Document:

Exhibit
10.7

 

AGREEMENT OF LEASE

 

BETWEEN

 

TRIBORO COACH HOLDING
CORP., Landlord

 

AND

 

THE CITY OF NEW YORK,
Tenant

 

 

PREMISES

 

85-01 24th Avenue

East Elmhurst, New York

 

Section 7, Block 1080,
Lot 1

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  DEMISED PREMISES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  TERM

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  RENT

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  USE OF DEMISED PREMISES

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  IMPOSITIONS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  [INTENTIONALLY OMITTED]

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  REPAIRS AND MAINTENANCE OF THE DEMISED PREMISES

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  TENANT’S ALTERATIONS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  UTILITIES

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  PRE EXISTING ENVIRONMENTAL CONDITIONS;

  ENVIRONMENTAL COMPLIANCE DURING PERIOD OF TENANCY;

  REQUIREMENTS OF LAW

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  INSURANCE

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  DAMAGE OR DESTRUCTION

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  ASSIGNMENT AND SUBLETTING

  	
   

  	
  29

  

 

 

	
  ARTICLE 14

  INDEMNIFICATION

  	
   

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  CONDEMNATION

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  RIGHT TO INSPECT

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  [INTENTIONALLY OMITTED]

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  DEFAULT PROVISIONS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19

  ATTORNEYS’ FEES

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20

  WAIVER OF REDEMPTION; COUNTERCLAIM; TRIAL BY JURY

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21

  NO WAIVER

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22

  END OF TERM

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23

  BROKER

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24

  QUIET ENJOYMENT

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25

  NON-LIABILITY OF LANDLORD

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 26

  APPLICABLE LAW AND CONSTRUCTION

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE 27

  BINDING EFFECT OF LEASE

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 28

  NOTICES

  	
   

  	
  50

  

 

 ii
 

 

 

	
  ARTICLE 29

  FEE MORTGAGES

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30

  ESTOPPEL CERTIFICATES

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 31

  REPRESENTATIONS

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 32

  MISCELLANEOUS

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE 33

  ROOF RIGHTS; AIR RIGHTS

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE 34

  INVESTIGATIONS

  	
   

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE 35

  SIGNIFICANT RELATED PARTY TRANSACTIONS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  List of
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule A -
  Description of the Real Property

  	
   

  	
   

  

 

 iii

 

AGREEMENT OF LEASE

AGREEMENT
OF LEASE (the “Lease”) made as of the             
day of                  ,
2005 between TRIBORO COACH HOLDING CORP., a corporation organized and existing
under the laws of the State of New York, with offices located at 444 Merrick
Road, Suite 370, Lynbrook, New York 11563, Attention: Jerome Cooper (the “Landlord”),
and THE CITY OF NEW YORK, a municipal corporation of the State of New York,
acting through the Department of Citywide Administrative Services, with offices
located at One Centre Street, New York, New York 10007 (the “Tenant”).

ARTICLE 1

DEMISED PREMISES

Section
1.01 - Description of Demised Premises. In consideration of
and subject to the terms, covenants, agreements, provisions, conditions and
limitations set forth in this Lease, Landlord has agreed to demise and lease
unto Tenant and Tenant has agreed to hire and take from Landlord that certain
parcel of real property known as 85-01 24th Avenue, in East
Elmhurst, County of Queens and State of New York, as more particularly
described on Schedule A annexed hereto and made a part hereof (the “Land”),
together with all buildings and improvements erected or to be erected thereon
(the “Improvements”), and together with all of Landlord’s right, title
and interest in all easements, rights and other matters appurtenant to the Land
or the Improvements and in and to any land lying in the bed of any roads
adjacent to the Land, except that rights to use the roof, air rights and
transferable development rights are specifically excluded and shall not be
demised or leased to Tenant under this Lease subject to the provisions of
Article 33 hereof (such Land, Improvements, easements and rights being
hereinafter collectively referred to as the “Demised Premises”).

Section 1.02 –
Condition of Demised Premises. Tenant acknowledges and agrees
that it shall hire and take the Demised Premises from Landlord in its present
state of title, subject to all existing liens, charges, encumbrances and any
other matters affecting title. Except as specifically set forth in this Lease,
Tenant agrees to accept the Demised Premises “as is,” in the existing condition
and state of repair as of the date hereof and without recourse to Landlord. Tenant
further agrees that no representations, statements or warranties, express or
implied, have been made by or on behalf of Landlord and Tenant has not relied
on any representations, statements or warranties, express or implied, in
respect of the Demised Premises or in respect of the condition thereof or the
present or future use or occupation that may be made thereof, the zoning or
other Requirements (as hereinafter defined), transferable development rights,
encumbrances thereon, appurtenances, or title thereto (except as may be
expressly set forth in this Lease). Without limiting the generality of the
foregoing, Tenant has not relied on any representations or warranties other
than as expressly set forth herein as to (1) the current or future real estate
tax liability, assessment or valuation of the Demised Premises, (2) the
potential qualification of the Demised Premises for any and all

 4
 

 

benefits conferred
by federal, state or municipal laws, whether for subsidies, special real estate
tax treatment, insurance, mortgages, or any other benefits, whether similar or
dissimilar to those enumerated, (3) the compliance of the Demised Premises, in
its current or any future state, with applicable zoning ordinances and the
ability to obtain a change in the zoning or a variance with respect to the
Demised Premises’ non-compliance, if any, with said zoning ordinances, (4) the
availability of any financing for the purchase, alteration or operation of the
Demised Premises from any source, (5) the current or future use of the Demised
Premises, including, but not limited to, the Demised Premises’ use for
residential or commercial purposes, (6) the present or future structural and
physical condition of any building, (7) the presence or absence of any
Requirements and any violations thereof, and (8) the presence or absence of any
Hazardous Materials (as hereinafter defined), and the compliance or
non-compliance with any Environmental Laws (as hereinafter defined). Landlord
shall in no event whatsoever be liable for any latent or patent defects in the
Demised Premises. Requirements shall mean any and all present and future laws,
rules, orders, ordinances, regulations, statutes and requirements of any
Governmental Authority (as hereinafter defined) relating in any way to the
Demised Premises.

ARTICLE 2

TERM

Section
2.01 – Term. This Lease shall be for a term (the “Term”)
of twenty-one (21) years, which shall commence on the date (the “Commencement
Date”) of the closing under that certain Asset Purchase Agreement between
Landlord or its parent and Tenant of even date and shall end at midnight on the
day which is the twenty-first (21st)
anniversary of the Commencement Date (the “Expiration Date”), unless
such Term shall sooner cease or expire as hereinafter provided. This Lease
shall be of no force and effect if the closing under that certain Asset
Purchase Agreement between Landlord or its parent and Tenant of even date does
not occur.

Section 2.02 –
Renewal Option. Tenant shall have the right and option (“Renewal
Option”) to renew the Term of this Lease for two (2) successive periods of
fourteen (14) years each (each, a “Renewal Term”). Tenant shall give
notice to Landlord of Tenant’s exercising of such option (each a “Renewal
Notice”) not later than twelve (12) months prior to the then effective
Expiration Date, TIME BEING OF THE ESSENCE
with respect to giving of the Renewal Notice by Tenant to Landlord; provided,
however, that the Renewal Notice shall be validly and effectively given only
if, on the date that Tenant shall exercise its Renewal Option (the “Exercise
Date”) this Lease shall not have been previously terminated or cancelled
and there shall be no uncured Event of Default. If Tenant shall validly
exercise its Renewal Option in accordance with the provisions of this Section
2.02, this Lease shall be deemed to be extended pursuant to the Renewal Notice,
subject to the provisions of this Lease. Notwithstanding anything to the
contrary contained in this Section 2.02, if on the commencement of a Renewal
Term there shall be an uncured Event of Default, then Landlord, in Landlord’s
sole and absolute discretion, may elect, by written notice to

 5
 

 

Tenant, to void
Tenant’s exercise of the Renewal Option, in which case Tenant’s exercise of the
Renewal Option shall be of no force or effect, and the Term shall end on the
Expiration Date of this Lease, unless sooner cancelled or terminated pursuant
to the provisions of this Lease or by law. The applicable Renewal Term shall
commence on the day following the then effective Expiration Date and shall end
at midnight on the date that is fourteen (14) Lease Years thereafter. All of
the terms, covenants and conditions of this Lease shall continue in full force
and effect during the applicable Renewal Term, except that during the first
Renewal Term, Tenant shall have an option to extend the Term of this Lease for one
(1) Renewal Term pursuant to this Article, and during the last Renewal Term,
Tenant shall have no further right to extend the Term of this Lease.

ARTICLE 3

RENT

Section
3.01 - Fixed Rent.

(a)           Tenant covenants and agrees, as
conditions to this Lease, to keep and abide by all of the terms, covenants and
conditions of this Lease on the part of Tenant to be performed and to pay to
Landlord a fixed annual rent (“Fixed Rent”) during the Term as follows:

	
  Lease Year

  	
   

  	
  Fixed Rent

  	
   

  	
  Monthly Installments

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  2,585,000.00

  	
   

  	
  $

  	
  215,416.67

  	
   

  
	
  6-10

  	
   

  	
  2,843,500.00

  	
   

  	
  236,958.33

  	
   

  
	
  11-15

  	
   

  	
  3,127,850.00

  	
   

  	
  260,654.17

  	
   

  
	
  16-20

  	
   

  	
  3,440,635.00

  	
   

  	
  286,719.58

  	
   

  
	
  21

  	
   

  	
  3,784,699.00

  	
   

  	
  315,391.58

  	
   

  
								

 

(b)           Tenant covenants and agrees, as
conditions to this Lease, to keep and abide by all of the terms, covenants and
conditions of this Lease on the part of Tenant to be performed and to pay to
Landlord a fixed annual rent (“Fixed Rent”) during the first Renewal
Term, if exercised, as follows:

 

	
  Lease Year

  	
   

  	
  Fixed Rent

  	
   

  	
  Monthly Installments

  	
   

  
	
  1-4

  	
   

  	
  $

  	
  3,784,699.00

  	
   

  	
  $

  	
  315,391.58

  	
   

  
	
  5-9

  	
   

  	
  4,163,168.00

  	
   

  	
  346,930.67

  	
   

  
	
  10-14

  	
   

  	
  4,579,485.00

  	
   

  	
  381,623.75

  	
   

  
								

 

(c)           Tenant covenants and agrees, as
conditions to this Lease, to keep and abide by all of the terms, covenants and
conditions of this Lease on the part of Tenant to be performed and to pay to
Landlord a fixed annual rent (“Fixed Rent”) during the

 6
 

 

second Renewal
Term, if exercised, as follows:

	
  Lease Year

  	
   

  	
  Fixed Rent

  	
   

  	
  Monthly Installments

  	
   

  
	
  1-5

  	
   

  	
  $

  	
  5,037,434.00

  	
   

  	
  $

  	
  419,786.17

  	
   

  
	
  6-10

  	
   

  	
  5,541,177.00

  	
   

  	
  461,764.75

  	
   

  
	
  11-14

  	
   

  	
  6,095,295.00

  	
   

  	
  507,941.25

  	
   

  
								

 

(d)           Tenant shall pay Fixed Rent upon the
Commencement Date for the remainder of the month in which the Commencement Date
occurs and the subsequent month.

(e)           For purposes of this Lease, the term “Lease
Year” shall mean for (i) the first (1st) Lease Year, the one (1) year period
commencing on the Commencement Date plus, if the Commencement Date is not the
first day of a calendar month, the number of days between the Commencement Date
and the end of the month in which the Commencement Date occurs, and (ii) for
each Lease Year thereafter, the one (1) year period commencing on the
expiration of the preceding Lease Year.

Section
3.02 – Manner of Payment. Tenant covenants and agrees to pay
Landlord the Fixed Rent at the principal office of Landlord, or at such place
as Landlord shall from time to time direct in writing without any abatement,
reduction, setoff, counterclaim or deduction for any reason whatsoever. The
Fixed Rent shall be paid in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
private and public debts. If requested by Landlord, Tenant shall pay Fixed Rent
by wire transfer in accordance with wire instructions to be provided by
Landlord. For Tenant’s convenience, Fixed Rent shall be payable by Tenant in
equal monthly installments in arrears on the last day of each calendar month
included in the Term. Landlord shall submit monthly invoices to Tenant no later
than the 15th day of the month for the Fixed Rent; provided,
however, that Landlord’s failure to provide such invoice shall not be deemed a
waiver and Fixed Rent shall nevertheless be due and owing on the dates set
forth herein.

Section
3.03 – Proration of Fixed Rent. For any portion of a calendar
month included at the beginning or end of the Term, Tenant shall pay 1/30th of
the then applicable monthly installment of Fixed Rent for each day of such
portion, payable in advance at the end of such portion.

Section 3.04 –
Late Payment. In any case in which any payment of Fixed Rent
due Landlord by Tenant under this Lease is not paid within five (5) days of the
day when same is due, such payment shall bear interest at the per annum rate of
seven (7%) percent over the then prevailing prime rate of interest (which, for
the purposes hereof, includes any equivalent or successor interest rate to the
prime rate, however the same may be denominated) of JPMorgan Chase Bank, or
Citibank N.A. if JPMorgan Chase Bank shall not then have an established prime
rate, or the prime rate of any major banking institution doing business in New
York City as selected by Landlord (the “Prime

 7
 

 

Rate”), if neither
of the aforementioned banks shall be in existence or have an established prime
rate (the “Default Rate”) from the date such payment was due and payable.
In any case in which any payment of Additional Rent (as hereinafter defined) or
any other sum due Landlord by Tenant under this Lease is not paid within ten
(10) days that such sum is due, such payment shall bear interest at the Default
Rate from the date such payment was due and payable. If Tenant shall reduce,
abate, setoff, counterclaim or deduct any sum from Fixed Rent or Additional
Rent payable to Landlord, the amount of such reduction, abatement, setoff,
counterclaim or deduction shall bear interest at the Default Rate from the date
such amount was reduced, abated, setoff, counterclaimed or deducted by Tenant. Tenant
agrees that the Default Rate imposed herein is fair and reasonable, complies
with all laws, regulations and statutes, and constitutes an agreement between
Landlord and Tenant as to the estimated compensation for costs and
administrative expenses incurred by Landlord due to the late payment to
Landlord by Tenant. The Default Rate shall be in addition to any other right or
remedy hereunder and shall be due and payable as Additional Rent. Tenant
further agrees that the Default Rate does not constitute a lender or
borrower/creditor relationship between Landlord and Tenant. In addition, Tenant
shall pay upon demand by Landlord any reasonable and actual attorneys’ fees,
costs and disbursements incurred by Landlord in connection with the imposition,
collection or payment of said interest, said amounts to be deemed Additional
Rent.

Section
3.05 – Additional Rent. Unless another time shall be herein
expressly provided, any additional rent, charges or sums payable by Tenant
under this Lease (collectively, “Additional Rent”) shall be due and
payable within thirty (30) days after written demand by Landlord with
supporting documentation, and Landlord shall have the same remedies for failure
to pay the Additional Rent as for a non-payment of Fixed Rent. Unless otherwise
specifically instructed by Landlord, all Additional Rent shall be paid in the
same currency and, at the same place as is the Fixed Rent required to be paid
hereunder, or by wire transfer if requested by Landlord, and shall be paid
without any abatement, reduction, setoff, counterclaim or deduction for any
reason whatsoever. Tenant shall timely pay all items of Additional Rent. In the
event Tenant has any reasonable objections or inquiries as to the supporting
documentation, Tenant may withhold payment as to the disputed amount. In the
event Landlord elects not to pay the disputed amount, and it is determined that
Tenant’s objection was unfounded, Tenant will be liable for all interest and
penalties arising from such non-payment by Tenant, however, Tenant will not be
responsible for late payment amounts under Section 3.04. In the event Landlord
elects to pay such disputed amount, and it is determined that Tenant’s
objection was unfounded, Tenant will promptly reimburse Landlord for the amount
paid by Landlord, plus late charges under Section 3.04 as to such amounts
commencing from the date of Landlord’s payment. Notwithstanding the foregoing,
any potential civil or criminal liability to Landlord shall not, in and of
itself, require Tenant to pay any disputed amounts under this Section 3.05.

Section 3.06 –
Landlord Cure Rights. If Tenant shall default in making any
payment required to be made by Tenant or in performing any obligation of Tenant
under

 8
 

 

this Lease which
shall require the expenditure of money, including, but not limited to
Impositions (as hereinafter defined), and such default shall continue for a
period of ten (10) days after written notice thereof from Landlord to Tenant,
or in the case of such a default or a contingency which cannot with due
diligence and in good faith be cured within ten (10) days, and Tenant fails to
proceed promptly and with due diligence and in good faith to cure the same and
thereafter to prosecute the curing of such default with due diligence and in
good faith (it being intended that in connection with a default that is not
susceptible of being cured with due diligence and in good faith within ten (10)
days, that the time of the Tenant within which to cure the same shall be
extended for such a period as may be necessary for the curing thereof promptly
with due diligence and in good faith), Landlord may, but shall not be obligated
to, make such payment on behalf of Tenant or expend such sum as may be
necessary to perform or fulfill such obligation. Any sums so paid by Landlord
shall be deemed Additional Rent.

Section
3.07 – Net Lease. The Fixed Rent hereinabove provided for
shall be in addition to all other payments to be made by Tenant as herein
provided. It is the purpose and intent of the parties hereto that the Fixed
Rent shall be absolutely net to Landlord, so that this Lease shall yield, net
to the Landlord, the Fixed Rent and that all costs, expenses and obligations of
every kind and nature whatsoever relating to the Demised Premises which may
arise or become due during the Term of this Lease shall be paid by Tenant and
that Landlord shall be indemnified and saved harmless by Tenant from and
against the same.

Section
3.08 – Rent Regulations. If all or any part of the Fixed Rent
or Additional Rent shall at any time become uncollectible, reduced or required
to be refunded by virtue of any Requirements (including rent control or
stabilization laws, however denominated), then for the period prescribed by
said Requirements, Tenant shall pay to Landlord the maximum amounts permitted
pursuant to said Requirements (but in no event to exceed the amounts which
would otherwise be due and payable under this Lease as if such Requirements
were not in effect), and Tenant shall execute and deliver such agreement(s) and
take such other steps as Landlord may reasonably request to permit Landlord to
collect the maximum fixed rent and additional rent which, from time-to-time
during the continuance of such legal rent restriction, may be legally
permissible (and not in excess of the amounts then reserved therefor under this
Lease). Upon the expiration or other legal termination of the applicable period
of time during which such amounts shall be uncollectible, reduced or refunded:
(a) the Fixed Rent and Additional Rent shall become and shall thereafter be
payable in accordance with the amounts reserved herein for the periods
following such expiration or termination, and (b) Tenant shall pay to Landlord
as Additional Rent, within ten (10) days after demand or such longer period as
is legally permissible if ten (10) days shall not be lawful, all uncollected,
reduced or refunded amounts that would have been payable for the above-said
period absent such Requirements.

Section 3.09 –
Survival. The provisions of this Article 3 shall survive the
expiration or earlier termination of this Lease. Landlord’s failure to bill
Tenant for Fixed

 9
 

 

Rent or Additional
Rent or any sum due under this Lease shall in no way excuse Tenant from its
obligation to pay Fixed Rent or Additional Rent or any sum due under this
Lease, or constitute a waiver of Landlord’s right to thereafter bill and
collect such Fixed Rent or Additional Rent or any sum due under this Lease from
Tenant in accordance with the terms of this Lease.

ARTICLE 4

USE OF DEMISED PREMISES

Section
4.01 – Use.

(a)           Subject to the provisions of Section 4.01(b),
Tenant (through any of its agencies) shall use the Demised Premises (i) during
the period ending April 30, 2008, for the maintenance, repair and storage of
passenger buses, administrative offices and for related purposes (the “Initial
Use”) and (ii) thereafter, for the Initial Use and for all other legal
purposes (the uses identified in this subsection (ii) are hereinafter, the “Permitted
Use”). Tenant may not use the Demised Premises for any other purposes. If
Tenant or an assignee or subtenant of Tenant shall use the Demised Premises for
other than a Permitted Use, a default shall be deemed to have occurred under
Section 18.01(b).

(b)           In no event shall the Demised
Premises be used for any of the following: (i) gambling activities; (ii)
conduct of obscene, pornographic or disreputable activities; (iii) offices of
an agency, department or bureau of the United States Government or any foreign
government, or any political subdivision of any of them; (iv) offices of any
charitable, religious, union or other not-for-profit organization; (v) offices
of any tax exempt entity within the meaning of Section 168(h)(2) of the
Internal Revenue Code of 1986, as amended, or any successor or substitute
statute, or rule or regulation applicable thereto; (vi) any manufacturing use;
(vii) landfill; (viii) the handling or treatment of garbage; (ix) the
maintenance, repair, parking and/or storage of sanitation department vehicles;
(x) residential facility, single room occupancy facility, hotel, motel,
apartment hotel, rooming house, dormitory, however denominated; (xi)
restaurant, bar and lounge, tavern, grill, catering facility, dance or social
club, theatre, night club, cabaret, disco, amusement center, movie theatre,
game room, video or amusement arcade or any other establishment whose primary
business is providing food or beverage or on-premises consumption or providing
entertainment; (xii) swimming pool, skating rink, dance hall, spa, health club,
gym, exercise facility or salon; (xiii) any retail use, catalog sales or
fulfillment center use; or (xiv) for
any purpose which would constitute a public or private nuisance (each, a “Prohibited
Use”).

Section 4.02 –
Compliance with Requirements. Tenant shall at all times
conduct its activities on the Demised Premises in full compliance with all
Requirements of any or all of the federal, state, city, county and borough
governments and rules, regulations, orders and directives of any and all
departments, subdivisions, bureaus, agencies or offices thereof, and of any
other governmental, public or quasi-public authorities having

 10
 

 

jurisdiction over
the Demised Premises, and the direction of any public officer pursuant to law,
whether nor or hereafter in force (“Governmental Authority”).

ARTICLE 5

IMPOSITIONS

Section
5.01 – Impositions. The term “Impositions” shall mean
all real estate taxes, assessments, payments in lieu of taxes, water meter and
water charges, sewer rentals, excises, levies, license and permit fees, charges
for public utilities or other taxes, charges for any prospective easement or
agreement maintained for the benefit of the Demised Premises which has been
consented to by Tenant, charges or burdens assessed, imposed or becoming a lien
upon or with respect to the use or ownership of the Demised Premises or any other
taxable interest therein, or upon the Improvements and other improvements
erected thereupon; whether any such Impositions are general or special,
ordinary or extraordinary, foreseen or unforeseen and whether same are imposed
by a Governmental Authority or any other taxing authority having jurisdiction
over the Demised Premises of every character, kind and nature whatsoever, but
shall not include income, intangible, franchise, capital stock, excise, rent,
sales, excess profits or gross profits, estate or inheritance taxes of Landlord
(unless the same shall be in lieu of “Impositions” as herein defined by
whatever name the tax may be designated).

Section 5.02 –
Payment of Impositions. Tenant shall, during the Term of this
Lease, pay and discharge, as Additional Rent, all Impositions prior to the day
any fine, penalty, interest or cost may be added thereto as imposed by law for
the non-payment thereof, if such day is used to determine the due date of the
respective item; provided, however, that if, by law, any Imposition may at the
option of the taxpayer be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Tenant may exercise the
option to pay the same in such installments, provided such installment payments
are not prohibited by the terms of any Mortgage (as hereinafter defined). From
and after the Commencement Date, Tenant shall be designated to receive Tax
bills and, if at any time after taxes are issued for any Tax Year, Tenant shall
receive a Real Estate Tax bill, Tenant shall furnish Landlord with a copy of
such bill. Upon the Expiration Date, Tenant will cooperate in designating
Landlord or its designee to receive Tax bills. Tenant shall pay all Real Estate
Taxes, as and when due and payable, directly to the applicable taxing authority.
Simultaneously with the payment of any of such Impositions directly to the
imposing authority, Tenant shall send to Landlord written evidence of such
timely payment by Tenant. Landlord shall provide Tenant with timely written
notice of any Impositions to be paid by Tenant. A copy of the Imposition
invoice or demand from the applicable imposing authority shall be sufficient
evidence of the amount of the subject Impositions. Tenant shall also pay or
cause to be paid, in the same manner as Impositions are paid, any occupancy
taxes arising under or in connection with this Lease. Tenant shall be
responsible for and shall pay as Additional Rent all penalties, fees, fines,
interest, late charges and other similar amounts for the late payment of any
Impositions. Tenant shall pay for all utilities directly to the applicable
entity.

 11
 

 

If at
any time during the Term Tenant shall default in the payment of any
Impositions, or if required by the holder of any Mortgage, Landlord shall have
the right to require Tenant (for all or any portion of the remainder of the
Term) to pay to Landlord, or to the holder of any Mortgage, in advance, in
equal monthly installments, the Impositions estimated by Landlord to be due for
the subsequent tax year, such amounts to be held in escrow by Landlord or to
the holder of any Mortgage, to ensure the full and timely payment of all
Impositions thereafter. Any certificate, invoice, advice or bill of the
applicable imposing authority of nonpayment of an Imposition shall be prima facie evidence that such Imposition
is due and unpaid at the time or date stated therein.

Section
5.03 – Landlord’s Demand. The provisions of this Article 5
shall survive the expiration or other termination of this Lease. Landlord’s
failure during the term of this Lease to prepare and deliver any Imposition
bill, invoice or demand or Landlord’s failure to make a demand for Additional
Rent due hereunder shall not in any way waive or 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.

Section
5.04 – Proration of Impositions. Any Imposition, other than
an Imposition which has been converted into installment payments as referred to
in Section 5.02 hereof, relating to a fiscal period of the taxing authority, a
part of which period is included within the Term of this Lease and a part of
which is included in a period of time before the Term and/or after the
expiration or other termination of the Term of this Lease, shall (whether or
not such Imposition shall be assessed, levied, confirmed, imposed upon or in
respect of or become a lien upon the Demised Premises, or shall become payable
during the Term of this Lease) be apportioned between Landlord and Tenant as of
the Commencement Date and/or as of the expiration or other termination of the
Term of this Lease, so that Tenant shall pay that portion of such Imposition
which that part of such fiscal period included in the period of time on and after
the Commencement Date and/or prior to the expiration or other termination of
the Term of this Lease bears to such fiscal period, and Landlord shall pay the
remainder thereof, provided, however, that Tenant shall not be entitled to
receive any apportionment if there be an Event of Default hereunder.

Section 5.05 –
Right to Contest. Only Landlord shall be eligible to
institute proceedings to reduce the assessed valuation of the Demised Premises.
In the event the Landlord shall obtain a tax refund or reduction as a result of
any such tax certiorari
proceedings or as a result of any other litigation or agreement involving the
relevant taxing authorities (collectively, a “Proceeding”), then,
provided Tenant is not then in default under the terms of this Lease and after
all applicable grace periods have expired and after the final conclusion of all
appeals or other remedies, Tenant shall be entitled to the net refund
applicable to any period as to which Tenant has paid Impositions pursuant to
this Article 5. Tenant’s net refund may be applied by Landlord to any amounts
payable to Landlord under this Lease. As used herein the term “net refund”
means the refund plus interest, if any, thereon, paid by the governmental
authority less

 12
 

 

appraisal,
engineering, expert testimony, consultant, architect, printing, administrative
and filing fees and all other Landlord costs and expenses of a Proceeding,
except for attorneys fees. If Landlord prevails in a Proceeding, Tenant shall
pay to Landlord all appraisal, engineering, expert testimony, printing and
filing fees and all other reasonable costs and expenses incurred by Landlord in
connection with any such Proceeding (up to the amount of the tax savings
resulting from the Proceeding.

ARTICLE
6

[INTENTIONALLY OMITTED]

ARTICLE 7

REPAIRS AND MAINTENANCE OF THE DEMISED PREMISES

Section
7.01 – Maintenance of Demised Premises. Tenant shall, at its
sole cost and expense, take good care of the Demised Premises, including
without limitation, the roof, structure, exterior and interior walls and
finishes, foundations, mechanical, plumbing, electrical and sanitary systems,
water and sewage facilities and drains, drywells, cesspools, pipes, fencing,
landscaping, paving, curbing, all alleyways, passageways, vaults, ramps,
sidewalks adjoining the Demised Premises (“Appurtenances”) and shall
keep same in good order and condition and make all repairs thereto, ordinary
and extraordinary, foreseen and unforeseen as and when needed to keep them in
good order and condition. Except as otherwise provided herein, Landlord shall
have no responsibility and shall not be required to furnish any services, make
any repairs or to perform any other maintenance work in or about the Demised
Premises, and Tenant hereby assumes the full and sole responsibility, at its
sole cost and expense for same, and for the condition of the Demised Premises,
including, but not limited to keeping the Demised Premises and Appurtenances,
at its own sole cost and expense, in a clean and orderly condition, free of
snow, ice, rubbish and obstructions. Tenant covenants to keep Landlord’s
interest in the Demised Premises free of liens and other foreclosable
impositions arising through Tenant and shall have no obligation with respect to
liens arising through Landlord. Tenant’s obligations to maintain the Demised
Premises shall not extend to conditions caused by the negligence or intentional
misconduct of Landlord or Landlord’s employees, agents and contractors, or to
repairs necessitated by Pre-Existing Environmental Conditions as set forth in
Article 10.

Section 7.02 –
Landlord Cure Rights. In the event (a) Tenant fails to
maintain the Demised Premises in accordance with Section 7.01 above to Landlord’s
reasonable satisfaction or (b) repairs to the Demised Premises or Appurtenances
are made necessary by reason of the acts, omissions or negligence of Tenant,
its agents, directors, shareholders, officers, employees, subtenants,
assignees, customers, licensees or invitees, then in any of such event(s),
Landlord may give Tenant thirty (30) days written notice within which to make
such repairs, or if such repairs cannot be made within such thirty (30) day
period, to commence such repairs within thirty (30) days and

 13
 

 

diligently pursue
them to completion thereafter. In the event Tenant fails timely to make such
repairs as aforesaid, Landlord shall be entitled, but shall not be obligated,
to make such repairs at Tenant’s expense without incurring any liability to
Tenant by reason thereof upon reasonable notice to Tenant. Notwithstanding
anything herein to the contrary, if, in Landlord’s sole, reasonable discretion,
emergency repairs are necessary, Landlord may, if Landlord so elects, to make
such repairs at any time without notice to Tenant, at Tenant’s expense for all
actual and reasonable costs, and shall provide written notice with supporting
documentation to Tenant that such repairs are being or have been made on the
first business day after commencing such repairs. All reasonable and actual
sums expended by Landlord under this Section 7.02 shall be deemed Additional
Rent and payable on demand by Landlord. Tenant shall pay all amounts required
under this Section 7.02. In the event Tenant has any reasonable objections or
inquiries as to the supporting documentation, Tenant may withhold payment as to
the disputed amount, and it is determined that Tenant’s objection was
unfounded, Tenant will be liable for all interest and penalties arising from
such non-payment by Tenant, however, Tenant will not be responsible for late
payment amounts under Section 3.04. In the event Landlord elects to pay such
disputed amount, and it is determined that Tenant’s objection was unfounded,
Tenant will promptly reimburse Landlord for the amount paid by Landlord, plus
late charges under Section 3.04 as to such amounts commencing from the date of
Landlord’s payment. Notwithstanding the foregoing, any potential civil or
criminal liability to Landlord shall not, in and of itself, require Tenant to
pay any disputed amounts under this Section 3.05.

Section
7.03 - Shoring. Tenant shall do, or cause others to do, all
necessary shoring of foundations, supporting walls and the walls of the
Improvements and shall comply with all Requirements with respect thereto and
shall do every other act or thing for the safety and preservation of the
Demised Premises (including the Improvements and any and all other improvements
erected thereon) which may be necessary by reason of any excavation, subsurface
construction, remodeling or other building operation upon any adjoining
property or street, avenue, alley or passageway.

ARTICLE
8

TENANT’S ALTERATIONS

Section 8.01 -
Alterations. During the Term, Tenant shall have the
right, without Landlord’s prior written consent but on thirty (30) days’ notice
to Landlord, to make any alterations or modifications to the Demised Premises
(collectively, “Alterations”), provided, however, that within fifteen
(15) days after Landlord’s receipt of any such notice, Landlord shall notify
Tenant of those Alterations that shall be removed by Tenant at the expiration or
other termination of the Lease in accordance with Article 22 of this Lease. Tenant
shall obtain all necessary certificates and authorizations required by any
Governmental Authority in connection with the Alterations.

Section 8.02 –
Plans and Specifications. Prior to performing any Alterations

 14
 

 

which affect the
roof, structure, exterior walls, foundations, mechanical, plumbing, electrical
and sanitary systems, water and sewer facilities and drains, drywells and
cesspools (collectively, “Structural Alterations”), Tenant covenants and
agrees that Tenant will provide Landlord with detailed plans and specifications
(“Plans and Specifications”) satisfying the requirements of Section
8.10(a), in accordance with the succeeding Sections of this Article, for the construction
of Tenant’s Structural Alterations and Tenant will promptly thereafter proceed
diligently and expeditiously to complete the Structural Alterations using
licensed, and reputable contractors, architects and engineers, prior to the
expiration of all time frames set forth in any building permit issued in
connection with the Structural Alterations. Tenant shall provide Landlord with
prior notice of the identities of the contractors, architects and engineers.

Section
8.03 – Compliance with Law; Labor Harmony. All Alterations
shall be performed and completed in compliance with all applicable Requirements
and comply with all zoning laws and ordinances. All Alterations, including
without limitation, Structural Alterations, shall be done in a manner, which
does not create any labor disharmony or dispute at the Demised Premises.

Section
8.04 – Commencement of Construction of Structural Alterations.
Tenant shall not commence any Structural Alterations unless and until Tenant
shall have delivered to Landlord:

(a)           Copies of all necessary permits,
certificates and authorizations required by any Governmental Authority in
connection with the Structural Alterations, together with evidence that such
permits, certificates and authorizations have been paid for in full. Landlord
shall not unreasonably refuse to join in the application for such permits,
certificates or authorizations and shall reasonably cooperate with Tenant,
without charge except to the extent Landlord’s participation required is more
than de minimus in which case
Tenant agrees to pay to Landlord, upon demand as Additional Rent hereunder, a
reasonable fee and Landlord’s costs paid or incurred in connection therewith. Landlord
shall not be subject to any liability for the payment of any costs or expenses in
connection with any such applications, and Tenant hereby indemnifies and agrees
to defend and hold Landlord harmless from and against any and all such costs
and expenses;

(b)           Plans and Specifications for the
proposed Structural Alterations satisfying the requirements of Section 8.10(a)
hereof. Tenant may not materially change the Plans and Specifications without
prior written notice to Landlord;

(c)           A contract for the construction of
the Structural Alterations in accordance with the Plans and Specifications and
satisfying the requirements of Section 8.10(b); and

(d)           Tenant shall use its best efforts to
obtain an agreement from Tenant’s architect and general contractor to continue
to perform for the benefit of Landlord, if Landlord so requests, their respective
obligations under their contracts with Tenant in

 15
 

 

the event of
termination of this Lease or upon Landlord’s re-entry upon the Demised Premises
following a default by Tenant prior to completion of the Structural
Alterations, provided such architect and/or general contractor are paid for
their respective services in accordance with such contracts.

