Document:

Exhibit 10.2

 

LEASE AGREEMENT

 

LEASE

 

 

HEARST COMMUNICATIONS, INC.,

 

Landlord,

 

with

 

HEARST-ARGYLE TELEVISION, INC.,

 

Tenant

 

 

Lease
dated as of May 5, 2006

 

 

Premises:  A Portion of the Thirty-Ninth Floor at 959
Eighth Avenue (aka 300 West 57th Street), New York, New York 10019

 

 

TABLE OF CONTENTS

 

ARTICLE

 

	
  1.

  	
  Demise;
  Premises; Term; Early Termination; Rents

  	
  2

  
	
  2.

  	
  Use

  	
  4

  
	
  3.

  	
  Preparation
  of Premises; Tenant Improvement Allowance

  	
  4

  
	
  4.

  	
  Premises
  Ready for Occupancy

  	
  5

  
	
  5.

  	
  Adjustments
  of Rent

  	
  6

  
	
  6.

  	
  Non-Liability
  and Indemnification

  	
  14

  
	
  7.

  	
  Subordination,
  Notice to Lessors and Mortgagees

  	
  15

  
	
  8.

  	
  Quiet
  Enjoyment

  	
  21

  
	
  9.

  	
  Assignment
  and Subletting

  	
  21

  
	
  10.

  	
  Compliance
  with Laws and Requirements of Public Authorities

  	
  31

  
	
  11.

  	
  Insurance

  	
  34

  
	
  12.

  	
  Rules and
  Regulations

  	
  37

  
	
  13.

  	
  Alterations,
  Renovations and Tenant’s Changes

  	
  38

  
	
  14.

  	
  Tenant’s
  Property

  	
  41

  
	
  15.

  	
  Repairs
  and Maintenance

  	
  42

  
	
  16.

  	
  Electricity

  	
  43

  
	
  17.

  	
  Heat,
  Ventilation and Air-Conditioning

  	
  44

  
	
  18.

  	
  Landlord’s
  Other Services; Use of common Facilities

  	
  45

  
	
  19.

  	
  Access,
  Changes in Building Facilities and Name, Signs

  	
  46

  
	
  20.

  	
  Notice of
  Accidents

  	
  48

  
	
  21.

  	
  Non-Liability
  and Indemnification

  	
  48

  
	
  22.

  	
  Damage or
  Destruction

  	
  49

  
	
  23.

  	
  Eminent
  Domain

  	
  52

  
	
  24.

  	
  Surrender

  	
  54

  
	
  25.

  	
  Conditions
  of Limitation

  	
  55

  
	
  26.

  	
  Re-entry
  by Landlord

  	
  56

  
	
  27.

  	
  Damages

  	
  57

  
	
  28.

  	
  Waiver

  	
  60

  
	
  29.

  	
  No Other
  Waivers or Modifications

  	
  61

  
	
  30.

  	
  Curing
  Tenant’s Defaults

  	
  63

  
	
  31.

  	
  Brokers

  	
  64

  
	
  32.

  	
  Notices

  	
  64

  
	
  33.

  	
  Estoppel
  Certificate; Memorandum

  	
  65

  
	
  34.

  	
  Arbitration

  	
  66

  
	
  35.

  	
  No Other
  Representations, Governing Law, Consents

  	
  67

  
	
  36.

  	
  Parties
  Bound

  	
  67

  
	
  37.

  	
  Definitions
  and Construction

  	
  68

  
	
  38.

  	
  Excavation;
  Shoring; Vaults

  	
  69

  
	
  39.

  	
  Right of
  First Refusal

  	
  69

  
	
  40.

  	
  Assumption
  Tenant’s Current Lease

  	
  70

  
	
  41.

  	
  Renewal

  	
  70

  

 

LEASE

 

LEASE
dated as of May 5, 2006, between HEARST
COMMUNICATIONS, INC., a 

 

 

Delaware
corporation, having an office at 959 Eighth Avenue, New York, New York 10019
(hereinafter referred to as “Landlord”)
and HEARST-ARGYLE TELEVISION, INC., a Delaware corporation, having an office at
888 Seventh Avenue, New York, New York 10019 (hereinafter referred to as “Tenant”).

 

WITNESSETH:

 

ARTICLE 1

 

Demise; Premises; Term; Early Termination; Rents

 

1.01                                                                        Landlord hereby leases to Tenant, and Tenant
hereby hires from Landlord, the premises hereinafter described, in the building
located at 959 Eighth Avenue, (aka 300 West 57th Street, in the
Borough of Manhattan, City, County and State of New York (hereinafter referred
to as the “Building”), on the
parcel of land more particularly described in Exhibit
A (hereinafter referred to as the “Land”),
of which Landlord is the fee owner, for the term hereinafter stated, for the
rents hereinafter reserved and upon and subject to the conditions (including
limitations, restrictions and reservations) and covenants hereinafter provided.
Each party hereby expressly covenants and agrees to observe and perform all of
the conditions and covenants herein contained on its part to be observed and
performed.

 

1.02                                                                        The premises hereby leased to Tenant are approximately
19,866 square feet of rentable space which comprise a portion of the
thirty-ninth (39th) Floor of the Building, as shown on the floor
plans annexed hereto as Exhibit B.
Said premises together with all fixtures and equipment which at the
commencement, or during the term, of this lease are thereto attached (except
items not deemed to be included therein and removable by Tenant as provided in
Article 14) constitute and are hereinafter referred to as the “Demised Premises”.

 

1.03                                                                        (a)  The
term of this lease, for which the Demised Premises are hereby leased, shall
commence on the later of i) July 1, 2006 or ii)the date on which Landlord delivers
possession of the Demised Premises to Tenant, with a temporary certificate of
occupancy in place permitting Tenant to use the Demised Premises(hereinafter
referred to as the “Commencement Date”)
and shall terminate on the last day of the month following the eleventh (11th)
anniversary of the Commencement Date (hereinafter referred to as the “Expiration Date”) or such earlier date
upon which said term may expire or be cancelled or terminated pursuant to any
of the conditions or covenants of this lease or pursuant to law.

 

(b)  Notwithstanding the foregoing, in the event
that there is a change of control of Tenant, and The Hearst Corporation no
longer has the right to elect a majority of the members to the Board of
Directors of Tenant, for a period of six (6) months after the date of such
change of control, either party shall have the right to terminate this Lease by
written notice to the other party. The effective date of termination shall be
the one-year anniversary following the giving of the notice.

 

1.04                                                                        The “rents”
reserved under this lease, for the term thereof, shall be and consist of:

 

(a)                                  “fixed rent” as follows:

 

(i)                                                                                     $1,688,610.00 per year (payable in equal
monthly installments of $140,717.50 per month) from July 1, 2006 to and
including June 30, 2011;

 

(ii)                                                                                  $1,787,940.00 per annum (payable in equal
monthly installments of $148,995.00 per month) from July 1, 2011 to and

 

 

including June 30, 2017;

 

(b)                                 “additional rent” consisting of all such other sums of money
as shall become due from and payable by Tenant to Landlord hereunder (for
default in payment of which Landlord shall have the same remedies as for a
default in payment of fixed rent),all to be paid to Landlord at its office, or
such other place, or to such agent and at such place, as Landlord may designate
by notice to Tenant, in lawful money of the United States of America.

 

1.05                                                                           Tenant shall pay the fixed rent and
additional rent herein reserved promptly as and when the same shall become due
and payable, without demand therefor and without any abatement, deduction or
setoff whatsoever except as expressly provided in this lease.

 

1.06                                                                           Notwithstanding the foregoing, so long as
Tenant is not in default under the terms of this lease, the fixed rent for the twelve
(12) month period following the Commencement Date (the Abatement Period) shall
be abated. In the event that Tenant shall be in default of the terms of this
lease during the Abatement Period, and such default shall not be cured within
the periods provided for herein, all fixed rent abated during the Abatement
Period shall become due and payable.

 

ARTICLE 2

 

Use

 

2.01                                                                        Tenant shall use and occupy the Demised
Premises for executive and general offices and for no other purpose.

 

2.02                                                                        If any governmental license or permit, other
than a Certificate of Occupancy, shall be required for the proper and lawful
conduct of Tenant’s business in the Demised Premises, or any part thereof, for
any purpose other than the mere use and occupancy of the Demised Premises for
executive and general office purposes, and if failure to secure such license or
permit would in any way affect Landlord, Tenant, at its expense, shall duly
procure and thereafter maintain such license or permit and submit the same for
inspection by Landlord. Tenant shall at all times comply with the terms and
conditions of each such license or permit. Landlord and Tenant are not aware of
any such licenses or permits presently being required.

 

2.03                                                                        Tenant shall not at any time use or occupy,
or suffer or permit anyone to use or occupy, the Demised Premises, or do or
permit anything to be done in the Demised Premises, in violation of the
Certificate of Occupancy for the Demised Premises or for the Building.

 

ARTICLE 3

 

Preparation of the Demised_Premises; 

Tenant Improvement Allowance

 

3.01                                                                        As of the date of execution of this Lease, The
Building is still under construction.

 

3.02                                                                        The Demised Premises shall be completed and
prepared by Landlord for Tenant’s occupancy, at Tenant’s expense, in the
manner, and subject to the terms, conditions and covenants, set forth in plans
previously reviewed and approved by Landlord and Tenant. The
plans are attached hereto as Exhibit C. The
facilities, materials and work so to be furnished, installed and performed in
the Demised Premises by Landlord are hereinafter referred to as the “Work”. The Work is being done by Landlord’s

 

4

 

contractor,
Turner Construction. Tenant will not be doing any work in the Demised Premises.
Landlord shall use reasonable speed and diligence in preparing the Demised
Premises for Tenant’s occupancy.

 

3.03                                                                        Notwithstanding the foregoing, Landlord shall
give Tenant a Tenant Improvement Allowance of $1,986,600. Such Tenant
Improvement Allowance shall be credited to Tenant by Landlord when the
calculations of the cost of the Work are done. Following such credit, Tenant
shall pay to Landlord the excess cost of the Work within thirty (30) days of
being billed by Landlord.

 

ARTICLE 4

 

When the Demised Premises Ready For Occupancy

 

4.01                                                                        The Demised Premises shall be deemed ready
for occupancy on the earliest date on which all of the following conditions
have been met:

 

(a)                                  the Work has been substantially completed,
and is so certified by Landlord’s architect; and it shall be so deemed when all
of Work is completed except for minor or insubstantial details of construction,
mechanical adjustment, or decoration remain to be performed, the non-completion
of which does not materially interfere with Tenant’s use of the Demised
Premises; and

 

5

 

(b)                                 reasonable means of access and facilities
necessary to Tenant’s use and occupancy of the Demised Premises, including
corridors, elevators and stairways and heating, ventilating, air conditioning,
sanitary, water, and electrical facilities, have been installed and are in
reasonably good operating order and available to Tenant, and are comparable
with Class A Office Buildings in Manhattan. Landlord shall give Tenant a
preliminary notice, estimating when the conditions listed in Subsections (a)
and (b) above will be met, on a date which shall be at least forty-five (45)
days prior to the estimated date set forth in such preliminary notice. Any immaterial
variance between the date so estimated and the date such conditions are met
shall be of no consequence. In the event Landlord shall send the preliminary
notice referred to herein but conditions (a) and (b) above shall actually be
met prior to the date set forth in such notice, then for purposes hereof, the
conditions referred to in (a) and (b) above shall be deemed met on the date set
forth in such notice.

 

4.02                                                                        If and when Tenant shall take actual occupancy
of the Demised Premises and operate its business therein, it shall be
conclusively presumed that the same were in satisfactory condition (except for
latent defects) as of the date of such taking of possession, unless within
ninety (90) days after the Commencement Date Tenant shall give Landlord notice
specifying the respects in which the Demised Premises were not in satisfactory
condition.

 

ARTICLE 5

 

Adjustments Of Rent

 

5.01                                                                        Tax Escalation. For the purpose of Sections
5.01-5.06:

 

(a)                                  “Taxes” shall mean the real estate taxes and assessments
and special assessments imposed upon the Building and the Land. If at any time
during the term of this lease the methods of taxation prevailing at the
commencement of the term hereof shall be altered so that in lieu of or as a
substitute for the whole or any part of the taxes, assessments, levies,
impositions or charges now levied, assessed or imposed on real estate and the
improvements thereon, there shall be levied, assessed or imposed (i) a tax,
assessment, levy, imposition or charge wholly or partially as capital levy or
otherwise on the rents received therefrom, or (ii) a tax, assessment, levy,
imposition or charge measured by or based in whole or in part upon the Demised
Premises and imposed upon Landlord, or (iii) a license fee measured by the rents
payable by Tenant to Landlord, then all such taxes, assessments, levies,
impositions or charges, or the part thereof so measured or based, shall be
deemed to be included within the term “Taxes” for the purposes hereof;

 

(b)                                 “Base Tax
Year” shall mean the fiscal year July 1, 2006 to June 30, 2007
inclusive. The Base Tax Years shall be adjusted if the Demised Premises are not
delivered to Tenant for Tenant’s occupancy by October 1, 2006. Base Year Taxes
shall be based upon a fully assessed and completed building with a permanent
Certificate of Occupancy, or a temporary Certificate of Occupancy and at least
ninety percent (90%) of the building occupied;

 

(c)                                  “Tax Year” shall mean the fiscal year for which Taxes
are levied by the governmental authority;

 

(d)                                 “Tenant’s Proportionate Share” shall mean for purposes of this lease and
all calculations in connection herewith Two and Three-Tenths percent (2.3%),
which has been computed on the basis of a fraction, the numerator of which is
the agreed rentable square foot area of the Demised Premises as set forth below
(which rentable square foot area is hereinafter sometimes referred to as the “Multiplication Factor”) and the 

 

6

 

denominator
of which is the agreed rentable square foot area of the Building as set forth
below. The parties agree that the rentable square foot area of the Demised
Premises shall be deemed to be 19,866 square feet and that the agreed rentable
square foot area of the Building shall be deemed to be 856,000 square feet
(hereinafter referred to as the “Building
Area”).

 

(f)                                    “Tenant’s Projected Share of
Taxes” shall mean the Tax
Payment (as hereinafter defined), if any, payable by Tenant for the immediately
prior Tax Year divided by twelve (12) and payable monthly by Tenant to Landlord
as additional rent.

 

5.02                                                                        If the Taxes for any Tax Year shall be more
than the Base Tax Rate for any reason whatsoever, whether foreseen or
unforeseen, Tenant shall pay, as additional rent for such Tax Year, an amount
equal to Tenant’s Proportionate Share of the amount by which the Taxes for such
Tax Year are greater than the Base Tax Rate. (The amount payable by Tenant is
hereinafter referred to as the “Tax Payment”.)
The Tax Payment shall be appropriately prorated, if necessary, to correspond
with that portion of a Tax Year occurring within the Term of this lease. The
Tax Payment shall be payable by Tenant within twenty (20) days after receipt of
a demand from Landlord therefor, which demand shall be accompanied by a copy of
the tax bill together with Landlord’s computation of the Tax Payment. If the
Taxes for any Tax Year are payable to the taxing authority on an installment
basis, Landlord may serve such demands upon, and the Tax Payment for such Tax
Year shall be payable by Tenant, on a corresponding installment basis.

 

5.03                                                                        Notwithstanding the fact that the increase in
rent is measured by an increase in Taxes, such increase is additional rent and
shall be paid by Tenant as provided herein regardless of the fact that Tenant
may be exempt, in whole or in part, from the payment of any taxes by reason of
Tenant’s diplomatic or other tax exempt status or for any other reason
whatsoever.

 

5.04                                                                        Only Landlord shall be eligible to institute
tax reduction or other proceedings to reduce the assessed valuation of the Land
and Building. Should Landlord be successful in any such reduction proceedings
and obtain a rebate or a reduction in assessment for periods during which
Tenant has paid or is obligated to pay Tenant’s Proportionate Share of
increases in Taxes then Landlord shall, in the event a rebate is obtained,
return Tenant’s Proportionate Share of such rebate to Tenant after deducting
Landlord’s expenses, including without limitation, attorneys’ fees and
disbursements in connection with such rebate (such expenses incurred with
respect to a rebate or reduction in assessment being hereinafter referred to as
“Tax Expenses.

 

5.05                                                                        Commencing with the first Tax Year after
Landlord shall be entitled to receive a Tax Payment, Tenant shall pay to
Landlord, as additional rent for the then Tax Year, Tenant’s Projected Share of
Taxes. Upon each date that a Tax Payment or an installment on account thereof
shall be due from Tenant pursuant to the terms of Section 5.02 hereof, Landlord
shall apply the aggregate of the installments of Tenant’s Projected Share of
Taxes then on account with Landlord against the Tax Payment or installment
thereof then due from Tenant.

 

In the event that such aggregate amount shall
be insufficient to discharge such Tax Payment or installment, Landlord shall so
notify Tenant in a demand served upon Tenant pursuant to the terms of Section
5.02, and the amount of Tenant’s payment obligation with respect to such Tax
Payment or installment pursuant to Section 5.02 shall be equal to the amount of
the insufficiency. If, however, such aggregate amount shall be greater than the
Tax Payment or installment, Landlord shall forthwith either (a) pay the amount
of excess (the “Excess”) directly
to Tenant concurrently with the notice or (b) permit Tenant to credit the
Excess against the next payment of Tenant’s Projected Share of Taxes due
hereunder and, if the credit of such payment is not sufficient to liquidate the
entire amount of the Excess, Landlord shall then pay the amount 

 

7

 

of any difference to Tenant. In the event any
Excess remains after the Expiration Date, Landlord shall pay the Excess to
Tenant promptly.

 

5.06                                                                                                                        (a)                                  Anything in this Article 5 to the contrary
notwithstanding, in the event that the holder of any superior mortgage or the
lessor of any superior lease (as such terms are defined in Section 7.0l hereof)
shall require advance payments from the Landlord on account of Taxes, then
Tenant will pay Tenant’s Proportionate Share of any amounts required to be paid
in advance by Landlord with the holder of the superior mortgage or the lessor
of the superior lease to the extent that such payments made by Landlord exceed
the Base Tax Rate. Any payments to be made by Tenant under this Section 5.06(a)
shall be made ten (l0) days prior to the date Landlord is required to make such
payments to the holder of the superior mortgage or the lessor of the superior
lease. There are presently no superior mortgage or lease holders with an interest
in the Building or the Land;

 

(b)                                 Anything in Sections 5.01 through 5.06 to the
contrary notwithstanding, in no event whatsoever shall the fixed rent be
reduced below the fixed rent initially set forth in Section 1.04(a) hereof as
same may be increased by provisions of this Lease other than Sections 5.01
through 5.06.

