Document:

Exhibit 10.5

 

AGREEMENT OF
SUBLEASE (NYT-2)

 

By and Between

 

42ND ST.
DEVELOPMENT PROJECT, INC.,

 

Landlord,

 

and

 

NYT REAL
ESTATE COMPANY LLC

 

Tenant

 

Dated as of: 
March 6, 2009

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS; CONSTRUCTION OF TERMS

  	
  3

  
	
  Section 1.1

  	
  Definitions

  	
  3

  
	
  Section 1.2

  	
  Rules of Construction

  	
  29

  
	
  Section 1.3

  	
  Captions/Table of Contents

  	
  30

  
	
  ARTICLE
  II

  	
  LEASE OF DEMISED PREMISES AND COMMON ELEMENTS;
  TERM OF LEASE

  	
  31

  
	
  Section 2.1

  	
  Demised Premises and Common Elements; Term

  	
  31

  
	
  Section 2.2

  	
  Condition of Demised Premises and Common Elements

  	
  31

  
	
  Section 2.3

  	
  Waiver of Right to Rescind

  	
  32

  
	
  ARTICLE
  III

  	
  CHARGES AND FEES

  	
  33

  
	
  Section 3.1

  	
  PILOT

  	
  33

  
	
  Section 3.2

  	
  Retail Space Percentage Rent Calculation of Percentage Rent

  	
  35

  
	
  Section 3.3

  	
  [INTENTIONALLY OMITTED]

  	
  37

  
	
  Section 3.4

  	
  Exemption from Mortgage Recording Tax; PILOMRT

  	
  37

  
	
  Section 3.5

  	
  Theater Surcharge

  	
  38

  
	
  Section 3.6

  	
  Administrative Fee

  	
  39

  
	
  Section 3.7

  	
  Prorations; Overdue Amounts

  	
  39

  
	
  Section 3.8

  	
  No Joint Venture

  	
  40

  
	
  Section 3.9

  	
  All Charges Treated as Rent

  	
  40

  
	
  Section 3.10

  	
  Payments

  	
  40

  
	
  Section 3.11

  	
  Net Lease

  	
  40

  
	
  Section 3.12

  	
  No Offset

  	
  41

  
	
  Section 3.13

  	
  Books and Records

  	
  41

  
	
  Section 3.14

  	
  Illegality

  	
  43

  
	
  Section 3.15

  	
  Administrative Code Section 11-208.1

  	
  43

  
	
  Section 3.16

  	
  Survival

  	
  43

  
	
  Section 3.17

  	
  Existing Violations

  	
  43

  
	
  ARTICLE
  IV

  	
  IMPOSITIONS

  	
  44

  
	
  Section 4.1

  	
  Impositions

  	
  44

  
	
  Section 4.2

  	
  Payment

  	
  44

  
				

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 4.3

  	
  Right to Contest

  	
  44

  
	
  ARTICLE V

  	
  PURCHASE OPTION

  	
  46

  
	
  Section 5.1

  	
  Purchase Option

  	
  46

  
	
  Section 5.2

  	
  Casualty to, or Condemnation of, the Property

  	
  49

  
	
  Section 5.3

  	
  Termination of Right to Purchase

  	
  49

  
	
  ARTICLE
  VI

  	
  CONSTRUCTION OF THE PROJECT

  	
  50

  
	
  Section 6.1

  	
  Construction of the Project

  	
  50

  
	
  Section 6.2

  	
  Plans and Specifications

  	
  56

  
	
  Section 6.3

  	
  Performance of Construction Work

  	
  59

  
	
  Section 6.4

  	
  Use of Plans and Specifications

  	
  63

  
	
  Section 6.5

  	
  Conditions Precedent to Commencement of Demolition, Asbestos Removal
  and Lead Abatement

  	
  64

  
	
  Section 6.6

  	
  Construction of Tenant’s Subway Improvements

  	
  67

  
	
  Section 6.7

  	
  Final Completion; Permanent Certificate of Occupancy

  	
  67

  
	
  Section 6.8

  	
  Construction Agreements

  	
  68

  
	
  Section 6.9

  	
  Construction Sign

  	
  68

  
	
  Section 6.10

  	
  Project Area

  	
  68

  
	
  Section 6.11

  	
  Title to Materials

  	
  69

  
	
  Section 6.12

  	
  Nonadverse Structural Effect

  	
  69

  
	
  Section 6.13

  	
  Arbitration

  	
  69

  
	
  ARTICLE
  VII

  	
  USE AND MAINTENANCE OF THE PROPERTY

  	
  69

  
	
  Section 7.1

  	
  Permitted Use

  	
  69

  
	
  Section 7.2

  	
  Restrictions on Use

  	
  70

  
	
  Section 7.3

  	
  Maintenance Obligations

  	
  70

  
	
  Section 7.4

  	
  Compliance with Legal Requirements

  	
  71

  
	
  Section 7.5

  	
  No Waste

  	
  72

  
	
  Section 7.6

  	
  Right of Entry

  	
  72

  
	
  Section 7.7

  	
  Utilities; Services; No Landlord Responsibility

  	
  73

  
	
  Section 7.8

  	
  Environmental

  	
  73

  
	
  Section 7.9

  	
  Equitable Relief

  	
  74

  
	
  Section 7.10

  	
  Windows

  	
  74

  
				

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  Section 7.11

  	
  Adverse Possession

  	
  74

  
	
  Section 7.12

  	
  [INTENTIONALLY OMITTED]

  	
  74

  
	
  ARTICLE
  VIII

  	
  REPAIRS

  	
  74

  
	
  Section 8.1

  	
  Repairs

  	
  74

  
	
  ARTICLE
  IX

  	
  ALTERATIONS AND COMPLETION OF THE IMPROVEMENTS

  	
  76

  
	
  Section 9.1

  	
  Right to Undertake Alterations

  	
  76

  
	
  Section 9.2

  	
  Performance of Alterations

  	
  76

  
	
  Section 9.3

  	
  Construction Agreements

  	
  79

  
	
  Section 9.4

  	
  Use of Plans and Specifications

  	
  80

  
	
  Section 9.5

  	
  Major Alterations

  	
  81

  
	
  Section 9.6

  	
  Approval of Project Participants

  	
  84

  
	
  Section 9.7

  	
  Alterations Certification

  	
  87

  
	
  Section 9.8

  	
  Reimbursement of Expenses of Review

  	
  88

  
	
  Section 9.9

  	
  Nonadverse Structural Effect

  	
  88

  
	
  Section 9.10

  	
  Completion of Improvements

  	
  88

  
	
  Section 9.11

  	
  Disputes

  	
  89

  
	
  ARTICLE
  X

  	
  INSURANCE

  	
  89

  
	
  Section 10.1

  	
  Insurance

  	
  89

  
	
  Section 10.2

  	
  Requirements for Policies

  	
  91

  
	
  Section 10.3

  	
  Waiver of Subrogation

  	
  92

  
	
  Section 10.4

  	
  Delivery of Policies

  	
  93

  
	
  Section 10.5

  	
  Separate Insurance

  	
  93

  
	
  Section 10.6

  	
  Cooperation; Adjustment

  	
  93

  
	
  Section 10.7

  	
  Approval by Landlord

  	
  94

  
	
  Section 10.8

  	
  Depositary

  	
  94

  
	
  Section 10.9

  	
  Security for Commercial Property Insurance Premium

  	
  94

  
	
  ARTICLE
  XI

  	
  DAMAGE AND DESTRUCTION

  	
  95

  
	
  Section 11.1

  	
  Damage and Destruction

  	
  95

  
	
  Section 11.2

  	
  Restoration Funds

  	
  98

  
	
  Section 11.3

  	
  Conditions Precedent to Disbursement

  	
  99

  
	
  Section 11.4

  	
  Section 227 of Real Property Law

  	
  100

  
				

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 11.5

  	
  Additional Requirements for Restoration

  	
  100

  
	
  Section 11.6

  	
  Effect of Casualty on this Lease

  	
  100

  
	
  ARTICLE
  XII

  	
  CONDEMNATION

  	
  101

  
	
  Section 12.1

  	
  Condemnation

  	
  101

  
	
  Section 12.2

  	
  Date of Taking

  	
  101

  
	
  Section 12.3

  	
  Minor Taking; Condemnation Restoration

  	
  101

  
	
  Section 12.4

  	
  Additional Restoration Requirements

  	
  103

  
	
  Section 12.5

  	
  Temporary Taking

  	
  103

  
	
  Section 12.6

  	
  Right to Compensation

  	
  103

  
	
  Section 12.7

  	
  Settlement; Compromise

  	
  103

  
	
  ARTICLE
  XIII

  	
  ASSIGNMENT, SUBLETTING AND TRANSFER

  	
  104

  
	
  Section 13.1

  	
  Transfers Generally

  	
  104

  
	
  Section 13.2

  	
  Subleasing

  	
  105

  
	
  Section 13.3

  	
  Assignments

  	
  109

  
	
  Section 13.4

  	
  Collect Charges from Assignee, Subtenant

  	
  109

  
	
  Section 13.5

  	
  No Relief

  	
  110

  
	
  Section 13.6

  	
  Consent

  	
  110

  
	
  Section 13.7

  	
  Costs and Expenses

  	
  110

  
	
  Section 13.8

  	
  Prohibited Persons

  	
  110

  
	
  Section 13.9

  	
  Constitutive Documents

  	
  111

  
	
  Section 13.10

  	
  Permitted Disposition

  	
  111

  
	
  ARTICLE
  XIV

  	
  DEFAULT PROVISIONS

  	
  114

  
	
  Section 14.1

  	
  Conditions of Limitation

  	
  114

  
	
  Section 14.2

  	
  Events of Default

  	
  115

  
	
  Section 14.3

  	
  Rights of Landlord

  	
  117

  
	
  Section 14.4

  	
  Waiver of Right of Redemption

  	
  118

  
	
  Section 14.5

  	
  No Waiver

  	
  119

  
	
  Section 14.6

  	
  Remedies Under Bankruptcy and Insolvency Codes

  	
  119

  
	
  Section 14.7

  	
  Relationship Among Severance Tenants

  	
  120

  
	
  ARTICLE
  XV

  	
  LANDLORD’S RIGHT TO PERFORM

  	
  121

  
	
  Section 15.1

  	
  Right to Perform

  	
  121

  
				

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 15.2

  	
  Additional Remedies

  	
  121

  
	
  Section 15.3

  	
  Strict Performance

  	
  122

  
	
  Section 15.4

  	
  Right to Enjoin Defaults or Threatened Defaults

  	
  122

  
	
  ARTICLE
  XVI

  	
  ARBITRATION

  	
  123

  
	
  Section 16.1

  	
  Generally

  	
  123

  
	
  Section 16.2

  	
  Standard Arbitration

  	
  123

  
	
  Section 16.3

  	
  Expedited Arbitration

  	
  125

  
	
  Section 16.4

  	
  Single Arbitration

  	
  127

  
	
  ARTICLE
  XVII

  	
  INDEMNITY; LIMITATION ON LIABILITY

  	
  128

  
	
  Section 17.1

  	
  Indemnification by Tenant

  	
  128

  
	
  Section 17.2

  	
  Indemnification Generally

  	
  129

  
	
  Section 17.3

  	
  Recourse Only to Landlord’s Estate in the Demised Premises and the
  Common Elements

  	
  129

  
	
  Section 17.4

  	
  Recourse Only to Tenant’s Estate in the Demised Premises and the
  Common Elements

  	
  130

  
	
  Section 17.5

  	
  Survival

  	
  131

  
	
  ARTICLE
  XVIII

  	
  QUIET ENJOYMENT; TRANSFER OF LANDLORD’S INTEREST

  	
  132

  
	
  Section 18.1

  	
  Quiet Enjoyment

  	
  132

  
	
  Section 18.2

  	
  Transfer of Landlord’s Interest

  	
  132

  
	
  ARTICLE
  XIX

  	
  WAIVER OF JURY TRIAL; COUNTERCLAIMS

  	
  133

  
	
  Section 19.1

  	
  Waiver of Jury Trial

  	
  133

  
	
  Section 19.2

  	
  No Counterclaims

  	
  133

  
	
  Section 19.3

  	
  Survival

  	
  133

  
	
  ARTICLE
  XX

  	
  NOTICES

  	
  134

  
	
  Section 20.1

  	
  Notices

  	
  134

  
	
  ARTICLE
  XXI

  	
  ESTOPPEL CERTIFICATE

  	
  136

  
	
  Section 21.1

  	
  Certificate of Tenant

  	
  136

  
	
  Section 21.2

  	
  Certificate of Landlord

  	
  136

  
	
  Section 21.3

  	
  [INTENTIONALLY OMITTED]

  	
  136

  
	
  ARTICLE
  XXII

  	
  SEVERABILITY

  	
  137

  
	
  Section 22.1

  	
  Severability

  	
  137

  
				

 

v

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXIII

  	
  END OF TERM; TITLE TO IMPROVEMENTS

  	
  138

  
	
  Section 23.1

  	
  Surrender

  	
  138

  
	
  Section 23.2

  	
  Re-Entry

  	
  139

  
	
  Section 23.3

  	
  Removal of Property

  	
  139

  
	
  Section 23.4

  	
  Title to Improvements

  	
  140

  
	
  ARTICLE
  XXIV

  	
  COVENANTS BINDING

  	
  141

  
	
  Section 24.1

  	
  Covenants Binding

  	
  141

  
	
  ARTICLE
  XXV

  	
  ENTIRE AGREEMENT; NO WAIVER

  	
  142

  
	
  Section 25.1

  	
  Entire Agreement

  	
  142

  
	
  Section 25.2

  	
  No Waiver

  	
  142

  
	
  ARTICLE
  XXVI

  	
  NO MERGER

  	
  143

  
	
  Section 26.1

  	
  No Merger

  	
  143

  
	
  ARTICLE
  XXVII

  	
  ENCUMBRANCES

  	
  144

  
	
  Section 27.1

  	
  Encumbrances

  	
  144

  
	
  ARTICLE
  XXVIII

  	
  CONSENTS; APPROVALS

  	
  145

  
	
  Section 28.1

  	
  Reasonable Standard

  	
  145

  
	
  Section 28.2

  	
  No Damages

  	
  145

  
	
  Section 28.3

  	
  Deemed Consent

  	
  145

  
	
  ARTICLE
  XXIX

  	
  NON-DISCRIMINATION AND AFFIRMATIVE ACTION

  	
  147

  
	
  Section 29.1

  	
  Incorporation by Reference

  	
  147

  
	
  ARTICLE
  XXX

  	
  REPRESENTATIONS, WARRANTIES AND COVENANTS, AND
  OTHER AGREEMENTS

  	
  148

  
	
  Section 30.1

  	
  Representations and Warranties

  	
  148

  
	
  Section 30.2

  	
  Possession

  	
  149

  
	
  Section 30.3

  	
  Covenants of Tenant

  	
  149

  
	
  Section 30.4

  	
  [INTENTIONALLY OMITTED]

  	
  149

  
	
  Section 30.5

  	
  Other Agreements

  	
  149

  
	
  ARTICLE
  XXXI

  	
  PERMITTED FINANCING

  	
  150

  
	
  Section 31.1

  	
  Recognized Mortgage

  	
  150

  
	
  Section 31.2

  	
  Right and Time to Cure

  	
  151

  
	
  Section 31.3

  	
  Notice to Landlord

  	
  152

  
	
  Section 31.4

  	
  Acceptance of Performance

  	
  152

  
				

 

vi

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 31.5

  	
  Other Defaults

  	
  152

  
	
  Section 31.6

  	
  Execution of New Lease

  	
  152

  
	
  Section 31.7

  	
  Recognition of Most Senior Recognized Mortgagee

  	
  156

  
	
  Section 31.8

  	
  No Rights of Other Mortgagees

  	
  157

  
	
  Section 31.9

  	
  Miscellaneous Mortgage Provisions

  	
  157

  
	
  Section 31.10

  	
  Delegation by Tenant

  	
  158

  
	
  Section 31.11

  	
  Survival

  	
  158

  
	
  ARTICLE
  XXXII

  	
  CONDOMINIUM DOCUMENTS

  	
  159

  
	
  Section 32.1

  	
  Condominium Conversion

  	
  159

  
	
  Section 32.2

  	
  Condominium Documents

  	
  159

  
	
  ARTICLE
  XXXIII

  	
  MISCELLANEOUS

  	
  160

  
	
  Section 33.1

  	
  Recording and Transfer Tax

  	
  160

  
	
  Section 33.2

  	
  Brokers

  	
  160

  
	
  Section 33.3

  	
  [INTENTIONALLY OMITTED]

  	
  160

  
	
  Section 33.4

  	
  Relationship of Landlord and Tenant

  	
  160

  
	
  Section 33.5

  	
  Person Acting on Behalf of a Party Hereunder

  	
  161

  
	
  Section 33.6

  	
  Third Party Beneficiary

  	
  161

  
	
  Section 33.7

  	
  Proprietary Capacity Only

  	
  161

  
	
  ARTICLE
  XXXIV

  	
  LOBBY SUBLEASE SPACE

  	
  162

  
	
  Section 34.1

  	
  Generally

  	
  162

  
	
  Section 34.2

  	
  Defined Terms

  	
  162

  
				

 

vii

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  	
  PILOT SCHEDULE

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  THE PROJECT DOCUMENTS

  
	
  EXHIBIT B

  	
   

  	
  APPROVED CERTIFIED PUBLIC ACCOUNTING FIRMS

  
	
  EXHIBIT C

  	
   

  	
  FORM OF COLLATERAL ASSIGNMENT

  
	
  EXHIBIT D

  	
   

  	
  INTENTIONALLY OMITTED

  
	
  EXHIBIT E-1

  	
   

  	
  DESIGN, CONSTRUCTION AND MAINTENANCE REQUIREMENTS FOR CONSTRUCTION OF
  BRIDGES AND FENCING

  
	
  EXHIBIT E-2

  	
   

  	
  HISTORIC PRESERVATION PROTECTION PLAN FOR CONSTRUCTION ADJACENT TO
  HISTORIC STRUCTURES

  
	
  EXHIBIT E-3

  	
   

  	
  STREETSCAPE IMPROVEMENT DESIGN PROGRAMS

  
	
  EXHIBIT E-4

  	
   

  	
  DISPLAY AND SIGNAGE REQUIREMENTS

  
	
  EXHIBIT E-5

  	
   

  	
  USE AND OPERATING PROGRAMS

  
	
  EXHIBIT E-6

  	
   

  	
  ARCHITECTURAL REQUIREMENTS

  
	
  EXHIBIT E-7

  	
   

  	
  SITE SAFETY PROGRAM

  
	
  EXHIBIT F-1

  	
   

  	
  DEMISED PREMISES

  
	
  EXHIBIT F-2

  	
   

  	
  LAND

  
	
  EXHIBIT G

  	
   

  	
  PERMITTED ENCUMBRANCES

  
	
  EXHIBIT H

  	
   

  	
  FORM OF NOTICE OF UNREIMBURSED ESAC

  
	
  EXHIBIT I

  	
   

  	
  APPROVED MAJOR CONTRACTORS

  
	
  EXHIBIT J

  	
   

  	
  STATEMENT OF ENGINEER OR ARCHITECT

  
	
  EXHIBIT K

  	
   

  	
  FORM OF NONDISTURBANCE AGREEMENT

  
	
  EXHIBIT L

  	
   

  	
  [INTENTIONALLY OMITTED]

  
	
  EXHIBIT M

  	
   

  	
  FORM OF NOTICE OF DEFAULT

  
	
  EXHIBIT N

  	
   

  	
  FORM OF SECOND NOTICE OF DEFAULT

  
	
  EXHIBIT O

  	
   

  	
  NON-DISCRIMINATION AND AFFIRMATIVE ACTION

  
	
  EXHIBIT P

  	
   

  	
  STRUCTURE OF TENANT

  
	
  EXHIBIT Q

  	
   

  	
  [INTENTIONALLY OMITTED]

  
	
  EXHIBIT R

  	
   

  	
  FORM OF MEMORANDUM OF LEASE

  

 

i

 

This AGREEMENT OF SUBLEASE (this “Lease”), is made as of the 6th day of
March, 2009, by and between 42ND ST. DEVELOPMENT PROJECT, INC. (“42DP”), a subsidiary of New York State Urban Development
Corporation (“UDC”) d/b/a Empire State
Development Corporation (“ESDC”), a
corporate governmental agency of the State of New York constituting a political
subdivision and public benefit corporation, having an office at 633 Third  Avenue, 33rd floor, New York, New York 10017,
as landlord (in such capacity, “Landlord”), and
NYT REAL ESTATE COMPANY LLC, a New York limited liability company, having an
office at c/o The New York Times Company, 620 Eighth Avenue, New York, New York
10018, as tenant (in such capacity “Tenant”).