Section
8.05 – Insurance. At all times during and until the
completion of the Structural Alterations, Tenant shall, at Tenant’s sole cost
and expense, maintain, or cause to be maintained, in addition to the insurance
required under Article 11 hereof, one hundred percent (100%) completed value
builders’ risk insurance; workmen’s compensation insurance covering all persons
employed in connection with the Structural Alterations and with respect to whom
death or bodily injury claims could be asserted against Landlord or Tenant; and
general comprehensive commercial liability insurance for the mutual benefit of
Tenant and Landlord expressly covering the additional hazards due to the
construction, with combined single coverage limits of not less than Five
Million and 00/100 Dollars ($5,000,000.00) in the event of death or bodily
injury or property damage. The policy of general comprehensive commercial
liability insurance, in so far as it relates to property damage, shall not
contain any restrictive clauses relating to excavating, sheet piling, moving,
shoring, underpinning, removal and rebuilding of structural supports or
subsurface work or any similar restrictive clauses. The general comprehensive
commercial liability insurance provided for in this Section may be affected by
an appropriate endorsement, if obtainable, upon the insurance required to be
maintained by Tenant pursuant to Section 11.01(d) hereof. All insurance of the
character in this Subsection described, shall be effected under valid and
enforceable policies issued by insurers of recognized responsibility and which
have been approved in writing by Landlord as to qualification of insurers and
the amounts of insurance to be written by each, which approval Landlord agrees
shall not be unreasonably withheld. The general comprehensive commercial
liability insurance policy and the builder’s risk insurance policies above
mentioned shall name Landlord and Tenant as the insured as their respective
interests may appear and may also include as the insureds, if required by
Landlord, any Mortgagee. The loss, if any, under any of the builder’s risk
policies above mentioned shall be adjusted by and shall be payable to Tenant
and such proceeds paid to Tenant shall be held in trust and disbursed only for
the purposes of completing the construction. All such policies or certificates
therefor issued by the respective insurers shall be delivered to Landlord. Within
ten (10) days after the premium of each such policy shall become due and
payable and the amount thereof shall be determined, Tenant agrees to pay said
premium or cause the same to be paid, and Landlord shall be furnished with
evidence satisfactory to it of such payment. Tenant may satisfy any of the
obligations under this Section through self-insurance, the extent and
sufficiency of which is subject to the sole and absolute discretion of Landlord
and, in any event, Landlord’s benefits and protection under this Section 8.05
shall in no manner be reduced or impaired by reason of Tenant’s self-insurance.

Section 8.06 –
[Intentionally Omitted].

Section 8.07 –
Final Completion of Structural Alterations. Tenant covenants
and

 16
 

 

agrees that:

(a)           the construction of the Structural Alterations
shall be performed in a good and workmanlike manner in accordance with (i) the
Plans and Specifications as approved by Landlord; (ii) all applicable permits,
certificates and authorizations and building and zoning laws and ordinances and
with all other Requirements; and (iii) the terms, covenants and conditions of
this Lease; and

(b)           throughout the course of such
construction and at and after Final Completion of the Structural Alterations
(as hereinafter defined), and in connection with any alterations, Landlord’s
fee estate in the Demised Premises will be free and clear of all liens and
encumbrances arising out of or connection with such construction. Upon
completion of the Structural Alterations, Tenant shall furnish to Landlord (i)
a certificate from Tenant’s architect certifying that the Structural
Alterations have been completed in accordance with the Plans and
Specifications; (ii) copies of either the temporary certificates of occupancy
or the permanent certificate of occupancy for the Structural Alterations; (iii)
a complete set of “as built” plans within six (6) months after Final Completion
of the Structural Alterations; (iv) a survey of the Land showing the Structural
Alterations as built thereon certified to Landlord by a surveyor reasonably
acceptable to Landlord, provided that the Structural Alterations include
additional improvements outside the present footprint of the existing
improvements; and (v) evidence reasonably satisfactory to Landlord of proof of
payment in full for the Structural Alterations, including, without limitation,
lien waivers in recordable form received from all architects, engineers,
contractors, subcontractors, materialmen and laborers providing supplies and/or
performing work in connection with the Structural Alterations. “Final
Completion of the Structural Alterations” shall be deemed to have occurred
on the date when all of the above have been fully satisfied and delivered to
Landlord in accordance with the terms hereof.

Section
8.08 – [Intentionally Omitted].

Section
8.09 – Landlord’s Approval of Plans. Landlord’s
retention of the Plans and Specifications or any other action taken with
respect thereto by Landlord or any Mortgagee shall not constitute an opinion or
representation by Landlord or the Mortgagee as to the sufficiency of said Plans
and Specifications or impose any responsibility for the sufficiency thereof
upon Landlord or the Mortgagee.

Section
8.10 – Plans and Specifications; Construction Contract.

(a)           Plans and Specifications shall be
prepared by a licensed architect and which Plans and Specifications shall meet
with the approval thereof by any Governmental Authority then exercising
jurisdiction with regard to such work and such Plans and Specifications shall
be and become the sole and absolute property of Landlord in the event that, for
any reason, this Lease shall be terminated.

(b)           The Structural Alterations contract
shall be made with a licensed

 17
 

 

contractor, providing
for the completion of all work, labor and materials necessary for completion of
the Structural Alterations in accordance with the Plans and Specifications.

 18

 

 

ARTICLE 9

UTILITIES

 

Section 9.01 -
Utilities. Tenant shall provide, at its own cost and expense,
fuel, heat, water, sewer, electricity, telephone and all other utilities or
services required in connection with its use of the Demised Premises. Tenant
shall be responsible for all deposits required by the respective utilities for
service. Tenant shall comply with all requirements of the utilities supplying
said service.

 

ARTICLE
10

PRE-EXISTING ENVIRONMENTAL CONDITIONS;

ENVIRONMENTAL COMPLIANCE DURING PERIOD OF TENANCY;

REQUIREMENTS OF LAW

 

Section 10.01 –
Pre-existing Environmental Conditions.

 

(a)           With respect to any and all
Pre-existing Environmental Conditions (as hereinafter defined), Landlord, at
its sole expense, shall conduct and complete all investigations, studies,
samplings, and testing, and all remedial, removal, and other response actions
necessary to clean up, remove and/or abate all Hazardous Materials (as
hereinafter defined), on, from, or affecting the Demised Premises (i) in
accordance with all then applicable federal, state and local laws, ordinances,
rules, regulations, and policies, and (ii) in accordance with the orders and
directives of all federal, state, and local governmental authorities.
Alternatively, Landlord may elect to request Tenant, at Landlord’s sole
expense, to directly oversee the response contractor’s work. “Pre-existing
Environmental Conditions” means the presence of any Hazardous Materials
existing as of the Commencement Date in the air, soil, surface water or
groundwater, and in, on and under any structure on the Demised Premises.

 

(b)           The term “Hazardous Materials”
includes, but shall not be limited to, (i) asbestos in any form, except to the
extent such asbestos in its present condition may remain in place pursuant to
and in compliance with all Environmental Laws; (ii) urea formaldehyde foam
insulation; (iii) transformers or other equipment which contain dialectic fluid
containing levels of polychlorinated byphenyls (PCBs) in excess of 50 parts per
million; (iv) lead paint; (v) any substance deemed hazardous or toxic, or
required to be investigated, disclosed, reported, treated, removed, disposed of
or cleaned up by an applicable Environmental Law; (vi) any substance or mixture
which is or shall be listed, defined, or otherwise determined by any agency or
court to be hazardous, toxic, dangerous or otherwise regulated, affected,
controlled or giving rise to liability under any Environmental Law; (vii)
polychlorinated biphenyls (PCBs); (viii) radon gas; (ix) laboratory wastes; (x)
experimental products, including genetically engineered microbes and other
recombinant DNA products; (xi) petroleum, crude oil, natural gas, natural gas
liquid, liquefied natural gas, other petroleum products, or synthetic gas
useable as fuel; and (xii) “source,” “special nuclear” and “by-products”
material, as

 19
 

 

 

defined in the Atomic
Energy Act of 1954, 42 U.S.C. § 3011 et seq.

 

(c)           The term “Environmental Law”
shall mean any federal, state or local environmental or health or safety law,
regulation or rules, as the same may be amended from time to time, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq.; the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. § 6901
et seq.; the Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act of
1976, 15 U.S.C. § 2601 et seq.; the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Clean Air Act of
1966, as amended, 42 U.S.C. § 741 et seq.; the National Environmental Policy
Act of 1975, 42 U.S.C. § 4321; the Rivers and Harbors Act of 1899, 33 U.S.C. §
401 et seq.; the Endangered Species Act of 1973, as amended, 16 U.S.C. § 1531
et seq.; the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
§ 651 et seq.; the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §
300(f) et seq.; the Hazardous Materials Transportation Act, 42 U.S.C. §§ 1471,
1472, 1655m 1801 et seq.; the Federal Insecticide, Fungicide & Rodenticide
Act, 7 U.S.C. § 136 et seq.; the Atomic Energy Act, 42 U.S.C. § 3011 et seq.,
and any other rule, guidance or common law which relates to (i) the existence
and/or remedy of contamination on property, (ii) the protection of persons,
property, animals, or the environment from any exposure to or contamination by
Hazardous Materials radiation or other emanations; (iii) the use generation,
storage, removal, recovery, treatment, transport, disposal, and control of
Hazardous Materials, including hazardous wastes and building materials; (iv)
the prevention of, control of, or response to the exposure of tenants,
employees or other persons to any Hazardous Material or radiation; or (v) the
prevention of, control of, or response to the emission or discharge of Hazardous
Materials in the workplace or environment.

 

(d)           Tenant shall not cause, consent to,
suffer or permit the installation or maintenance of any underground storage
tanks upon, under or within the Demised Premises.

 

(e)           Tenant agrees to take occupancy of
the Demised Premises on the Commencement Date and to cooperate with Landlord
and its response contractors in addressing the Pre-existing Environmental
Conditions. Landlord shall use commercially reasonable efforts to minimize
interruption with Tenant’s business in performing its obligations hereunder.

 

(f)            Landlord covenants and agrees to
defend, indemnify and hold harmless Tenant, from and against, and pay or
reimburse Tenant for, any and all claims, liabilities, obligations, losses,
fines, costs, royalties, proceedings, deficiencies or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims, but excluding consequential, special or indirect

 20
 

 

 

damages and lost
profits), including out-of-pocket expenses and reasonable attorneys,’
consultants’ and accountants’ fees incurred in the investigation or defense of
any of the same or in asserting any of their respective rights hereunder
resulting from or arising out of Pre-existing Environmental Conditions or the
actions, operations, activities, or non-compliance of Landlord, Landlord’s
contractor’s or agents, or Landlord’s invitees, with Environmental Laws at the
Demised Premises. During the Term of this Lease, Landlord agrees to require
Landlord’s contractors or agents which perform work on the Demised Premises in
connection with environmental remediation to maintain insurance in a form and
amount as are commonly maintained for such work in cases of properties that are
similarly situated, and that Tenant, Metropolitan Transit Authority (“MTA”) and
MTA Bus Company (“MTA Bus”) will be named as additional insureds, as their
interests may appear, on insurance policies maintained by Landlord’s
contractors or agents which perform work on the Demised Premises in connection
with environmental remediation. The foregoing indemnity shall survive the
expiration or other termination of this Lease.

 

Section 10.02
–Environmental Compliance During Period of Tenancy; Requirements of Law.

 

(a)           In the operation and occupancy of its
business on the Demised Premises, Tenant shall promptly execute and comply with
all statutes, ordinances, rules, orders, regulations and requirements
(including those which require structural alterations) of and permits issued by
the federal, state, county and local government and of any and all their
departments and bureaus applicable to the Demised Premises, including, without
limitation, those for the correction, prevention or abatement of nuisances or
other grievances in, upon, or connected with the Demised Premises during the
Term; and shall also promptly comply with and execute all rules, orders and
regulations of the New York Board of Fire Underwriters for the prevention of
fires at the Tenant’s own cost and expense. The Tenant’s obligations pursuant
to this provision pertain solely to conditions that, in whole or in part, arise
or develop during the term of its tenancy. Nothing in this paragraph in any way
alters the Landlord’s obligations and responsibilities under Section 10.01 for
all Pre-existing Environmental Conditions.

 

(b)           Tenant shall operate and occupy the
Demised Premises in compliance with all Environmental Laws. Without limiting
the foregoing, Tenant shall not cause or permit the Demised Premises to be used
to generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable federal, state and local laws or regulations nor shall Tenant cause
or permit, as a result of any intentional or unintentional act or omission on
the part of Tenant or Tenant’s directors, officers, members, managers,
employees, agents and contractors, a release of Hazardous Materials onto the
Demised Premises or onto any other property. Tenant shall obtain and comply with
any and all approvals, registrations or permits required under applicable
Environmental Laws, including, without limitation, air quality and fuel storage
permits.

 21
 

 

 

(c)           In the event a Hazardous Material in
the air, soil, surface water or groundwater, or in, on and/or under any
structure on the Demised Premises is identified at the Demised Premises that is
not a Pre-existing Environmental Condition and which occurred, was created or
aggravated during the Lease Term (a “Tenant Environmental Condition”), Tenant
shall (i) conduct and complete all investigations, studies, samplings, and
testing, and all remedial, removal, and other actions necessary to clean up,
remove and/or abate all Tenant Environmental Conditions in accordance with all
applicable federal, state and local laws, ordinances, rules, regulations, and
policies, and (ii) in accordance with the orders and directives of all federal,
state, and local governmental authorities.

 

(d)           In the event a Tenant Environmental
Condition has been identified, at the expiration of this Lease or in the event
this Lease is terminated, or Tenant is dispossessed, Tenant shall be
responsible with respect to any and all such Tenant Environmental Conditions to
(i) deliver the Demised Premises to Landlord in a condition that conforms with
all applicable federal, state and local laws, ordinances, rules or regulations
affecting the Demised Premises including, without limitation, Environmental
Laws, and (ii) deliver to Landlord a phase one and, if reasonably necessary, a
phase two environmental report and tank testing reports showing no leaks,
prepared by an environmental consultant reasonably satisfactory to Landlord, or
if commercially reasonable, a no-action letter or closure letter, certifying to
Landlord that the Tenant Environmental Condition or Conditions has been
appropriately remediated or abated. Nothing in this paragraph, however, alters
or relieves Landlord from its obligations under Section 10.01 to be responsible
for any and all Pre-existing Environmental Conditions.

 

(e)           In the event a Tenant Environmental
Condition has been identified, Tenant covenants and agrees to defend, indemnify
and hold harmless Landlord, from and against, and pay or reimburse Landlord
for, any and all claims, liabilities, obligations, losses, fines, costs,
royalties, proceedings, deficiencies or damages (whether absolute, accrued,
conditional or otherwise and whether or not resulting from third party claims,
but excluding consequential, special and indirect damages and lost profits),
including out-of-pocket expenses and reasonable attorneys,’ consultants’ and
accountants’ fees incurred in the investigation or defense of any of the same
or in asserting any of their respective rights hereunder resulting from or
arising out of Tenant Environmental Conditions at the Demised Premises,
including the presence of Hazardous Materials, or the discharge or release of
Hazardous Materials, and liabilities under Environmental Laws that arise from
actions, conditions, or the disposal or release of Hazardous Materials or the
actions, operations, activities, or non-compliance of Tenant, Tenant’s agents,
or Tenant’s invitees, with Environmental Laws at the Demised Premises. The
foregoing indemnity shall survive the expiration or other termination of this
Lease.

 

(f)            If Tenant receives any notice of (i)
the happening of any event

 22
 

 

 

involving the presence,
spill, release, leak, seepage, discharge or cleanup of any Hazardous Material
on, to or from the Demised Premises, or (ii) any complaint, order, citation or
notice with regard to air emissions, water discharge or any other
environmental, health or safety matter affecting Tenant or the Demised
Premises, then Tenant shall promptly notify Landlord in writing of said notice
and shall contemporaneously send to the Landlord a copy of any notice sent to
any governmental agency.

 

(g)           During the Term, Landlord or its
designee, provided Landlord has a reasonable basis to believe that the Demised
Premises has been affected by Hazardous Materials, may, at Landlord’s sole cost
and expense, and upon prior notice to Tenant, conduct such investigations and
tests as Landlord reasonably deems necessary to determine whether the Demised
Premises and the operation thereof are in compliance with all Environmental
Laws, provided that any such investigations and tests do not materially
interfere with Tenant’s Permitted Use of the Demised Premises or the operation
of its business thereon.

 

Section 10.03 –
[Intentionally Omitted].

 

Section 10.04 –
Environmental Insurance.

 

(a)           Except as specifically provided in
this Lease, neither the maintenance of any insurance policy required under this
Lease nor the minimum insurance limits specified herein shall be deemed to
limit or restrict in any way the Tenant’s liability for environmental matters
under this Article 10.

 

(b)           With respect to third-party claims
arising from or related to, directly or indirectly, in whole or in part: (i)
the threatened or actual release of any Hazardous Materials in, on, under or
from the Demised Premises; and (ii) any environmental liability or remedial
action associated with the Demised Premises for any activities conducted on the
Demised Premises; both parties shall be covered and such losses, costs,
expenses, claims, demands, obligations and liabilities will be satisfied to the
extent environmental insurance provides coverage. This provision shall survive
the Lease Term.

 

ARTICLE 11

INSURANCE

 

Section
11.01 – Insurance. Tenant may satisfy, in whole or in part,
any or all of the obligations under this Article 11 through self-insurance,
provided (i) Landlord’s benefits and interests under this Article 11 are not
decreased or impaired thereby, (ii) Tenant’s indemnity obligations under this
Lease are not decreased or expanded thereby, and (iii) the self-insurance
obligation shall not extend responsibility to Tenant for the negligent or
willful misconduct of Landlord, or Landlord’s officers, employees, agents, or
contractors, or for Landlord’s obligations under Article 10 for any
Pre-Existing Environmental Condition, or as to the installation repair,
relocation or removal of any

 23
 

 

 

antennae pursuant to
Section 33.01. The Tenant’s obligations as self-insurer shall be governed by
the requirements set forth below. Tenant shall, at its sole cost and expense,
during the Term of this Lease:

 

(a)           Keep all Improvements, building
fixtures and equipment (other than Tenant’s trade fixtures and business
equipment) and other property on, in or appurtenant to the Demised Premises, or
used in connection with the operation and maintenance of the Demised Premises,
and all replacements, alterations and additions of or to the foregoing, insured
for the benefit of Tenant (except as otherwise specifically noted), Landlord
and for the benefit of the Mortgagee (under a standard New York Mortgage
Endorsement) and for the benefit of any other party designated by Landlord who
has an insurable interest in the Demised Premises, as their respective
interests may appear, against all risk of loss or damage, including loss or
damage by fire and other perils included in a so-called “extended coverage
endorsement” or “multi-peril endorsement”, vandalism and malicious mischief,
collapse, lightning, windstorm, hail, explosion, riot, riot attending a strike,
civil commotion, aircraft, vehicles, smoke, and water damage and against such
other risks as are normally or customarily insured against by owners or
operators of similar properties as Landlord may from time-to-time reasonably
request, and containing Replacement Cost endorsements. Such coverage shall be
in amounts at all times sufficient to prevent Landlord, Tenant or any
additional insured from becoming a co-insurer under the terms of the applicable
policies, but in any event in amounts not less than the full replacement value
of the Improvements. Tenant shall cause full replacement value to be determined
from time-to-time at the request of Landlord, but not more frequently than once
every calendar year, by an insurance appraisal or other valuation method
reasonably acceptable to Landlord. Such policies shall name Landlord, and/or
the Mortgagee, and/or any other party having an insurable interest as Landlord
may designate, as loss payee(s).

 

(b)           If a sprinkler system is located in
the Demised Premises or any Improvement located thereon, provide sprinkler
leakage insurance in amounts reasonably satisfactory to Landlord, and provide
and keep in force a sprinkler supervisory, maintenance and alarm service
contract.

 

(c)           Provide boiler and machinery broad
form insurance covering fire, damage and explosion in respect of steam and
pressure boilers and similar apparatus, if any, located in or upon the Demised
Premises in the amount of Five Million ($5,000,000.00) Dollars.

 

(d)           Provide comprehensive general
liability and broad form property damage insurance, written on an occurrence
basis, including elevator, escalator, machinery and contractual liability
insurance, protecting and indemnifying Landlord, Tenant and others having an
insurable interest against any and all claims (including all costs and expenses
of defending against same) for personal injury, disease or death and for damage
or injury to or destruction of property (including loss of use) occurring on,
in or about the Demised Premises, sidewalks, gutters, curbs, vaults or vault
spaces appurtenant to the Demised Premises, which insurance shall have a
combined single

 24
 

 

 

limit of not less than
Fifty Million and 00/100 ($50,000,000.00) Dollars. The insurance carried
pursuant to this Section 11.01(d) shall include coverage for contractual
liability, independent contractors’ liability and completed operations
liability with a personal injury endorsement covering claims arising out of
arrest, false imprisonment, libel, slander, wrongful eviction and invasion of
privacy.

 

(e)           Provide automobile liability
insurance covering all vehicles operated or owned by Tenant in connection with
the Demised Premises.

 

(f)            Provide for the benefit of Landlord
and any Mortgagee only, business interruption and rent loss insurance in an
amount equal to at least the sum of twelve (12) months’ Fixed Rent and
Additional Rent (including Impositions), plus twelve (12) months’ insurance
premiums and the estimated amount of annual maintenance costs for the Demised
Premises.

 

(g)           Provide workers’ compensation
insurance to the extent required by applicable law.

 

(h)           At any time prior to undertaking and
during the duration of any Alteration or any construction or Alteration of any
Improvements on the Demised Premises, provide Builder’s Risk All Risk
Non-Reporting property insurance for the full replacement value of such
Alterations, work and construction of Improvements, with Replacement Cost and
Agreed Amount endorsements.

 

(i)            Provide and keep in force such other
insurance covering such risks and in such amounts as may from time-to-time be
reasonably required by Landlord or any Mortgagee against any other insurable
hazards as are commonly insured against in cases of properties similarly
situated.

 

(j)            Provide garagekeeper’s liability
coverage in amounts reasonably satisfactory to Landlord, if Tenant provides, directly
or indirectly, valet parking or in any other way exercises care, custody or
control over vehicles in the parking areas of the Demised Premises.

 

(k)           Maintain environmental insurance in
form and amounts reasonably satisfactory to Landlord throughout the Lease Term.
Tenant shall name Landlord as an additional insured under Tenant’s
environmental insurance policy maintained for the Demised Premises.

 

Tenant agrees that the
limits of insurance required by this Article may be increased at the request of
Landlord or any Mortgagee consistent with limits of coverage for properties
similarly situated provided, however, that in no event shall the limits of
insurance be reduced below the amounts of coverage required at the commencement
of the Term of this Lease.

 

Section
11.02 – Evidence of Insurance. Contemporaneous with the
execution of this Lease, Tenant shall deliver to Landlord and to any Mortgagee
and to any other

 25
 

 

 

party designated by
Landlord, duly executed certificates of insurance or endorsements and duplicate
original insurance policies reflecting Tenant’s maintenance of the insurance
required under Section 11.01 of this Lease, together with proof of payment of
the premiums and shall thereafter furnish to Landlord, at least ten (10) days
prior to the expiration of any policies and any renewal thereof, evidence of
renewal or continued coverage together with evidence of the payment of premiums
thereon. The insurance required under Section 11.01 shall not have any
deductible or retention in excess of Fifty Thousand and 00/100 ($50,000.00)
Dollars and shall provide that the same may not be otherwise materially changed
or cancelled on less than thirty (30) days’ prior written notice to Landlord
and any Mortgagee. Landlord shall have the right, to be exercised upon prior
reasonable notice to Tenant, to review and copy Tenant’s insurance policies to
confirm compliance with Section 11.01.

 

Section 11.03 –
Additional Requirements. Landlord, Landlord’s managing agent
and any Mortgagee shall be named as additional insureds as their interests may
appear in the policies of liability insurance described in Section 11.01, but
shall nevertheless be protected against all liability occasioned by an
occurrence insured against to the same extent and limits as Tenant is protected
and insured under said policies, which policies shall provide primary coverage
for Landlord, Landlord’s managing agent and any Mortgagee. All policies of
insurance shall be: (i) written as “occurrence” policies, (ii) written as
primary coverage and not contributing with or in excess of any coverage which
Landlord or any management agent, or Mortgagee may carry, (iii) issued in form
acceptable to Landlord by insurance companies reasonably acceptable to Landlord
carrying a General Policyholder’s Service Rating of not less than “A/X” as
rated in the most current Best’s Insurance Reports (or any successor rating
guide acceptable to Landlord), and licensed to do business in New York State
and authorized to issue such policy or policies; and (iv) contain an endorsement
that Landlord, Landlord’s managing agent and all Mortgagees, although named as
additional insureds as their interests may appear, nevertheless shall be
entitled to recover under said policies for any loss or damage occasioned to
their respective servants, agents, employees and contractors by reason of the
negligence of Tenant, its servants, agents, employees and contractors. In
addition, the policies referred to in Sections 11.01(a), 11.01(b), 11.01(c),
11.01(f) and 11.01(h) shall name Landlord and any Mortgagees designated by
Landlord as Loss Payee(s) for all losses, claims and insurance proceeds
pertaining to, arising out of, or in connection with the Demised Premises.

 

Section 11.04 –
Payment of Premiums.

 

(a)           Tenant shall pay all premiums and charges
for all of said policies of insurance and, if Tenant shall fail to make any
payment when due or carry any such policy, Landlord may but shall not be
obligated to, following an uncured Insurance
Notice (hereinafter defined), make such payment or procure such
insurance coverage (which may be maintained under a blanket policy of insurance
maintained by Landlord or any affiliate of Landlord), and the amount paid by
Landlord or its affiliate, with interest thereon at the Default Rate, shall be
repaid to Landlord by Tenant on demand, and all such amounts so repayable,
together with such interest, shall be

 26
 

 

 

deemed to constitute
Additional Rent hereunder. Payment by Landlord of any such premium, or the
carrying by Landlord or its affiliates of any such policy, shall not be deemed
to waive or release the default of Tenant with respect thereto.

 

(b)           As used herein, the term “Insurance Notice” shall mean a
notice with respect to the Tenant’s failure to pay any insurance charges or
premiums following the giving of which Tenant shall have ten (10) days to cure
such default, provided, however, if the insurance policy or coverage shall
lapse by reason of such non-payment, within said ten (10) day period, Tenant’s
time to cure shall expire ten (10) business days prior to the lapse of such
insurance policy or coverage.

 

Section 11.05 - Waiver of Subrogation. Tenant shall cause each insurance
policy carried by Tenant and insuring the Demised Premises and Tenant’s
leasehold improvements, equipment, furnishings, fixtures and contents against
loss, damage, or destruction by fire or other casualty, including business
interruption, and other special coverages, to be written in a manner so as to
provide that the insurer waives all rights of recovery against Landlord in
connection with any loss or damage covered by any such policy, including all
rights of subrogation. Landlord shall not be liable to Tenant and Tenant hereby
releases Landlord from any such liability for the amount of such loss or
damage. If Landlord procures any casualty insurance concurrent with or
supplemental to any casualty insurance procured by Tenant pursuant to this
Lease, such policy or policies shall provide that the insurer waives all rights
of recovery against Tenant in connection with any loss or damage covered by
such policy, including all rights of subrogation.

 

Section 11.06 - Binding on Subtenants.
In the event of any sublease or occupancy by a person other than Tenant of all
or a portion of the Demised Premises, irrespective of whether permitted by this
Lease or made in violation thereof, all of the covenants and obligations on the
part of Tenant set forth in this Article 11 shall bind and be fully applicable
to the subtenant or occupant (as if such subtenant or occupant were Tenant
hereunder) for the benefit of Tenant and Landlord, but nothing contained herein
shall be deemed a consent to such subletting if in contradiction of the terms
of this Lease.

 

Section 11.07 - Tenant’s Supplemental Insurance.
The limits of insurance specified in Section 11.01 hereof are the minimum
limits of insurance required of Tenant pursuant to this Lease. Nothing
contained herein shall prevent Tenant from maintaining separate property
insurance in respect of Tenant’s personalty, inventory, trade fixtures and
business interruption expenses. Except with respect to the insurance required
by Sections 11.01(d) and 11.01(j) hereof, Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with that
required by Sections 11.01(a), 11.01(b), 11.01(c), 11.01(f) and 11.01(h) to be
furnished by Tenant unless Landlord is included therein as the insured, with
loss payable as in this Lease, provided Tenant shall promptly notify the
Landlord of the placing of any such separate insurance.

 27

 

 

ARTICLE 12

DAMAGE OR DESTRUCTION

Section
12.01 – Damage or Destruction to Improvements.

(a)           If any Improvements shall be
destroyed or damaged by any cause whatsoever, Tenant shall promptly notify
Landlord and shall, at Tenant’s sole cost and expense, restore, repair, replace
or rebuild the same as nearly as possible to their condition and character
immediately prior to the damage or destruction, reasonable wear and tear
excepted (“Casualty Restoration”).

(b)           Casualty Restoration shall be commenced promptly and prosecuted to
completion with reasonable diligence. Landlord shall join with Tenant in the
adjustment and settlement of any insurance claim. The net insurance proceeds,
if any, payable by reason of such damage or destruction (other than insurance
proceeds for the loss of Tenant’s personalty and other than insurance proceeds
for loss of Rents, Impositions and/or maintenance, irrespective of whether paid
to Tenant or Landlord) shall be paid to Landlord and made available by Landlord
for the payment of the cost of the Casualty Restoration and shall be disbursed
in the manner provided in Section 12.03.

(c)           Notwithstanding the provisions of
Sections 12.01(a) and 12.01(b) to the contrary, if all or substantially all of
the Improvements are damaged or destroyed at a time when there is fewer than
two (2) years remaining in the Term, then at Tenant’s option, to be exercised
by notice given within fifteen (15) days following the date of such substantial
damage or destruction, this Lease shall be terminated effective as of the date
such notice is given, whereupon Tenant shall be released from its obligation to
repair or restore the Demised Premises (except as otherwise specifically set
forth in this Section 12.01(c)), any insurance proceeds paid or payable to Tenant
shall be paid to Landlord free of any claim by Tenant, Landlord shall have the
exclusive right to adjust and settle any insurance claim on account of or
relating to any such damage or destruction and Tenant shall pay Landlord the
amount of any deductible or retention limit under the applicable policy or
policies, and pay to Landlord, contemporaneously with such election, the amount
of Fixed Rent and Additional Rent payable through the Expiration Date. If
Tenant elects to terminate this Lease as aforesaid, Tenant shall, at its sole
cost and expense, promptly remove all remaining portions of the Improvements,
including all debris, and fill in and level the area to proper grade. Notwithstanding,
anything stated herein to the contrary if Tenant self-insures, upon a Casualty
in last two (2) years of the Term, or Renewal Term as the case may be, if
Tenant elects not to restore, this Lease shall be deemed terminated only upon
payment of all Fixed Rent and Additional Rent through the end of the Lease, and
payment to Landlord of the cost of restoration of the Demised Premises to the
condition existing immediately prior to the Casualty.

Section 12.02 – No Abatement of Rent.
Except as otherwise set forth in Section 12.01(c), no destruction of or damage
to the Demised Premises, or to any Improvement, furniture, furnishings,
fixtures, equipment or other property, shall permit Tenant to surrender this
Lease or shall relieve Tenant from its liability to pay the full Fixed Rent or

 28
 

 

 

Additional Rent payable under this Lease or
from any of its other obligations under this Lease. This Section shall be
deemed to be an agreement expressly providing otherwise within the meaning of
Section 227 of the Real Property Law of the State of New York and any successor
law of like impact.

Section
12.03 – Disbursement of Insurance Proceeds.

(a)           If and for so long as Tenant is not
in default of any of its obligations for the payment of Fixed Rent or
Additional Rent, and no uncured Event of Default has occurred which is
continuing, and Tenant is conducting the Casualty Restoration in accordance
with this Lease, the Casualty Proceeds shall be paid out from time-to-time, but
not more frequently than once per month, to pay for all work, labor and
material installed and completed at the Demised Premises as the Casualty
Restoration progresses (subject to Landlord’s approval which shall not be
unreasonably withheld), upon the written request of Tenant, which request shall
be accompanied by the following:

(i)            A
certificate signed by the architect or engineer in charge of the Casualty
Restoration, reasonably satisfactory to Landlord and Mortgagee, dated not more
than fifteen (15) days prior to such request, setting forth:

(A)          that
the sum then requested either has been paid by Tenant or is justly due to contractors,
sub-contractors, materialmen, engineers, architects or other persons who have
rendered services or furnished materials for the work specified, and stating
that no part of such expenditures has been or is being made on the basis of any
previous or then pending request for the disbursement of the Casualty Proceeds;

(B)           a
copy of the requisition(s) submitted by Tenant and/or its contractor(s) setting
forth a brief description of the services and materials supplied to and
completed for the Casualty Restoration, subtotaled by trade;

(C)           that,
except for the amount described in Section 12.03(a)(i)(A), there is no
outstanding indebtedness known to the persons signing such certificate, after
due inquiry, which is then due for labor, materials, or services in connection
with the Casualty Restoration; and

(D)          that
the cost, as estimated by the persons signing such certificate, of the work
required to complete the Casualty Restoration does not exceed the amount of the
remaining Casualty Proceeds, plus any amount deposited by Tenant to defray the
expenses of Casualty Restoration;

(ii)           Lien
waivers (following completion of any portion of the work), title insurance
endorsements or such other evidence, reasonably satisfactory to Landlord, to
the effect that all work, labor and materials installed and completed at the
Demised Premises have been paid for, or shall be paid for out of the amount
then

 29
 

 

 

requested, and that there has not been filed with
respect to the Demised Premises, any vendor’s, mechanic’s, laborer’s,
materialmen’s or other lien which has not been discharged or record, except
such as will be discharged by payment of the amount then requested and a waiver
of the right to file any lien in connection with any work or material covered
by the requisition and all prior requisitions (all of the documents referred to
in this clause (ii) are individually and collectively referred to as “Lien Waivers”);

(iii)          dual
obligee payment and performance bonds or such other security for the benefit of
the Landlord and the Mortgagee in form and substance reasonably satisfactory to
the Landlord and Mortgagee;

(iv)          the
written undertaking of each architect, engineer, construction manager, general
contractor and major subcontractor to continue performance on Landlord’s behalf
under their respective agreements in the event of a default by the Tenant under
this Lease;

(v)           complete
copies of the construction management agreement, general construction contract,
major subcontracts, all change orders, amendments and modifications to each of
the foregoing, all plan revisions and supplements and all payment requisitions,
Lien Waivers, architect’s certifications and proof of payment for all work,
labor and materials and material notices relating to or incorporated in the
Casualty Restoration prior to the date of such requisition, provided, however,
that any of the foregoing which have been delivered with a prior requisition do
not have to be re-delivered with each subsequent requisition, unless the same
have been modified or amended; and

(vi)          such
other documentation regarding the Casualty Restoration (including concrete,
soil, steel, welding and other testing certifications, surveys, engineers
certificates, building or other permits, paid invoices, data sheets and the
like) as applicable governmental or public agencies, the Mortgagee or a
construction consultant or engineer engaged by Landlord or the Mortgagee shall
reasonably require.