 

5.07                        Expense Escalation.                                      For purposes of this Article:

 

(a)                                  “Operating Expenses” shall mean any or all expenses incurred by
Landlord in connection with the operation of the Building, with at least 90% of
the Building’s non-retail rentable footage leased and occupied, including all
expenses incurred as a result of Landlord’s compliance with any of its
obligations hereunder and such expenses shall include:  (i) salaries, wages, medical, surgical and
general welfare benefits, (including group life insurance) pension payments and
other fringe benefits of employees of Landlord up to the grade of Building
Manager only engaged in the operation and maintenance of the Building (The
salaries and other benefits aforesaid of such employees servicing the Building
shall be comparable to those of employees servicing buildings similar to the
Building, located in the Borough of Manhattan); (ii) payroll taxes, workmen’s
compensation, uniforms and dry cleaning for the employees referred to in
subdivision (i); (iii) the cost of all charges for steam, heat, ventilation,
air conditioning and water (including sewer rental) furnished to the Building
and/or used in the operation of all of the service facilities of the Building
and the cost of all charges for electricity furnished to the public and service
areas of the Building and/or used in the operation of all of the service
facilities of the Building including any taxes on any of such utilities; (iv)
the cost of all charges for rent, casualty, war risk insurance (if obtainable
from the United States government) and of liability insurance for the Building
to the extent that such insurance is required to be carried by Landlord under
any superior lease or superior mortgage or if not required under any superior
lease or superior mortgage then to the extent such insurance is carried by
owners of Buildings comparable to the Building; (v) the cost of all building
and cleaning supplies for the common areas of the Building and charges for
telephone for the Building; (vi) the cost of all charges for management,
security, cleaning and service contracts for the Building (if no managing agent
is employed by Landlord, there shall be included in Operating Expenses a sum
equal to 2.5% of all rents, additional rents and other charges collected from
tenants or other permitted occupants of the Building); (vii) the amortized cost
of rentals of capital equipment designed to result in savings or reductions in
Operating Expenses: (viii) the cost incurred in connection with the maintenance
and repair of the Building and (ix) the cost of Tenant’s use of the Building
amenities listed in Section 18.06. Operating Expenses shall not include (A)
administrative wages and salaries, above the level of building manager; (B)
renting commissions; (C) franchise taxes or income taxes of Landlord; (D) Taxes
on the Land and Building; (E) costs of painting and decorating expenditures for
capital improvements except (1) those which under generally applied real estate
practice are expenses or regarded as deferred 

 

8

 

expenses
and (2) for capital improvements required by law or (3) for capital
improvements which are designed to result in a saving in the amount of
Operating Expenses, in any of such cases the cost thereof shall be included in
Operating Expenses for the Operational Year in which the costs are incurred and
subsequent Operational Years, on a straight line basis, to the extent that such
items are amortized over an appropriate period, but not more than ten years,
with an interest factor equal to the Landlord’s actual cost of capital at the
time of Landlord’s having incurred said expenditure;

 

(b)                                 “Operational Year” shall mean each calendar year or part thereof
occurring during the Term of this lease;

 

(c)                                  “Base Operational Year” shall mean calendar year 2007, or such later
year as the Building non-retail rentable square footage is leased and occupied;

 

(d)                                 “Base Operating Expenses” shall mean Operating Expenses for the Base
Operational Year;

 

(e)                                  “Tenant’s Operational
Proportionate Share” shall
mean 2.3%;

 

(f)                                    “Actual Operating Expense
Differential” shall mean the
amount by which the Operating Expenses actually incurred by Landlord for the
recently expired Operational Year actually exceeded the Base Operating
Expenses;

 

(g)                                 “Tenant’s Projected Share of
Operating Expense Increase”
shall mean one-twelfth (1/12th) of the product of (i) Tenant’s Operational
Proportionate Share, multiplied by (ii) the Actual Operating Expense
Differential for the recently expired Operational Year; and

 

(h)                                 “Tenant’s Initial Projected
Share of Operating Expense Increase” shall mean one-twelfth (1/12th) of the product of (i) Tenant’s
Operational Proportionate Share multiplied by (ii) Landlord’s reasonable
estimate of anticipated increases in Operating Expenses during the initial
Operational Year over Operating Expenses in the prior calendar year;

 

(i)                                     “Tenant’s Actual Share of Operating
Expense Increase” shall mean
the product of (i) the Actual Operating Expense Differential multiplied by (ii)
Tenant’s Operational Proportionate Share;

 

5.08                                                                        (a)                                  After the expiration of the Base Operational
year, Landlord shall furnish Tenant with a written detailed statement
(hereinafter referred to as the “Initial Operating Statement”) certified by
Landlord’s accountant as being true and correct indicating (i) Base Operating
Expenses, and (ii) Landlord’s computation of Tenant’s Initial Projected Share
of Operating Expense Increase for the upcoming Operational Year;

 

(b)                                 After the expiration of the first Operational
Year and each Operational year thereafter, Landlord shall furnish Tenant with a
written detailed statement (hereinafter referred to as a “Subsequent Operating Statement”) certified
by Landlord’s accountant as being true and correct indicating (i) actual amount
of Operating Expenses for the recently expired Operational Year, (ii) Landlord’s
computation of Tenant’s Projected Share of Operating Expense Increase for the
upcoming Operational Year, and (iii) the amount of any discrepancy between
Tenant’s Actual Share of Operating Expense Increase and Tenant’s Initial
Projected Share of Operating Expense Increase and Tenant’s Initial Projected
Share of Operating Expense Increase or Tenant’s Projected Share of Operating
Expense Increase, as the case may be, for the recently expired Operational
year.

 

(c)                                  Payments of rental in accordance with the 

 

9

 

Initial
Operating Statement and Subsequent Operating Statements shall be made at the
times specified in Section 5.09.

 

5.09                                                                        (a)                                  Tenant shall pay to Landlord, as additional
rent during the first Operational year Tenant’s Initial Projected Share of
Operating Expense Increase, which shall be payable in equal monthly
installments the first payment representing the payments retroactive to the
first day of the current Operational Year and including the current month shall
be made twenty (20) days after Tenant receives the Initial Operating Statement,
and thereafter normal monthly payments shall be made on the first day of each
month throughout the upcoming Operational Year and thereafter until receipt of
the first Subsequent Operating Statement. If the first Subsequent Operating
Statement furnished by Landlord to Tenant for the recently expired Operational
Year shall indicate that Tenant’s Initial Projected Share of Operating Expense
Increase exceeded Tenant’s Actual Share of Operating Expense Increase, Landlord
shall forthwith either (a) pay the amount of excess directly to Tenant
concurrently with the first Subsequent Operating Statement or (b) permit Tenant
to credit the amount of such excess against the subsequent payments of rent due
hereunder. If, however, the first Subsequent Operating Statement shall indicate
that Tenant’s Actual Share of Operating Expense Increase exceeded Tenant’s
Initial Projected Share of Operating Expense Increase, Tenant shall, within twenty
(20) days, pay the amount of such excess to Landlord as additional rent;

 

(b)                                 Tenant shall pay to Landlord, as additional
rent during each subsequent Operational year, Tenant’s Projected Share of
Operating Expense Increase, which shall be payable in equal monthly
installments, the first payment representing the payments retroactive to the
first day of the current Operational Year and including the current month after
crediting Tenant with payments made for the current Operational Year but prior
to the receipt of a Subsequent Operating Statement, and which shall be made twenty
(20) days after Tenant receives a Subsequent Operating Statement, and
thereafter normal monthly payments shall be made on the first day of each month
throughout the upcoming Operational Year and thereafter until receipt of the
next Subsequent Operating Statement. If a Subsequent Operating Statement
furnished by Landlord to Tenant for a recently expired Operational Year shall
indicate that Tenant’s Projected Share of Operating Expense Increase Exceeded
Tenant’s Actual Share of Operating Expense increase, Landlord shall forthwith
either (a) pay the amount of excess directly to Tenant concurrently with the
Subsequent Operating Statement or (b) permit Tenant to credit the amount of
such excess against the subsequent payments of rent due hereunder. Any excess
attributable to the last Operational Year (or part thereof) occurring during
the term of this Lease, provided Tenant shall not exercise any of its renewal
options set forth in Article 39 hereof or such renewal options shall not apply,
shall be paid by Landlord to Tenant within thirty (30) days after delivery of
the final Subsequent Operating Statement provided Tenant shall have surrendered
possession of the Demised Premises to Landlord in the manner required hereunder
and further provided Tenant shall not then be in default of any of the terms,
covenants or conditions of this Lease on Tenant’s part to observe or perform
after the giving of any required notice and expiration of any applicable grace
or cure period. If, however, the Subsequent Operating Statement shall indicate
that Tenant’s Actual Share of Operating Expense Increase exceeded Tenant’s
Projected Share of Operating Expense Increase, Tenant shall, within twenty (20)
days, pay the amount of such excess to Landlord as additional rent;

 

(c)                                  Anything in Sections 5.07 through 5.11 to the
contrary notwithstanding, in no event whatsoever shall the fixed rent be
reduced below the fixed rent initially set forth in Section 1.04(a) hereof as
same may be increased by provisions of this lease other than Sections 5.07
through 5.11. The amounts payable pursuant to Sections 5.07 through 5.11 shall
be prorated, if necessary, to correspond with that portion of an Operational
Year occurring within the term of this lease.

 

10

 

5.10                                                                        The Initial Operating Statement and every
Subsequent Operating Statement given by Landlord shall be conclusive and
binding upon Tenant unless Tenant shall (a) notify Landlord within sixty (60)
days after its receipt of such statement that it disputes the correctness
thereof, specifying the particular respects in which the statement is claimed
to be incorrect and (b) submit its dispute to arbitration within one hundred
twenty (120) days after its receipt of the Initial Operating Statement or
Subsequent Operating Statement, as the case may be, if such dispute shall not
theretofore be settled by agreement between Landlord and Tenant. Pending the
resolution of such dispute by agreement or arbitration as aforesaid, Tenant
shall, within ten (10) days after receipt of such disputed Initial Operating
Statement or Subsequent Operating Statement, as the case may be, pay any
additional rent due in accordance therewith, but such payment shall be without
prejudice to Tenant’s right to dispute such statement. If the dispute shall be
resolved in Tenant’s favor, Landlord shall, within ten (10) days after Tenant’s
demand, pay Tenant the amount of the overpayment, if any, resulting from Tenant’s
compliance with the disputed Initial Operating Statement or Subsequent
Operating Statement. Landlord agrees to grant Tenant reasonable access to
Landlord’s books and records with respect to the Building for the purpose of
verifying Operating Expenses incurred by Landlord. In the event of any dispute
submitted to arbitration hereunder, Landlord shall make its books and records
governing Operating Expenses available for inspection at least thirty (30) days
prior to a scheduled arbitration hearing.

 

5.11                                                                           Landlord’s failure during the lease term to
prepare and deliver any of the tax bills, statements, notice or bills set forth
in this Article 5, or Landlord’s failure to make a demand, shall not in any way
cause Landlord to forfeit or surrender its rights to collect any of the
foregoing items of additional rent which may have become due during the term of
this lease. Notwithstanding the foregoing, if Landlord shall fail to deliver to
Tenant any bill, notice, statement or demand for a period of three (3) years
following the expiration of the period for which the tax or operating costs are
due, Landlord shall waive its right to collect such amounts from Tenant. Tenant’s
liability for the amounts due under this Article 5 shall survive the expiration
of the Term.

 

5.12                                                                           Tenant shall also pay as additional rent a
charge for electrical use of $59,598 per year, payable in equal monthly
installments of $4,966.50.

 

ARTICLE 6

 

Non-Liability and Indemnification

 

6.01                                                                        Neither Landlord nor any agent or employee of
Landlord shall be liable to Tenant for any injury or damage to Tenant or to any
other person or for any damage to, or loss (by theft or otherwise) of, any
property of Tenant or of any other person, irrespective of the cause of such
injury, damage or loss, unless caused by or due to the negligence or willful
acts of Landlord, its agents or employees occurring within the scope of their
respective employments without negligence on the part of Tenant, it being
understood that no property, other than such as might normally be brought upon
or kept in the Demised Premises as an incident to the reasonable use of the
Demised Premises for the purpose herein permitted and use related to Tenant’s
business, will be brought upon or be kept in the Demised Premises.

 

6.02                                                                        (a) Tenant shall indemnify and save harmless
Landlord and its agents against and from (a) any and all claims (i) arising from
(x) the conduct or management of the Demised Premises or of any business
therein, or (y) any work or thing whatsoever done, or any condition created
(other than by Landlord for Landlord’s or Tenant’s account) in or about the
Demised Premises during the term of this Lease or during the period of time, if
any, prior to the Commencement Date that Tenant may have been given access to
the Demised Premises, or (ii) arising from any negligent or otherwise wrongful
act 

 

11

 

or
omission of Tenant or any of its subtenants or licensees or its or their
employees occurring within the scope of their respective employments, agents or
contractors, and (b) all costs, expenses and liabilities (including reasonable
attorneys fees) incurred in or in connection with each such claim or action or
proceeding brought thereon. In case any action or proceeding be brought against
Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall
resist and defend such action or proceeding.

 

(b) Landlord shall indemnify
and save harmless Tenant from and against any and all claims arising from Landlord’s
negligence or willful act.

 

6.03                                                                        Except as otherwise expressly provided in
this Lease, this Lease and the obligations of Tenant hereunder shall be in no
wise affected, impaired or excused because Landlord is unable to fulfill, or is
delayed in fulfilling, any of its obligations under this Lease by reason of
strike, other labor trouble, governmental pre-emption or priorities or other
controls in connection with a national or other public emergency or shortages
of fuel, supplies or labor resulting therefrom, acts of God or other like cause
beyond Landlord’s reasonable control. Notwithstanding the foregoing, if there
has been a continuous major interruption in services due to the causes stated
in this Section 6.03, resulting in Tenant being unable to carry out its
business, for a period exceeding six (6) months, Tenant shall have the right to
terminate this Lease on written notice to Landlord.

 

ARTICLE 7

 

Subordination, Notice To Lessors And Mortgagees

 

7.01                                                                        This lease, and all rights of Tenant
hereunder, are and shall be subject and subordinate in all respects to all
ground leases, overriding leases and underlying leases of the Land and/or the
Building now or hereafter existing and to all mortgages which may now or
hereafter affect the Land and/or the Building and/or any of such leases,
whether or not such mortgages shall also cover other lands and/or buildings, to
each and every advance made or hereafter to be made under such mortgages, and
to all renewals, modifications, replacements and extensions of such leases and
such mortgages and spreaders and consolidations of such mortgages. This Section
shall be self-operative and no further instrument of subordination shall be
required. In confirmation of such subordination, Tenant shall promptly execute
and deliver any instrument that Landlord, the lessor of any such lease or the
holder of any such mortgage or any of their respective successors in interest
may reasonably request to evidence such subordination. The leases to which this
lease is, at the time referred to, subject and subordinate pursuant to this
Article are hereinafter sometimes referred to as “superior leases” and the mortgages to which this lease is,
at the time referred to, subject and subordinate are hereinafter sometimes
referred to as “superior mortgages”
and the lessor of a superior lease or its successor in interest at the time
referred to is sometimes hereinafter referred to as a “lessor”.

 

7.02                                                                        In the event of any act or omission of Landlord
which would give Tenant the right, immediately or after lapse of a period of
time, to cancel or terminate this lease, or to claim a partial or total
eviction, Tenant shall not exercise such right (i) until it has given written
notice of such act or omission to the holder of each superior mortgage and the
lessor of each superior lease whose name and address shall previously have been
furnished to Tenant in writing, and (ii) unless such act or omission shall be
one which is not capable of being remedied by Landlord or such mortgage holder
or lessor within a reasonable period of time, until a reasonable period for
remedying such act or omission shall have elapsed following the giving of such
notice and following the time when such holder or lessor shall have become
entitled under such superior mortgage or superior lease, as the case may be, to
remedy the same (which reasonable period shall in no event be 

 

12

 

less
than the period to which Landlord would be entitled under this lease or
otherwise, after similar notice, to effect such remedy), provided such holder
or lessor shall with due diligence give Tenant written notice of intention to, and
commence and continue to remedy such act or omission.

 

7.03                                                                        If the lessor of a superior lease or the
holder of a superior mortgage shall succeed to the rights of Landlord under
this lease, whether through possession or foreclosure action or delivery of a
new lease or deed, then at the request of such party so succeeding to Landlord’s
rights (herein sometimes referred to as “successor
landlord”) and upon successor landlord’s written agreement to accept
Tenant’s attornment, Tenant shall attorn to and recognize such successor
landlord as Tenant’s landlord under this lease, and shall promptly execute and
deliver any instrument that such successor landlord may reasonably request to
evidence such attornment. Upon such attornment this lease shall continue in full
force and effect as, or as if it were, a direct lease between the successor
landlord and Tenant upon all of the terms, conditions and covenants as are set
forth in this lease and shall be applicable after such attornment except that
the successor landlord shall not:

 

(a)                                  be liable for any previous act or omission of
Landlord under this lease;

 

(b)                                 be subject to any offset, not expressly
provided for in this lease, which shall have theretofore accrued to Tenant
against Landlord;

 

(c)                                  be bound by any previous modification of this
lease, not expressly provided for in this lease, or by any previous prepayment
of more than one month’s fixed rent, unless such modification or prepayment
shall have been expressly approved in writing by the lessor of the superior lease
or the holder of the superior mortgage through or by reason of which the
successor landlord shall have succeeded to the rights of Landlord under this
lease.

 

7.04                                                                        Landlord represents to Tenant that as of the
date hereof, Landlord is the fee owner of both the Land and the Building and there
are no superior leases affecting Landlord’s interest in the Land or Building.

 

7.05                                                                                                                        (a)                                  The subordination of this lease to superior
leases hereafter existing in accordance with Section 7.0l is subject to the
express conditions that so long as this lease shall be in full force and effect
in the event of termination of the term of any such superior lease by reentry,
notice, summary proceedings, or other action or proceeding, or if the term of
such superior lease shall otherwise terminate or expire before the termination
or expiration of the term of this lease, (i) Tenant shall not be made a party
to any action or proceeding to remove or evict Tenant or the tenant under such
superior lease, or to disturb its possession by reason of, or based upon, such
termination or expiration of the term of such superior lease, and (ii) this
lease shall continue in full force and effect as a direct lease between Tenant
and the then owner of the fee or lessor of such superior lease, as the case may
be, upon all of the obligations of this lease, except that said owner or lessor
shall not:

 

(x)                                   be liable for any previous act or omission of
any prior landlord (including Landlord) under this lease;

 

(y)                                 be subject to any offset, not expressly
provided for in this lease, that shall have theretofore accrued to Tenant
against Landlord; or

 

(z)                                   be bound by (1) any previous modification of
this 

 

13

 

lease,
not expressly provided for in this lease or consented to by such owner or
lessor, or (2) any previous prepayment of more than one month’s fixed rent or
any additional rent then due, unless such modification or prepayment shall have
been expressly approved in writing by the lessor of the superior lease through,
or by reason of which, said owner or lessor shall have succeeded to the rights
of Landlord under this lease.

 

(b)                                 If requested by the then owner of the fee or
the lessor of such superior lease, or any mortgage holder, Tenant and such
owner or lessor shall execute and deliver a non-disturbance agreement with such
owner or lessor on the terms set forth in this Section 7.05 plus such
additional terms and provisions as are then customarily contained in such owner’s
or lessor’s form of non-disturbance agreement.

 

7.06                                                                                                                        (a)                                  The subordination of this lease to the liens
of superior mortgages hereafter existing in accordance with Section 7.0l is
subject to the express condition that, so long as this lease shall be in
effect: (i) Tenant shall not be named or joined in any action or proceeding to
foreclose any such mortgage,
(ii) such action or proceeding shall not result in a cancellation or
termination of the term of this lease, and (iii) if the holder of any such
mortgage becomes the owner of the fee or the assignee of any superior lease
referred to in Section 7.0l, or the lessee of any other lease given in
substitution therefor, or if the Land or the Building shall be sold as a result
of any action or proceeding to foreclose such mortgage, this lease shall
continue in full force and effect as a direct lease between Tenant and the then
owner of the fee or the then lessee of such superior lease, the lessee of any
other lease given in substitution therefor, or such purchaser of the Land or
Building, as the case may be, upon all of the obligations of this lease, except
that such owner, lessee, or purchaser shall not:

 

(x)                                   be liable for any previous act or omission of
any prior landlord (including Landlord) under this lease;

 

(y)                                 be subject to any offset, not expressly
provided for in this lease, that shall have theretofore accrued to Tenant
against Landlord; or

 

(z)                                   be bound by (1) any previous modification of
this lease entered into after the date of such superior mortgage, unless such
modification is expressly provided for in this lease or consented to by such
owner, lessee or purchaser or (2) any previous prepayment of more than one
month’s fixed rent or any additional rent then due, unless such modification or
prepayment shall have been expressly approved in writing by the holder of the
superior mortgage through or by reason of which, such owner, lessee, or
purchaser shall have succeeded to the rights of Landlord under this lease.

 

(b)                                 If requested by the holder of any such
mortgage, Tenant shall execute and deliver a non-disturbance agreement with
such holder on the terms set forth in this Section 7.06, plus such additional
terms and provisions as are then customarily contained in such holder’s form of
non-disturbance agreement.

 

7.07                                                                        Provided Landlord shall not incur any expense
(unless Tenant agrees in writing to pay and thereafter on Landlord’s demand,
does pay such expense) or be required to renegotiate or modify the provisions
of any superior mortgage, Landlord agrees that it will request and thereafter
diligently pursue from the holder of any superior mortgage a non-disturbance
agreement on such holder’s then customary form for the benefit of Tenant, to
the effect that as long as Tenant is not in default after notice and the
expiration of any applicable cure period in the payment of fixed rent or
additional rent or any of the other covenants and conditions of this Lease, its
rights as Tenant hereunder shall not be terminated or materially reduced and
its rights shall not be materially increased and the possession of Tenant 

 

14

 

shall
not be disturbed by the holder of such superior mortgage or by any proceedings
on the debt which any such mortgage secures or by virtue of a right or power
contained in any such mortgage or the bond or note secured thereby and that any
sale at foreclosure will be subject to this Lease. No non-disturbance agreement
shall materially modify or materially reduce Tenant’s rights under this Lease
or materially increase Tenant’s obligations hereunder. Any form of agreement
executed by Tenant and such holder pursuant to the provisions of this Section
7.07 shall be deemed to satisfy the conditions hereof.