 

W I T N E S S E T H :

 

WHEREAS, Landlord and The New
York Times Building LLC (“NYTB”) entered
into that certain Agreement of Lease dated as of December 12, 2001, as
amended by letter dated April 8, 2004 (the “Initial
Ground Lease”) with respect to certain land more particularly
therein and all improvements then or thereafter located thereon;

 

WHEREAS, NYTB, as landlord,
entered into (a) that certain Agreement of Sublease dated as of December 12,
2001 with Tenant, as tenant (the “Initial NYTC Sublease”),
(b) that certain Agreement of Sublease (Office) dated as of December 12,
2001 with FC Lion LLC (“FC Lion”), as
tenant (the “Initial FC Office Sublease”), and (c) that
certain Agreement of Sublease (Retail) dated as of December 12, 2001
with FC Lion, as tenant (the “Initial FC Retail Sublease”;
and collectively with the Initial NYTC Sublease and the Initial FC Office
Sublease, the “Initial Severance Leases”);

 

WHEREAS, NYTB submitted the
Initial Ground Lease to a leasehold condominium structure pursuant to Article 9-B of the Real Property Law of the
State of New York;

 

WHEREAS, pursuant to that
certain Assignment and Assumption Agreement dated as of August 15, 2006
(being the “Lease Assignment Date” under the
Initial Ground Lease) between NYTB and Landlord (the “Assignment”),
NYTB assigned to Landlord all of NYTB’s right, title and interest in and to the
Initial Ground Lease and the Initial Severance Subleases;

 

WHEREAS, pursuant to the
provisions of the Initial Ground Lease and the Assignment, the Assignment did
not cause a merger of the interests of landlord and tenant under the Initial
Ground Lease, which interests are and remain separate and distinct;

 

WHEREAS, the Initial Ground
Lease was amended and restated pursuant to Amended and Restated Agreement of
Lease dated as of August 15, 2006 and recorded in the Office of the City
Register of the City of New York on November 20, 2006 as CRFN
2006000644736, which Amended and Restated Agreement of Lease was amended by
First Amendment to Amended and Restated Agreement of Lease dated as of January 29,
2007 and recorded in the Office of the City Register of the City of New York on
February 22, 2007 as CRFN 2007000100154;

 

1

 

WHEREAS, the Initial NYTC
Sublease was amended pursuant to First Amendment to Agreement of Sublease (NYT)
dated as of August 15, 2006 between Landlord and Tenant and recorded in
the Office of the City Register of the City of New York on November 20,
2006 as CRFN 2006000644735 and by Second Amendment to Agreement of Sublease
(NYT) dated as of January 29, 2007 between Landlord and Tenant and
recorded in the Office of the City Register of the City of New York on February 22,
2007 as CRFN 2007000100157 (the Initial NYTC Sublease, as so amended, and as
further amended by the Third Amendment, hereinafter defined, the “Existing NYTC Sublease”);

 

WHEREAS, pursuant
to that certain Assignment and Assumption of FC Severance Sublease dated as of August 15,
2006 between FC Lion, as assignor, and FC Eighth Ave., LLC, a Delaware limited
liability company (“FC Eighth”), as
assignee, and recorded in the Office of the City Register of the City of New
York on November 20, 2006 as CRFN 200600644730 FC Lion assigned to FC
Eighth, and FC Eighth assumed, all of FC Lion’s right, title and interest in,
to and under the Initial FC Office Sublease;

 

 WHEREAS, pursuant to
that certain Assignment and Assumption of FC Severance Sublease dated as of August 15,
2006 between FC Lion, as assignor, and FC Eighth, as assignee, and recorded in
the Office of the City Register of the City of New York on November 20,
2006 as CRFN 200600644731, FC Lion assigned to FC Eighth, and FC Eighth
assumed, all of FC Lion’s right, title and interest in, to and under the
Initial FC Retail Sublease;

 

WHEREAS, the Initial FC Office Sublease was amended
pursuant to First Amendment to Agreement of Sublease (Office) dated as of August 15,
2006 between Landlord and FC Eighth and recorded in the Office of the
City Register of the City of New York on November 20, 2006 as CRFN
2006000644733, by Second Amendment to
Agreement of Sublease (Office) dated as of January 29, 2007 between
Landlord and FC Eighth and recorded in the Office of the City Register
of the City of New York on February 22, 2007 as CRFN 2007000100155, by
Third Amendment  to Agreement of Sublease
(Office) dated as of October 11, 2007 between Landlord and FC Eighth and
recorded in the Office of the City Register of the City of New York on January 8,
2008 as CRFN 2008000008732, and by Fourth Amendment to Agreement of Sublease
(Office) of even date herewith between Landlord and FC Eighth and intended to
be recorded in the Office of the City Register of the City of New York  (the
Initial FC Office Sublease, as so assigned and amended, the “FC Office Sublease”);

 

WHEREAS, the Initial FC Retail Sublease was amended
pursuant to First Amendment to Agreement of Sublease (Retail) dated as of August 15,
2006 between Landlord and FC Eighth and recorded in the Office of the
City Register of the City of New York on November 20, 2006 as CRFN
2006000644734, by Second Amendment to
Agreement of Sublease (Retail) dated as of January 29, 2007 between
Landlord and FC Eighth and recorded in the Office of the City Register
of the City of New York on February 22, 2007 as CRFN 2007000100156, by
Third Amendment  to Agreement of Sublease
(Retail) dated as of October 11, 2007 between Landlord and FC Eighth and
recorded in the Office of the City Register of the City of New York on January 8,
2008 as CRFN 2008000008733, and by Fourth Amendment to Agreement of Sublease
(Retail) of even date herewith between Landlord and FC Eighth and intended to
be recorded in the Office of the City Register of the City of New York  (the
Initial FC Retail Sublease, as so assigned and amended, the “FC Retail Sublease”);

 

2

 

WHEREAS, by Third Amendment to Agreement of Sublease
(NYT) of even date herewith and intended to be recorded in the Office of
the City Register of the City of New York (the
“Third Amendment”), Landlord and Tenant
further modified the Existing NYTC Sublease, inter alia, to remove from
the premises demised thereunder a portion of the NYTC Collective Unit (as
defined in the Condominium Declaration) consisting of Units 21-A, 22-A, 23-A,
24-A, 25-A, 26-A and 27-A, together their undivided percentage interest in the
Common Elements and the NYTC Limited Common Elements, as more particularly
described on Exhibit F-1 annexed hereto
(the “Demised Premises”), upon the condition
that Landlord and Tenant enter into this Lease covering the Demised Premises;

 

WHEREAS, this Lease, the
Existing NYTC Sublease, the FC Office Sublease, the FC Retail Sublease, any New
Office Subleases (as defined in the FC Office Sublease) and any new leases
entered into pursuant to Section 31.6 of any of the foregoing are referred
to herein, collectively, as the “Severance Subleases”;

 

WHEREAS, ESDC, 42DP, Landlord,
Tenant, NYCEDC, the City and certain other parties, as applicable, are parties
to the documents listed on Exhibit A
attached hereto (the “Project Documents”);

 

WHEREAS, Landlord and Tenant
wish to provide for the operation and maintenance of the Demised Premises and
the Common Elements;

 

WHEREAS, the parties intend that
Tenant have all of the rights and obligations of the Unit Owner (as defined and
described in the Condominium Declaration) as they relate to the Demised
Premises and the Common Elements, including without limitation, the right to
control the Units (as defined and described in the Condominium Declaration)
that correspond to the space comprising the Demised Premises under this Lease,
subject and pursuant to the Condominium Declaration; and

 

WHEREAS, Tenant wishes to hire
and to take from Landlord, and Landlord wishes to lease and to demise to
Tenant, the Demised Premises, together with an undivided interest in the Common
Elements.

 

NOW, THEREFORE, in consideration
of the foregoing and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
covenant and agree as follows:

 

ARTICLE I

DEFINITIONS; CONSTRUCTION OF TERMS

 

Section 1.1            Definitions.  (a)  The terms defined in this Section 1.1 shall, for all purposes of
this Lease and all agreements supplemental hereto, have the meanings herein
specified, unless specifically stated otherwise:

 

(i)   “$2,000,000+
Alteration” has the meaning set forth in Section 9.5(a) hereof.

 

3

 

(ii)   “42DP”
means 42nd St. Development Project, Inc., a
subsidiary of New York State Urban Development Corporation d/b/a Empire State
Development Corporation (“ESDC”), a
corporate governmental agency of the State of New York constituting a political
subdivision and public benefit corporation, having an office at 633 Third
Avenue, 33rd floor, New York, New York 10017.

 

(iii)   “AAA”
has the meaning set forth in Section 16.2(a) hereof.

 

(iv)   “Acceptable
Guarantor” means a Person having (A) a net worth, on the date
of the depositing of such security, of at least $50,000,000, as Adjusted for
Inflation from December 12, 2001 and (B) a debt rating of at least
“A” from Standard and Poors or the equivalent rating from another nationally
recognized rating agency.

 

(v)   “Accounting
Principles” means, from time to time, the then generally accepted
accounting practices, consistently applied on a “cash basis”.

 

(vi)   “Adjusted for
Inflation” means, with respect to any sum, that there shall be added
to such sum (as the same may have been previously adjusted), beginning on December 12,
2001 unless otherwise specified, on an annual or such other basis as may be
specified in this Lease (such annual or other period, the “Specified
Interval”), an amount equal to the product of (A) such sum (as
the same may have been previously adjusted) and (B) a fraction (1) the
numerator of which is the difference between [a] the Consumer Price Index for
the calendar month immediately preceding the calendar month in which the
Specified Interval for which such calculation is being made ended and [b] the
Consumer Price Index for the calendar month immediately preceding the calendar
month in which the immediately preceding Specified Interval ended (or, if such
date would be prior to December 12, 2001, the calendar month of December 2001)
(the “Measuring Month”), and (2) the
denominator of which is the Consumer Price Index for the Measuring Month; provided,
however, (i) if for any Specified Interval the difference between
the index numbers in clauses [a] and [b] above is less than zero (0), such
numerator shall be deemed to be zero (0) for purposes of calculating the applicable
adjustment, and (ii) the applicable adjustment for the Specified Interval
immediately following a Specified Interval in which the preceding clause (i) shall
have been applicable shall be determined by replacing clause [b] above in its
entirety with the following:  “[b] the
Consumer Price Index for the calendar month immediately preceding the calendar
month in which the Last Positive Specified Interval (as hereinafter defined)
ended.  The “Last
Positive Specified Interval” shall mean the last Specified Interval
prior to the date of the applicable determination hereunder for which the
difference between the index numbers, determined in accordance with clause [a]
above and this clause [b] prior to being altered due to the triggering of this
proviso, was more than zero (0)”.

 

(vii)   [INTENTIONALLY OMITTED]

 

(viii)   “Administrative
Fee” has the meaning set forth in Section 3.6
hereof.

 

4

 

(ix)   “Allocated
Square Feet” has the meaning set forth in Section 1.1(cclxi)
hereof, the definition of Total Taxable Square Feet Certificate.

 

(x)   “Alteration”
means every alteration, installation, improvement, addition, removal,
demolition or other physical change in or about any portion of the Demised
Premises or the Common Elements (or applicable portion thereof); provided,
however, that no Interior Construction Work shall constitute an
Alteration.

 

(xi)   “Alterations
Certification” has the meaning set forth in Section 9.7
hereof.

 

(xii)   “Alteration
Plans and Specifications” means the plans and specifications for any
Alteration that have been submitted to and approved by Landlord in accordance
with Section 9.5 hereof with such
modifications after such approval as shall have been consented to by Landlord
in accordance herewith.  All proposed
Alterations Plans and Specifications submitted to Landlord shall (A) comply
with the applicable requirements of DUO, and (B) be in such detail,
including elevations and sections, as Landlord may reasonably request.

 

(xiii)   “Applicable
Judgments” means all judgments, court orders and injunctions
applicable to or affecting the Demised Premises, this Lease or the Common
Elements, now or hereafter existing.

 

(xiv)   “Appointment
Date” has the meaning set forth in Section 16.2(a) hereof
or Section 16.3(a) hereof, as
applicable.

 

(xv)   “Approved
Schematic Design Plans” means those certain Schematic Design Plans
approved in accordance with Section 6.2(a)(ii) of the Initial Ground
Lease.

 

(xvi)   “Arbitration
Notice” has the meaning set forth in Section 16.2(a) hereof.

 

(xvii)   “Arbitrator”
has the meaning set forth in Section 16.2(a) hereof.

 

(xviii)   “Architect”
means the Design Architect and any other registered architect or architectural
firm selected by Tenant and/or any Subtenant and, if required pursuant to the
terms of this Lease, approved by Landlord in accordance with this Lease.

 

(xix)   “Architect’s
Certification” means a certification, executed by an Architect or an
Engineer, made to Landlord.

 

(xx)   “Argent”
has the meaning set forth in Section 33.2(a) hereof.

 

5

 

(xxi)   “Assignment”
means the sale, exchange, assignment or other disposition, whether by operation
of law or otherwise, of all or any portion of 
Tenant’s interest in this Lease or the leasehold estate created hereby.

 

(xxii)   [INTENTIONALLY OMITTED]

 

(xxiii)   “BID”
means a Business Improvement District or any successor in function.

 

(xxiv)   “Brokers”
has the meaning set forth in Section 33.2 hereof.

 

(xxv)   “Budgeted
Lobby Sublease Space Construction Costs” has the meaning set forth
in Section 34.2(a) hereof.

 

(xxvi)   [INTENTIONALLY OMITTED]

 

(xxvii)   [INTENTIONALLY OMITTED]

 

(xxviii)   “Business Day”
means any day which is not a Saturday, a Sunday or a day observed as a holiday
by the City or the State of New York or the federal government of the United
States of America.

 

(xxix)   [INTENTIONALLY OMITTED]

 

(xxx)   “Casualty”
has the meaning set forth in Section 11.1(a) hereof.

 

(xxxi)   “Certified
Public Accountant” means (A) any of the firms set forth on Exhibit B attached hereto, or (B) any other
reputable and disinterested certified public accounting firm with more than
seventy-five (75) Principals.

 

(xxxii)   “Charges”
means all of the amounts payable by Tenant pursuant to this Lease, including,
but not limited to, PILOT, Percentage Rent, Theater Surcharge, additional
charges, and any other sums, costs, expenses, or deposits which Tenant is
obligated, pursuant to any of the provisions of this Lease, to pay to and/or
deposit with Landlord.

 

(xxxiii)   “City”
means The City of New York, a municipal corporation.

 

(xxxiv)   “Claims”
means all liabilities (statutory or otherwise), obligations, claims, demands,
damages, penalties, causes of action, costs, expenses (including attorneys’
fees and expenses), losses and injuries in any manner relating to or arising
with respect to the subject matter of any indemnity granted herein, including
any enforcement of any such indemnity by the indemnified party; provided, however,
“Claims” shall not include any of the foregoing to the extent arising directly
from 

 

6

 

disputes between Landlord and Tenant under
this Lease except to the extent that any such dispute between Landlord and
Tenant arises from enforcement of any such indemnity by the indemnified party.

 

(xxxv)   “Collateral
Assignment” means that certain Collateral Assignment in the form
attached hereto as Exhibit C.

 

(xxxvi)   “Collection
Agent” means the Person designated in accordance with the Project
Agreement to collect rents and other amounts payable hereunder, and such
Person’s successors and assigns.

 

(xxxvii)   [INTENTIONALLY OMITTED]

 

(xxxviii)   “Commencement
Date” means the date hereof.

 

(xxxix)   “Common Elements”
has the meaning set forth in the Condominium Declaration (it being acknowledged
that “Common Elements” shall not include any Limited Common Elements (as
defined in the Condominium Declaration), but shall expressly include the Lobby
Sublease Space).

 

(xl)   “Comptroller”
has the meaning set forth in Section 3.13(a) hereof.

 

(xli)   “Condemnation”
means the “Proceeding” as such term is defined in the Site 8 South LADA.

 

(xlii)   “Condemnation
Restoration” has the meaning set forth in Section 12.3(a) hereof.

 

(xliii)   “Condominium
Act” means Article 9-B of the Real Property Law of the State of
New York or any statute enacted in lieu thereof.

 

(xliv)   “Condominium
Association” means the condominium association established pursuant
to the Condominium Documents.

 

(xlv)   “Condominium
Association Assumption Agreement” means that certain Assumption
Agreement, dated as of August 15, 2006, entered into by the Condominium
Association.

 

(xlvi)   “Condominium
By-Laws” means the by-laws annexed to the Condominium Declaration,
together with all amendments, modifications and supplements thereto.

 

(xlvii)   “Condominium
Declaration” means that certain Declaration Establishing a Plan of
Leasehold Condominium Ownership of Premises 
known as and having a street address of 620 Eighth Avenue, New York, New
York, dated as of August 4, 2006, and recorded in the Office of the City
Register of the City of New York on August 15, 2006 as CRFN 2006000460293,
as amended by that 

 

7

 

certain First Amendment to Declaration of
Leasehold Condominium dated as of January 29, 2007 and recorded in the
Office of the City Register of the City of New York on February 8, 2007 as
CRFN 2007000075106, as further amended by that certain Second Amendment to
Declaration of Leasehold Condominium dated as of October 11, 2007 and
recorded in the Office of the City Register of the City of New York on January 8,
2008 as CRFN 2008000008734, as further amended by that certain Third Amendment
to Declaration of Leasehold Condominium dated as of March 6, 2009 and
intended to be recorded in the Office of the City Register of the City of New
York, together with all further amendments, modifications and supplements
thereto.

 

(xlviii)   “Condominium
Documents” means the Condominium Declaration, the Condominium
By-Laws and any other documents executed or recorded in connection with
subjecting the Property to the Condominium Act.

 

(xlix)   “Constitutive
Documents” means Tenant’s organizational documents, including (A) the
operating agreement of Tenant, (B) the operating agreement of any member
of Tenant, (C) the articles of organization of Tenant and (D) any
modifications to the foregoing.

