Business Days after Landlord
gives Tenant notice thereof;


                   (E)  
Tenant defaults in respect of Tenant’s obligations under Section 7.5(A)(4)
hereof, and such default continues for more than five (5) Business Days after
Landlord gives Tenant notice thereof;


75






                   (F)   (i) Landlord presents
the Letter of Credit
for payment in accordance with the terms hereof, (ii) the issuer thereof fails
to make payment thereon in accordance with the terms thereof, and (iii) either
Tenant or such issuer fails to make such payment to Landlord within two (2)
Business Days after the date that Landlord gives Tenant notice of such failure
of such issuer;


                   (G)  
Tenant fails to provide Landlord with any portion of the Cash Security Deposit
applied by Landlord or a replacement Letter of Credit after Landlord presents
the Letter of Credit for payment to apply the proceeds thereof, as the case may
be, after the occurrence of an Event of Default as provided in Section 23.2
hereof within five (5) Business Days after the date that Landlord gives Tenant
notice demanding that Tenant provide such replacement;


                   (H)  
Tenant fails to provide Landlord with the increase in the amount of the Letter
of Credit or the Case Security Deposit, as the case may be, required pursuant
to Section 23.6 hereof within the time period set forth therein,


                   (I)  
Tenant defaults in the observance or performance of any other covenant of this
Lease on Tenant’s part to be observed or performed and Tenant fails to remedy
such default within twenty (20) days after Landlord gives Tenant notice
thereof, except that if (i) such default cannot be remedied with reasonable
diligence during such period of twenty (20) days, (ii) Tenant takes reasonable
steps during such period of twenty (20) days to commence Tenant’s remedying of
such default, and (iii) Tenant prosecutes diligently Tenant’s remedying of such
default to completion, then an Event of Default shall not occur by reason of
such default; or


                   (J)  
the Premises are abandoned.


          19.2.  
Termination.


          If
(1) an Event of Default occurs, and (2) Landlord, at any time thereafter, at
Landlord’s option, gives a notice to Tenant stating that this Lease and the
Term shall expire and terminate on the third (3rd) Business Day after the date
that Landlord gives Tenant such notice, then this Lease and the Term and all
rights of Tenant under this Lease shall expire and terminate as of the third
(3rd) Business Day after the date that Landlord gives Tenant such notice, and
Tenant immediately shall quit and surrender the Premises, but Tenant shall
nonetheless remain liable for all of its obligations hereunder, as provided in
Article 21 hereof and Article 22 hereof.


ARTICLE 20

TENANT’S INSOLVENCY


          20.1.  
Assignments pursuant to the Bankruptcy Code.


                   (A)  
The term “Bankruptcy Code” shall mean 11 U.S.C. Section 101 et seq., or
any statute of similar nature and purpose.


                   (B)  
If Tenant, Tenant’s trustee or Tenant as debtor-in-possession (each, an “Insolvency
Party”) proposes to assign the tenant’s interest hereunder pursuant to the
provisions of the Bankruptcy Code to any Person that has made a bona fide offer
to accept an assignment of the tenant’s interest under this Lease on terms
acceptable to Tenant, then the Insolvency Party  


76






shall give to
Landlord notice of such proposed assignment no later than twenty (20) days
after the date that the Insolvency Party receives such offer, but in any event
no later than ten (10) days before the date that the Insolvency Party makes
application to a court of competent jurisdiction for authority and approval to
consummate such assignment. Such notice given by the Insolvency Party to
Landlord shall (a) set forth the name and address of such Person that has made
such bona fide offer, (b) set forth all of the terms and conditions of such
bona fide offer, and (c) confirm that such Person will provide to Landlord
adequate assurance of future performance that conforms with the terms of
Section 20.1(D) hereof. Landlord shall have the right to accept an assignment
of this Lease upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such Person (less any
brokerage commissions that would otherwise be payable by the Insolvency Party
out of the consideration to be paid by such Person in connection with such
assignment of the tenant’s interest under this Lease), by giving notice thereof
to the Insolvency Party at any time prior to the effective date of such
proposed assignment.  


                   (C)  
Tenant shall pay to Landlord an amount equal to the reasonable Out-of-Pocket
Costs that Landlord incurs in connection with Tenant’s assignment of the
tenant’s interest hereunder pursuant to the provisions of the Bankruptcy Code,
within thirty (30) days after Landlord’s submission to Tenant of an invoice
therefor that contains reasonable supporting documentation for the charges
described therein.


                   (D)  
A Person that submits a bona fide offer to take by assignment the tenant’s
interest under this Lease as described in Section 20.1(B) hereof shall be
deemed to have provided Landlord with adequate assurance of future performance
only if such Person (a) deposits with Landlord simultaneously with such
assignee’s taking by assignment the tenant’s interest under this Lease an
amount equal to the then annual Fixed Rent, as security for the faithful
performance and observance by such assignee of the tenant’s obligations of this
Lease (and such Person gives to Landlord, at least five (5) days prior to the
date that the proposed assignment becomes effective, information reasonably
satisfactory to Landlord that indicates that such Person has the ability to
post such deposit), (b) gives to Landlord, at least five (5) days prior to the
date that the proposed assignment becomes effective, such Person’s financial
statements, audited by a certified public accountant in accordance with
generally accepted accounting principles, consistently applied, for the three
(3) fiscal years that immediately precede such assignment, that indicate that
such Person has a tangible net worth of at least ten (10) times the then annual
Fixed Rent for each of such three (3) years, and (c) gives to Landlord, at
least five (5) days prior to the date that the proposed assignment becomes
effective, such other information or takes such action that in either case
Landlord, in its reasonable judgment, determines is necessary to provide
adequate assurance of the performance by such assignee of the obligations of
the tenant under this Lease; provided, however, that in no event shall such
adequate assurance of future performance be less favorable to Landlord than the
assurance contemplated by Section 365(b)(3) of the Bankruptcy Code (notwithstanding
that this Lease may not be construed as a lease of real property in a shopping
center). 


                   (E)  
If Tenant’s interest under this Lease is assigned to any Person pursuant to the
provisions of the Bankruptcy Code, then any such assignee shall (x) be deemed
without further act or deed to have assumed all the obligations of the tenant
arising under this Lease from 


77






and after the
date of such assignment, and (y) execute and deliver to Landlord upon demand an
instrument confirming such assumption.


                   (F)  
Nothing contained in this Article 20 limits Landlord’s rights against Tenant
under Article 17 hereof.


          20.2.  
Replacement Lease.


          If
(i) Tenant is not the Person that constituted Tenant initially, and (ii) either
(I) this Lease is disaffirmed or rejected pursuant to the Bankruptcy Code, or
(II) this Lease terminates by reason of occurrence of an Insolvency Event,
then, subject to the terms of this Section 20.2, the Persons that constituted
Tenant hereunder previously, including, without limitation, the Person that
constituted Tenant initially (each such Person that previously constituted
Tenant hereunder (but does not then constitute Tenant hereunder), and with
respect to which Landlord exercises Landlord’s rights under this Section 20.2,
being referred to herein as a “Predecessor Tenant”) shall (1) pay to
Landlord the aggregate Rental that is then due and owing by Tenant to Landlord
under this Lease to and including the date of such disaffirmance, rejection or
termination, and (2) enter into a new lease, between Landlord, as landlord, and
the Predecessor Tenant, as tenant, for the Premises, and for a term commencing
on the effective date of such disaffirmance, rejection or termination and
ending on the Fixed Expiration Date, at the same Fixed Rent and upon the then
executory terms that are contained in this Lease, except that (a) the
Predecessor Tenant’s rights under the new lease shall be subject to the
possessory rights of Tenant under this Lease and the possessory rights of any
Person claiming by, through or under Tenant or by virtue of any statute or of
any order of any court, and (b) such new lease shall require all defaults
existing under this Lease to be cured by the Predecessor Tenant with reasonable
diligence. Landlord shall have the right to require the Predecessor Tenant to
execute and deliver such new lease on the terms set forth in this Section 20.2
only by giving notice thereof to Tenant and to the Predecessor Tenant within
thirty (30) days after Landlord receives notice of any such disaffirmance or
rejection (or, if this Lease terminates by reason of Landlord making an
election to do so, then Landlord may exercise such right only by giving such
notice to Tenant and the Predecessor Tenant within thirty (30) days after this
Lease so terminates). If the Predecessor Tenant defaults in its obligation to
enter into said new lease for a period of ten (10) days following Landlord’s
request therefor, then, in addition to all other rights and remedies by reason
of such default, either at law or in equity, Landlord shall have the same
rights and remedies against such Predecessor Tenant as if such Predecessor
Tenant had entered into such new lease and such new lease had thereafter been
terminated as of the commencement date thereof by reason of such Predecessor
Tenant’s default thereunder.


          20.3.  
Insolvency Events.


          This
Lease shall terminate automatically upon the occurrence of any of the following
events:


                   (A)  
a Tenant Obligor commences or institutes any case, proceeding or other action
(a) seeking relief on its behalf as debtor, or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts under any existing or future law of any 


78






jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, or (b) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
property; or


                   (B)  
a Tenant Obligor makes a general assignment for the benefit of creditors; or


                   (C)  
any case, proceeding or other action is commenced or instituted against a
Tenant Obligor (a) seeking to have an order for relief entered against it as
debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (b) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property, which in either of such cases (i) results in
any such entry of an order for relief, adjudication of bankruptcy or insolvency
or such an appointment or the issuance or entry of any other order having a
similar effect, and (ii) remains undismissed for a period of ninety (90) days;
or


                   (D)  
any case, proceeding or other action is commenced or instituted against a
Tenant Obligor seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
property which results in the entry of an order for any such relief which is
not vacated, discharged, or stayed or bonded pending appeal within ninety (90)
days from the entry thereof; or


                   (E)  
a Tenant Obligor takes any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clauses (A),
(B), (C), or (D) above; or


                   (F)  
a trustee, receiver or other custodian is appointed for any substantial part of
a Tenant Obligor’s assets, and such appointment is not vacated or stayed within
fifteen (15) Business Days (the events described in this Section 20.3 being
collectively referred to herein as “Insolvency Events”).