 

7.08                                                                        Provided Landlord has requested and diligently
pursued a non-disturbance agreement from the holder of any superior mortgage
for the benefit of Tenant as provided in Paragraph 7.07, the inability of
Landlord to obtain the agreement referred to in Section 7.07 above, shall not
be deemed a default on Landlord’s part of its obligations hereunder, or impose
any claim in favor of Tenant against Landlord by reason thereof or affect the
validity of this Lease.

 

ARTICLE 8

 

Quiet Enjoyment

 

8.01                                                                        So long as Tenant pays all of the fixed rent
and additional rent due hereunder and performs all of Tenant’s other
obligations hereunder, Tenant shall peaceably and quietly have, hold and enjoy
the Demised Premises subject, nevertheless, to the obligations of this lease
and, as provided in Article 7, to the superior leases and the superior
mortgages.

 

ARTICLE 9

 

Assignment And Subletting

 

9.01                                                                        Tenant, for itself, its heirs, distributees,
executors, administrators, legal representatives, successors and assigns,
expressly covenants that it shall not assign, mortgage or encumber this
agreement, nor underlet, nor suffer, nor permit the Demised Premises or any
part thereof to be used or occupied by others, without the prior written
consent of Landlord in each instance, which consent may be withheld by the
Landlord for any or no reason, at its sole discretion. Only in the event of a
change in majority control of Tenant, shall Landlord be required to agree to an
assignment of this Lease, subject to the termination rights stated in Section
1.03. Under no circumstances shall such successor holder of a majority interest
in Tenant be permitted to further assign this Lease, or sublet any portion of
the Premises. If this lease be assigned, or if the Demised Premises or any part
thereof be underlet or occupied by anybody other than Tenant, Landlord may,
after default by Tenant, collect rent from the assignee, undertenant or
occupant, and apply the net amount collected to the rent herein reserved, but
no assignment, underletting, occupancy or collection shall be deemed a waiver
of the provisions hereof, the acceptance of the assignee, undertenant or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. The consent by
Landlord to an assignment or underletting shall not in any way be construed to
relieve Tenant from obtaining the express consent in writing of Landlord to any
further assignment or underletting. In no event shall any permitted sublessee
assign or encumber its sublease or further sublet all or any portion of its
sublet space, or otherwise suffer or permit the sublet space or any part
thereof to be used or occupied by others, without Landlord’s prior written
consent in each instance. Notwithstanding the foregoing, Tenant shall be
permitted to sublease portions of the Demised Premises to affiliates of Tenant,
“affiliates” being defined as entities under the control of, controlled by, or
under common control with Tenant.

 

9.02                                                                        (a) Subject to Section 9.02(b), if Tenant
shall at any 

 

15

 

time
or times during the term of this lease desire to assign this lease or sublet
all or part of the Demised Premises, Tenant shall give notice thereof to
Landlord, which notice shall be accompanied by (a) a conformed or photostatic
copy of the proposed assignment or sublease, the effective or commencement date
of which shall be not less than 30 nor more than 180 days after the giving of
such notice, (b) a statement setting forth in reasonable detail the identity of
the proposed assignee or subtenant, the nature of its business and its proposed
use of the Demised Premises, and (c) current financial information with respect
to the proposed assignee or subtenant, including, without limitation, its most
recent financial report. Such notice shall be deemed an offer from Tenant to
Landlord whereby Landlord (or Landlord’s designee) may, at its option, (i)
sublease such space (hereinafter referred to as the “Leaseback Space”) from Tenant upon the terms and conditions
hereinafter set forth (if the proposed transaction is a sublease of all or part
of the Demised Premises), (ii) terminate this lease (if the proposed
transaction is an assignment or a sublease of all or substantially all of the
Demised Premises), or (iii) subject to the further provisions of this Section
9.02 terminate this lease with respect to the Leaseback Space (if the proposed
transaction is a sublease of part of the Demised Premises expiring within the
last two (2) years of the original term or the “Renewal Term” of this Lease and
Tenant has not exercised the “Renewal Option” with respect to the original
term, as such quoted terms are hereinafter defined). Said options may be
exercised by Landlord by notice to Tenant at any time within thirty (30) days
after such notice has been given by Tenant to Landlord; and during such thirty
(30) day period Tenant shall not assign this lease nor sublet such space to any
person.

 

(b)  Provided Tenant shall not then be in default
of any of the terms, covenants or conditions of this lease on the Tenant’s part
to observe or perform, Landlord agrees that it shall not exercise its options
under this Section 9.02 with respect to subleases proposed by Tenant, provided
such sublease(s), when aggregated with all other subleases entered into (or
then pending) by Tenant, do(es) not exceed fifteen thousand two hundred eighty
six (15,286) rentable square feet.

 

9.03                                                                        If Landlord exercises its option to terminate
this lease in the case where Tenant desires either to assign this lease or
sublet all or substantially all of the Demised Premises, then, this lease shall
end and expire on the date that such assignment or sublet was to be effective
or commence, as the case may be, and the fixed rent and additional rent shall
be paid and apportioned to such date and the parties shall thereafter owe no
further obligations to the other except as provided to the contrary in this
lease.

 

9.04                                                                        If Landlord exercises its option to terminate
this lease in part in any case where Tenant desires to sublet part of the
Demised Premises, then, (a) this lease shall end and expire with respect to
such part of the Demised Premises on the date that the proposed sublease was to
commence and the parties shall thereafter owe no further obligations to the
other except as provided to the contrary in this lease; (b) from and after such
date the fixed rent and additional rent shall be adjusted, based upon the
proportion that the rentable area of the Demised Premises remaining bears to
the total rentable area of the Demised Premises; and (c) Landlord, at Tenant’s
expense shall make such alterations as may be required or deemed reasonably
necessary by Landlord to physically separate such part of the Demised Premises
from the balance of the Demised Premises and in complying with any laws and
requirements of any public authorities relating to such separation, provided
Tenant or the proposed sublessee was required to physically separate such part
of the Demised Premises from the balance of the Demised Premises under the
proposed sublease, but if such subletting did not require Tenant or the
proposed sublessee to physically separate such part of the Demised Premises
from the balance of the Demised Premises, then Landlord shall cause such
portion of the Demised Premises to be physically separated at the Landlord’s
expense.

 

16

 

9.05                                                                        If Landlord exercises its option to sublet
the Leaseback Space, such sublease to Landlord or its designee (as subtenant)
(hereinafter referred to as the “Recapture
Sublessee”) shall be at the lower of (i) the rental rate per
rentable square foot of fixed rent and additional rent then payable pursuant to
this lease or (ii) the rentals set forth in the proposed sublease, and shall be for the same term as that of the
proposed subletting, and such sublease shall:

 

(a)                                  be expressly subject to all of the covenants,
agreements, terms, provisions and conditions of this lease except such as are
irrelevant or inapplicable, and except as otherwise expressly set forth to the
contrary in this Section;

 

(b)                                 be upon the same terms and conditions as
those contained in the proposed sublease, except such as are irrelevant or
inapplicable and except as otherwise expressly set forth to the contrary in
this Section;

 

(c)                                  give the Recapture Sublessee the unqualified
and unrestricted right, without Tenant’s permission, to assign such sublease or
any interest therein and/or to sublet the Leaseback Space or any part or parts
of the Leaseback Space and to make any and all changes, alterations, and
improvements in the space covered by such sublease and if the proposed sublease
will result in all or substantially all of the Demised Premises being sublet,
grant Landlord or its designee the option to extend the term of such sublease
for the balance of the term of this lease less one (1) day;

 

(d)                                 provide that any assignee or further
subtenant, of Landlord or its designee, may, at the election of Landlord, be
permitted to make alterations, decorations and installations in the Leaseback
Space or any part thereof and shall also provide in substance that any such
alterations, decorations and installations in the Leaseback Space therein made
by any assignee or subtenant of Landlord or its designee may be removed, in
whole or in part, by such assignee or subtenant, at its option, prior to or
upon the expiration or other termination of such sublease provided that such
assignee or subtenant, at its expense, shall repair any damage and injury to
that portion of the Leaseback Space so sublet caused by such removal; and

 

(e)                                  also provide that (i) the parties to such
sublease expressly negate any intention that any estate created under such
sublease be merged with any other estate held by either of said parties, (ii)
any assignment or subletting by Landlord or its designee (as the subtenant) may
be for any purpose or purposes that Landlord, in Landlord’s uncontrolled
discretion, shall deem suitable or appropriate, (iii) Tenant, at Tenant’s
expense, shall and will at all times provide and permit reasonably appropriate
means of ingress to and egress from the Leaseback Space so sublet by Tenant to
Landlord or its designee, (iv) Landlord, at Tenant’s expense, may make such
alterations as may be required or deemed necessary by Landlord to physically
separate the Leaseback Space from the balance of the Demised Premises and to
comply with any laws and requirements of public authorities relating to such
separation, and (v) that at the expiration of the term of such sublease, Tenant
will accept the space covered by such sublease in its then existing condition,
subject to the obligations of the sublessee to make such repairs thereto as may
be necessary to preserve the premises demised by such sublease in good order
and condition.

 

(f)                                    provide that the Recapture Sublessee shall
pay to the Tenant the lower of (i) the amount, if any, that Tenant would have
been entitled to retain pursuant to the provisions of Section 9.10(b) hereof if
Tenant had entered into a sublease with the proposed subtenant pursuant to the
proposed sublease or (ii) fifty (50%) percent of the amount, if any, by which
the fixed rents, additional rents and other charges payable by any 

 

17

 

further
sublessee of the Recapture Sublessee during the term of any further sublease
(on a square foot basis) exceeds the fixed and additional rent payable by the
Tenant under this Lease (on a square foot basis) during the term of such
further sublease in respect of the subleased space, less the amounts incurred
by the Recapture Sublessee for the items set forth in Section 9.10(a)(2)(B). Such
amounts, if any, shall be paid to Tenant as and when received by the Recapture
Sublessee from the further sublessee. The sums payable by the Recapture
Sublessee to the Tenant under this Section 9.05(f) shall not include any rents,
additional rents or other charges payable by any further sublessee of the
Recapture Sublessee on account of the First Floor Premises.

 

9.06                                                                                                                        (a)                                  If Landlord exercises its option to sublet
the Leaseback Space, Landlord shall indemnify and save Tenant harmless from all
obligations under this lease as to the Leaseback Space during the period of
time it is so sublet to Landlord;

 

(b)                                 Performance by Landlord, or its designee,
under a sublease of the Leaseback Space shall be deemed performance by Tenant
of any similar obligation under this lease and any default under any such
sublease shall not give rise to a default under a similar obligation contained
in this Lease, nor shall Tenant be liable for any default under this lease or
deemed to be in default hereunder if such default is occasioned by or arises
from any act or omission of the tenant under such sublease or is occasioned by
or arises from any act or omission of any occupant holding under or pursuant to
any such sublease;

 

(c)                                  Tenant shall have no obligation, at the expiration
or earlier termination of the term of this lease, to remove any alteration,
installation or improvement made in the Leaseback Space by Landlord.

 

9.07                                                                        In the event Landlord does not exercise an
option provided to it pursuant to Section 9.02 and providing that Tenant is not
in default of any of Tenant’s obligations under this lease after notice and the
expiration of any applicable grace period, Landlord’s consent (which must be in
writing and in form reasonably satisfactory to Landlord) to the proposed
assignment or sublease, which may be withheld for any or no reason at Landlord’s
sole discretion, may issue, provided and upon condition that:

 

(a)                                  Tenant shall have complied with the
provisions of Section 9.02 and Landlord shall not have exercised any of its
options under said Section 9.02 within the time permitted therefor;

 

(b)                                 In
Landlord’s reasonable judgment the proposed assignee or subtenant is engaged in
a business and the Demised Premises, or the relevant part thereof, will be used
in a manner which (i) is in keeping with the then standards of the Building,
(ii) is limited to the use expressly permitted under this lease, and (iii) will
not violate any negative covenant as to use contained in any other lease of
space in the Building of which Tenant has been advised;

 

(c)                                  The
proposed assignee or subtenant is a reputable entity of good character and with
sufficient financial worth considering the responsibility involved, and
Landlord has been furnished with reasonable proof thereof;

 

(d)                                 Neither
(i) the proposed assignee or sublessee nor (ii) any person which, directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed assignee or sublessee or any person who controls the proposed assignee
or sublessee, is then an occupant of any part of the Building. For purposes of
this lease 

 

18

 

“control” shall be deemed to mean
ownership of more than 50% of all the voting stock of a corporate or more than
50% of all the legal and equitable interest in any other business entity;

 

(e)                                  The proposed assignee or sublessee is not a
person with whom Landlord is then negotiating to lease space in the Building;

 

(f)                                    The form of the proposed lease shall be in
form reasonably satisfactory to Landlord and shall comply with the applicable
provisions of this Article;

 

(g)                                 There shall not be more than two (2)
subtenants (including Landlord or its designee) on any floor of the Demised
Premises or more than a total of four (4) subtenants (excluding Landlord or its
designee) in the Demised Premises;

 

(h)                                 The rental and other terms and conditions of
the sublease are the same as those contained in the proposed sublease furnished
to Landlord pursuant to Section 9.02;

 

(i)                                     Tenant shall reimburse Landlord on demand for
any reasonable costs that may be incurred by Landlord in connection with said
assignment or sublease, including, with- out limitation, the costs of making
investigations as to the acceptability of the proposed assignee or subtenant,
and legal costs incurred in connection with the granting of any requested
consent; and

 

(j)                                     Tenant shall not have (i) advertised or
publicized in any way the availability of the Demised Premises without prior
notice to and approval by Landlord, nor shall any advertisement state the name
(as distinguished from the address) of the Building or the proposed rental,
(ii) listed the Premises for subletting or assignment, at a rental rate less
than the fixed rent and additional rent at which Landlord is then offering to
lease other space in the Building.

 

(k)                                  The sublease shall not allow the use of the
Demised Premises or any part thereof for (i) the preparation and/or sale of
food for on or off premises consumption or (ii) for use by a foreign or
domestic governmental agency.

 

Except for any subletting by Tenant to
Landlord or its designee pursuant to the provisions of this Article, each
subletting pursuant to this Article shall be subject to all of the covenants,
agreements, terms, provisions and conditions contained in this lease.
Notwithstanding any such subletting to Landlord or any such subletting to any
other subtenant and/or acceptance of rent or additional rent by Landlord from
any subtenant, Tenant shall and will remain fully liable for the payment of the
fixed rent and additional rent due and to become due hereunder and for the
performance of all the covenants, agreements, terms, provisions and conditions
contained in this lease on the part of Tenant to be performed and all acts and
omissions of any licensee or sub- tenant or anyone claiming under or through
any subtenant which shall be in violation of any of the obligations of this
lease, and any such violation shall be deemed to be a violation by Tenant. Tenant
further agrees that notwithstanding any such subletting, no other and further
subletting of the Premises by Tenant or any person claiming through or under
Tenant (except as provided in Section 9.05) shall or will be made except upon
compliance with and subject to the provisions of this Article. If Landlord
shall decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise any of its options under Section 9.02, Tenant shall
indemnify, defend and hold harmless Landlord against and from any and all loss,
liability, damages, costs and expenses (including reasonable counsel fees)
resulting from any claims that may be made against Landlord by the proposed
assignee or 

 

19

 

sublessee or by any brokers or other persons
claiming a commission or similar compensation in connection with the proposed
assignment or sublease, but such indemnity shall not apply to any transaction
which Landlord may enter into with a proposed assignee or subtenant of the
Landlord.

 

9.08                                                                        In the event that (a) Landlord fails to
exercise any of its options under Section 9.02 and consents to a proposed
assignment or sublease, and (b) Tenant fails to execute and deliver the
assignment or sublease to which Landlord consented within 90 days after the
giving of such consent, then, Tenant shall again comply with all of the
provisions and conditions of Section 9.02 before assigning this lease or
subletting all or part of the Demised Premises.

 

9.09                                                                        With respect to each and every sublease or
subletting authorized by Landlord under the provisions of this lease, it is
further agreed:

 

(a)                                  no subletting shall be for a term ending
later than one day prior to the expiration date of this lease;

 

(b)                                 no sublease shall be valid, and no subtenant
shall take possession of the Demised Premises or any part thereof, until an
executed counterpart of such sublease has been delivered to Landlord;

 

(c)                                  each sublease shall provide that it is
subject and subordinate to this lease and to the matters to which this lease is
or shall be subordinate, and that in the event of termination, re-entry or
dispossess by Landlord under this lease Landlord may, at its option, take over
all of the right, title and interest of Tenant, as sublessor, under such
sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord
pursuant to the then executory provisions of such sublease, except that
Landlord shall not (i) be liable for any previous act or omission of Tenant
under such sublease, (ii) be subject to any offset, not expressly provided in such
sublease, which theretofore accrued to such subtenant against Tenant, or (iii)
be bound by any previous modification of such sublease not consented to in
writing by Landlord or by any previous prepayment of more than one month’s
rent.

 

9.10                                                                        If the Landlord shall give its consent to any
assignment of this lease or to any sublease, Tenant shall in consideration
therefor, pay to Landlord, as additional rent:

 

(a)                                  in the case of an assignment, other than a
Permitted Assignment hereunder to a successor entity by asset or stock sale, an
amount equal to the product of (1) fifty (50%) percent multiplied by (2)  the difference between (A) all sums and other
considerations paid to Tenant by the assignee for or by reason of such
assignment (including, but not limited to, sums paid for the sale of Tenant’s
fixtures, leasehold improvements, equipment, furniture, furnishings or other
personal property, less, in the case of a sale thereof, the then net
unamortized or underdepreciated cost thereof determined on the basis of Tenant’s
federal income tax returns) and (B) the reasonable actual out-of-pocket
expenses incurred by Tenant for preparing the Demised Premises for the assignee
or the amount of any contributions made by Tenant to the cost of such
preparation, legal fees and brokerage commissions; and

 

(b)                                 in the case of a sublease, the product of (1)
fifty (50%) percent multiplied by (2) the difference between (A) any rents,
additional charge or other consideration payable under the sublease to Tenant
by the subtenant which is in excess of the fixed rent and additional rent
accruing during the term of the sublease in respect of the subleased space (at
the rate per square foot payable by Tenant hereunder) pursuant to the terms
hereof (including, but not limited to, sums paid for the sale or rental of
Tenant’s fixtures, leasehold improvements, equipment, furniture or 

 

20

 

other
personal property, less, in the case of the sale thereof, the then net
unamortized or underdepreciated cost thereof determined on the basis of Tenant’s
federal income tax returns) and (B) the reasonable actual out-of-pocket
expenses incurred by Tenant for preparing the Demised Premises (or applicable
portion thereof) for the subtenant or the amount of any contributions made by
Tenant to the cost of such preparation (in either case, amortized over the term
of the sublease on a straight-line basis), legal fees and brokerage commissions.
The sums payable under this Section 9.10(b) shall be paid to Landlord as and
when payable by the subtenant to Tenant. The provisions of this subparagraph
9.10(b) shall not apply to subleases to affiliates of Tenant.

 

9.11                                                                        If Tenant is a corporation or partnership,
the provisions of Section 9.01 shall apply to a transfer (by one or more
transfers) of a majority of the stock or partnership interest of Tenant as if
such transfer of a majority of the stock of Tenant were an assignment of this
lease; said provisions shall also apply to transactions with a corporation or
other entity into or with which Tenant is merged or consolidated or to which
substantially all of Tenant’s assets are transferred or to any corporation or
other entity which controls or is controlled by Tenant or is under common
control with Tenant, including any event of merger, consolidation or transfer
of substantially all of Tenant’s assets. The above referenced provisions shall
not apply to Tenant’s stock being sold on a nationally recognized exchange.