 

(l)   “Consumer
Price Index” means the Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics of the United States Department of Labor, New
York - Northern New Jersey - Long Island, NY-NJ-CT area, All Items (1982-1984 =
100), or any successor index thereto, appropriately adjusted.  If the Consumer Price Index ceases to be
published, and there is no successor thereto, such other index as Landlord and
Tenant agree upon, each acting reasonably, as appropriately adjusted, shall be
substituted for the Consumer Price Index. 
If the Consumer Price Index ceases to use 1982-1984 = 100 as the basis
of calculation, the Consumer Price Index shall be adjusted accordingly.

 

(li)   “Continuation
Notice” has the meaning set forth in Section 31.6(i)(ii) hereof.

 

(lii)   “Control”
has the meaning indicated in the definition of Control Affiliate.

 

(liii)   “Control
Affiliate” means any Person controlling, controlled by or under
common control with another Person, and for the purposes hereof no Person shall
be deemed to control any other Person unless more than fifty percent (50%) of
such controlled Person is owned beneficially by the controlling person or
entity.

 

(liv)   “Conviction”
has the meaning set forth in Section 13.10(d)(2) hereof.

 

(lv)   “Court”
has the meaning set forth in Section 16.2(a) hereof.

 

8

 

(lvi)   “CPLR”
has the meaning set forth in Section 16.2(b)(i) hereof.

 

(lvii)   “Customary”
or “customary” when used in respect of
fees, commissions or other payments for services performed or materials
furnished, means the amount customarily and reasonably paid in arm’s length
transactions to an unaffiliated third party for the performance of the
applicable service or the provision of the applicable material in multi-tenant
office developments situated in Manhattan.

 

(lviii)   “Date of
Taking” has the meaning set forth in Section 12.2
hereof.

 

(lix)   “Default”
means (A) the failure of any party hereto to perform or complete any
Obligations as required hereunder and in accordance herewith, after receipt of
any applicable First Default Notice (but without regard to any cure period in
respect thereof), and (B) any other matter expressly identified as a
Default hereunder.

 

(lx)   “Delivery
Date” means  September 24,
2003.

 

(lxi)   “Demised
Premises” has the meaning set forth in the recitals of this Lease.

 

(lxii)   “Demised
Space” means the portion of the Property in which a Subtenant has an
interest pursuant to a Sublease, including, without limitation, any portion of
the Lobby Sublease Space.

 

(lxiii)   “Depositary”
means any entity, agreeing for the benefit of Landlord and the Condominium
Association, to perform the obligations of depositary hereunder on
substantially the terms of the Depositary Agreement, which (A) (1) is
a Recognized Mortgagee or a Control Affiliate of a Recognized Mortgagee under
any Severance Sublease (provided that such Recognized Mortgagee or such
Control Affiliate is designated as the Depositary by the Condominium
Association and such Recognized Mortgage and would qualify as a Lending
Institution, but is other than a savings bank or savings and loan association),
(2) if not a Recognized Mortgagee or such Control Affiliate, is a
commercial bank or trust company qualifying as a Lending Institution designated
by the Recognized Mortgagee most senior in lien, or (3) if not the
Recognized Mortgagee or such Control Affiliate or designated by the Recognized
Mortgagee pursuant to clause (2) above, is a commercial bank or trust
company qualifying as a Lending Institution, as designated by the Condominium
Association with the reasonable concurrence of Landlord, (B) has an office
in the City of New York, and (C) has a net worth of not less than One
Hundred Million Dollars ($100,000,000) and net assets of not less than Two
Hundred Fifty Million Dollars ($250,000,000) (as such sums shall be Adjusted
for Inflation on an annual basis from December 12, 2001) throughout the
period during which it acts as the Depositary. 
If, at any time, no Lending Institution has been designated to so act,
then Landlord shall designate as the Depositary an unaffiliated third party
reasonably acceptable to the 

 

9

 

Condominium Association that is ordinarily
engaged in the business of acting as a depositary.  The Condominium Association’s disapproval of
an unaffiliated third party so designated by Landlord shall not be reasonable
unless it is based solely on the prior direct experience of a tenant under a
Severance Sublease or any Related Entity of a tenant under a Severance Sublease
with such party.

 

(lxiv)   “Depositary
Agreement” means the agreement, in form reasonably acceptable to
Landlord and the Condominium Association (and reasonably approved by each
Recognized Mortgagee, if any, at the time of the execution and delivery
thereof), pursuant to which the Depositary agrees to perform its obligations
hereunder.

 

(lxv)   “Design
Architect” means Renzo Piano Building Workshop or, in the event that
Renzo Piano Building Workshop is no longer the Design Architect, any other
Replacement Design Architect approved in accordance with this Lease, in either
case alone or in affiliation with another Architect acting as the Production
Architect.

 

(lxvi)   “Design
Development Plans” means those certain Design Development Plans
approved in accordance with the Initial Ground Lease.

 

(lxvii)   “Determination”
has the meaning set forth in Section 16.2(b)(iii) hereof.

 

(lxviii)   “Discount
Rate” means a discount rate equal to the then current rate of United
States Treasury bills or notes, as applicable, maturing ten (10) years
after the Delivery Date or the next maturity date for such bills or notes
occurring after such date.

 

(lxix)   “Discretionary
Inside Mechanical Space” has the meaning set forth in the Initial
Ground Lease.

 

(lxx)   “DUO”
means the Design, Use and Operating Requirements which are attached to this
Lease as follows:

 

(A)  Design, Construction and
Maintenance Requirements for construction of Bridges and Fencing attached
hereto as Exhibit E-1;

 

(B)   Historic Preservation
Protection Plan for Construction Adjacent to Historic Structures attached
hereto as Exhibit E-2;

 

(C)   Streetscape Improvement
Design Program attached hereto as Exhibit E-3;

 

(D)  Display and Signage
Requirements attached hereto as Exhibit E-4;

 

(E)   Use and Operating Program
attached hereto as Exhibit E-5;

 

10

 

(F)   Architectural Requirements
attached hereto as Exhibit E-6;

 

(G)   Site Safety Program attached
hereto as Exhibit E-7.

 

(lxxi)   “DUO/Structural
Alteration” has the meaning set forth in Section 9.5(a) hereof.

 

(lxxii)   “DUO
Alteration” has the meaning set forth in Section 9.5(a) hereof.

 

(lxxiii)   [INTENTIONALLY OMITTED]

 

(lxxiv)   “EIN”
means an employer identification number or taxpayer identification number
issued by the Internal Revenue Service.

 

(lxxv)   “Engineer”
means any licensed structural engineer or engineering firm selected by Tenant
and/or any Subtenant and, if required pursuant to the terms of this Lease,
approved by Landlord in accordance with this Lease.

 

(lxxvi)   “Environmental
Activity” means any use, storage, installation, existence, release,
threatened release, discharge, generation, abatement, removal, disposal,
handling or transportation from, under, into or on the Demised Premises or the
Common Elements (or any portion thereof) of any Hazardous Materials.

 

(lxxvii)   “Equipment”
means all fixtures and personal property incorporated in or attached to and
used or usable in the operation of the Demised Premises or the Common Elements
owned or leased by Tenant.

 

(lxxviii)   “Equity
Interest Disposition” means any Transfer in a Person or in any
direct or indirect constituent entity of such Person, where such Transfer
directly or indirectly produces any change in the direct or indirect beneficial
ownership of an interest in, or Control of, such Person.  The term “Equity Interest Disposition” shall
also include any (A) transaction or series of transactions (including,
without limitation, the issuance of additional equity interests in such Person)
or (B) direct or indirect revision of the beneficial ownership structure
or control of such Person or any direct or indirect constituent entity of such
Person, which, in either case, produces any change in the direct or indirect
beneficial ownership of an interest in, or Control of, such Person.

 

(lxxix)   [INTENTIONALLY OMITTED]

 

(lxxx)   “ESDC”
has the meaning set forth in the definition of 42DP.

 

(lxxxi)   [INTENTIONALLY OMITTED]

 

11

 

(lxxxii)   “Event”
has the meaning set forth in Section 30.4(b)(ii) hereof.

 

(lxxxiii)   “Event of
Default” has the meaning set forth in Section 14.2
hereof.

 

(lxxxiv)   “Eviction
Proceeding” has the meaning set forth in Section 13.2(e) hereof.

 

(lxxxv)   “Excess Site
Acquisition Costs (Allocated)” means the amount by which (A) Tenant’s
Percentage Allocation of the Total SAC Amount, including interest thereon
pursuant to Section 3.04(c) of the Site 8 South LADA, exceeds (B) Tenant’s
Percentage Allocation of the Transaction Price.

 

(lxxxvi)   “Excluded
Taxes” has the meaning set forth in Section 1.1(a)(cx)
hereof, the definition of Impositions.

 

(lxxxvii)   [INTENTIONALLY OMITTED]

 

(lxxxviii)   “Existing
Violations” means any condition on the Property, existing on or
before the Delivery Date, which gives rise to a violation of record of Legal
Requirements, issued by a Governmental Authority with applicable jurisdiction
prior to or within twelve (12) months after the Delivery Date.

 

(lxxxix)   “Expiration
Date” has the meaning set forth in Section 2.1(b) hereof.

 

(xc)   “FC Office
Sublease” has the meaning set forth in the recitals of this Lease.

 

(xci)   “FC Retail
Sublease” has the meaning set forth in the recitals of this Lease.

 

(xcii)   “FC Subleases”
means the FC Office Sublease and the FC Retail Sublease.

 

(xciii)   “Final MRT
Notification” has the meaning set forth in Section 3.4(e) hereof.

 

(xciv)   “Final Plans
and Specifications” means those certain Final Plans and
Specifications approved in accordance with the Initial Ground Lease, as
modified by any Alteration Plans and Specifications approved in accordance with
Section 9.5 hereof.

 

(xcv)   “First
Default Notice” has the meaning set forth in Section 14.2
hereof.

 

12

 

(xcvi)   “First Lease
Year” has the meaning set forth in Section 1.1(a)(xxxiii)
hereof, the definition of Lease Year.

 

(xcvii)   [INTENTIONALLY OMITTED]

 

(xcviii)   “First PILOT
Year” has the meaning set forth in Section 1.1(a)(clxxxvii)
hereof, the definition of PILOT Year.

 

(xcix)   “Full
Insurable Value” means actual replacement cost of the Improvements
(exclusive of the cost of excavation, foundations and footings).

 

(c)   “Full Taxes”
means the real property taxes that would be assessed and levied against the
Demised Premises and Tenant’s undivided interest in the Common Elements, the
owner thereof and the interest of Tenant therein, if the Demised Premises and
Tenant’s undivided interest in the Common Elements or the owner thereof were
not exempt from such taxes, pursuant to (A) the provisions of Chapter 58
of the Administrative Code of The City of New York and Title 11, Chapter 2, of
the Administrative Code of the City of New York, as the same may be amended
from time to time, or (B) any statute or ordinance in lieu thereof or in
addition thereto to the extent the charges imposed thereby are of a type
customarily considered as real property taxes.

 

(ci)   [INTENTIONALLY OMITTED]

 

(cii)   “Governmental
Authority” or “Governmental Authorities”
means the United States of America, the State of New York, the City and any
agency, department, commission, board, bureau, instrumentality or political
subdivision of any of the foregoing, now existing or hereafter created, having
jurisdiction over the Demised Premises and/or the Common Elements or any
portion thereof or any street, road, avenue or sidewalk comprising a part of,
or in front of, the Demised Premises and/or the Common Elements, or any vault
in or under the Demised Premises and/or the Common Elements.

 

(ciii)   “Ground Lease”
has the meaning set forth in the recitals of this Lease.

 

(civ)   “Hazardous
Materials” means (A) any “hazardous substance” as defined in Section 101(14)
of the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C § 9601(14), as amended, (B) any “hazardous waste” as defined in Section 27
1301(1) of the New York Environmental Conservation Law, (C) petroleum
or petroleum products, crude oil or any by products thereof, natural gas or
synthetic gas used for fuel, (D) any asbestos, asbestos containing
material or polychlorinated biphenyl and (E) any additional substances or
materials which are classified or considered to be hazardous or toxic under the
laws of the State of New York, the United States of America or under any other
Legal Requirements.

 

(cv)   “Hearing”
has the meaning set forth in Section 13.10(a) hereof.

 

13

 

(cvi)   “Hearing
Officers” has the meaning set forth in Section 13.10(a) hereof.

 

(cvii)   [INTENTIONALLY OMITTED]

 

(cviii)   [INTENTIONALLY OMITTED]

 

(cix)   [INTENTIONALLY OMITTED]

 

(cx)   “Impositions”
means all taxes, fees, assessments and charges that are levied by a
Governmental Authority, BID or similar entity against the Demised Premises
and/or Tenant’s undivided interest in the Common Elements or the interest of
Tenant therein to the extent that same may give rise to a lien against the
Demised Premises and/or the Tenant’s undivided interest in Common Elements,
including special assessments, personal property and general intangibles taxes,
gross receipts, sales, use and occupancy, water and sewer charges, rates and
rents to the extent charged separately from Full Taxes, charges for the
establishment and operation of any BID in which the Improvements are located,
charges for public utilities assessed by a Governmental Authority, BID or similar
entity, excises, levies, vault and other license, rent and permit fees and
other municipal and governmental impositions and charges, general and special,
ordinary and extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever, which are during the term of this Lease assessed, levied, charged
or imposed upon or become payable out of or become a lien on (A) the
Demised Premises and/or Tenant’s undivided interest in the Common Elements, or
any part thereof, the appurtenances thereto or the sidewalks, streets or vaults
adjacent thereto, (B) any personal property owned by Tenant and located on
the Property, or any part thereof, (C) any rent and income received by or
for the account of Tenant from any Subtenants or other users or occupants of
the Demised Premises and/or Tenant’s undivided interest in the Common Elements,
or any part thereof, (D) any franchises, easements or similar rights
demised hereunder, licenses and permits as may be appurtenant to the use of the
Demised Premises and/or Tenant’s undivided interest in the Common Elements or
any documents to which Tenant is a party, creating or transferring an interest
or estate in the Demised Premises and/or Tenant’s undivided interest in the
Common Elements, or (E) any occupancy, use or possession of the Demised
Premises and/or Tenant’s undivided interest in the Common Elements, or any part
thereof, the appurtenances thereto or the sidewalks, streets, alleys or vaults
adjacent thereto; “Impositions” shall not include any amounts included in Full
Taxes, any PILOT, PILOMRT, Theater Surcharge, municipal, state or federal
income taxes assessed against Landlord or Tenant, any capital levy, estate,
gift, succession, inheritance or transfer taxes, or any corporate franchise
taxes or unincorporated business taxes imposed upon any owner of the Land, or
any part thereof (“Excluded Taxes”);
provided, however, that if at any time during the term of this
Lease the present method of taxation or assessment shall be so changed that any
Excluded Taxes shall either be added to, or substituted in whole or in part
for, Impositions, then any such Excluded Tax shall, to the extent that it is so
added or substituted, be deemed to be included within Impositions.

 

14

 

(cxi)   “Improvements” means any buildings and structures, and any
building machinery, equipment and fixtures (including Equipment) affixed to and
forming a part of such buildings and structures (including the Demised Premises
and the Common Elements), which may be erected or located wholly or partially
on the Land during the term of this Lease by or on behalf of Landlord, Tenant
or any Subtenant, but excluding any personal property owned or leased by
Landlord, Tenant or any Subtenant.

 

(cxii)   “Income Tax
Code” means the United States Internal Revenue Code of 1986, as
amended from time to time.

 

(cxiii)   “Indemnified
Parties” has the meaning set forth in Section 17.2(a) hereof.

 

(cxiv)   “Indicted
Party” has the meaning set forth in Section 13.10(a) hereof.

 

(cxv)   “in effect”
when used with respect to a Sublease means a Sublease, the term of which has
commenced and under which rent has become payable (or if not yet payable, will
become payable upon expiration of a rent abatement period provided for in such
Sublease) regardless of whether the space leased thereby is occupied by the
Subtenant.

 

(cxvi)   “Initial
Ground Lease” has the meaning set forth in the recitals of this
Lease.

 

(cxvii)   “Initial
Restoration Estimate” has the meaning set forth in Section 11.1(d) hereof.

 

(cxviii)   “Initial
Taking Estimate” has the meaning set forth in Section 12.3(c) hereof.

 

(cxix)   “Insurance
Guaranty” has the meaning set forth in Section 10.9(a) hereof.

 

(cxx)   “Insurance
Requirements” means all of the terms and conditions of all insurance
policies covering, related to or applicable to the Demised Premises and/or the
Common Elements, all requirements of the issuers of such policies and all
rules, regulations, orders and other requirements or standards issued or
promulgated by the National or Regional Board of Fire Underwriters, the
National or Regional Fire Protective Association or any other national or
regional body in lieu of the foregoing exercising similar functions whose
requirements or standards must be complied with in order to obtain any
governmental approval or insurance policy required hereunder, and applicable to
or affecting the Demised Premises and/or the Common Elements or the use and
occupancy thereof.

 

15

 

(cxxi)   “Interest
Rate” means a rate equal to the lesser of (A) three (3) percentage
points over the Prime Rate or (B) the maximum rate permitted by applicable
law.

 

(cxxii)   “Interior
Construction Work” means any Alteration which (A) relates
solely to interior spaces in (1) the Demised Premises and/or (2) the
Common Elements, and (B) is not governed by any element of the DUO (it
being understood that the DUO may govern certain interior spaces) and does not
affect a Structural Component (other than by having a Nonadverse Structural
Effect).

 

(cxxiii)   “Issuing Bank”
means any commercial bank reasonably acceptable to Landlord.

 

(cxxiv)   “Land”
means the parcel of land described in Exhibit F-2
attached hereto, together with all right, title and interest, if any, of
Landlord in and to any easements, licenses, privileges, rights and
appurtenances related thereto.

 

(cxxv)   “Landlord”
means 42DP and its successors and assigns as landlord under this Lease.

 

(cxxvi)   “Landlord’s
Obligations” has the meaning set forth in Section 1.1(a)(clviii)
hereof, the definition of Obligations.

 

(cxxvii)   “Landlord’s
TSF Statement” has the meaning set forth in Section 3.1(a)(i)(B)(3) hereof.

 

(cxxviii)   “Last
Specified Positive Interval” has the meaning set forth in Section 1.1(a)(vi) hereof, the definition of
Adjusted for Inflation.

 

(cxxix)   “Laws and
Regulations” means all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, permits, licenses, regulations and
ordinances applicable to or affecting this Lease, the Property, the Demised
Premises and/or the Common Elements or the use or occupancy thereof, or the
owner thereof as owner of the Demised Premises and/or the Common Elements,
whether now or hereafter enacted or in force, ordinary or extraordinary,
foreseen or unforeseen.

 

(cxxx)   “Lease”
has the meaning set forth in the preamble to this Lease.

 

(cxxxi)   “Lease
Assignment Date” means August 15, 2006.

 

(cxxxii)   “Lease Year”
means (A) in the event that the Commencement Date does not occur on January 1,
the period from the Commencement Date through the second December 31
thereafter (such period, the “First Lease Year”),
and (B) each twelve (12) calendar month period commencing on the first January 1
following the First Lease Year and on each anniversary thereof, and in the case
of the 

 

16

 

calendar year in which the term of this Lease
shall expire, so much of such calendar year as shall fall within the term of
this Lease.

 

(cxxxiii)   “Legal
Requirements” means all Laws and Regulations and all Applicable
Judgments.