The term “Tenant
Obligor” shall mean (a) Tenant, (b) any Person that comprises Tenant (if
Tenant is comprised of more than one (1) Person), (c) any partner in Tenant (if
Tenant is a general partnership), (d) any general partner in Tenant (if Tenant
is a limited partnership), (e) any Person that has guarantied all or any part
of the obligations of Tenant hereunder, and (f) any Person that previously
constituted Tenant hereunder. If this Lease terminates pursuant to this Section
20.3, then (I) Tenant immediately shall quit and surrender the Premises, and
(II) Tenant shall nonetheless remain liable for all of its obligations
hereunder, as provided in Article 21 hereof and Article 22 hereof.


          20.4.  
Effect of Stay.


          Notwithstanding
anything to the contrary contained herein, if (i) Landlord’s right to terminate
this Lease after the occurrence of an Event of Default, or the termination of
this Lease upon the occurrence of an Insolvency Event, is stayed by order of
any court having jurisdiction over an Insolvency Event, or by federal or state
statute, (ii) the trustee appointed in connection 


79






with an
Insolvency Event, or Tenant or Tenant as debtor-in-possession, fails to assume
Tenant’s obligations under this Lease on or prior to the earliest to occur of
(a) the last day of the period prescribed therefor by law, (b) the one hundred
twentieth (120th) day after entry of the order for relief, or (c) a date that
is otherwise designated by the court, or (iii) said trustee, Tenant or Tenant
as debtor-in-possession fails to provide adequate protection of Landlord’s
right, title and interest in and to the Premises or adequate assurance of the
complete and continuous future performance of Tenant’s obligations under this
Lease as provided in Section 20.1(D) hereof, then Landlord, to the extent
permitted by law or by leave of the court having jurisdiction over such
proceeding, shall have the right, at its election, to terminate this Lease on
five (5) Business Days of advance notice to Tenant, Tenant as
debtor-in-possession or said trustee, and, upon the expiration of said period
of five (5) Business Days, this Lease shall cease and expire as aforesaid and
Tenant, Tenant as debtor-in-possession or said trustee shall immediately quit
and surrender the Premises as aforesaid.


          20.5.  
Rental for Bankruptcy Purposes.


          Notwithstanding
anything contained in this Lease to the contrary, all amounts payable by Tenant
to or on behalf of Landlord under this Lease, regardless of whether such
amounts are expressly denominated as Rental, shall constitute rent for the
purposes of Section 502(b)(6) of the Bankruptcy Code, and Tenant’s payment
obligations with respect thereto shall constitute obligations to be timely
performed pursuant to Section 365(d) of the Bankruptcy Code.


ARTICLE 21

REMEDIES AND DAMAGES


          21.1.  
Certain Remedies.


                   (A)  
If (x) an Event of Default occurs and this Lease and the Term expires and comes
to an end as provided in Article 19 hereof, or (y) this Lease terminates as
provided in Section 20.3 hereof, then:


                            (1)  
Tenant shall immediately quit and peacefully surrender the Premises to
Landlord, and Landlord and its agents may, without prejudice to any other
remedy which Landlord may have, (a) re-enter the Premises or any part thereof,
without notice, either by summary proceedings, or by any other applicable
action or proceeding, or by lawful force (without being liable to indictment,
prosecution or damages therefor), (b) repossess the Premises and dispossess
Tenant and any other Persons from the Premises, and (c) remove any and all of
their property and effects from the Premises; and


                        (2)  
Landlord, at Landlord’s option, may relet the whole or any portion or portions
of the Premises from time to time, either in the name of Landlord or otherwise,
to such tenant or tenants, for such term or terms ending before, on or after
the Fixed Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord,
in its sole discretion, may determine.


                   (B)  
Landlord shall have no obligation to relet the Premises or any part thereof and
shall not be liable for refusal or failure to relet the Premises or any part
thereof, or, in the event of any such reletting, for refusal or failure to
collect any rent due upon any such reletting. 


80






Any such
refusal or failure on Landlord’s part shall not relieve Tenant of any liability
under this Lease or otherwise affect any such liability. Landlord, at
Landlord’s option, may make such repairs, replacements, alterations, additions,
improvements, decorations and other physical changes in and to the Premises as
Landlord, in its sole discretion, considers advisable or necessary in
connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this Lease or otherwise affecting any such
liability.


                   (C)  
In the event of a breach or threatened breach by Tenant, or any Persons
claiming by, through or under Tenant, of any term, covenant or condition of
this Lease, Landlord shall have the right to (1) enjoin or restrain such
breach, (2) invoke any other remedy allowed by law or in equity as if re-entry,
summary proceedings and other special remedies were not provided in this Lease
for such breach, and (3) seek any declaratory, injunctive or other equitable
relief, and specifically enforce this Lease. The right to invoke the remedies
hereinbefore set forth are cumulative and nonexclusive and shall not preclude
Landlord from invoking any other remedy allowed at law or in equity.


          21.2.  
No Redemption.


          Tenant,
on its own behalf and on behalf of all Persons claiming by, through or under
Tenant, including all creditors, does hereby waive any and all rights which
Tenant and all such Persons might have under any present or future law to
redeem the Premises, or to re-enter or repossess the Premises, or to restore
the operation of this Lease, after (a) Tenant has been dispossessed by a
judgment or by warrant of any court or judge, or (b) any re-entry by Landlord,
or (c) any expiration or termination of this Lease and the Term, whether such
dispossess, reentry, expiration or termination is by operation of law or
pursuant to the provisions of this Lease. The words “re-enter,” “re-entry” and
“re-entered” as used in this Lease shall not be deemed to be restricted to
their technical legal meanings.


          21.3.  
Calculation of Damages.


                   (A)  
If this Lease terminates by reason of the occurrence of an Event of Default or
by reason of the occurrence of an Insolvency Event, then Tenant shall pay to
Landlord, on demand, and Landlord shall be entitled to recover:


                            (1)  
all Rental payable under this Lease by Tenant to Landlord (x) to the date that
this Lease terminates, or (y) to the date of re-entry upon the Premises by
Landlord, as the case may be;


                            (2)  
the excess of (a) the Rental for the period which otherwise would have
constituted the unexpired portion of the Term, over (b) the net amount, if any,
of rents collected under any reletting effected pursuant to the provisions of
clause (2) of Section 21.1(A) hereof for any part of such period (such excess
being referred to herein as a “Deficiency”), as damages (it being
understood that (x) such net amount described in clause (b) above shall be
calculated by deducting from the rents collected under any such reletting all
of Landlord’s expenses in connection with the termination of this Lease,
Landlord’s re-entry upon the Premises and such reletting, including, but not
limited to, all repossession costs, brokerage commissions, legal expenses,
attorneys’ fees and disbursements, alteration costs, contributions to work and 


81






other expenses
of preparing the Premises for such reletting, (y) any such Deficiency shall be
paid in monthly installments by Tenant on the days specified in this Lease for
payment of installments of Fixed Rent or Escalation Rent (as the case may be),
and (z) Landlord shall be entitled to recover from Tenant each monthly
Deficiency as it arises, and no suit to collect the amount of the Deficiency
for any month shall prejudice Landlord’s right to collect the Deficiency for
any subsequent month by a similar proceeding); and


                            (3)  
regardless of whether Landlord has collected any monthly Deficiency as
aforesaid, and in lieu of any further Deficiency, as and for liquidated and
agreed final damages, an amount equal to the excess (if any) of (a) the Rental
for the period which otherwise would have constituted the unexpired portion of
the Term (commencing on the date immediately succeeding the last date with
respect to which a Deficiency, if any, was collected), over (b) the then fair
and reasonable net effective rental value of the Premises for the same period
(which is calculated by (X) deducting from the fair and reasonable rental value
of the Premises the expenses that Landlord would reasonably expect to incur in
reletting the Premises, including, but not limited to, all repossession costs,
brokerage commissions, legal expenses, attorneys’ fees and disbursements,
alteration costs, contributions to work and other expenses of preparing the
Premises for such reletting, and (Y) taking into account the time period that
Landlord would reasonably require to consummate a reletting of the Premises to
a new tenant), both discounted to present value at the Base Rate. If, before
presentation of proof of such liquidated damages to any court, commission or
tribunal, the Premises, or any part thereof, have been relet by Landlord to any
Person other than an Affiliate of Landlord for the period which otherwise would
have constituted the unexpired portion of the Term, or any part thereof, then
the amount of rent reserved upon such reletting shall be deemed, prima facie,
to be the fair and reasonable rental value of the Premises (or the applicable
part thereof) so relet during the term of the reletting.


                   (B)  
If the Premises, or any part thereof, are relet together with other space in
the Building, then the rents collected or reserved under any such reletting and
the expenses of any such reletting shall be equitably apportioned for the
purposes of this Section 21.3. Tenant acknowledges and agrees that in no event
shall it be entitled to any rents collected or payable under any reletting,
regardless of whether such rents exceed the Rental reserved in this Lease.


                   (C)  
Nothing contained in this Article 21 shall be deemed to limit or preclude the
recovery by Landlord from Tenant of the maximum amount allowed to be obtained
as damages by any applicable statute or rule of law, or of any sums or damages
to which Landlord may be lawfully entitled in addition to the damages set forth
in this Section 21.3.


ARTICLE 22

LANDLORD’S EXPENSES AND LATE CHARGES


          22.1.  
Landlord’s Costs.


                   (A)  
Tenant shall pay to Landlord an amount equal to the reasonable costs that
Landlord incurs in instituting or prosecuting any legal proceeding against
Tenant (or any other Person claiming by, through or under Tenant) to the extent
that such legal proceeding derives from the occurrence of an Event of Default,
together with interest thereon calculated at the 


82






Applicable
Rate from the date that Landlord incurs such costs, within thirty (30) days
after Landlord gives to Tenant an invoice therefor (it being understood that
(x) Landlord shall have the right to collect such amount from Tenant as
additional rent to the extent that Landlord incurs such costs during the Term and
as damages to the extent that Landlord incurs such costs after the Expiration
Date, and (y) the amount that Landlord has the right to collect from Tenant
under this Section 22.1(A) shall be adjusted appropriately to reflect the
extent to which Landlord is successful in such legal proceeding).