 

9.12                                                                        Any assignment or transfer, whether made with
Landlord’s consent pursuant to Section 9.01 shall be made only if, and shall
not be effective until, the assignee shall execute, acknowledge and deliver to
Landlord an agreement in form and substance reasonably satisfactory to Landlord
whereby the assignee shall assume the obligations of this lease on the part of
Tenant to be performed or observed and whereby the assignee shall agree that
the provisions in Section 9.01 shall, notwithstanding such assignment or
transfer, continue to be binding upon it in respect of all future assignments
and transfers. The original named Tenant covenants that, notwithstanding any
assignment or transfer, whether or not in violation of the provisions of this
lease, and notwithstanding the acceptance of fixed rent and/or additional rent
by Landlord from an assignee, transferee, or any other party, the original
named Tenant shall remain fully liable for the payment of the fixed rent and
additional rent and for the other obligations of this lease on the part of
Tenant to be performed or observed.

 

9.13                                                                        The joint and several liability of Tenant and
any immediate or remote successor in interest of Tenant and the due performance
of the obligations of this lease on Tenant’s part to be performed or observed
shall not be discharged, released or impaired in any respect by any agreement
or stipulation made by Landlord extending the time of, or modifying any of the
obligations of, this lease, or by any waiver or failure of Landlord to enforce
any of the obligations of this lease.

 

9.14                                                                        The listing of any name other than that of
Tenant, whether on the doors of the Premises or the Building directory, or
otherwise, shall not operate to vest any right or interest in this lease or in
the Premises, nor shall it be deemed to be the consent of Landlord to any
assignment or transfer of this lease or to any sublease of the Premises or to
the use or occupancy thereof by others.

 

9.15                                                                        Tenant hereby agrees that the elevator lobby
and public hallways on any floor on which Tenant shall have subleased space to
a subtenant shall conform in all respects (including, without limitation,
colors schemes) to either (a) the elevator lobby and hallways (if any) on other
floors leased to Tenant (if Tenant has leased more than one (l) floor from Landlord)
or (b) Landlord’s then building standard for elevator lobbies and public
hallways on multi-tenanted floors of the Building, or shall otherwise be
approved in writing by Landlord, which approval shall not be unreasonably 

 

21

 

withheld
or delayed, prior to the commencement of work thereon, notwithstanding anything
in this lease to the contrary.

 

ARTICLE 10

 

Compliance With Laws And Requirements

Of

Public Authorities

 

10.01                 Tenant shall give prompt notice to Landlord
of any notice it receives of the violation of any law or requirement of public
authority, and Tenant, at its expense, shall com- ply with all laws and
requirements of public authorities which shall, with respect to the Demised
Premises or the use and occupation thereof, or the abatement of any nuisance,
impose any violation, order or duty on Landlord or Tenant, arising from (i)
Tenant’s use of the Demised Premises, as distinguished from its mere occupancy
of the Demised Premises for executive and general office purposes, (ii) the
manner of conduct of Tenant’s business or operation of its installations,
equipment or other property therein, as distinguished from its mere occupancy
of the Demised Premises for the executive and general office purposes, (iii)
any cause or condition created by or at the instance of Tenant, other than by
Landlord’s performance of any work for or on behalf of Tenant, or (iv) breach
of any of Tenant’s obligations hereunder. However, Tenant shall not be so
required to make any structural or other substantial change in the Demised
Premises unless the requirement arises from a cause or condition referred to in
clause (ii), (iii) or (iv) above. Furthermore, Tenant need not comply with any
such law or requirement of public authority so long as Tenant shall be
contesting the validity thereof, or the applicability thereof to the Demised
Premises, in accordance with Section 10.02. Landlord, at its expense, shall
comply with all other such laws and requirements of public authorities as shall
affect the Demised Premises, but may similarly contest the same subject to
conditions reciprocal to Subsections (a), (b) and (d) of Section 10.02.

 

10.02                 Tenant may, at its expense (and if necessary,
in the name of but without expense to Landlord) contest, by appropriate proceedings
prosecuted diligently and in good faith, the validity, or applicability to the
Demised Premises, of any law or requirement of public authority, and Landlord
shall cooperate with Tenant in such proceedings, provided that:

 

(a)                                  Landlord shall not be subject to criminal
penalty or to prosecution for a crime nor shall the Demised Premises or any
part thereof be subject to being condemned or vacated, by reason of
non-compliance or otherwise by reason of such contest;

 

(b)                                 Tenant shall defend, indemnify and hold
harmless Landlord against all liability, loss or damage which Landlord shall
suffer by reason of such non-compliance or contest, including reasonably
attorney’s fees and other expenses reasonably incurred by Landlord;

 

(c)                                  such non-compliance or contest shall not
constitute or result in any violation of any superior lease or superior
mortgage, or if such superior lease and/or superior mortgage shall permit such
non-compliance or contest on condition of the taking of action or furnishing of
security by Landlord, such action shall be taken and such security shall be
furnished at the expense of Tenant; and

 

(d)                                 Tenant shall keep Landlord advised as to the
status of such proceedings.

 

Without limiting the application of
Subsection (a) above thereto, Landlord shall be deemed subject to prosecution
for a crime within the meaning of said Subsection, if Landlord, or any officer
of Landlord individually, is charged with a crime of any kind or degree
whatever, whether by service of a summons 

 

22

 

or otherwise, unless such charge is withdrawn
before Landlord or such officer (as the case may be) is required to plead or
answer thereto.

 

10.03                 Tenant shall not cause or permit “Hazardous
Materials” (as defined below) to be used, transported, stored, released,
handled, produced or installed in, on or from, the Demised Premises or the
Building. The term “Hazardous Materials” shall, for the purposes hereof, mean
any flammable, explosives, radioactive materials, hazardous wastes, hazardous
and toxic substances or related materials, asbestos or any material containing
asbestos, or any other substance or material, as defined by any federal, state
or local law, ordinance, rule or regulation, including, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, the Hazardous Materials Transportation Act, as amended, the Resource
Conservation and Recovery Act, as amended, and in the regulations adopted and
publications promulgated pursuant to each of the foregoing. In the event of a
breach of the provisions of this Section 10.03, the parties agree that Landlord
will suffer irreparable harm for which money damages will be an insufficient
remedy. For that reason, Landlord shall, in addition to all of its rights and
remedies under this lease and pursuant to law, and equity (a) have the right to
require Tenant to remove any such Hazardous Materials from the Demised Premises
or the Building in the manner prescribed for such removal by all requirements
of law and (b) have the right to obtain a court order granting an injunction
against Tenant’s violation of the foregoing provisions, application for such
injunction to be made without notice. The provisions of this Section 10.03,
shall survive the expiration or sooner termination of this lease.

 

10.04                 Landlord represents to Tenant that, on or
before the Commencement Date, all asbestos containing material will have been
removed from the Demised Premises to the extent required by laws and/or requirements
of public authorities and that, to the best of its knowledge, the Building is
in compliance with all laws and/or requirements of public authorities relating
to asbestos containing material. To the extent such representations are
inaccurate, Landlord, as its sole liability for such inaccuracy, shall, at its
sole cost and expense, cause the Demised Premises and/or the Building to comply
with all such laws and requirements. On or before the Commencement Date,
Landlord will deliver to Tenant a certificate from Landlord’s asbestos
abatement contractor to the effect that there is no asbestos containing
material in the Demised Premises.

 

ARTICLE 11

 

Insurance

 

11.01                 Tenant shall not knowingly violate, or permit
the violation of any condition imposed by the standard fire insurance policy
then issued for office buildings in the Borough of Manhattan, City of New York,
and shall not do, or permit anything to be done, or keep or permit anything to
be kept in the Demised Premises, except as may be expressly provided to the
contrary in this lease, which would subject Landlord to any liability or
responsibility for personal injury or death or property damage, or which would
increase the fire or other casualty insurance rate on the Building or the
property therein over the rate which would otherwise then be in effect (unless
Tenant pays the resulting premium as provided in Section 11.03) or which would
result in insurance companies of good standing refusing to insure the Building
or any of such property in amounts reasonably satisfactory to Landlord.

 

11.02                 The parties acknowledge that Landlord
currently provides Tenant with all of its insurance coverage. In the event that
such practice were to be discontinued for any reason, the following provisions
shall apply.

 

(a) Tenant covenants to
provide on or before the earlier to occur 

 

23

 

of
(i) the Commencement Date and (ii) ten (l0) days from the date of this lease
and to keep in force during the term hereof the following insurance coverage
which coverage shall be effective on the Commencement Date:

 

(i)                                     for the benefit of Landlord and Tenant a
comprehensive policy of liability insurance protecting Landlord and Tenant
against any liability whatsoever occasioned by accident on or about the Demised
Premises or any appurtenances thereto. Such policy is to be written by good and
solvent insurance companies authorized to do business in the state of New York
and the limits of liability thereunder shall not be less than the amount of
Five Million ($5,000,000.00) Dollars combined single limit coverage on a per
occurrence basis, including property damages. Such insurance may be carried
under a blanket policy covering the Demised Premises and other locations of
Tenant, if any;

 

(ii)                                  Fire and Extended coverage in an amount
adequate to cover the cost of replacement of all personal property, fixtures,
furnishing and equipment, including Tenant’s Work located in the Demised Premises.
Such policy shall be written by good and solvent insurance companies authorized
to do business in the State of New York.

 

(iii)                               Prior to the time such insurance is first
required to be carried by Tenant and thereafter, at least fifteen (15) days
prior to the expiration of any such policies, Tenant agrees to deliver to
Landlord either duplicate originals of the aforesaid policies or certificates
evidencing such insurance, provided said certificate contains an endorsement
that such insurance may not be modified or cancelled except upon fifteen (15)
days’ notice to Landlord, together with evidence of payment for the policy. Tenant’s
failure to provide and keep in force the aforementioned insurance shall be
regarded as a material default hereunder, entitling Landlord to exercise any or
all of the remedies as provided in this lease in the event of Tenant’s default.
However, prior to declaring a default for breach of the provisions herein,
Landlord shall deliver Tenant a notice of default and Tenant shall have five
(5) business days to cure said default.

 

11.03                 Landlord and Tenant shall each endeavor to
secure an appropriate clause in, or an endorsement upon, each fire or extended
coverage policy obtained by it and covering the Building, the Demised Premises
or the personal property, fixtures and equipment located therein or thereon,
pursuant to which the respective insurance companies waive subrogation or
permit the insured, prior to any loss, to agree with a third party to waive any
claim it might have against said third party. The waiver of subrogation or
permission for waiver of any claim hereinbefore referred to shall extend to the
agents of each party and its employees and, in the case of Tenant, shall also
extend to all other persons and entities occupying or using the Demised
Premises in accordance with the terms of this lease. If and to the extent that
such waiver or permission can be obtained only upon payment of an additional
charge then, except as provided in the following two paragraphs, the party
benefiting from the waiver or permission shall pay such charge upon demand, or
shall be deemed to have agreed that the party obtaining the insurance coverage
in question shall be free of any further obligations under the provisions
hereof relating to such waiver or permission.

 

In the event that Landlord
shall be unable at any time to obtain one of the provisions referred to above
in any of its insurance policies, at Tenant’s option Landlord shall cause
Tenant to be named in such policy or policies as one of the assureds, but if
any additional premium shall be imposed for the inclusion of Tenant as such as
assured, Tenant shall pay such additional premium upon demand accompanied by
evidence of such additional premium. In the event that Tenant shall have been
named as one of the assureds in any of Landlord’s policies in accordance with
the foregoing, Tenant shall endorse promptly to the order of Landlord, without
recourse, any check, draft or order for the payment of money representing the
proceeds of any such policy or any other payment growing out of or connected
with said policy and Tenant hereby 

 

24

 

irrevocably
waives any and all rights in and to such proceeds and payments.

 

In the event that Tenant
shall be unable at any time to obtain one of the provisions referred to above
in any of its insurance policies, Tenant shall cause Landlord to be named in
such policy or policies as one of the assureds, but if any additional premium
shall be imposed for the inclusion of Landlord as such an assured, Landlord
shall pay such additional premium upon demand or Tenant shall be excused from
its obligations under this paragraph with respect to the insurance policy or
policies for which such additional premiums would be imposed. In the event that
Landlord shall have been named as one of the assureds in any of Tenant’s
policies in accordance with the foregoing, Landlord shall endorse promptly to
the order of Tenant, without recourse, any check, draft or order for the
payment of money representing the proceeds of any such policy or any other
payment growing out of or connected with said policy and Landlord hereby
irrevocably waives any and all rights in and to such proceeds and payments.

 

Subject to the foregoing
provisions of this Section 11.03, and insofar as may be permitted by the terms
of the insurance policies carried by it, each party hereby releases the other
with respect to any claim (including a claim for negligence) which it might
otherwise have against the other party for loss, damages or destruction with
respect to its property by fire or other casualty (including rental value or
business interruption, as the case may be) occurring during the term of this
lease.

 

11.04                 If, by reason of a failure of Tenant to com-
ply with the provisions of Section 10.01 or Section 11.01, the rate of fire
insurance with extended coverage on the Building or equipment or other property
of Landlord shall be higher than it otherwise would be, Tenant shall reimburse
Landlord, on demand, for that part of the premiums for fire insurance and
extended coverage paid by Landlord because of such failure on the part of
Tenant.

 

11.05                 If any dispute shall arise between Landlord
and Tenant with respect to the incurrence or amount of any additional insurance
premium referred to in Section 11.03, the dispute shall be determined by
arbitration.

 

11.06                 A schedule or make up of rates for the
Building or the Demised Premises, as the case may be, issued by the New York
Fire Insurance Rating Organization or other similar body making rates for fire
insurance and extended coverage for the premises concerned, shall be conclusive
evidence of the facts therein stated and of the several items and charges in
the fire insurance rate with extended coverage then applicable to such
premises.

 

ARTICLE 12

 

Rules and Regulations

 

12.01                 Tenant and its employees and agents shall
faithfully observe and comply with the Rules and Regulations promulgated from
time to time by Landlord with respect to conduct in the Building, and such
reasonable changes therein (whether by modification, elimination or addition)
as Landlord at any time or times hereafter may make and communicate in writing
to Tenant, which do not unreasonably affect the conduct of Tenant’s business in
the Demised Premises except as required by any governmental law, rule,
regulation, ordinance or similar decree; provided, however, that in case of any
conflict or inconsistency between the provisions of this lease and any of the
Rules and Regulations as originally promulgated or as changed, the provisions
of this lease shall control.

 

12.02                 Nothing in this lease contained shall be
construed to impose upon Landlord any duty or obligation to Tenant to enforce
the Rules and Regulations or the terms, covenants or conditions in any other
lease, as 

 

25

 

against
any other tenant, and Landlord shall not be liable to Tenant for violation of
the same by any other tenant or its employees, agents or visitors. However,
Landlord shall not enforce any of the Rules and Regulations in such manner as
to discriminate against Tenant or anyone claiming under or through Tenant.

 

ARTICLE 13

 

Alterations, Renovations and Tenant’s Changes

 

13.01                 Tenant shall make no alterations,
renovations, decorations or any other changes to the Demised Premises without
the written consent of the Landlord which may be withheld for any or no reason,
at Landlord’s sole discretion. Tenant may from time to time during the term of
this lease, at its expense, make such alterations, additions, installations,
substitutions, improvements and decorations (hereinafter collectively referred
to as “changes” and, as applied to
changes provided for in this Article, “Tenant’s
Changes”) in and to the Demised Premises, excluding structural
changes, as Tenant may reasonably consider necessary for the conduct of its
business in the Demised Premises, on the following conditions:

 

(a)                                  the outside appearance or the strength of the
Building or of any of its structural parts shall not be affected;

 

(b)                                 no part of the Building outside of the
Demised Premises shall be physically affected;

 

(c)                                  the proper functioning of any of the
mechanical, electrical, sanitary and other service systems of the Building
shall not be adversely affected or the usage of such systems by Tenant shall
not be increased beyond the capacity of the systems servicing the Demised
Premises;

 

(d)                                 in performing the work involved in making
such changes, Tenant shall be bound by and observe all of the conditions and
covenants contained in the following Sections of this Article;

 

(e)                                  before proceeding with any Tenant’s Changes,
Tenant will submit to Landlord plans and specifications and all changes and
revisions thereto, for the work to be done, and proof reasonably satisfactory
of the cost thereof and shall submit the names of the contractors or
subcontractors who will be performing Tenant’s Changes, all for Landlord’s
approval, which approval may be withheld for any or no reason, at Landlord’s
sole discretion. Additionally, before proceeding with any Tenant’s Changes,
Tenant shall, upon demand of Landlord, pay to Landlord the reasonable costs
incurred by Landlord for the review of such plans and specifications and all
changes and revisions thereto by its architect, engineer and other consultants.
Landlord may as a condition of its approval require Tenant to make reasonable
revisions in and to the plans and specifications and to post a bond or other
security reasonably satisfactory to Landlord to insure the completion of such
change.

 

13.02                 (a)Tenant, at its expense, shall obtain all
necessary governmental permits and certificates for the commencement and
prosecution of Tenant’s Changes and for final approval thereof upon completion
and shall furnish copies thereof to Landlord, and shall cause Tenant’s Changes
to be performed in compliance therewith and with all applicable laws and
requirements of public authorities, and with all applicable requirements of
insurance bodies, and in good and workmanlike manner, using new materials and
equipment at least equal in quality and class to the original installations in
the Building. Tenant’s Changes shall be performed in such manner as not to
unreasonably interfere with or delay and (unless Tenant shall indemnify
Landlord therefor to the latter’s reasonable satisfaction) as not to impose any
additional expense upon, Landlord in the renovation, maintenance or operation
of the Building or any portion thereof. Throughout the performance 

 

26

 

of
Tenant’s Changes, Tenant, at its expense, shall carry, or cause to be carried,
workmen’s compensation insurance in statutory limits and general liability
insurance for any occurrence in or about the Building as set forth in Section
11.02 hereof, in which Landlord and its agents shall be named as parties
insured, in such limits as Landlord may reasonably prescribe, with insurers
reasonably satisfactory to Landlord. Tenant shall furnish Landlord with
satisfactory evidence that such insurance is in effect at or before the
commencement of Tenant’s Changes and, on request, at reasonable intervals
thereafter during the continuance of Tenant’s Changes. If any of Tenant’s
Changes shall involve the removal of any fixtures, equipment or other property
in the Demised Premises which are not Tenant’s Property (as defined in Article
14), such fixtures, equipment or other property shall be promptly replaced, at
Tenant’s expense, with new fixtures, equipment or other property (as the case
may be) of like utility and at least equal value unless Landlord shall
otherwise expressly consent in writing. All electrical and plumbing work in
connection with Tenant’s changes shall be performed by contractors or
subcontractors licensed therefor by all governmental agencies having or
asserting jurisdiction. Upon the completion of Tenant’s Changes Tenant shall
furnish to Landlord a complete set of “as-built” plans and specifications. If
laws and/or requirements of public authorities require Tenant to prepare,
maintain or submit “as-built” plans and specifications in connection with any
Tenant’s Changes, Tenant shall furnish a complete set of same to Landlord.

 

(b)  The provisions of Subparagraph 13.2 above
shall not apply to the initial Work being done by Landlord pursuant to Articles
3 and 4 of this Lease.

 

13.03                 Tenant, at its expense, and with diligence
and dispatch, shall procure the cancellation or discharge of all notices of
violation arising from or otherwise connected with Tenant’s Changes which shall
be issued by the Department of Buildings or any other public or quasi-public
authority having or asserting jurisdiction. Tenant shall defend, indemnify and
save harmless Landlord against any and all mechanic’s and other liens filed in
connection with Tenant’s Changes, including the liens of any security interest
in, conditional sales of, or chattel mortgages upon, any materials, fixtures or
articles so installed in and constituting part of the Demised Premises and
against all costs, expense and liabilities incurred in connection with any such
lien, security interest, conditional sale or chattel mortgage or any action or
proceeding brought thereon. Tenant, at its expense, shall procure the
satisfaction or discharge of all such liens, or shall bond any such lien within
thirty (30) days after Landlord makes written demand therefor. However, nothing
herein contained shall prevent Tenant from contesting, in good faith and at its
own expense, any such notice of violation, provided that Tenant shall comply
with the provisions of Section 10.02.