 

(cxxxiv)   “Lending
Institution” means (A) a savings bank, savings and loan
association, commercial bank or trust company (whether acting individually or
in a fiduciary capacity) or a Control Affiliate of the foregoing, (B) an
insurance company, (C) a real estate investment trust, a trustee or issuer
of collateralized mortgage obligations, a loan conduit, or other similar
investment entity which is listed on the New York, American Stock Exchange or
other regional exchange (or their respective successors), (D) a federal,
state, municipal or secular employee’s welfare, benefit, pension or retirement
fund, a religious, educational or eleemosynary institution, any governmental
agency or entity insured by a governmental agency, a credit union, trust or
endowment, (E) any combination of the foregoing entities, (F) any
other Person approved by Landlord, such approval not to be unreasonably
withheld that (1) shall have a business office in Manhattan and be subject
to the jurisdiction of the courts of the State of New York, (2) shall be
subject to the supervision of the Comptroller of the Currency of the United
States, the federal Securities and Exchange Commission, the Insurance
Department or the Banking Department or the Comptroller of the State of New
York, the Board of Regents of the University of the State of New York, or the
Comptroller of the City or any federal, state or municipal agency or public
benefit corporation or public authority advancing or assuring mortgage loans or
making payments which, in any manner, assist in the financing, development,
operation and maintenance of improvements, (3) shall have a net worth of
not less than One Hundred Million Dollars ($100,000,000) and net assets of not
less than Two Hundred Fifty Million Dollars ($250,000,000) (as such amounts
shall be Adjusted for Inflation on an annual basis from December 12, 2001)
at the time of the initial determination of its status as a Lending
Institution, (4) is not a Related Entity of Tenant, and (5) is not a
Prohibited Person, or (G) any other Person satisfying the conditions of
clauses (1) through (5) above.

 

(cxxxv)   “Letter of
Credit” means a clean, irrevocable and unconditional letter of
credit, in form and content reasonably satisfactory to Landlord, issued by and
drawn upon any Issuing Bank.

 

(cxxxvi)   “Lobby
Sublease Space” has the meaning set forth in Section 34.1(c) hereof.

 

(cxxxvii)   “Lobby
Sublease Space Adjusted Gross Revenue” has the meaning set forth in Section 34.2(c) hereof.

 

(cxxxviii)   “Major
Alteration” has the meaning set forth in Section 9.5(a) hereof.

 

17

 

(cxxxix)   “Major
Contractor” has the meaning set forth in Section 9.6(b)(ii) hereof.

 

(cxl)   “Manager”
means the manager of any portion of the Common Elements under a management
agreement.

 

(cxli)   “Modification”
has the meaning set forth in Section 13.9
hereof.

 

(cxlii)   “Mortgage”
means any mortgage that constitutes a lien on Tenant’s interest in this Lease
and the leasehold estate created hereby.

 

(cxliii)   “Mortgage
Recording Tax” means any mortgage recording tax under Article 11
of the New York State Tax Law, or any successor statute thereto, as the same
may now or hereafter be amended, and any New York City mortgage recording tax.

 

(cxliv)   “Mortgage
Recording Tax Savings” means any savings, as provided in Section 3.4 hereof, realized by Tenant on account of
Mortgage Recording Tax.

 

(cxlv)   [INTENTIONALLY OMITTED]

 

(cxlvi)   [INTENTIONALLY OMITTED]

 

(cxlvii)   [INTENTIONALLY OMITTED]

 

(cxlviii)   [INTENTIONALLY OMITTED]

 

(cxlix)   “Nonadverse
Structural Effect” means any effect of any Alteration on any
Structural Component that, taken together with the totality of the remedial
measures to be taken in respect of such Alteration, will not have more than an
insignificant adverse effect on such Structural Component at the completion of
the Alteration.

 

(cl)   “Nondisturbance
Agreement” has the meaning set forth in Section 13.2(b) hereof.

 

(cli)   [INTENTIONALLY OMITTED]

 

(clii)   “NYCEDC”
means the New York City Economic Development Corporation or any successor in
function.

 

(cliii)   “NYTB”
has the meaning set forth in the preamble to this Lease.

 

(cliv)   “NYTC”
means The New York Times Company.

 

(clv)   [INTENTIONALLY OMITTED]

 

18

 

(clvi)   [INTENTIONALLY OMITTED]

 

(clvii)   [INTENTIONALLY OMITTED]

 

(clviii)   “Obligations”,
and words of like import, mean covenants to pay Charges and other sums payable
hereunder and perform acts or fulfill obligations hereunder, as applicable, and
all of the other covenants, agreements, terms, conditions, limitations,
exceptions and reservations contained in this Lease and the schedules and
exhibits attached hereto.  The terms “Tenant’s Obligations” and “Landlord’s
Obligations”, and words of like import, mean the Obligations of this
Lease which are imposed upon and are to be performed, observed or complied with
by Tenant or by Landlord, as the case may be.

 

(clix)   “Occupied
Square Foot” means (A) each Rentable Square Foot of the Demised
Premises, and (B) with respect to the Lobby Sublease Space, each Rentable
Square Foot within the Lobby Sublease Space.

 

(clx)   “Office PILOT”
means (a) the rate set forth under “Office PILOT” on Schedule 1 attached
hereto multiplied by (b) the number of Taxable Square Feet, exclusive of
any Taxable Square Feet with respect to which Retail PILOT is being paid.

 

(clxi)   “Office Space”
means all Taxable Square Feet other than that which is attributable to the
Retail Space.

 

(clxii)   “Operative
Agreements” means (A) all Condominium Documents, and (B) the
applicable building management agreement.

 

(clxiii)   “Organized
Crime Figure” means any Person (A) who has been convicted in a
criminal proceeding for a felony or any crime involving moral turpitude or that
is an organized crime figure or is reputed to have substantial business or
other affiliations with an organized crime figure, or (B) who, directly or
indirectly controls, is controlled by, or is under common control with, a
Person who has been convicted in a criminal proceeding for a felony or any
crime involving moral turpitude or that is an organized crime figure or is
reputed to have substantial business or other affiliations with an organized
crime figure.  The determination as to
whether any Person is an organized crime figure or is reputed to have
substantial business or other affiliations with an organized crime figure shall
be within the sole discretion of Landlord, which discretion shall be exercised
in good faith; provided, however, that such Person shall not be
deemed a Prohibited Person if the City, having actual knowledge that such
Person meets the criteria set forth in clauses (A) or (B) above of
this definition, entered into a contract and is then doing business with such
Person.

 

(clxiv)   “Overdue
Payment” has the meaning set forth in Section 3.7(c) hereof.

 

(clxv)   [INTENTIONALLY OMITTED]

 

19

 

(clxvi)   [INTENTIONALLY OMITTED]

 

(clxvii)   [INTENTIONALLY OMITTED]

 

(clxviii)   [INTENTIONALLY OMITTED]

 

(clxix)   [INTENTIONALLY OMITTED]

 

(clxx)   [INTENTIONALLY OMITTED]

 

(clxxi)   [INTENTIONALLY OMITTED]

 

(clxxii)   [INTENTIONALLY OMITTED]

 

(clxxiii)   [INTENTIONALLY OMITTED]

 

(clxxiv)   “Percentage
Allocation” has the meaning set forth in the Site 8 South LADA.

 

(clxxv)   “Percentage
Rent” means the amounts specified as Percentage Rent and payable by
Tenant pursuant to Section 3.2
and Article 34 hereof.

 

(clxxvi)   “Percentage
Rent Report” has the meaning set forth in Section 3.2(c) hereof.

 

(clxxvii)   “Permitted
Developer” means a legal entity composed only of NYTC or its
wholly-owned, single-purpose Control Affiliates.

 

(clxxviii)   “Permitted
Disposition” has the meaning set forth in Section 13.10(d) hereof.

 

(clxxix)   “Permitted
Encumbrances” means (A) the matters described in Exhibit G attached hereto, (B) any other
encumbrance on the Property expressly agreed to in writing by the parties
hereto and, subject to Section 3.17 hereof, any violation that will, by
its nature, be cured or otherwise rendered inconsequential due to the
demolition of the Existing Improvements (as defined in the Initial Ground
Lease), and (C) any existing matters of record recorded since December 12,
2001.

 

(clxxx)   “Permitted
Transferee” means a Person who (A) either (1) directly
and/or together with its Control Affiliates, owns and/or manages, and has not
less than five (5) years’ experience in the ownership and/or management
of, at least five million (5,000,000) square feet of office space or (2) retains
a qualified manager having the qualifications set forth in clause (A)(1),
above, (B) is of sufficient financial condition to perform the obligations
to be assumed by such proposed assignee (Landlord having been furnished with
evidence reasonably satisfactory to Landlord of such financial condition) and (C) is
not a Prohibited Person.

 

20

 

(clxxxi)   “Permitted
Use” has the meaning set forth in Section 7.1(a) hereof.

 

(clxxxii)   “Person”
means (A) an individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association or other
entity, (B) any federal, state, county or municipal government (or any
bureau, department, agency or instrumentality thereof), and (C) any
fiduciary acting in such capacity on behalf of any of the foregoing.

 

(clxxxiii)   “PILOMRT”
means the payments in lieu of Mortgage Recording Tax payable by Tenant to
Landlord pursuant to Section 3.4(b) hereof.

 

(clxxxiv)   [INTENTIONALLY OMITTED]

 

(clxxxv)   [INTENTIONALLY OMITTED]

 

(clxxxvi)   “PILOT”
means the payments in lieu of real estate taxes payable by Tenant to Landlord pursuant
to Section 3.1 hereof.

 

(clxxxvii)   “PILOT Year”
means (A) in the event that the Delivery Date does not occur on January 1,
the period from the Delivery Date through the second December 31
thereafter (such period, the “First PILOT Year”),and
(B) each twelve (12) calendar month period commencing on the first January 1
following the First PILOT Year and on each anniversary thereof.

 

(clxxxviii)   “Possession”
means good and indefeasible leasehold title to, and actual vacant occupancy and
possession of, all of the Property, free and clear of all leases, licenses,
tenancies, occupancies, liens or other similar encumbrances, and any claims to
or rights of others attaching to the Property, except Permitted Encumbrances.

 

(clxxxix)   “Prime Rate”
means the fluctuating annual interest rate announced publicly by Citibank,
N.A., or any successor, at its headquarters in New York City, as its base
commercial lending rate, as the same may change from time to time.

 

(cxc)   “Principal”
means, with respect to any Person, (A) any director or the president, any
vice president, the treasurer, or the secretary thereof if such Person is a
corporation, (B) any general partner of a partnership or managing member
of a limited liability company, or (C) any shareholder, limited partner,
member or other Person having a direct or indirect economic interest in such
Person, whether beneficially or of record, in excess of ten percent (10%) of
all of the issued and outstanding shares, partnership interests, limited
liability company interests or other ownership interests of such Person.  In calculating the percentage interest of any
shareholder, partner, member or other beneficially interested Person referred
to in the prior sentence, the interest in the equity of any affiliate of such
shareholder, partner, 

 

21

 

member or beneficially interested Person
shall be attributed to such shareholder, partner, member or beneficially
interested Person.

 

(cxci)   “Pro Rata
Cost” has the meaning set forth in Section 30.4(b)(xii)
hereof.

 

(cxcii)   “Production
Architect” means any Architect proposed by Tenant and approved (or
deemed approved) by Landlord pursuant to Section 9.6(a) hereof
as the production architect working in affiliation with the Design Architect.

 

(cxciii)   “Prohibited
Person” means (A) any Person (1) that is in default after
notice and beyond any applicable cure period, of such Person’s obligations
under any material written agreement with the City, the State or any of their instrumentalities,
or (2) that directly controls, is controlled by, or is under common
control with a Person that is in default after notice and beyond any applicable
cure period, of such Person’s obligations under any material written agreement
with the City, the State or any of their instrumentalities, unless, in each
instance, such default or breach either (x) has been waived in writing by
the City, the State or any of their instrumentalities as the case may be or (y) is
being disputed in a court of law, administrative proceeding, arbitration or
other forum or (z) is cured within thirty (30) days after a determination
and notice to Tenant from Landlord that such Person is a Prohibited Person as a
result of such default; (B) any Person that is an Organized Crime Figure; (C) any
government, or any Person that is directly or indirectly controlled (rather
than only regulated) by a government, that is finally determined to be in
violation of (including, but not limited to, any participant in an
international boycott in violation of) the Export Administration Act of 1979,
as amended, or any successor statute, or the regulations issued pursuant
thereto, or any government that is, or any Person that, directly or indirectly,
is controlled (rather than only regulated) by a government that is subject to
the regulations or controls thereof; (D) any government, or any Person
that, directly or indirectly, is controlled (rather than only regulated) by a
government, the effects or the activities of which are regulated or controlled
pursuant to regulations of the United States Treasury Department or executive
orders of the President of the United States of America issued pursuant to the
Trading with the Enemy Act of 1917, as amended; (E) any Person that is in
default in the payment to the City of any real estate taxes, sewer rents or
water charges totaling more than $10,000, unless such default is then being
contested in good faith in accordance with applicable Legal Requirements or
unless such default is cured within thirty (30) days after a determination and
notice to Tenant from Landlord that such Person is a Prohibited Person as a
result of such default; or (F) any Person (1) that has solely owned,
at any time during the 3-year period immediately preceding a determination of
whether such Person is a Prohibited Person, any property which, while in the
ownership of such Person, was acquired by the City by in rem tax foreclosure,
other than a property in which the City has released or is in the process of
releasing its interest pursuant to the Administrative Code of the City, or (2) that,
directly or indirectly controls, is controlled by, or is under common control
with a person that has owned, at any time in the 3-year period immediately
preceding a determination of whether such Person is a Prohibited Person, any
property which, while in the ownership of such person, was acquired by the 

 

22

 

City by in rem tax foreclosure, other than a
property in which the City has released or is in the process of releasing its
interest to such person pursuant to the Administrative Code of the City.

 

(cxciv)   “Project
Agreement” means that certain Site 8 South Project Agreement, dated
as of December 12, 2001, by and among ESDC, 42DP, the City, NYTB, FC Lion
LLC and NYT Real Estate Company LLC, and any amendments thereto.

 

(cxcv)   “Project
Documents” has the meaning set forth in the recitals of this Lease.

 

(cxcvi)   “Project
Participants” means (A) Tenant and Control Affiliates of
Tenant, (B) the Condominium Association, and (C) any Manager.

 

(cxcvii)   “Property”
means the Land and the Improvements.

 

(cxcviii)   [INTENTIONALLY OMITTED]

 

(cxcix)   [INTENTIONALLY OMITTED]

 

(cc)   “Public
Parties” means 42DP, ESDC, the City and NYCEDC.

 

(cci)   “Public Party
Expenses” has the meaning set forth in the Site 8 South LADA.

 

(ccii)   “Purchase
Option” has the meaning set forth in Section 5.1(a) hereof.

 

(cciii)   “Purchase
Option Closing Date” has the meaning set forth in Section 5.1(a) hereof.

 

(cciv)   “Purchase
Option Notice” has the meaning set forth in Section 5.1(a) hereof.

 

(ccv)   “Purchase
Price” means Ten Dollars ($10).

 

(ccvi)   “Purchaser”
has the meaning set forth in Section 5.1(d) hereof.

 

(ccvii)   “Qualified
Certifying Party” means with respect to any Person that is a
partnership or limited liability company, a member or general partner thereof,
or in the case of a Person or general partner that is a corporation, the
President, Vice President, Chief Financial Officer or Treasurer of such Person
or general partner.

 

(ccviii)   [INTENTIONALLY OMITTED]

 

23

 

(ccix)   “Recognized
Mortgage” means a Mortgage (A) that is held by a Lending
Institution, (B) that complies with the provisions of this Lease, and (C) a
copy of which has been delivered to Landlord, together with a certification of
a Qualified Certifying Party of Tenant confirming that the copy is a true and
complete copy of such Mortgage and giving the name and address of the mortgagee
thereunder.

 

(ccx)   “Recognized
Mortgagee” means the holder of a Recognized Mortgage.

 

(ccxi)   “Related
Entity” means, as to any Person, any other Person that controls, is
controlled by, or is under common control with, such Person; for the purposes
of this definition, “control” (and its correlative meanings, “controlled by”
and “under common control with”) means (A) direct or indirect ownership of
more than fifty percent (50%) of the outstanding voting capital stock of a
corporation or more than fifty percent (50%) of the beneficial interests of any
other entity or (B) the possession, directly or indirectly, of the power
to direct or cause the direction of  the
business decisions of such corporation or other entity.

 

(ccxii)   “Rentable
Square Feet” or “Rentable Square Foot”
means rentable square footage of the Improvements, as determined in accordance
with the Standard Method for Measuring Floor Area in Office Buildings ANSI
Z65.1-1996), as promulgated by the Building Owners and Managers Association
(BOMA) International or any successor entity.

 

(ccxiii)   “Replacement
Design Architect” has the meaning set forth in Section 9.6(a)(i) hereof.

 

(ccxiv)   “Replacement
Design Architect Approval Criteria” has the meaning set forth in Section 9.6(a)(i) hereof.

 

(ccxv)   “Restoration”
has the meaning set forth in Section 11.1(a) hereof.

 

(ccxvi)   “Restoration
Funds” has the meaning set forth in Section 11.2(a) hereof.

 

(ccxvii)   “Restore”
has the meaning set forth in Section 11.1(a) hereof.

 

(ccxviii)   “Retail PILOT”
means (A) the rate set forth under “Retail PILOT” in Schedule 1
attached hereto multiplied by (B) the sum of (1) the number of gross
square feet of above-grade Retail Space, (2) the number of gross square
feet of below-grade Revenue Producing Retail Space for which a Taxable Square
Feet Delivery Date has occurred, and (3) if (and for so long as) the Lobby
Sublease Space is used for retail purposes, Tenant’s Percentage Allocation of
the number of gross square feet of the Lobby Sublease Space (collectively “Taxable Retail Square Feet”).

 

24

 

(ccxix)   “Retail Space”
means (A) any portion of the Demised Premises to be used for retail
purposes or any purposes ancillary thereto, 
and (B) with respect to Tenant’s obligations in connection with
Retail PILOT, the Lobby Sublease  Space.

 

(ccxx)   “Revenue-Producing
Retail Space” means that portion of the Retail Space leased or
otherwise demised to a Subtenant, which space is being used for the selling of
goods, merchandise or services.

 

(ccxxi)   [INTENTIONALLY OMITTED]

 

(ccxxii)   “Roof Top
Garden Space” shall mean up to 10,000 Square Feet of space on the
floor designated as the 53rd floor of the Building, as shown on, and in
conformity with, the schematic design plan drawing listed on Exhibit I-1
attached to the Initial Ground Lease as numbered A1053.

 

(ccxxiii)   “Roof Top
Mechanical Space” means all the mechanical space located on and
above the 52nd floor of the Improvements (as shown on the
schematic design plan drawings set forth on Exhibit I-1 attached to the
Initial Ground Lease) (it being understood that the space on and above such 52nd floor of the Improvements shall only be used
for (A) housing mechanical equipment, (B) siting the Roof Top Garden
Space and (C) the development of the Roof Top Garden Improvements (as
defined in the Initial Ground Lease)).

 

(ccxxiv)   [INTENTIONALLY OMITTED]

 

(ccxxv)   [INTENTIONALLY OMITTED]

 

(ccxxvi)   [INTENTIONALLY OMITTED]

 

(ccxxvii)   “Scheduled
Expiration Date” means the date set forth in Section 2.1
hereof as the originally scheduled Expiration Date.

 

(ccxxviii)   “Scheduled
PILOT Conversion Date” means December 31, 2032.