(b)           Tenant shall, prior to the
commencement of the Casualty Restoration, furnish to Landlord and the Mortgagee
an estimate of the total cost of the Casualty Restoration certified by the
architect or engineer in charge of the Casualty Restoration. If such cost
estimate or any subsequent estimate shall show that the cost of completing the
Casualty Restoration is in excess of the amount of the Casualty Proceeds then
available (a “Shortfall”),
Tenant shall promptly deposit with the Landlord an amount equal to such
Shortfall. The amount, if any, so deposited shall be included in the Casualty
Proceeds for all purposes of this Article.

(c)           Upon
compliance by Tenant with the foregoing provisions of this Article, Landlord
shall pay to Tenant or the persons named in the certificate referred to in
Section 12.03(a)(i), from the Casualty Proceeds, an amount equal to ninety (90%)

 30
 

 

 

percent of the cost of the Casualty Restoration which
is evidenced by the request. Upon compliance by Tenant with the foregoing
provisions of this Article, at the completion of the Casualty Restoration, the
balance of the Casualty Proceeds, to the extent of and as required to complete
the payment of the costs of Casualty Restoration, shall be paid to the persons
named in the certificates referred to in Section 12.03(a)(i) for the balance of
any sums justly due, and upon payment in full for the Cost of the Casualty
Restoration, any sums remaining shall be paid to Tenant upon Tenant’s delivery
to Landlord of final Lien Waivers and evidence reasonably satisfactory to the
Landlord that the Casualty Restoration has been paid in full.

(d)           If the amount of any Casualty
Proceeds shall exceed the entire cost of the Casualty Restoration, such excess,
upon completion of the Casualty Restoration, and upon compliance by Tenant with
the foregoing provisions of this Article, shall be paid to and retained by
Tenant.

(e)           If prior to the completion of any
Casualty Restoration, this Lease shall terminate or expire for any reason,
including a termination by reason of an Event
of Default (hereinafter defined), then Landlord shall have the right to
receive and retain any Casualty Proceeds to the extent that they shall not have
been applied to the payment of the costs and expenses of the Casualty
Restoration, and if such termination or expiration shall be by reason other
than an Event of Default, Tenant shall thereupon be discharged from any and all
obligations to complete such Casualty Restoration provided said Casualty
Proceeds are sufficient to complete such Casualty Restoration. If, in such
case, the Casualty Proceeds are insufficient to pay the full cost of the
Casualty Restoration, Tenant shall pay the amount of any shortfall to Landlord.
The provisions of this Section 12.03(e) shall survive the expiration or earlier
termination of this Lease.

Section 12.04 – Lease
Supersedes. This Lease shall be considered an express agreement
governing any case of damage to or destruction of the Demised Premises or any
part thereof by fire or other casualty, and Section 227 of the Real Property
Law of the State of New York and any other law of like import now or hereafter
in force, are hereby waived by Tenant and shall have no application in such
case.

ARTICLE 13

ASSIGNMENT AND SUBLETTING

Section 13.01 – Landlord
Consent. Tenant shall not assign, mortgage or encumber this
Lease, its interest hereunder or the estate granted hereby, nor sublet or
suffer or permit the Demised Premises or any part thereof to be used by others,
without the prior written consent of Landlord in each instance.

Section
13.02 – Collection of Rent. If Tenant should assign its
interest in this Lease, or if all or any part of the Demised Premises be
underlet or occupied by anybody other than Tenant, Landlord may, after default
by Tenant, collect rent from the assignee, under-tenant or occupant, as the
case may be, and apply the net amount to the Fixed

 31
 

 

 

Rent and Additional Rent
herein reserved, but no such assignment, underletting, occupancy or collection
shall be deemed a waiver of this covenant, or the acceptance of the assignee,
under-tenant or occupant as Tenant, or a release of Tenant from the further
performance by Tenant of the covenants on the part of Tenant contained herein. The
consent by Landlord to any 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.

 32
 

 

 

Section 13.03 – Recapture.

(a)           If
Tenant shall desire to assign this Lease, or to sublet the Demised Premises, it
shall, no later than thirty (30) days prior to the proposed effective date of
the assignment or sublet, submit to Landlord a written request for Landlord’s
consent to such assignment or subletting (“Tenants Offer Notice”), which shall contain the following
information: (i) the name and address of the proposed assignee or subtenant;
(ii) the terms and conditions of the proposed assignment or subletting; (iii)
the nature and character of the business of the proposed assignee or subtenant
and its proposed use of the Demised Premises; and (iv) current financial
information and any other information Landlord may reasonably request.

(b)           Tenant’s
Offer Notice shall be deemed an offer from Tenant to Landlord whereby Landlord
(or Landlord’s designee) may, at Landlord’s option, (i) sublease such space
from Tenant (if the proposed transaction is a sublease of all or part of the
Demised Premises), (ii) have this Lease assigned to it or terminate this Lease
(if the proposed transaction is an assignment or a sublease of all or
substantially all of the Demised Premises or a sublease of a portion of the
Demised Premises which, when aggregated with other subleases then in effect,
covers all or substantially all of the Demised Premises), or (iii) terminate
this Lease with respect to the space covered by the proposed sublease (if the
proposed transaction is a sublease of part of the Demised Premises). Said
option may be exercised by Landlord by notice to Tenant within sixty (60) days
after a Tenant’s Offer Notice, together with all information required pursuant
to Section 13.03(a), has been given by Tenant to Landlord.

(c)           If
Landlord exercises its option under Section 13.03(b) to terminate this Lease,
then this Lease shall terminate on the proposed assignment or sublease
commencement date specified in the applicable Tenant’s Offer Notice and all
Fixed Rent and Additional Rent shall be paid and apportioned to such date.

(d)           If
Landlord exercises its option under Section 13.03(b) to have this Lease
assigned to it (or its designee), then Tenant shall assign this Lease to
Landlord (or Landlord’s designee) by an assignment in form and substance
reasonably satisfactory to Landlord, effective on the proposed assignment or
sublease commencement date specified in the applicable Tenant’s Offer Notice. Tenant
shall not be entitled to consideration or payment from Landlord (or Landlord’s
designee) in connection with any such assignment. If the Tenant’s Offer Notice
provides that Tenant will pay any consideration or grant any concessions in
connection with the proposed assignment or sublease, then Tenant shall pay such
consideration and/or grant any such concessions to Landlord (or Landlord’s
designee) on the date Tenant assigns this Lease to Landlord (or Landlord’s
designee).

(e)           If
Landlord exercises its option under Section 13.03(b) to terminate this Lease
with respect to the space covered by a proposed sublease, then (i) this Lease
shall terminate with respect to such part of the Demised Premises on the
effective date of the proposed sublease, (ii) from and after such date the
Fixed Rent and

 33
 

 

 

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 (iii) Tenant shall pay to Landlord, upon demand, the costs incurred by
Landlord in demising separately such part of the Demised Premises and in complying
with any applicable laws and regulations relating to such demise.

(f)            If
Landlord exercises its option under Section 13.03(b) to sublet the space Tenant
desires to sublet, such sublease to Landlord or its designee (as subtenant)
shall be in form and substance reasonably satisfactory to Landlord at the
rental rate per rentable square foot of Fixed Rent and Additional Rent then
payable pursuant to this Lease and shall be for the term set forth in the
applicable Tenant’s Offer Notice, and:

(i)            shall
be subject to all of the terms 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 13.03;

(ii)           shall
be upon the same terms and conditions as those contained in the applicable
Tenant’s Offer Notice and otherwise on the terms 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 13.03;

(iii)          shall
permit the sublessee, without Tenant’s consent, freely to assign such sublease
or any interest therein or to sublet all or any part of the space covered by
such sublease and to make any and all alterations and improvements in the space
covered by such sublease;

(iv)          shall
provide that any assignee or further subtenant of Landlord or its designee may,
at the election of Landlord, make alterations, decorations and installations in
such space or any part thereof, any or all of which 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 caused by such removal;
and

(v)           shall
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 shall deem appropriate, (iii) Landlord, at Tenant’s expense, may make
such alterations as may be required or deemed necessary by Landlord to demise
separately the subleased space and to comply with any applicable laws and regulations
relating to such demise, and (iv) at the expiration of the term of such
sublease, Tenant shall 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 such space in good order and
condition.

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(g)           In
the case of a proposed sublease, Tenant shall not sublet any space to a third
party at a rental which is less (on a per rentable square foot basis) than the
rental (on a per rentable square foot basis) specified in Tenant’s Offer Notice
with respect to such space, without complying once again with all of the
provisions of this Section 13.03 and re-offering such space to Landlord at such
lower rental. In the case of a proposed assignment, Tenant shall not assign
this Lease to a third party where Tenant pays greater consideration or grants a
greater concession to such third party for such assignment then the
consideration offered to be paid or concession offered to be granted to Landlord
in Tenant’s Offer Notice without complying once again with all of the
provisions of this Section 13.03 and re-offering to assign this Lease to
Landlord and pay such consideration or grant such concession to Landlord.

Section 13.04 – Landlord
Consent. If Landlord shall not exercise its option to
terminate this Lease pursuant to Section 13.03(b) above, except as set forth in
Section 13.13, Landlord shall not unreasonably delay, condition or withhold its
consent to the proposed assignment or subletting referred to in Tenant’s Offer
Notice, provided that the following further conditions shall be fulfilled:

(a)           The
Demised Premises shall not, without Landlord’s prior consent, have been listed
or otherwise publicly advertised for assignment or subletting at a rental less
than the Fixed Rent and Additional Rent. However, this shall not be deemed to
prohibit Tenant from negotiating or consummating a sublease at a lower rental
if Tenant shall first have offered to sublet the space involved to Landlord for
the same rent and term by notice given with or after Tenant’s request for
consent to the subletting or assignment. Landlord may accept such offer within
thirty (30) days from receipt of such request for consent or twenty (20) days
after receipt of the offer, whichever is later;

(b)           Tenant
shall not then be in default hereunder beyond the time herein provided, if any,
to cure such default;

(c)           The
proposed assignee or subtenant shall have a financial standing, be of a
character, be engaged in a business, and propose to use the Demised Premises in
a manner consistent with the extent of the obligations undertaken by the
proposed assignee or subtenant;

(d)           No
subletting shall end later than one (1) day before the Expiration Date of this
Lease or shall be for a term of less than two (2) years unless it commences
less than two (2) years before the Expiration Date;

(e)           There
should be no more than three (3) subtenants in the Demised Premises;

(f)            Tenant
shall reimburse Landlord on demand for any actual costs that may be incurred by
Landlord in connection with said assignment or sublease, including, without
limitation, the costs of making investigations as to the acceptability of the
proposed assignee or subtenant, and legal costs incurred in connection with the

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granting of any
requested consent; and

(g)           The
proposed assignee or subtenant is engaged in a business and the Demised
Premises will be used in a manner, which is limited to the Permitted Use.

Section 13.05 –
Attornment. Every subletting hereunder is subject to the
express condition, and by accepting a sublease hereunder each subtenant shall
be conclusively deemed to have agreed, that if this Lease should be terminated
prior to the Expiration Date or if Landlord should succeed to Tenant’s estate
in the Demised Premises, then at Landlord’s election the subtenant shall either
surrender the Demised Premises to Landlord within sixty (60) days of Landlord’s
request therefor, or attorn to and recognize Landlord as the subtenant’s
landlord under the sublease and the subtenant shall promptly execute and
deliver any instrument Landlord may request to evidence such attornment.

Section 13.06 –
Counterpart/Insurance.

(a)           Tenant
shall furnish Landlord with a counterpart (which may be a reproduced copy) of
each sublease or assignment made hereunder within ten (10) days after the date
of its execution.

(b)           No
sublease shall be valid, and no subtenant shall take possession of the Demised
Premises or any part thereof, until there has been delivered to Landlord, both
(i) an executed counterpart of such sublease, and (ii) a certificate of
insurance evidencing that (x) Landlord and its designees are additional
insureds under the insurance policies required to be maintained by occupants of
the Premises pursuant to Article 11, and (y) there is in full force and effect,
the insurance otherwise required by Article 11.

Section 13.07 – Tenant
Liability. Except where Landlord exercises its option under
Section 13.3(b) to sublet the entire Demised Premises, notwithstanding any
sublease or any assignment and assumption by the assignee of all or any part of
the obligations of Tenant hereunder, Tenant herein named, and each immediate or
remote successor in interest of Tenant named herein, shall remain liable
jointly and severally (as a primary obligor) with its assignee and subtenant
and all subsequent assignees and subtenants for the performance of Tenant’s
obligations hereunder, and, without limiting the generality of the foregoing,
shall remain liable to Landlord for all acts and omissions on the part of any
assignee and subtenant subsequent to it in violation of any of the obligations
of this Lease.

Section 13.08 –
Partnership Tenant. If at any time Tenant is a partnership,
the following shall apply:

(a)           the
liability of each of the parties comprising Tenant shall be joint and several;

(b)           each of
the parties comprising Tenant hereby consents to, and

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agrees to be bound by,
any written instrument which may hereafter be executed, changing, modifying or
discharging this Lease, in whole or in part, or surrendering all or any part of
the Demised Premises to Landlord or renewing or extending this Lease and by any
notices, demands, requests or other communications which may hereafter be
given, by Tenant or by any of the parties comprising Tenant;

(c)           any
bills, statements, notices, demands, requests or other communications given or
rendered to Tenant or to any of the parties comprising Tenant shall be deemed
given or rendered to Tenant and to all such parties and shall be binding upon
Tenant and all such parties;

(d)           if
Tenant shall admit new partners, all of such new partners shall, by their
admission to Tenant, be deemed to have assumed performance of all of the terms,
covenants and conditions of this Lease on Tenant’s part to be observed and
performed;

(e)           Tenant
shall give prompt notice to Landlord of the admission of any partner or
partners, and upon demand of Landlord, shall cause each such partner to execute
and deliver to Landlord an agreement in form satisfactory to Landlord, wherein
each such new partner shall assume performance of all of the terms, covenants
and conditions of this Lease on Tenant’s part to be observed and performed (but
neither Landlord’s failure to request any such agreement nor the failure of any
such new partner to execute or deliver any such agreement to Landlord shall
vitiate the provisions of this Section 13.08;

(f)            on
each anniversary of the Commencement Date, Tenant shall deliver to Landlord a
list of all partners together with their current residential addresses;

(g)           For so long
as Tenant shall not be in default under the terms of this Lease, if any partner
in Tenant, as now or hereafter constituted, shall resign or retire from Tenant,
or shall die, then in any such event the equity partner so retiring, or
resigning or the estate of an equity partner or shareholder thereof who has
died, as the case may be, shall be released from any liability or
responsibility under this Lease from and after the date of such retirement,
resignation or death provided that only the first such equity partner or
shareholder resigning, retiring, or dying within any given calendar year shall
be so released in that calendar year, with any subsequent equity partner or
shareholder resigning, retiring or dying within said calendar year being
released, in chronological order, in the next-subsequent calendar year or
calendar years. Tenant shall give Landlord prompt notice of such resignation,
retirement or death; and

Section
13.09 – Profit. If Tenant shall sublet the Demised Premises
to anyone for rents which for any period shall exceed the Fixed Rent payable
under this Lease for the same period, Tenant shall pay Landlord, as Additional
Rent hereunder, the amount of any rents, additional charges 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 Demised Premises

 37
 

 

 

pursuant to the terms
hereof. The sums payable under this Section 13.09 shall be paid to Landlord as
Additional Rent as and when payable by the subtenant to Tenant.

Section 13.10 – Transfers
of Interests in Tenant. Any transfer, by operation of law or
otherwise, of Tenant’s interest in this Lease (in whole or in part) or of a
fifty (50%) percent or greater interest in Tenant or of fifty (50%) percent or
more of the assets of Tenant (whether stock, partnership interest or otherwise)
shall be deemed an assignment of this Lease within the meaning of this Article.
If there has been a previous transfer of less than a fifty (50%) percent
interest in Tenant or Tenant’s assets, then any simultaneous or subsequent
transfer of an interest in Tenant or Tenant’s assets which, when added to the
total percentage interest previously transferred, totals a transfer of greater
than a fifty (50%) percent interest in Tenant or Tenant’s assets shall be
deemed an assignment of Tenant’s interest in this Lease within the meaning of
this Article.

Section 13.11 – Corporate
Reorganization. Notwithstanding the provisions of Section
13.10 hereof, without the consent of Landlord, this Lease may be assigned to
(i) an entity created by merger, reorganization or recapitalization of or with
Tenant or (ii) a purchaser of all or substantially all of Tenant’s assets; provided,
in the case of both clause (i) and clause (ii), that (A) Landlord
shall have received a notice of such assignment from Tenant, (B) the assignee
assumes by written instrument satisfactory to Landlord all of Tenant’s
obligations under this Lease, (C) such assignment is for a valid business
purpose and not to avoid any obligations under this Lease, and (D) the assignee
is a reputable entity of good character and shall have, immediately after
giving effect to such assignment, an aggregate net worth (computed in
accordance with GAAP) at least equal to the aggregate net worth (as so
computed) of Tenant immediately prior to such assignment or on the date of this
Lease, whichever is greater.

13.12 – Metropolitan
Transit Authority. Notwithstanding any provisions of this
Article to the contrary, without the consent of Landlord, Tenant may sublet, in
whole or in part, the Demised Premises to MTA and/or MTA Bus, provided Tenant
provides Landlord with a copy of the executed sublease. Sections 13.02,
13.04(b), 13.04(d), 13.05, 13.06, 13.07 and 13.09 of this Lease shall apply to
such sublease.

13.13 – Non-Compliance
with Article. In the event that (i) Landlord fails to
exercise any of its options under this Article 13 and (ii) Tenant fails to
execute and deliver the assignment or sublease to which Landlord consented
within forty-five (45) days after the giving of such consent, then, Tenant
shall again comply with all of the provisions and conditions of this Article 13
before assigning its interest in this Lease or subletting the Demised Premises.

ARTICLE
14

INDEMNIFICATION

Section 14.01 –
Indemnity. Tenant shall indemnify, defend, save and hold
harmless Landlord and its affiliates, trustees, agents, members, employees,
officers, directors, successors and assigns (each, an “Indemnified Party”)
from and against any

 38
 

 

 

and all liability
and damages and any and all injury, loss, claim, damage or suit of every kind
and nature, including Landlord’s reasonable counsel fees and disbursements, to
any person, firm, association or corporation or to any property, arising out of
or based upon, related to, or in any way connected with, a breach of Tenant’s
obligations under this Lease, the actions or omissions of Tenant or any Tenant
Party or the use or occupancy of the Demised Premises, except that Tenant shall
not indemnify Landlord for Landlord’s negligence or willful misconduct or the
negligence or willful misconduct of any Indemnified Party, or for any
Pre-Existing Environmental Condition in Article 10.

Section
14.02 – Notice of Proceedings. An Indemnified Party which
becomes entitled to indemnification under this Agreement shall promptly notify
Tenant of any claim or proceeding in respect of which it is to be indemnified. Such
notice shall be given as soon as reasonably practicable after the Indemnified
Party obligated to give such notice becomes aware of such claim or proceeding
and shall include a complete copy of all notices, pleadings and other papers
related thereto. Failure to give such notice shall not excuse an
indemnification obligation except to the extent failure to provide notice
adversely affects Tenant’s interests.

Section
14.03 – Conduct of Claim. Tenant shall assume the defense of
the claim or proceeding with counsel designated by Tenant; provided, however,
that the Indemnified Party shall have the right to participate fully in any
claim or proceeding and to retain its own counsel, but the fees and expenses of
such counsel will be at its own expense unless (i) Tenant shall have agreed to
the retention of such counsel for both Tenant and the Indemnified Party or (ii)
the named parties to any action or proceeding include the Tenant and the
Indemnified Party and representation of both such parties has been determined
in the reasonable and good faith judgment of either party to be inappropriate
under applicable standards of professional conduct due to actual or potential
conflicting interests between them. In the event the Tenant is defending or
prosecuting any claim or proceeding, (a) the Indemnified Party shall not admit
any liability with respect to, or settle, compromise or discharge such claim or
proceeding without Tenant’s prior written consent, and (b) the Indemnified
Party will agree to any settlement, compromise or discharge of the suit, action
or proceeding which the Tenant may recommend and which by its terms obligates
Tenant to pay the full amount of liability in connection with such claim or
proceeding; provided, however, that without the Indemnified Party’s consent,
which consent may not be unreasonably withheld or delayed, Tenant may only
consent to the entry of any judgment or enter into any settlement that does not
provide for injunctive or other non-monetary relief affecting the Indemnified
Party. If Tenant fails to assume the defense of a claim, the indemnification of
which is required under this Lease, the Indemnified Party may, at the expense
of Tenant, contest, settle, or pay such claim. Except as otherwise expressly
set forth herein, Tenant shall not compromise or settle a claim hereunder
without the prior written consent of the Indemnified Party

 39

 

 

ARTICLE 15

CONDEMNATION

 

Section 15.01 – Condemnation/Notice.     If
Landlord or Tenant receives written notice of a Taking (hereinafter defined) or a proposed Taking, it shall
promptly notify the other thereof, but no such notice of intention shall confer
any rights upon Tenant under this Article, all of which rights shall come into
effect only upon the vesting of title in the Taking authority. As used herein,
a “Taking” shall mean
the appropriation, condemnation or taking of all or any portion of the Demised
Premises by any governmental or public authority for public or quasi-public use
under any right of eminent domain, condemnation or other law, or the giving of
a deed in lieu thereof.

 

Section 15.02 – Material Taking.

 

(a)           (i)            In the event of a Taking of the
entire Demised Premises, this Lease shall automatically cease and terminate
upon the date that title is vested in the Taking authority and all Fixed Rent
and Additional Rent shall be paid up to that date. In the event of a Taking of
the entire Demised Premises during the Term, in addition to any award received
by Landlord and in addition to all other payments required to be made by Tenant
hereunder, and in the event such Taking is effected by the City of New York or
any of its agencies or instrumentalities, or by the MTA, or by New York State
on behalf of the MTA, Tenant shall pay Landlord an additional amount equal to
twenty-five (25%) percent of the award received by Landlord in the condemnation
proceeding (which award, for purposes of calculating the additional amount paid
to Landlord, shall not be reduced by such amount). Landlord and Tenant agree
that this additional amount represents Landlord’s recovery of its loss of
business opportunity and such amount is not a penalty.

 

(ii)         In
the event of a Taking of less than the entire Demised Premises, this Lease
shall continue in full force and effect as to the portion of the Demised
Premises not Taken and Section 15.03 shall apply.

 

(b)           In
the event of a Taking, Landlord and any Mortgagee designated by Landlord shall
have the exclusive right to file any claim or to commence any action or
proceeding to collect any Proceeds payable out of or in connection with such
Taking, except for any separate award to which Tenant may be entitled pursuant
to Section 15.05, and Tenant and everyone claiming by, under or through Tenant
waives all right to assert any claim against Landlord or the Taking authority
in such proceeding. The term “Proceeds”
shall mean any award, settlement, compensation or proceeds payable by reason of
or in connection with any Taking, including the value of the interests of
Landlord and Tenant in the Demised Premises and this Lease, any Improvements
made by Tenant and Landlord respectively, the value of all awards for severance
and indirect damage, and the right to receive any advance payment or interest
thereon. Tenant shall, at Tenant’s own cost and expense, cooperate with
Landlord and take all actions and execute all documents reasonably required by
Landlord or required by the Taking authority to collect such Proceeds, and if
Tenant shall fail or refuse to take any act and/or execute any document which
is reasonably required by Landlord or required by the Taking authority to
collect such Proceeds (or any part thereof), then Tenant shall be

 40
 

 

 

responsible to Landlord for the sum of all
Proceeds, including interest at the Default Rate, and for all damages, expenses
and fees incurred by Landlord as a result of Tenant’s failure or refusal to act
or execute any document as aforesaid, including, but not limited to, attorneys’
fees and suspension of interest by the Taking authority, which sums shall be
Additional Rent under this Lease and which Landlord may offset from any share
of such Proceeds to which Tenant may be entitled pursuant to Sections 15.02, 15.03
and 15.04. The provisions of this Section are in addition to any other remedies
available to Landlord.

 

(c)           In
the event of a Taking of the entire Demised Premises and a termination of this
Lease, all Proceeds shall be paid to Landlord who shall within forty-five (45)
days thereafter (or within thirty (30) days following any final determination
in any arbitration proceeding pursuant to Section 15.07 hereof, as hereinafter
set forth) disburse the net Proceeds of such Taking to Landlord and Tenant in proportion
to their interests in the Demised Premises, as follows:

 

(i)            to
the Landlord for the value of the Landlord’s interest in the Demised Premises,
valuing the Demised Premises free and clear of this Lease and at its highest
and best use as of the date of the Taking, except that consideration shall be
given to this Lease to the extent it is relevant in determining the highest and
best use of the Demised Premises, including Landlord’s reversionary interest,
and any consequential damages, including severance damages, out of which
Landlord shall pay any sums due any Mortgagee; and

 

(ii)           provided
that no uncured Event of Default has occurred which is then continuing and
provided further that there are at least two (2) years remaining in the Term on
the date on which title to the Demised Premises is vested in the Taking
authority to Tenant for the value of Tenant’s leasehold estate, giving
consideration to the terms of this Lease, as though there had been no Taking.
Any dispute between Landlord and Tenant concerning the pro rata portions
of Proceeds payable to Landlord and Tenant in accordance with clauses (i) and
(ii) above shall be promptly submitted to binding arbitration in accordance
with Section 15.07 hereof.

 

Section 15.03 –
Taking of Less Than Entire Demised Premises.

 

(a)           If a Taking involves less than the
Entire Demised Premises, this Lease shall terminate as to the area so Taken
from and after the vesting of title in such Taking and shall continue as to the
remainder of the Demised Premises; provided, however, from and after the date
on which possession of the portion of the Demised Premises is Taken, the Tenant
shall proceed diligently and in good faith to close in and restore the
Improvements. The Fixed Rent shall be reduced as of the vesting date proportionally
to account for the area of the Improvements so taken. Notwithstanding the
foregoing, in the event of a taking of less than the Entire Demised Premises,
this Lease shall automatically terminate as to the area so taken by or given to
the Taking Authority and shall continue as to the remainder of the Demised
Premises. In the event of a Taking of less than the Entire Demised Premises
during the Term, in addition to any award

 41
 

 

 

received by Landlord and
in addition to all other payments required to be made by Tenant hereunder and
in the event such Taking is effected by the City of New York or any of its
agencies or instrumentalities, or by the MTA, or by New York State on behalf of
the MTA,, Tenant shall pay Landlord an additional amount equal to twenty-five
(25%) percent of the award received by Landlord in the condemnation proceeding
(which award, for purposes of calculating the additional amount paid to
Landlord, shall not be reduced by such amount). Landlord and Tenant agree that
this additional amount represents Landlord’s recovery of its loss of business
opportunity and such amount is not a penalty. From and after the date on which
title the possession of the portion of the Demised Premises is Taken, the
Tenant shall proceed diligently and in good faith to close in and restore the
Improvements.

 

(b)           Landlord shall be entitled to receive
all Proceeds and Tenant shall have no part thereof or claim thereto nor shall
Tenant have any claim for the value of the portion of the leasehold estate so
Taken. Landlord shall pay all fees, costs and expenses of every character and
kind of Landlord incurred in connection with such Taking and obtaining the
Proceeds therefor.

 

Section 15.04 – Temporary Taking.     If
possession of all or any portion of the Demised Premises shall be Taken for
occupancy for a limited period (a “Temporary
Taking”), this Lease shall continue in full force and effect and
Tenant shall continue to pay in full the Fixed Rent, Additional Rent and other
charges herein reserved without reduction or abatement. Landlord shall receive
out of the Proceeds of such Temporary Taking (and Tenant shall be credited
with) an amount equal to the total of the Fixed Rent, Additional Rent and other
charges due to Landlord or to be paid by Tenant under the terms of this Lease
for the period of such Temporary Taking (less any amounts theretofore paid by
Tenant to Landlord) and the balance thereof shall be divided equally between
Landlord and Tenant.

 

Section 15.05 –
Tenant’s Claim for Fixtures.     In
any condemnation proceeding, Tenant may submit a separate claim against the
Taking authority for the value of Tenant’s trade fixtures, the cost of removal
or relocation, goodwill, inventory, equipment and going concern values if such
separate claims are allowable as such and, provided that such Proceeds shall
not include an amount of such claims of Tenant, such separate claims shall not
reduce the amount of Proceeds otherwise payable to Landlord.

 

(a)           Section 15.06 – Costs of Taking.     Landlord
and Tenant shall be solely responsible for their respective legal, appraisal,
engineering and other fees, costs and expenses arising out of or in connection
with any claim allocable or attributable to any item which each is permitted to
separately claim under this Article 15; provided, however, that the Landlord’s
legal, appraisal, engineering and other fees and expenses incurred in
connection with the collection of any Proceeds pursuant to Section 15.02 shall
be allocated and paid by Landlord and Tenant in proportion to the amount of
Proceeds disbursed to Landlord and Tenant respectively.

 42
 

 

 

ARTICLE 16

RIGHT TO INSPECT

Section 16.01 –
Right to Inspect.     Tenant shall
permit Landlord or Landlord’s agents to enter the Demised Premises at all
reasonable hours and upon reasonable notice to Tenant for the purpose of (i)
inspecting the same; (ii) confirming that Tenant is complying with terms of
this Lease; (iii) making repairs which Tenant neglects or refuses to make; (iv)
exhibiting the Demised Premises to prospective mortgagees; (v) exhibiting the
Demised Premises to brokers and prospective purchasers; and (vi) during the two
(2) years preceding the expiration of this Lease, exhibiting the Demised
Premises to brokers and prospective purchasers and lessees  (it being understood that Landlord shall have
no obligation to do any of the foregoing acts); provided, in each and every
case, Landlord shall use commercially reasonable efforts not to unreasonably
interfere with the conduct of Tenant’s business at the Demised Premises.

 

 43
 

 

 

ARTICLE
17

[INTENTIONALLY
OMITTED]

 

ARTICLE
18

DEFAULT PROVISIONS

 

Section 18.01 -
Events of Default.     If any one or
more of the following events (in this Lease sometimes called “Events of
Default”) shall happen:

 

(a)           (i)           
if default shall be made in the due and punctual payment of any Fixed Rent
payable under this Lease or any part thereof when and as the same shall become
due and payable, and such default shall continue for a period of thirty (30)
days after written notice thereof from Landlord to Tenant; provided, however,
that such thirty (30) day period shall be reduced to ten (10) days after the
third (3rd)
default in any twelve (12) month period, and further reduced to five (5) days
if such default occurs four (4) or more times in any twelve (12) month period;

 

(ii)           if default shall be made in the due
and punctual payment of any Additional Rent or other charges payable under this
Lease or any part thereof when and as the same shall become due and payable,
and such default shall continue for a period of thirty (30) days after written
notice thereof from Landlord to Tenant;

 

(b)           if default shall be made by Tenant in
keeping, observing or performing any of the terms, covenants, agreements,
provisions, conditions or limitations contained in this Lease on Tenant’s part
to be kept, observed or performed, other than those referred to in the
foregoing subdivision (A) of this Section, which do not expose the Landlord to
criminal liability, and such default shall continue for a period of thirty (30)
days after written notice thereof from Landlord to Tenant, or in the case of
such a default or a contingency which cannot with due diligence and in good
faith be cured within thirty (30) days, and Tenant fails to proceed promptly
and with due diligence and in good faith to cure the same and thereafter to
prosecute the curing of such default with due diligence and in good faith (it
being intended that in connection with a default which does not expose Landlord
to criminal liability, and is not susceptible of being cured with due diligence
and in good faith within thirty (30) days, that the time of the Tenant within
which to cure the same shall be extended for such a period as may be necessary
for the curing thereof promptly with due diligence and in good faith);

 

(c)           if Tenant shall file a voluntary
petition in bankruptcy and shall be adjudicated a bankrupt or insolvent, or
shall file any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy act or any other present or future
applicable federal, state or other statute or law, or shall seek or consent to
or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any substantial part of its properties or of the Demised
Premises or of Tenant’s interest therein; or

 44
 

 

 

(d)           if within ninety (90) days after the
commencement of any proceeding against Tenant seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the present or any future federal bankruptcy act or any other
present or future applicable federal, state or other statute or law, such
proceeding shall not have been dismissed or if, within ninety (90) days after
the appointment, without the consent or acquiescence of Tenant, of any trustee,
receiver or liquidator of Tenant or of all or any substantial part of its
properties or of the Demised Premises or of Tenant’s interest therein, such
appointment shall not have been vacated or stayed on appeal or otherwise, or
if, within forty-five (45) days after the expiration of any such stay, such
appointment shall not have been vacated;

 

then and in any such
event Landlord at any time thereafter during the continuance of any such Event
of Default may give written notice to Tenant, specifying such Event of Default
or Events of Default and stating that this Lease and the term hereby demised
shall expire and terminate on the date specified in such notice, which shall be
at least thirty (30) days after the giving of such notice, and upon the date
specified in such notice, subject to the provisions of Section 18.03, this
Lease and the term hereby demised and all rights of Tenant under this Lease,
including all rights of renewal whether exercised or not, shall expire and
terminate, as if the date specified in such notice were the day herein
definitely fixed for the end and expiration of this Lease and the term thereof.

 

Section 18.02 -
Bankruptcy.     Any such proceeding
or action involving bankruptcy, insolvency, reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy act or any other present or future
applicable federal, state or other statute or law, above set forth in
subdivisions (c) and (d) of Section 18.01 of this Article, shall be grounds for
the termination of this Lease pursuant to the terms, covenants, agreements,
provisions, conditions and limitations of this Article 18, only when such
proceeding, action or remedy shall be taken or brought by or against Tenant or
any assignee of this Lease, while such Tenant or such assignee is the owner of
this Lease.