 

13.04                 Tenant agrees that the exercise of its rights
pursuant to the provisions of this Article 13 or any other provision of this
lease shall not be done in a manner which would reasonably be likely to create
any work stoppage, picketing, labor disruption or dispute or violate Landlord’s
union contracts affecting the Land and/or Building nor unreasonably interfere
with the business of Landlord or any Tenant or occupant of the Building. In the
event of the occurrence of any condition described above arising from the
exercise by Tenant of its right pursuant to the provisions of this Article 13
or any other provision of this lease, Tenant shall, immediately upon notice
from Landlord, cease the manner of exercise of such right giving rise to such
condition. The parties agree that in such instance, Landlord will suffer
irreparable harm for which money damages will be an insufficient remedy. For
that reason, in the event Tenant fails to cease such manner of exercise of its
rights as aforesaid, Landlord, in addition to any rights available to it under
this lease and pursuant to law, shall have the right to injunction without
notice. With respect to Tenant’s Changes, Tenant shall make all arrangements
for, and pay all expenses incurred in connection with, use of the freight
elevators servicing the Demised Premises. The immediately preceding sentence 

 

27

 

shall
not apply to the initial move-in or Work done during normal business hours relating
to the Work.

 

ARTICLE 14

 

Tenant’s Property

 

14.01      All fixtures, equipment, improvements and
appurtenances attached to or built into the Demised Premises at the commencement
of or during the term of this lease, whether or not by or at the expense of
Tenant, shall be and remain a part of the Demised Premises, shall be deemed the
property of Landlord and shall not be removed by Tenant, except as hereinafter
in this Article expressly provided.

 

14.02      All panelling, movable partitions,
lighting fixtures, special cabinet work, other business and trade fixtures,
machinery and equipment, communications equipment and office equipment, whether
or not attached to or built into the Demised Premises, which are installed in
the Demised Premises by or for the account of Tenant, without expense to
Landlord, and can be removed without permanent structural damage to the
Building, and all furniture, furnishings and other articles of movable personal
property owned by Tenant and located in the Demised Premises, (all of which are
sometimes referred to as “Tenant’s Property”)
shall be and shall remain the property of Tenant and may be removed by it at
any time during the term of this lease; provided that if any of Tenant’s
Property is removed, Tenant or any party or person entitled to remove same
shall repair or pay the cost of repairing any damage to the Demised Premises
o0.r to the Building resulting from such removal. Any equipment or other
property for which Landlord shall have granted any allowance or credit to
Tenant or which has replaced such items originally provided by Landlord at
Landlord’s expense shall not be deemed to have been installed by or for the
account of Tenant, without expense to Landlord, and shall not be considered
Tenant’s Property.

 

14.03      At or before the Expiration Date, or the
date of any earlier termination of this lease, or as promptly as practicable
after such an earlier termination date, Tenant at its expense, shall remove
from the Demised Premises all of Tenant’s Property except such items thereof as
Tenant shall have expressly agreed in writing with Landlord were to remain and
to become the property of Landlord, and shall fully repair any damage to the
Demised Premises or the Building resulting from such removal. Tenant’s
obligation herein shall survive the termination of the lease. Notwithstanding
the foregoing, Tenant shall have no obligation to remove any of the initial
improvements made to the Premises pursuant to Article 3 of this Lease.

 

14.04      Any other items of Tenant’s Property
(except money, securities and other like valuables) which shall remain in the
Demised Premises after the Expiration Date or after a period of fifteen (15)
days following an earlier termination date, may, the option of the Landlord, be
deemed to have been abandoned, and in such case either may be retained by
Landlord as its property or may be disposed of, without accountability, at
Tenant’s expense in such manner as Landlord may see fit.

 

ARTICLE 15

 

Repairs And Maintenance

 

15.01      Tenant shall take good care of the Demised
Premises. Tenant, at its expense, shall promptly pay the cost of all repairs,
ordinary or extraordinary, interior or exterior, structural or otherwise, in
and about the Demised Premises and the Building, as shall be required by reason
of (i) the performance or existence of Tenant’s Work or Tenant’s Changes, (ii)
the installation, use or operation of Tenant’s Property in the Demised
Premises, (iii) the moving of Tenant’s Property in or out of the Building, or
(iv) the 

 

28

 

misuse
or neglect of Tenant or any of its employees, agents or contractors; but Tenant
shall not be responsible for any of such repairs as are required by reason of a
destruction of all or any part of the Demised Premises due to a cause referred
to in Article 22 of this lease, Landlord’s neglect or other fault in the manner
of performing any of Tenant’s Work, Additional Work or Tenant’s Changes which
may be undertaken by Landlord for Tenant’s account or are otherwise required by
reason of neglect or other fault of Landlord or its employees, agents or
contractors. Except if required by the neglect or other fault of Landlord or
its employees, agents or contractors, Tenant, at its expense, shall replace or
repair all scratched, damaged or broken doors or other interior glass in or
about the Demised Premises and shall be responsible for all repairs,
maintenance and replacement of wall and floor coverings in the Demised Premises
and, for the repair and maintenance of all lighting fixtures therein. All
repairs, except for emergency repairs, made by Tenant as provided herein shall
be performed by Landlord’s Building personnel, or contractors or subcontractors
approved in writing by Landlord prior to commencement of such repairs, which
approval may be withheld for any or no reason, at Landlord’s sole discretion.

 

15.02      Landlord, at its expense, shall keep and
maintain the Building and its fixtures, appurtenances, systems and facilities
serving the Demised Premises, in good, safe and clean working order, condition
and repair and shall make all repairs, structural and otherwise, interior and
exterior, as and when needed in or about the Demised Premises, except for those
repairs for which Tenant is responsible pursuant to any other provisions of
this lease.

 

15.03      Except as expressly otherwise provided in
this lease, Landlord shall have no liability to Tenant by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord’s making any repairs or changes which Landlord is required or
permitted by this lease, or required by law, to make in or to any portion of
the Building or the Demised Premises, or in or to the fixtures, equipment or
appurtenances of the Building or the Demised Premises, provided that Landlord
shall use due diligence with respect thereto and shall perform such work,
except in case of emergency, at times reasonably convenient to Tenant and
otherwise in such manner as will not materially interfere with Tenant’s use of
the Demised Premises, and access thereto.

 

ARTICLE 16

 

Electricity

 

16.01                      (a)           Any additional risers, feeders or other equipment or
service proper or necessary to supply Tenant’s electrical requirements, will,
upon written request of Tenant, be installed by Landlord, at the sole cost and
expense of Tenant, if in Landlord’s sole judgment, the same are necessary and
will not cause permanent damage or injury to the Building or the Demised
Premises or cause or create a dangerous or hazardous condition or entail
excessive or unreasonable alterations, repairs or expense or interfere with or
disturb other tenants or occupants. Rigid conduit only will be allowed.

 

16.02    Landlord shall not in anywise be liable or
responsible to Tenant for any loss or damage or expense which Tenant may
sustain or incur if either the quantity or character of electric service is
changed or is no longer available or suitable for Tenant’s requirements.

 

16.03      Tenant agrees not to connect any
additional electrical equipment of any type to the Building electric
distribution system, beyond that on Tenant’s approved plans per the attached
exhibit, for initial occupancy, other than lamps, typewriters and other office
machines which 

 

29

 

operate
utilizing only the standard electrical current available in a duplex receptacle
outlet without the need for any special wiring or dedicated lines which consume
comparable amounts of electricity, without the Landlord’s prior written
consent, which consent shall not be unreasonably withheld or delayed. In no
event shall Tenant use or install any fixtures, equipment or machines the use
of which in conjunction with other fixtures, equipment and machines in the Demised
Premises would result in an overload or exceed the electrical capacity of the
electrical circuits, risers, feeders or wiring servicing the Demised Premises.

 

16.04      (a) 
Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of the then existing feeders to the
Building or the risers or wiring installation. Tenant shall furnish, install
and replace, as required, all lighting tubes, lamps, bulbs and ballasts
required in the Demised Premises, at Tenant’s sole cost and expense. All
lighting tubes, lamps, bulbs and ballasts so installed shall become Landlord’s
property upon the expiration or sooner termination of this Lease.

 

(b)  Landlord covenants that the electrical
service to the Demised Premises shall never be reduced below that necessary for
the Tenant to operate its business.

 

ARTICLE 17

 

Heat, Ventilation And Air-Conditioning

 

17.01      Landlord, at its expense, shall supply
condenser water and fresh air from May 1st to October 31st during Business
Hours of Business Days (as such terms are hereinafter defined) as may
reasonably be required to operate any ventilating and air-conditioning systems
which are installed in the Demised Premises. “Business
Hours” and “regular hours”
shall mean the hours between 8:00 a.m. and 6:00 p.m. on Business Days (other
than holidays). “Business Days”
shall mean all days except Saturdays, Sundays and days observed by the Federal
or the state government as legal holidays or building service employees’ union
holidays. Landlord, at its expense, shall supply heat from November 1 to April
30 during Business Hours of Business Days. If Landlord shall charge for
condenser water and fresh air outside of Business Hours, Tenant shall be
charged at the lowest rate Landlord charges to any of its wholly-owned units.

 

ARTICLE 18

 

Landlord’s Other Services; Use of Common Facilities

 

18.01      Landlord, at its expense, shall provide
public elevator service, passenger and freight, by elevators serving the floor
on which the Demised Premises are situated during regular hours of business
days, and shall have at least one passenger elevator subject to call at all
other times.

 

18.02      Landlord, at its expense, shall cause the
Demised Premises to be cleaned in accordance with the cleaning specifications then
in effect for the Building, as referenced in Exhibit F attached hereto, as such
may be changed from time to time. Tenant shall pay to Landlord on demand the
costs incurred by Landlord for (a) extra cleaning work in the Demised Premises
required because of (i) misuse or neglect on the part of Tenant or its
employees or visitors, (ii) use of portions of the Demised Premises for
preparation, serving or consumption of food or beverages, data processing or
reproducing operations, private lavatories or toilets or other special purposes
requiring greater or more difficult cleaning work than office areas, (iii)
unusual quantity of interior glass surfaces, (iv) non-building standard
materials or finishes installed by Tenant or at its request, and (b) removal
from the Demised Premises and the Building of so much of any refuse and 

 

30

 

rubbish
of Tenant as shall exceed that ordinarily accumulated daily in the routine of
business office occupancy. Landlord, its cleaning contractor and their
employees shall have after hours access to the Demised Premises and the free
use of light, power and water in the Demised Premises as reasonably required
for the purpose of cleaning the Demised Premises in accordance with Landlord obligations
hereunder.

 

18.03      Landlord, at its expense, shall furnish
adequate hot and cold water to the Demised Premises for drinking, lavatory and
cleaning purposes. If Tenant uses water for a separate kitchen facility,
Landlord, at Tenant’s expense, shall install meters to measure Tenant’s
consumption of cold water and/or hot water for such other purposes and/or
steam, as the case may be. Tenant shall pay for the quantities of cold water
and hot water shown on such meters, at Landlord’s cost thereof, on the rendition
of Landlord’s bills therefor.

 

18.04      Landlord, at its expense, and on Tenant’s
request, shall maintain the original listings on the Building directory of the
names of Tenant and other permitted occupants, in a manner and number
consistent with Landlord’s treatment of its wholly-owned units. Tenant shall
also be entitled to signage in the lobby of the floor of which the Demised
Premises are a part, such signage to be consistent in size and design with the
signage on other floors.

 

18.05      Landlord reserves the right, without any
liability to Tenant, except as otherwise expressly provided in this lease, to
stop service of any of the heating, ventilating, air conditioning, electric,
sanitary, elevator or other Building systems serving the Demised Premises, or
the rendition of any of the other services required of Landlord under this
lease, when- ever and for so long as may be necessary, by reason of accidents,
emergencies, strikes or the making of repairs or changes which Landlord is
required by this lease or by law to make or in good faith deems necessary, by
reason of difficulty in securing proper supplies of fuel, steam, water,
electricity, labor or supplies, or by reason of any other cause beyond Landlord’s
reasonable control.

 

18.06      Tenant and its employees shall be permitted to use Landlord’s employee
and other amenity common areas in the Building, including but not limited to
the Third Floor employee’s cafe, fitness center, and conference and private
dining facilities on the Forty-First Floor, and the broadcast studio space. Also,
Tenant will pay its pro rata share for mail delivery services, IT support and
other similar services on a basis consistent with Landlord’s charges to its
other wholly-owned profit centers. Tenant will be charged by Landlord for such
access and services as Operating Expenses.

 

18.07      Any out-of-pocket costs for Tenant’s use for conference space, food,
catering and the like, will be billed directly to Tenant as incurred. Use of
the Landlord’s Board Room will not be billed to Tenant, except for out of
pocket costs such as catering.

 

ARTICLE 19

 

Access, Changes in Building Facilities

And/or Name, Building Sign

 

19.01      All portions of the Building except the
inside surfaces of all walls, windows and doors bounding the Demised Premises
(including exterior Building walls, core corridor walls and doors and any core
corridor entrance) and any space in or adjacent to the Demised Premises used
for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other Building facilities, and the use thereof, as well as
access thereto through the Demised Premises for the purpose of operation,
maintenance, decoration and repair, are reserved to Landlord except as provided
to the contrary in Section 

 

31

 

1.02 hereof.

 

 

19.02      Tenant shall permit Landlord to install, use,
replace and maintain pipes, ducts and conduits within the demising walls,
bearing columns and ceilings of the Demised Premises.

 

19.03      Landlord or Landlord’s agent shall have
the right, upon reasonable prior notice (except in emergency under clause
(ii)  hereof), which notice need not be
written notwithstanding anything in this lease to the contrary, to enter and/or
pass through the Demised Premises or any part thereof, during Business Hours of
Business Days (and at any time in the case of emergencies) (i) to examine the
Demised Premises and to show them to the fee owners, lessors of superior
leases, holders of superior mortgages, or prospective purchasers, mortgagees or
lessees of the Building as an entirety, and (ii) for the purpose of making such
repairs or changes in or to the Demised Premises or in or its facilities, as
may be provided for by this lease or as may be mutually agreed upon by the
parties or as Landlord may be required to make by law or in order to repair and
maintain said structure or its fixtures or facilities. Landlord shall be
allowed to take all materials into and upon the Demised Premises that may be
required for such repairs, changes, repainting or maintenance, without
liability to Tenant, but Landlord shall not unreasonably interfere with Tenant’s
use of the Demised Premises. Landlord shall prosecute such repairs, changes,
repainting or maintenance with due diligence and use reasonable efforts, which
shall not be deemed to include the use of overtime labor, to minimize
interference with the conduct of Tenant’s business due to Landlord’s exercise
of its rights pursuant to the immediately preceding sentence. Landlord shall
also have the right to enter on and/or pass through the Demised Premises, or
any part thereof, at such times as such entry shall be required by
circumstances of emergency affecting the Demised Premises or said structure.

 

19.04      During the period of twelve (12) months
prior to the Expiration Date or the expiration date of the Renewal Term, and
upon prior notice to Tenant which may be by telephone, Landlord may exhibit the
Demised Premises to prospective tenants unless with respect to the Expiration
Date, Tenant has theretofore exercised the Renewal Option.

 

19.05      Landlord reserves the right, at any time,
without incurring any liability to Tenant therefor, to make such changes in or
to the Building and the fixtures and equipment thereof, as well as in or to the
street entrances, halls, passages, elevators, escalators and stairways thereof,
as it may deem necessary or desirable, provided Landlord shall not materially
diminish Tenant’s access to the Demised Premises.

 

19.06      For the purposes of Article 19, the term “Landlord”
shall include lessors of leases and the holders of mortgages to which this
lease is subject and subordinate as provided in Article 7.

 

ARTICLE 20

 

Notice of Accidents

 

20.01      Tenant shall give written notice to
Landlord, promptly after Tenant learns thereof, of (i) any accident in or about
the Demised Premises for which Landlord might be liable, (ii) all fires in the
Demised Premises, (iii) all damages to or defects in the Demised Premises,
including the fixtures, equipment and appurtenances thereof, for the repair of
which Landlord might be responsible, and (iv) all damage to or defects in any
parts or appurtenances of the Building’s sanitary, electrical, heating,
ventilating, air-conditioning, elevator and other systems located in or passing
through the Demised Premises or any part thereof.

 

32

 

ARTICLE 21

 

Non-Liability and Indemnification

 

21.01      Neither Landlord nor any agent or employee
of Landlord shall be liable to Tenant for any injury or damage to Tenant or to
any other person or for any damage to, or loss (by theft or otherwise) of, any
property of Tenant or of any other person, irrespective of the cause of such
injury, damage or loss, unless caused by or due to the negligence, wrongful act
or wrongful omission of Landlord, its agents or employees occurring within the
scope of their respective employments without negligence on the part of Tenant,
it being understood that no property, other than such as might normally be
brought upon or kept in the Demised Premises as an incident to the reasonable
use of the Demised Premises for the purpose herein permitted, will be brought
upon or be kept in the Demised Premises.

 

21.02      Tenant shall indemnify and save harmless
Landlord and its agents against and from (a) any and all claims (i) arising
from (x) the conduct or management of the Demised Premises or of any business
therein, or (y) any work or thing whatsoever done, or any condition created
(other than by Landlord for Landlord’s or Tenant’s account) in or about the
Demised Premises during the term of this lease or during the period of time, if
any, prior to the Commencement Date that Tenant may have been given access to
the Demised Premises, or (ii) arising from any negligent or otherwise wrongful
act or omission of Tenant or any of its subtenants or licensees or its or their
employees occurring within the scope of their respective employments, agents or
contractors, and (b) all costs, expenses and liabilities (including reasonable
attorneys fees) incurred in or in connection with each such claim or action or
proceeding brought thereon. In case any action or proceeding be brought against
Landlord by reason of any such claim, upon notice from Landlord, Tenant shall
resist and defend such action or proceeding.

 

21.03      Except as otherwise expressly provided in
this lease, this lease and the obligations of Tenant hereunder shall be in no
wise affected, impaired or excused because Landlord is unable to fulfill, or is
delayed in fulfilling, any of its obligations under this lease by reason of
strike, other labor trouble, governmental pre-emption or priorities or other
controls in connection with a national or other public emergency or shortages
of fuel, supplies or labor resulting therefrom, acts of God or other like cause
beyond Landlord’s reasonable control.

 

ARTICLE 22

 

Destruction or Damage

 

22.01      If the Building or the Demised Premises or
access thereto, shall be partially damaged or partially destroyed by fire or
other cause, the rents payable hereunder shall be abated to the extent that the
Demised Premises shall have been rendered untenantable and for the period from
the date of such damage or destruction to the date the damage shall be repaired
or restored in accordance with the provisions of Section 22.03. If the Demised
Premises or a major part thereof shall be totally (which shall be deemed to
include substantially totally) damaged or destroyed or rendered completely
(which shall be deemed to be substantially completely) untenantable on account
of fire or other cause, the rents shall abate as of the date of the damage or
destruction and until Landlord shall repair, restore and rebuild the Building
and the Demised Premises, provided, however, that should Tenant reoccupy a
portion of the Demised Premises during the period the restoration work is
taking place and prior to the date that the same are made completely
tenantable, rents allocable to such portion shall be payable by Tenant from the
date of such occupancy. No rent shall abate on account of any damage to the
First Floor Premises.

 

33

 

22.02      If the Building or the Demised Premises or
access thereto shall be totally damaged or destroyed by fire or other cause, or
if the Building shall be so damaged or destroyed by fire or other cause
(whether or not the Demised Premises are damaged or destroyed) as to require a
reasonably estimated expenditure of more than 40% of the full insurable value
of the Building immediately prior to the casualty, then in either such case
Landlord may terminate this lease by giving Tenant notice to such effect within
one hundred eighty (180) days after the date of the casualty. In case of any
damage or destruction mentioned in this Article Tenant may terminate this
lease, by notice to Landlord, if Landlord has not completed the making of the
required repairs and restored and rebuilt the Building and the Demised Premises
within twelve (12) months from the date of such damage or destruction, or
within such period after such date (not exceeding six months) as shall equal
the aggregate period Landlord may have been delayed in doing so by adjustment
of insurance, labor trouble, governmental controls, act of God, or any other
cause beyond Landlord’s reasonable control. In case of any damage or
destruction mentioned in this Article occurring in the last year of the
original term of this Lease (provided Tenant has not theretofore exercised the
First Renewal Option) or occurring in the last year of the First Renewal Term
(provided Tenant has not theretofore exercised the Second Renewal Option) or
occurring in the last year of the Second Renewal Term, Tenant may terminate
this Lease on written notice to Landlord.