 

(ccxxix)   [INTENTIONALLY OMITTED]

 

(ccxxx)   “Security
Deposit” has the meaning set forth in Section 10.9(a) hereof.

 

(ccxxxi)   “Severance
Subleases” means this Lease, the Existing NYTC Sublease, the FC
Office Sublease, the FC Retail Sublease, any New Office Subleases (as defined
in the FC Office Sublease) and any new leases entered into pursuant to Section 31.6
of any of the foregoing.

 

(ccxxxii)   “Site 8 South
LADA” means that certain Site 8 South Land Acquisition and
Development Agreement, dated as of December 12, 2001, 

 

25

 

entered into by 42DP, ESDC and NYTB, as
amended by First Amendment to Site 8 South Land Acquisition and Development
Agreement, dated as of February 14, 2003 by 42DP, ESDC and NYTB.

 

(ccxxxiii)   “Site 8 South
Subway Agreement” means that certain Subway Entrance Agreement,
dated as of December 12, 2001, among Landlord, The New York City Transit
Authority, 42DP and The City of New York.

 

(ccxxxiv)   “Site
Acquisition Costs” has the meaning set forth in the Site 8 South
LADA.

 

(ccxxxv)   “Square Feet”
or “Square Foot” means square footage computed
with reference to the gross square footage of the Improvements, above grade,
measured from the outside of the exterior walls for each floor and including,
without limitation, mechanical space (other than the Roof Top Mechanical
Space), floor cutouts for ducts, interior partition walls and loading
areas.  Because the Improvements include
a double curtain wall (i.e., an interior glass curtain wall and an exterior
screen curtain wall), “exterior walls” for purposes of this definition means
the inner glass curtain wall of the Improvements, as long as and to the extent
that there is no usable floor area between the two components of the curtain
wall.

 

(ccxxxvi)   “Stabilized
Lease Year” has the meaning set forth in Section 14.3(g) hereof.

 

(ccxxxvii)   “Structural
Alteration” has the meaning set forth in Section 9.5(a) hereof.

 

(ccxxxviii)   “Structural
Component” means, in respect of the Improvements, (A) the roof,
(B) exterior walls and (C) any load-bearing member, including
load-bearing columns and slabs.

 

(ccxxxix)   “Sublease”
means any sub-sublease, license, concession, occupancy or other agreement
pursuant to which a Subtenant occupies or otherwise uses all or any portion of
the Demised Premises.

 

(ccxl)   “Submission
Date” has the meaning set forth in Section 16.2(b)(iv) hereof.

 

(ccxli)   “Substantial
Casualty” means a Casualty that would require a Restoration the cost
of which is greater than eighty percent (80%) of the replacement cost of the
Improvements.

 

(ccxlii)   “Substantial
Completion Date” means the Substantial Completion Date determined in
accordance with the Initial Ground Lease.

 

(ccxliii)    “Substantially
All Of” has the meaning set forth in Section 12.1(a) hereof.

 

26

 

(ccxliv)   “Subtenant”
means any space tenant, subtenant, operator, licensee, franchisee,
concessionaire or other occupant of the Demised Premises (or any portion
thereof).

 

(ccxlv)   “Taking”
means, other than in respect of the Condemnation, a taking, or voluntary
conveyance, of title to, or any interest in, the Property, the Demised Premises
or the Common Elements, or any part thereof, or of the right to use all or any
part thereof pursuant to, as a result of, in lieu of or in anticipation of the
exercise of the right of condemnation, expropriation or eminent domain, and
upon such a Taking, the Property, the Demised Premises or the Common Elements,
or such part thereof, shall be deemed to have been “taken”.

 

(ccxlvi)   “Taxable
Retail Square Feet” has the meaning set forth in Section 1.1(a)(ccxviii) hereof, the definition of
Retail PILOT.

 

(ccxlvii)   “Taxable
Square Feet” means, as determined pursuant to Section 3.1(a)(i)(B) hereof,
the sum of: (A) the total number of Square Feet comprising the Demised
Premises (as set forth in the Total Taxable Square Feet Certificate or, as of
the date of its approval or deemed approval, the most recent Tenant’s TSF
Certificate), (B) the number of Allocated Square Feet (as set forth in the
Total Taxable Square Feet Certificate), (C) any below-grade Taxable Retail
Square Feet demised to Tenant pursuant to this Lease (as set forth in the Total
Taxable Square Feet Certificate or, as of the date of its approval or deemed
approval, the most recent Tenant’s TSF Certificate) and (D) the total
number of Square Feet comprising the Roof Top Garden Space; “Taxable Square
Feet” explicitly excludes the Roof Top Mechanical Space.

 

(ccxlviii)   [INTENTIONALLY OMITTED]

 

(ccxlix)   “Tenant”
has the meaning set forth in the preamble to this Lease.

 

(ccl)   “Tenant’s
Obligations” has the meaning set forth in Section 1.1(c)(clviii)
hereof, the definition of Obligations.

 

(ccli)   “Tenant’s
Sublet Notice” has the meaning set forth in Section 13.2(b)(vii) hereof.

 

(cclii)   “Tenant’s
Subway Improvements” has the meaning set forth in the Initial Ground
Lease.

 

(ccliii)   “Tenant’s TSF
Certification” has the meaning set forth in Section 3.1(a)(i)(B)(2) hereof.

 

(ccliv)   “Termination
Notice” has the meaning set forth in Section 14.2
hereof.

 

27

 

(cclv)   “Theater
Management Entity” means The New 42nd Street, Inc. or any other not-for-profit
organization which promotes, operates and/or oversees one or more historic
theaters within the 42nd Street Project.

 

(cclvi)   “Theater
Surcharge” has the meaning set forth in Section 3.5(a) hereof.

 

(cclvii)   “Theater
Surcharge Commencement Date” has the meaning set forth in Section 3.5(b) hereof.

 

(cclviii)   “Theater
Surcharge Report” has the meaning set forth in Section 3.5(d) hereof.

 

(cclix)   “Total SAC
Amount” means the total of all Site Acquisition Costs.

 

(cclx)   “Total
Taxable Square Feet” means, as of the Lease Assignment Date, the sum
of (1) 1,380,000 Square Feet, (2) the total number of Square Feet of
Discretionary Inside Mechanical Space within the Improvements, and (3) the
number of below-grade Taxable Retail Square Feet, all as set out in the Total
Taxable Square Feet Certificate.

 

(cclxi)   “Total
Taxable Square Feet Certificate” means a certification delivered in
accordance with Section 32.1(a)(iii) of the Initial Ground Lease,
setting forth as of the Substantial Completion Date (A) the Total Taxable
Square Feet of the Improvements, and (B) the Taxable Square Feet
comprising each Demised Premises (under each Severance Sublease), which shall
be comprised of (1) the number of Taxable Square Feet, above-grade,
situated within the applicable Demised Premises, (2) an amount equal to
the product of (a) the number of Square Feet comprising the Common
Elements and (b) a percentage equal to the Common Interest (as defined in
the Condominium Declaration) attributed to the condominium unit comprising the
applicable Demised Premise (such product, the “Allocated
Square Feet”), and (3) any then identified below-grade Taxable
Retail Square Feet (as defined in the Initial Ground Lease), and (4) the
Square Feet comprising the Roof Top Garden Space.

 

(cclxii)   “Transaction
Price” means $85,560,000.

 

(cclxiii)   “Transfer”
has the meaning set forth in Section 13.1(a) hereof.

 

(cclxiv)   “Unavoidable
Delay(s)” means actual delays (after taking into account all
reasonable measures that are taken or should reasonably have been taken by
Tenant to mitigate the effect of the following) caused by (A) acts of God,
war, sabotage, hostilities, invasion, insurrection, riot, mob violence,
malicious mischief, embargo, enemy action, civil commotion, earthquake, flood,
fire or other casualty, government restriction, strikes, labor troubles,
unknown physical conditions which differ materially from those ordinarily found
to exist and generally recognized as inherent in the construction of office
building in Manhattan and inability to procure 

 

28

 

labor, equipment, materials or supplies
(exclusive of delays inherent in the ordering of long-lead items) which are not
attributable to the improper acts or omissions of Tenant or its affiliates, (B) any
litigation (not instituted, financed or supported by either of Tenant any
Related Entity of Tenant) which results in an injunction prohibiting or
otherwise delaying the commencement of any Alteration or the continuation of
such Alteration, and (C) any other matter beyond the reasonable control of
Tenant and not normally associated with a project of the nature described herein.  Inability (1) to pay a sum of money or (2) to
obtain or to timely obtain (a) any permits or certificates from applicable
governmental authorities or (b) financing from a lender, shall not
constitute Unavoidable Delay.  The period
of delay caused by any occurrence of Unavoidable Delay shall not be deemed to
commence any earlier than ten (10) days before the date Landlord receives
notification from Tenant of such occurrence; provided, however,
that no such notification shall be valid unless Tenant shall substantiate the
basis for any claim of Unavoidable Delay made therein to the reasonable
satisfaction of the Public Parties within twenty (20) days thereafter.  Tenant shall advise Landlord in such notice
as to the measures taken or proposed to be taken by Tenant to mitigate the
delay caused by such occurrence of Unavoidable Delay and thereafter to keep
Landlord reasonably informed as to the status of such measures, and notify
Landlord as to the termination of the occurrence of Unavoidable Delay within ten
(10) days thereafter; provided, however, Tenant’s failure to
provide any such notice of termination shall not prejudice Tenant’s rights to
claim Unavoidable Delay.

 

(cclxv)   “Venue”
has the meaning set forth in Section 30.4(b) hereof.

 

(cclxvi)   “Verified
Statement” means a statement in reasonable detail and in a
reasonable form prescribed by Landlord, prepared in a consistent manner and
certified as being true, correct and complete by a Qualified Certifying Party
or the Certified Public Accountants, unless such statement pertains to an
annual (or longer) period, in which case it shall be so certified by both a
Qualified Certifying Party and the Certified Public Accountants.

 

(cclxvii)   “Zoning
Resolution” means the Zoning Resolution of The City of New York or
any successor statute, as the same may be amended or otherwise modified.

 

Section 1.2            Rules of Construction.  The following rules of construction
shall be applicable for all purposes of this Lease and all agreements
supplemental hereto, unless the context otherwise requires:

 

(a)   The terms “hereby”, “hereof”,
“hereto”, “herein”, “hereunder”
and any similar terms shall refer to this Lease, and “hereafter” shall mean after, and “heretofore” shall mean before, the date of
this Lease.

 

(b)   Words of the masculine,
feminine or neuter gender shall mean and include the correlative words of the
other genders and words importing the singular number shall mean and include
the plural number and vice versa.

 

29

 

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

 

(d)   This Lease shall be governed
by, and construed in accordance with, the law of the State of New York
applicable to agreements to be performed wholly within such State.

 

(e)   Whenever a party hereto
“shall” perform (or cause to be performed) any Obligations hereunder, such
performance shall be at such party’s sole cost and expense unless otherwise
expressly provided.

 

Section 1.3            Captions/Table of Contents.  The captions under the article and section
numbers and the table of contents of this Lease are for convenience and
reference only and in no way define, limit or describe the scope or intent of
this Lease nor in any way affect this Lease.

 

30

 

ARTICLE II

LEASE OF DEMISED PREMISES AND COMMON
ELEMENTS; TERM OF LEASE

 

Section 2.1            Demised Premises and
Common Elements; Term.

 

(a)   Demise
and Lease.  (i)  During the term
described in Section 2.1(b) hereof,
Landlord hereby demises and leases to Tenant, and Tenant hereby hires and takes
from Landlord, pursuant to the provisions of this Lease, the Demised Premises,
together with an undivided interest in the Common Elements equal to the Common
Interest (as defined in the Condominium Declaration) attributable to the
condominium unit(s) comprising the Demised Premises under the Condominium
Declaration), subject only to Permitted Encumbrances.

 

(ii)   During the term of this Lease, Landlord shall
not create or consent to any encumbrance or permit any lien on the Property or
the leasehold interest under the Ground Lease (other than an encumbrance or
lien resulting from the prosecution by Landlord of any remedy for the
enforcement of any provision of this Lease) without Tenant’s prior written
consent and, with respect to the Common Elements, the consent of all other
tenants under Severance Subleases.

 

(iii)   Landlord and Tenant acknowledge and
agree:  (A) that the demise set
forth in this Section 2.1(a) is
expressly intended to include all rights and obligations of Landlord under the
Condominium Documents in respect of the Demised Premises and the  interest in the Common Elements appurtenant
thereto so that Tenant is vested with, and assumes, all rights and obligations
of a Unit Owner, as such term is defined in and understood under the
Condominium Documents; (B) except as set forth in this Lease, Landlord has
retained no rights or obligations as a Unit Owner under the Condominium
Documents with respect to the Demised Premises and the Common Elements; and (C) no
action or omission in respect of the Demised Premises or the Common Elements
taken by or on behalf of Tenant, or any Person claiming by, though or under
Tenant, may or will be characterized or treated as a default by Landlord under
any Condominium Document.

 

(b)   Term.  Subject to the terms of Section 2.1(d) hereof, the
leasehold estate granted in Section 2.1(a) hereof
is for a term commencing on the Commencement Date, and ending upon December 11,
2100 or the date on which this Lease shall sooner terminate as hereunder
provided (the “Expiration Date”),
upon and subject to the covenants, agreements, terms, provisions and
limitations herein set forth, all of which covenants, agreements, terms,
provisions and limitations Landlord and Tenant covenant and agree to perform
and observe.

 

(c)   Intentionally
Omitted.

 

(d)   Intentionally
Omitted.

 

Section 2.2            Condition of Demised Premises and Common Elements.  Tenant is fully familiar with the Demised
Premises and Common Elements, the condition thereof and the Permitted Encumbrances,
and Tenant accepts and agrees to lease the same in their then “AS IS” condition
on the Commencement Date and without any representation or warranty, express or
implied, in fact or by law, by 42DP, NYCEDC, ESDC or the City, except as
expressly 

 

31

 

provided in this Lease, and
without recourse to 42DP, NYCEDC, ESDC or the City as to the title thereto, the
nature, condition or usability thereof or the use or uses to which the Demised
Premises and Common Elements or any part thereof may be put, except as
expressly provided in this Lease.

 

Section 2.3            Waiver of Right to Rescind.  Tenant waives any right to rescind this Lease
under Section 223-a of the New York State Real Property Law or under any
present or future statute of similar import then in force and further expressly
waives the right to recover any damages which may result from Landlord’s
failure to deliver possession of the Demised Premises.  Tenant agrees that this Section 2.3 is intended to constitute
“an express provision to the contrary” within the meaning of said Section 223-a.

 

32

 

ARTICLE III

CHARGES AND FEES

 

Section 3.1            PILOT.

 

(a)   Determination
of PILOT.  Tenant covenants and
agrees to pay to Landlord, during the term of this Lease, payments in lieu of
real estate taxes (“PILOT”)
determined as follows:

 

(i)   Prior to Scheduled PILOT Conversion Date.

 

(A)  In
respect of the first PILOT payment period after the Lease Assignment Date
through the day before the Scheduled PILOT Conversion Date, Tenant shall pay to
Landlord an amount, per annum, equal to the lesser of (1) Full Taxes and (2) [a]
the sum of Office PILOT and Retail PILOT for the applicable PILOT Year minus
[b] any Theater Surcharge payable in respect of such applicable PILOT
Year.  Landlord’s calculation of PILOT
shall be binding, absent computational error.

 

(B)   The
number of Taxable Square Feet shall be determined as follows:

 

(1)     The
parties hereto agree that as of the Substantial Completion Date, the Taxable
Square Feet and the Total Taxable Square Feet shall be as set forth in the
Total Taxable Square Feet Certificate provided to Landlord and 42DP on or prior
to the Substantial Completion Date.

 

(2)     Upon
the completion of any Alteration, transfer or other event which would
potentially cause a change in the number of Taxable Square Feet in the Demised
Premises, including, without limitation, the Allocated Square Feet, Tenant
shall:  [a]  cause an Architect, approved (or deemed approved)
by Landlord pursuant to Section 9.6(a) hereof,
to submit an Architect’s Certification to Landlord and Tenant (it being agreed
that such Architect’s Certification shall be deemed approved by Landlord unless
disputed within ten (10) Business Days of receipt thereof by Landlord)
confirming that the number of Taxable Square Feet certified to pursuant to the
Total Taxable Square Feet Certificate, or pursuant to an earlier Architect’s
Certificate provided pursuant to this Section 3.1(a)(i)(B)(2),
is still correct (or, if the number of any of such Square Feet has changed,
setting forth the correct number and the reasons that such number has changed);
and [b] provide to Landlord a certification of Tenant (the “Tenant’s TSF Certification”) setting forth, as of such date (X) the
aggregate number of Square Feet of below-grade space in the Demised Premises
that is Revenue-Producing Retail Space and (Y) the total number of Taxable
Square Feet.  In any event and in
addition to the circumstances described above, on each January 1 and July 1
during the term of this Lease, Tenant shall provide to Landlord a Tenant’s TSF
Certification.

 

(3)     Subject
to Landlord’s right to dispute a Tenant’s TSF Certification pursuant to this Section 3.1(a)(i)(B)(3), each Tenant’s TSF Certification
shall be considered a final and binding determination of the number of Taxable
Square Feet certified therein.  Within
twenty (20) Business Days after the delivery of a Tenant’s TSF Certification,
Landlord may deliver to Tenant a statement (“Landlord’s
TSF Statement”) disapproving such 

 

33

 

Tenant’s TSF
Certification and indicating in reasonable detail (to the extent then
ascertainable by Landlord) the reasons for the disapproval.  In the event that Landlord provides a
Landlord’s TSF Statement, Tenant and Landlord shall attempt to agree upon the
then actual number of Taxable Square Feet. 
In the event that Landlord and Tenant are unable to agree upon the then
actual number of Taxable Square Feet within fifteen (15) Business Days of
Tenant’s receipt of Landlord’s TSF Statement, the disagreement shall be
referred to arbitration in accordance with Section 16.2 hereof. 
Failure of Landlord to provide a Landlord’s TSF Statement within the
indicated period shall be deemed approval of the number of Taxable Square Feet
set forth in the applicable Tenant’s TSF Certification.  Notwithstanding any other term in this Section 3.1(a)(i)(B) to the contrary, it is
acknowledged and agreed that for the purpose of calculating PILOT, no
Architect’s Certification submitted under this Section 3.1(a)(i)(B) shall
reduce the number of Total Taxable Square Feet to fewer than the number
determined pursuant to clause (1) of this Section 3.1(a)(i)(B).

 

(ii)       On and After Scheduled PILOT
Conversion Date.  On and after the
Scheduled PILOT Conversion Date through the expiration of the term of this
Lease, Tenant shall pay to Landlord an amount, per annum, equal to Full Taxes.

 

(b)   PILOT
Payment.

 

(i)        From and after the first
PILOT payment period after the first of the earlier of January 1 or July 1
to occur after the Lease Assignment Date, PILOT shall be payable in advance, in
equal semi-annual installments, on or prior to January 1 and July 1
of each and every Lease Year.  Upon the
Expiration Date or earlier termination of this Lease, Landlord shall repay or
provide an appropriate credit for any prepaid PILOT in respect of the period
after such Expiration Date or earlier termination of this Lease.