                   (B)  
Landlord and Tenant shall pay to each other an amount equal to the reasonable
costs that such party incurs in defending successfully against a claim made by
the other party (or any other Person claiming by, through or under the other
party) against Landlord or Tenant that relates to this Lease in a legal
proceeding, together with interest thereon calculated at the Applicable Rate
from the date that Landlord or Tenant incurs such costs, within thirty (30)
days after Landlord or Tenant gives to the other an invoice therefor (it being
understood that (x) Landlord shall have the right to collect such amount from
Tenant as additional rent to the extent that Landlord incurs such costs during
the Term and as damages to the extent that Landlord incurs such costs after the
Expiration Date, and (y) the amount that Landlord has the right to collect from
Tenant under this Section 22.1(B) shall be adjusted appropriately to reflect
the extent to which Landlord is successful in defending against such claim).


          22.2.  
Interest on Late Payments.


          If
Tenant fails to pay any item of Rental on or prior to the date that such
payment is due, then Tenant shall pay to Landlord, in addition to such item of
Rental, as a late charge and as additional rent, an amount equal to interest at
the Applicable Rate on the amount unpaid, computed from the date such payment
was due to and including the date of payment. Nothing contained in this Section
22.2 limits Landlord’s rights and remedies, by operation of law or otherwise,
after the occurrence of an Event of Default.


ARTICLE 23

SECURITY


          23.1.  
Security Deposit.


                   (A)  
Subject to the terms of this Article 23, Tenant, on the date hereof, shall
deposit with Landlord, as security for the performance of Tenant’s obligations
under this Lease, an amount in cash equal to One Hundred Fifty-Six Thousand
Ninety-Four Dollars and Fifty Cents ($156,094.50) (the “Cash Security
Deposit”). Landlord shall deposit the Cash Security Deposit in an
interest-bearing account at a bank designated from time to time by Landlord.
Landlord shall cause the interest earned on the Cash Security Deposit to be
paid to Tenant annually, except that Landlord shall be entitled to retain an
annual administrative fee in an amount equal to the lesser of (x) the interest
earned on the Cash Security Deposit, and (y) one percent (1%) of the Cash
Security Deposit.


                   (B)  
Tenant, at any time during the Term, shall have the right to deliver to
Landlord a “clean,” unconditional, irrevocable and transferable letter of
credit (the “Letter of Credit”) that (i) is in the amount of the Cash
Security Deposit, (ii) is in a form that is reasonably 


83






satisfactory
to Landlord, (iii) is issued for a term of not less than one (1) year, (iv) is
issued for the account of Landlord, (v) automatically renews for periods of not
less than one (1) year unless the issuer thereof otherwise advises Landlord on
or prior to the thirtieth (30th) day before the applicable expiration date, and
(vi) is issued by, and drawn on, a bank that has a Standard & Poor’s rating
of at least “AA” (or, if Standard & Poor’s hereafter ceases the publication
of ratings for banks, a rating of a reputable rating agency as reasonably
designated by Landlord that most closely approximates a Standard & Poor’s
rating of “AA” as of the date hereof) and that either (I) has an office in the
city where the Building is located at which Landlord can present the Letter of
Credit for payment, or (II) has an office in the United States and allows
Landlord to draw upon the Letter of Credit without presenting a draft in person
(such as, for example, by submitting a draft by fax or overnight delivery
service) (the aforesaid rating of the bank that issues the Letter of Credit
being referred to herein as the “Bank Rating”).


          23.2.  
Landlord’s Rights.


          If
(i) an Event of Default occurs and is continuing, or (ii) Tenant fails to
vacate the Premises and surrender possession thereof in accordance with the
terms of this Lease upon the Expiration Date, then Landlord may apply the whole
or any part of the Cash Security Deposit or present the Letter of Credit for
payment and apply the proceeds thereof, as the case may be, (i) to the payment
of any Rental that then remains unpaid, or (ii) to any damages to which
Landlord is entitled hereunder and that Landlord incurs by reason of such Event
of Default or Tenant’s aforesaid failure to vacate the Premises or surrender
possession thereof in accordance with the terms of this Lease upon the
Expiration Date. If Landlord so applies any part of the Cash Security Deposit
or the proceeds of the Letter of Credit, as the case may be, then Tenant, upon
demand, shall deposit with Landlord the cash amount so applied or a replacement
Letter of Credit so that Landlord has the full amount of the required security
at all times during the Term. If (x) Tenant deposits the Letter of Credit with
Landlord as provided in Section 23.1 hereof, and (y) at any time the Bank Rating
of the issuer of the Letter of Credit is less than “AA” (or, if Standard &
Poor’s hereafter ceases the publication of ratings for banks, the Bank Rating
of the issuer of the Letter of Credit is less than a rating of a reputable
rating agency as reasonably designated by Landlord that most closely
approximates a Standard & Poor’s rating of “AA” as of the date hereof),
then Tenant shall deliver to Landlord a replacement Letter of Credit, issued by
a bank that has a Bank Rating that satisfies the aforesaid requirement (and
otherwise meets the requirements set forth in Section 23.1 hereof) within
fifteen (15) days after the date that Landlord gives Tenant notice of such
deficiency in such issuer’s rating. If Tenant fails to deliver to Landlord such
replacement Letter of Credit within such period of fifteen (15) days, then
Landlord, in addition to Landlord’s other rights at law, in equity or as
otherwise set forth herein, shall have the right to present the Letter of
Credit for payment and retain the proceeds thereof as security in lieu of the
Letter of Credit (it being agreed that Landlord shall have the right to use,
apply and transfer such proceeds in the manner described in this Article 23).
Tenant shall reimburse Landlord for any reasonable costs that Landlord incurs
in so presenting the Letter of Credit for payment within thirty (30) days after
Landlord submits to Tenant an invoice therefor. Tenant shall not assign or
encumber or attempt to assign or encumber the Cash Security Deposit Nothing
contained in this Section 23.2 limits Landlord’s rights or remedies in equity,
at law, or as otherwise set forth herein.


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          23.3.  
Return of Security.


Landlord shall
return to Tenant the Cash Security Deposit (or the unapplied portion thereof,
as the case may be) or the Letter of Credit (to the extent not theretofore
presented for payment in accordance with the terms hereof), as the case may be,
within thirty (30) days after Tenant performs all of the obligations of Tenant
hereunder upon the expiration or earlier termination of the Term. Landlord’s
obligations under this Section 23.3 shall survive the expiration or earlier
termination of the Term.


          23.4.  
Transfer of Letter of Credit.


Tenant, at
Tenant’s expense, shall cause the issuer of the Letter of Credit to amend the
Letter of Credit to name a new beneficiary thereunder in connection with
Landlord’s assignment of Landlord’s rights under this Lease to a Person that
succeeds to Landlord’s interest in the Real Property, promptly after Landlord’s
request from time to time.


          23.5.  
Renewal of Letter of Credit.


If Tenant
fails to provide Landlord with a replacement Letter of Credit that complies
with the requirements of this Article 23 on or prior to the thirtieth (30th)
day before the expiration date of the Letter of Credit that is then expiring,
then Landlord may present the Letter of Credit for payment and retain the
proceeds thereof as security in lieu of the Letter of Credit (it being agreed
that Landlord shall have the right to use, apply and transfer such proceeds in
the manner described in this Article 23). Tenant shall reimburse Landlord for
any reasonable costs that Landlord incurs in so presenting the Letter of Credit
for payment within thirty (30) days after Landlord submits to Tenant an invoice
therefor. Landlord also shall have the right to so present the Letter of Credit
and so retain the proceeds thereof as security in lieu of the Letter of Credit
at any time from and after the thirtieth (30th) day before the Expiration Date
if the Letter of Credit expires earlier than the ninetieth (90th) day after the
Expiration Date.


          23.6.  
Reduction of Security.


          Notwithstanding
anything set forth in this Article 23 to the contrary, if on the earlier of (i)
six (6) months after an initial public offering of stock in Tenant and (ii) the
first (1st) anniversary of the Commencement Date (such earlier date, the “Security
Deposit Date”), (x) Tenant’s then debt, as evidenced by the EBITDA
Certificate is in excess of the product of five (5) times Tenant’s then EBITDA,
as evidenced by the EBITDA Certificate or (y) Tenant’s EBITDA, as evidenced by
the EBITDA Certificate is less than One Hundred Million Dollars ($100,000,000),
Tenant shall be obligated to increase the amount of the Cash Security Deposit
or the Letter of Credit, as the case may be, within twenty (20) days of the
date of the EBITDA Certificate, to Three Hundred Twelve Thousand One Hundred
Ninety-Two Dollars and No Cents ($312,192.00); provided, however, if on the
Security Deposit Date, Tenant’s EBITDA, as evidenced by the EBITDA Certificate
is over One Hundred Fifty Million Dollars ($150,000,000) and Tenant’s current
assets, as evidenced by the EBITDA Certificate are over Fifty Million Dollars
($50,000,000) then Landlord shall promptly return the Cash Security Deposit or
the Letter of Credit, as the case may be, and Tenant shall have no further
obligation to deposit security with Landlord hereunder.


85






ARTICLE 24

END OF TERM


          24.1.  
End of Term. 


          On
the Expiration Date, Tenant shall quit and surrender to Landlord the Premises,
vacant, broom-clean, in good order and condition, ordinary wear and tear and
damage for which Tenant is not responsible under the terms of this Lease
excepted, and otherwise in compliance with the provisions hereof. Tenant
expressly waives, for itself and for any Person claiming by, through or under
Tenant, any rights which Tenant or any such Person may have under the
provisions of Section 2201 of the New York Civil Practice Law and Rules and of
any successor law of like import then in force in connection with any holdover
summary proceedings that Landlord institutes to enforce the provisions of this
Article 24. 


          24.2.  
Holdover. 


          If
vacant and exclusive possession of the Premises is not surrendered to Landlord
on the Expiration Date, then Tenant shall pay to Landlord on account of use and
occupancy of the Premises, for each month (or any portion thereof) during which
Tenant (or a Person claiming by, through or under Tenant) holds over in the
Premises after the Expiration Date, an amount equal to one hundred fifty
percent (150%) of the aggregate Rental that was payable under this Lease during
the last month of the Term, except that Tenant shall pay an amount equal to two
hundred percent (200%) of the aggregate Rental that was payable under this
Lease during the last month of the Term for the period commencing on the
thirtieth (30th) day of such holdover period. Landlord’s right to collect such
amount from Tenant for use and occupancy shall be in addition to any other
rights or remedies that Landlord may have hereunder or at law or in equity
(including, without limitation, Landlord’s right to recover Landlord’s damages
from Tenant that derive from vacant and exclusive possession of the Premises
not being surrendered to Landlord on the Expiration Date). Nothing contained in
this Section 24.2 shall permit Tenant to retain possession of the Premises after
the Expiration Date or limit in any manner Landlord’s right to regain
possession of the Premises, through summary proceedings or otherwise.
Landlord’s acceptance of any payments from Tenant after the Expiration Date
shall be deemed to be on account of the amount to be paid by Tenant in
accordance with the provisions of this Article 24. 