 

22.03      If the Building or the Demised Premises
shall be partially or totally damaged or destroyed by fire or other cause,
then, whether or not the damage or destruction shall have resulted from the
fault or neglect of Tenant, or its employees or agents (and if this lease shall
not have been terminated as in this Article provided), Landlord shall repair the
damage and restore and rebuild the Building and/or the Demised Premises, at its
expense, with reasonable dispatch after notice to it of the damage or
destruction; provided, however, that Landlord shall not be required to repair
or replace any Tenant’s Work or “Additional Work” (as hereinafter defined).

 

22.04      No damages, compensation or claim shall be
payable by Landlord for inconvenience, loss of business or annoyance arising
from any repair or restoration of any portion of the Demised Premises or of the
Building pursuant to this Article. Landlord shall use its best efforts to
effect such repair or restoration promptly and in such manner as to not
unreasonably interfere with Tenant’s use and occupancy.

 

22.05      Intentionally Deleted

 

22.06      Landlord will not carry insurance of any
kind on Tenant’s Property or Tenant’s Work or Additional Work, and, except as
provided by law or by reason of its fault or its breach of any of its
obligations hereunder, shall not be obligated to repair any damage thereto or
replace the same.

 

22.07      The provisions of this Article shall be
considered an express agreement governing any case of damage or destruction of
the Demised Premises by fire or other casualty, and Section 227 of the Real
Property Law of the State of New York, providing for such a contingency in the
absence of an express agreement, and any other law of like import, now or
hereafter in force, shall have no application in such case.

 

ARTICLE 23

 

Eminent Domain

 

23.01      If the whole of the Building shall be
lawfully taken by condemnation or in any other manner for any public or
quasi-public use or purpose, this lease and the term and estate hereby granted
shall forthwith terminate as of the date of vesting of title in such taking
(which date is hereinafter also referred to as the “date of the taking”), and the rents shall 

 

34

 

be
prorated and adjusted as of such date.

 

23.02      If only a part of the Building shall be so
taken, this lease shall be unaffected by such taking, except that Tenant may
elect to terminate this lease in the event of a partial taking, if the
remaining area of the Demised Premises shall not be reasonably sufficient for
Tenant to continue feasible operation of its business or if Tenant shall not
have reasonable access to the Demised Premises. Tenant shall give notice of
such election to Landlord not later than sixty (60) days after (i) notice of
such taking is given by Landlord to Tenant, or (ii) the date of such taking,
whichever occurs sooner. Upon the giving of such notice by Tenant this lease
shall terminate on the date of such taking and the rents shall be prorated as
of such termination date. Upon such partial taking and this lease continuing in
force as to any part of the Demised Premises, the rents apportioned to the part
taken shall be prorated and adjusted as of the date of taking and from such
date the fixed rent for the Demised Premises and additional rent shall be
payable pursuant to Article 5 according to the rentable area remaining. No rent
shall abate on account of any taking of the First Floor Premises.

 

23.03      Landlord shall be entitled to receive the
entire award in any proceeding with respect to any taking provided for in this
Article without deduction therefrom for any estate vested in Tenant by this
lease and Tenant shall receive no part of such award, except as hereinafter
expressly provided in this Article. Tenant hereby expressly assigns to Landlord
all of its right, title and interest in or to every such award. Notwithstanding
anything herein to the contrary, Tenant may, at its sole cost and expense, make
a claim with the condemning authority for Tenant’s moving expenses, the value
of Tenant’s fixtures or Tenant’s Changes which do not become part of the
Building or property of the Landlord, provided however that Landlord’s award is
not thereby reduced or otherwise adversely affected.

 

23.04      If the temporary use or occupancy of all
or any part of the Demised Premises shall be lawfully taken by condemnation or
in any other manner for any public or quasi-public use or purpose during the
term of this lease, Tenant shall be entitled, except as hereinafter set forth,
to receive that portion of the award for such taking which represents
compensation for the use and occupancy of the Demised Premises (other than the
First Floor Premises and, if so awarded, for the taking of Tenant’s Property
and for moving expenses, and Landlord shall be entitled to receive that portion
which represents reimbursement for the cost of restoration of the Demised Premises
and compensation for use and occupancy of the First Floor Premises. This lease
shall be and remain unaffected by such taking and Tenant shall continue
responsible for all of its obligations hereunder insofar as such obligations
are not affected by such taking and shall continue to pay in full the fixed
rent and additional rent when due. If the period of temporary use or occupancy
shall extend beyond the Expiration Date, that part of the award which
represents compensation for the use or occupancy of the Demised Premises (or a
part thereof) shall be divided between Landlord and Tenant so that Tenant shall
receive so much thereof as represents the period prior to the Expiration Date
and Landlord shall receive so much thereof as represents the period subsequent
to the Expiration Date. All moneys received by Tenant as, or as part of, an
award for temporary use and occupancy for a period beyond the date to which the
rents hereunder have been paid by Tenant shall be received, held and applied by
Tenant as a trust fund for payment of the rents falling due hereunder.

 

23.05      In the event of any taking of less than
the whole of the Building which does not result in a termination of this lease,
or in the event of a taking for a temporary use or occupancy of all or any part
of the Demised Premises which does not extend beyond the Expiration Date,
Landlord, at its expense, and to the extent any award or awards shall be
sufficient for the purpose, shall proceed with reasonable diligence to repair,
alter and restore the remaining parts of the Building and the Demised Premises
to substantially a building standard condition to the extent that the same may
be feasible and 

 

35

 

so
as to constitute a complete and tenantable Building and Demised Premises.

 

23.06      Should any part of the Demised Premises be
taken to effect compliance with any law or requirement of public authority
other than in the manner hereinabove provided in this Article, then (i) if such
compliance is the obligation of Tenant under this lease, Tenant shall not be
entitled to any diminution or abatement of rent or other compensation from
Landlord there- for, but (ii) if such compliance is the obligation of Landlord
under this lease, the fixed rent hereunder shall be reduced and additional
rents under Article 5 shall be adjusted in the same manner as is provided in
Section 23.02 according to the reduction in rentable area of the Demised
Premises resulting from such taking.

 

23.07      Any dispute which may arise between the
parties with respect to the meaning or application of any of the provisions of
this Article shall be determined by arbitration in the manner provided in
Article 34.

 

ARTICLE 24

 

Surrender

 

24.01      On the last day of the term of this lease,
or upon any earlier termination of this lease, or upon any re-entry by Landlord
upon the Demised Premises, Tenant shall quit and surrender the Demised Premises
to Landlord in good order, condition and repair, except for ordinary wear and
tear and damage by fire or other casualty, and Tenant shall remove all of
Tenant’s Property, and any improvements made subsequent to those initial
improvements made pursuant to Article 3 of this Lease, therefrom except as
otherwise expressly provided in this lease and shall restore the Demised
Premises wherever such removal results in damage thereto.

 

ARTICLE 25

 

Conditions of Limitation

 

25.01      To the extent permitted by applicable law
this lease and the term and estate hereby granted are subject to the limitation
that whenever Tenant shall make an assignment of the property of Tenant for the
benefit of creditors, or shall file a voluntary petition under any bankruptcy
or insolvency law, or an involuntary petition alleging an act of bankruptcy or
insolvency shall be filed against Tenant under any bankruptcy or insolvency
law, or whenever a petition shall be filed or against Tenant under the
reorganization provisions of the United States Bankruptcy Act or under the
provisions of any law of like import, or whenever a petition shall be filed by
Tenant under the arrangement provisions of the United States Bankruptcy Act or
under the provisions of any law of like import, or whenever a permanent
receiver of Tenant or of or for the property of Tenant shall be appointed,
then, Landlord, (a)  at any time after
receipt of notice of the occurrence of any such event, or (b) if such event
occurs without the acquiescence of Tenant, at any time after the event
continues for ninety (90) days, Landlord may give Tenant a notice of intention
to end the term of this lease at the expiration of five (5) days from the date
of service of such notice of intention, and upon the expiration of said five
(5) day period this lease and the term and estate hereby granted, whether or
not the term shall theretofore have commenced, shall terminate with the same
effect as if that day were the Expiration Date, but Tenant shall remain liable
for damages as provided in Article 27.

 

25.02      This lease and the term and estate hereby
granted are subject to the further limitation that:

 

(a)           whenever Tenant shall default in the 

 

36

 

payment
of any installment of fixed rent, or in the payment of any additional rent or
any other charge payable by Tenant to Landlord, on any day upon which the same
ought to be paid, and such default shall continue for three (3) days after
Landlord shall have given Tenant a notice specifying such default; or

 

(b)           whenever Tenant shall do or permit anything to be done,
whether by action or inaction, contrary to any of Tenant’s obligations
hereunder, and if such situation shall continue and shall not be remedied by
Tenant within thirty (30) days after Landlord shall have given to Tenant a
notice specifying the same, or, in the case of a happening or default which
cannot with due diligence be cured within a period of thirty (30) days and the
continuance of which for the period required for cure will not subject Landlord
to the risk of criminal liability (as more particularly described in Section
10.02) or termination of any superior lease or foreclosure of any superior
mortgage, if Tenant shall not, (i) within said thirty (30) day period advise
Landlord of Tenant’s intention to duly institute all steps necessary to remedy
such situation, (ii) duly institute within said thirty (30) day period, and
thereafter diligently prosecute to completion all steps necessary to remedy the
same and (iii) complete such remedy within such time after the date of the
giving of said notice of Landlord as shall reasonably be necessary; or

 

(c)             whenever any event shall occur or
any contingency shall arise whereby this lease or the estate hereby granted or
the unexpired balance of the term hereof would, by operation of law or
otherwise, devolve upon or pass to any person, firm or corporation other than
Tenant, except as expressly permitted by Article 9; or

 

(d)           whenever Tenant shall abandon (as distinguished from
temporary vacating) the Demised Premises (unless as a result of a casualty), or

 

(e)           when Tenant shall be in default in the observance or
performance of its obligations under any other lease in the Building, then in
any of said cases set forth in the foregoing Subsections (a), (b), (c) (d) and
(e), Landlord may give to Tenant a notice of intention to end the term of this
lease at the expiration of ten (10) days from the date of the service of such
notice of intention, and upon the expiration of said ten (10) days this lease
and the term and estate hereby granted, whether or not the term shall
theretofore have commenced, shall terminate with the same effect as if that day
were the Expiration Date, but Tenant shall remain liable for damages as
provided in Article 27.

 

ARTICLE 26

 

Re-Entry By Landlord

 

26.01      If Tenant shall default in the payment of
any installment of fixed rent, or of any additional rent, on any date upon
which the same ought to be paid, and if such default shall continue for ten
(10) days after Landlord shall have given to Tenant a notice specifying such
default, or if this lease shall expire as in Article 25 provided, Landlord or
Landlord’s agents and employees may immediately or at any time thereafter
re-enter the Demised Premises, or any part thereof, in the name of the whole,
either by summary dispossess proceedings or by any suitable action or
proceeding at law, or by force or otherwise, without being liable to
indictment, prosecution or damages therefor, and may repossess the same, and
may remove any persons therefrom, to the end that Landlord may have, hold and
enjoy the Demised Premises again as and of its first estate and interest
therein. The word re-enter, as herein used, is not restricted to its technical
legal meaning. In the event of any termination of this lease under the
provisions of

Article 25 or if Landlord shall re-enter the Demised Premises under the
provisions of this Article or in the event of the termination of this lease, or
of re-entry, 

 

37

 

by
or under any summary dispossess or other proceeding or action or any provision
of law by reason of default hereunder on the part of Tenant, Tenant shall
thereupon pay to Landlord the fixed rent and additional rent payable by Tenant
to Landlord up to the time of such termination of this lease, or of such
recovery of possession of the Demised Premises by Landlord, as the case may be,
and shall also pay to Landlord damages as provided in Article 27.

 

26.02      In the event of a breach or threatened
breach by Tenant of any of its obligations under this lease, Landlord shall
also have the right of injunction. The special remedies to which Landlord may
resort hereunder are cumulative and are not intended to be exclusive of any
other remedies or means of redress to which Landlord may lawfully be entitled
at any time and Landlord may invoke any remedy allowed at law or in equity as
if specific remedies were not provided for herein.

 

26.03      If this lease shall terminate under the
provisions of Article 25, or if Landlord shall re-enter the Demised Premises
under the provisions of this Article, or in the event of the termination of
this lease, or of re-entry, by or under any summary dispossess or other
proceeding or action or any provision of law by reason of default hereunder on
the part of Tenant, Landlord shall be entitled to retain all moneys, if any,
paid by Tenant to Landlord, whether as advance rent, security or otherwise, but
such moneys shall be credited by Landlord against and to the extent of any
fixed rent or additional rent due from Tenant at the time of such termination
or re-entry or, at Landlord’s option, against any damages payable by Tenant
under Article 27 or pursuant to law.

 

ARTICLE 27

 

Damages

 

27.01      If this lease is terminated under the
provisions of Article 25, or if Landlord shall re-enter the Demised Premises
under the provisions of Article 26, or in the event of the termination of this
lease, or of re-entry, by or under any summary dispossess or other proceeding
or action or any provision of law by reason of default hereunder on the part of
Tenant, Tenant shall pay to Landlord as damages, at the election of Landlord,
either:

 

(a)           a sum which at the time of such termination of this lease
or at the time of any such re-entry by Landlord, as the case may be, represents
the then value of the excess, if any, of:

 

(1)           the aggregate of the fixed rent and the additional rent
payable hereunder which would have been payable by Tenant (conclusively
presuming the additional rent to be the same as was payable for the year
immediately preceding such termination) for the period commencing with such
earlier termination of this lease or the date of any such re-entry, as the case
may be, and ending with the Expiration Date, had this lease not so terminated
or had Landlord not so re-entered the Demised Premises; over

 

(2)           the aggregate rental value of the Demised Premises for the
same period; or

 

(b)           sums equal to the fixed rent and the additional rent (as
above presumed) payable hereunder which would have been payable by Tenant had
this lease not so terminated, or had Landlord not so re-entered the Demised
Premises, payable upon the due dates therefor specified herein following such
termination or such re-entry and until the Expiration Date, provided, however,
that if Landlord shall relet the Demised Premises during said period, Landlord
shall credit Tenant with the net rents received by Landlord from such reletting,
such net rents to be determined by first deducting from the gross rents as and
when received by Landlord from such

 

38

 

reletting
the expenses incurred or paid by Landlord in terminating this lease or in
re-entering the Demised Premises and in securing possession thereof, as well as
the expenses of reletting, including altering and preparing the Demised
Premises for new tenants, brokers’ commissions, and all other expenses properly
chargeable against the Demised Premises and the rental therefrom; it being
understood that any such reletting may be for a period shorter or longer than
the remaining term of this lease; but in no event shall Tenant be entitled to
receive any excess of such net rents over the sums payable by Tenant to
Landlord hereunder, nor shall Tenant be entitled in any suit for the collection
of damages pursuant to this Subsection to a credit in respect of any net rents
from a reletting, except to the extent that such net rents are actually
received by Landlord. If the Demised Premises shall be relet for a period
shorter than the remaining term of this Lease and Landlord shall actually
receive during such period, net rents in excess of the sums payable by Tenant
to Landlord under this Lease during such period, then Landlord shall credit the
amount of such excess against the sums payable by Tenant under this Lease
during such subsequent periods for which the Demised Premises are not so relet.
If the Demised Premises or any part thereof should be relet in combination with
other space, then proper apportionment on a square foot basis (for equivalent
space) shall be made of the rent received from such reletting and of the
expenses of reletting.

 

If the Demised Premises or any part thereof
be relet by Landlord for the unexpired portion of the term of this lease, or
any part thereof, before presentation of proof of such damages to any court,
commission or tribunal, the amount of rent reserved upon such reletting shall, in
the case of an unaffiliated, bona fide third party only, prima facie, be the
fair and reasonable rental value for the Demised Premises, or part thereof, so
relet during the term of the reletting.

 

27.02      Suit or suits for the recovery of such
damages, or any installments thereof, may be brought by Landlord from time to
time at its election, and nothing contained herein shall be deemed to require
Landlord to postpone suit until the date when the term of this lease would have
expired if it had not been so terminated under the provisions of Article 25, or
under any provision of law, or had Landlord not re-entered the Demised Premises.
Nothing herein contained shall be construed to limit or preclude recovery by
Landlord against Tenant of any sums or damages to which, in addition to the
damages particularly pro- vided above, Landlord may lawfully be entitled by
reason of any default hereunder on the part of Tenant. Nothing herein contained
shall be construed to limit or prejudice the right of Landlord to prove for and
obtain as liquidated damages by reason of the termination of this lease or
re-entry on the Demised Premises for the default of Tenant under this lease, an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, such damages are to be
proved whether or not such amount be greater, equal to, or less than any of the
sums referred to in Section 27.01.

 

ARTICLE 28

Waiver

 

28.01      Tenant, for Tenant, and on behalf of any
and all persons claiming through or under Tenant, including creditors of all
kinds, does hereby waive and surrender all right and privilege which they or
any of them might have under or by reason of any present or future law, to
redeem the Demised Premises or to have a continuance of this lease for the term
hereby demised after being dispossessed or ejected therefrom by process of law
or under the terms of this lease or after the termination of this lease as
herein provided.

 

28.02      In the event that Tenant is in arrears in
payment of fixed rent or additional rent hereunder, Tenant waives Tenant’s
right, if any, to designate the items against which any payments made by Tenant
are to be credited, and Tenant agrees that Landlord may apply any payments made
by

 

39

 

Tenant
to any items it sees fit, irrespective of and notwithstanding any designation
or request by Tenant as to the items against which any such payments shall be
credited.

 

28.03      Landlord and Tenant hereby waive trial by jury
in any action, proceeding or counterclaim (except for a mandatory counterclaim
which would be waived if not asserted) brought by either against the other on
any matter 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
Demised Premises, including any claim of injury or damage, or any emergency or
other statutory remedy with respect thereto.

 

28.04      The provisions of Articles 17 and 18 shall
be considered expressed agreements governing the services to be furnished by
Landlord, and Tenant agrees that any laws and/or requirements of public
authorities, now or hereafter in force, shall have no application in connection
with any enlargement of Landlord’s obligations with respect to such services
unless Tenant agrees, in writing, to pay to Landlord, as additional rent,
Landlord’s reasonable charges for any additional services provided.

 

28.05      If, at any time during the term of this
lease, any requirement of public authority shall have the effect of limiting,
for any period of time, the amount of the rents payable by Tenant, or
receivable by Landlord, under this lease, and the maximum rents so permitted to
be paid by Tenant, or received by Landlord, hereunder shall be less than the
rents herein reserved, then:

 

(a)           throughout the period of limitation, Tenant shall remain
liable for the maximum amount of rents that is lawfully payable; and

 

(b)           if and when the period of limitation ends, the requirement
of public authority imposing such limitation is repealed, or such limitation is
restrained or rendered unenforceable by any order or ruling of a court of
appropriate jurisdiction:

 

thereafter, Tenant shall pay
to Landlord all of the rents reserved under this lease, all of which shall be
calculated as if there had been no intervening period of limitation.

 

ARTICLE 29

 

No Other Waivers Or Modifications

 

29.01           The failure of either party to insist
in any one or more instances upon the strict performance of any one or more of
the obligations of this lease, or to exercise any election herein contained,
shall not be construed as a waiver or relinquishment for the future of the
performance of such one or more obligations of this lease or of the right to
exercise such election, but the same shall continue and remain in full force
and effect with respect to any subsequent breach, act or omission. No executory
agreement hereafter made between Landlord and Tenant shall be effective to
change, modify, waive, release, discharge, terminate or effect an abandonment
of this lease, in whole or in part, unless such executory agreement is in
writing, refers expressly to this lease and is signed by the party against whom
enforcement of the change, modification, waiver, release, discharge or
termination or effectuation of the abandonment is sought.

 

29.02           The following specific provisions of
this Section shall not be deemed to limit the generality of any of the
foregoing provisions of this Article:

 

(a)         no agreement to accept a surrender of
all or any 

 

40

 

part
of the Demised Premises shall be valid unless in writing and signed by Landlord.
The delivery of keys to an employee of Landlord or of its agent shall not
operate as a termination of this lease or a surrender of the Demised Premises. If
Tenant shall at any time request Landlord to sublet the Demised Premises for
Tenant’s account, Landlord or its agent is authorized to receive said keys for
such purposes without releasing Tenant from any of its obligations under this
lease, and Tenant hereby releases Landlord from any liability for loss or
damage to any of Tenant’s property in connection with such subletting.