 

Section 18.03 –
Termination of Lease.     Upon any
expiration or termination of this Lease, Tenant shall quit and peacefully
surrender the Demised Premises to Landlord, and Landlord, upon or at any time
after any such expiration or termination, may without further notice, enter
upon and reenter the Demised Premises and possess and repossess itself thereof,
by force, summary proceedings, ejectment or otherwise, and may dispossess
Tenant and remove Tenant and all other persons and property from the Demised
Premises and may have, hold and enjoy the Demised Premises and the right to receive
all rental and other income of and from the same.

 

Section 18.04 –
Reletting of Demised Premises.     At
any time or from time to time after any such expiration or termination,
Landlord may relet the Demised Premises or any part thereof, in the name of
Landlord or otherwise, for such term or terms (which

 45
 

 

 

may be greater or less
than the period which would otherwise have constituted the balance of the Term
of this Lease) and on such conditions (which may include concessions or free
rent) as Landlord, in its uncontrolled discretion, may determine and may
collect and receive the rents therefor. Landlord shall in no way be responsible
or liable for any failure to relet the Demised Premises or any part thereof, or
for any failure to collect any rent due upon any such reletting.

 

Section 18.05 -
Damages.     No such expiration or
termination of the Lease shall relieve Tenant of its liabilities and
obligations under this Lease, and such liabilities and obligations shall
survive any such expiration or termination. In the event of any such expiration
or termination, whether or not the Demised Premises or any part thereof shall
have been relet, Tenant shall pay to Landlord a sum equal to the Fixed Rent and
the Additional Rent required to be paid by Tenant up to the time of such
expiration or termination of this Lease, and thereafter Tenant, until the end
of what would have been the Term of this Lease in the absence of such
expiration or termination, shall be liable to Landlord for, and shall pay to
Landlord, as and for liquidated and agreed current damages for Tenant’s
default, at the election of Landlord, either:

 

(a)           (i)            the equivalent of the amount of the
Fixed Rent and the Additional Rent which would be payable under this Lease by
Tenant if this Lease were still in effect, less

 

(ii)           the net proceeds of any reletting
effected pursuant to the provisions of Section 18.04 hereof, after deducting
all Landlord’s expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions, legal expenses,
reasonable attorneys’ fees, alteration costs, and expenses of preparation for
such reletting.

 

Tenant shall pay such
current damages (herein called “deficiency”) to Landlord quarterly on
the first day of each calendar quarter, commencing with the next succeeding
calendar quarter, and Landlord shall be entitled to recover from Tenant each
deficiency as the same shall arise. If the Demised Premises or any part thereof
be relet by the Landlord for the unexpired Term of this Lease, or any part
thereof, before presentation of proof of such liquidated damages to any court,
commission or tribunal, the amount of rent reserved upon such reletting shall, prima facie, be the fair and reasonable
rental value for the part or the whole of the premises so relet during the term
of the reletting.

 

Nothing contained in this
Section 18.05 shall limit or prejudice the right of the Landlord to prove for
and obtain as liquidated damages by reason of such expiration or termination,
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 the
amount of the sums referred to above.

 

 46
 

 

 

Section 18.06 –
Tenant’s Waiver of Notice to Re-enter.     Tenant
hereby expressly waives, so far as permitted by law, the service of any notice
of intention to enter or re-enter provided for in any statute, or of the
institution of legal proceedings to that end, and Tenant, for and on behalf of
itself and all persons claiming through or under Tenant (including but not
limited to any leasehold mortgagee or other creditor) also waives any and all
right of redemption or re-entry or re-possession or to redeem or to restore the
operation of this Lease in case Tenant shall be dispossessed by a judgment or
by warrant of any court or judge or in case of entry, re-entry or re-possession
by lessor or in case of any expiration or termination of this Lease. Landlord and
Tenant, so far as permitted by law, hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matters whatsoever arising out of, or in any way connected with
this Lease, including but not limited to, the relationship of Landlord and
Tenant, Tenant’s use or occupancy of the Demised Premises or any claim of
injury or damage. The terms “enter”, “re-enter”, “entry” or re-entry”, as used
in this Lease are not restricted to their technical legal meaning.

 

Section 18.07 –
Threatened Breach.     In the event
of any breach or threatened breach by Tenant of any of the terms, covenants,
agreements, provisions, conditions or limitations contained in this Lease,
Landlord shall be entitled to enjoin such breach or threatened breach and shall
have the right to invoke any right or remedy allowed at law or in equity or by
statute or otherwise as though entry, re-entry, summary proceedings, and other
remedies were not provided for in this Lease.

 

Section 18.08 –
Remedies Cumulative.     Each right
or remedy of Landlord provided for in this Lease shall be cumulative and shall
be in addition to every other right or remedy provided for in this Lease or now
or hereafter existing at law or in equity or by statute or otherwise, and the
exercise or the beginning of the exercise by Landlord of any one or more of the
rights or remedies provided for in this Lease or now or hereafter existing at
law or in equity or by statute or otherwise shall not preclude the simultaneous
or later exercise by Landlord of any or all other rights or remedies provided
for in this Lease or now or hereafter existing at law or in equity or by
statute or other law.

 47

 

 

ARTICLE
19

ATTORNEYS’
FEES

Section
19.01 – Attorneys’ Fees.     If at
any time there shall occur an Event of Default hereunder, and if Landlord shall
institute an action or summary proceedings against Tenant based upon such Event
of Default and prevail in such action or summary proceeding, then Tenant shall
reimburse Landlord for the expenses of reasonable and actual attorneys’ fees
and disbursements incurred by Landlord. The amount of such expenses shall be
deemed to be “Additional Rent” hereunder and shall be due from Tenant on demand
from Landlord.

ARTICLE
20

WAIVER
OF REDEMPTION; COUNTERCLAIM; TRIAL BY JURY

Section
20.01 - Waiver.     Tenant hereby
expressly (i) waives any and all rights of redemption granted by or under any
present or future laws in the event of Tenant being evicted or dispossessed for
any cause, or in the event of Landlord obtaining possession of the Demised
Premises by reason of the violation by Tenant of any of the covenants and
conditions of this Lease or otherwise; (ii) waives all rights to stay summary
proceedings except in connection with a “Yellowstone” injunction; and (iii)
agrees that it shall not interpose any counterclaim in any summary proceeding
or any action based on non-payment of Fixed Rent, Additional Rent or any other payments
or charges required to be made by Tenant to Landlord. Nothing contained herein
shall prevent Tenant from asserting any such counterclaim as a cause of action
in a separate action or proceeding, but Tenant shall not seek a consolidation
or joint trial of such separate action or proceeding with any summary
proceeding or other action or proceeding commenced by Landlord for non-payment
of Fixed Rent, Additional Rent or any other payments or charges required to be
made by Tenant to Landlord. Landlord and Tenant hereby waive trial by jury in
any action, proceeding or counterclaim brought by either of them against the
other with respect to any matters arising out of or connected with this Lease,
the relationship of Landlord and Tenant, Tenant’s use or occupancy of the
Demised Premises, and/or any claim of injury or damage and any emergency
statutory or any other statutory remedy.

ARTICLE
21

NO
WAIVER

Section
21.01 – No Waiver.     No act or
thing done by Landlord or Landlord’s agents during the Term hereby demised
shall be deemed an acceptance of a surrender of the Demised Premises, and no
agreement to accept such surrender shall be valid unless in writing signed by
Landlord. The failure of Landlord or Tenant to seek redress for violation of,
or to insist upon the strict performance of, any covenant or condition of this
Lease shall not prevent a subsequent act, which would have originally
constituted a violation, from having all the force and effect of an original
violation. The receipt by Landlord of Fixed Rent or Additional Rent with
knowledge of the breach of any covenant

 48
 

 

 

of this Lease
shall not be deemed a waiver of such breach. No provision of this Lease shall
be deemed to have been waived by Landlord or Tenant unless such waiver is in
writing signed by the Party against whom such waiver is to be enforced.

ARTICLE
22

END
OF TERM

Section
22.01 – Surrender of Demised Premises.

(a)           Tenant shall, at the expiration or
other termination of this Lease quit and surrender to Landlord the Demised
Premises, broom clean and in good condition and repair, reasonable wear and
tear and casualty excepted, and the roof shall be free of leaks. Tenant shall
surrender all keys for the Demised Premises to Landlord at Landlord’s office,
and shall inform Landlord of all combinations of locks, safes, vaults, alarms
and other encoded devices or facilities if any, located in the Demised
Premises. If the last day of the Term shall fall on a Saturday, Sunday or legal
holiday, the Term of this Lease shall expire on the business day immediately
preceding such date.

(b)           All personal property, furniture,
furnishings and trade fixtures furnished by or at the expense of Tenant, other
than those affixed to the Demised Premises so that they cannot be removed
without damage, shall remain the property of Tenant and may be removed by
Tenant from time-to-time prior to the expiration or other termination of this
Lease. Tenant shall notify Landlord in writing not less than sixty (60) days
prior to the expiration of the Term specifying any such items of property which
Tenant does not wish to remove. If, within thirty (30) days after the service
of such notice, Landlord shall request Tenant to remove any of said items,
Tenant shall, at Tenant’s expense, remove said items prior to the expiration of
the Term.

(c)           In any case where Tenant removes any
property or Alterations pursuant to Sections 22.01(a) or 22.01(b), or otherwise,
Tenant shall immediately repair all structural damage caused by said removal
and shall restore the Demised Premises to good condition at Tenant’s expense,
and if Tenant fails to do so, Landlord may do so at Tenant’s cost and Tenant
shall reimburse Landlord therefor upon demand for reasonable and actual costs
incurred by Landlord.

(d)           Upon failure of Tenant to remove any
property in accordance with Sections 22.01(a) and 22.01(b), or upon failure of
Tenant to notify Landlord of any property it does not wish to remove from the
Demised Premises in accordance with Section 22.01(b), then, as to such property,
upon termination of this Lease, Landlord may, at Tenant’s expense: (i) remove
all such property which Landlord may require Tenant to remove pursuant  to Sections 22.01(a) and 22.01(b), (ii) cause
the same to be placed in storage, and (iii) repair any damage caused by said
removal. Tenant shall, upon demand, reimburse Landlord for all of the aforesaid
expenses.

(e)           [Intentionally Omitted].

 49
 

 

 

(f)            Notwithstanding anything to the
contrary contained in this Section 22.01, any items of property or Alterations
not removed by Tenant may, at the election of Landlord, be deemed to have been
abandoned by Tenant, and Landlord may retain and dispose of said items without
any liability to Tenant and without accounting to Tenant for the proceeds
thereof.

Section
22.02 - Ownership of Improvements.     Upon
the termination of this Lease, whether by expiration of the Term or by reason
of default on the part of Tenant, or for any other reason whatsoever, all
Improvements then located on the Premises including all affixed lighting
fixtures, heating, ventilating and air conditioning equipment, pipes, ducts,
conduits, wiring, paneling, partitions, railings, mezzanine floors, galleries
and the like, shall, except as provided otherwise in Section 8.01, remain upon
and be surrendered with the Demised Premises as a part thereof and shall then
merge with the freehold estate and become the property of Landlord as a part of
the realty, free and clear of any liens, encumbrances or burdens placed upon
Tenant’s leasehold estate.

Section
22.03 – Holdover.

(a)           If the Demised Premises shall not be
surrendered as and when aforesaid and in the condition required hereunder,
Tenant shall pay to Landlord as use and occupancy for each month or fraction
thereof during which Tenant continues to occupy the Demised Premises from and
after the Expiration Date (the “Continued
Occupancy Period”), an amount of money (the “Occupancy Payment”) equal to one
hundred fifty (150%) percent of one-twelfth (1/12th) of the aggregate Fixed Rent and
Additional Rent paid or payable by Tenant during the first twelve (12) months
immediately preceding such holding over. Tenant shall make the Occupancy
Payment, without notice or previous demand therefor, on the first day of each
and every month during the Continued Occupancy Period.

(b)           The receipt and acceptance by
Landlord of the Occupancy Payment shall not be deemed a waiver or acceptance by
Landlord of Tenant’s breach of Tenant’s covenants and agreements under this
Article 22, or a waiver by Landlord of Landlord’s right to institute any
summary holdover proceedings against Tenant, or a waiver by Landlord of
Landlord’s rights to enforce any of Landlord’s rights or pursue any of Landlord’s
remedies against Tenant in such event other than the payment of Fixed Rent as
provided for in this Lease or under law. This Section shall be deemed to be an
agreement expressly providing otherwise within the meaning of Section 232-c of
the Real Property Law of the State of New York and any successor law of like
import.

(c)           No holding over by Tenant shall be
deemed nor operate as an extension of the Term of this Lease.

Section
22.04 – Survival.     Tenant’s
obligation to observe or perform each and every one of the covenants set forth
in this Article shall survive the expiration or other termination of the Term.

 50
 

 

 

ARTICLE
23

BROKER

Section
23.01 - Broker.     Tenant and
Landlord each represent that to the other that it has dealt with no broker in
connection with this Lease other than Lighthouse Real Estate Advisors, LLC (“Broker”).
Landlord shall pay Broker any commission earned pursuant to a separate
agreement between Landlord and Broker. Tenant hereby agrees to indemnify and
hold Landlord harmless of and from any and all losses, costs, damages or
expense (including, without limitation, attorneys’ fees and disbursements)
incurred by Landlord by reason of any claim of or liability to any broker,
other than the Broker, who claims to have dealt with Tenant in connection with
this Lease, which indemnity shall survive the expiration or other termination
of this Lease.

ARTICLE
24

QUIET
ENJOYMENT

Section
24.01 – Quiet Enjoyment.     Landlord
covenants that if and so long as Tenant pays the Fixed Rent and Additional Rent
and other charges reserved by this Lease, and performs all the terms, covenants
and conditions of this Lease on the part of Tenant to be performed, Tenant
shall quietly enjoy the Demised Premises subject, however, to the terms of this
Lease.

ARTICLE
25

NON-LIABILITY
OF LANDLORD

Section
25.01 – Non-Liability of Landlord.

(a)           Landlord and Landlord’s affiliates,
trustees, agents, members, employees, officers, directors, successors and
assigns shall not be liable for, and Tenant waives all claims for, loss or
damage to Tenant’s business or damage to person or property sustained by Tenant
resulting from any accident or occurrence, including, but not limited to,
claims for damage resulting from: (i) any equipment or appurtenances becoming
out of repair; (ii) injury done or occasioned by wind, rain, fire, storm or
other occurrence of nature; (iii) any defect in or failure of plumbing, heating
or air conditioning equipment, electric wiring or installation thereof, gas,
water, or steam pipes, stairs, porches, railings or walks; (iv) broken glass;
(v) the backing up of any sewer pipe or downspout; (vi) the bursting, leaking
or running of any tank, tub, washstand, water closet, waste pipe, drain or
other pipe or tank in, upon or about the Demised Premises; (vii) the escape of
steam or hot water; (viii) water, snow or ice being upon or coming through the
roof, skylight, trapdoor, stairs, doorways, windows, walks or any other place
upon or near the Demised Premises or otherwise; (ix) the falling of any fixture,
plaster, tile or stucco; and (x) any act, omission or negligence of Tenant, any
Tenant Party or of any other persons or occupants of the Improvements or of
adjoining or contiguous buildings or improvements or of owners of adjacent or
contiguous property.

(b)           Landlord shall be under no personal
liability with respect to its

 51
 

 

 

obligations under
this Lease. Tenant shall look solely to the equity of the Landlord in the Land
and Improvements constituting the Demised Premises for the satisfaction of
Tenant’s remedies, and in no event shall Tenant attempt to secure any personal
judgment against any individual or any member, principal, partner, employee,
officer, director or agent of Landlord by reason of such default by Landlord.

(c)           The word “Landlord” as used herein
means only the owner in fee for the time being of the Demised Premises, and in
the event of any sale of the Demised Premises, Landlord shall be and hereby is
entirely freed and relieved of all covenants and obligations of Landlord
hereunder and it shall be deemed and construed without further agreement
between the parties or between the parties and the purchaser of the Demised Premises,
that such purchaser has assumed and agreed to carry out any and all covenants
and obligations of Landlord hereunder.

ARTICLE 26

APPLICABLE
LAW AND CONSTRUCTION

Section
26.01 – Applicable Law and Construction.     The
laws of the State of New York shall govern the validity, performance and
enforcement of this Lease without giving effect to any principle of such law as
would result in the selection or application of law of any other jurisdiction.
The invalidity or unenforceability of any provision of this Lease shall not
affect or impair any other provision. The headings of the several articles and
sections contained herein are for convenience only and do not define, limit or
construe the contents of such articles or sections. Whenever herein the singular
number is used, the same shall include the plural, and the neuter gender shall
include the masculine and feminine genders. Neither this Lease nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought. This Lease shall be
given a fair and reasonable construction in accordance with the intentions of
the parties hereto, and without regard to or aid of canons requiring
construction against the party drafting this Lease.

 52
 

 

 

ARTICLE
27

BINDING
EFFECT OF LEASE

Section
27.01 - Binding Effect of Lease.     The
covenants, agreements and obligations contained in this Lease shall, except as
herein otherwise provided, extend to, bind and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Each
covenant, agreement, obligation or other provision herein contained shall be
deemed and construed as a separate and independent covenant of the party bound
by, undertaking or making the same, not dependent on any other provision of
this Lease unless otherwise expressly provided.

ARTICLE 28

NOTICES

Section 28.01 - Notice.     All
notices to be given hereunder shall be in writing and given by hand delivery,
by certified or registered mail, or by recognized overnight courier (e.g. Fed
Ex) addressed to either of the parties at the address listed below or at any
other subsequent mailing address they may indicate by written notice. Any
notice given hereunder by mail shall be deemed delivered upon receipt or
rejection of delivery by the addressee.

	
  If to Landlord:

  	
   

  	
  Mr. Jerome Cooper

  
	
   

  	
   

  	
  444 Merrick Road,
  Suite 370

  
	
   

  	
   

  	
  Lynbrook, New
  York 11563

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Ruskin Moscou Faltischek, P.C.

  
	
   

  	
   

  	
  1425 Reckson
  Plaza, East Tower, 15th Floor

  
	
   

  	
   

  	
  Uniondale, New
  York 11556-1425

  
	
   

  	
   

  	
  Attn: Chairman,
  Real Estate Department

  
	
   

  	
   

  	
   

  
	
  If to Tenant:

  	
   

  	
  Assistant Commissioner for Acquisitions,

  
	
   

  	
   

  	
     and
  Construction Services

  
	
   

  	
   

  	
  Department of
  Citywide Administrative Services

  
	
   

  	
   

  	
  Division of Real
  Estate Services

  
	
   

  	
   

  	
  1 Centre Street,
  20th Floor North

  
	
   

  	
   

  	
  New York, New York 10007

  
	
   

  	
   

  	
   

  
	
  And

  	
   

  	
  Metropolitan Transportation Authority

  
	
   

  	
   

  	
  347 Madison
  Avenue

  
	
   

  	
   

  	
  New York, New
  York 10017

  
	
   

  	
   

  	
  Attn: Director
  of Real Estate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Office of General Counsel

  
	
   

  	
   

  	
  Metropolitan
  Transportation Authority

  
	
   

  	
   

  	
  347 Madison
  Avenue

  
	
   

  	
   

  	
  New York, New
  York 10017

  

 

 53
 

 

 

ARTICLE
29

FEE MORTGAGES

Section
29.01 – Landlord’s Right to Mortgage.     Nothing
herein contained shall limit Landlord’s right to place any mortgage on the
interest of Landlord in the Demised Premises including, without limitation, any
modifications, consolidations, extensions, renewals and replacements thereof (“Mortgage”).

Section
29.02 – Mortgagee’s Right to Cure.     If
any act or omission of Landlord would give Tenant the right, immediately or
after lapse of a period of time, to cancel or terminate this Lease, or to abate
the payment of rent or to claim a partial or total eviction, Tenant shall not
exercise such right (a) until it has given written notice of such act or
omission to Landlord and the holder of each Mortgage; provided the name and
address of the holder of any such Mortgage shall previously have been furnished
to Tenant, and (b) until thirty (30) days shall have elapsed following the
giving of such notice if the same can be remedied within such thirty (30) day
period or if the same cannot be remedied within thirty (30) days until a
reasonable period of time has elapsed to cure provided such cure has commenced
within the thirty (30) day period, and, further, provided the holder of such
Mortgage shall with due diligence continue to remedy such act or omission.

Section
29.03 – Tenant’s Attornment.     If
the holder of any Mortgage, or any designee of any such holder, 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 Tenant shall
automatically attorn to and recognize such party so succeeding to Landlord’s
rights (“Successor Landlord”) as Tenant’s landlord under this Lease and
shall promptly execute and deliver any instrument (“Attornment Agreement”)
that such Successor Landlord may reasonably request to evidence such
Attornment. Upon such Attornment, this Lease shall continue in full force and
effect as a direct lease between the Successor Landlord and Tenant upon all of
the terms, conditions and covenants as are set forth in this Lease, 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 theretofore shall have accrued to Tenant
against Landlord; (c) be bound by any previous modification of this Lease or by
any previous prepayment of more than one (1) month’s rent, unless such
modification or prepayment shall have been expressly approved in writing by the
holder of the Mortgage; or (d) be obligated to make any improvements to, or
perform any work at, or furnish any services to, the Demised Premises.

Section
29.04 – Priority of Lease.     This
Lease and all rights of Tenant hereunder are and shall be subject and
subordinate to every underlying lease, the rights of the overlandlord or
overlandlords under each underlying lease, all Mortgages heretofore or

 54
 

 

 

hereafter placed
on or affecting any underlying lease, alone or with other property, and to all
advances heretofore or hereafter made under such leasehold mortgage, and to the
lien of all renewals, modifications, consolidations, replacements,
substitutions, spreaders, additions and extensions of any such leasehold
mortgage, and (b) any Mortgage now or hereafter affecting the Demised Premises
or any part or parts of such real property, or such real property and other
property, and to each advance made or hereafter to be made under any such
Mortgage and to all renewals, modifications, consolidations, replacements,
substitutions, spreaders, additions and extensions of any such underlying lease
or leases and/or Mortgages. In confirmation of such subordination, Tenant shall
execute and deliver promptly any certificate reasonably approved by Tenant’s
counsel that Landlord or its successors in interest may reasonably request.

ARTICLE 30

ESTOPPEL CERTIFICATES

Section 30.01 – Tenant’s Estoppel Certificate.     Tenant
shall, upon not less than fifteen (15) days’ prior written request from
Landlord, execute and deliver to Landlord a statement certifying 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 so modified) and
stating whether there are any defaults under this Lease of which Tenant has
actual knowledge and specifying such defaults, if any, and stating such other factual
information which Landlord reasonably requests.

Section
30.02 – Landlord’s Estoppel Certificate.     Landlord
shall, upon not less than fifteen (15) days’ prior written request from Tenant,
execute and deliver to Tenant a statement certifying 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 so modified) and stating whether
there are any defaults under this Lease of which Landlord has actual knowledge
and specifying such defaults, if any, and stating such other factual
information which Tenant reasonably requests.

ARTICLE 31

REPRESENTATIONS

Section 31.01 – Tenant’s Representations. Tenant represents and warrants
that:

(a)           Tenant is a municipal corporation
duly organized, validly existing and in good standing under the laws of the
State of New York and has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and to execute,
deliver and perform this Lease. The Lease has been duly authorized by all
necessary action on the part of the Tenant.

(b)           The execution, delivery and
performance of the Lease and the consummation of the transactions contemplated
hereby will not result in violation of or be in conflict with or constitute a
default under any term or provision of Tenant’s

 55
 

 

 

governing organization documents or under any
term or condition of any contract, agreement, lease or instrument to which
Tenant is a party or by which Tenant is bound or any term of any judgment,
decree, statute, rule, regulation, ordinance, franchise, certificate, permit or
the like applicable to the Tenant.

(c)           There is no action, suit, proceeding
or investigation pending or threatened or any basis therefor known to Tenant
which would question the validity of any of the foregoing representations or
the validity of this Lease.

The foregoing representations and warranties
shall be deemed made as of the date hereof and as of the Commencement Date.

Section
31.02 – Landlord’s Representations.     Landlord
represents and warrants that:

(a)           Landlord is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has all requisite power and authority to own and operate
properties, to carry on its business as now conducted, and to execute, deliver
and perform this Lease. The Lease has been duly authorized by all necessary
action on the part of the Landlord.

(b)           The execution, delivery and
performance of the Lease and the consummation of the transactions contemplated
hereby and thereby will not result in violation of or be in conflict with or
constitute a default under any term or provision of the Certificate of
Incorporation or By-Laws of the Landlord or any term of any judgment, decree,
statute, rule, regulation, ordinance, franchise, certificate, permit or the
like applicable to the Landlord.

(c)           There is no action, suit, proceeding
or investigation pending or threatened or any basis therefor known to Landlord
which would question the validity of any of the foregoing representations or
the validity of this Lease.

(d)           The shareholder of the Landlord is
Triboro Coach Corp. and the officers of the Landlord are as follows:  Jerome Cooper, President; Stephen Eagar, Vice
President; and Stan Brettschneider, Secretary and Treasurer. The foregoing
representations and warranties shall be deemed made as of the date hereof and
as of the Commencement Date.

ARTICLE
32

MISCELLANEOUS

Section
32.01 - Taxes.     Tenant shall be
responsible for any taxes, including, but not limited to, New York State
transfer taxes, payable by reason of the execution of this Lease. Landlord
shall complete and sign any required tax return.

Section 32.02 –
Venue; Service of Process.     Landlord
and Tenant and any subtenant under this Lease, hereby expressly consent to the
jurisdiction of the Supreme

 56
 

 

 

Court of the County of Queens (or any
successor thereto), the Supreme Court of the State of New York and the United
States District Court with respect to any action or proceeding between Landlord
and Tenant or such party with respect to this Lease or any rights or
obligations of either party pursuant to or in connection with this Lease, and
each of such subtenant, Landlord and Tenant agree that venue shall lie in
Queens County. Tenant and any subtenant further waive any and all rights to
commence any such action or proceeding against Landlord before any other court.
Without limiting any other methods of obtaining jurisdiction, personal
jurisdiction of the Tenant in any action or proceeding may be obtained within
and without the jurisdiction of any court located in the State of New York, and
that process or notice of motion or other application in connection with such
action or proceeding may be served upon the Tenant by registered or certified mail
at the last known address of the Tenant, whether such address be within or
without the jurisdiction of any such court, and service shall be deemed
complete three (3) business days after when mailed even if delivery is refused
by the addressee.

Section 32.03 –
Lease Not an Offer.     The
submission of this Lease to Tenant shall not be construed as an offer, nor
shall Tenant have any rights with respect thereto or the Demised Premises
unless and until Landlord shall execute a counterpart of this Lease and deliver
the same to Tenant. Until such execution and delivery, any action taken or
expense incurred by Tenant in connection with this Lease or the Demised
Premises shall be solely at Tenant’s own risk and account.

Section
32.04 - Memorandum of Lease.     This
Lease shall not be recorded by Landlord or Tenant. At the request of either
party, Landlord and Tenant shall execute and deliver to the other party a short
form memorandum of lease in form for recording. Such memorandum of lease shall
not set forth any of the financial terms of this Lease and shall set forth the
Initial Term of this Lease and shall provide that the memorandum of lease shall
automatically expire at the Expiration Date of the Term.

Section
32.05 – No Waiver.     Except as
otherwise expressly provided in this Lease, the failure of Landlord to enforce
its rights for violation of, or to insist upon the strict performance of any
covenant, agreement, term, provision or condition of this Lease, or any of the
rules and regulations, shall not constitute a waiver thereof, and Landlord
shall have all remedies provided herein and by applicable law with respect to
any subsequent act which would have originally constituted a violation. The
receipt by Landlord or the payment by Tenant, as the case may be, of rent with
knowledge of the breach of any covenant, agreement, term, provision or
condition of this Lease shall not be deemed a waiver of such breach. Except as
otherwise expressly provided in this Lease, no provision of this Lease shall be
deemed to have been waived by Landlord unless such waiver be in a writing
signed by the party against whom enforcement shall be enforced. The remedies
provided in this Lease shall be cumulative and shall not in any way abridge,
modify or preclude any other rights or remedies to which Landlord may be
entitled under this Lease, at law or in equity.

Section 32.06 –
Landlord’s Consent.     In
any instance in which Landlord’s

 57
 

 

 

consent, approval or other action or exercise
of judgment or discretion shall be made or shall be required by this Lease, or
otherwise requested by Tenant, and Tenant disputes Landlord’s reasonableness in
granting, exercising, delaying or withholding the same, Tenant in no event
shall be entitled to make, nor shall Tenant make, any claim for, and Tenant
hereby waives, any claim for damages or any remedy not specifically authorized
herein; nor shall Tenant claim any damages by way of setoff, counterclaim or
defense but Tenant’s sole remedy shall be an action or proceeding to enforce
any such provision, or for specific performance or declaratory judgment.

Section
32.07 – Counterparts.     This Lease
may be executed in multiple counterparts, each of which shall be an original,
and all of which shall constitute one and the same instrument.

ARTICLE 33

ROOF RIGHTS; AIR RIGHTS

Section
33.01 – Roof Rights.     Provided
that Landlord does not interfere with Tenant’s use of the Demised Premises,
Landlord shall retain rights to utilize the roof and/or to lease rights to
utilize the roof for the installation, relocation or repair of
transmitting/receiving antennae. Landlord shall require Landlord’s contractors
or agents which perform work on the Demised Premises regarding the installation,
relocation or repair of the antennae to maintain insurance in a form and amount
as are commonly maintained for such work in cases of properties that are
similarly situated, and further provided that Tenant, MTA and MTA Bus are named
as additional insureds, as their interest may appear (during the Term of this
Lease) on insurance policies maintained by those contractors or agents which
perform work on the Demised Premises regarding the installation, relocation or
repair of the antennae. Landlord shall, at its expense, be responsible for
obtaining all permits from all applicable agencies in connection with
utilization of the roof. Tenant shall cooperate with Landlord in performing any
alterations required to permit use of the roof by Landlord. Landlord shall be
responsible to make any roof repairs necessitated by Landlord’s use of the
roof. If it is reasonably determined by the Tenant that Landlord’s antennae
interferes with Tenant’s Permitted Use of the Demised Premises, Landlord shall
relocate the antennae within a reasonable time after being notified by Tenant.

Section
33.02 – Air Rights.

(a)           Landlord shall retain air rights and
transferable development rights (collectively “Air Rights”) to the Demised
Premises. Subject to the provisions of this Section 33.02 Landlord may transfer
any and all Air Rights, either to a non-related party or an affiliate, provided
Landlord’s affiliate is an adjoining property owner (if the adjoining ownership
requirement is then existing under the Zoning Resolution of the City of New
York) and further provided that the offer to purchase the Air Rights is a bona
fide offer. Prior to transferring any Air Rights, Landlord shall transmit a
written notice to Tenant (the “Air Rights Request Notice”) setting forth the
material terms of the proposed transfer (the “Material Terms”), no later than
forty-five (45) days prior to the effective

 58
 

 

 

date of such
transfer. Tenant may by written notice to Landlord (the “Air Rights Response
Notice”) within forty-five (45) days of receipt of the Air Rights Request
Notice  elect to either (i) approve the
transfer, (ii) purchase the Air Rights on the Material Terms, (iii) terminate
the Lease or (iv) disapprove the transfer, in which event Tenant,
contemporaneously with the transmittal of the Air Rights Response Notice, shall
pay Landlord an amount equal to the Air Rights Payment (as hereinafter
defined). In the event Tenant elects either (ii) or (iii) above, Landlord by
written notice (the “Air Rights Withdrawal Notice”) transmitted within thirty
(30) days of Landlord’s receipt of the Air Rights Response Notice, may withdraw
the Air Rights Request Notice and Tenant shall have no right to acquire the Air
Rights or terminate the Lease, as the case may be. In the event Tenant elects
(ii) above, and Landlord does not transmit an Air Rights Withdrawal Notice
within the required time period, Tenant may assign its right to acquire the Air
Rights to the New York City Economic Development Corporation (“EDC”).

(b)           The Air Rights Payment shall be the
amount equal to the consideration stated in the Air Rights Request Notice
multiplied by an amount equal to the Prime Rate plus 3%, payable monthly for
the balance of the Term and all Renewal Terms, which Air Rights Payment shall
be increased in the same percentage and contemporaneously with the increased
Fixed Rent under Section 3.01. If Tenant does not respond to Landlord’s Air
Rights Request Notice within forty-five (45) days of Tenant’s receipt of the
Air Rights Request Notice, Tenant shall be deemed to have approved the
Transfer. Landlord shall not seek Tenant’s approval for the transfer of Air Rights
for the first five (5) years of the Term and for the first two (2) years of
each Renewal Term. Landlord is permitted to transfer Air Rights during the last
five (5) years of the last Renewal Term without seeking Tenant’s approval. If a
Renewal Option is not exercised, Landlord shall not be required to seek Tenant’s
approval to transfer Air Rights. Under no circumstances will the use of any Air
Rights by Landlord or its transferee interfere with the Tenant’s current
operations.

ARTICLE 34

INVESTIGATIONS

Section
34.01 – Cooperation.     The parties
to this agreement agree to cooperate fully and faithfully with any
investigation, audit or inquiry conducted by a State of New York (State) or
City of New York (City) governmental agency or authority that is empowered
directly or by designation to compel the attendance of witnesses and to examine
witnesses under oath, or conducted by the Inspector General of a governmental
agency that is a party in interest to the transaction, submitted bid, submitted
proposal, contract, lease, permit, or license that is the subject of the
investigation, audit or inquiry.

Section 34.02 - Testimony

(a)           If any person who has been advised
that his or her statement, and any information from such statement, will not be
used against him or her in any subsequent criminal proceeding refuses to
testify before a grand jury or other governmental agency

 59
 

 

 

or authority
empowered directly or by designation to compel the attendance of witnesses and
to examine witnesses under oath concerning the award of or performance under
any transaction, agreement, lease, permit, contract, or license entered into
with the City, the State, or any political subdivision or public authority
thereof, or the Port Authority of New York and New Jersey, or any local development
corporation within the City, or any public benefit corporation organized under
the laws of the State of New York, or;

(b)           If any person refuses to testify for
a reason other than the assertion of his or her privilege against
self-incrimination in an investigation, audit or inquiry conducted by a City or
State governmental agency or authority empowered directly or by designation to
compel the attendance of witnesses and to take testimony under oath, or by the
Inspector General of the governmental agency that is a party in interest in,
and is seeking testimony concerning the award of, or performance under, any
transaction, agreement, lease, permit contract, or license entered into with
the City, the State, or any political subdivision thereof or any local
development corporation within the City, then;

Section 34.03 – Failure to Testify.     The
commissioner or agency head whose agency is a party in interest to the
transaction, submitted bid, submitted proposal, contract, lease, permit, or
license shall convene a hearing, upon not less than five (5) days written
notice to the parties involved to determine if any penalties should attach for
the failure of a person to testify.