 

(ii)       Except as qualified by the
immediately following sentence, for so long as any portion of Landlord’s
obligation to reimburse Excess Site Acquisition Costs (Allocated) to Tenant
shall remain owing and unpaid, Tenant’s payment of PILOT shall be in the form
of (x) a credit against eighty-five percent (85%) of the PILOT then due
and payable pursuant to Section 3.1
hereof, in reimbursement of the Excess Site Acquisition Costs (Allocated) and (y) a
payment of the remaining fifteen percent (15%) as otherwise required in
accordance with the provisions of this Lease. 
The offset described in the immediately preceding sentence is available
to Tenant if, and only if:  (A) no
Event of Default has occurred and is continuing hereunder (but such right shall
be immediately reinstated, on a prospective basis only, upon Tenant’s curing of
such Event of Default); (B) the PILOT payment required by this Section 3.1 is made in a timely manner; and (C) notice
is provided to Landlord with each payment of PILOT setting forth the
outstanding balance of the unreimbursed Excess Site Acquisition Costs
(Allocated), such notice to be substantially in the form set forth in Exhibit H attached hereto.  If such conditions are not fulfilled, then
Tenant shall pay 100% of the PILOT then due and payable and the provisions of Section 3.04 of the Site 8 South LADA shall apply to
Landlord’s obligation to reimburse the Excess Site Acquisition Costs
(Allocated).

 

34

 

(c)   Tax Contest Proceeding.

 

(i)        Tenant shall have the
exclusive right (but shall be under no obligation) to seek and agree upon
reductions in the valuation of the condominium unit(s) comprising the
Demised Premises, as assessed for real property tax purposes and to prosecute
any action or proceeding in connection therewith by appropriate proceedings, in
accordance with the Charter and Administrative Code of the City of New York, as
it may be amended, including, without limitation, the right to prosecute
administrative and/or judicial proceedings and judicial review and appeal of any
decision which Tenant, in its sole discretion, considers adverse, and the right
to settle or compromise any such proceeding.

 

(ii)       If Tenant institutes a tax
assessment reduction or other action or proceeding pursuant to Section 3.1(c)(i) hereof to reduce Full Taxes,
Tenant shall nevertheless continue to pay, during the pendency of such action
or proceeding, the full amount of PILOT required under Section 3.1(a) hereof
for the applicable period.  If there is a
final determination of any such tax reduction or other action or proceeding in
Tenant’s favor, Tenant shall offset the amount of any PILOT paid to Landlord
under Section 3.1(a) hereof by (A) the
amount by which PILOT paid by Tenant for any applicable period exceeds the
amount of Full Taxes for such period, as so reduced, and (B) interest for
the applicable period to the extent (if any) that such interest would be
payable in comparable circumstances by the applicable taxing authority if the
condominium unit(s) comprising the Demised Premises were not tax exempt,
provided that any such amount (together with such interest, if any) unrecovered
at the expiration of the term of this Lease shall be paid by Landlord to
Tenant.  In the event that there is a tax
protest filed by Tenant or a tax certiorari proceeding filed by Tenant in
respect of the condominium unit(s) comprising the Demised Premises which
is unresolved on the Purchase Option Closing Date, such circumstances shall be
governed by Section 5.1(c)(iv) hereof.

 

(iii)      Landlord shall not be
required to join in any action or proceeding referred to in this Section 3.1(c) unless the provisions of any law, rule or
regulation at the time in effect require that such action or proceeding be
joined in by or brought by and/or in the name of Landlord.  If so required, Landlord shall join and
cooperate in such actions and proceedings or permit them to be brought by
Tenant in Landlord’s name to the extent necessary to permit Tenant to effect
such proceeding, in which case Tenant shall pay all reasonable costs and expenses
incurred by Landlord in connection therewith. 
Such cooperation shall include, without limitation, the execution,
acknowledgment and delivery of any documents or instruments reasonably required
to prosecute, settle or compromise the action or proceeding in question,
provided that Landlord shall not be obligated to incur any liability, cost or
expense in connection therewith unless indemnified by Tenant therefor.

 

Section 3.2            Retail Space Percentage Rent  Calculation of Percentage Rent.  Tenant covenants and agrees to pay to
Landlord, from and after the Commencement Date and through the date that is one
(1) day before the Scheduled PILOT Conversion Date, Percentage 

 

35

 

Rent, determined in accordance
with this Section 3.2(a).  Percentage Rent for any Lease Year shall be
the sum of:

 

(A)    Twenty
percent (20%) of the amount, if any, by which the lesser of (1) Lobby
Sublease Space Adjusted Gross Revenues for such Lease Year and (2) the
product of (x) 0.15 and (y) the Budgeted Lobby Sublease Space
Construction Costs exceeds (3) the product of (x) 0.13 and (y) the
Budgeted Lobby Sublease Space Construction Costs; and

 

(B)    Thirty
percent (30%) of the amount, if any, by which (A) Lobby Sublease Space
Adjusted Gross Revenues for such Lease Year exceeds (B) the product of (1) 0.15
and (2) the Budgeted Lobby Sublease Space Construction Costs.

 

It is agreed that in making the calculation set forth in this Section 3.2(a), in respect of the
Lease Year during which the Lease Assignment Date has occurred, the Lobby
Sublease Space Adjusted Gross Revenues for such Lease Year shall be the Lobby
Sublease Space Adjusted Gross Revenues for such entire Lease Year.

 

(b)   Percentage
Rent Due Dates.  Percentage Rent for
each Lease Year, if any, shall be paid, in arrears, annually to Landlord no
later than February 15 of each Lease Year after the Lease Assignment Date
and shall be accompanied by a Percentage Rent Report.

 

(c)   Percentage
Rent Report.  Tenant shall deliver
annually to Landlord, prior to February 15 of each Lease Year after the
Commencement Date, a report (the “Percentage
Rent Report”) which shall be a Verified Statement and which shall
set forth (i) in detail the amount of the Lobby Sublease Space Adjusted
Gross Revenues for the applicable Lease Year on a monthly, quarterly and annual
basis, (ii) in detail the sources from which the same were derived and the
deductions thereto and (iii) the calculation of Percentage Rent, if any,
for the applicable Lease Year.

 

(d)   Independent
Calculation.  The calculation of the
amount of Percentage Rent for any Lease Year shall be independent of the
calculation for any other Lease Year. 
The acceptance of any Percentage Rent tendered by Tenant shall be
without prejudice to Landlord’s right to any further sums subsequently shown to
be due for the same period.

 

(e)   Accounting
Principles.  All rentals, sums or
other consideration which are to be included in Lobby Sublease Space Adjusted
Gross Revenues shall be included based upon Accounting Principles.

 

(f)    Subleasing
to Related Entity.  No subleasing by
Tenant to a Related Entity shall affect, reduce or impair Tenant’s Obligations
hereunder to pay Percentage Rent and to deliver any Percentage Rent Report as
required hereunder and to make available books and records pursuant to Section 3.13 hereof.  Tenant shall deliver to Landlord promptly
upon the receipt or sending thereof copies of all notices, reports and
communications between Tenant and any such Subtenant which relate to any
financial or sales reports of such Subtenant with respect to the Demised
Premises, any default by Tenant or such Subtenant under the applicable
Sublease, or any other matter material to the financial or sales performance of
either Tenant or such Subtenant under the applicable Sublease.  Any failure by a Subtenant which is a Related
Entity to provide to Tenant the information necessary for Tenant to prepare a
Percentage Rent Report or 

 

36

 

to make
available books and records for review pursuant to Section 3.13 hereof shall be deemed to be an Event of
Default hereunder.  Tenant shall provide
in each Sublease with a Tenant Related Entity that each such Subtenant shall be
subject to the provisions of this Section 3.2
with respect to the preparation and delivery of Percentage Rent Reports and the
provisions of Section 3.13
hereof with respect to making available books and records.  With respect to a Tenant Related Entity that
is a Subtenant in possession and actual use of its Demised Space, nothing in
the foregoing portions of this Section 3.2(f) shall
affect the determination of  the Lobby
Sublease Space Adjusted Gross Revenues derived therefrom as provided in clause
(A)(9) of the definition of Lobby Sublease Space Adjusted Gross Revenues.

 

Section 3.3            [INTENTIONALLY
OMITTED]

 

Section 3.4            Exemption from Mortgage Recording Tax; PILOMRT

 

(a)           Exemption from
Mortgage Recording Tax.  Landlord
shall cooperate with, and cause ESDC to make available to, Tenant an exemption
in respect of Mortgage Recording Tax permitted by reason of the public
ownership of the Property, the Demised Premises and the Common Elements and
ESDC’s participation in the development of the Improvements.  Landlord shall cooperate with Tenant in
structuring Mortgages so as to take advantage of the exemption described in
this Section 3.4(a), which
cooperation shall include arranging for ESDC or an affiliate thereof to act as
the original mortgagee and/or holder thereof if required to enable Tenant to
avail itself of the exemption from Mortgage Recording Tax provided for in this
Lease.

 

(b)           Payment in Lieu of
Mortgage Recording Tax.  Prior to the
recording of any Mortgage with the Office of the Register of the City, New York
County, Tenant shall make a payment of PILOMRT to Landlord in an amount equal
to an amount equal to the Mortgage Recording Tax that would have been payable
upon the recording of such Mortgage if not for the exemption provided under Section 3.4(a) hereof.  Simultaneously with such payment, Tenant shall
deliver to Landlord a certificate from a Qualified Certifying Officer of Tenant
setting forth the maximum principal amount that may be advanced under such
Mortgage to be recorded and Tenant’s calculation of the amount of the PILOMRT
due in respect thereof.  The amount of
the PILOMRT shall be determined by using the Mortgage Recording Tax rates in
effect at the time such Mortgage is recorded.

 

(c)           Notification of Tax
Due.  Tenant shall notify Landlord
within seven (7) Business Days after receipt of notice by Tenant of a
written determination by the appropriate taxing authority that any Mortgage
Recording Tax  is payable by Tenant with
respect to any Mortgage that benefited from the exemption set forth in Section 3.4(a) hereof.  Within twenty-three (23) Business Days after
Tenant sends to Landlord a written notification that any determination by the
appropriate taxing authority is final (a “Final
MRT Notification”) and Tenant, in accordance therewith, has paid to
such taxing authority an amount equal to the Mortgage Recording Tax demanded
(together with evidence thereof), Landlord shall repay to Tenant the amount, if
any, of such Mortgage Recording Tax (but no more than the amount, if any, of
any PILOMRT that Tenant made to Landlord in respect of the recording of the
applicable Mortgage), together with an amount equal to any interest or
penalties imposed on Tenant by the applicable taxing authority for Tenant’s
non-payment, which payment shall be made by Landlord 

 

37

 

prior to the date which is
twenty-three (23) Business Days after the Final MRT Notification.  If Landlord fails to so reimburse Tenant for
the Mortgage Recording Tax within the foregoing period, Tenant shall have the
right to offset the amount of such Mortgage Recording Tax  together with interest at the Interest Rate
from the date Tenant made such Mortgage Recording Tax against the next
installments of Charges coming due pursuant to this Lease.  If as a result of the expiration or
termination of this Lease other than by reason of Tenant’s default Tenant is
unable to recoup the entire Mortgage Recording Tax with interest as aforesaid
by offsetting the same against Charges, Landlord shall reimburse Tenant for any
such amount not so recouped less any amounts due and owing from Tenant to
Landlord hereunder within twenty-three (23) Business Days of the expiration or
termination of this Lease.  Neither
Landlord nor Tenant shall be obligated to contest the decision of any such
authority to deny, revoke or terminate any exemptions or other relief from the
payment of such taxes.  However, should
either party desire to contest any such decision by bringing a lawsuit or
otherwise, it may do so at its own risk and expense, and Landlord shall have
the right to bring such lawsuit in the name of Tenant if Tenant fails to do so
within twenty-three (23) Business Days following written request by
Landlord.    In the event that the
contest of such decision is successful and Landlord has paid the amount of the
Mortgage Recording Tax to Tenant, then Tenant shall, within twenty-three (23)
Business Days after written demand by Landlord, reimburse Landlord in an amount
equal to the applicable Mortgage Recording Tax.

 

Section 3.5            Theater Surcharge.

 

(a)   Calculation
of Theater Surcharge.  Tenant
covenants and agrees to pay to Landlord, for the benefit of the rehabilitation,
maintenance, management and promotion of the historic theaters within the 42nd Street Project Area (which payment shall be
forwarded by Landlord to a Theater Management Entity) an amount equal to $0.15
per Occupied Square Foot per annum (the “Theater
Surcharge”); provided, however, that the Theater
Surcharge shall be Adjusted for Inflation from January 1, 2000.

 

(b)   Triggering
of Theater Surcharge Obligation.  The
Theater Surcharge obligation in respect to any given Occupied Square Foot shall
commence, in respect of each such Occupied Square Foot, upon the earlier to
occur of (1) the commencement of the term of the Sublease demising such
Occupied Square Foot, if any, and (2) actual occupancy of such Occupied
Square Foot for the conduct of business (such earlier date, the “Theater Surcharge Commencement Date”).  The obligation to pay the Theater Surcharge
in respect of a given Occupied Square Foot shall continue until the earliest of
(i) the expiration of the applicable Sublease, if any (it being understood
that the obligations to make payments on account of the Theater Surcharge shall
recommence when the requirements of clause (1) and (2) above are
again satisfied), (ii) the first date on which no entity exists to
exercise the functions of a Theater Management Entity and (iii) the
ninety-ninth (99th) anniversary of the Delivery Date.

 

(c)   Theater
Surcharge Due Dates.  The aggregate
Theater Surcharge for each Lease Year in respect to a given Occupied Square
Foot shall be paid, in advance, annually to Landlord (together with the PILOT
payment due pursuant to Section 3.1(c) hereof)
on or prior to January 1 of such Lease Year and shall be accompanied by a
Theater Surcharge Report (it being agreed that the Theater Surcharge in respect
of any Occupied Square Foot for which Theater Surcharge Commencement Date
occurs after January 1 shall be paid, pro rata, on the basis of the 

 

38

 

actual number
of days in such Lease Year after such Theater Surcharge Commencement Date,
within twenty (20) Business Days after the applicable Theater Surcharge
Commencement Date).  If a Sublease for
any Occupied Square Feet shall terminate on any date which is prior to December 31
of any Lease Year, the Theater Surcharge for such period shall be prorated
accordingly (and, in respect of a Sublease that is terminated unexpectedly
before December 31 of any applicable Lease Year, any Theater Surcharge
paid in respect of the period after such unexpected termination will be deemed
a credit against the payment of Theater Surcharge next due).

 

(d)   Theater
Surcharge Report.  Tenant shall
deliver to Landlord, along with the annual Theater Surcharge payment, a report
(the “Theater Surcharge Report”)
which shall be a Verified Statement and which shall set forth, together with
support adequate to permit Landlord to undertake an informed review in respect
thereof, (i) in detail, the number of Occupied Square Feet in the Demised
Premises that form the basis of the Theater Surcharge calculation, (ii) the
applicable Theater Surcharge Commencement Dates related to each Occupied Square
Foot listed in clause (i) above, (iii) the applicable Theater
Surcharge factor (i.e., $0.15 in the year 2000) as Adjusted for Inflation, and (iv) the
calculation of Theater Surcharge for the applicable Lease Year.

 

(e)   Independent
Calculation.  The calculation of the
amount of Theater Surcharge for any Lease Year shall be independent of the calculation
for any other Lease Year.  The acceptance
of any Theater Surcharge payment tendered by Tenant shall be without prejudice
to Landlord’s right to any further sums subsequently shown to be due for the
same period.

 

(f)    Subleasing
to Related Entity.  No subleasing by
Tenant for the actual occupancy of the demised space to a Tenant Related Entity
shall affect, reduce or impair Tenant’s Obligations hereunder to pay Theater
Surcharge (or the amount thereof) and to deliver a Theater Surcharge Report as
required hereunder.

 

Section 3.6            Administrative Fee.  Tenant covenants and agrees to pay Landlord,
from and after the Commencement Date, in annual payments in advance on January 10
of each year, FIFTEEN THOUSAND DOLLARS ($15,000) per annum (the “Administrative Fee”).  On every fifth (5th) anniversary of the
Delivery Date, the Administrative Fee shall be Adjusted for Inflation in
respect of the next succeeding five-year period.

 

Section 3.7            Prorations; Overdue Amounts.

 

(a)   365/366-Day
Year.  All prorations under this Article III shall be calculated on the
basis of a the actual number of days elapsed in a 365-day year (or 366-day
year, if applicable).

 

(b)   Prorations.  Except as otherwise provided in Section 3.7(c) hereof, if the
Expiration Date is other than the last day of a calendar month, the installment
of Charges for the period in which the Expiration Date occurs shall be prorated
on the basis of the number of days occurring within the period commencing on
the first day of the calendar month in which the Expiration Date occurs and
ending on the Expiration Date.

 

39

 

(c)   Overdue
Amounts.  Additional Charges shall be
payable by Tenant to Landlord in respect of any amounts payable hereunder to
Landlord (including, without limitation, sums advanced by Landlord hereunder to
cure a default by Tenant in the performance of Tenant’s Obligations) which
shall not have been paid on the date the same shall be due and payable (an “Overdue Payment”) together with interest as
follows:  (A) with respect to any
overdue PILOT, the overdue amount shall bear interest at the rate then generally
charged by the City with respect to overdue Full Taxes, and shall be subject to
the same fines and penalties as are assessed by the City with respect to
overdue Full Taxes; provided, however, the imposition or
assessment of interest, fines and penalties for overdue PILOT shall be subject
to the notice and grace periods identical to the notice and grace periods, if
any, from time to time granted by the City with respect to the payment of Full
Taxes in respect of comparable properties and amounts; and (B) with
respect to any other overdue Charges (other than Charges incurred pursuant to Section 14.1(b) hereof), the
overdue amount shall bear interest calculated at the Interest Rate.  Such aforesaid charges shall be due and
payable within twenty (20) Business Days after demand for payment therefor by
Landlord.  No failure by Landlord to
insist upon the strict performance by Tenant of Tenant’s Obligations to pay
such Overdue Payment or interest shall constitute a waiver by Landlord of its
right to enforce the provisions of this Section 3.7
in any instance thereafter occurring. 
The provisions of this Section 3.7
shall not be construed in any way to extend the grace periods or notice periods
with respect to the payment of Charges as provided in Section 14.2(a) hereof.

 

Section 3.8            No Joint Venture.  The fixing of a portion of the Charges to be
paid by Tenant with reference to a percentage of Lobby Sublease Space Adjusted
Gross Revenues shall not cause either party hereto to be deemed to be a partner
or an associate in business with, or responsible in any way for the business
of, the other party hereto.  Landlord, in
its capacity as landlord hereunder, and Tenant further agree that they are not
partners or joint venturers and that they do not stand in any fiduciary
relationship one to the other.

 

Section 3.9            All Charges Treated as Rent.  All PILOT, PILOMRT, Percentage Rent, Theater
Surcharge, Overdue Payments, and other charges, fees and other amounts payable
by Tenant under this Lease shall constitute Charges and, in the event of the
non-payment by Tenant of any of the same when due according to the provisions
of this Lease, Landlord shall have the same rights and remedies in respect
thereof as would be available to Landlord if Charges were rent.  It is expressly agreed by the parties hereto
that no fixed rent is payable under this Lease. 
Moreover, no charges or other amounts are payable pursuant to this Article III for any period prior to
the Lease Assignment Date.

 

Section 3.10         Payments. 
All payments of Charges and other sums required to be paid hereunder to
Landlord shall be in lawful money of the United States of America and shall be
paid to the Collection Agent at the address designated therefor, or to such
other person and/or at such other place as Landlord and the City may jointly
designate from time to time in writing.