 

(b)        the receipt by Landlord of rent with
knowledge of breach of any obligation of this lease shall not be deemed a
waiver of such breach;

 

(c)         no payment by Tenant or receipt by
Landlord of a lesser amount than the correct fixed rent or additional rent due
hereunder shall be deemed to be other than a payment on account, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and Landlord may accept such
check or payment without prejudice to Landlord’s right to recover the balance
or pursue any other remedy in this lease or at law provided.

 

ARTICLE 30

 

Curing Tenant’s Defaults, Additional Rent

 

30.01                           (a)           If Tenant shall default in the
performance of any of Tenant’s obligations under this lease, Landlord, without
thereby waiving such default, may (but shall not be obligated to) perform the
same for the account and at the expense of Tenant, without notice, in a case of
emergency, and in any other case, only if such default continues after the
expiration of (i) ten (10) business days from the date Landlord gives Tenant notice
of intention so to do, or (ii) the applicable grace period provided in Section
25.02 or elsewhere in this lease for cure of such default, whichever occurs
later;

 

(b)        If Tenant is late in making any payment
due to Landlord from Landlord under this lease for five (5) or more days, then
interest shall become due and owing to Landlord on such payment from the date
when it was due computed at the greater of (A) one and 25/100 (1.25%) percent
per month or (B) two (2%) percent per annum over the then prime rate of Chase
Manhattan Bank, N.A. but in no event in excess of the maximum legal rate of
interest chargeable to corporations in the State of New York.

 

30.02      Bills for any expenses incurred by
Landlord in connection with any such performance by it for the account of
Tenant, and bills for all costs, expenses and disbursements of every kind and
nature whatsoever, including reasonable counsel fees, involved in collecting or
endeavoring to collect the fixed rent or additional rent or any part thereof or
enforcing or endeavoring to enforce any rights against Tenant, under or in
connection with this lease, or pursuant to law, including any such cost,
expense and disbursement involved in instituting and prosecuting summary
proceedings, as well as bills for any property, material, labor or services
provided, furnished, or rendered, by Landlord or at its instance to Tenant, may
be sent by Landlord to Tenant monthly, or immediately, at Landlord’s option,
and, shall be due and payable in accordance with the terms of such bills.

 

ARTICLE 31

 

Broker

 

31.01           Landlord and Tenant covenant, warrant
and represent to each other that there was no broker or finder instrumental in
consummating this lease and that no conversations or negotiations were had by
such party with any broker or finder concerning the renting of the Demised
Premises. 

 

41

 

Landlord
and Tenant agree to indemnify and hold the other harmless from and against any
actions, suits or claims (including, without limitation, legal fees, costs and
expenses) for a brokerage, finder or other commission or fee arising out of any
conversations or negotiations had by such party with any broker or finder
concerning the renting of the Demised Premises.

 

ARTICLE 32

 

Notices

 

32.01           Any notice, statement, demand or
other communication required or permitted to be given, rendered or made by
either party to the other, pursuant to this lease or pursuant to any applicable
law or requirement of public authority, shall be in writing (whether or not so
stated elsewhere in this lease) and shall be deemed to have been properly
given, rendered or made, only if sent by a) personal delivery, b) reputable
overnight courier or c)registered or certified mail, return receipt requested,
addressed to the other party at the address hereinabove set forth (except that
after the Commencement Date, Tenant’s address, unless Tenant shall give notice
to the contrary, shall be the Building), and shall be deemed to have been
given, rendered or made on the day so mailed, unless mailed outside of the
State of New York, in which case it shall be deemed to have been given,
rendered or made on the expiration of the normal period of time for delivery of
mail from the post-office of origin to the post-office of destination. Notices
to Tenant shall be sent to the attention of David Barrett, with a copy to: Jonathan
Mintzer. Notices to Landlord shall be sent to Chief Financial Officer, with a
copy to: Real Estate Counsel. Either party may, by notice as aforesaid,
designate a different address or addresses for notices, statements, demand or
other communications intended for it.

 

ARTICLE 33

 

Estoppel Certificate, Memorandum

 

33.01           Each party agrees, at any time and
from time to time, as requested by the other party, upon not less than ten (10)
days’ prior notice, to execute and deliver to the other a statement certifying
(a) that this lease is unmodified and in full force and effect (or if there
have been modifications, that the same is in full force and effect as modified
and stating the modifications) and whether any options granted to Tenant
pursuant to the provisions of this lease have been exercised, (b) certifying
the dates to which the fixed rent and additional rent have been paid and the
amounts thereof, and stating whether or not, to the best knowledge of the
signer, the other party is in default in performance of any of its obligations
under this lease, and, if so, specifying each such default of which the signer
may have knowledge, it being intended that any such statement delivered
pursuant hereto may be relied upon by others with whom the party requesting
such certificate may be dealing. Additionally, Tenant’s Statement shall contain
such other information relating to this Lease and the Demised Premises as shall
be reasonably required by the holder or proposed holder of any superior mort-
gage or the lessor or proposed lessor under any superior lease.

 

33.02           At the request of either party,
Landlord and Tenant shall promptly execute, acknowledge and deliver a mutually
acceptable memorandum with respect to this lease sufficient for recording. Such
memorandum shall not in any circumstances be deemed to change or otherwise
affect any of the obligations or provisions of this lease.

 

42

 

ARTICLE 34

 

Arbitration

 

34.01           Either party may request arbitration
of any matter in dispute wherein arbitration is expressly provided in this
lease as the appropriate remedy. The party requesting arbitration shall do so
by giving notice to that effect to the other party, and both parties shall
promptly thereafter jointly apply to the American Arbitration Association (or
any organization successor thereto) in the City and County of New York for the
appointment of a single arbitrator.

 

34.02           The arbitration shall be conducted in
accordance with the then prevailing rules of the American Arbitration
Association (or any organization successor thereto) in the City and County of
New York. In rendering such decision and award, the arbitrator shall not add
to, subtract from or otherwise modify the provisions of this lease.

 

34.03           If for any reason whatsoever a
written decision and award of the arbitrator shall not be rendered within
ninety (90) days after the appointment of such arbitrator, then at any time
thereafter before such decision and award shall have been rendered either party
may apply to the Supreme Court of the State of New York or to any other court
having jurisdiction and exercising the functions similar to those now exercised
by such court, by action, proceeding or otherwise (but not by a new arbitration
proceeding) as may be proper to determine the question in dispute consistently
with the provisions of this lease.

 

34.04           All the expenses of the arbitration
shall be borne by the parties equally.

 

ARTICLE 35

 

No Other Representations, Construction,

Governing Law, Consents

 

35.01           Tenant expressly acknowledges and
agrees that Landlord has not made and is not making, and Tenant, in executing
and delivering this lease, is not relying upon, any warranties,
representations, promises or statements, except to the extent that the same are
expressly set forth in this lease or in any other written agreement which may
be made between the parties concurrently with the execution and delivery of
this lease and shall expressly refer to this lease. This lease and said other
written agreement(s) made concurrently herewith are hereinafter referred to as
the “lease documents”. It is
understood and agreed that all understandings and agreements heretofore had
between the parties are merged in the lease documents, which alone fully and
completely express their agreements and that the same are entered into after
full investigation, neither party relying upon any statement or representation
not embodied in the lease documents, made by the other.

 

35.02           If any of the provisions of this
lease, or the application thereof to any person or circumstances, shall, to any
extent, be invalid or unenforceable, the remainder of this lease, or the
application of such provision or provisions to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not
be affected thereby, and every provision of this lease shall be valid and
enforceable to the fullest extent permitted by law.

 

35.03           This lease shall be governed in all
respects by the laws of the State of New York.

 

35.04           Wherever in this lease Landlord’s
consent or approval is required, if Landlord shall refuse such consent or
approval, Tenant in no event shall be entitled to make, nor shall Tenant make,
any claim, and Tenant hereby waives any claim, for money damages (nor shall
Tenant claim any money damages by way of set-off, counterclaim or defense)
based upon any claim or assertion by Tenant that Landlord unreasonably withheld
or unreason- ably 

 

43

 

delayed
its consent or approval. Tenant’s sole remedy shall be an action or proceeding
to enforce any such provision, for specific performance, injunction or
declaratory judgment.

 

ARTICLE 36

 

Parties Bound

 

36.01           The obligations of this lease shall
bind and benefit the successors and assigns of the parties with the same effect
as if mentioned in each instance where a party is named or referred to, except
that no violation of the provisions of Article 9 shall operate to vest any
rights in any successor or assignee of Tenant and that the provisions of this
Article shall not be construed as modifying the conditions of limitation
contained in Article 25. However, the obligations of Landlord under this lease
shall not be binding upon Landlord herein named with respect to any period
subsequent to the transfer of its interest in the Building as owner or lessee
thereof and in event of such transfer said obligations shall thereafter be
binding upon each transferee of the interest of Landlord herein named as such
owner or lessee of the Building, but only with respect to the period ending
with a subsequent transfer within the meaning of this Article.

 

36.02           If Landlord shall be an individual,
joint venture, tenancy in common, co-partnership, unincorporated association,
or other unincorporated aggregate of individuals and/or entities or a
corporation, Tenant shall look only to such Landlord’s estate and property in
the Building (or the proceeds thereof) and, where expressly so provided in this
lease, to off- set against the rents payable under this lease, for the
satisfaction of Tenant’s remedies for the collection of a judgment (or other
judicial process) requiring the payment of money by Landlord in the event of any
default by Landlord hereunder, and no other property or assets of such Landlord
or any partner, member, officer or director thereof, disclosed or undisclosed
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant’s remedies under or with respect to this lease, the
relationship of Landlord and Tenant hereunder or Tenant’s use or occupancy of
the Demised Premises.

 

ARTICLE 37

 

Certain Definitions And Construction

 

37.01           For the purposes of this lease and
all agreements supplemental to this lease, unless the context otherwise
requires the definitions set forth in Exhibit E annexed hereto shall be
utilized.

 

37.02           The various terms which are
italicized and defined in other Articles of this lease or are defined in Exhibits
annexed hereto, shall have the meanings specified in such other Articles and
such Exhibits for all purposes of this lease and all agreements supplemental
thereto, unless the context shall otherwise require.

 

ARTICLE 38

 

Adjacent Excavation And Construction; Shoring; Vaults

 

38.01           If an excavation or other
substructure work shall be made upon land adjacent to the Demised Premises, or
shall be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the Demised Premises
for the purpose of doing such work as shall be necessary to preserve the wall
of or the Building from injury or damage and to support the same by proper
foundations without any claim for damages or indemnity against Landlord, or
diminution or 

 

44

 

abatement or rent.

 

38.02           No vaults, vault space or area,
whether or not enclosed or covered, not within the property line of the
Building is leased hereunder, anything contained in or indicated on any sketch,
blue print or plan or anything contained elsewhere in this lease to the
contrary notwithstanding. Landlord makes no representation as to the location
of the property line of the Building. All vaults and vault space and all such
areas not within the property line of the Building, which Tenant may be
permitted to use and/or occupy, is to be used and/or occupied under a revocable
license, and if any such license be revoked, or if the amount of such space or
area be diminished or required by any federal, state or municipal authority or
public utility, Landlord shall not be subject to any liability nor shall Tenant
be entitled to any compensation or diminution or abatement of rent, nor shall
such revocation, diminution or requisition be deemed constructive or actual
eviction. Any tax, fee or charge of municipal authorities for such vault or
area shall be paid by Tenant.

 

ARTICLE 39

 

Right of First Refusal

 

39.01           Tenant shall have no right of first
refusal on any space in the Building.

 

ARTICLE 40

 

Assumption of Tenant’s Current Lease

 

40.01        As of the date of execution of this Lease, Tenant
occupies premises at 888 Seventh Avenue (the Current Premises) in the City,
County and State of New York pursuant to lease, (hereinafter the “Current Lease”). Landlord hereby agrees
that it shall assume of all rights and obligations of Tenant under the current
Lease on the later of July 1, 2006 or the date on which Tenant completely
vacates the Current Premises and surrenders them to Landlord. Landlord hereby
agrees to indemnify and hold harmless Tenant from any claim for rent or
additional rent due under the lease after the date that Tenant vacates the
current Premises.

 

ARTICLE 41

 

Renewal Option

 

41.01           Provided that this Lease shall be in
full force and effect without an uncured monetary default on the part of Tenant
hereunder, on the Expiration Date, Tenant shall have the option (hereinafter
referred to as the “Renewal Option”)
to renew this Lease for a renewal term (hereinafter referred to as the “Renewal Term”) of ten (10) years, to
commence on the day next succeeding the Expiration Date and to expire on the
day which shall be the tenth (10th) anniversary of the Expiration Date. Tenant
shall exercise the Renewal Option by sending written notice thereof
(hereinafter referred to as a “Renewal Notice”)
to Landlord by certified mail, return receipt requested, on or before the day
which shall be twelve (12) months next preceding the Expiration Date. If Tenant
shall send a Renewal Notice within the time and in the manner hereinbefore
provided, this Lease shall be deemed renewed for the Renewal Term upon the
terms, covenants and conditions hereinafter contained. If Tenant shall fail to
send a Renewal Notice within the time and in the manner hereinbefore provided,
the Renewal Option shall cease and terminate, and Tenant shall have no further
options to renew this Lease.

 

45

 

41.02           The Renewal Term, if any, shall be
upon, and subject to, all of the terms, covenants and conditions provided in
this Lease for the original term hereof, except that:

 

(a)           Any terms, covenants, or conditions hereof that are
expressly or by their nature inapplicable to the Renewal Term (including,
without limitation, Articles 3 and 4 and Exhibit C hereof with respect to the
Renewal Term) shall not apply during the Renewal Term;

 

(b)  The annual fixed rent payable by Tenant
during the Renewal Term, (the Renewal Fixed Rent) subject to adjustments as
otherwise provided in this Lease, shall be at Fair Market Value, which shall be
determined as follows in the succeeding sections of this Article, but in no
event shall it be less than the fixed rent payable for the last year under this
Lease. Furthermore, the Renewal Fixed Rent shall be adjusted on the Fifth
Anniversary of the Renewal Term (June 30, 2022) to reflect Fair Market Rent
(the Adjusted Renewal Fixed Rent). The Adjusted Renewal Fixed Rent shall not be
less than the higher of a) the fixed rent under this lease or b) the Renewal
Fixed Rent.

 

41.03      Landlord
and Tenant shall have twenty (20) days after Landlord receives the exercise
notice in which to agree on the Renewal Fixed Rent during the Renewal Term. In
no event shall the Renewal Fixed Rent for the Renewal Term be less than the
Fixed Rent in effect immediately prior to the Extension Term in question.

 

41.04  If
Landlord and Tenant are unable to agree upon the Renewal Fixed Rent for the
Renewal Term within such twenty (20) day period, then within ten (10) days
after the expiration of the twenty (20) day period, each party, by giving
notice to the other party, shall appoint a real estate appraiser who is a
current member of the American Institute of Real Estate Appraisers, with at
least ten (10) years of experience appraising the rental value of commercial
space comparable to the Premises in the Midtown Manhattan area, to determine
the Fair Market Rent. Fair Market Rent shall mean the monthly amount that a
willing, new tenant would pay and a willing landlord would accept at arm’s
length for space in a comparable building, with comparable improvements, in a
comparable location, based upon highest and best use and giving appropriate
consideration to monthly rental rates per rentable square foot, the presence or
absence of rent escalation clauses such as operating expense and tax
pass-throughs, size and location of premises being leased and other generally
applicable terms and conditions of tenancy. If the two (2) appraisers are
unable to agree on the Fair Market Rent for the Renewal Term within fifteen
(15) days, they shall select a third appraiser meeting the qualifications
stated in this Section within five (5) days after the last day the two (2)
appraisers are given to set the Fair Market Rent for the Renewal Term and shall
each deliver to the third appraiser within such five (5) day period such
appraiser’s written determination of the Fair Market Rent. The third appraiser,
however selected, shall be a person who has not previously acted in any
capacity for either party. Within ten (10) days after the selection of the
third appraiser, the third appraiser shall select one of the two appraisals
submitted by the first two appraisers as being closest to the Fair Market Rent
for the Renewal Term and such appraised amount shall be the Fair Market Rent
for the Renewal Term. Each party shall be responsible for the costs, charges
and fees of the appraiser appointed by that party plus one-half of the cost of
the third appraiser.

 

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

 

46

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  HEARST
  COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ronald
  Doerfler

  	
   

  
	
   

  	
   

  	
  Sr. Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  HEARST-ARGYLE
  TELEVISION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Harry T. Hawks

  	
   

  
	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  

 

47

 

EXHIBIT A

 

Description

 

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

 

Block 1047, Lots 1601 and
1602 on the tax map of the City of New York.

 

A-1

 

EXHIBIT B

 

Floor Plan

 

 

(On
file with the Company)

 

B-1

 

EXHIBIT C

 

 

(On
file with the Company)

 

C-1

 

EXHIBIT D

 

Rules and Regulations

 

1.             The rights of tenants in the entrances, corridors and
elevators of the Building are limited to ingress to and egress from the tenants’
premises for the tenants and their employees, licensees and invitees, and no
tenant shall use, or permit the use of, the entrances, corridors, or elevators
for any other purpose. No tenant shall invite to the tenant’s premises, or
permit the visit of, persons in such numbers or under such conditions as to
interfere with the use and enjoyment of any of the entrances, corridors,
elevators and other facilities of the Building by other tenants. Except as
provided to the contrary in Section 1.02 of this Lease, fire exits and
stairways are for emergency use only, and they shall not be used for any other
purpose by the tenants, their employees, licensees or invitees. No tenant shall
encumber or obstruct, or permit the encumbrance or obstruction of any of the
sidewalks, entrances, corridors, elevators, fire exits or stairways of the
Building. The Landlord reserves the right to control and operate the public
portions of the Building and the public facilities, as well as facilities
furnished for the common use of the tenants, in such manner as it deems best
for the benefit of the tenants generally.

 

2.             The Landlord may refuse admission to the Building
outside of ordinary business hours to any person not known to the watchman in
charge or not having a pass issued by the Landlord or the tenant whose premises
are to be entered or not otherwise properly identified, and may require all
persons admitted to or leaving the Building outside of ordinary business hours
to register. Any person whose presence in the Building at any time shall, in
the judgment of the Landlord, be prejudicial to the safety, character,
reputation and interests of the Building or of its tenants may be denied access
to the Building or may be ejected therefrom. In case of invasion, riot, public
excitement or other commotion, the Landlord may prevent all access to the
Building during the continuance of the same, by closing the doors or otherwise,
for the safety of the tenants and protection of property in the Building. The
Landlord may require any person leaving the Building with any package or other
object to exhibit a pass from the tenant from whose premises the package or
object is being removed, but the establishment and enforcement of such
requirement shall not impose any responsibility on the Landlord for the
protection of any tenant against the removal of property from the premises of
the tenant. The Landlord shall, in no way, be liable to any tenant for damages
or loss arising from the admission, exclusion or ejection of any person to or
from the tenant’s premises or the Building under the provisions of this rule. Canvassing,
soliciting or peddling in the Building is prohibited and every tenant shall
co-operate to prevent the same.

 

3.             No tenant shall obtain or accept for use in its premises
barbering, boot blacking, floor polishing, or other similar services or food or
beverage service (other than reasonably customary deliveries of meals from
outside vendors) from any persons not authorized by the Landlord in writing to
furnish such services, provided that the charges for such services by persons
authorized by the Landlord are not excessive. Such services shall be furnished
only at such hours, in such places within the tenant’s premises and under such
reasonable regulations as may be fixed by the Landlord.

 

4.             No lettering, sign, advertisement, notice or object
shall be displayed in or on the windows or doors, or on the outside of any
tenant’s premises, or at any point inside any tenant’s premises where the same
might be visible outside of such premises, except that the name of the tenant
may be displayed on the entrance door of the tenant’s premises, and in the
elevator lobbies of the floors which are occupied entirely by any tenant,
subject to the approval of the Landlord as to the size, color and style of such
display, such approval not to be unreasonably withheld or delayed.

 

D-2

 

5.             No awnings or other projections over or around the
windows shall be installed by any tenant, and only such window blinds as are
supplied or permitted by the Landlord shall be used in a tenant’s premises. Linoleum,
tile or other floor covering shall be laid in a tenant’s premises only in a
manner approved by the Landlord.