Section
34.04 - Penalties.     The penalties
which may attach after a final determination by the commissioner or agency head
may include but shall not exceed:

(a)           The disqualification for a period not
to exceed five (5) years from the date of an adverse determination for any
person, or any entity of which such person was a member at the time the
testimony was sought, from submitting bids for, or transacting business with,
or entering into or obtaining any contract, lease, permit or license with or
from the City; and/or

(b)           The cancellation or termination of
any and all such existing City contracts, leases, permits or licenses that the
refusal to testify concerns and that have not been assigned as permitted under
this agreement, nor the proceeds of which pledged, to an unaffiliated and
unrelated institutional lender for fair value prior to the issuance of the
notice scheduling the hearing, without the City incurring any penalty or
damages on account of such cancellation or termination; monies lawfully due for
goods delivered, work done, rentals, or fees accrued prior to the cancellation or
termination shall be paid by the City.

Section
34.05 – Agency Considerations.     The
commissioner or agency head shall consider and address in reaching his or her
determination and in assessing an appropriate penalty the factors in paragraphs
(a) and (b) below. He or she may also consider, if relevant and appropriate,
the criteria established in paragraphs (c) and (d)

 60
 

 

 

below in addition
to any other information which may be relevant and appropriate:

(a)           The party’s good faith endeavors or
lack thereof to cooperate fully and faithfully with any governmental
investigation or audit, including but not limited to the discipline, discharge,
or disassociation of any person failing to testify, the production of accurate
and complete books and records, and the forthcoming testimony of all other
members, agents, assignees or fiduciaries whose testimony is sought.

(b)           The relationship of the person who
refused to testify to any entity that is a party to the hearing, including, but
not limited to, whether the person whose testimony is sought has an ownership
interest in the entity and/or the degree of authority and responsibility the
person has within the entity.

(c)           The nexus of the testimony sought to
the subject entity and its contracts, leases, permits or licenses with the
City.

(d)           The effect a penalty may have on an
unaffiliated and unrelated party or entity that has a significant interest in
an entity subject to penalties under 1.4 above, provided that the party or
entity has given actual notice to the commissioner or agency head upon the
acquisition of the interest, or at the hearing called for in 1.3(a) above gives
notice and proves that such interest was previously acquired. Under either
circumstance the party or entity must present evidence at the hearing demonstrating
the potential adverse impact a penalty will have on such person or entity.

Section
34.06 - Definitions.

(a)           The term “license” or “permit” as
used herein shall be defined as a license, permit, franchise or concession not
granted as a matter of right.

(b)           The term “person” as used herein
shall be defined as any natural person doing business alone or associated with
another person or entity as a partner, director, officer, principal or
employee.

(c)           The term “entity” as used herein
shall be defined as any firm, partnership, corporation, association, or person
that receives monies, benefits, licenses, leases, or permits from or through
the City or otherwise transacts business with the City.

(d)           The term “member” as used herein
shall be defined as any person associated with another person or entity as a
partner, director, officer, principal or employee.

Section 34.07 -
Termination.     In
addition to and notwithstanding any other provision of this Agreement, the
Commissioner or agency head may in his or her sole discretion terminate this
Agreement upon not less than three (3) days written notice in the event
contractor fails to promptly report in writing to the Commissioner of

 61
 

 

 

Investigation of the
City of New York any solicitation of money, goods, requests for future
employment of other benefit or thing of value, by or on behalf of any employee
of the City or other person, firm, corporation or entity for any purpose which
may be related to the procurement or obtaining of this Lease by the Landlord,
or affecting the performance of this Lease.

ARTICLE 35

SIGNIFICANT RELATED PARTY TRANSACTIONS

 

Section
35.01 – Significant Related Party Transactions.     Landlord
shall be required to disclose and notify Tenant of any transactions with
significant related parties, including subsidiaries and affiliates of Landlord,
the costs of which are charged to Tenant as Rent or Additional Rent. Landlord
shall provide Tenant with written notice of such transactions upon submission
of invoices for rent or at the end of the calendar year in which the
transactions to be billed as rent were performed by significant related
parties. When such transactions occur, prices of same must be in line with
normal industry practice in New York City. Landlord’s failure to notify Tenant
of such related party transactions shall result in a disallowance of such costs
that would otherwise be billed as Rent. If such related party transactions
occurred and were disclosed, but it is found by Tenant that the costs thereof
exceed normal industry costs in an arms length third party transaction in New
York City, then such excessive charges shall be disallowed.

IN WITNESS WHEREOF, the
parties have executed this Agreement of Lease as of the day and year first
above written.

	
  

  	
  TRIBORO COACH HOLDING CORP.,

  
	
   

  	
  Landlord

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Jerome Cooper

  
	
   

  	
   

  	
   Jerome
  Cooper

  
	
   

  	
   

  	
   President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CITY OF NEW YORK,

  
	
   

  	
  Tenant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Lori Fierstein

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Lori Fierstein

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Deputy Commissioner

  
								

 

 62Exhibit 10.8

 

 

AGREEMENT OF LEASE

BETWEEN

G.T.J. CO., INC., Landlord

AND

AVIS RENT A CAR SYSTEM, INC., Tenant

 

 

TABLE OF
CONTENTS

	
  ARTICLE 1

  	
   

  	
   

  
	
  DEMISED PREMISES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
  TERM

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
  RENT

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
  USE OF DEMISED
  PREMISES

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  IMPOSITIONS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  CONSTRUCTION OF
  IMPROVEMENTS BY LESSEE

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
  REPAIRS AND
  MAINTENANCE OF THE DEMISED PREMISES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
  LESSEE’S
  ALTERATIONS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
  UTILITIES

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  PRE-EXISTING
  ENVIRONMENTAL CONDITIONS; ENVIRONMENTAL COMPLIANCE DURING PERIOD OF TENANCY;
  REQUIREMENTS OF LAW

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  
	
  INSURANCE

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
   

  
	
  DAMAGE OR
  DESTRUCTION

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
   

  
	
  ASSIGNMENT AND
  SUBLETTING

  	
   

  	
  29

  

 

 i
 

 

 

	
  ARTICLE 14

  	
   

  	
   

  
	
  INDEMNIFICATION

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
   

  	
   

  
	
  CONDEMNATION

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  	
   

  
	
  RIGHT TO
  INSPECT; POSTING SIGNS

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
   

  
	
  ZONING

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
   

  	
   

  
	
  DEFAULT
  PROVISIONS

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19

  	
   

  	
   

  
	
  ATTORNEYS’ FEES

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20

  	
   

  	
   

  
	
  WAIVER OF
  REDEMPTION; COUNTERCLAIM; TRIAL BY JURY

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21

  	
   

  	
   

  
	
  NO WAIVER

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22

  	
   

  	
   

  
	
  END OF TERM

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23

  	
   

  	
   

  
	
  BROKER

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24

  	
   

  	
   

  
	
  QUIET ENJOYMENT

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25

  	
   

  	
   

  
	
  NON-LIABILITY OF
  LANDLORD

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 26

  	
   

  	
   

  
	
  APPLICABLE LAW
  AND CONSTRUCTION

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE 27

  	
   

  	
   

  
	
  BINDING EFFECT
  OF LEASE

  	
   

  	
  50

  

 

 ii
 

 

 

	
  ARTICLE 28

  	
   

  	
   

  
	
  NOTICES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 29

  	
   

  	
   

  
	
  FEE MORTGAGES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30

  	
   

  	
   

  
	
  ESTOPPEL
  CERTIFICATES

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 31

  	
   

  	
   

  
	
  REPRESENTATIONS

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 32

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
  53

  

 

List of Schedules

Schedule A - Description
of the Real Property

Schedule B – Location of
R-Zone and De-Map Parcels

Schedule C – Letter describing Tenant’s Insurance
Coverage

(including, without limitation, environmental insurance)

 iii

 

AGREEMENT OF LEASE

AGREEMENT OF LEASE (the “Lease”) made as of the
31st day of October, 2003 between G.T.J. CO., INC.,
a corporation organized and existing under the laws of the State of New York,
with offices located at 114-15 Guy R. Brewer Boulevard, Jamaica, New York 11434
(the “Landlord”), and AVIS RENT A CAR SYSTEM, INC., a corporation
organized and existing under the laws of the State of Delaware, with offices at
6 Sylvan Way, Parsippany, New Jersey 07054 (the “Tenant”).

ARTICLE 1

DEMISED PREMISES

Section 1.01 – Description of Demised Premises.  In consideration of and subject to the terms,
covenants, agreements, provisions, conditions and limitations set forth in this
Lease, Landlord has agreed to demise and lease unto Tenant and Tenant has
agreed to hire and take from Landlord those certain parcels of real property
located in East Elmhurst, County of Queens and State of New York, consisting of
the “Building Parcel” and the “Land Parcel,” as more particularly
described on Schedule A annexed hereto and made a part hereof (the “Land”),
together with all buildings and improvements erected or to be erected thereon
(the “Improvements”), and together with all of Landlord’s right, title
and interest in all easements, rights and other matters appurtenant to the Land
or the Improvements and in and to any land lying in the bed of any roads
adjacent to the Land, except that air rights and transferable development
rights shall not be demised or leased to Tenant under this Lease (such Land,
Improvements, easements and rights being hereinafter collectively referred to
as the “Demised Premises”).  Upon
completion of the de-mapping of the De-Map Parcel (as hereinafter defined), the
Demised Premises shall include the De-Map Parcel.

Section 1.02 – Condition of Demised Premises.  (a)  Tenant acknowledges and agrees that
it shall hire and take the Demised Premises from Landlord in its present state
of title, subject to all existing liens, charges, encumbrances and any other
matters affecting title.  Except as
specifically set forth in this Lease, Tenant agrees to accept the Demised
Premises “as is,” in the existing condition and state of repair as of the date
hereof and without recourse to Landlord. 
Tenant further agrees that no representations, statements or warranties,
express or implied, have been made by or on behalf of Landlord and Tenant has
not relied on any representations, statements or warranties, express or
implied, in respect of the Demised Premises or in respect of the condition
thereof or the present or future use or occupation that may be made thereof,
the zoning or other Requirements (as hereinafter defined), transferable
development rights, encumbrances thereon, appurtenances, or title thereto
(except as may be expressly set forth in this Lease).  Without limiting the generality of the
foregoing, Tenant has not

 

 

relied
on any representations or warranties other than as expressly set forth herein
as to (1) the current or future real estate tax liability, assessment or
valuation of the Demised Premises, (2) the potential qualification of the
Demised Premises for any and all benefits conferred by federal, state or
municipal laws, whether for subsidies, special real estate tax treatment,
insurance, mortgages, or any other benefits, whether similar or dissimilar to those
enumerated, (3) the compliance of the Demised Premises, in its current or
any future state, with applicable zoning ordinances and the ability to obtain a
change in the zoning or a variance with respect to the Demised Premises’
non-compliance, if any, with said zoning ordinances, (4) the availability
of any financing for the purchase, alteration or operation of the Demised
Premises from any source, (5) the current or future use of the Demised
Premises, including, but not limited to, the Demised Premises’ use for
residential or commercial purposes, (6) the present or future structural
and physical condition of any building, (7) the presence or absence of any
Requirements and any violations thereof, and (8) the presence or absence
of any Hazardous Materials (as hereinafter defined), and the compliance or
non-compliance with any Environmental Laws (as hereinafter defined).  Landlord shall in no event whatsoever be
liable for any latent or patent defects in the Demised Premises.  Requirements shall mean any and all present
and future laws, rules, orders, ordinances, regulations, statutes and
requirements of any Governmental Authority (as hereinafter defined).

(b)           Except
as hereinafter set forth, (i) the Landlord shall cure all notes or notices
of violations of law or municipal ordinances, and all orders or requirements
issued as of the Commencement Date by any Governmental Authority (“Existing
Violations”), (ii) the Demised Premises shall be leased to Tenant free
of all Existing Violations, and (iii) Landlord’s duty to cure Existing
Violations shall survive delivery of possession of the Demised Premises to the
Tenant.  Notwithstanding anything in this
Lease to the contrary, (A) Landlord shall not be obligated to cure
Existing Violations if same shall be cured by Tenant’s Initial Construction (as
hereinafter defined) and (B) Landlord shall not be obligated to remove of
record prior to delivery of possession of the Demised Premises boiler violation
v1160/77 noted against the Demised Premises; provided, however, that Landlord
shall have taken all required actions to cure such boiler violation noted
against the Demised Premises and pay all fees in connection therewith and shall
take all further necessary actions to remove such boiler violation of record.

(c)           Landlord represents and warrants that
the mortgage loan from American Airlines, Inc. to Varsity Transit, Inc.
(predecessor-in-interest to Landlord), dated May 31, 1977, and recorded on
June 3, 1077, in Reel 991, page 423, in Queens County, in the
original principal amount of $602,082.00 (the “American Airlines Mortgage”),
has been paid in full and covenants to take all commercially reasonable steps
necessary to satisfy the American Airlines Mortgage of record.

 2
 

 

 

ARTICLE 2

TERM

Section 2.01 –Term.  This Lease shall be for a term (the “Term”)
of twenty (20) years, which shall commence on November 1, 2003 (the “Commencement
Date”) and shall end at midnight on October 31, 2023 (the “Expiration
Date”), unless such Term shall sooner cease or expire as hereinafter
provided.  If Landlord is unable to give
possession of the Demised Premises on the Commencement Date for any reason
whatsoever, Landlord shall not be liable for failure to give such possession
and the validity of this Lease shall not be impaired under such circumstances,
nor shall the same be construed in any wise to extend the Term, but the Fixed
Rent and Additional Rent payable hereunder shall be abated until after Landlord
shall have given Tenant written notice that the Landlord is able to deliver
possession of the Demised Premises.  The
provisions of this Section are intended to constitute “an express
provision to the contrary” within the meaning of Section 223-a of the New
York Real Property Law.

ARTICLE 3

RENT

Section 3.01 – Fixed Rent.

(a)           Tenant
covenants to pay to Landlord a minimum fixed annual rent (“Fixed Rent”)
during the Term as follows:

(i)            Subject
to increases in Fixed Rent as provided in this Article and subject to Article 17,
Fixed Rent for the Term shall be One Million Eight Hundred Thousand and 00/100
($1,800,000.00) Dollars per annum, payable for Tenant’s convenience in equal
monthly installments of One Hundred Fifty Thousand and 00/100 ($150,000.00)
Dollars.

(b)           Tenant
shall pay the first month’s Fixed Rent upon its execution of this Lease.

(c)           The
Fixed Rent shall increase as follows:

(i)            The
Fixed Rent for the sixth (6th) through tenth (10th) Lease Years (as hereinafter defined) shall be the
greater of: (A) one hundred five (105%) percent of the Fixed Rent in
effect during the fifth (5th)
Lease Year, or (B) the Fixed Rent in effect during the fifth (5th) Lease Year plus an amount
per annum computed by multiplying the Fixed Rent in effect during the fifth (5th) Lease Year by the Cost of
Living Percentage Increase (as hereinafter defined) for the first (1st) through fifth (5th) Lease Years, up to a maximum
of one hundred fifteen (115%) percent of the Fixed Rent in effect during the
fifth (5th) Lease
Year;

 3
 

 

 

(ii)           The
Fixed Rent for the eleventh (11th) through fifteenth (15th) Lease Years shall be the greater of: (A) one
hundred five (105%) percent of the Fixed Rent in effect during the tenth (10th) Lease Year, or (B) the
Fixed Rent in effect during the tenth (10th) Lease Year plus an amount per annum computed by
multiplying the Fixed Rent in effect during the tenth (10th) Lease Year by the Cost of Living
Percentage Increase for the sixth (6th)
through tenth (10th)
Lease Years, up to a maximum of one hundred fifteen (115%) percent of the Fixed
Rent in effect during the tenth (10th)
Lease Year; and

(iii)          The
Fixed Rent for the sixteenth (16th) through twentieth (20th) Lease Years shall be the greater of: (A) one
hundred five (105%) percent of the Fixed Rent in effect during the fifteenth
(15th) Lease
Year, or (B) the Fixed Rent in effect during the fifteenth (15th) Lease Year plus an amount
per annum computed by multiplying the Fixed Rent in effect during the fifteenth
(15th) Lease Year
by the Cost of Living Percentage Increase for the eleventh (11th) through fifteenth (15th) Lease Years, up to a maximum of one
hundred fifteen (115%) percent of the Fixed Rent in effect during the fifteenth
(15th) Lease
Year.

(d)           For
purposes of this Lease, the term “Lease Year” shall mean for (i) the
first (1st)
Lease Year, the one (1) year period commencing on the Commencement Date
plus, if the Commencement Date is not the first day of a calendar month, the
number of days between the Commencement Date and the end of the month in which
the Commencement Date occurs, and (ii) for each Lease Year thereafter, the
one (1) year period commencing on the day after the expiration of the
preceding Lease Year.

(e)           The
term “Cost of Living Percentage
Increase” shall mean the percentage increase in the “Index” (hereinafter defined) for
the period specified.  Such Cost of
Living Percentage Increase shall be computed for each period under
consideration by subtracting the Index for the earlier date specified in the
Lease from the Index for the later date specified in the Lease and dividing the
difference by the Index in effect for the earlier date.  For example, if the Index for the month of August 2003
is 175, and the Index for the month of August 2008 shall be 225, the Cost
of Living Percentage Increase for such period shall be computed as follows:

	
  Index for August 2008

  	
   

  	
  225

  	
   

  	
   

  
	
  Less Index for
  August 2003

  	
   

  	
  (175

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Difference

  	
   

  	
  50

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Difference
  divided by Index for August 2003

  	
   

  	
  (50/175) = 28.57%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost of Living
  Percentage Increase =

  	
   

  	
  28.57

  	
  %

  	
   

  

 

 4
 

 

 

(f)            The
term “Index” shall mean
the Consumer Price Index published by the United States Bureau of Labor
Statistics, or its successor, for All Urban Consumers, New York - Northern N.J.
– Long Island, NY-NJ-CT-PA, , All Items (1982-1984 = 100).  If the Index is no longer published by the
United States Bureau of Labor Statistics, or any successor thereto, or if the
reference base for the Index is changed, the Index shall thereafter be any
successor index or method of conversion or re-basing of the index as determined
by the Landlord.  If the United States
Bureau of Labor Statistics or any successor thereto shall publish a means for
converting the base Index of 1982-1984 = 100, such re-basing method shall be
used if annual Index figures are no longer published under the original basing
set forth in this Section.  However, if
Index figures continue to be published by the United States Bureau of Labor
Statistics, or its successor, under the basing method designated in this
Section, such Index figures shall continue to be used.

Section 3.02 – Manner of Payment.  Tenant covenants and agrees to pay Landlord
the Fixed Rent at the principal office of Landlord, or at such place as
Landlord shall from time to time direct in writing without any abatement,
reduction, setoff, counterclaim or deduction whatsoever.  The Fixed Rent shall be paid in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of private and public debts.  For Tenant’s convenience, Fixed Rent shall be
payable by Tenant in equal monthly installments in advance on the first day of
each calendar month included in the Term.

Section 3.03 – Proration of Fixed Rent.  For any portion of a calendar month included
at the beginning or end of the Term, Tenant shall pay 1/30th of the then
applicable monthly installment of Fixed Rent for each day of such portion,
payable in advance at the beginning of such portion.

Section 3.04 – Late Payment.  In any case in which any payment of Fixed
Rent or Additional Rent (as hereinafter defined) or any other sum due Landlord
by Tenant under this Lease is not paid within five (5) days of the day
when same is due, such payment shall bear interest at the rate of eighteen
percent (18%) per annum (the “Default Rate”) from the date such payment
was due and payable.  Tenant agrees that
the Default Rate imposed herein is fair and reasonable, complies with all laws,
regulations and statutes, and constitutes an agreement between Landlord and
Tenant as to the estimated compensation for costs and administrative expenses
incurred by Landlord due to the late payment to Landlord by Tenant.  The Default Rate shall be in addition to any
other right or remedy hereunder and shall be due and payable as Additional
Rent.  Tenant further agrees that the
Default Rate does not constitute a lender or borrower/creditor relationship
between Landlord and Tenant.  In
addition, Tenant shall pay upon demand by Landlord any attorneys’ fees, costs
and disbursements incurred by Landlord in connection with the imposition,
collection or payment of said interest, said amounts to be deemed Additional
Rent.

 5
 

 

 

Section 3.05 – Additional Rent.  Unless another time shall be herein expressly
provided, any additional rent, charges or sums payable by Tenant under this
Lease (collectively, “Additional Rent”) shall be due and payable within
ten (10) business days after written demand by Landlord, and Landlord
shall have the same remedies for failure to pay the Additional Rent as for a
non-payment of Fixed Rent.  Unless
otherwise specifically instructed by Landlord, all Additional Rent shall be
paid in the same currency and, at the same place as is the Fixed Rent required
to be paid hereunder, and shall be paid without any abatement, reduction,
setoff, counterclaim or deduction whatsoever.

Section 3.06 – Landlord Cure Rights.  If Tenant shall default in making any payment
required to be made by Tenant or in performing any obligation of Tenant under
this Lease which shall require the expenditure of money, including, but not
limited to Impositions (as hereinafter defined), Landlord may, but shall not be
obligated to, make such payment on behalf of Tenant or expend such sum as may
be necessary to perform or fulfill such obligation.  Any sums so paid by Landlord shall be deemed
Additional Rent.

Section 3.07 – Net Lease.  The Fixed Rent hereinabove provided for shall
be in addition to all other payments to be made by Tenant as herein
provided.  It is the purpose and intent
of the parties hereto that the Fixed Rent shall be absolutely net to Landlord,
so that this Lease shall yield, net to the Landlord, the Fixed Rent and that
all costs, expenses and obligations of every kind and nature whatsoever
relating to the Demised Premises which may arise or become due during the Term
of this Lease shall be paid by Tenant and that Landlord shall be indemnified
and saved harmless by Tenant from and against the same.

Section 3.08 – Rent Regulations.  If all or any part of the Fixed Rent or
Additional Rent shall at any time become uncollectible, reduced or required to
be refunded by virtue of any Requirements (including rent control or
stabilization laws, however denominated), then for the period prescribed by
said Requirements, Tenant shall pay to Landlord the maximum amounts permitted
pursuant to said Requirements (but in no event to exceed the amounts which
would otherwise be due and payable under this Lease as if such Requirements
were not in effect), and Tenant shall execute and deliver such agreement(s) and
take such other steps as Landlord may reasonably request to permit Landlord to
collect the maximum fixed rent and additional rent which, from time-to-time
during the continuance of such legal rent restriction, may be legally
permissible (and not in excess of the amounts then reserved therefor under this
Lease).  Upon the expiration or other
legal termination of the applicable period of time during which such amounts
shall be uncollectible, reduced or refunded: 
(a) the Fixed Rent and Additional Rent shall become and shall
thereafter be payable in accordance with the amounts reserved herein for the
periods following such expiration or termination, and (b) Tenant 

 6
 

 

 

shall
pay to Landlord as Additional Rent, within ten (10) days after demand or
such longer period as is legally permissible if ten (10) days shall not be
lawful, all uncollected, reduced or refunded amounts that would have been
payable for the above-said period absent such Requirements.

Section 3.09 – Survival.  The provisions of this Article 3 shall
survive the expiration or other termination of this Lease.  Landlord’s failure to bill Tenant for Fixed
Rent or Additional Rent or any sum due under this Lease shall in no way excuse
Tenant from its obligation to pay Fixed Rent or Additional Rent or any sum due
under this Lease, or constitute a waiver of Landlord’s right to thereafter bill
and collect such Fixed Rent or Additional Rent or any sum due under this Lease
from Tenant in accordance with the terms of this Lease.

ARTICLE 4

USE OF DEMISED PREMISES

Section 4.01 – Use.

(a)           Tenant
shall use the Demised Premises (i) for motor vehicle rental and leasing
including the storage and maintenance of passenger motor vehicles, trucks and
buses, fueling, washing and cleaning rental fleet vehicles and buses and for
administrative offices and for all other legal purposes incidental thereto (“Initial
Use”), and (ii) for any other legal purpose with the prior written
consent of the Landlord, not to be unreasonably withheld (together with the
Initial Use, the “Permitted Use”). 
Tenant may not use the Demised Premises for any other purposes.

(b)           In
no event shall the Demised Premises be used for any of the following: (i) a
school or classroom, (ii) gambling activities, (iii) conduct of
obscene, pornographic or disreputable activities, (iv) offices of an
agency, department or bureau of the United States Government, any state or
municipality within the United States or any foreign government, or any
political subdivision of any of them, (v) offices of any charitable,
religious, union or other not-for-profit organization; (vi) offices of any
tax exempt entity within the meaning of Section 168(h)(2) of the
Internal Revenue Code of 1986, as amended, or any successor or substitute
statute, or rule or regulation applicable thereto, (vii) any
manufacturing or industrial use, or (viii)  for any purpose which would constitute a public or private
nuisance (each, a “Prohibited Use”).

Section 4.02 – Compliance with Requirements.  Tenant shall at all times conduct its
activities on the Demised Premises in full compliance with all Requirements of
any or all of the federal, state, city, county and borough governments and
rules, regulations, orders and directives of any and all departments,
subdivisions, bureaus, agencies or offices thereof, and of any other
governmental, public or quasi-public authorities having

 7
 

 

 

jurisdiction
over the Demised Premises, and the direction of any public officer pursuant to
law, whether now or hereafter in force (“Governmental Authority”).

ARTICLE 5

IMPOSITIONS

Section 5.01 – Impositions.  The term “Impositions” shall mean all
real estate taxes, assessments, payments in lieu of taxes, water meter and
water charges, sewer rentals, excises, levies, license and permit fees, charges
for public utilities or other taxes, charges for any easement or agreement
maintained for the benefit of the Demised Premises, charges or burdens
assessed, imposed or becoming a lien upon or with respect to the use or
ownership of the Demised Premises or any other taxable interest therein, or
upon the Improvements and other improvements erected thereupon; whether any
such Impositions are general or special, ordinary or extraordinary, foreseen or
unforeseen and whether same are imposed by a Governmental Authority or any
other taxing authority having jurisdiction over the Demised Premises of every
character, kind and nature whatsoever, but shall not include income,
intangible, franchise, capital stock, estate or inheritance taxes of Landlord
(unless the same shall be in lieu of “Impositions” as herein defined by
whatever name the tax may be designated).

Section 5.02 – Payment of Impositions.  Tenant shall, during the Term of this Lease,
pay and discharge, as Additional Rent, all Impositions when due; provided,
however, that if, by law, any Imposition may at the option of the taxpayer be
paid in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition), Tenant may exercise the option to pay the same in
such installments, provided such installment payments are not prohibited by the
terms of any Mortgage (as hereinafter defined). 
Simultaneously with the payment of any of such Impositions directly to
the imposing authority, Tenant shall send to Landlord written evidence of such
timely payment by Tenant.  A copy of the
Imposition invoice or demand from the applicable imposing authority shall be
sufficient evidence of the amount of the subject Impositions.  Tenant shall also pay or cause to be paid, in
the same manner as Impositions are paid, any occupancy taxes arising under or
in connection with this Lease.  Tenant
shall be responsible for and shall pay as Additional Rent all penalties, fees,
fines, interest, late charges and other similar amounts for the late payment of
any Impositions.

Section 5.03 – Landlord’s Demand.  The provisions of this Article 5 shall
survive the expiration or other termination of this Lease.  Landlord’s failure during the term of this
Lease to prepare and deliver any Imposition bill, invoice or demand or Landlord’s
failure to make a demand for Additional Rent due hereunder shall not in any way
waive or 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.

 8

 

 

Section 5.04 – Proration of Impositions.  Any Imposition, other than an Imposition
which has been converted into installment payments as referred to in Section 5.02
hereof, relating to a fiscal period of the taxing authority, a part of which
period is included within the Term of this Lease and a part of which is
included in a period of time before the Term and/or after the expiration or
other termination of the Term of this Lease, shall (whether or not such
Imposition shall be assessed, levied, confirmed, imposed upon or in respect of
or become a lien upon the Demised Premises, or shall become payable during the
Term of this Lease) be apportioned between Landlord and Tenant as of the
Commencement Date and/or as of the expiration or other termination of the Term
of this Lease, so that Tenant shall pay that portion of such Imposition which
that part of such fiscal period included in the period of time on and after the
Commencement Date and/or prior to the expiration or other termination of the
Term of this Lease bears to such fiscal period, and Landlord shall pay the
remainder thereof, provided, however, that Tenant shall not be entitled to
receive any apportionment if there be an Event of Default hereunder.

Section 5.05 – Right to Contest.  Landlord and Tenant, on behalf of and with
Landlord’s prior consent, shall be eligible to institute proceedings to reduce
the assessed valuation of the Demised Premises. 
In the event the Landlord shall obtain a tax refund or reduction as a
result of any such tax certiorari
proceedings or as a result of any other litigation or agreement involving the
relevant taxing authorities (collectively, a “Proceeding”), then,
provided Tenant is not then in default under the terms of this Lease and after
all applicable grace periods have expired and after the final conclusion of all
appeals or other remedies, Tenant shall be entitled to the net refund
applicable to any period as to which Tenant has paid Impositions pursuant to
this Article 5.  Tenant’s net refund
may be applied by Landlord to any amounts payable to Landlord under this
Lease.  As used herein the term “net
refund” means the refund plus interest, if any, thereon, paid by the
governmental authority less appraisal, engineering, expert testimony, attorney,
consultant, architect, printing, administrative and filing fees and all other
Landlord costs and expenses of a Proceeding. 
Tenant shall pay to Landlord all appraisal, engineering, expert
testimony, attorney, printing and filing fees and all other reasonable costs
and expenses incurred by Landlord in connection with any Proceeding.

ARTICLE 6

CONSTRUCTION OF IMPROVEMENTS BY LESSEE

Section 6.01 – General.  Tenant covenants and agrees that (a) Tenant
will provide Landlord with detailed plans and specifications (“Plans and
Specifications”) satisfying the requirements of Section 6.09(a), in
accordance with the succeeding Sections of this Article, for the construction
of Tenant’s Initial Construction (as hereinafter defined) and (b) after
Landlord has approved the Plans and Specifications, in accordance with the
succeeding Sections of this Article, Tenant will promptly

 9
 

 

 

thereafter
proceed diligently and expeditiously to complete the Initial Construction,
using licensed, bonded (by a surety company licensed to do business in New
York) and reputable contractors, architects and engineers, prior to the
expiration of all time frames set forth in any building permit issued in
connection with the Initial Construction. 
Tenant shall provide Landlord with prior notice of the identities of the
contractors, architects and engineers. 
The term “Initial Construction” shall mean (i) the
installation of fueling facilities and other improvements on the Land Parcel, (ii) the
modification, expansion, relocation and/or demolition of the existing fuel
island and a portion of the existing building adjacent thereto on the Building
Parcel, and (iii) the modification and renovation of the existing
improvements on the Building Parcel for Tenant’s use of the Demised Premises in
accordance with the terms of this Lease. 
Tenant reserves the right to modify or alter its plans for the Initial
Construction prior to submitting its Plans and Specifications to Landlord for
Landlord’s approval.

Section 6.02 – Initial Construction.  The Initial Construction shall be erected wholly
within the boundary lines of the Land in compliance with all applicable
Requirements and comply with all zoning laws and ordinances.  Tenant’s Initial Construction shall be done
in a manner which does not create any labor disharmony or dispute at the
Demised Premises.

Section 6.03 – Commencement of Construction.  Tenant shall not commence the Initial
Construction unless and until Tenant shall have delivered to Landlord:

(a)           Copies
of all necessary permits, certificates and authorizations required by any
Governmental Authority in connection with the Initial Construction, together
with evidence that such permits, certificates and authorizations have been paid
for in full.  Landlord shall not
unreasonably refuse to join in the application for such permits, certificates
or authorizations and shall reasonably cooperate with Tenant, without charge
except to the extent Landlord’s participation required is more than de minimus in which case Tenant agrees to
pay to Landlord, upon demand as Additional Rent hereunder, a reasonable fee and
Landlord’s costs paid or incurred in connection therewith.  Landlord shall not be subject to any
liability for the payment of any costs or expenses in connection with any such
applications, and Tenant hereby indemnifies and agrees to defend and hold
Landlord harmless from and against any and all such costs and expenses;

(b)           Plans
and Specifications for the proposed Initial Construction satisfying the
requirements of Section 6.09(a) hereof.  In connection with its approval of such Plans
and Specifications, Landlord is authorized to retain architects of its choice,
at its sole cost and expense, to consult and assist Landlord in its analysis,
review and approval of such Plans and Specifications in order to determine
compliance with the terms of this Lease and of all applicable requirements of
any Governmental Authority.  In the event
Landlord shall not approve such Plans and Specifications, Landlord shall so

 10
 

 

 

notify
Tenant of such disapproval, together with a memorandum setting forth Landlord’s
required modifications, amendments and corrections.  Tenant shall, within thirty (30) days after
receipt of such notice, resubmit its Plans and Specifications to Landlord for
approval.  Upon approval by Landlord,
Landlord and Tenant shall initial the Plans and Specifications reflecting such
approval.  Thereafter, Tenant may not
materially change the Plans and Specifications without the prior written
consent of Landlord;

(c)           A
contract for the construction of the Initial Construction in accordance with
the Plans and Specifications and satisfying the requirements of Section 6.09(b);
and

(d)           Tenant
shall use its best efforts to obtain an agreement from Tenant’s architect and
general contractor to continue to perform for the benefit of Landlord, if Landlord
so requests, their respective obligations under their contracts with Tenant in
the event of termination of this Lease or upon Landlord’s re-entry upon the
Demised Premises following a default by Tenant prior to completion of the
Initial Construction, provided such architect and/or general contractor are
paid for their respective services in accordance with such contracts.

Section 6.04 – Insurance.  At all times during and until the completion
of the Initial Construction, Tenant shall, at Tenant’s sole cost and expense,
maintain, or cause to be maintained, in addition to the insurance required
under Article 11 hereof, one hundred percent (100%) completed value
builders’ risk insurance; workmen’s compensation insurance covering all persons
employed in connection with the Initial Construction and with respect to whom
death or bodily injury claims could be asserted against Landlord or Tenant; and
general comprehensive commercial liability insurance for the mutual benefit of
Tenant and Landlord expressly covering the additional hazards due to the
construction, with combined single coverage limits of not less than Ten Million
and 00/100 Dollars ($10,000,000.00) in the event of death or bodily injury or
property damage.  The policy of general
comprehensive commercial liability insurance, in so far as it relates to
property damage, shall not contain any restrictive clauses relating to
excavating, sheet piling, moving, shoring, underpinning, removal and rebuilding
of structural supports or subsurface work or any similar restrictive
clauses.  The general comprehensive
commercial liability insurance provided for in this Section may be
affected by an appropriate endorsement, if obtainable, upon the insurance
required to be maintained by Tenant pursuant to Section 11.01(d) hereof.  All insurance of the character in this Subsection described,
shall be effected under valid and enforceable policies issued by insurers of
recognized responsibility and which have been approved in writing by Landlord
as to qualification of insurers and the amounts of insurance to be written by
each, which approval Landlord agrees shall not be unreasonably withheld.  The general comprehensive commercial
liability insurance policy and the builder’s risk insurance policies above
mentioned shall name Landlord and Tenant as the insured as their respective
interests may appear and may also

 11
 

 

 

include
as the insureds, if required by Landlord, any Mortgagee.  The loss, if any, under any of the builder’s
risk policies above mentioned shall be adjusted by and shall be payable to
Tenant and such proceeds paid to Tenant shall be held in trust and disbursed
only for the purposes of completing the construction.  All such policies or certificates therefor
issued by the respective insurers shall be delivered to Landlord.  Within ten (10) days after the premium
of each such policy shall become due and payable and the amount thereof shall
be determined, Tenant agrees to pay said premium or cause the same to be paid,
and Landlord shall be furnished with evidence satisfactory to it of such
payment.