ARTICLE 25

NO WAIVER


          25.1.  
No Surrender. 


                   (A)  
Landlord shall be deemed to have accepted a surrender of the Premises only if
Landlord executes and delivers to Tenant a written instrument providing
expressly therefor. 


                   (B)  
No employee of Landlord or of Landlord’s agents shall have any power to accept
the keys to the Premises prior to the Expiration Date. The delivery of such
keys to any employee of Landlord or of Landlord’s agents shall not operate as a
termination of this Lease or a surrender of the Premises. If Tenant at any time
desires to have Landlord sublet the Premises 


86






on Tenant’s
account, then Landlord or Landlord’s agents are authorized to receive said keys
for such purpose without releasing Tenant from any of Tenant’s obligations
under this Lease. 


          25.2.  
No Waiver by Landlord. 


                   (A)  
Landlord’s failure to seek redress for violation of, or to insist upon the
strict performance of, any covenant or condition of this Lease, or any of the
Rules, shall not be deemed to be a waiver thereof. The receipt by Landlord of
Rental with knowledge of the breach of any covenant of this Lease by Tenant
shall not be deemed a waiver of such breach. 


                   
(B)   No payment by Tenant or receipt by Landlord of a lesser amount than the
monthly Fixed Rent or other item of Rental herein stipulated shall be deemed to
be other than on account of the earliest stipulated Fixed Rent or other item of
Rental, or as Landlord may elect to apply such payment. No endorsement or
statement on any check or any letter accompanying any check or payment as Fixed
Rent or other item of Rental shall be deemed to be an accord and satisfaction.
Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the balance of such Fixed Rent or other item of Rental or to pursue
any other remedy provided in this Lease or otherwise available to Landlord at
law or in equity. 


               
    (C)   Landlord’s failure during the Term to prepare and deliver any invoices, and
Landlord’s failure during the Term to make a demand for payment under any of
the provisions of this Lease, shall not in any way be deemed to be a waiver of,
or cause Landlord to forfeit or surrender, its rights to collect any item of
Rental which may have become due during the Term (except to the extent
otherwise expressly set forth herein). Tenant’s liability for such amounts
shall survive the expiration or earlier termination of this Lease (except to
the extent otherwise expressly set forth herein). 


                   
(D)   No provision of this Lease shall be deemed to have been waived by Landlord,
unless such waiver is in writing signed by Landlord. 


          25.3.  
No Waiver by Tenant. 


                   
(A)   Tenant’s failure to seek redress for violation of, or to insist upon the
strict performance of, any covenant or condition of this Lease on Landlord’s
part to be performed, shall not be deemed to be a waiver. The payment by Tenant
of any item of Rental or performance of any obligation of Tenant hereunder with
knowledge of any breach by Landlord of any covenant of this Lease shall not be
deemed a waiver of such breach, nor shall it prejudice Tenant’s right to pursue
any remedy against Landlord in this Lease provided or otherwise available to
Tenant in law or in equity. No provision of this Lease shall be deemed to have
been waived by Tenant, unless such waiver is in writing signed by Tenant. 


                   
(B)   Tenant’s failure during the Term to make a demand for payment under any of
the provisions of this Lease shall not in any way be deemed to be a waiver of,
or cause Tenant to forfeit or surrender, its rights to collect any amount which
may have become due during the Term (except to the extent otherwise expressly
set forth herein). Landlord’s liability for such amounts shall survive the
expiration or earlier termination of this Lease (except to the extent otherwise
expressly set forth herein). 


87






ARTICLE 26

JURISDICTION


          26.1.  
Governing Law. 


          This
Lease shall be construed and enforced in accordance with the laws of the State
of New York. 


          26.2.  
Submission to Jurisdiction. 


          Tenant
hereby (a) irrevocably consents and submits to the jurisdiction of any federal,
state, county or municipal court sitting in the State of New York for purposes
of any action or proceeding brought therein by Landlord against Tenant
concerning any matters relating to this Lease, (b) irrevocably waives all
objections as to venue and any and all rights it may have to seek a change of
venue with respect to any such action or proceedings, (c) agrees that the laws
of the State of New York shall govern in any such action or proceeding and
waives any defense to any action or proceeding granted by the laws of any other
country or jurisdiction unless such defense is also allowed by the laws of the
State of New York, and (d) agrees that any final unappealable judgment rendered
against it in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law. Tenant further agrees that any action or proceeding by
Tenant against Landlord concerning any matters arising out of or in any way
relating to this Lease shall be brought only in the State of New York, County
of New York. 


          26.3.  
Waiver of Trial by Jury; Counterclaims. 


                   
(A)   Landlord and Tenant hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other on any
matters whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises,
or for the enforcement of any remedy under any statute, emergency or otherwise.



                   
(B)   If Landlord commences any summary proceeding against Tenant, then Tenant
shall not interpose any counterclaim of whatever nature or description in any
such proceeding (except to the extent that applicable law precludes Tenant from
asserting such counterclaim in another proceeding), and shall not seek to
consolidate such proceeding with any other action which may have been or will
be brought in any other court by Tenant. Nothing contained in this Section
26.3(B) limits Tenant’s right to assert claims against Landlord in a separate
proceeding. 


ARTICLE 27

NOTICES


          27.1.  
Addresses; Manner of Delivery. 


          Except
as otherwise expressly provided in this Lease, any bills, statements, consents,
notices, demands, requests or other communications that a party desires or is
required to give to the other party under this Lease shall (1) be in writing,
(2) be deemed sufficiently given if (a) 


88






delivered by hand (against a
signed receipt), (b) sent by registered or certified mail (return receipt
requested), or (c) sent by a nationally-recognized overnight courier (with
verification of delivery), and (3) be addressed in each case: 


	
 

	
 


	
if to Tenant
 before the Commencement Date, at:


	
 


	
 

	
Two Penn
 Plaza


	
 

	
New York,
 New York 10121


	
 

	
 


	
if to Tenant
 from and after the Commencement Date, at the Building,


	
 

	
 


	
with a copy
 to:


	
 

	
 


	
 

	
Penthouse
 Media Group Inc.


	
 

	
6800 Broken
 Sound Parkway


	
 

	
Boca Raton,
 Florida 33487


	
 

	
Attn:
 General Counsel


	
 

	
 


	
With a copy
 to Tenant’s attorney:


	
 

	
 


	
 

	
Moses &
 Singer LLP


	
 

	
405
 Lexington Avenue


	
 

	
New York,
 New York 10174


	
 

	
Attn: Arnold
 N. Bressler, Esq.


	
 

	
 


	
if to
 Landlord, at:


	
 

	
 


	
 

	
c/o Vornado
 Office Management LLC


	
 

	
888 Seventh
 Avenue


	
 

	
New York,
 New York 10019


	
 

	
 


	
 

	
Attn.:
 Ronald T. Lo Russo


	
 

	
 


	
 

	
with a copy
 to:


	
 

	
 


	
 

	
210 Route 4
 East


	
 

	
Paramus, New
 Jersey 07652


	
 

	
 


	
 

	
Attn: Joseph
 Macnow





or to such
other address or addresses as Landlord or Tenant may designate from time to
time on at least ten (10) Business Days of advance notice given to the other in
accordance with the provisions of this Article 27. Any such bill, statement,
consent, notice, demand, request, or other communication shall be deemed to
have been given (x) on the date that it is hand delivered, as aforesaid, or (y)
three (3) Business Days after the date that it is mailed, as aforesaid, or (z)
on the first (1st) Business Day after the date that it is sent by a
nationally-recognized courier, as aforesaid. Any such bills, statements,
consents, notices, demands, requests or other communications that the Person
that is the property manager for the Building gives to Tenant in 


89






accordance
with the terms of this Article 27 shall be deemed to have been given by
Landlord (except that Landlord, at any time and from time to time, shall have
the right to terminate or suspend such property manager’s right to give such
bills, statements, consents, notices, demands, requests or other communications
to Tenant by giving not less than five (5) days of advance notice thereof to
Tenant). 


ARTICLE 28

BROKERAGE


          28.1.  
Broker. 


          Landlord
and Tenant each represent to the other that it has not dealt with any broker,
finder or salesperson in connection with this Lease other than Newmark Knight
Frank (the “Broker”). Landlord agrees to pay the commission due to the
Broker pursuant to a separate agreement. 


ARTICLE 29

INDEMNITY


          29.1.  
Tenant’s Indemnification of the Landlord Indemnitees. 


                   
(A)   Subject to the terms of this Section 29.1, Tenant shall indemnify the
Landlord Indemnitees, and hold the Landlord Indemnitees harmless, from and
against, all losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) that are incurred
by a Landlord Indemnitee and that derive from a claim (a “Claim Against
Landlord”) made by a third party against such Landlord Indemnitee arising from
or alleged to arise from:  


                            (1)  
a wrongful act or wrongful omission of any Tenant Indemnitee during the Term
(including, without limitation, claims that derive from a Permitted Party’s
conducting such Permitted Party’s business in the Premises) (it being
understood that Tenant shall not have responsibility under this clause (1) for
any wrongful act or wrongful omission of a Recapture Subtenant); 


                            
(2)   an event or circumstance that occurs during the Term in the Premises or in
another portion of the Building with respect to which Tenant has exclusive use
pursuant to the terms hereof (subject, however, to Landlord’s rights of access
under Article 9 hereof) (it being understood that Tenant’s liability under this
clause (2) shall not apply to the extent that Landlord exercises Landlord’s
rights under Section 17.3 hereof with respect to the Recapture Space); 


                            
(3)   the breach of any covenant to be performed by Tenant hereunder; 


                            
(4)   a misrepresentation made by Tenant hereunder (including, without
limitation, a misrepresentation of Tenant under Section 28.1 hereof); 


                            
(5)   a Person with whom a Permitted Party has dealt making a claim for a leasing
commission or other similar compensation in connection with a Transfer; 


90






                            
(6)   a Compliance Challenge (or Tenant’s delaying Tenant’s compliance with a
Requirement during the pendency of a Compliance Challenge); or 


                            
(7)   Landlord’s cooperating with Tenant as contemplated by
Section 7.4(A) hereof. Tenant shall not be required to indemnify the Landlord
Indemnitees, and hold the Landlord Indemnitees harmless, in either case as
aforesaid, to the extent that it is finally determined that the negligence or
wilful misconduct of a Landlord Indemnitee contributed to the loss or damage
sustained by the Person making the Claim Against Landlord. Nothing contained in
this Section 29.1 limits the provisions of Section 31.19 hereof. 