 

Section 3.11         Net Lease. 
This Lease shall be deemed and construed to be a “triple net lease”, and
Tenant shall pay to Landlord, absolutely net throughout the term of this Lease,
all Charges and other sums payable hereunder, free of any charges, assessments,
Impositions or deductions of any kind and without abatement, deferment,
reduction, defense, counterclaim, demand, notice, deduction or set-off of any
kind, and under no circumstances or 

 

40

 

conditions, whether now
existing or hereafter arising, or whether beyond the present contemplation of
the parties, shall Landlord be expected or required to make any payment of any
kind whatsoever or be under any other obligation or liability hereunder, except
as otherwise expressly set forth herein. 
All costs, expenses, charges, Impositions and other payments of every
kind and nature whatsoever relating to the Demised Premises and the Common
Elements, or the use, operation or maintenance thereof, which may arise or
become due during or in respect of the term of this Lease after the Lease
Assignment Date shall be paid by Tenant, and Tenant assumes full responsibility
for the condition, operation, repair, alteration, improvement, replacement,
maintenance and management of the Demised Elements and the Common Elements
(which obligations, in the case of Tenant’s Subway Improvements, shall be
governed by the Site 8 South Subway Agreement). 
Under no circumstances or conditions, whether now existing or hereafter
arising, or whether beyond the present contemplation of the parties, shall
Landlord be expected or required to make any payment of any kind whatsoever or
be under any other obligation or liability hereunder except as herein otherwise
expressly set forth.

 

Section 3.12         No Offset. 
Except as expressly provided for herein (including, without limitation,
in Section 5.1(c)(iv) hereof),
no happening, event, occurrence or situation during the term of this Lease,
whether foreseen or unforeseen, and however extraordinary, shall permit Tenant
to quit the Demised Premises or surrender this Lease or shall relieve Tenant
from Tenant’s Obligations, or shall affect this Lease in any way, it being the
intention that the Obligations of Landlord and Tenant hereunder shall be
separate and independent covenants and agreements and that the Charges shall
continue to be payable in all events unless the Obligations to pay the same
shall be terminated pursuant to the express provisions of this Lease.  Tenant covenants and agrees that it will
remain obligated under this Lease in accordance with its terms.

 

Section 3.13         Books and Records.

 

(a)   Right
to Audit.  Tenant shall keep, or
cause to be kept, true and complete books of record and accounts in respect of
matters that are required by this Lease to be reported by Tenant to Landlord or
that are monetary obligations governed by or relating to this Lease and Tenant
Obligations hereunder, including monthly records of Lobby Sublease Space
Adjusted Gross Revenues and records and calculations in respect of Theater
Surcharge.  Such records shall be located
or made available in New York City and shall be maintained as aforesaid for a
period of not less than six (6) years after the end of the applicable
Lease Year to which such records relate. 
Landlord and Landlord’s accountants and other representatives and the
Comptroller of the City (the “Comptroller”)
shall have the right from time to time to conduct a review of Tenant’s books of
record and accounts relating to the relevant matters governed by or relating to
this Lease and Tenant Obligations hereunder (including Lobby Sublease Space
Adjusted Gross Revenues) and Tenant shall cooperate with the performance of
such review.  Each Sublease shall provide
that Landlord and Landlord’s accountants and other representatives and the
Comptroller shall have the right from time to time to conduct a review of such
Subtenant’s books of record and accounts relating to Percentage Rent payments,
and shall require such Subtenant to cooperate with the performance of such
review.  All such reviews shall occur
during regular business hours and upon not less than three (3) days’ prior
written notice.  The cost of such review
shall be borne solely by Landlord, except that if the results of such review
determine that Tenant (or any such Subtenant, as applicable), whether or not
inadvertently, has understated the Percentage Rent, payable to Landlord (or
percentage rent payments payable to Tenant, as 

 

41

 

applicable) by
more than five percent (5%) of what is owed, then Tenant (or such Subtenant in
the case of such percentage rent payments) shall pay or shall reimburse
Landlord on demand for payment of the reasonable costs and expenses involved in
such review.

 

(b)   Incorrect
Payments of Charges.  Should any
audit performed by Landlord, Landlord’s agent or designee disclose that Lobby
Sublease Space Adjusted Gross Revenues were understated or that Tenant
otherwise provided information that led to an underpayment of (or on account
of) Charges, then any underpayments shall be paid to Landlord (i) within
five (5) days after Tenant has received notice of such underpayment from
Landlord, but such payment shall be without prejudice to Tenant’s right to
dispute any such notice of underpayment or (ii) at Tenant’s option, within
five (5) days after resolution of any dispute as to any such
underpayment.  Any underpayment under
this Section 3.13(b) shall
bear interest at the Interest Rate from the date on which the payment first
should have been made to the date such underpayment is paid.  Any overpayment of Charges, after the
resolution of any dispute with respect thereto (together with interest at the
Interest Rate from the date of overpayment to the date such overpayment is
credited or refunded), shall be credited against the next installment(s) of
Charges, provided that any amount unrecovered at the Expiration Date shall be
paid by Landlord to Tenant or if Tenant exercises its option under Article V hereof of this Lease, shall
be allowed as a credit against the Purchase Price.  If the sum of such credit and any other
credits against the Purchase Price exceeds the Purchase Price, then Landlord
shall pay Tenant on the Purchase Option Closing Date the amount by which the
aggregate of all credits against the Purchase Price exceeds the Purchase
Price.  Any dispute as to any payment of
charges or the calculation thereof shall be resolved pursuant to arbitration as
provided in Section 16.2 hereof.

 

(c)   Right
to Prepare Statements.  If Tenant
shall fail to deliver to Landlord any report or Verified Statement required by
this Article III on or prior
to the due date thereof, in addition to any other rights or remedies Landlord
may have under this Lease and without thereby waiving such default by Tenant,
Landlord shall be entitled, after fifteen (15) Business Days’ prior notice to
Tenant if Tenant shall have not cured such default within such period, at
Tenant’s expense, to have such report or Verified Statement prepared by a
certified public accountant selected by Landlord.  Landlord and such certified public accountant
shall have the right to review Tenant’s relevant books and records with respect
to the Property relating to the relevant overdue report or Verified Statement
on demand and to make such copies thereof as either shall reasonably
require.  All fees and expenses incurred
in the preparation of any such overdue Verified Statement or report shall be
payable by Tenant on demand as additional Charges hereunder.

 

(d)   Copies
of Reports.  Tenant shall deliver to
Landlord upon request by Landlord, copies of reports received or given by
Tenant from or to any Subtenant which relate to (1) any financial or sales
reports of such Subtenant or (2) to any other components of Lobby Sublease
Space Adjusted Gross Revenues.

 

(e)   Landlord
and Tenant Contests.  Any statement
prepared by or on behalf of Landlord pursuant to Section 3.13(c) hereof or the results of any audit
conducted by or on behalf of Landlord pursuant to Section 3.13(a) hereof shall be conclusive and
binding upon Tenant unless Tenant notifies Landlord within one hundred eighty
(180) days after receipt thereof that it disputes the correctness of such
statement or results, which notice shall specify the particular 

 

42

 

respects in
which the same is claimed to be incorrect, and Tenant pays the amount in
dispute in accordance with such statement or results, without prejudice to
Tenant’s position.  If Landlord and
Tenant are unable to resolve such dispute within twenty (20) Business Days
after receipt of Tenant’s notice, the dispute shall be submitted to arbitration
for resolution pursuant to Section 16.2
hereof.

 

Section 3.14         Illegality. 
If any Charges shall be or become uncollectible, reduced or required to
be refunded because of any rent control or similar act or law enacted by a
Governmental Authority, Tenant shall enter into such agreement(s) and take
such other steps as Landlord may reasonably request and as may be legally
permissible to permit Landlord to collect the maximum amounts which from time
to time during the continuance of such rent controls may be legally permissible
(and not in excess of the amounts reserved therefor under this Lease).  Upon the termination of such rent controls or
similar act or law, (a) the Charges in question shall become and
thereafter be payable in accordance with the amounts reserved herein for the
periods following such termination, and (b) Tenant shall pay to Landlord,
up to the maximum extent legally permissible, an amount equal to (i) the
amount of any Charges in question which would have been paid pursuant to this
Lease but for such rent controls minus (ii) the amounts with respect to
any such Charges paid by Tenant during the period such rent controls were in
effect.

 

Section 3.15         Administrative Code Section 11-208.1.  For as long as 42DP or the City is Landlord
and to the extent that the Administrative Code of The City of New York Section 11-208.1
(or successor thereto) is then in force and effect, Tenant shall submit income
and expense statements of the type required by such code section (or successor
thereto) as if Tenant were the “owner” of the Leased Unit as such terms are
used in said Section 11-208.1, such statements to be submitted within the
time periods and to the address provided for in said Section 11-208.1, and
shall submit the same notwithstanding that 42DP or the City holds fee title to
the Property, that the Property may therefore not be “income-producing
property” as that concept is used in Section 11-208.01, or that PILOT
rather than real estate taxes are being paid with respect to the Property.

 

Section 3.16         Survival. 
Tenant’s and Landlord’s Obligations and rights under this Article III in respect of Charges that
shall have accrued prior to the expiration or earlier termination of this
Lease, including Tenant’s Obligations to maintain and make available books and
records with respect thereto, shall survive the expiration or earlier
termination of this Lease.

 

Section 3.17         Existing Violations.  From and after the Lease Assignment Date,
Landlord shall pay or otherwise remove all fines, penalties and other monetary
charges imposed by reason of the Existing Violations (it being acknowledged
that, prior to the Lease Assignment Date, 42DP is obligated to perform the
foregoing obligations pursuant to the Initial Ground Lease).

 

43

 

ARTICLE IV

IMPOSITIONS

 

Section 4.1            Impositions.

 

(a)   Payment.  Subject to Section 4.1(b) and
4.1(c) hereof, Tenant shall
pay or shall cause to be paid, as and when the same become due, all Impositions
under this Lease attributable to the period from and after the first day of the
applicable fiscal year after the Lease Assignment Date.

 

(b)   Apportionments.  All Impositions for the fiscal year or tax
year in which the first day of the applicable fiscal year after the Lease
Assignment Date occurs or the term of this Lease expires shall be apportioned; provided,
however, that if there shall be a Default or Event of Default hereunder,
Tenant shall not be entitled to receive any credit due to Tenant on account of
any such apportionment until such Default or Event of Default has been cured.

 

(c)   Installments.  Where any Imposition is permitted by Legal
Requirements to be paid in installments, Tenant may pay such Imposition in
installments as and when each such installment becomes due.

 

Section 4.2            Payment.

 

(a)   Obligation
to Pay.  Tenant shall pay all
Impositions directly to the appropriate Governmental Authority or other Person
entitled to receive the same and shall pay such Impositions before any fine,
penalty, interest or other cost shall become due or be imposed by operation of
law.

 

(b)   Evidence
of Payment.  At Landlord’s request,
Tenant shall furnish Landlord, within twenty-five (25) Business Days after the
date when an Imposition is required to be paid hereunder, (i) a copy of
any bill received by Tenant relating to such Imposition and (ii) copies of
cancelled checks or official receipts of the appropriate taxing authority or
other proof reasonably satisfactory to Landlord evidencing the payment thereof.

 

Section 4.3            Right to Contest.  (a) Tenant may, if it shall so desire,
protest or contest the validity or amount of any Imposition, in whole or in
part, without paying at the time of such protest or contest such Imposition; provided,
however, that if Tenant has not elected to pay such Imposition:

 

(i)   the same is done by Tenant upon prior written
notice to Landlord, at Tenant’s sole cost and expense and with due diligence
and continuity so as to resolve such protest or contest promptly;

 

(ii)   neither the Demised Premises nor the Common
Elements, nor any part thereof is or will be in imminent danger of being
forfeited or lost by reason of such protest or contest;

 

(iii)   Tenant shall either bond such Imposition or
deposit with Landlord, or provide Landlord with, security in an amount and in
form and substance 

 

44

 

reasonably satisfactory to Landlord (it being
agreed that an acceptable guaranty of an Acceptable Guarantor shall be security
reasonably satisfactory to Landlord under this Section 4.3(a)(iii)) for application toward the cost of
curing or removing the same from record and to secure Landlord against any loss
or damage arising out of such protest or contest or the deferral of Tenant’s
performance or compliance;

 

(iv)   if an in rem action with respect to the
non-payment of such Imposition has been commenced or any writ or order is issued
under which the Demised Premises and/or the Common Elements, or any part
thereof, may be sold or forfeited, Tenant shall thereafter diligently proceed
to cure or remove the same from record or take such other actions in lieu
thereof as are legally permissible to toll or enjoin any such action, sale or
forfeiture;

 

(v)   such protest or contest shall not subject
Landlord to prosecution for a criminal offense or a claim for civil liability
(it being agreed that assessment of the Imposition, together with interest and
penalties thereon, shall not be deemed civil liability for the purpose of this
clause);

 

(vi)   Tenant agrees in writing to indemnify
Landlord from and against any and all Claims upon or arising out of such
protest or contest; and

 

(vii)   no Event of Default shall have occurred and
be continuing.

 

(b)   If
Tenant receives any notice that Tenant or the Demised Premises and/or the
Common Elements, or any part thereof, is in default under or is not in
compliance with any of the foregoing Sections
4.3(a)(i) through 4.3(a)(vii) hereof, or notice of any
proceeding initiated under or with respect to any of the foregoing Sections  4.3(a)(i) through
4.3(a)(vii) hereof, Tenant
will promptly furnish a copy of such notice to Landlord.  Nothing herein contained, however, shall be
so construed as to allow such Imposition to remain unpaid for such length of
time as shall permit the Demised Premises and/or the Common Elements, or any
part thereof, to be sold by any Governmental Authority for the non-payment of the
same, and, if at any time in the judgment of Landlord, reasonably exercised, it
shall become necessary or proper to do so, Landlord, after not less than twenty
(20) Business Days’ written notice to Tenant (unless such sale is scheduled
prior to the expiration of any shorter period), may pay or apply the moneys
deposited in accordance with this Section 4.3
or so much thereof as may be required to the payment of the challenged
Imposition to prevent the sale of the Demised Premises and/or the Common
Elements or any part thereof.  If the
amount so deposited as aforesaid shall exceed the amount required to satisfy
the challenged Imposition as finally fixed and determined, the excess (or the
entire amount if no such payment is required) shall be paid to Tenant, or in
case there shall be any deficiency, the amount of such deficiency shall be
forthwith paid by Tenant.  Promptly
following resolution of the contest and payment by Tenant of any amounts due,
Landlord shall refund to Tenant any monies so deposited and not applied to
payment of the Imposition.  Any moneys so
deposited shall be held in an interest-bearing account at a Lending
Institution, and any interest earned thereon, shall be refunded, applied or
paid in the same manner as the amount deposited is refunded, applied or paid in
accordance with the immediately preceding two (2) sentences.

 

45

 

(c)   Landlord
shall not be required to join in any action or proceeding referred to in this Section 4.3 unless required by any
Legal Requirement in order to make such action or proceeding effective, in
which event any such action or proceeding may be pursued by Tenant (upon prior
written notice to Landlord) in the name of, but without expense to, Landlord.  Tenant hereby agrees to indemnify Landlord
from and against any and all Claims incurred or suffered by Landlord in its
proprietary capacity and arising out of any such action or proceeding.  The provisions of this Section 4.3(c) shall survive the
expiration or earlier termination of this Lease.

 

ARTICLE V

PURCHASE OPTION

 

Section 5.1            Purchase Option.

 

(a)   Tenant’s
Exercise of Purchase Option.  After
the Scheduled PILOT Conversion Date or as otherwise expressly permitted under
this Lease, Tenant, simultaneously with the tenants under all other Severance
Subleases, shall have the right, which right shall be exercised by notice to
Landlord (the “Purchase Option Notice”),
to purchase (or have a designee purchase) all of the interest of 42DP (if any)
and the City in the portion of the Land and the Improvements comprising the
Demised Premises, and the undivided interest in the Common Elements associated
therewith (the “Purchase Option”)
on a date identified in the Purchase Option Notice and being no less than
ninety (90) days after the date of the Purchase Option Notice (such date, the “Purchase Option Closing Date”) and on the
terms and conditions set forth in this Article V.  The Purchase Option Notice may be delivered
prior to the Scheduled PILOT Conversion Date so long as the Purchase Option
Closing Date set forth therein occurs on or subsequent to the Scheduled PILOT
Conversion Date.  In the event that the
right of any tenant under a Severance Sublease to exercise the purchase option
provided under such Severance Sublease is accelerated pursuant to Section 11.1(g) of
such Severance Sublease, Tenant’s right to exercise the Purchase Option
hereunder shall automatically be so accelerated.

 

(b)   Purchase
Option Closing Date.  The closing of
Tenant’s purchase pursuant to the Purchase Option shall take place on the
Purchase Option Closing Date.  Tenant may
adjourn the Purchase Option Closing Date, on up to two (2) occasions, so
long as Tenant notifies Landlord of each such adjournment at least five (5) Business
Days prior to any applicable scheduled Purchase Option Closing Date; provided,
however, that Tenant may adjourn the Purchase Option Closing Date on
additional occasions so long as Tenant pays all of Landlord’s costs incurred on
account of such adjournment.

 

(c)   Conditions
to Closing.  Closing of the transfer
of fee title to the portion of the Land and the Improvements comprising the
Demised Premises, and the undivided interest in the Common Elements associated
therewith, pursuant to the Purchase Option shall be conditioned on the
following:

 

(i)   The Purchase Price shall be paid to Landlord
on the Purchase Option Closing Date.

 

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(ii)   Appropriate adjustments of all Charges,
apportioned as of the Purchase Option Closing Date, shall be made between
Tenant and Landlord on the Purchase Option Closing Date.

 

(iii)   If, on the Purchase Option Closing Date,
there shall be any dispute between Landlord and Tenant as to any Charges then
due and payable, the closing shall proceed as scheduled and Tenant shall (A) pay
to Landlord, on the Purchase Option Closing Date, the undisputed portion of the
balance of the Charges apportioned as of the Purchase Option Closing Date and (B) deposit
with the Depositary cash or cash-equivalents (e.g., an unconditional,
irrevocable letter of credit, U.S. Government Securities in bearer form and/or
certificates of deposit issued by Lending Institutions in bearer form) in an
amount equal to, and as security for, the disputed Charges (together with an
amount equal to the reasonably estimated interest at the Interest Rate to
accrue thereon for a two-year period). 
At such time as the dispute is resolved, the additional amount, if any,
still owing shall be paid to Landlord (with interest at the Interest
Rate).  Upon such payment, any excess
security (and any interest earned thereon) shall be refunded or returned to
Tenant.  Tenant’s and Landlord’s
obligations to make any payment pursuant to this Section 5.1(c)(iii) with respect to Charges shall
survive the termination of this Lease.

 

(iv)   If, on the Purchase Option Closing Date,
there shall be an unresolved tax contest initiated by Tenant pursuant to Section 3.1(c) hereof in respect of the Demised
Premises and its undivided interest in the Common Elements, Tenant shall
nevertheless pay the full amount of PILOT then due on the Purchase Option
Closing Date for the applicable period. 
Landlord will deposit any disputed portion of such PILOT with the
Depositary, as escrowee for such funds pursuant to an escrow agreement entered
into by Landlord, Tenant and Depositary on the Purchase Option Closing
Date.  It is agreed that such escrowed
funds shall be distributed in accordance with the results of the tax contest.  Upon receiving joint instructions from
Landlord and Tenant as to the disposition of such escrowed funds pursuant to
the preceding sentence, Landlord and Tenant shall instruct Depositary to
immediately so disburse the escrowed funds.