Section 6.05 –
[Intentionally Omitted].

Section 6.06 – Final Completion of Initial
Construction.  Tenant
covenants and agrees that:

(a)           the
construction of the Initial Construction shall be performed in a good and
workmanlike manner in accordance with (i) the Plans and Specifications as
approved by Landlord; (ii) all applicable permits, certificates and
authorizations and building and zoning laws and ordinances and with all other
Requirements; and (iii) the terms, covenants and conditions of this Lease;
and

(b)           throughout
the course of such construction and at and after Final Completion of the
Initial Construction (as hereinafter defined), Landlord’s fee estate in the
Demised Premises will be free and clear of all liens and encumbrances arising
out of or connection with such construction. 
Upon completion of the Initial Construction, Tenant shall furnish to
Landlord (i) a certificate from Tenant’s architect certifying that the
Initial Construction has been completed in accordance with the Plans and
Specifications; (ii) copies of either the temporary certificates of
occupancy or the permanent certificate of occupancy for the Initial
Construction; (iii) a complete set of “as built” plans within six (6) months
after Final Completion of the Initial Construction; (iv) a survey of the
Land showing the Initial Construction as built thereon certified to Landlord by
a surveyor reasonably acceptable to Landlord; and (v) evidence reasonably
satisfactory to Landlord of proof of payment in full for the Initial
Construction, including, without limitation, lien waivers in recordable form
received from all architects, engineers, contractors, subcontractors,
materialmen and laborers providing supplies and/or performing work in
connection with the Initial Construction. 
“Final Completion of the Initial Construction” shall be deemed to
have occurred on the date when all of the above have been fully satisfied and
delivered to Landlord in accordance with the terms hereof.

Section 6.07 – Title
to Improvements.  Title
to Existing Improvements shall remain in Landlord.  Title to the Improvements erected by Tenant
on the Land shall be vested solely and exclusively in Tenant until the termination
of this Lease, whereupon title shall vest in Landlord in accordance with Section 22.02.  Concurrent with Landlord’s

 12
 

 

 

approval of the Plans
and Specifications, Landlord shall notify Tenant of those portions of the
Initial Construction that shall be removed by Tenant at the expiration or other
termination of the Lease in accordance with Article 22 of this Lease.  All salvage and proceeds from any salvage
resulting from alterations or demolition of any existing Improvements pursuant
to the provisions of this Article 6 shall be the property of Tenant or its
immediate or remote grantees.

Section 6.08 –
Landlord’s Approval of Plans. 
Landlord’s retention or approval of the Plans and Specifications or any
other action taken with respect thereto by Landlord or any Mortgagee shall not
constitute an opinion or representation by Landlord or the Mortgagee as to the
sufficiency of said Plans and Specifications or impose any responsibility for
the sufficiency thereof upon Landlord or the Mortgagee.

Section 6.09 –
Plans and Specifications; Construction Contract.

(a)           Plans and Specifications shall be
prepared by an architect satisfactory to Landlord and which Plans and
Specifications shall meet with the approval of Landlord, together with the
approval thereof by any Governmental Authority then exercising jurisdiction
with regard to such work and such Plans and Specifications shall be and become
the sole and absolute property of Landlord in the event that, for any reason,
this Lease shall be terminated.

(b)           The Initial Construction contract
shall be made with a contractor satisfactory to Landlord, providing for the
completion of all work, labor and materials necessary for completion of the
Initial Construction in accordance with the Plans and Specifications.

ARTICLE 7

REPAIRS AND MAINTENANCE OF THE DEMISED PREMISES

Section 7.01 – Maintenance of Demised Premises.  Tenant shall, at its sole cost and expense,
take good care of the Demised Premises, including without limitation, the roof,
structure, exterior and interior walls and finishes, foundations, mechanical,
plumbing, electrical and sanitary systems, water and sewage facilities and
drains, drywells, cesspools, pipes, fencing, landscaping, paving, curbing, all
alleyways, passageways, vaults, ramps, sidewalks adjoining the Demised Premises
(“Appurtenances”) and shall keep same in good order and condition and
make all repairs thereto, ordinary and extraordinary, foreseen and unforeseen
as and when needed to keep them in good order and condition. Except as
otherwise provided herein, Landlord shall have no responsibility and shall not
be required to furnish any services, make any repairs or to perform any other
maintenance work in or about the Demised Premises, and Tenant hereby assumes
the full and sole responsibility, at its sole cost

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and
expense for same, and for the condition of the Demised Premises, including, but
not limited to keeping the Demised Premises and Appurtenances, at its own sole
cost and expense, in a clean and orderly condition, free of snow, ice, rubbish
and obstructions.  Tenant covenants to
keep Landlord’s interest in the Demised Premises free of liens and other
foreclosable impositions arising through Tenant and shall have no obligation
with respect to liens arising through Landlord.

Section 7.02 – Landlord Cure Rights.  In the event (a) Tenant fails to
maintain the Demised Premises in accordance with Section 7.01 above to
Landlord’s reasonable satisfaction or (b) repairs to the Demised Premises
or Appurtenances are made necessary by reason of the acts, omissions or
negligence of Tenant, its agents, directors, shareholders, officers, employees,
subtenants, assignees, customers, licensees or invitees, then in any of such
event(s), Landlord may give Tenant thirty (30) days notice within which to make
such repairs, or if such repairs cannot be made within such thirty (30) day
period, to commence such repairs within thirty (30) days and diligently pursue
them to completion thereafter.  In the
event Tenant fails timely to make such repairs as aforesaid, Landlord shall be
entitled, but shall not be obligated, to make such repairs at Tenant’s expense
without incurring any liability to Tenant by reason thereof upon reasonable
notice to Tenant. Notwithstanding anything herein to the contrary, if, in
Landlord’s sole, reasonable discretion, emergency repairs are necessary,
Landlord may, if Landlord so elects to, make such repairs at any time without
notice to Tenant, at Tenant’s expense. 
All sums expended by Landlord under this Section 7.02 shall be
deemed Additional Rent and payable on demand by Landlord.

Section 7.03 – Shoring.  Tenant shall do, or cause others to do, all
necessary shoring of foundations, supporting walls and the walls of the
Improvements and shall comply with all Requirements with respect thereto and
shall do every other act or thing for the safety and preservation of the
Demised Premises (including the Improvements and any and all other improvements
erected thereon) which may be necessary by reason of any excavation, subsurface
construction, remodeling or other building operation upon any adjoining
property or street, avenue, alley or passageway.

ARTICLE 8

LESSEE’S ALTERATIONS

Section 8.01 – Alterations.  During the Term, Tenant shall not have the
right, without Landlord’s prior written consent, which shall not be
unreasonably withheld or delayed, to modify, expand, relocate or demolish the
structures on the Demised Premises (except for the Initial Construction in
compliance with Article 6) or to make any alterations or modifications to
the roof, structure, exterior walls, foundations,

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mechanical, plumbing,
electrical and sanitary systems, water and sewage facilities and drains,
drywells and cesspools of the Demised Premises.

ARTICLE 9

UTILITIES

Section 9.01 – Utilities.  Tenant shall provide, at its own cost and
expense, fuel, heat, water, sewer, electricity, telephone and all other
utilities or services required in connection with its use of the Demised
Premises.  Tenant shall be responsible
for all deposits required by the respective utilities for service.  Tenant shall comply with all requirements of
the utilities supplying said service.

ARTICLE 10

PRE-EXISTING ENVIRONMENTAL CONDITIONS;

ENVIRONMENTAL COMPLIANCE DURING PERIOD OF TENANCY;

REQUIREMENTS OF LAW

Section 10.01 – Pre-Existing Environmental
Conditions.

(a)           Landlord
and Tenant acknowledge and agree that (i) according to a Phase I
Environmental Site Assessment dated August 28, 2003, conducted for Tenant
by MFG, Inc. (“Phase I Study”), a number of recognized environmental
conditions as defined in the Phase I Study (RECs) have been identified at the
Demised Premises; (ii) the Demised Premises have been found to be affected
by petroleum hydrocarbons, including free phase product, in soil and
groundwater; (iii) further characterization of the Demised Premises will
be necessary to more accurately identify the nature and extent of the
contamination, including the extent, if any, of off-site migration; (iv) it
will be necessary to conduct further analysis of remedial options and potential
risks associated with the Demised Premises; and (v) remedial action will
also be required to address the contamination and bring the conditions at the
Demised Premises into compliance with applicable Environmental Law.  “Pre-existing Environmental Conditions” means
(i) any and all RECs identified in the Phase I Study and (ii) the
presence of any Hazardous Materials existing as of the Commencement Date in the
air, soil, surface water or groundwater, and in, on and under any structure on
the Demised Premises in a form, condition or concentration such that removal,
abatement or remediation is required under applicable Environmental Law.  Notwithstanding anything herein to the
contrary, Landlord and Tenant hereby agree that the underground storage tanks
existing on the date hereof at the Demised Premises (the “Existing Tanks”)
shall not be deemed to be a Pre-existing Environmental Condition.

(b)           With
respect to any and all Pre-Existing Environmental Conditions, Landlord, at its
sole expense, shall conduct and complete all investigations, studies,
samplings, and testing, and all remedial, removal, and other response actions

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necessary
to clean up, remove and/or abate all Hazardous Materials, on, from, or
affecting the Demised Premises, including but not limited to any and all
activities necessary and appropriate to follow up on the recommendations of the
Phase 1 Study, (i) in accordance with all applicable federal, state and
local laws, ordinances, rules, regulations, and policies, and (ii) in
accordance with the orders and directives of all federal, state, and local
governmental authorities.  Alternatively,
Landlord may elect to request Tenant, at Landlord’s sole expense, to retain the
response contractors and directly oversee their work.  Without affecting in any way the parties’
obligations under Article 10, Tenant concurs with the recommendations set
forth in the Groundwater Monitoring Program, prepared by P.W. Grosser
Consulting, Inc. for Lighthouse Retail Partners, Inc., dated September 2003.

(c)           For
purposes of this paragraph, “Hazardous Materials” includes, but shall
not be limited to, (i) asbestos in any form, except to the extent such
asbestos in its present condition may remain in place pursuant to and in
compliance with all Environmental Laws; (ii) urea formaldehyde foam
insulation; (iii) transformers or other equipment which contain dialectic
fluid containing levels of polychlorinated byphenyls (PCBs) in excess of 50
parts per million; (iv) any substance deemed hazardous or toxic, or
required to be investigated, disclosed, reported, treated, removed, disposed of
or cleaned up by an applicable Environmental Law; (v) any substance or
mixture which is or shall be listed, defined, or otherwise determined by any
agency or court to be hazardous, toxic, dangerous or otherwise regulated,
affected, controlled or giving rise to liability under any Environmental Law; (vi) polychlorinated
biphenyls (PCBs); (vii) laboratory wastes; (viii) experimental
products, including genetically engineered microbes and other recombinant DNA
products; (ix) petroleum, crude oil, natural gas, natural gas liquid, liquefied
natural gas, other petroleum products, or synthetic gas useable as fuel; and
(x) “source,” “special nuclear” and “by-products” material, as defined in the
Atomic Energy Act of 1954, 42 U.S.C. § 3011 et seq.

(d)           The
term “Environmental Law” shall mean any federal, state or local
environmental or health or safety law, regulation or rules, as the same may be
amended from time to time, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601
et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976, as amended by the Solid and Hazardous Waste
Amendments of 1984, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251
et seq.; the Toxic Substances Control Act of 1976, 15 U.S.C. § 2601 et
seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
§ 11001 et seq.; the Clean Air Act of 1966, as amended, 42 U.S.C. § 741
et seq.; the National Environmental Policy Act of 1975, 42 U.S.C. § 4321;
the Rivers and Harbors Act of 1899, 33 U.S.C. § 401 et seq.; the
Endangered Species Act of 1973, as amended, 16 U.S.C. § 1531 et seq.; the
Occupational Safety 

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and Health
Act of 1970, as amended, 29 U.S.C. § 651 et seq.; the Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. § 300(f) et seq.; the Hazardous
Materials Transportation Act, 42 U.S.C. §§ 1471, 1472, 1655m 1801 et seq.;
the Federal Insecticide, Fungicide & Rodenticide Act, 7 U.S.C. § 136
et seq.; the Atomic Energy Act, 42 U.S.C. § 3011 et seq., and any other
rule, guidance or common law which relates to (i) the existence and/or
remedy of contamination on property, (ii) the protection of persons,
property, animals, or the environment from any exposure to or contamination by
Hazardous Materials, radiation or other emanations; (iii) the use
generation, storage, removal, recovery, treatment, transport, disposal, and
control of Hazardous Materials, including hazardous wastes and building
materials; (iv) the prevention of, control of, or response to the exposure
of tenants, employees or other persons to any Hazardous Material or radiation; or
(v) the prevention of, control of, or response to the emission or
discharge of Hazardous Materials in the workplace or environment.

(e)           If
Landlord elects to retain the services of response contractors to discharge its
obligations pursuant to Section 10.01(b), above, Tenant shall have the
right, at Tenant’s expense, to retain the services of an environmental
consultant of its choosing to monitor the work conducted by Landlord’s response
contractors in addressing the Pre-Existing Environmental Conditions.

(f)            Tenant
agrees to take occupancy of the Demised Premises on the Commencement Date and
to cooperate with Landlord and its response contractors in addressing the
Pre-Existing Environmental Conditions. 
Landlord shall use commercially reasonable efforts to minimize
interruption with Tenant’s business in performing its obligations
hereunder.  In the event any response
actions taken to address Pre-existing Environmental Conditions materially
interfere with or materially impair Tenant’s Permitted Use of all or any
material portion of the Demised Premises, the Fixed Rent payable hereunder
shall abate equitably based upon the portion of the Demised Premises that is
unusable by Tenant, provided however, if Tenant cannot reasonably operate its
business at the Demised Premises during any period as a result of such work by
Landlord, then all Fixed Rent shall abate until Tenant may reasonably operate
its business at the Demised Premises.  In
the event as a result of any Pre-existing Environmental Conditions or the performance
of Landlord’s obligations hereunder, Tenant is unable to operate its entire
business at the Demised Premises for an uninterrupted period in excess of six (6) months,
then Tenant shall have the one time right to cancel this Lease upon notice to
Landlord within thirty (30) days after the expiration of said period, TIME
BEING OF THE ESSENCE.  Tenant’s failure
to give notice within the time period required herein shall be deemed an
irrevocable waiver of Tenant’s right to terminate this Lease under this Section 10.01(f)

(g)           Notwithstanding
anything stated herein to the contrary, if Tenant shall elect at any time to
remove the Existing Tanks, Tenant shall pay the cost for such removal, which
shall be performed using licensed, bonded (by a surety company

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licensed
to do business in New York) and reputable contractors.  The foregoing option of Tenant to remove the
Existing Tanks shall not limit Landlord’s obligation under this Article 10
to remediate Preexisting Environmental Conditions.  If the removal of the Existing Tanks is
required as part of Landlord’s remediation obligations under this Article 10,
Landlord shall remove the Existing Tanks at its expense.  Landlord shall in no event be obligated to
remove the Existing Tanks if the removal is required as a result of either a
Tenant Environmental Condition (hereinafter defined) or Tenant’s Initial
Construction.

(h)           Notwithstanding
the provisions of Section 10.01(f) hereof, in the event that due to
Tenant’s construction or renovation of the Demised Premises, Tenant’s inability
to use all or any portion of the Demised Premises for the Permitted Use due to
the concurrent remediation of the Demised Premises by Landlord, shall not give
rise to a claim for the abatement of Fixed Rent under Section 10.01(f) hereof,
except to the extent Landlord’s remediation in and of itself materially
interferes with Tenant’s construction or renovation.

(i)            Landlord
covenants and agrees to defend, indemnify and hold harmless Tenant, from and
against, and pay or reimburse Tenant for, any and all claims, liabilities,
obligations, losses, fines, costs, royalties, proceedings, deficiencies or
damages (whether absolute, accrued, conditional or otherwise and whether or not
resulting from third party claims, but excluding consequential, special or
indirect damages and lost profits), including out-of-pocket expenses and
reasonable attorneys,’ consultants’ and accountants’ fees incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder resulting from or arising out of Pre-existing
Environmental Conditions or the actions, operations, activities, or
non-compliance of Landlord, Landlord’s agents, or Landlord’s invitees, with
Environmental Laws at the Demised Premises. 
The foregoing indemnity shall survive the expiration or other
termination of this Lease.

Section 10.02 – Environmental Compliance During
Period of Tenancy; Requirements of Law.

(a)           In the operation and occupancy of its
business on the Demised Premises, Tenant shall promptly execute and comply with
all statutes, ordinances, rules, orders, regulations and requirements
(including those which require structural alterations) of and permits issued by
the federal, state, county and local government and of any and all their
departments and bureaus applicable to the Demised Premises, including, without
limitation, those for the correction, prevention or abatement of nuisances or
other grievances in, upon, or connected with the Demised Premises during the
Term; and shall also promptly comply with and execute all rules, orders and
regulations of the New York Board of Fire Underwriters for the prevention of
fires at the Tenant’s own cost and expense. 
The Tenant’s obligations pursuant to this provision pertain solely to
conditions that, in whole or in part, arise or develop during the term of

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its
tenancy and which only be first discovered after the expiration or earlier
termination of the term of this Lease. 
Nothing in this paragraph in any way alters the Landlord’s obligations
and responsibilities under Section 10.01 for all Pre-existing
Environmental Conditions that have been identified or are found in place on the
Demised Premises on the Commencement Date.

(b)           Tenant
shall operate and occupy the Demised Premises in compliance with all Environmental
Laws (as defined above).  Without
limiting the foregoing, Tenant shall not cause or permit the Demised Premises
to be used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Materials, except in compliance
with all applicable federal, state and local laws or regulations.  Tenant shall obtain and comply with any and
all approvals, registrations or permits required under applicable Environmental
Laws, including, without limitation, air quality and fuel storage permits.  For as long as the Existing Tanks remain at
the Demised Premises, Tenant shall maintain the tanks in good condition, in
compliance with all Environmental Laws and all other applicable federal, state
and local laws and regulations.

(c)           In
the event a REC and/or Hazardous Material in the air, soil, surface water or
groundwater, or in, on and/or under any structure on the Demised Premises is
identified at the Demised Premises that is not a Pre-existing Environmental
Condition and which occurred, was created or aggravated during the Lease Term
(a “Tenant Environmental Condition”), Tenant shall (i) conduct and
complete all investigations, studies, samplings, and testing, and all remedial,
removal, and other actions necessary to clean up, remove and/or abate all
Tenant Environmental Conditions in accordance with all applicable federal,
state and local laws, ordinances, rules, regulations, and policies, and (ii) in
accordance with the orders and directives of all federal, state, and local
governmental authorities.

(d)           In
the event a Tenant Environmental Condition has been identified, at the
expiration of this Lease or in the event this Lease is terminated, or Tenant is
dispossessed, Tenant shall be responsible with respect to any and all such
Tenant Environmental Conditions to (i) deliver the Demised Premises to
Landlord in a condition that conforms with all applicable federal, state and
local laws, ordinances, rules or regulations affecting the Demised
Premises including, without limitation, Environmental Laws, and (ii) deliver
to Landlord a phase one and, if reasonably necessary, a phase two environmental
report and tank testing reports showing no leaks, prepared by an environmental
consultant reasonably satisfactory to Landlord, or if commercially reasonable,
a no-action letter or closure letter, certifying to Landlord that the Tenant
Environmental Condition or Conditions has been appropriately remediated or
abated.  Nothing in this paragraph,
however, alters or relieves Landlord from its obligations under Section 10.01
to be responsible for any and all Pre-existing Environmental Conditions.

 19

 

 

(e)           In
the event a Tenant Environmental Condition has been identified, including,
without limitation, in connection with the Existing Tanks, Tenant covenants and
agrees to defend, indemnify and hold harmless Landlord, from and against, and
pay or reimburse Landlord for, any and all claims, liabilities, obligations,
losses, fines, costs, royalties, proceedings, deficiencies or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims, but excluding consequential, special and indirect damages
and lost profits), including out-of-pocket expenses and reasonable attorneys,’
consultants’ and accountants’ fees incurred in the investigation or defense of
any of the same or in asserting any of their respective rights hereunder
resulting from or arising out of Tenant Environmental Conditions at the
Premises, including the presence of Hazardous Materials, or the discharge or
release of Hazardous Materials, and liabilities under Environmental Laws that
arise from actions, conditions, or the disposal or release of Hazardous
Materials or the actions, operations, activities, or non-compliance of Tenant,
Tenant’s agents, or Tenant’s invitees, with Environmental Laws at the Demised
Premises. The foregoing indemnity shall survive the expiration or other
termination of this Lease.

(f)            Tenant
shall be permitted, provided it complies with this Article 10, to install
on the Demised Premises underground and above ground fuel storage tanks as well
as car wash and vacuum facilities and overhead reels for automotive fluids,
including, but not limited to, motor oil and windshield washer fluid.

(g)           If
Landlord or Tenant receives any notice of (i) the happening of any event
involving the presence, spill, release, leak, seepage, discharge or cleanup of
any Hazardous Material on, to or from the Demised Premises, or (ii) any
complaint, order, citation or notice with regard to air emissions, water
discharge or any other environmental, health or safety matter affecting Tenant
or the Demised Premises, then such party shall promptly notify the other in
writing of said notice and shall contemporaneously send to the other party a
copy of any notice sent to any governmental agency.

(h)           During
the Term, Landlord or its designee, provided Landlord has a reasonable basis to
believe that the Demised Premises has been affected by Hazardous Materials,
may, at Landlord’s sole cost and expense, and in consultation with Tenant,
conduct such investigations and tests as Landlord reasonably deems necessary to
determine whether the Demised Premises and the operation thereof are in
compliance with all Environmental Laws, provided that any such investigations
and tests do not materially interfere with Tenant’s Permitted Use of the
Demised Premises or the operation of its business thereon.

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Section 10.03 – [Intentionally Omitted].

Section 10.04 – Environmental Insurance.

(a)           Except
as specifically provided in this Lease, neither the maintenance of any
insurance policy required under this Lease nor the minimum limits specified
herein shall be deemed to limit or restrict in any way the Tenant’s or Landlord’s
liability for environmental matters under this Article 10.

(b)           With
respect to third-party claims arising from or related to, directly or
indirectly, in whole or in part: (i) the threatened or actual release of
any Hazardous Materials in, on, under or from the Demised Premises; and (ii) any
environmental liability or remedial action associated with the Demised Premises
for any activities conducted on the Demised Premises; both parties shall be
covered and such losses, costs, expenses, claims, demands, obligations and
liabilities will be satisfied to the extent environmental insurance provides
coverage. This provision shall survive the Lease Term.

(c)           Landlord
shall name Tenant as an additional insured under any environmental insurance
policy that Landlord maintains for the Demised Premises.

Section 10.05 – Additional Remedies of Tenant.

(a)           In
the event Landlord defaults with respect to any provision of this Article 10
after thirty (30) days’ written notice, if performance is reasonably possible
in that time period, then Tenant shall have the right to perform any such
obligation hereunder and offset against the Fixed Rent next coming due
hereunder until the full amount so expended or incurred by Tenant, including
any fines and penalties payable to any Governmental Authority as a direct
result of Landlord’s default under this Section 10, of any such actual,
out-of-pocket, reasonable sum or obligation in default has been recouped by
Tenant.

(b)           The
offset of Fixed Rent, as provided in this Section, shall not be deemed or
construed as a waiver of Landlord’s default or as a waiver of any other rights
and remedies to which Tenant may be entitled under the provisions of this Lease
by reason of such default, it being intended that Tenant’s rights to offset
Fixed Rent shall be in addition to but not in limitation of any such other
rights and remedies; and Tenant may exercise any of such other rights and
remedies independent of or in conjunction with its rights under this Section.

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ARTICLE 11

INSURANCE

Section 11.01 – Insurance.  Tenant shall, at its sole cost and expense,
during the Term of this Lease:

(a)           Keep
all Improvements, building fixtures and equipment (other than Tenant’s trade
fixtures and business equipment) and other property on, in or appurtenant to
the Demised Premises, or used in connection with the operation and maintenance
of the Demised Premises, and all replacements, alterations and additions of or
to the foregoing, insured for the benefit of Tenant (except as otherwise
specifically noted), Landlord and for the benefit of the Mortgagee (under a
standard New York Mortgage Endorsement) and for the benefit of any other party
designated by Landlord who has an insurable interest in the Demised Premises,
as their respective interests may appear, against all risk of loss or damage,
including loss or damage by fire and other perils included in a so-called “extended
coverage endorsement” or “multi-peril endorsement”, vandalism and malicious
mischief, collapse, lightning, windstorm, hail, explosion, riot, riot attending
a strike, civil commotion, aircraft, vehicles, smoke, and water damage and
against such other risks as are normally or customarily insured against by owners
or operators of similar properties as Landlord may from time-to-time reasonably
request, and containing Replacement Cost endorsements. Such coverage shall be
in amounts at all times sufficient to prevent Landlord, Tenant or any
additional insured from becoming a co-insurer under the terms of the applicable
policies, but in any event in amounts not less than the full replacement value
of the Improvements. Tenant shall cause full replacement value to be determined
from time-to-time at the request of Landlord, but not more frequently than once
every three (3) years, by an insurance appraisal or other valuation method
reasonably acceptable to Landlord. Such policies shall name Landlord, and/or
the Mortgagee, and/or any other party having an insurable interest as Landlord
may designate, as loss payee(s).

(b)           If
a sprinkler system is located in the Demised Premises or any Improvement
located thereon, provide sprinkler leakage insurance in amounts reasonably
satisfactory to Landlord, and provide and keep in force a sprinkler
supervisory, maintenance and alarm service contract.

(c)           Provide
boiler and machinery broad form insurance covering fire, damage and explosion
in respect of steam and pressure boilers and similar apparatus, if any, located
in or upon the Demised Premises in the amount of Five Million ($5,000,000.00)
Dollars.

(d)           Provide
comprehensive general liability and broad form property damage insurance,
written on an occurrence basis, including elevator, escalator, machinery and
contractual liability insurance, protecting and indemnifying Landlord, Tenant
and others having an insurable interest against any and all claims (including
all 

 22
 

 

 

costs and expenses of defending against same) for
personal injury, disease or death and for damage or injury to or destruction of
property (including loss of use) occurring on, in or about the Demised
Premises, sidewalks, gutters, curbs, vaults or vault spaces appurtenant to the
Demised Premises, which insurance shall have a combined single limit of not
less than Ten Million and 00/100 ($10,000,000.00) Dollars. The insurance
carried pursuant to this Section 11.01(d) shall include coverage for
contractual liability, independent contractors’ liability and completed
operations liability with a personal injury endorsement covering claims arising
out of arrest, false imprisonment, libel, slander, wrongful eviction and
invasion of privacy.

(e)           Provide
automobile liability insurance covering all vehicles operated or owned by
Tenant in connection with the Demised Premises.

(f)            Provide
for the benefit of Landlord and any Mortgagee only, business interruption and
rent loss insurance in an amount equal to at least the sum of twelve (12)
months’ Fixed Rent and Additional Rent (including Impositions), plus twelve
(12) months’ insurance premiums and the estimated amount of annual maintenance
costs for the Demised Premises.

(g)           Provide
workers’ compensation insurance to the extent required by applicable law.

(h)           At
any time prior to undertaking and during the duration of any construction or Alteration
of any Improvements on the Demised Premises, including the Initial
Construction, provide Builder’s Risk All Risk Non-Reporting property insurance
for the full replacement value of such Alterations, work and construction of
Improvements, with Replacement Cost and Agreed Amount endorsements.

(i)            Provide
and keep in force such other insurance covering such risks and in such amounts
as may from time-to-time be reasonably required by Landlord or any Mortgagee
against any other insurable hazards as are commonly insured against in cases of
properties similarly situated.

(j)            Provide
garagekeeper’s liability coverage in amounts reasonably satisfactory to
Landlord, if Tenant provides, directly or indirectly, valet parking or in any
other way exercises care, custody or control over vehicles in the parking areas
of the Demised Premises.

(k)           Maintain
environmental insurance throughout the Lease Term in the form and at least in
the amounts as set forth in the letter (the “Insurance Letter”) from
Tenant’s duly licensed insurance broker annexed hereto as Schedule C
and made a part hereof. Tenant shall name Landlord as an additional insured
under Tenant’s environmental insurance policy maintained for the Demised
Premises.

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Tenant agrees that the limits of insurance required by
this Article may be increased at the request of Landlord or any Mortgagee
consistent with limits of coverage for properties similarly situated provided,
however, that in no event shall the limits of insurance be reduced below the
amounts of coverage required at the commencement of the Term of this Lease.

Section 11.02 – Evidence of Insurance.  Contemporaneous with the execution of this
Lease, Tenant shall deliver to Landlord and to any Mortgagee and to any other
party designated by Landlord, duly executed certificates of insurance or
endorsements and the Insurance Letter reflecting Tenant’s maintenance of the
insurance required under Section 11.01 of this Lease, together with proof
of payment of the premiums and shall thereafter furnish to Landlord, at least
ten (10) days prior to the expiration of any insurance policies and any
renewal thereof, evidence of renewal or continued coverage together with
evidence of the payment of premiums thereon. The insurance required under Section 11.01
shall not have any deductible or retention in excess of One Million and 00/100
($1,000,000.00) Dollars and shall provide that the same may not be otherwise
materially changed or cancelled on less than thirty (30) days’ prior written
notice to Landlord and any Mortgagee. Landlord shall have the right, to be
exercised upon prior reasonable notice to Tenant, to review and copy Tenant’s
insurance policies to confirm compliance with Section 11.01. During the
Term, Tenant shall provide, within ten (10) days of Landlord’s written
request, an updated Insurance Letter.

Section 11.03 – Additional Requirements.  Landlord, Landlord’s managing agent and any
Mortgagee shall be named as additional insureds as their interests may appear
in the policies of liability insurance described in Section 11.01, but
shall nevertheless be protected against all liability occasioned by an
occurrence insured against to the same extent and limits as Tenant is protected
and insured under said policies, which policies shall provide primary coverage
for Landlord, Landlord’s managing agent and any Mortgagee. All policies of
insurance shall be: (i) written as “occurrence” policies, (ii) written
as primary coverage and not contributing with or in excess of any coverage
which Landlord or any management agent, or Mortgagee may carry, (iii) issued
in form acceptable to Landlord by insurance companies reasonably acceptable to
Landlord carrying a General Policyholder’s Service Rating of not less than “A/X”
as rated in the most current Best’s Insurance Reports (or any successor rating
guide acceptable to Landlord), and licensed to do business in New York State
and authorized to issue such policy or policies; and (iv) contain an
endorsement that Landlord, Landlord’s managing agent and all Mortgagees,
although named as additional insureds as their interests may appear,
nevertheless shall be entitled to recover under said policies for any loss or
damage occasioned to their respective servants, agents, employees and
contractors by reason of the negligence of Tenant, its servants, agents,
employees and contractors. In addition, the policies referred to in Sections
11.01(a), 11.01(b), 11.01(c), 11.01(f) and 11.01(h) shall name
Landlord and any Mortgagees designated by Landlord as Loss 

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Payee(s) for all losses, claims and insurance proceeds
pertaining to, arising out of, or in connection with the Demised Premises.

Section 11.04 – Payment of Premiums.

(a)           Tenant
shall pay all premiums and charges for all of said policies of insurance and,
if Tenant shall fail to make any payment when due or carry any such policy,
Landlord may but shall not be obligated to, following an uncured Insurance Notice (hereinafter
defined), make such payment or procure such insurance coverage (which may be
maintained under a blanket policy of insurance maintained by Landlord or any
affiliate of Landlord), and the amount paid by Landlord or its affiliate, with
interest thereon at the Default Rate, shall be repaid to Landlord by Tenant on
demand, and all such amounts so repayable, together with such interest, shall
be deemed to constitute Additional Rent hereunder. Payment by Landlord of any
such premium, or the carrying by Landlord or its affiliates of any such policy,
shall not be deemed to waive or release the default of Tenant with respect
thereto.

(b)           As
used herein, the term “Insurance
Notice” shall mean a notice with respect to the Tenant’s failure to
pay any insurance charges or premiums following the giving of which Tenant
shall have ten (10) days to cure such default, provided, however, if the insurance
policy or coverage shall lapse by reason of such non-payment, within said ten (10) day
period, Tenant’s time to cure shall expire ten (10) business days prior to
the lapse of such insurance policy or coverage.

Section 11.05 - Waiver of Subrogation.  Tenant shall cause each
insurance policy carried by Tenant and insuring the Demised Premises and Tenant’s
leasehold improvements, equipment, furnishings, fixtures and contents against
loss, damage, or destruction by fire or other casualty, including business
interruption, and other special coverages, to be written in a manner so as to
provide that the insurer waives all rights of recovery against Landlord in
connection with any loss or damage covered by any such policy, including all
rights of subrogation. Landlord shall not be liable to Tenant and Tenant hereby
releases Landlord from any such liability for the amount of such loss or
damage. If Landlord procures any casualty insurance concurrent with or
supplemental to any casualty insurance procured by Tenant pursuant to this
Lease, such policy or policies shall provide that the insurer waives all rights
of recovery against Tenant in connection with any loss or damage covered by
such policy, including all rights of subrogation.

Section 11.06 - Binding on Subtenants.

(a)           In
the event of any sublease or occupancy by a person other than Tenant of all or
a portion of the Demised Premises, irrespective of whether permitted by this
Lease or made in violation thereof, all of the covenants and obligations on the
part of Tenant set forth in this Article 11 shall bind and be fully
applicable to the subtenant or 

 25
 

 

 

occupant (as if such subtenant or occupant were Tenant
hereunder) for the benefit of Tenant and Landlord, but nothing contained herein
shall be deemed a consent to such subletting if in contradiction of the terms
of this Lease.