                   (B)  
The term “Landlord Indemnitees” shall mean, collectively, Landlord, each
Lessor, each Mortgagee and their respective partners, members, managers,
shareholders, officers, directors, employees, trustees and agents. 


                   (C)  
The term “Tenant Indemnitees” shall mean each Permitted Party and their
respective partners, members, managers, shareholders, officers, directors,
employees, trustees and agents. 


                   (D)  
The parties intend that the Landlord Indemnitees (other than Landlord) shall be
third-party beneficiaries of this Section 29.1. 


          29.2.  
Landlord’s Indemnification of the Tenant Indemnitees. 


                   (A)  
Subject to the terms of this Section 29.2, Landlord shall indemnify the Tenant
Indemnitees, and hold the Tenant Indemnitees harmless, from and against, all
losses, damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) that are incurred by a Tenant
Indemnitee and that derive from a claim (a “Claim Against Tenant”) made
by a third party against such Tenant Indemnitee arising from or alleged to
arise from: 


                            (1)  
the breach of any covenant to be performed by Landlord hereunder; 


                            (2)  
a misrepresentation made by Landlord hereunder (including, without limitation,
a misrepresentation of Landlord under Section 28.1 hereof); 


                            (3)  
Landlord’s failure to pay the Broker a commission or other compensation in
connection herewith; or 


                            (4)  
a wrongful act or wrongful omission of any Landlord Indemnitee (including,
without limitation, a wrongful act or wrongful omission of the Person that has
the right to occupy the Recapture Space by virtue of Landlord’s exercising
Landlord’s rights under Section 17.3 hereof). Landlord shall not be required to
indemnify the Tenant Indemnitees, and hold the Tenant Indemnitees harmless, in
either case as aforesaid, to the extent that it is finally determined that the
negligence or wilful misconduct of a Tenant Indemnitee contributed to the loss
or damage sustained by the Person making the Claim Against Tenant. 


91






                   (B)  
The parties intend that the Tenant Indemnitees (other than Tenant) shall
constitute third-party beneficiaries of this Section 29.2. 


          29.3.  
Indemnification Procedure. 


                   (A)  
If at any time a Claim Against Tenant is made or threatened against a Tenant
Indemnitee, or a Claim Against Landlord is made or threatened against a
Landlord Indemnitee, then the Person entitled to indemnity under this Article
29 (the “Indemnitee”) shall give to the other party (the “Indemnitor”)
notice of such Claim Against Tenant or such Claim Against Landlord, as the case
may be (the “Claim”); provided, however, that the Indemnitee’s failure
to provide such notice shall not impair the Indemnitee’s rights to indemnity as
provided in this Article 29 except to the extent that the Indemnitor is
prejudiced materially thereby. Such notice shall state the basis for the Claim
and the amount thereof (to the extent such amount is determinable at the time
that such notice is given). 


                   (B)  
The Indemnitor shall have the right to defend against the Claim using attorneys
that the Indemnitor designates and that the Indemnitee approves (it being
understood that (I) the Indemnitee shall not unreasonably withhold, condition
or delay such approval, (II) the Indemnitee shall be deemed to have approved
such attorneys if the Indemnitee fails to respond within ten (10) days to the
Indemnitor’s request for approval, and (III) the attorneys designated by the
Indemnitor’s insurer shall be deemed approved by the Indemnitee for purposes
hereof). The Indemnitor’s failure to notify the Indemnitee of the Indemnitor’s
election to defend against the Claim within thirty (30) days after the
Indemnitee gives such notice to the Indemnitor shall be deemed a waiver by the
Indemnitor of its aforesaid right to defend against the Claim. 


                   (C)  
Subject to the terms of this Section 29.3(C), if the Indemnitor elects to
defend against the Claim pursuant to Section 29.3(B) hereof, then the
Indemnitee may participate, at the Indemnitee’s expense, in defending against
the Claim. The Indemnitor shall have the right to control the defense against
the Claim (and, accordingly, the Indemnitee shall cause its counsel to act
accordingly). If there exists a conflict between the interests of the Indemnitor
and the interests of the Indemnitee, then the Indemnitor shall pay the
reasonable fees and disbursements of any counsel that the Indemnitee retains in
so participating in the defense against the Claim. Except as otherwise provided
in this Section 29.3(C), the Indemnitor shall not be required to pay the costs
that Indemnitee otherwise incurs in engaging counsel to consult with Indemnitee
in connection with the Claim. 


                   (D)  
If the Claim is a Claim Against Landlord, then Landlord shall cooperate
reasonably with Tenant in connection therewith. If the Claim is a Claim Against
Tenant, then Tenant shall cooperate reasonably with Landlord in connection
therewith. 


                   (E)  
The Indemnitor shall not consent to the entry of any judgment or award
regarding the Claim, or enter into any settlement regarding the Claim, except
in either case with the prior approval of the Indemnitee (any such entry of any
judgment or award regarding a Claim to which the Indemnitor consents, or any
such settlement regarding a claim to which the Indemnitor agrees, being
referred to herein as a “Settlement”). The Indemnitee shall not
unreasonably withhold, condition or delay the Indemnitee’s approval of a
proposed Settlement, provided that (I) the Indemnitor pays, in cash, to the
Person making the Claim, the entire amount 


92






of the
Settlement contemporaneously with the Indemnitee’s approval thereof (so that
neither the Indemnitor nor the Indemnitee have any material obligations
regarding the applicable Claim that remain executory from and after the
consummation of the Settlement), or (II) the Person making the Claim releases
the Indemnitee from any obligations owed to such Person pursuant to such
Settlement that remain executory after the consummation thereof). If (x) the
terms of the Settlement do not provide for the Indemnitor’s making payment, in
cash, to the Person making the Claim, the entire amount of the Settlement,
contemporaneously with the Indemnitee’s approval thereof (so that either the
Indemnitor or the Indemnitee have any material obligations regarding the
applicable Claim that remain executory from and after the consummation of the
Settlement), (y) the Person making the Claim does not release the Indemnitee
from any obligations owed to such Person pursuant to such Settlement that
remain executory after the consummation thereof, and (z) the Indemnitee does
not approve the proposed Settlement, then the Indemnitor’s aggregate liability
under this Article 29 for the Claim (including, without limitation, the costs
incurred by the Indemnitor for legal costs and other costs of defense) shall
not exceed an amount equal to the sum of (i) the aggregate legal costs and
defense costs that the Indemnitor incurred to the date that the Indemnitor
proposes such Settlement, (ii) the amount that the Indemnitor would have
otherwise paid to the Person making the applicable Claim under the terms of the
proposed Settlement, and (iii) the aggregate legal costs and defense costs that
the Indemnitor would have reasonably expected to incur in consummating the
proposed Settlement. 


                   (F)  
If the Indemnitor does not elect to defend against the Claim as contemplated by
this Section 29.3, then the Indemnitee may defend against, or settle, such
claim, action or proceeding in any manner that the Indemnitee deems
appropriate, and the Indemnitor shall be liable for the Claim to the extent
provided in this Article 29. 


ARTICLE 30 

LANDLORD’S CONSENTS; ARBITRATION


          30.1.  
Certain Limitations. 


          Subject
to the terms of Section 30.2 hereof, Tenant hereby waives any claim against
Landlord for Landlord’s unreasonably withholding, unreasonably conditioning or
unreasonably delaying any consent or approval requested by Tenant in cases
where Landlord expressly agreed herein not to unreasonably withhold,
unreasonably condition or unreasonably delay such consent or approval. If there
is a determination that such consent or approval has been unreasonably
withheld, unreasonably conditioned or unreasonably delayed, then (1) the
requested consent or approval shall be deemed to have been granted, and (2)
Landlord shall have no liability to Tenant for its refusal or failure to give
such consent or approval. Tenant’s sole remedy for Landlord’s unreasonably
withholding, conditioning or delaying consent or approval shall be as provided
in this Article 30. 


          30.2.  
Expedited Arbitration. 


                   (A)  
If (i) this Lease obligates Landlord to not unreasonably withhold, condition or
delay Landlord’s consent or approval for a particular matter, (ii) Landlord
withholds, delays or conditions its consent or approval for such matter, and
(iii) Tenant believes that Landlord did so unreasonably, then Tenant shall have
the right to submit the issue of whether 


93






Landlord
unreasonably withheld, delayed or conditioned such consent or approval to an
Expedited Arbitration Proceeding only by giving notice thereof to Landlord on
or prior to the thirtieth (30th) day after the date that Landlord denied or
conditioned such consent or approval, or the thirtieth (30th) day after the
date that Tenant claims that Landlord’s delaying such consent or approval first
became unreasonable, as the case may be. 


                   (B)  
The sole decision to be made in the Expedited Arbitration Proceeding shall be
whether Landlord unreasonably withheld, delayed or conditioned its consent with
respect to the particular matter being arbitrated. If the decision in the
Expedited Arbitration Proceeding is that Landlord unreasonably withheld,
conditioned, or delayed consent with respect to such matter, then (i) Landlord
shall be deemed to have consented to such matter, and (ii) Landlord shall
execute and deliver documentation that is reasonably requested by Tenant to
evidence such consent. 