 

6.             The Landlord shall have the right to reasonably
prescribe the weight and position of safes and other objects of excessive
weight, and no safe or other object whose weight exceeds the lawful load for
the area upon which it would stand shall be brought into or kept upon a tenant’s
premises. If, in the reasonable judgment of the Landlord, it is necessary to
distribute the concentrated weight of any heavy object, the work involved in
such distribution shall be done at the expense of Tenant and in such manner as
the Landlord shall reasonably determine. The moving of safes and other heavy
objects shall take place only outside of ordinary business hours upon previous
notice to the Landlord, and the persons employed to move the same in and out of
the Building shall be reasonably acceptable to the Landlord and, if so required
by law, shall hold a Master Rigger’s license. Freight, furniture, business
equipment, merchandise and bulky matter of any description shall be delivered
to and removed from the premises only in the freight elevators and through the
service entrances and corridors, and only during hours and in a manner approved
by the Landlord, which approval will not be unreasonably withheld or delayed.
Arrangements will be made by the Landlord with any tenant for moving large
quantities of furniture and equipment into or out of the building.

 

7.             No machines or mechanical equipment of any kind
installed or operated in any tenant’s premises shall be placed or operated as
to disturb other tenants but machines and mechanical equipment which may be
permitted to be installed and used in a tenant’s premises shall be so equipped,
installed and maintained by such tenant as to prevent any disturbing noise,
vibration or electrical or other interference from being transmitted from such
premises to any other area of the Building.

 

8.             No noise, including the playing of any musical
instruments, radio or television, which, in the judgment of the Landlord, might
disturb other tenants in the Building, shall be made or permitted by any
tenant, and no cooking shall be done in the tenant’s premises, except as
expressly approved by the Landlord. Notwithstanding the foregoing, Landlord
acknowledges that Tenant is in the television business, and Tenant shall be
permitted to have televisions and radios in the Demised Premises. Nothing shall
be done or permitted in any tenant’s premises, and nothing shall be brought
into or kept in any tenant’s premises, which would impair or interfere with any
of the Building services or the proper and economic heating, cleaning or other
servicing of the Building or the premises, or the use or enjoyment by any other
tenant of any other premises, nor shall there be installed by any tenant any
ventilating, air conditioning, electrical or other equipment of any kind which,
in the reasonable judgment of the Landlord, might cause any such impairment or
interference. No dangerous, inflammable, combustible or explosive object or
material shall be brought into the Building by any tenant or with the
permission of any tenant. Any cuspidors or similar containers or receptacles
used in any tenant’s premises shall be cared for and cleaned by and at the
expense of the tenant.

 

9.             No acids, vapors or other materials shall be discharged
or permitted to be discharged into the waste lines, vents or flues of the
Building which may damage them. The water and wash closets and other plumbing
fixtures in or serving any tenant’s premises shall not be used for any purpose
other than the purposes for which they were designed or constructed, and no
sweepings, rubbish, rags, acids or other foreign substances shall be deposited
therein.

 

10.           No additional locks or bolts of any kind shall be placed
upon any of the doors or windows in any tenant’s premises and no lock on any
door therein shall be changed or altered in any respect. Additional keys for a 

 

D-3

 

tenant’s
premises and toilet rooms shall be procured only from the Landlord, which may
make a reasonable charge therefor. Upon the termination of a tenant’s lease,
all keys of the tenant’s premises and toilet rooms shall be delivered to the
Landlord.

 

11.           All entrance doors in each tenant’s premises shall be left
locked and all windows shall be left closed by the tenant when the tenant’s
premises are not in use. Entrance doors shall not be left open at any time.

 

12.           Hand trucks not equipped with rubber tires and side guards
shall not be used within the Building.

 

13.           All windows in each tenant’s premises shall be kept closed
and all blinds therein, if any, above the ground floor shall be lowered when
and as reasonably required because of the position of the sun, during the
operation of the Building air-conditioning system to cool or ventilate the tenant’s
premises.

 

14.           The Landlord reserves the right to rescind, alter or waive
any rule or regulation at any time prescribed for the Building when, in its
judgment, it deems it reasonably necessary, desirable or proper for its best
interest and for the best interests of the tenants, and no alteration or waiver
of any rule or regulation in favor of one tenant shall operate as an alteration
or waiver in favor of any other tenant. The Landlord shall not be responsible
to any tenant for the non-observance or violation by any other tenant of any of
the rules and regulations at any time prescribed for the Building.

 

D-4

 

EXHIBIT E

 

Definitions

 

(a)           The term mortgage shall include an indenture of
mortgage and deed of trust to a trustee to secure an issue of bonds, and the
term mortgagee shall include such a trustee.

 

(b)           The terms include, including and such as
shall each be construed as if followed by the phrase “without being limited to”.

 

(c)           The term obligations of this lease, and words of
like import, shall mean the covenants to pay rent and additional rent under
this lease and all of the other covenants and conditions contained in this
lease. Any provision in this lease that one party or the other or both shall do
or not do or shall cause or permit or not cause or permit a particular act,
condition, or circumstance shall be deemed to mean that such party so covenants
or both parties so covenant, as the case may be.

 

(d)           The term Tenant’s obligations hereunder, and words
of like import, and the term Landlord’s obligations hereunder, and words
of like import, shall mean the obligations of this lease which are to be
performed or observed by Tenant, or by Landlord, as the case may be. Reference
to performance of either party’s obligations under this lease shall be
construed as “performance and observance”.

 

(e)           Reference to Tenant being or not being in default
hereunder, or words of like import, shall mean that Tenant is in default in
the performance of one or more of Tenant’s obligations hereunder after the
giving of any required notice and expiration of any applicable grace or cure
period, or that Tenant is not in default in the performance of any of Tenant’s
obligations hereunder after the giving of any required notice and expiration of
any applicable grace or cure period, or that a condition of the character
described in Section 25.01 has occurred and continues or has not occurred or
does not continue, as the case may be.

 

(f)            References to Landlord as having no liability to
Tenant or being without liability to Tenant, shall mean that Tenant
is not entitled to terminate this lease, or to claim actual or constructive
eviction, partial or total, or to receive any abatement or diminution of rent,
or to be relieved in any manner of any of its other obligations hereunder, or
to be compensated for loss or injury suffered or to enforce any other kind of
liability whatsoever against Landlord under or with respect to this lease or
with respect to Tenant’s use or occupancy of the Demised Premises.

 

(g)           The term laws and/or requirements of public authorities
and words of like import shall mean laws and ordinances of any or all of the
Federal, state, city, county and borough governments and rules, regulations,
orders and/or directives of any or all departments, subdivisions, bureaus,
agencies or offices thereof, or of any other governmental, public or
quasi-public authorities, having jurisdiction in the premises, and/or the
direction of any public officer pursuant to law.

 

(h)           The term requirements of insurance bodies and words
of like import shall mean rules, regulations, orders and other requirements of
the New York Board of Fire Underwriters and/or the New York Fire Insurance
Rating Organization and/or any other similar body performing the same or
similar functions and having jurisdiction or cognizance of the Building and/or
the Demised Premises.

 

(i)            The term repair shall be deemed to include
restoration and 

 

 

replacement
as may be necessary to achieve and/or maintain good working order and
condition.

 

(j)            Reference to termination of this lease includes
expiration or earlier termination of the term of this lease or cancellation of
this lease pursuant to any of the provisions of this lease or to law. Upon a
termination of this lease, the term and estate granted by this lease shall end
at noon of the date of termination as if such date were the date of expiration
of the term of this lease and neither party shall have any further obligation
or liability to the other after such termination (i) except as shall be
expressly provided for in this lease, or (ii) except for such obligation as by
its nature or under the circumstances can only be, or by the provisions of this
lease, may be, performed after such termination, and, in any event, unless
expressly otherwise provided in this lease, any liability for a payment which
shall have accrued to or with respect to any period ending at the time of
termination shall survive the termination of this lease.

 

(k)           The term in full force and effect when herein used
in reference to this lease as a condition to the existence or exercise of a
right on the part of Tenant shall be construed in each instance as including
the further condition that at the time in question no default on the part of
Tenant exists, and no event has occurred which has continued to exist for such
period of time (after the notice, if any, required by this lease), as would
entitle Landlord to terminate this lease or to dispossess Tenant.

 

(l)            The term Tenant shall mean Tenant herein named or
any assignee or other successor in interest (immediate or remote) of Tenant
herein named, while such Tenant or such assignee or other successor in
interest, as the case may be, is in possession of the Demised Premises as owner
of the Tenant’s estate and interest granted by this lease and also, if Tenant
is not an individual or a corporation, all of the persons, firms and
corporations then comprising Tenant.

 

(m)          Words and phrases used in the singular shall be deemed to
include the plural and vice versa, and nouns and pronouns used in any
particular gender shall be deemed to include any other gender.

 

(n)           The rule of ejusdem generis shall not be applicable
to limit a general statement following or referable to an enumeration of
specific matters to matters similar to the matters specifically mentioned.

 

(o)           All references in this lease to numbered Articles,
numbered Sections and lettered Exhibits are references to Articles and Sections
of this lease, and Exhibits annexed to (and thereby made part of) this lease,
as the case may be, unless expressly otherwise designated in the context.

 

E-3

 

EXHIBIT F

 

Cleaning Specifications

 

l. General.

 

All linoleum, rubber, asphalt tile and other
similar types of flooring (that may be waxed) to be swept nightly, using
approved dust-check type of mop.

 

All carpeting and rugs to be carpet swept
nightly and vacuum cleaned once per week.

 

Hand dust and wipe clean all furniture,
fixtures and window sills nightly.

 

Empty and clean all waste receptacles
nightly.

 

Empty and clean all ash trays and screen all
sand urns nightly.

 

Dust interior of all waste disposal cans and
baskets nightly.

 

Wash clean all water fountains and coolers
nightly.

 

Hand dust all door and other ventilating louvers
within reach, as necessary.

 

Dust all telephones as necessary.

 

Dust chair rails, trim, baseboards nightly.

 

Sweep all private stairway structures
nightly.

 

2.  Lavatories in the Core

 

Sweep and wash all lavatory floors nightly
using proper disinfectants. Wash and polish all mirrors, powder shelves, bright
work and enameled surfaces in all lavatories nightly.

 

Scour, wash and disinfect all basins, bowls
and urinals throughout all lavatories, nightly.

 

Wash all toilet seats, nightly.

 

Empty paper towel receptacles and transport
wastepaper to designated area in basements, nightly.

 

Fill toilet tissue and towel holders nightly.
(Towels and soap to be furnished by Tenant).

 

Empty sanitary disposal receptacles, nightly.

 

Thoroughly wash and polish all wall tile and
stall surfaces weekly.

 

3.  High Dusting

 

Dust all air conditioning grills, venetian
blinds, frames, charts, graphs and similar wall hangings and vertical surfaces
not reached in nightly cleaning, quarterly.

 

Cleaning of light fixtures shall be at the
request of and for account of Tenant.

 

4.  Glass

 

Exterior windows to be cleaned inside and
outside approximately once every 10 

 

 

weeks, weather permitting.

 

5.  Conditions

 

As herein used “nightly” means five nights a
week, Monday through Friday, during regular cleaning hours (between 6:00 P.M.
and 6:00 A.M.) and excludes legal and union holidays.

 

Tenant will allow the electricity, power and
hot and cold water in the Demised Premises to be used for cleaning during the
regular cleaning hours.Exhibit 4.1
  
 

 

 

DUKE
REALTY  LIMITED  PARTNERSHIP

ISSUER

TO

J.P. MORGAN
TRUST COMPANY, NATIONAL ASSOCIATION

TRUSTEE

TWENTIETH
SUPPLEMENTAL INDENTURE

DATED AS OF
JULY 24, 2006

SUPPLEMENT TO INDENTURE,

DATED AS OF SEPTEMBER 19, 1995, BETWEEN

DUKE REALTY LIMITED PARTNERSHIP AND

J.P. MORGAN TRUST COMPANY, NATIONAL
ASSOCIATION

(successor in interest to The First National Bank of Chicago)

   
 

 

TWENTIETH SUPPLEMENTAL INDENTURE,
dated as of July 24, 2006 (this “Twentieth Supplemental Indenture”),
between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership (the “Issuer”),
having its principal offices at 600 East 96th Street, Suite
100, Indianapolis, IN  46240 and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
(successor in interest to The First National Bank of Chicago), a national
banking association organized under the laws of the United States of America,
as trustee (the “Trustee”), having its Corporate Trust Office at 227 W.
Monroe Street, Suite 2600, Chicago, Illinois 
60606.

RECITALS

WHEREAS, the Issuer executed and delivered its Indenture
(the “Original Indenture”), dated as of September 19, 1995, to the Trustee to issue from time to time for
its lawful purposes debt securities evidencing its unsecured and unsubordinated
indebtedness;

WHEREAS, Section 902 of the Original Indenture provides that the Issuer and the
Trustee, to the extent authorized thereby, may enter into a supplemental
indenture for the purpose of changing any of the provisions of the Original
Indenture with the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities affected by such supplemental
indenture;

WHEREAS, the Issuer intends by
this Twentieth Supplemental Indenture to amend the Original Indenture, as it
relates to the Amended Securities (as defined below),  to
modify certain financial covenants contained in Sections 1004 and 1005 of the
Original Indenture (the “Proposed Amendments”) to make them consistent
with corresponding terms included in each series of notes issued by the Issuer
under the Original Indenture on or after May 22, 2003;

WHEREAS, the Board of Directors
of Duke Realty Corporation, the general partner of the Issuer, acting through
authority delegated to certain of its executive officers, has approved the
Proposed Amendments; and

WHEREAS, the Issuer hereby certifies to the Trustee that
the holders of not less than a majority in aggregate principal amount of
the 6.75% Notes due 2008, the 6.8% Notes due 2009, the 7.75% Notes due 2009,
the 5.25% Notes due 2010, the 6.95% Notes due 2011, the 5.875% Notes due 2012,
the 5.45% Notes due 2012 and the 7.25% Notes due 2028 (collectively, the “Amended
Securities”), voting together as one class, have approved the Proposed Amendments and consented to the execution
and delivery of the Twentieth Supplemental Indenture, and all other actions
required to be taken under the Original Indenture with respect to this Twentieth
Supplemental Indenture have been taken.

NOW, THEREFORE, IT IS AGREED:

ARTICLE ONE

Definitions

SECTION 1.01  Definitions. 
Capitalized terms used in this Twentieth Supplemental Indenture and not
otherwise defined herein shall have the meanings ascribed to them in the 

 

Original Indenture.

ARTICLE
TWO

Amendments

SECTION 2.01.  The following section will replace Sections
1004(a) and (b) of the Original Indenture in its entirety:

Section 1004.  Limitations on Incurrence of Debt.  (a)  The
Issuer will not, and will not permit any Subsidiary to, incur any Debt, other
than intercompany Debt (representing Debt to which the only parties are the
General Partner, the Issuer and/or any of their Subsidiaries (but only so long
as such Debt is held solely by any of the General Partner, the Issuer and any
Subsidiary) that is subordinate in right of payment to the Securities) if,
immediately after giving effect to the incurrence of such additional Debt, the
aggregate principal amount of all outstanding Debt of the Issuer and its
Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 60% of the sum of (i) the Total Assets as of the end of the
calendar quarter covered in the Issuer’s Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed with the
Commission (or, if such filing is not permitted under the Exchange Act, with
the Trustee) prior to the incurrence of such additional Debt and (ii) any
increase in the Total Assets since the end of such quarter including, without
limitation, any increase in Total Assets resulting from the incurrence of such
additional Debt (such increase together with the Total Assets being referred to
as the “Adjusted Total Assets”);

(b)           In
addition to the limitation set forth in subsection (a) of this Section 1004,
the Issuer will not, and will not permit any Subsidiary to, incur any Debt if,
for the period consisting of the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Debt is to be incurred, the
ratio of Consolidated Income Available for Debt Service to the Annual Service
Charge shall have been less than 1.5 to 1, on a pro forma basis after giving
effect to the incurrence of such Debt and to the application of the proceeds therefrom,
and calculated on the assumption that (i) such Debt and any other Debt incurred
by the Issuer or its Subsidiaries since the first day of such four-quarter
period and the application of the proceeds therefrom, including to refinance
other Debt, had occurred at the beginning of such period, (ii) the repayment or
retirement of any other Debt by the Issuer or its Subsidiaries since the first
day of such four-quarter period had been incurred, repaid or retained at the
beginning of such period (except that, in making such computation, the amount
of Debt under any revolving credit facility shall be computed based upon the
average daily balance of such Debt during such period), (iii) any income earned
as a result of any increase in Adjusted Total Assets since the end of such four
quarter period had been earned, on an annualized basis, for such period, and
(iv) in the case of any acquisition or disposition by the Issuer or any
Subsidiary of any asset or group of assets since the first day of such
four-quarter period, including, without limitation, by merger, stock purchase
or sale, or asset purchase or sale, such acquisition or disposition or any
related repayment of Debt had occurred as of the first day of such period with
the appropriate adjustments with respect to such acquisition or disposition
being included in such pro forma calculation.

 

SECTION
2.02.  The following
section will replace Section 1005 of the Original Indenture in its entirety:

Section 1005.  Maintenance of Total Unencumbered Assets.  The Issuer will maintain Total Unencumbered
Assets of not less than 150% of the aggregate outstanding principal amount of
the Unsecured Debt of the Issuer.

ARTICLE
THREE

Trustee

SECTION 3.01.  Trustee.  The Trustee
shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this Twentieth Supplemental Indenture or the due
execution thereof by the Issuer.  The
recitals of fact contained herein shall be taken as the statements solely of
the Issuer, and the Trustee assumes no responsibility for the correctness
thereof.  All of the provisions contained
in the Indenture in respect of the rights, privileges, immunities, powers, and
duties of the Trustee shall be applicable in respect of the Twentieth
Supplemental Indenture as fully and with like force and effect as though fully
set forth in full herein.

ARTICLE FOUR

Miscellaneous Provisions

SECTION 4.01.  Ratification of Original Indenture.  This Twentieth Supplemental Indenture is
executed and shall be construed as an indenture supplemental to the Original
Indenture, and as supplemented and modified hereby, the Original Indenture is
in all respects ratified and confirmed, and the Original Indenture and this
Twentieth Supplemental Indenture shall be read, taken and construed as one and
the same instrument.  Notwithstanding
anything herein to the contrary, to the extent that any provision of this
Twentieth Supplemental Indenture is inconsistent with any provision of the
Original Indenture, the terms of this Twentieth Supplemental Indenture shall
govern and apply to the Amended Securities.

SECTION 4.02.  Effect of Headings.  The
Article and Section headings herein are for convenience only and shall not
affect the construction hereof.

SECTION 4.03.  Successors and Assigns.  All
covenants and agreements in this Twentieth Supplemental Indenture by the Issuer
shall bind its successors and assigns, whether or not so expressed.

SECTION 4.04.  Separability Clause.  In case
any one or more of the provisions contained in this Twentieth Supplemental
Indenture shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

SECTION 4.05.  Governing Law.  This
Twentieth Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.  This Twentieth Supplemental Indenture is
subject to the provisions of the Trust Indenture Act of 1939, as amended, that
are required to be part of this Twentieth Supplemental Indenture and shall, to
the extent applicable, be governed by such provisions.

 

SECTION 4.06.  Counterparts.  This
Twentieth Supplemental Indenture may be executed in any number of counterparts,
by facsimile or otherwise, and each of such counterparts shall for all purposes
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.

[Signatures on following page(s).]

 

[Signature page to Twentieth Supplemental Indenture]

IN WITNESS
WHEREOF, the parties
hereto have caused this Twentieth Supplemental Indenture to be duly executed, and the Issuer has caused its corporate seal to be hereunto affixed and attested, all as
of the date first above written.

	
  

  	
   

  	
  DUKE REALTY LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  DUKE REALTY CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Matthew A Cohoat

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Matthew A. Cohoat

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice President &

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  

 

Attest:

	
  /s/ Howard L. Feinsand

  	
   

  	
   

  
	
  Name: 

  	
  Howard L.
  Feinsand

  	
   

  	
   

  
	
  Title:

  	
  Executive Vice
  President,

  	
   

  	
   

  
	
   

  	
  General Counsel
  & Secretary

  	
   

  	
   

  

 

	
  

  	
   

  	
  J.P. MORGAN TRUST COMPANY,
  NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Janice Ott Rotunno

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Janice Ott Rotunno

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

Attest:

	
  /s/ Christopher Holly

  	
   

  	
   

  
	
  Name: 

  	
  Christopher Holly

  	
   

  	
   

  
	
  Title:

  	
  Assistant Secretary

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