(b)           Notwithstanding
anything in this Section 11.06 to the contrary, if Tenant remains in
compliance with the provisions of Article 11 of this Lease, including, but
not limited to, maintenance of insurance for the benefit of Landlord, any
subtenant shall not be bound by the covenants and obligations of this Article 11.

Section 11.07 - Tenant’s Supplemental Insurance.  The limits of insurance specified in Section 11.01
hereof are the minimum limits of insurance required of Tenant pursuant to this
Lease. Nothing contained herein shall prevent Tenant from maintaining separate
property insurance in respect of Tenant’s personalty, inventory, trade fixtures
and business interruption expenses. Except with respect to the insurance
required by Sections 11.01(d) and 11.01(j) hereof, Tenant shall not take
out separate insurance concurrent in form or contributing in the event of loss
with that required by Sections 11.01(a), 11.01(b), 11.01(c), 11.01(f) and
11.01(h) to be furnished by Tenant unless Landlord is included therein as
the insured, with loss payable as in this Lease, provided Tenant shall promptly
notify the Landlord of the placing of any such separate insurance.

ARTICLE 12

DAMAGE OR DESTRUCTION

Section 12.01 – Damage or Destruction to Improvements.

(a)           If
any Improvements shall be destroyed or damaged by any cause whatsoever, Tenant
shall promptly notify Landlord and shall, at Tenant’s sole cost and expense,
restore, repair, replace or rebuild the same as nearly as possible to their
condition and character immediately prior to the damage or destruction,
reasonable wear and tear excepted (“Casualty Restoration”).

(b)           Casualty Restoration shall be
commenced promptly and prosecuted to completion with reasonable diligence.
Landlord shall join with Tenant in the adjustment and settlement of any
insurance claim. If Tenant is not in default of any of its obligations for the
payment of Fixed Rent or Additional Rent, and no uncured Event of Default has
occurred which is continuing, the net insurance proceeds, if any, payable by
reason of such damage or destruction (other than insurance proceeds for the
loss of Tenant’s personalty and other than insurance proceeds for loss of
Rents, Impositions and/or maintenance, irrespective of whether paid to Tenant
or Landlord) shall be paid to Tenant and used by Tenant for the payment of the
cost of the Casualty Restoration in compliance with Section 12.03.

(c)           Notwithstanding
the provisions of Sections 12.01(a) and 12.01(b) to the contrary, if
all or substantially all of the Improvements are damaged or destroyed at 

 26
 

 

 

a time when there is fewer than two (2) years
remaining in the Term, then at Tenant’s option, to be exercised by notice given
within fifteen (15) days following the date of such substantial damage or
destruction, this Lease shall be terminated effective as of the date such
notice is given, whereupon, Tenant shall be released from its obligation to
repair or restore the Demised Premises (except as otherwise specifically set
forth in this Section 12.01(c)), any insurance proceeds paid or payable to
Tenant shall be paid to Landlord free of any claim by Tenant, Landlord shall
have the exclusive right to adjust and settle any insurance claim on account of
or relating to any such damage or destruction and Tenant shall pay Landlord the
amount of any deductible or retention limit under the applicable policy or
policies. If Tenant elects to terminate this Lease as aforesaid, Tenant shall,
at its sole cost and expense, promptly remove all remaining portions of the
Improvements, including all debris, and fill in and level the area to proper
grade.

Section 12.02
– No Abatement of Rent.  Except as otherwise set forth in Section 12.01(c),
no destruction of or damage to the Demised Premises, or to any Improvement,
furniture, furnishings, fixtures, equipment or other property, shall permit
Tenant to surrender this Lease or shall relieve Tenant from its liability to
pay the full Fixed Rent or Additional Rent payable under this Lease or from any
of its other obligations under this Lease. This Section shall be deemed to
be an agreement expressly providing otherwise within the meaning of Section 227
of the Real Property Law of the State of New York and any successor law of like
impact.

Section 12.03 – Disbursement of Insurance
Proceeds.

(a)           Prior
to commencement and during the Casualty Restoration, Tenant shall provide
Landlord with the following:

(i)            Lien waivers (following completion
of any portion of the work), title insurance endorsements or such other
evidence, reasonably satisfactory to Landlord, to the effect that all work,
labor and materials installed and completed at the Demised Premises have been
paid for, or shall be paid for, and that there has not been filed with respect
to the Demised Premises, any vendor’s, mechanic’s, laborer’s, materialmen’s or
other lien which has not been discharged or record, except such as will be
discharged by payment of the amount then requested and a waiver of the right to
file any lien in connection with any work or material covered by the
requisition and all prior requisitions (all of the documents referred to in
this clause (i) are individually and collectively referred to as “Lien Waivers”);

(ii)           dual obligee payment and performance
bonds or such other security for the benefit of the Landlord and the Mortgagee
in form and substance reasonably satisfactory to the Landlord and Mortgagee;

 27
 

 

 

(iii)          the written undertaking of each
architect, engineer, construction manager, general contractor and major
subcontractor to continue performance on Landlord’s behalf under their
respective agreements in the event of a default by the Tenant under this Lease;

(iv)          complete copies of the construction
management agreement, general construction contract, major subcontracts, all
change orders, amendments and modifications to each of the foregoing, all plan
revisions and supplements and all payment requisitions, Lien Waivers, architect’s
certifications and proof of payment for all work, labor and materials and
material notices relating to or incorporated in the Casualty Restoration prior
to the date of such requisition, provided, however, that any of the foregoing
which have been delivered with a prior requisition do not have to be
re-delivered with each subsequent requisition, unless the same have been
modified or amended; and

(v)           such other documentation regarding
the Casualty Restoration (including concrete, soil, steel, welding and other
testing certifications, surveys, engineers certificates, building or other
permits, paid invoices, data sheets and the like) as applicable governmental or
public agencies, the Mortgagee or a construction consultant or engineer engaged
by Landlord or the Mortgagee shall reasonably require.

(b)           Tenant shall, prior to the commencement
of the Casualty Restoration, furnish to Landlord and the Mortgagee an estimate
of the total cost of the Casualty Restoration certified by the architect or
engineer in charge of the Casualty Restoration. If such cost estimate or any
subsequent estimate shall show that the cost of completing the Casualty
Restoration is in excess of the amount of the Casualty Proceeds then available
(a “Shortfall”), Tenant shall contribute the amount of the Shortfall to
complete the Casualty Restoration.

(c)           If prior to the completion of any
Casualty Restoration, this Lease shall terminate or expire for any reason,
including a termination by reason of an Event
of Default (hereinafter defined), then Landlord shall have the right to
receive and retain any Casualty Proceeds to the extent that they shall not have
been applied to the payment of the costs and expenses of the Casualty
Restoration, and if such termination or expiration shall be by reason other
than an Event of Default, Tenant shall thereupon be discharged from any and all
obligations to complete such Casualty Restoration provided said Casualty
Proceeds are paid to Landlord and are sufficient to complete such Casualty
Restoration. If, in such case, the Casualty Proceeds are insufficient to pay
the full cost of the Casualty Restoration, Tenant shall pay the amount of any
shortfall to Landlord. The provisions of this Section 12.03(c) shall
survive the expiration or other termination of this Lease.

 28

 

 

Section 12.04
– Lease Supersedes. 
This Lease shall be considered an express agreement governing any case
of damage to or destruction of the Demised Premises or any part thereof by fire
or other casualty, and Section 227 of the Real Property Law of the State
of New York and any other law of like import now or hereafter in force, are
hereby waived by Tenant and shall have no application in such case.

ARTICLE 13

ASSIGNMENT AND SUBLETTING

Section 13.01
– Landlord Consent. 
Tenant shall not assign, mortgage or encumber this Lease, its interest
hereunder or the estate granted hereby, nor sublet or suffer or permit the
Demised Premises or any part thereof to be used by others, without the prior
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld for an assignment or sublease.

Section 13.02 –
Collection of Rent.  If
Tenant should assign its interest in this Lease, or if all or any part of the
Demised Premises be underlet or occupied by anybody other than Tenant, Landlord
may, after default by Tenant, collect rent from the assignee, under-tenant or
occupant, as the case may be, and apply the net amount to the Fixed Rent and
Additional Rent herein reserved, but no such assignment, underletting,
occupancy or collection shall be deemed a waiver of this covenant, or the
acceptance of the assignee, under-tenant or occupant as Tenant, or a release of
Tenant from the further performance by Tenant of the covenants on the part of
Tenant contained herein. The consent by Landlord to any 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.

Section 13.03
– Tenant’s Offer Notice. 
If Tenant shall desire to assign this Lease, or to sublet the Demised
Premises, it shall, no later than thirty (30) days prior to the proposed
effective date of the assignment or sublet, submit to Landlord a written
request for Landlord’s consent to such assignment or subletting (“Tenants Offer Notice”), which
shall contain the following information: (i) the name and address of the
proposed assignee or subtenant; (ii) the terms and conditions of the
proposed assignment or subletting; (iii) the nature and character of the
business of the proposed assignee or subtenant and its proposed use of the
Demised Premises; and (iv) current financial information and any other
information Landlord may reasonably request.

Section 13.04
– Landlord Consent. 
Landlord shall not unreasonably withhold its consent to the proposed
assignment or subletting referred to in Tenant’s Offer Notice, provided that
the following further conditions shall be fulfilled:

(a)           Tenant shall not then be in default
hereunder beyond the time herein provided, if any, to cure such default.

 29
 

 

 

(b)           The proposed assignee or subtenant
shall have a financial standing, be of a character, be engaged in a business,
and propose to use the Demised Premises in a manner consistent with the extent
of the obligations undertaken by the proposed assignee or subtenant.

(c)           No subletting shall end later than
one (1) day before the Expiration Date of this Lease.

(d)           Tenant shall reimburse Landlord on
demand for any costs that may be incurred by Landlord in connection with said
assignment or sublease, including, without limitation, the costs of making
investigations as to the acceptability of the proposed assignee or subtenant,
and reasonable legal costs incurred in connection with the granting of any
requested consent. This Section 13.04(d) shall not apply to any
sublease to Budget (as hereinafter defined) entered into during the first six (6) months
of the Term in accordance with Section 13.12 hereof.

(e)           The proposed assignee or subtenant is
engaged in a business and the Demised Premises will be used in a manner which
is limited to the Permitted Use.

Section 13.05 –
Attornment.  Every
subletting hereunder is subject to the express condition, and by accepting a
sublease hereunder each subtenant shall be conclusively deemed to have agreed,
that if this Lease should be terminated prior to the Expiration Date or if
Landlord should succeed to Tenant’s estate in the Demised Premises, then at
Landlord’s election the subtenant shall either surrender the Demised Premises
to Landlord within sixty (60) days of Landlord’s request therefor, or attorn to
and recognize Landlord as the subtenant’s landlord under the sublease and the
subtenant shall promptly execute and deliver any instrument Landlord may
request to evidence such attornment.

Section 13.06 –
Counterpart.  Tenant
shall furnish Landlord with a counterpart (which may be a reproduced copy) of
each sublease or assignment made hereunder within thirty (30) days after the
date of its execution. No sublease or assignment shall be valid, and no
subtenant or assignee shall take possession of the Demised Premises or any part
thereof, until there has been delivered to Landlord an executed counterpart of
such sublease or assignment.

Section 13.07 –
Tenant Liability. 
Notwithstanding any sublease or any assignment and assumption by the
assignee of all or any part of the obligations of Tenant hereunder, Tenant
herein named, and each immediate or remote successor in interest of Tenant
named herein, shall remain liable jointly and severally (as a primary obligor)
with its assignee and subtenant and all subsequent assignees and subtenants for
the performance of Tenant’s obligations hereunder, and, without limiting the
generality of the foregoing, shall remain liable to Landlord for all acts and
omissions on 

 30
 

 

 

the part of any assignee and subtenant subsequent to
it in violation of any of the obligations of this Lease.

Section 13.08
– [Intentionally Omitted]

Section 13.09 -
Profit.           If
Tenant shall sublet the Demised Premises to anyone for rents which for any
period shall exceed the Fixed Rent payable under this Lease for the same
period, Tenant shall pay Landlord, as Additional Rent hereunder, fifty percent
(50%) of the amount of any rents, additional charges 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 Demised Premises pursuant to the terms hereof. The sums payable
under this Section 13.09 shall be paid to Landlord as Additional Rent as
and when payable by the subtenant to Tenant.

Section 13.10 –
Transfers of Interests in Tenant.  Any transfer, by operation of law or
otherwise, of Tenant’s interest in this Lease (in whole or in part) or of a
fifty (50%) percent or greater interest in Tenant or of fifty (50%) percent or
more of the assets of Tenant (whether stock, partnership interest or otherwise)
shall be deemed an assignment of this Lease within the meaning of this Article.
If there has been a previous transfer of less than a fifty (50%) percent
interest in Tenant or Tenant’s assets, then any simultaneous or subsequent
transfer of an interest in Tenant or Tenant’s assets which, when added to the
total percentage interest previously transferred, totals a transfer of greater
than a fifty (50%) percent interest in Tenant or Tenant’s assets shall be
deemed an assignment of Tenant’s interest in this Lease within the meaning of
this Article.

Section 13.11 –
Corporate Reorganization. 
Notwithstanding the provisions of Section 13.10 hereof, without the
consent of Landlord, this Lease may be assigned to (i) an entity created
by merger, reorganization or recapitalization of or with Tenant or (ii) a
purchaser of all or substantially all of Tenant’s assets; provided, in
the case of both clause (i) and clause (ii), that (A) Landlord
shall have received a notice of such assignment from Tenant, (B) the
assignee assumes by written instrument satisfactory to Landlord all of Tenant’s
obligations under this Lease, (C) such assignment is for a valid business
purpose and not to avoid any obligations under this Lease, and (D) the
assignee is a reputable entity of good character and shall have, immediately
after giving effect to such assignment, an aggregate net worth (computed in
accordance with GAAP) at least equal to the aggregate net worth (as so
computed) of Tenant immediately prior to such assignment or on the date of this
Lease, whichever is greater.

Section 13.12
– Permitted Subleases. 
Notwithstanding anything in this Lease to the contrary, Tenant shall be
permitted to sublease all or a portion of the Demised Premises to:

 31
 

 

 

(a)           Budget Rent a Car System (“Budget”)
(provided that at the time of the proposed sublease, Budget is a wholly owned
subsidiary of Cendant Corporation), or

(b)           a wholly owned subsidiary of Cendant;

provided,
that in each instance:

(i)            Tenant shall not then be in default
hereunder beyond the time herein provided, if any, to cure such default;

(ii)           No subletting shall end later than
one (1) day before the Expiration Date of this Lease;

(iii)          Tenant shall reimburse Landlord on
demand for any costs that may be incurred by Landlord in connection with said
assignment or sublease, including, without 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;

(iv)          The Demised Premises will be used in
accordance with Section 4.01; and

(v)           Tenant provides Landlord with thirty
(30) days prior written notice of such sublease.

The provisions of Section 13.07 shall apply to
any sublease permitted under this Section 13.12.

13.13 – Non-Compliance
with Article.  In the
event that (i) Landlord fails to exercise any of its options under this Article 13
and (ii) Tenant fails to execute and deliver the assignment or sublease to
which Landlord consented within forty-five (45) days after the giving of such
consent, then, Tenant shall again comply with all of the provisions and
conditions of this Article 13 before assigning its interest in this Lease
or subletting the Demised Premises.

ARTICLE 14

INDEMNIFICATION

Section 14.01 – Indemnity.
Tenant shall indemnify, defend, save and hold harmless Landlord and its
affiliates, trustees, agents, members, employees, officers, directors,
successors and assigns (each, an “Indemnified Party”) from and against
any and all liability and damages and any and all injury, loss, claim, damage
or suit of every kind and nature, including Landlord’s reasonable counsel fees
and disbursements, to 

 32
 

 

 

any person, firm, association or corporation or to any
property, arising out of or based upon, related to, or in any way connected
with, a breach of Tenant’s obligations under this Lease, the actions or
omissions of Tenant or any Tenant Party or the use or occupancy of the Demised
Premises.

Section 14.02 – Notice of Proceedings.  An Indemnified Party which becomes entitled
to indemnification under this Agreement shall promptly notify Tenant of any
claim or proceeding in respect of which it is to be indemnified. Such notice
shall be given as soon as reasonably practicable after the Indemnified Party
obligated to give such notice becomes aware of such claim or proceeding and
shall include a complete copy of all notices, pleadings and other papers
related thereto. Failure to give such notice shall not excuse an
indemnification obligation except to the extent failure to provide notice
adversely affects Tenant’s interests.

Section 14.03 – Conduct of Claim.  Tenant shall assume the defense of the claim
or proceeding with counsel designated by Tenant; provided, however, that the
Indemnified Party shall have the right to participate fully in any claim or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel will be at its own expense unless (i) Tenant shall have agreed to
the retention of such counsel for both Tenant and the Indemnified Party or (ii) the
named parties to any action or proceeding include the Tenant and the
Indemnified Party and representation of both such parties has been determined
in the reasonable and good faith judgment of either party to be inappropriate
under applicable standards of professional conduct due to actual or potential
conflicting interests between them. In the event the Tenant is defending or
prosecuting any claim or proceeding, (a) the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge such
claim or proceeding without Tenant’s prior written consent, and (b) the
Indemnified Party will agree to any settlement, compromise or discharge of the
suit, action or proceeding which the Tenant may recommend and which by its
terms obligates Tenant to pay the full amount of liability in connection with
such claim or proceeding; provided, however, that without the Indemnified Party’s
consent, which consent may not be unreasonably withheld or delayed, Tenant may
only consent to the entry of any judgment or enter into any settlement that
does not provide for injunctive or other non-monetary relief affecting the
Indemnified Party. If Tenant fails to assume the defense of a claim, the
indemnification of which is required under this Lease, the Indemnified Party
may, at the expense of Tenant, contest, settle, or pay such claim. Except as
otherwise expressly set forth herein, Tenant shall not compromise or settle a
claim hereunder without the prior written consent of the Indemnified Party

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ARTICLE 15

CONDEMNATION

Section 15.01
– Condemnation/Notice. 
If Landlord receives written notice of a Taking (hereinafter defined) or a proposed Taking, Landlord
shall promptly notify Tenant thereof, but no such notice of intention shall
confer any rights upon Tenant under this Article, all of which rights shall
come into effect only upon the vesting of title in the Taking authority. As
used herein, a “Taking”
shall mean the appropriation, condemnation or taking of all or any portion of
the Demised Premises by any governmental or public authority for public or
quasi-public use under any right of eminent domain, condemnation or other law,
or the giving of a deed in lieu thereof.

Section 15.02
– Material Taking.

(a)           In the event of a
Taking of the entire Demised Premises, this Lease shall automatically cease and
terminate upon the date that possession of the entire Premises is taken by or
given to the Taking authority and all Fixed Rent and Additional Rent shall be
paid up to that date. In the event of a Taking of more than an “Immaterial
Area” (as hereinafter defined) but not of the entire Demised Premises, this
Lease shall, at the option of Tenant, to be exercised only by giving notice of
termination to Landlord no later than thirty (30) days following the date on
which the portion of the Demised Premises is Taken by or given to the Taking
authority, TIME BEING OF THE ESSENCE, cease and terminate on the later of (i) the
date on which Tenant’s notice is given, or (ii) the date on which the
portion of the Demised Premises is Taken by or given to the Taking authority,
and all Fixed Rent, Additional Rent and all other sums due Landlord by Tenant
shall be paid up to the date of such termination. Tenant’s failure to give
notice within the time period required herein shall be deemed an irrevocable
waiver of Tenant’s right to terminate this Lease under this Section 15.02(a).

(b)           If this Lease is
terminated in accordance with Section 15.02(a), Tenant shall be entitled
to receive from Landlord a portion of the net Proceeds (hereinafter defined) of such Taking in accordance with Section 15.02(e).
If this Lease is not terminated in accordance with Section 15.02(a), or if
the Taking is of an Immaterial Area, then this Lease shall continue in full
force and effect as to the portion of the Demised Premises not Taken, and
Tenant shall be entitled to a reduction in the Fixed Rent in accordance with Section 15.03.

(c)           As used herein, the
term “Immaterial Area”
shall mean up to thirty percent (30%) of the Demised Premises.

(d)           In the event of a
Taking, Landlord and any Mortgagee designated by Landlord shall have the
exclusive right to file any claim or to commence any action or proceeding to
collect any Proceeds payable out of or in connection with such Taking, except
for any separate award to which Tenant may be entitled pursuant to Section 

 34
 

 

 

15.05, and Tenant and everyone claiming by, under or
through Tenant waives all right to assert any claim against Landlord or the
Taking authority in such proceeding. The term “Proceeds” shall mean any award, settlement, compensation or
proceeds payable by reason of or in connection with any Taking, including the
value of the interests of Landlord and Tenant in the Demised Premises and this
Lease, any Improvements made by Tenant and Landlord respectively, the value of
all awards for severance and indirect damage, and the right to receive any
advance payment or interest thereon. Tenant shall, at Tenant’s own cost and
expense, cooperate with Landlord and take all actions and execute all documents
reasonably required by Landlord or required by the Taking authority to collect
such Proceeds, and if Tenant shall fail or refuse to take any act and execute
any document which is reasonably required by Landlord or required by the Taking
authority to collect such Proceeds (or any part thereof), then Tenant shall be
responsible to Landlord for the sum of all Proceeds, including interest at the
Default Rate, which sums shall be Additional Rent under this Lease and which
Landlord may offset from any share of such Proceeds to which Tenant may be
entitled pursuant to Sections 15.02, 15.03 and 15.04.

(e)           In the event of a
Taking (other than a Taking of an Immaterial Area), and a termination of this
Lease, all Proceeds shall be paid to Landlord who shall within forty-five (45)
days thereafter (or within thirty (30) days following any final determination
in any arbitration proceeding pursuant to Section 15.07 hereof, as hereinafter
set forth) disburse the net Proceeds of such Taking to Landlord and Tenant in
proportion to their interests in the Demised Premises, as follows:

(i)            to the Landlord for
the value of the Landlord’s interest in the Demised Premises, giving consideration
to the terms of this Lease as though there had been no Taking, including
Landlord’s reversionary interest, and any consequential damages, including
severance damages, out of which Landlord shall pay any sums due any Mortgagee;
and

(ii)           provided that no
uncured Event of Default has occurred which is then continuing and provided
further that there are at least two (2) years remaining in the Term on the
date on which possession of the Demised Premises is Taken by or given to the
Taking authority to Tenant for the value of Tenant’s leasehold estate, giving
consideration to the terms of this Lease, as though there had been no Taking.
Any dispute between Landlord and Tenant concerning the pro rata portions
of Proceeds payable to Landlord and Tenant in accordance with clauses (i) and
(ii) above shall be promptly submitted to binding arbitration in
accordance with Section 15.07 hereof.

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Section 15.03 –
Immaterial Taking.

(a)           If
a Taking involves an Immaterial Area, this Lease shall terminate as to the area
so Taken from and after the vesting of title in such Taking and shall continue
as to the remainder of the Demised Premises provided, however, from and after
the date on which possession of the portion of the Demised Premises is Taken,
the Tenant shall proceed diligently and in good faith to close in and restore
the Improvements. The Fixed Rent shall be reduced as of the vesting date
proportionally to account for the area of the Demised Premises so taken.

(b)           Landlord
shall be entitled to receive all Proceeds and Tenant shall have no part thereof
or claim thereto nor shall Tenant have any claim for the value of the portion
of the leasehold estate so Taken. Landlord shall pay all fees, costs and
expenses of every character and kind of Landlord incurred in connection with
such Taking and obtaining the Proceeds therefor, and in connection with such
restoration.

Section 15.04
– Temporary Taking. 
If possession of all or any portion of the Demised Premises shall be
Taken for occupancy for a limited period (a “Temporary Taking”), this Lease shall continue in full force
and effect and the Fixed Rent and Additional Rent shall be abated for the time
of the Temporary Taking.

Section 15.05 – Tenant’s Additional Claim.  In any condemnation proceeding, Tenant may
submit a separate claim against the Taking authority for the value of Tenant’s
trade fixtures, the cost of removal or relocation, goodwill, inventory,
equipment, the value of its leasehold improvements and going concern values if
such separate claims are allowable as such and such separate claims do not
reduce the amount of Proceeds otherwise payable to Landlord.

Section 15.06 – Costs of Taking.  Landlord and Tenant shall be solely
responsible for their respective legal, appraisal, engineering and other fees,
costs and expenses arising out of or in connection with any claim allocable or
attributable to any item which each is permitted to separately claim under this
Article 15, provided, however, that the Landlord’s legal, appraisal,
engineering and other fees and expenses incurred in connection with the
collection of any Proceeds pursuant to Section 15.02 shall be allocated
and paid by Landlord and Tenant in proportion to the amount of Proceeds
disbursed to Landlord and Tenant respectively.

Section 15.07 – Arbitration.

(a)           In
the event of a dispute as to the amounts payable under this Article 15
(the “Applicable Amounts”) and Landlord and Tenant are unable to reach a
mutually acceptable determination of the Applicable Amounts within thirty (30)
days after commencement of such negotiation, the matter shall be submitted to
arbitration in 

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accordance with the following terms and provisions of
this Section. The sole issue to be determined by such arbitration shall be the
Applicable Amounts in accordance with this Section. Each party shall appoint an
arbitrator within ten (10) days of the expiration of such thirty (30) day
period, and provide the other party with the name and address of its
arbitrator. Within ten (10) days after the date of the appointment of the
second arbitrator, the two (2) arbitrators will meet. If the two (2) arbitrators
are unable to agree on the Applicable Amounts as provided herein within ten (10) days
after their first meeting, they will immediately select a third arbitrator. If
the two (2) arbitrators are unable to agree upon the selection of the
third arbitrator within ten (10) days, then Landlord and Tenant will
petition the New York State Supreme Court to appoint the third arbitrator. The
third arbitrator will be designated as chairman and will immediately give
Landlord and Tenant written notice of its appointment. The three (3) arbitrators
will meet within ten (10) days after the appointment of the third
arbitrator. The third arbitrator will then select the Applicable Amounts
proposed by one of the first two (2) arbitrators within thirty (30) days
after appointment of the third arbitrator. The arbitrators must be licensed
real estate appraisers with at least fifteen (15) years experience in the
Queens real estate market. No arbitrator may be an active real estate broker.
The arbitration will be governed by the laws of the State of New York and, when
not in conflict with such law, by the general procedures in the commercial
arbitration rules of the American Arbitration Association. The arbitrators
will not have the power to add to, modify, detract from or alter in any way the
provisions of this Lease or any amendments or supplements to this Lease. The
arbitrators will not have any power to decide or consider anything other than
the specific issue of the Applicable Amounts in accordance with the terms of
this Lease. No arbitrator is authorized to make an award for damages of any
kind including, without limitation, an award for punitive, exemplary,
consequential or incidental damages. Landlord and Tenant will pay for the
services of its appointees, attorneys and witnesses plus one-half of all other
proper costs relating to the arbitration. The decision of the arbitrators will
be final and non-appealable and may be enforced according to the laws of the
State of New York.

ARTICLE 16

RIGHT TO INSPECT; POSTING SIGNS

Section 16.01 – Right to Inspect.  Tenant shall permit Landlord or Landlord’s
agents to enter the Demised Premises at all reasonable hours and upon
reasonable notice to Tenant for the purpose of (i) inspecting the same; (ii) confirming
that Tenant is complying with terms of this Lease; (iii) making repairs
which Tenant neglects or refuses to make; (iv) exhibiting the Demised
Premises to prospective mortgagees; and (v) during the two (2) years
preceding the expiration of this Lease, exhibiting the Demised Premises to
brokers and prospective purchasers and lessees (it being understood that
Landlord shall have no obligation to do any of the foregoing acts); provided,
in each and every case, Landlord shall use commercially reasonable efforts not
to unreasonably interfere with the conduct of Tenant’s business at the Demised
Premises. In the event 

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of an emergency, or if Landlord would be subject to
criminal or civil liability, if admission to the Demised Premises for the
aforesaid purposes cannot be obtained, Landlord’s agents may enter the Demised
Premises with reasonable force without rendering Landlord or its agents liable
to Tenant for damages by reason thereof.

ARTICLE 17

ZONING

Section 17.01 – R-Zone Parcel.  Landlord and Tenant acknowledge and agree
that a portion of the Land Parcel, approximately as shown on Schedule B
annexed hereto and made a part hereof ( the “R-Zone Parcel”), is zoned “R3-2.”
To the extent that the R-Zone Parcel is not able to be used for the Initial Use
due to any Requirement, the Fixed Rent then payable shall be reduced by the
number of square feet comprising the R-Zone Parcel unable to be used for the
Initial Use multiplied by the Fixed Rent then payable per square foot for the R-Zone
Parcel. For purposes of the immediately preceding sentence only, Fixed Rent per
square foot for the R-Zone parcel shall be calculated at $5.00 per square foot
for the first five (5) Lease Years and, thereafter, shall be calculated in
accordance with Section 3.01(c) of this Lease. Landlord and Tenant
acknowledge and agree that the R-Zone Parcel totals 43,067 square feet, the
Land Parcel totals 223,911 square feet (inclusive of the R-Zone Parcel) and the
Demised Premises totals 309,142 square feet. Such reduction in Fixed Rent shall
continue only until such time as Landlord or Tenant, each at their own expense,
has satisfied all Requirements necessary to allow the Initial Use of the R-Zone
Parcel. At such time as the R-Zone Parcel is able, pursuant to all
Requirements, to be used for the Initial Use, the Fixed Rent for the R-Zone
Parcel shall automatically and without notice to Tenant increase to then Fixed
Rent payable per square foot of the Land Parcel, which shall be calculated at
$5.00 per square foot as of the Commencement Date and thereafter be adjusted in
accordance with Sections 3.01(c) and 17.02 of this Lease. Landlord, at
Landlord’s cost and expense, shall make commercially reasonable efforts to file
all required applications, permits and filings to allow the Initial Use of the
R-Zone Parcel.

Section 17.02 – De-Map Parcel.  Landlord and Tenant acknowledge and agree
that Landlord is in the process of submitting to The City of New York all
necessary filings to “de-map” that portion of 88th Street between the Land Parcel and the
Building Parcel, approximately as shown on Schedule B (the “De-Map
Parcel”). Landlord shall make commercially reasonable efforts to complete
the de-mapping of the De-Map Parcel. Upon the completion of the de-mapping, the
De-Map Parcel shall automatically and without notice to Tenant become part of
the Demised Premises and all references in this Lease to the Demised Premises
shall be deemed to include the De-Map Parcel.

(a)           Upon
completion of the de-mapping of the De-Map Parcel and provided that the R-Zone
Parcel is able, pursuant to all Requirements, to be used for 

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the Initial Use, the Fixed Rent then payable for the
Demised Premises shall be increased in accordance with Section 17.01 and,
effective as of the first day of the next succeeding calendar month, be
increased by (i) $1.00 per square foot multiplied by the number of square
feet in the Land Parce and (ii) $6.00 per square foot multiplied by the
number of square feet in the De-Map Parcel. Thereafter, Fixed Rent shall be
adjusted in accordance with Section 3.01(c). Landlord shall provide Tenant
with written notice of the increase in Fixed Rent promptly after the completion
of the de-mapping of the De-Map Parcel. Landlord shall measure the De-Map
Parcel upon completion of the de-mapping. Landlord and Tenant shall agree to
the square footage of the De-Map Parcel in a writing signed by both parties.

(b)           If,
upon completion of the de-mapping of the De-Map Parcel, Tenant is not able,
pursuant to all Requirements, to use the R-Zone Parcel for the Initial Use,
then, until such time as the R-Zone Parcel is able, pursuant to all
Requirements, to be used for the Initial Use, the Fixed Rent then payable shall
be increased by $6.00 per square foot in the De-Map Parcel, subject to adjustment
in accordance with Section 3.01(c). Such increase in Fixed Rent shall be
effective as of the first day of the next succeeding calendar month. Landlord
shall provide Tenant with written notice of the increase in Fixed Rent promptly
after the completion of the de-mapping of the De-Map Parcel.

(c)           Solely
for purposes of illustrating this Article 17, the following examples are
provided:

(i)            During
such time as the R-Zone Parcel is allowed to be used for the Initial Use and
the de-mapping of the De-Map Parcel has been completed, (A) Fixed Rent
shall be increased by $1.00 per square foot comprising the Land Parcel, (B) Fixed
Rent shall be increased by $6.00 per square foot comprising the De-Map Parcel,
and (C) Fixed Rent for the R-Zone Parcel shall be payable at the same rate
as the then Fixed Rent payable per square foot of the Land Parcel plus $1.00
per square foot. For this example, assume the R-Zone Parcel is R square feet,
the Land Parcel is L square feet and Tenant is paying $5.00 per square foot of
Fixed Rent for the Land Parcel and the De-Map Parcel is D square feet, the
Fixed Rent for the De-Map Parcel shall be D times $6.00; the Fixed Rent for the
R-Zone Parcel shall be R times $6.00 ($5.00 plus $1.00); and the Fixed Rent for
the Land Parcel shall be L times $6.00 ($5.00 plus $1.00);

(ii)           During such time as the R-Zone Parcel
is not allowed to be used for the Initial Use and the de-mapping of the De-Map
Parcel has been completed, (A) Fixed Rent shall be increased by $1.00 per
square foot comprising the Land Parcel, (B) Fixed Rent shall be increased
by $6.00 per square foot comprising the De-Map Parcel, and (C) Fixed Rent
for the R-Zone Parcel shall be reduced in accordance with Section 17.01.
For this example, assume the R-Zone Parcel is R square feet, the Land Parcel is
L square feet and Tenant is paying $5.00 per square foot of Fixed Rent for the 

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Land Parcel and the De-Map Parcel is D square feet,
the Fixed Rent for the De-Map Parcel shall be D times $6.00; no Fixed Rent
shall be incurred for the R-Zone Parcel; and the Fixed Rent for the Land Parcel
shall be L times $6.00 ($5.00 plus $1.00);

(iii)          During such time as the R-Zone Parcel
is allowed to be used for the Initial Use and the de-mapping of the De-Map
Parcel has not been completed, (A) there shall be no increase in the Fixed
Rent for the Land Parcel, (B) there shall be no increase in the Fixed Rent
for the square footage comprising the De-Map Parcel, and (C) Fixed Rent
for the R-Zone Parcel shall be payable at the same rate as the then Fixed Rent
payable per square foot of the Land Parcel. For this example, assume the R-Zone
Parcel is R square feet, the Land Parcel is L square feet and Tenant is paying
$5.00 per square foot of Fixed Rent for the Land Parcel and the De-Map Parcel
is D square feet, the Fixed Rent for the De-Map Parcel shall be D times $0.00;
the Fixed Rent incurred for the R-Zone Parcel shall be R times $5.00; and the
Fixed Rent for the Land Parcel shall be L times $5.00;

(iv)          During such time as the R-Zone Parcel
is not allowed to be used for the Initial Use and the de-mapping of the De-Map
Parcel has not been completed, (A) there shall be no increase in the Fixed
Rent for the Land Parcel, (B) there shall be no increase in the Fixed Rent
for the square footage comprising the De-Map Parcel, and (C) Fixed Rent
for the R-Zone Parcel shall be reduced in accordance with Section 17.01.
For this example, assume the R-Zone Parcel is R square feet, the Land Parcel is
L square feet and Tenant is paying $5.00 per square foot of Fixed Rent for the
Land Parcel and the De-Map Parcel is D square feet, the Fixed Rent for the
De-Map Parcel shall be D times $0.00; no Fixed Rent shall be incurred for the
R-Zone Parcel; and the Fixed Rent for the Land Parcel shall be L times $5.00.