                   (C)  
The term “Expedited Arbitration Proceeding” shall mean a binding
arbitration proceeding conducted in The City of New York under the Commercial
Arbitration Rules of the American Arbitration Association (or its successor)
and administered pursuant to the Expedited Procedures provisions thereof;
provided, however, that with respect to any such arbitration, (i) the list of
arbitrators referred to in Section E-4(b) shall be returned within five (5)
Business Days from the date of mailing; (ii) the parties shall notify the
American Arbitration Association (or its successor) by telephone, within four
(4) Business Days, of any objections to the arbitrator appointed and, subject
to clause (vii) below, shall have no right to object if the arbitrator so
appointed was on the list submitted by the American Arbitration Association (or
its successor) and was not objected to in accordance with Section E-4(c) as
modified by clause (i) above; (iii) the notification of the hearing referred to
in Section E-7 shall be four (4) Business Days in advance of the hearing; (iv)
the hearing shall be held within seven (7) Business Days after the appointment
of the arbitrator; (v) the arbitrator shall have no right to award damages or
vary, modify or waive any provision of this Lease; (vi) the decision of the
arbitrator shall be final and binding on the parties; and (vii) the arbitrator
shall not have been employed by either party (or their respective Affiliates)
during the period of three (3) years prior to the date of the Expedited
Arbitration Proceeding. The arbitrator shall determine the extent to which each
party is successful in such Expedited Arbitration Proceeding in addition to
rendering a decision on the dispute submitted. If the arbitrator determines
that one (1) party is entirely unsuccessful, then such party shall pay all of
the fees of such arbitrator. If the arbitrator determines that both parties are
partially successful, then each party shall be responsible for such
arbitrator’s fees only to the extent such party is unsuccessful (e.g., if
Landlord is eighty percent (80%) successful and Tenant is twenty percent (20%)
successful, then Landlord shall be responsible for twenty percent (20%) of such
arbitrator’s fees and Tenant shall be responsible for eighty percent (80%) of
such arbitrator’s fees). 


ARTICLE 31

ADDITIONAL PROVISIONS


          31.1.  
Tenant’s Property Delivered to Building Employees. 


          Any
Building employee to whom any property is entrusted by or on behalf of Tenant
shall be deemed to be acting as Tenant’s agent with respect to such property. 


94






          31.2.  
Not Binding Until Execution. 


          This
Lease shall not be binding upon Landlord or Tenant unless and until Landlord
and Tenant have executed and unconditionally delivered a fully executed
counterpart of this Lease to each other. 


          31.3.  
No Third Party Beneficiaries. 


          Landlord
and Tenant hereby acknowledge that they do not intend for any other Person to
constitute a third-party beneficiary hereof, except to the extent otherwise set
forth herein. 


          31.4.  
Extent of Landlord’s Liability. 


                   (A)  
The obligations of Landlord under this Lease shall not be binding upon the
Person that constitutes Landlord initially after the sale, conveyance,
assignment or transfer by such Person of its interest in the Building or the
Real Property, as the case may be (or upon any other Person that constitutes
Landlord after the sale, conveyance, assignment or transfer by such Person of
its interest in the Building or the Real Property, as the case may be), to the
extent such obligations accrue from and after the date of such sale,
conveyance, assignment or transfer. 


                   (B)  
The members, managers, partners, shareholders, directors, officers and
principals, direct and indirect, comprising Landlord shall not be liable for
the performance of Landlord’s obligations under this Lease. Tenant shall look
solely to Landlord to enforce Landlord’s obligations hereunder. 


                   (C)  
The liability of Landlord for Landlord’s obligations under this Lease shall be
limited to Landlord’s interest in the Real Property and the proceeds thereof
(including, without limitation, proceeds of a sale or refinancing of Landlord’s
interest in the Real Property, casualty insurance proceeds, and condemnation
awards). Tenant shall not look to any property or assets of Landlord (other
than Landlord’s interest in the Real Property and such proceeds thereof) in
seeking either to enforce Landlord’s obligations under this Lease or to satisfy
a judgment for Landlord’s failure to perform such obligations. 


          31.5.  
Extent of Tenant’s Liability. 


          If
Tenant is a corporation, limited partnership, limited liability partnership or
limited liability company, then (i) the members, managers, limited partners,
shareholders, directors, officers and principals, direct and indirect,
comprising Tenant shall not be liable for the performance of Tenant’s
obligations under this Lease, and (ii) Landlord shall look solely to Tenant to
enforce Tenant’s obligations hereunder. 


          31.6.  
Survival. 


          Subject
to the terms hereof, Tenant’s liability for all amounts that are due and
payable to Landlord hereunder shall survive the Expiration Date. 


95






          31.7.  
Recording. 



          Tenant
shall not record this Lease. Tenant shall not record a memorandum of this
Lease. Landlord shall have the right to record a memorandum of this Lease. If
Landlord submits to Tenant a memorandum hereof that is in reasonable form, then
Tenant shall execute, acknowledge and deliver such memorandum promptly after
Landlord’s submission thereof to Tenant. 


          31.8.  
Entire Agreement. 


          This
Lease contains the entire agreement between the parties and supersedes all
prior understandings, if any, with respect thereto. This Lease shall not be
modified, changed, or supplemented, except by a written instrument executed by
both parties. 


          31.9.  
Counterparts. 


          This
Lease may be executed in counterparts, it being understood that all such
counterparts, taken together, shall constitute one and the same agreement. 


          31.10.  
Exhibits. 


          If
any inconsistency exists between the terms and provisions of this Lease and the
terms and provisions of the Exhibits hereto, then the terms and provisions of
this Lease shall prevail. 


          31.11.  
Gender; Plural. 


          Wherever
appropriate in this Lease, personal pronouns shall be deemed to include the
other gender and the singular to include the plural. 


          31.12.  
Divisibility. 


          If
any term of this Lease, or the application thereof to any Person or
circumstance, is held to be invalid or unenforceable, then the remainder of
this Lease or the application of such term to any other Person or any other
circumstance shall not be thereby affected, and each term shall remain valid
and enforceable to the fullest extent permitted by law. 


          31.13.  
Vault Space. 


          If
(i) Tenant uses or occupies any vaults, vault space or other space outside the
boundaries of the Real Property that in each case is located below grade, and
(ii) such space is diminished by any Governmental Authority or by any utility
company, then such diminution shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of Rental, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord. 


          31.14.  
Adjacent Excavation. 


          If
an excavation is made upon land adjacent to the Building, or is authorized to
be made, then Tenant, upon reasonable advance notice, shall grant to the Person
causing or authorized to cause such excavation a license to enter upon the
Premises for the purpose of doing such work as said Person deems necessary to
preserve the Building from injury or damage and to support the 


96






same by proper
foundations, without any claim for damages or indemnity against Landlord, or
diminution or abatement of Rental. Landlord acknowledges that Landlord’s right
to access the Premises as provided in this Section 31.14 is subject to the
provisions of Article 9 hereof. 


          31.15.  
Captions. 


          The
captions are inserted only for convenience and for reference and in no way
define, limit or describe the scope of this Lease or the intent of any
provision thereof. 


          31.16.  
Parties Bound. 


          The
covenants, conditions and agreements contained in this Lease shall bind and
inure to the benefit of Landlord and Tenant and their respective legal
representatives, successors, and, except as otherwise provided in this Lease,
their assigns. 


          31.17.  
Authority. 


                       (A)  
Tenant hereby represents and warrants to Landlord that (i) Tenant is duly
organized and validly existing in good standing under the laws of Nevada, and
possesses all licenses and authorizations necessary to carry on its business,
(ii) Tenant has full power and authority to carry on its business, enter into
this Lease and consummate the transaction contemplated by this Lease, (iii) the
individual executing and delivering this Lease on Tenant’s behalf has been duly
authorized to do so, (iv) this Lease has been duly executed and delivered by
Tenant, (v) this Lease constitutes a valid, legal, binding and enforceable
obligation of Tenant (subject to bankruptcy, insolvency or creditor rights laws
generally, and principles of equity generally), (vi) the execution, delivery
and performance of this Lease by Tenant will not cause or constitute a default
under, or conflict with, the organizational documents of Tenant or any
agreement to which Tenant is a party, (vii) the execution, delivery and
performance of this Lease by Tenant will not violate any Requirement, and
(viii) all consents, approvals, authorizations, orders or filings of or with
any court or governmental agency or body, if any, required on the part of
Tenant for the execution, delivery and performance of this Lease have been
obtained or made. 


                       (B)  
Landlord hereby represents and warrants to Tenant that (i) Landlord is duly
organized and validly existing in good standing under the laws of New York, and
possesses all licenses and authorizations necessary to carry on its business,
(ii) Landlord has full power and authority to carry on its business, enter into
this Lease and consummate the transaction contemplated by this Lease, (iii) the
individual executing and delivering this Lease on Landlord’s behalf has been
duly authorized to do so, (iv) this Lease has been duly executed and delivered
by Landlord, (v) this Lease constitutes a valid, legal, binding and enforceable
obligation of Landlord (subject to bankruptcy, insolvency or creditor rights
laws generally, and principles of equity generally), (vi) the execution,
delivery and performance of this Lease by Landlord will not cause or constitute
a default under, or conflict with, the organizational documents of Landlord or
any agreement to which Landlord is a party, (vii) the execution, delivery and
performance of this Lease by Landlord does not violate any Requirement, and
(viii) all consents, approvals, authorizations, orders or filings of or with
any court or governmental agency or body, if any, required on the part of
Landlord for the execution, delivery and performance of this Lease have been
obtained or made. 


97






          31.18.  
Rent Control. 


          If
at the commencement of, or at any time or times during, the Term, the Rental
reserved in this Lease is not fully collectible by reason of any Requirement,
then Tenant shall enter into such agreements and take such other steps (without
additional expense to Tenant) as Landlord may reasonably request and as may be
legally permissible to allow Landlord to collect the maximum rents which may
from time to time during the continuance of such legal rent restriction be
legally permissible (and not in excess of the amounts reserved therefor under
this Lease). Upon the termination of such legal rent restriction prior to the
expiration of the Term, (a) the Rental shall become and thereafter be payable
hereunder in accordance with the amounts reserved in this Lease for the periods
following such termination, and (b) Tenant shall pay to Landlord, if legally
permissible, an amount equal to the excess of (i) the items of Rental which
would have been paid pursuant to this Lease but for such legal rent
restriction, over (ii) the rents paid by Tenant to Landlord during the period
or periods such legal rent restriction was in effect. 


          31.19.  
Consequential Damages. 


          Tenant
shall have no liability for any consequential, indirect or punitive damages
that Landlord suffers (it being understood, however, that nothing contained in
this Section 31.19 limits Landlord’s right to recover damages (x) as expressly
provided in Section 21.3(A) hereof and in Section 24.2 hereof, or (y) for Tenant’s
failure to remove Specialty Alterations to the extent provided in Section 7.8
hereof). Landlord shall have no liability for any consequential, indirect or
punitive damages that are suffered by Tenant or any Person claiming by, through
or under Tenant. 