(d)           Notwithstanding anything in this Article 17
to the contrary, until such time as all Requirements necessary to allow the
Initial Use of the R-Zone Parcel have been satisfied, the R-Zone Parcel shall
not be deemed part of the Land Parcel for the purposes of calculating Fixed
Rent for the Land Parcel. At such time as the R-Zone Parcel is able, pursuant
to all Requirements, to be used for the Initial Use, the R-Zone Parcel shall be
deemed to be part of the Land Parcel for purposes of calculating Fixed Rent for
the Land Parcel.

ARTICLE 18

DEFAULT PROVISIONS

Section 18.01 – Events of Default.  If any one or more of the following events
(in this Lease sometimes called “Events of Default”) shall happen:

(a)           if
default shall be made in the due and punctual payment of any Fixed Rent or
Additional Rent payable under this Lease or any part thereof when and as the
same shall become due and payable, and such default shall continue for a period
of five (5) business days after notice from Landlord of such default in
payment;

 40

 

 

(b)           if
default shall be made by Tenant in keeping, observing or performing any of the
terms, covenants, agreements, provisions, conditions or limitations contained
in this Lease on Tenant’s part to be kept, observed or performed, other than
those referred to in the foregoing subdivision (a) of this Section, which
do not expose the Landlord to criminal liability, and such default shall
continue for a period of thirty (30) days after written notice thereof from
Landlord to Tenant, or in the case of such a default or a contingency which
cannot with due diligence and in good faith be cured within thirty (30) days,
and Tenant fails to proceed promptly and with due diligence and in good faith
to cure the same and thereafter to prosecute the curing of such default with
due diligence and in good faith (it being intended that in connection with a
default which does not expose Landlord to criminal liability, and is not
susceptible of being cured with due diligence and in good faith within thirty
(30) days, that the time of the Tenant within which to cure the same shall be
extended for such a period as may be necessary for the curing thereof promptly
with due diligence and in good faith);

(c)           if
Tenant shall file a voluntary petition in bankruptcy and shall be adjudicated a
bankrupt or insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal
bankruptcy act or any other present or future applicable federal, state or
other statute or law, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of Tenant or of all or any
substantial part of its properties or of the Demised Premises or of Tenant’s
interest therein; or

(d)           if
within ninety (90) days after the commencement of any proceeding against Tenant
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present or any future federal
bankruptcy act or any other present or future applicable federal, state or
other statute or law, such proceeding shall not have been dismissed or if,
within ninety (90) days after the appointment, without the consent or
acquiescence of Tenant, of any trustee, receiver or liquidator of Tenant or of
all or any substantial part of its properties or of the Demised Premises or of
Tenant’s interest therein, such appointment shall not have been vacated or
stayed on appeal or otherwise, or if, within forty-five (45) days after the
expiration of any such stay, such appointment shall not have been vacated;

then
and in any such event Landlord at any time thereafter during the continuance of
any such Event of Default may give written notice to Tenant, specifying such
Event of Default or Events of Default and stating that this Lease and the term
hereby demised shall expire and terminate on the date specified in such notice,
which shall be at least thirty (30) days after the giving of such notice, and
upon the date specified in such notice, subject to the provisions of Section 18.03,
this Lease and the term hereby demised and all rights of Tenant under this
Lease, including all rights of renewal whether exercised or not, shall expire
and terminate, as if the date specified in such

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notice
were the day herein definitely fixed for the end and expiration of this Lease
and the term thereof.

Section 18.02 – Bankruptcy.  Any such proceeding or action involving
bankruptcy, insolvency, reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present or any future
federal bankruptcy act or any other present or future applicable federal, state
or other statute or law, above set forth in subdivisions (c) and (d) of
Section 18.01 of this Article, shall be grounds for the termination of
this Lease pursuant to the terms, covenants, agreements, provisions, conditions
and limitations of this Article 18, only when such proceeding, action or
remedy shall be taken or brought by or against Tenant or any assignee of this
Lease, while such Tenant or such assignee is the owner of this Lease.

Section 18.03 – Termination of Lease.  Upon any expiration or termination of this
Lease, Tenant shall quit and peacefully surrender the Demised Premises to
Landlord, and Landlord, upon or at any time after any such expiration or
termination, may without further notice, enter upon and reenter the Demised
Premises and possess and repossess itself thereof, by force, summary
proceedings, ejectment or otherwise, and may dispossess Tenant and remove
Tenant and all other persons and property from the Demised Premises and may
have, hold and enjoy the Demised Premises and the right to receive all rental
and other income of and from the same.

Section 18.04 – Reletting of Demised Premises.  At any time or from time to time after any
such expiration or termination, Landlord may relet the Demised Premises or any
part thereof, in the name of Landlord or otherwise, for such term or terms
(which may be greater or less than the period which would otherwise have
constituted the balance of the Term of this Lease) and on such conditions
(which may include concessions or free rent) as Landlord, in its uncontrolled
discretion, may determine and may collect and receive the rents therefor.  Landlord shall in no way be responsible or
liable for any failure to relet the Demised Premises or any part thereof, or
for any failure to collect any rent due upon any such reletting.

Section 18.05 – Damages.  No such expiration or termination of the
Lease shall relieve Tenant of its liabilities and obligations under this Lease,
and such liabilities and obligations shall survive any such expiration or
termination.  In the event of any such
expiration or termination, whether or not the Demised Premises or any part
thereof shall have been relet, Tenant shall pay to Landlord a sum equal to the
Fixed Rent and the Additional Rent required to be paid by Tenant up to the time
of such expiration or termination of this Lease, and thereafter Tenant, until the
end of what would have been the Term of this Lease in the absence of such
expiration or termination, shall be liable to Landlord for, and shall pay to
Landlord, as and for liquidated and agreed current damages for Tenant’s
default, at the election of Landlord, either:

 42
 

 

 

(a)           (i)            the
equivalent of the amount of the Fixed Rent and the Additional Rent which would
be payable under this Lease by Tenant if this Lease were still in effect, less

(ii)           the net proceeds of any reletting
effected pursuant to the provisions of Section 18.04 hereof, after
deducting all Landlord’s expenses in connection with such reletting, including,
without limitation, all repossession costs, brokerage commissions, legal
expenses, reasonable attorneys’ fees, alteration costs, and expenses of
preparation for such reletting.

Tenant
shall pay such current damages (herein called “deficiency”) to Landlord
monthly on the days on which the Fixed Rent would have been payable under this
Lease if this Lease were still in effect, and Landlord shall be entitled to
recover from Tenant each monthly deficiency as the same shall arise.

OR

(b)           a sum which, at the time of such
expiration or termination, represents the present value (employing a discount
rate of four percent (4%) per annum) of the aggregate of the Fixed Rent and all
Additional Rent which would have been payable under this Lease by Tenant had
this Lease not expired or terminated, for the period commencing with the day
following the date of such expiration or termination and ending with the Expiration
Date.  For purposes of this Section 18.05(b),
the amount of Additional Rent which would have been payable by Tenant under
this Lease shall, for each Lease Year ending after such expiration or
termination, be deemed to be an amount equal to the amount of all Additional
Rent payable by Tenant for the Lease Year immediately preceding the Lease Year
in which such expiration or termination shall occur and prorated for any period
less than a full Lease Year.  Tenant
shall pay the amount under this Section 18.05(b) upon demand by
Landlord.

Nothing contained in this Section 18.05 shall
limit or prejudice the right of the Landlord to prove for and obtain as
liquidated damages by reason of such expiration or termination, 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 the amount of the
sums referred to above.

Section 18.06 – Tenant’s Waiver of Notice to
Re-Enter.  Tenant
hereby expressly waives, so far as permitted by law, the service of any notice
of intention to enter or re-enter provided for in any statute, or of the
institution of legal proceedings to that end, and Tenant, for and on behalf of
itself and all persons claiming through or under Tenant (including but not
limited to any leasehold mortgagee or other creditor) also waives any and all
right of redemption or re-entry or re-possession or to redeem or to restore the

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operation
of this Lease in case Tenant shall be dispossessed by a judgment or by warrant
of any court or judge or in case of entry, re-entry or re-possession by lessor
or in case of any expiration or termination of this Lease.  Landlord and Tenant, so far as permitted by
law, hereby waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matters
whatsoever arising out of, or in any way connected with this Lease, including
but not limited to, the relationship of Landlord and Tenant, Tenant’s use or
occupancy of the Demised Premises or any claim of injury or damage.  The terms “enter”, “re-enter”, “entry” or
re-entry”, as used in this Lease are not restricted to their technical legal
meaning.

Section 18.07 – Threatened Breach.  In the event of any breach or threatened
breach by Tenant of any of the terms, covenants, agreements, provisions,
conditions or limitations contained in this Lease, Landlord shall be entitled
to enjoin such breach or threatened breach and shall have the right to invoke
any right or remedy allowed at law or in equity or by statute or otherwise as
though entry, re-entry, summary proceedings, and other remedies were not
provided for in this Lease.

Section 18.08 – Remedies Cumulative.  Each right or remedy of Landlord provided for
in this Lease shall be cumulative and shall be in addition to every other right
or remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise or the beginning of the
exercise by Landlord of any one or more of the rights or remedies provided for
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by Landlord of
any or all other rights or remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or other law.

ARTICLE 19

ATTORNEYS’ FEES

Section 19.01 – Attorneys’ Fees.

(a)           If
at any time there shall occur an Event of Default hereunder, and if Landlord
shall institute an action or summary proceedings against Tenant based upon such
Event of Default, or if Landlord or Tenant brings an action against the other
to enforce the terms of this Lease, then the prevailing party to such an action
shall be reimbursed by the other for the expenses of attorneys’ fees and
disbursements incurred.  If Landlord is
the prevailing party, the amount of such expenses shall be deemed to be “Additional
Rent” hereunder.  If the Tenant is the
prevailing party, the amount of such expenses shall be due from Landlord within
ten (10) business days after written demand by Tenant.

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(b)           If
an Event of Default under Section 18.01(a) occurs more than two (2) times
during any consecutive twelve (12) month period, Tenant shall pay to Landlord
as Additional Rent all of Landlord’s fees, costs and expenses in preparing and
serving notices to Tenant during such twelve (12) month period, including, but
not limited to, reasonable attorneys’ fees and expenses.

ARTICLE 20

WAIVER OF REDEMPTION; COUNTERCLAIM; TRIAL BY JURY

Section 20.01 – Waiver.  Tenant hereby expressly (i) waives any
and all rights of redemption granted by or under any present or future laws in
the event of Tenant being evicted or dispossessed for any cause, or in the
event of Landlord obtaining possession of the Demised Premises by reason of the
violation by Tenant of any of the covenants and conditions of this Lease or
otherwise; (ii) waives all rights to stay summary proceedings; and (iii) agrees
that it shall not interpose any counterclaim in any summary proceeding or any
action based on non-payment of Fixed Rent, Additional Rent or any other
payments or charges required to be made by Tenant to Landlord.  Nothing contained herein shall prevent Tenant
from asserting any such counterclaim as a cause of action in a separate action
or proceeding, but Tenant shall not seek a consolidation or joint trial of such
separate action or proceeding with any summary proceeding or other action or
proceeding commenced by Landlord for non-payment of Fixed Rent, Additional Rent
or any other payments or charges required to be made by Tenant to
Landlord.  Landlord and Tenant hereby
waive trial by jury in any action, proceeding or counterclaim brought by either
of them against the other with respect to any matters arising out of or
connected with this Lease, the relationship of Landlord and Tenant, Tenant’s
use or occupancy of the Demised Premises, and/or any claim of injury or damage
and any emergency statutory or any other statutory remedy.

ARTICLE 21

NO WAIVER

Section 21.01 – No Waiver.   No act or thing done by Landlord or Landlord’s
agents during the Term hereby demised shall be deemed an acceptance of a
surrender of the Demised Premises, and no agreement to accept such surrender
shall be valid unless in writing signed by Landlord.  The failure of Landlord to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease shall not prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation.  The receipt by
Landlord of Fixed Rent or Additional Rent with knowledge of the breach of any
covenant of this Lease shall not be deemed a waiver of such breach.  No provision of this Lease shall be deemed to
have been waived by Landlord unless such waiver be in writing signed by
Landlord.

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ARTICLE 22

END OF TERM

Section 22.01 – Surrender of Demised Premises.

(a)           (i)            Tenant shall, at the expiration or
other termination of this Lease, (A) quit and surrender to Landlord the
Demised Premises broom clean and in good condition and repair, reasonable wear
and tear and casualty excepted, and the roof shall be free of leaks and (B) at
Landlord’s option, restore the Demised Premises to the condition existing on
the date hereof.

(ii)           Tenant shall, at
the expiration or other termination of this Lease, surrender all keys for the
Demised Premises to Landlord at Landlord’s office, and shall inform Landlord of
all combinations of locks, safes, vaults, alarms and other encoded devices or
facilities if any, located in the Demised Premises.

(b)           All personal
property, furniture, furnishings and trade fixtures furnished by or at the
expense of Tenant, other than those affixed to the Demised Premises so that
they cannot be removed without damage, shall remain the property of Tenant and
may be removed by Tenant from time-to-time prior to the expiration or
termination of this Lease.  Tenant shall
notify Landlord in writing not less than sixty (60) days prior to the
expiration of the Term specifying any such items of property which Tenant does
not wish to remove.  If, within thirty
(30) days after the service of such notice, Landlord shall request Tenant to
remove any of said items, Tenant shall, at Tenant’s expense, remove said items
prior to the expiration of the Term.

(c)           In any case where
Tenant removes any property or Alterations pursuant to Sections 22.01(a) and
22.01(b), or otherwise, Tenant shall immediately repair all structural damage
caused by said removal and shall restore the Demised Premises to good condition
at Tenant’s expense, and if Tenant fails to do so, Landlord may do so at Tenant’s
cost and Tenant shall reimburse Landlord therefor upon demand.

(d)           Upon failure of
Tenant to remove any property in accordance with Sections 22.01(a) and
22.01(b), or upon failure of Tenant to notify Landlord of any property it does
not wish to remove from the Demised Premises in accordance with Section 22.01(b),
then, as to such property, upon termination of this Lease, Landlord may, at
Tenant’s expense: (i) remove all such property which Landlord may require
Tenant to remove pursuant  to Sections
22.01(a) and 22.01(b), (ii) cause the same to be placed in storage,
and (iii) repair any damage caused by said removal.  Tenant shall, upon demand, reimburse Landlord
for all of the aforesaid expenses.

(e)           Notwithstanding
anything to the contrary contained in this Section 22.01, any items of
property or Alterations not removed by Tenant may, at the election of Landlord,
be deemed to have been abandoned by Tenant, and Landlord may retain

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and dispose of
said items without any liability to Tenant and without accounting to Tenant for
the proceeds thereof.

Section 22.02 – Ownership of Improvements.  Upon the termination of this Lease, whether
by expiration of the Term or by reason of default on the part of Tenant, or for
any other reason whatsoever, all Improvements then located on the Premises
including all affixed lighting fixtures, heating, ventilating and air
conditioning equipment, pipes, ducts, conduits, wiring, paneling, partitions,
railings, mezzanine floors, galleries and the like, shall remain upon and be
surrendered with the Demised Premises as a part thereof and shall then merge
with the freehold estate and become the property of Landlord as a part of the
realty, free and clear of any liens, encumbrances or burdens placed upon Tenant’s
leasehold estate.

Section 22.03 – Holdover.

(a)           If,
without the Landlord’s prior written consent, the Demised Premises shall not be
surrendered as and when aforesaid and in the condition required hereunder,
Tenant shall pay to Landlord as use and occupancy for each month or fraction
thereof during which Tenant continues to occupy the Demised Premises from and
after the Expiration Date (the “Continued
Occupancy Period”), an amount of money (the “Occupancy Payment”) equal to one
hundred fifty (150%) percent of one-twelfth (1/12th) of the aggregate Fixed Rent and
Additional Rent paid or payable by Tenant during the first twelve (12) months
immediately preceding such holding over. Tenant shall make the Occupancy
Payment, without notice or previous demand therefor, on the first day of each
and every month during the Continued Occupancy Period.

(b)           The
receipt and acceptance by Landlord of the Occupancy Payment shall not be deemed
a waiver or acceptance by Landlord of Tenant’s breach of Tenant’s covenants and
agreements under this Article 22, or a waiver by Landlord of Landlord’s
right to institute any summary holdover proceedings against Tenant, or a waiver
by Landlord of Landlord’s rights to enforce any of Landlord’s rights or pursue
any of Landlord’s remedies against Tenant in such event other than the payment
of Fixed Rent as provided for in this Lease or under law.  This Section shall be deemed to be an
agreement expressly providing otherwise within the meaning of Section 232(c) of
the Real Property Law of the State of New York and any successor law of like
import.

(c)           No
holding over by Tenant shall be deemed nor operate as an extension of the Term
of this Lease.

Section 22.04 – Survival.  Tenant’s obligation to observe or perform
each and every one of the covenants set forth in this Article shall
survive the expiration or other termination of this Lease.

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ARTICLE 23

BROKER

Section 23.01 – Broker.  Tenant and Landlord each represent that it
has dealt with no broker in connection with this Lease other than Lighthouse
Retail Partners, LLC (“Lighthouse”) and Josh Segal Realty Group (“Segal”)
(“Lighthouse” and “Segal” are hereinafter collectively referred to as the “Broker”).  Landlord shall pay Lighthouse any commission
earned pursuant to a separate agreement between Landlord and Lighthouse.  Contemporaneously herewith, Segal has
delivered a letter to Landlord, Tenant and Lighthouse confirming that Segal is
not entitled to a commission.  Tenant
hereby agrees to indemnify and hold Landlord harmless of and from any and all
losses, costs, damages or expense (including, without limitation, attorneys’
fees and disbursements) incurred by Landlord by reason of any claim of or
liability to any broker, other than the Broker, who claims to have dealt with
Tenant in connection with this Lease, which indemnity shall survive the
expiration or other termination of this Lease.

ARTICLE 24

QUIET ENJOYMENT

Section 24.01 – Quiet Enjoyment.  Landlord covenants that if and so long as
Tenant pays the Rent and Additional Rent and other charges reserved by this
Lease, and performs all the terms, covenants and conditions of this Lease on
the part of Tenant to be performed, Tenant shall quietly enjoy the Demised
Premises without hindrance or molestation by anyone claiming by, through or
under the Landlord, subject, however, to the terms of this Lease.

ARTICLE 25

NON-LIABILITY OF LANDLORD

Section 25.01 – Non-Liability of Landlord.

(a)           Landlord
and Landlord’s affiliates, trustees, agents, members employees, officers,
directors, successors and assigns shall not be liable for, and Tenant waives
all claims for, loss or damage to Tenant’s business or damage to person or
property sustained by Tenant resulting from any accident or occurrence,
including, but not limited to, claims for damage resulting from: (i) any
equipment or appurtenances becoming out of repair; (ii) injury done or
occasioned by wind, rain, fire, storm or other occurrence of nature; (iii) any
defect in or failure of plumbing, heating or air conditioning equipment,
electric wiring or installation thereof, gas, water, or steam pipes, stairs,
porches, railings or walks; (iv) broken glass; (v) the backing up of
any sewer pipe or downspout; (vi) the bursting, leaking or running of any
tank, tub, washstand, water closet, waste pipe, drain or other pipe or tank in,
upon or about the Demised Premises; (vii) the escape of steam or hot water;
(viii) water, snow or ice being upon or coming through the roof, skylight,
trapdoor, stairs, doorways, windows, walks or any other place

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upon
or near the Demised Premises or otherwise; (ix) the falling of any
fixture, plaster, tile or stucco; and (x) any act, omission or negligence of
Tenant, any Tenant Party or of any other persons or occupants of the
Improvements or of adjoining or contiguous buildings or improvements or of
owners of adjacent or contiguous property.

(b)           Landlord
shall be under no personal liability with respect to its obligations under this
Lease.  Tenant shall look solely to the
equity of the Landlord in the Land and Improvements constituting the Demised
Premises for the satisfaction of Tenant’s remedies, and in no event shall Tenant
attempt to secure any personal judgment against any individual or any member,
principal, partner, employee, officer, director or agent of Landlord by reason
of such default by Landlord.

(c)           The
word “Landlord” as used herein means only the owner in fee for the time being
of the Demised Premises, and in the event of any sale of the Demised Premises,
Landlord shall be and hereby is entirely freed and relieved of all covenants
and obligations of Landlord hereunder and it shall be deemed and construed
without further agreement between the parties or between the parties and the
purchaser of the Demised Premises, that such purchaser has assumed and agreed
to carry out any and all covenants and obligations of Landlord hereunder.

ARTICLE 26

APPLICABLE LAW AND CONSTRUCTION

Section 26.01 – Applicable Law and Construction.  The laws of the State of New York shall
govern the validity, performance and enforcement of this Lease without giving
effect to any principle of such law as would result in the selection or application
of law of any other jurisdiction.  The
invalidity or unenforceability of any provision of this Lease shall not affect
or impair any other provision.  The
headings of the several articles and sections contained herein are for
convenience only and do not define, limit or construe the contents of such
articles or sections.  Whenever herein
the singular number is used, the same shall include the plural, and the neuter
gender shall include the masculine and feminine genders.  Neither this Lease nor any provision hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.  This Lease shall be given a fair and reasonable
construction in accordance with the intentions of the parties hereto, and
without regard to or aid of canons requiring construction against the party
drafting this Lease.

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ARTICLE 27

BINDING EFFECT OF LEASE

Section 27.01 – Binding Effect of Lease.  The covenants, agreements and obligations
contained in this Lease shall, except as herein otherwise provided, extend to,
bind and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  Each
covenant, agreement, obligation or other provision herein contained shall be
deemed and construed as a separate and independent covenant of the party bound
by, undertaking or making the same, not dependent on any other provision of
this Lease unless otherwise expressly provided.

ARTICLE 28

NOTICES

Section 28.01 – Notice.  All notices to be given hereunder shall be in
writing and given by hand delivery, by certified or registered mail, or by
recognized overnight courier (e.g. Fed Ex) addressed to either of the parties
at the address hereinabove given or at any other subsequent mailing address
they may indicate by written notice.  Any
notice given hereunder by mail shall be deemed delivered upon receipt or
rejection of delivery by the addressee. 
Any notice to be delivered to Landlord hereunder should be directed to
the attention of Jerome Cooper at Landlord’s address stated above.  Any notice to be delivered to Tenant
hereunder shall be directed to Properties Department, Cendant Car Rental Group, Inc.,
at Tenant’s address stated above.  In
addition, copies of default notices to Landlord shall be delivered to Landlord’s
counsel:  Ruskin Moscou Faltischek, P.C.,
190 EAB Plaza, East Tower, 15th Floor, Uniondale, New York 11556-0190, Attn:
Chairman, Real Estate Department, and copies of notices to Tenant shall be
delivered to Theodore E. Hommel, Regional Director-Properties, Cendant Car
Rental Group, Inc., 90-20 Grand Central Parkway, East Elmhurst, New York
11369.

ARTICLE 29

FEE MORTGAGES

Section 29.01 – Landlord’s Right to Mortgage.  Nothing herein contained shall limit Landlord’s
right to place any mortgage on the interest of Landlord in the Demised Premises
including, without limitation, any modifications, consolidations, extensions,
renewals and replacements thereof (“Mortgage”).

Section 29.02 – Mortgagee’s Right to Cure.  If any act or omission of Landlord would give
Tenant the right, immediately or after lapse of a period of time, to cancel or
terminate this Lease, or to abate the payment of rent or to claim a partial or
total eviction, Tenant shall not exercise such right (a) until it has
given written notice of such act or omission to Landlord and the holder of each
Mortgage; provided the name and address of the holder of any such Mortgage
shall previously have been furnished to

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Tenant,
and (b) until thirty (30) days shall have elapsed following the giving of
such notice if the same can be remedied within such thirty (30) day period or
if the same cannot be remedied within thirty (30) days until a reasonable
period of time has elapsed to cure provided such cure has commenced within the
thirty (30) day period, and, further, provided the holder of such Mortgage
shall with due diligence continue to remedy such act or omission.

Section 29.03 – Tenant’s Attornment.  If the holder of any Mortgage, or any
designee of any such holder, 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 (“Successor Landlord”), Tenant shall automatically attorn to and
recognize such Successor Landlord as Tenant’s landlord under this Lease and
shall promptly execute and deliver any instrument (“Attornment Agreement”)
that such Successor Landlord may reasonably request to evidence such
Attornment.  Upon such Attornment, this
Lease shall continue in full force and effect as a direct lease between the
Successor Landlord and Tenant upon all of the terms, conditions and covenants
as are set forth in this Lease, except that the Successor Landlord, provided,
that such Successor Landlord is not an Affiliate (as hereinafter defined) of
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 theretofore shall have accrued to Tenant
against Landlord; (c) be bound by any previous modification of this Lease
or by any previous prepayment of more than one (1) month’s rent, unless
such modification or prepayment shall have been expressly approved in writing
by the holder of the Mortgage; or (d) be obligated to make any
improvements to, or perform any work at, or furnish any services to, the
Demised Premises.  For purposes of this Section 29.03,
the term “Affiliate” shall mean any person or entity that controls, is
controlled by, or is under common control with Landlord.  “Control” shall mean the power to direct or
cause the direction of the management and policies of Landlord.

Section 29.04 – Priority of Lease.  This Lease and all rights of Tenant hereunder
are and shall be subject and subordinate to every underlying lease, the rights
of the overlandlord or overlandlords under each underlying lease, all Mortgages
heretofore or hereafter placed on or affecting any underlying lease, alone or
with other property, and to all advances heretofore or hereafter made under
such leasehold mortgage, and to the lien of all renewals, modifications,
consolidations, replacements, substitutions, spreaders, additions and
extensions of any such leasehold mortgage, and (b) any Mortgage now or
hereafter affecting the Demised Premises or any part or parts of such real
property, or such real property and other property, and to each advance made or
hereafter to be made under any such Mortgage and to all renewals,
modifications, consolidations, replacements, substitutions, spreaders,
additions and extensions of any such underlying lease or leases and/or Mortgages.  In confirmation of such subordination, Tenant
shall execute and deliver promptly any certificate reasonably

 51
 

 

 

approved
by Tenant’s counsel that Landlord or its successors in interest may reasonably
request.  Landlord shall obtain a
non-disturbance and attornment agreement from the holder of any Mortgage and
from the landlord or overlandlord of any underlying lease in form and substance
reasonably acceptable to such holder of a Mortgage and to landlord or
overlandlord, as the case may be, which shall provide that so long as Tenant is
not in default under this Lease beyond any applicable grace periods, Tenant
shall not be disturbed in its possession of the Demised Premises.

ARTICLE 30

ESTOPPEL CERTIFICATES

Section 30.01 – Tenant’s Estoppel Certificate.
 Tenant shall, upon not less than fifteen
(15) days’ prior written request from Landlord, execute and deliver to Landlord
a statement certifying 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 so modified) and stating whether there are any defaults under this
Lease of which Tenant has actual knowledge and specifying such defaults, if
any, and stating such other factual information which Landlord reasonably
requests.

Section 30.02 – Landlord’s Estoppel Certificate.  Landlord shall, upon not less than fifteen
(15) days’ prior written request from Tenant, execute and deliver to Tenant a
statement certifying 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 so modified) and stating whether there are any defaults under this Lease of
which Landlord has actual knowledge and specifying such defaults, if any, and
stating such other factual information which Tenant reasonably requests.

ARTICLE 31

REPRESENTATIONS

Section 31.01 – Tenant’s Representations.  Tenant represents and warrants that:

(a)           Tenant is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and to execute, deliver
and perform this Lease.  The Lease has
been duly authorized by all necessary action on the part of the Tenant.

(b)           The execution, delivery and
performance of the Lease and the consummation of the transactions contemplated
hereby will not result in violation of or be in conflict with or constitute a
default under any term or provision of the Certificate of Incorporation or
By-Laws of the Tenant or under any term or condition of any contract,
agreement, lease or instrument to which Tenant is a party or by which Tenant is
bound

 52
 

 

 

or any term of any judgment,
decree, statute, rule, regulation, ordinance, franchise, certificate, permit or
the like applicable to the Tenant.

(c)           There is no action, suit, proceeding
or investigation pending or threatened or any basis therefor known to Tenant
which would question the validity of any of the foregoing representations or
the validity of this Lease.

The foregoing representations
and warranties shall be deemed made as of the Commencement Date.

Section 31.02 – Landlord’s Representations.  Landlord represents and warrants that:

(a)           Landlord is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and subject to Section 1.01(b), has all requisite power and
authority to own and operate properties, to carry on its business as now
conducted, and to execute, deliver and perform this Lease.  The Lease has been duly authorized by all
necessary action on the part of the Landlord.

(b)           The execution, delivery and
performance of the Lease and the consummation of the transactions contemplated
hereby and thereby will not result in violation of or be in conflict with or
constitute a default under any term or provision of the Certificate of
Incorporation or By-Laws of the Landlord or any term of any judgment, decree,
statute, rule, regulation, ordinance, franchise, certificate, permit or the
like applicable to the Landlord.

(c)           There is no action, suit, proceeding
or investigation pending or threatened or any basis therefor known to Landlord
which would question the validity of any of the foregoing representations or
the validity of this Lease.

(d)           Landlord is the fee owner of the
Demised Premises.

(e)           There are no mortgages, other than
the American Airlines Mortgage, or leases encumbering the Demised Premises.

The
foregoing representations and warranties shall be deemed made as of the
Commencement Date.

ARTICLE 32

MISCELLANEOUS

Section 32.01 – Taxes.  Landlord shall be responsible for any taxes,
including, but not limited to, New York State transfer taxes, payable by reason
of the execution of this Lease.  Tenant
shall complete and sign any required tax return.

 53
 

 

 

Section 32.02
– Venue; Service of Process.  Landlord and Tenant and any subtenant under
this Lease, hereby expressly consent to the jurisdiction of the Supreme Court
of the County of Queens (or any successor thereto), the Supreme Court of the
State of New York and the United States District Court with respect to any
action or proceeding between Landlord and Tenant or such party with respect to
this Lease or any rights or obligations of either party pursuant to or in connection
with this Lease, and each of such subtenant, Landlord and Tenant agree that
venue shall lie in Queens County.  Tenant
and any subtenant further waive any and all rights to commence any such action
or proceeding against Landlord before any other court.  Without limiting any other methods of
obtaining jurisdiction, personal jurisdiction of a party to this Lease in any
action or proceeding may be obtained within and without the jurisdiction of any
court located in the State of New York, and that process or notice of motion or
other application in connection with such action or proceeding may be served
upon such party by registered or certified mail at the last known address of
such party, whether such address be within or without the jurisdiction of any such
court, and service shall be deemed complete three (3) business days after
when mailed even if delivery is refused by the addressee.

Section 32.03
– Lease Not an Offer. 
The submission of this Lease to Tenant shall not be construed as an
offer, nor shall Tenant have any rights with respect thereto or the Demised
Premises unless and until Landlord shall execute a counterpart of this Lease
and deliver the same to Tenant.  Until
such execution and delivery, any action taken or expense incurred by Tenant in connection
with this Lease or the Demised Premises shall be solely at Tenant’s own risk
and account.

Section 32.04 – Memorandum of Lease.  This Lease shall not be recorded by Landlord
or Tenant.  At the request of either
party, Landlord and Tenant shall execute and deliver to the other party a short
form memorandum of lease in form for recording. 
Such memorandum of lease shall not set forth any of the financial terms
of this Lease and shall set forth the Initial Term of this Lease and shall
provide that the memorandum of lease shall automatically expire at the
Expiration Date of the Term.

Section 32.05 – No Waiver.  Except as otherwise expressly provided in
this Lease, the failure of Landlord to enforce its rights for violation of, or
to insist upon the strict performance of any covenant, agreement, term,
provision or condition of this Lease, or any of the rules and regulations,
shall not constitute a waiver thereof, and Landlord shall have all remedies
provided herein and by applicable law with respect to any subsequent act which
would have originally constituted a violation. The receipt by Landlord or the
payment by Tenant, as the case may be, of rent with knowledge of the breach of
any covenant, agreement, term, provision or condition of this Lease shall not
be deemed a waiver of such breach. 
Except as otherwise expressly provided in this Lease, no provision of
this Lease shall be deemed to have been waived by Landlord

 54
 

 

 

unless
such waiver be in a writing signed by the party against whom enforcement shall be
enforced.  The remedies provided in this
Lease shall be cumulative and shall not in any way abridge, modify or preclude
any other rights or remedies to which Landlord may be entitled under this
Lease, at law or in equity.

Section 32.06
– Landlord’s Consent.

(a)           In any instance in which Landlord’s
consent, approval or other action or exercise of judgment or discretion shall
be made or shall be required by this Lease, or otherwise requested by Tenant,
and Tenant disputes Landlord’s reasonableness in granting, exercising, delaying
or withholding the same, Tenant in no event shall be entitled to make, nor
shall Tenant make, any claim for, and Tenant hereby waives, any claim for
damages or any remedy not specifically authorized herein; nor shall Tenant
claim any damages by way of setoff, counterclaim or defense but Tenant’s sole
remedy shall be an action or proceeding to enforce any such provision, or for
specific performance or declaratory judgment.

(b)           In
any instance where Tenant requests, in the manner set forth in this Lease,
Landlord’s consent, approval or other action or exercise of judgment or
discretion and Landlord does not respond to Tenant’s request within thirty (30)
days after such request, Landlord shall be deemed to have consented, approved
or not objected to Tenant’s request, as the case may be.

Section 32.07 – Counterparts.  This Lease may be executed in multiple
counterparts, each of which shall be an original, and all of which shall
constitute one and the same instrument.

Section 32.08 – Consent.  The Demised Premises do not represent all or
substantially all of the assets of the Landlord.  The Certificate of Incorporation of the
Landlord does not require the consent of the stockholders to the lease of the
Demised Premises.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]

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IN
WITNESS WHEREOF, the parties have executed this Agreement of Lease as of the
day and year first above written.

	
  

  	
  G.T.J. CO., INC., Landlord

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

	
  

  	
  AVIS
  RENT A CAR SYSTEM,
  Tenant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 56

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