          31.20.  
Tenant’s Advertising. 


          Tenant
shall not use a picture, photograph or drawing of the Building (or a silhouette
thereof) in Tenant’s letterhead or promotional materials without Landlord’s
prior approval. 


          31.21.  
Specially Designated Nationals; Blocked Persons; Embargoed Persons. 


                       (A)  
Tenant represents and warrants to Landlord that (a) Tenant and each person or
entity directly or indirectly owning an interest in Tenant is (i) not currently
identified on the Specially Designated Nationals and Blocked Persons List
maintained by the Office of Foreign Assets Control of the Department of the
Treasury (“OFAC”) and/or on any other similar list maintained by OFAC
pursuant to any authorizing statute, executive order or regulation
(collectively, the “List”), and (ii) not a person or entity with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States, (b) none
of the funds or other assets of Tenant constitute property of, or are
beneficially owned, directly or indirectly, by, any Embargoed Person, (c) no
Embargoed Person has any interest of any nature whatsoever in Tenant (whether
directly or indirectly), (d) none of the funds of Tenant have been derived from
any unlawful activity with the result that the investment in Tenant is
prohibited by Requirements or that the Lease is in violation of Requirements,
and (e) Tenant has implemented procedures, and will consistently apply those
procedures, to ensure the foregoing representations and warranties remain true
and correct at all times. The term 


98






“Embargoed
Person” means any person, entity or government subject to trade
restrictions under U.S. law, including but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with
the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or
regulations promulgated thereunder with the result that the investment in
Tenant is prohibited by Requirements or Tenant is in violation of Requirements.



                       (B)  
Tenant covenants and agrees (a) to comply with all Requirements relating to
money laundering, anti-terrorism, trade embargos and economic sanctions, now or
hereafter in effect, (b) to immediately notify Landlord in writing if any of
the representations, warranties or covenants set forth in this paragraph or the
preceding paragraph are no longer true or have been breached or if Tenant has a
reasonable basis to believe that they may no longer be true or have been
breached, (c) not to use funds from any “Prohibited Person” (as such term is
defined in the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism) to make any payment due to Landlord under the Lease and (d)
at the request of Landlord, to provide such information as may be requested by
Landlord to determine Tenant’s compliance with the terms hereof. 


                       (C)  
Tenant hereby acknowledges and agrees that Tenant’s inclusion on the List at
any time during the Lease Term shall be a material default of this Lease.
Notwithstanding anything herein to the contrary, Tenant shall not permit the
Premises or any portion thereof to be used or occupied by any person or entity
on the List or by any Embargoed Person (on a permanent, temporary or transient
basis), and any such use or occupancy of the Premises by any such person or
entity shall be a material default of this Lease. 


99






This page constitutes the signature page to
the Lease, dated as of the 6 day of May, 2008, between 20 BROAD COMPANY L.L.C.,
as landlord, and PENTHOUSE MEDIA GROUP INC., as tenant, for certain space in
the building known by the street address of 20 Broad Street, New York, New York
10005


          IN
WITNESS WHEREOF, Landlord and Tenant have duly executed and delivered this
Lease as of the date first above written. 


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
20 BROAD
 COMPANY L.L.C., Landlord


	
 

	
 


	
 

	
By:

	
Vornado
 Realty L.P., member


	
 

	
 

	
 


	
 

	
 

	
By:

	
Vornado
 Realty Trust, general partner


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
By: 

	
/s/ David R.
 Greembaum


	
 

	
 

	
 

	
 

	



	
 

	
 

	
 

	
 

	
Name: David
 R. Greenbaum


	
 

	
 

	
 

	
 

	
Title:
 President - New York Office Division


	
 

	
 

	
 

	
 

	
 


	
 

	
PENTHOUSE
 MEDIA GROUP INC., Tenant


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
/s/Ezra
 Shahoua


	
 

	
 

	
 

	



	
 

	
 

	
 

	
Name: Ezra
 Shashoua


	
 

	
 

	
 

	
Title: Chief
 Financial Officer












UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT

(Within New York State)


	
 

	
 

	
 


	
STATE OF
 ____________________ 

	
 

	
)


	
 

	
: ss.:

	
 


	
COUNTY OF
 __________________ 

	
 

	
)





On the _____ day of
_________________, in the year 2008, before me, the undersigned personally
appeared ________________________________, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual(s) whose name(s)
is (are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument. 


	
 

	
 


	
 

	 


	
 

	
Notary
 Public 





UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT

(Outside of New York State)


	
 

	
 

	
 


	
STATE OF
 Florida)

	
 

	
 


	
 

	
: ss.:

	
 


	
COUNTY OF
 Palm Beach)

	
 

	
 





On the 1st day of May, in the
year 2008, before me, the undersigned, personally appeared Ezra Shashoua,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned in the Boca Raton, FL. (Insert the city or other political
subdivision and the state or country or other place the acknowledgement was
taken.) 


	
 

	
 


	
 

	
/s/ Terra L.
 Phillips 


	
 

	



	
 

	
(Signature
 and office of individual) 












Exhibit “A”


Premises


20 Broad Street (20)
14


4/30/2008





Note: all dimensions and square footage shown are approximate.






Exhibit “3.3”


Rules


	
 

	
 


	
1.

	
Tenant shall
 not obstruct the common areas of the Building. Tenant shall not use the
 common areas of the Building for any purpose other than for the purpose that
 the applicable common area is used ordinarily.


	
 

	
 


	
2.

	
Tenant shall
 not use any plumbing fixtures that are connected to Building Systems for any
 purpose other than the ordinary purpose for which such plumbing fixtures are
 installed.


	
 

	
 


	
3.

	
Tenant shall
 not use the Premises in any manner that materially and unreasonably interferes
 with the use of any other portion of the Building for ordinary business
 purposes.


	
 

	
 


	
4.

	
Tenant shall
 not at any time keep in the Premises any flammable, combustible or explosive
 substance, except for any such substances that are incidental to the use or
 maintenance of the Premises for ordinary office purposes or the performance
 of Alterations that are performed in accordance with the terms of this Lease.


	
 

	
 


	
5.

	
Tenant shall
 not bring any bicycles, vehicles or animals of any kind (except for service animals)
 into the Premises or the Building.


	
 

	
 


	
6.

	
Subject to
 Section 3.3 of the Lease, Tenant shall comply with the security procedures
 that Landlord reasonably adopts from time to time for the Building. Tenant
 acknowledges that Landlord’s security procedures may include, without
 limitation, (i) Landlord’s denying entry to the Building by any person who
 does not present a Building pass or who does not comply with Landlord’s
 procedures regarding the registration of visitors to the Building, and (ii)
 procedures governing the inspection of freight that arrives at the loading
 facilities for the Building.


	
 

	
 


	
7.

	
Landlord
 shall have the right to require Tenant to (x) direct Persons who are
 delivering packages to the Premises to make delivery to an office in the Building
 that Landlord designates (in which case Landlord shall make arrangements for
 such packages to be delivered to Tenant using other personnel that Landlord
 engages), or (y) arrange for such Persons to be escorted by a representative
 of Tenant while such Person makes delivery to the Premises.


	
 

	
 


	
8.

	
Tenant shall
 subject to inspection by Landlord or Landlord’s designee all items being
 brought into the Building by or on behalf of Tenant (including, without
 limitation, packages, boxes, bags, handbags, attaché cases, and suitcases).
 Landlord may refuse entry into the Building to any Person who refuses to
 cooperate with such inspection or who is carrying any item which has a
 reasonable likelihood of being dangerous to persons or property. 











 

	
 

	
 


	
9.

	
Tenant, at
 Tenant’s expense, shall operate its interior lights for the employees of
 Landlord during the period that such employees make repairs in the Premises
 or perform cleaning services in accordance with the terms of this Lease.


	
 

	
 


	
10.

	
Tenant shall
 not canvass or solicit the other occupants of the Building. Tenant shall
 cooperate reasonably with Landlord in connection with Landlord’s efforts to
 prevent any Person from canvassing, soliciting or peddling in the Building.


	
 

	
 


	
11.

	
Tenant shall
 use in the Building only hand trucks and hand carts that in either case are
 equipped with rubber tires and side guards.


	
 

	
 


	
12.

	
Tenant shall
 implement a policy that precludes its personnel from smoking in the Building
 and shall use reasonable efforts to enforce such policy.





2






Exhibit “4.2”


Landlord’s Charges


TENANT CHARGE - PRICE LIST


Updated 4/9/08


	
 

	
 

	
 

	
 

	
 

	
 


	
20 BROAD STREET


	
Tel: (212)
 269-8171

	
 

	
 

	
 

	
Fax: (212)
 269-8623


	
 

	
 

	
 

	
 

	
 


	
PERSONNEL *

	
 

	
 

	
 

	
 

	
RATE PER HOUR


	



	
 

	
 

	
 

	
 

	




	
ENGINEER -
 BLDG SERVICES (PER MAN) - Plus Materials

	
 

	
$80.00 +
 $6.60 tax = $86.60


	
 

	
 

	
 

	
 

	
 


	
PORTER
 SERVICE (PER MAN)

	
 

	
 

	
$50.00 +
 $4.13 tax = $54.13


	
 

	
 

	
 

	
 

	
 


	
SECURITY
 GUARD

	
 

	
 

	
$50.00 +
 $4.13 tax = $54.13


	
 

	
 

	
 

	
 

	
 


	
O.T. FREIGHT
 CAR & OPERATOR (NO TAX)

	
 

	
 

	
$80.00


	
 

	
 

	
 

	
(Min 4 Hrs -
 Weekends & Holidays)


	
 

	
 

	
 

	
 

	
 


	
RUBBISH REMOVAL

	
 

	
 

	
 

	
 

	
PER CONTAINER


	


	
 

	
 

	
 

	
 

	




	
DUMPSTERS
 (PAPER) / HAMPERS (regular)

	
 

	
 

	
$39.50 +
 $3.26 tax = $42.76


	
CONSTRUCTION
 DUMPSTERS (metal)

	
 

	
 

	
$60.00 +
 $4.95 tax = $64.95


	
RECYCLE
 DUMPSTERS (high grade paper only)

	
 

	
 

	
N/C


	
 

	
 

	
 

	
 

	
 


	
AIR CONDITIONING *

	
 

	
(NO TAX)

	
Min 4 Hrs -
 Weekends

	
PER HOUR


	



	
 

	
 

	
 

	




	
UPPER HOUSE

	
 

	
 

	
 

	
$305.00


	
LOWER HOUSE

	
 

	
 

	
 

	
$267.00


	
 

	
 

	
 

	
 

	
 


	
VENTILATION *

	
 

	
(NO TAX)

	
Min 4 Hrs -
 Weekends


	



	
 

	
 

	
 


	
UPPER HOUSE

	
 

	
 

	
 

	
$197.00


	
LOWER HOUSE

	
 

	
 

	
 

	
$179.00


	
 

	
 

	
 

	
 

	
 


	
HEATING *

	
 

	
(NO TAX)

	
Min 4 HRS -
 Weekends


	



	
 

	
 

	
 


	
UPPER HOUSE

	
 

	
 

	
 

	
$288.00


	
LOWER HOUSE

	
 

	
 

	
 

	
$232.00


	
 

	
 

	
 

	
 

	
 


	
DIRECTORY SERVICE

	
 

	
 

	
 

	
 


	



	
 

	
 

	
 

	
 


	
LOBBY
 DIRECTORY (PER LINE)

	
 

	
 

	
$15.00 +
 $1.24 tax = $16.24


	
LOBBY STRIPS

	
 

	
 

	
 

	
$30.00 +
 $2.48 tax = $32.48


	
 

	
 

	
 

	
 

	
 


	
KEY CHARGE

	
 

	
 

	
 

	
 


	



	
 

	
 

	
 

	
 


	
DUPLICATE
 KEY

	
 

	
 

	
 

	
$5.00 + 0.41
 tax = $5.41


	
MEDECO

	
 

	
 

	
 

	
$10.00 +
 0.83 tax = $10.83


	
 

	
 

	
 

	
 

	
 


	
* Upper
 House 10th to 27th floors

	
 

	
* Lower
 House 3LL to 9th floors


	
* New Street - Freight Hours 9:30 AM to 4:30 PM (No Lunch)


	
* Service
 required for Saturday, Sunday or scheduled Holidays will be billed at a 4
 hour minimum.












Exhibit “4.4”


Cleaning Specifications 


NIGHTLY (ON BUSINESS DAYS)


	
 

	
 


	
•

	
Sweep
 hard-surfaced flooring in general office space using a dust-down preparation.
 


	
 

	
 


	
•

	
Carpet sweep
 carpets in general office areas without moving heavy furniture (such as
 desks, file cabinets, computer stands, and sofas). 


	
 

	
 


	
•

	
Hand dust
 and wipe clean all furniture, fixtures and window sills in the general office
 areas that are within reach of the cleaning staff without ladders. 


	
 

	
 


	
•

	
Empty and
 clean waste receptacles in the general office areas and remove wastepaper. 


	
 

	
 


	
•

	
Dust the
 interior of waste receptacles in the general office areas. 


	
 

	
 


	
•

	
Wash clean
 water fountains and coolers in the general office areas. 


	
 

	
 


	
•

	
Sweep
 private stairways within the premises. 


	
 

	
 


	
•

	
Sweep and
 wash (using disinfectant) all floors in the base building lavatories that are
 located in the Building core. 


	
 

	
 


	
•

	
Wash and
 polish mirrors, shelves, bright work and enameled surfaces in the base
 building lavatories that are located in the Building core. 


	
 

	
 


	
•

	
Wash and
 disinfect basins, bowls and urinals in the base building lavatories that are
 located in the Building core. 


	
 

	
 


	
•

	
Wash and
 disinfect toilet seats in the base building lavatories that are located in
 the Building core. 


	
 

	
 


	
•

	
Hand dust
 and clean all partitions, tile walls, dispensers and receptacles in the base
 building lavatories that are located in the Building core. 


	
 

	
 


	
•

	
Empty paper
 receptacles and remove wastepaper in the base building lavatories that are
 located in the Building core. 


	
 

	
 


	
•

	
Fill toilet
 tissue holders in the base building lavatories that are located in the
 Building core. 


	
 

	
 


	
•

	
Fill paper
 towel dispensers. 


	
 

	
 


	
•

	
Empty and
 clean sanitary disposal receptacles in the base building lavatories that are
 located in the Building core. 












 

	
 

	
 

	
 


	
•

	
Waste
 receptacles liners, toilet tissue, paper towels, soap and disinfectant shall
 be supplied at no additional charge. 


	
 


	
WEEKLY


	
 


	
•

	
 Vacuum clean carpeting and rugs in the
 general office areas without moving heavy furniture (such as desks, file
 cabinets, computer stands, and sofas). 


	
 

	
 


	
•

	
Dust door
 louvers and other ventilating louvers that are within reach of the cleaning
 staff without ladders. 


	
 

	
 


	
•

	
 Wipe clean bright work. 


	
 

	
 


	
QUARTERLY


	
 

	
 


	
•

	
High dust
 the Premises, including the following: 


	
 

	
 

	
 


	
 

	
•

	
 Dust pictures, frames, charts, graphs and
 similar wall hangings that are not reached in nightly or weekly cleaning. 


	
 

	
 

	
 


	
 

	
•

	
Dust clean
 vertical surfaces, such as walls, partitions, doors and door bucks and other
 surfaces not reached in nightly or weekly cleaning. 


	
 

	
 

	
 


	
 

	
•

	
 Dust pipes, ventilating and
 air-conditioning louvers, ducts, high moldings and other high areas not
 reached in nightly or weekly cleaning. 


	
 

	
 

	
 


	
 

	
•

	
 Dust Venetian blinds or similar treatments.
 


	
 

	
 

	
 


	
ADDITIONAL SERVICES


	
 

	
 

	
 


	
•

	
 Wash the exterior of windows periodically,
 subject to weather conditions and Requirements. 





2






Exhibit “6.2”-1


Preliminary Plan 










Exhibit “6.2”-2 


The Work Letter 



	
 

	
 


	
April 30,
 2008


	
 

	
 


	
Penthouse Media Group, Inc.
 

 20 Broad Street, 14th Floor


	
 

	
 


	
Landlord Scope of Work


	
 

	
 


	
Construction


	
 

	
 


	
1.

	
Install
 double wood primary entrance door 6’-0” x 8’-0”, and single wood secondary
 entrance door in welded metal frames, 3’-0” x 8’-0”. 


	
 

	
 


	
2.

	
Private
 Offices to have solid wood doors, 3’-0” x 8’-0”, on knock down hollow metal
 frames with 18” wide frameless glass sidelites 8’-2” high. The Board Room to
 have same door, however glass fronts approximately 12’ wide; additional
 conference rooms to have same doors and 18” wide frameless glass sidelites. 


	
 

	
 


	
3.

	
Walls
 constructed to slab and sound insulation provided in walls between the
 Reception and IT Room, the Reception and Pantry, the Executive Office at the
 corner of New Street and Exchange Place, at Board Room and 2 conference
 rooms. Board Room shall have additional support necessary to mount Plasma TV
 for video conferencing. All other walls constructed to just above the hung ceiling
 in accordance with applicable Building Department Code. 


	
 

	
 


	
4.

	
All Hardware
 to be building standard lever handles, passage sets. Key locksets to be at
 Executive Offices, MIS Room, IT Room, Photo Library, Conference Rooms and
 Entry Doors. 


	
 

	
 


	
5.

	
Plywood
 blocking to be provided in IT Room. 


	
 


	
Ceilings


	
 


	
1.

	
Hung
 ceilings in open areas: 15/16 grid, 2 x 2 Armstrong Ultima (consistent with
 ceiling tile in Suite 2128 at 1 Penn Plaza) at 8’-6” high. Window pockets
 shall be constructed at the perimeter of the Premises. 


	
 

	
 


	
Finishes


	
 


	
1.

	
Wall
 surfaces to receive (1) prime base coat and (2) coats of paint, general color
 and accent color. 


	
 

	
 


	
2.

	
High-traffic
 pattern carpet at in open areas and coordinated solid carpet in private
 offices, conference rooms and photo library. VCT flooring to be installed in
 storage room, copy room, IT room, pantry, file room, imaging room, production
 room and art slide room. Vinyl wall base throughout. 










 


	
 

	
 


	
Electrical


	
 


	
1.

	
All private
 office and conference rooms to receive (1) quad outlet, two 3⁄4 inch EMT
 conduit to 2 junction boxes on the walls in a location to be determined for
 tel/data; 


	
 

	
 


	
2.

	
Storage and
 general open areas to receive convenience duplex outlets; 


	
 

	
 


	
3.

	
Pantry to
 receive full size refrigerator and outlet, (1) microwave and outlet, outlet
 for vending machine, (2) GFI quad outlets. Microwave, refrigerator and
 vending machine to be on separate circuits; 


	
 

	
 


	
4.

	
Work
 stations to receive power feeds from recessed or floor chopped power feeds.
 The space will be constructed to provide adequate power/tel/data consistent
 with that which is currently provided to the workstations located in Tenant’s
 premise on the 11th floor of 2 Penn Plaza. Each conference room shall receive
 2 additional duplex perimeter outlets and a quad electrical outlet. 


	
 

	
 


	
5.

	
Building
 standard fluorescent basket light fixtures, combination of 2 x 2 and 2 x 4
 throughout office (consistent with fixtures in Suite 2128 at 1 Penn Plaza). 


	
 

	
 


	
6.

	
Standard
 fluorescent down lights at reception area (consistent with fixtures in Suite
 2128 at 1 Penn Plaza). 


	
 

	
 


	
7.

	
Provide
 Decora light switches or equal. 


	
 

	
 


	
8.

	
(1) 30 amp
 circuit in the IT room. 


	
 

	
 


	
Plumbing


	
 


	
1.

	
Provide sink
 and faucet set in pantry; 


	
 

	
 


	
2.

	
Provide
 cold-water direct connect with shutoff for coffee machine. 


	
 

	
 


	
Millwork


	
 


	
1.

	
Provide
 upper and lower cabinets and counter-tops in pantry; 


	
 

	
 


	
2.

	
Provide
 upper shelf and rod in coat closets and shelving in other closets; 


	
 

	
 


	
3.

	
Provide
 countertops in Mailroom and Production workroom. 





2