 

(v)   Landlord shall not be obligated to convey any
portion of the Property to Tenant or to any other tenant under a Severance
Sublease, until Tenant or another tenant under a Severance Sublease, in
addition to all other sums due on the Purchase Option Closing Date, pays to
Landlord in full all Charges due and not disputed pursuant to Sections 5.1(c)(iii) and 5.1(c)(iv) hereof
as of the Purchase Option Closing Date.

 

(vi)   Tenant shall provide to Landlord (A) a
certificate of Tenant, which shall be certified by a Qualified Certifying
Party, stating that, as of the Purchase Option Closing Date, Tenant is fully
familiar with the Demised Premises and the Common Elements, the condition
thereof and the Permitted Encumbrances, and Tenant accepts title to same in
their “AS IS” condition without any representation or warranty, express or implied,
in fact or by law, of Landlord, NYCEDC, ESDC or the City as to the title
thereto, the nature, condition or viability thereof, or the use or uses to 

 

47

 

which the Demised Premises and the Common
Elements or any part thereof may be put, (B) an agreement, in a form
reasonably satisfactory to Landlord, providing for the survival of any of
Tenant’s Obligations expressly stated herein to survive this Lease and (C) all
other documentation customarily entered into in the connection with the full
and complete transfer of interest in property in New York City.

 

(vii)   Landlord shall not be obligated to convey any
portion of the Property to Tenant unless, on the Purchase Option Closing Date,
Landlord is obligated to convey its interest in the balance of the Property
under all of the other Severance Subleases. 
It is expressly agreed that a default by Landlord in its obligations
relating to the conveyance of title to any portion of the Property pursuant to
the exercise of the Purchase Option under any Severance Sublease shall be
deemed a default by Landlord with respect to such obligations under all of the
Severance Subleases.

 

(d)   Condition
of Title.  On the Purchase Option
Closing Date, fee simple title in and to the applicable portion of the Land and
the Improvements comprising the Demised Premises (under each Severance
Sublease), and the undivided interest in the Common Elements associated
therewith shall be conveyed to each applicable tenant under the Severance Subleases,
or the designee(s) of such tenant (collectively, “Purchaser”), in either case subject only to
the Ground Lease, any Subleases, the Severance Subleases, the Permitted
Encumbrances, and all matters and encumbrances affecting title to which this
Lease is subject resulting from a Person claiming by, through or under such
tenant under the Severance Sublease.

 

(e)   Deed.  On the Purchase Option Closing Date, 42DP
and/or the City, as applicable, shall deliver to the Purchaser (i) bargain
and sale deeds without covenant against grantor’s acts, in proper statutory
short form for recording, duly executed and acknowledged, in order to convey
the title to each portion of the Land and the Improvements comprising the
Demised Premises (under each Severance Sublease), and the undivided interest in
the Common Elements associated therewith in accordance with the provisions of Section 5.1(d) hereof, (ii) an
executed counterpart of an agreement the sole purpose of which is the
termination of the Ground Lease, and (iii) such other reasonable and
customary documents that a reputable title insurance company licensed to do
business in the State of New York may request in order to convey title in the
condition provided for in Section 5.1(d) hereof.

 

(f)    Tax
Returns.  On the Purchase Option
Closing Date, each of the parties shall duly execute and, if applicable,
acknowledge any and all transfer tax returns required in connection with the
delivery and/or recording of the deed or deeds described in Section 5.1(e) hereof which shall
reflect the Purchase Price.  All taxes
imposed pursuant to such returns, whether payable by Landlord and/or the
Purchaser under applicable law, shall be paid by the Purchaser, who shall also
pay the documentary stamps, if any, to be affixed to the deed or deeds.  The tax returns and the amount of such taxes
and documentary stamps shall be delivered to the purchaser’s title insurer on
the Purchase Option Closing Date for delivery to the appropriate Governmental
Authorities (or delivered directly to a reputable title insurance company for
delivery to the appropriate Governmental Authorities in the event that the
Purchaser does not have a title insurer).

 

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(g)   Tenant’s
Liabilities.  If, after giving the
Purchase Option Notice, the Purchaser, whether by reason of its acts or
omissions or the acts or omissions of any other tenant under a Severance
Sublease, fails to purchase the portion of the Land and the Improvements
comprising the Demised Premises (under each Severance Sublease), and the
undivided interest in the Common Elements associated therewith, Tenant shall
reimburse (or cause the Purchaser to reimburse) the Public Parties, within
seven (7) Business Days of a request therefor, for all expenses incurred by the
Public Parties in connection with, and in contemplation of, the failed exercise
of the Purchase Option.

 

Section 5.2            Casualty to, or Condemnation of, the Property.  If all or any portion of the Improvements are
damaged or destroyed by Casualty, or if condemnation proceedings referred to in
the provisions of Section 12.1
hereof are instituted, and if Tenant theretofor has exercised the Purchase
Option in accordance with the provisions of this Lease:

 

(a)   Landlord
shall assign to the Purchaser, on the Purchase Option Closing Date, all of
Landlord’s interest in and to so much of the insurance proceeds or condemnation
award, as the case may be, as has not been paid to Depositary; and

 

(b)   Depositary
shall pay on the Purchase Option Closing Date the Restoration Funds (i) first,
to itself and Landlord, to the extent, if any, of the necessary and proper
expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Depositary and Landlord in the collection of such
Restoration Funds as of the Purchase Option Closing Date, and (ii) the
balance to the Purchaser.  Landlord shall
recognize any assignment to a Recognized Mortgagee of the balance of such
Restoration Funds.

 

Section 5.3            Termination of Right to Purchase.  If condemnation proceedings referred to in Section 12.1(a) hereof commence after
the Purchase Option Notice is given and before the Purchase Option Closing
Date, Tenant may either (a) withdraw such notice, in which event the parties
shall have no further rights or obligations under this Article V, or (b) proceed with
such purchase without abatement of the Purchase Price on account of such
condemnation proceeding, in which event (i) such proceedings shall not be
an objection to title and (ii) if the title to the Property and the
applicable leasehold estates shall have vested in the condemnor prior to the
Purchase Option Closing Date, Landlord shall not be required to deliver a deed
(except as to any portion of the Property not taken in such condemnation), but
only an assignment on the Purchase Option Closing Date of the award in such
proceeding, in form and substance reasonably satisfactory to Tenant.

 

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ARTICLE VI

CONSTRUCTION OF THE PROJECT

 

Section 6.1            Construction of the Project.

 

(a)   Demolition.
Tenant shall undertake, at its cost, the Demolition Work pursuant to the
applicable terms of this Article VI.

 

(b)   Commencement and Substantial Completion of
Tenant’s Construction Work.

 

(i)   Generally. Tenant shall (A) Commence
Construction of Tenant’s Construction Work as soon as is reasonably
practicable, but in any event not later than the Fixed Construction
Commencement Date (subject to Unavoidable Delays), TIME BEING OF THE ESSENCE as
to such date, (B) following Commencement of Construction of Tenant’s
Construction Work, perform or cause to be performed Tenant’s Construction Work
with diligence and continuity (subject to Unavoidable Delays), and (C) Substantially
Complete Tenant’s Construction Work as soon as is reasonably practicable, but
in any event not later than the Fixed Substantial Completion Date, TIME BEING
OF THE ESSENCE as to such date (subject to Unavoidable Delays). Tenant
acknowledges, without waiving any of its rights under Sections 6.1(b)(ii) or 6.1(c)(vi) hereof, that the obtaining
of financing with respect to the performance of its construction of the New
Building is not a condition precedent to Tenant’s obligations under this Article VI.

 

(ii)   Extension Due to Certain Litigation.
In addition to any extension to which Tenant is entitled due to the occurrence
of Unavoidable Delays, in the event that, at any time after the Delivery Date,
but prior to the Commencement of Construction, (A) litigation is pending
against ESDC or Landlord in connection with the Property or the Project
(excluding EDPL valuation litigation), which litigation (1) is not or was
not instituted, financed or supported by any of Tenant, NYTC, FC, an Equity
Investor or any of its or their Related Entities and (2) has not resulted
in an injunction barring Commencement of Construction of Tenant’s Construction
Work, and (B) Tenant, in its reasonable and good faith judgment,
determines that such litigation prevents or significantly impedes Commencement
of Construction of Tenant’s Construction Work (including, without limitation,
by preventing or significantly impeding Tenant’s ability to obtain construction
financing for the Project), then Tenant shall have the right to extend the
Fixed Construction Commencement Date (by written notice to Landlord indicating
the exercise of such option and setting forth the basis for such extension) by
a number of days equal to the number of days (x) such litigation remains
pending and (y) Tenant, in its good faith judgment, determines that the
prevention or impediment resulting from such litigation is continuing (the
period the Fixed Construction Commencement Date is extended pursuant to this Section 6.1(b)(ii), the “Section 6.1(b)(ii) Extension Period”).

 

(iii)   No Public Party Obligation. The parties acknowledge and agree that none
of the Public Parties shall be obligated to perform any of the Tenant’s 

 

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Construction Work or any other work on the Land or the Existing
Improvements or to provide any funds to Tenant or any Subtenant in connection
therewith.

 

(c)   Other
Extensions. Notwithstanding the provisions of Section 6.1(b)(i) hereof, the Fixed Construction
Commencement Date and/or the Fixed Substantial Completion Date may be extended
as follows.

 

(i)   In the event of the occurrence of the First
Non-Delivery Event, the Fixed Construction Commencement Date shall be deemed to
be automatically extended by three (3) months (the “First Extension Period”) to the date that
is fifteen (15) months after the Delivery Date; it being agreed that, following the occurrence of the
First Non-Delivery Event, if Tenant Commences Construction prior to the last
day in the First Extension Period, then the 36-month period between the Fixed
Construction Commencement Date and the Fixed Substantial Completion Date
referred to in Section l.l(a)(cxxvii) hereof
(the “Fixed Construction Period”) shall
automatically be extended by the number of days (maximum of ninety (90) days)
that Tenant Commences Construction prior to the last day of the First Extension
Period.

 

(ii)   In the event of the occurrence of the Third
Non-Delivery Event, the Fixed Construction Commencement Date shall be deemed to
be automatically extended by six (6) months (the “Second Extension Period”) to the date that
is eighteen (18) months after the Delivery Date; it being agreed that following
the occurrence of the Third Non-Delivery Event, if Tenant Commences
Construction prior to the last day in the Second Extension Period, then the
Fixed Construction Period shall automatically be extended by the number of days
(maximum of one hundred eighty (180) days) that Tenant Commences Construction
prior to the last day of the Second Extension Period.

 

(iii)   In addition to the extensions described in Sections 6.1(c)(i) and 6.1(c)(ii) hereof, if the Delivery
Date occurs prior to the occurrence, if any, of the Third Non-Delivery Event,
Tenant may, at and to the extent of Tenant’s election, (A) further extend
the Fixed Construction Commencement Date by up to three (3) months by
making a payment to Landlord in accordance with Section 6.1(c)(v) hereof and (B) further extend
the Fixed Construction Period by up to six (6) months by making a payment
to Landlord in accordance with Section 6.1(c)(v) hereof;
provided, however, that in the event that Tenant purchases less
than the 3-month extension permitted pursuant to clause (iii)(A) of this Section 6.1(c), any such unpurchased
days (“Excess Days”) may be
purchased by Tenant from time to time, by making a payment to Landlord in
accordance with Section 6.1(c)(v) hereof,
so as to further extend such extension period, by the number of Excess Days so
purchased by Tenant. Any election made by Tenant for the extensions or further
extension provided for in this Section 6.1(c)(iii) shall
be for a minimum of one (1) month at a time.

 

(iv)   In addition to the extensions set forth in Sections 6.1(c)(i) and 6.1(c)(ii) hereof, if the Delivery
Date occurs subsequent to the occurrence, if any, of the Third Non-Delivery
Event, Tenant may, at and to the extent of Tenant’s election, (A) further
extend the Fixed Construction Commencement Date by up to six (6) months by

 

51

 

making a payment to Landlord in accordance
with Section 6.1(c)(v) hereof
and (B) further extend the Fixed Construction Period by up to six (6) months
by making a payment to Landlord in accordance with Section 6.1(c)(v) hereof; provided, however,
that in the event that Tenant purchases less than the 6-month extension
permitted pursuant to clause (iv)(A) of this Section 6.1(c), any such unpurchased Excess Days may be
purchased by Tenant from time to time, by making a payment to Landlord in
accordance with Section 6.1(c)(v) hereof,
so as to further extend such extension period, by the number of Excess Days so
purchased by Tenant. Any election made by Tenant for the extension or further
extension provided for in this Section 6.1(c)(iv) shall
be for a minimum of one (1) month at a time.

 

(v)   Tenant shall exercise any extension permitted
by this Section 6.1(c) by
written notice to Landlord, which notice (A) shall set forth the period by
which Tenant desires to extend the Fixed Construction Commencement Date or the
Fixed Construction Period, as applicable, and (B) shall be accompanied by
a payment to Landlord, in the case of any extensions pursuant to clause (iii) or
(iv) of this Section 6.1(c), in
the amount equal to $20,000 per day (for a minimum of one month) for each day
that the Fixed Construction Commencement Date or the Fixed Construction Period,
as applicable, is so extended (it being agreed that in the event that Excess
Site Acquisition Costs exist for the calendar quarter in which Landlord
receives Tenant’s notice given under this Section 6.1(c)(v) any
payment to Landlord required under this Section 6.1(c), in lieu of payment
in cash by Tenant, instead shall be credited by Landlord against such Excess
Site Acquisition Costs in respect to the calendar quarter in which Landlord
receives such notice).

 

(vi)   In addition to the other extensions provided for in this Section 6.1(c),
if (A) Tenant is seeking construction financing for the construction of
the New Building, (B) the proposed construction lender requires as a
condition to entering into such construction financing that Tenant obtain
insurance against terrorist acts, (C) such insurance is generally required
by lenders with respect to loans for the construction or refinancing of
buildings in midtown Manhattan of a size and nature comparable to the New
Building, (D) Tenant is using its best efforts to obtain such insurance
and (E) such insurance is not Commercially Available, then for so long as
Tenant provides evidence, reasonably satisfactory to Landlord, that the
conditions listed in this Section 6.1(c)(vi) continue
to be met, Tenant shall be entitled to an extension of the Fixed Commencement
Construction Date.

 

(d)   Approval
of Architects.

 

(i)   Design Architect. The design architect
for any Construction Work (other than Interior Construction Work or Demolition
Work) governed by any element of the DUO shall be the Design Architect. If
Tenant shall desire to replace Renzo Piano Building Workshop or any Replacement
Design Architect previously approved by Landlord as the Design Architect, then
such replacement Design Architect proposed by Tenant shall be approved by
Landlord (such approved replacement Design Architect, the “Replacement Design
Architect”), so long as the proposed Replacement Design Architect, in
Landlord’s reasonable judgment, meets all of the following criteria 

 

52

 

(the “Replacement
Design Architect Approval Criteria”): (A) the proposed
Replacement Design Architect is known for artistically combining architecture
and engineering in inventive and unique ways; (B) the proposed Replacement
Design Architect is capable of creating architecture that sensitively and
imaginatively addresses the needs of users of the improvement as well as user
of adjacent city sidewalks; (C) the proposed Replacement Design Architect
is known for sensitive and imaginative use of materials to resolve problems in
new ways; (D) the proposed Replacement Design Architect is known for an
influential, diverse body of work, all of which is, as a whole, internationally
recognized for high standards of excellence in architecture; (E) the
proposed Replacement Design Architect is the recipient of international awards
and prizes; (F) the proposed Replacement Design Architect has experience
in creating architecture that is responsive to complex urban sites; and (G) the
proposed Replacement Design Architect will be involved in all phases of the
design, including an active role while the New Building is under construction.
In the event that Tenant proposes to replace the Design Architect with an
architect that, in Landlord’s reasonable judgment, does not meet the
Replacement Design Architect Approval Criteria, then Landlord may approve or
disapprove the proposed Design Architect in Landlord’s sole discretion. Any
proposed Replacement Design Architect shall, in any event, have substantial
experience in construction projects that are comparable in scope and visibility
to the New Building and shall not be a Prohibited Person. If Landlord fails to
approve or reject any architect nominated by Tenant to be a Design Architect
within sixteen (16) Business Days after the written submission to Landlord of
such architect’s name and other information (including adequate portfolio
information) sufficiently detailed to permit Landlord to make a reasoned
judgment of the appropriateness of the proposed architect for the 42nd Street
Project, or Landlord fails to make reasonable requests for additional
information related thereto within such time period and thereafter to approve or
reject such architect within eleven (11) Business Days after written submission
of such additional information as Landlord shall have reasonably requested,
Tenant shall have the right to give Landlord a reminder notice, which reminder
notice shall contain the following caption in bold and capitalized type:

 

YOUR
APPROVAL OF                                      AS
THE DESIGN ARCHITECT SHALL

 

BE
DEEMED GIVEN IF YOU FAIL TO APPROVE OR REJECT SUCH PERSON WITHIN FIVE (5) BUSINESS
DAYS FROM THE DATE OF YOUR RECEIPT OF THIS NOTICE.

 

If Landlord fails to approve or reject the
proposed architect within five (5) Business Days after its receipt of such
reminder notice, such architect shall be deemed approved by Landlord. Any
rejection of an architect by Landlord shall be accompanied by specific reasons
set forth in reasonable detail.

 

(ii)   Other Architects and Engineers. Except
in respect of the Design Architect (which shall be approved in accordance with Section 6.1(d)(i) hereof), the
Production Architect and each other architect and engineer proposed to be
engaged in respect to any Construction Work (other than Interior Construction
Work or demolition work (other than the Demolition Work)) (A) governed by
any element of the 

 

53

 

DUO, (B) affecting a Structural
Component (other than by having a Nonadverse Structural Effect), or (C) of
a value of greater than $1,000,000 (which amount shall be Adjusted for
Inflation from the Substantial Completion Date), shall be approved by Landlord:
(1) in respect of any Construction Work subject to clause (A) of this
Section 6.1(d)(ii), in
Landlord’s sole discretion; and (2) in respect of Construction Work
subject only to clause (B) or (C) of this Section 6.1(d)(ii), in Landlord’s approval not to be
unreasonably withheld. Each such Architect shall have substantial experience in
construction projects that are comparable in scope to such architect’s intended
work at the Project and shall not be a Prohibited Person. Each such Engineer shall
(x) be of recognized standing among its peers, (y) have at least ten (10) years
experience in providing engineering services in respect of highrise buildings
in urban centers and (z) not be a Prohibited Person. If Landlord fails to
approve or reject any architect nominated by Tenant to be an Architect (other
than the Design Architect), or engineer nominated by Tenant to be an Engineer,
as the case may be, within sixteen (16) Business Days after the written
submission to Landlord of such architect’s name and other information
(including adequate portfolio information) sufficiently detailed to permit
Landlord to make a reasoned judgment of the appropriateness of the proposed
architect or engineer, as the case may be, for the 42nd Street Project, or
Landlord fails to make reasonable requests for additional information related
thereto within such time period and thereafter to approve or reject such
architect or engineers, as the case may be within eleven (11) Business Days
after written submission of such additional information as Landlord shall have
reasonably requested, Tenant shall have the right to give Landlord a reminder
notice, which reminder notice shall contain the following caption in bold and
capitalized type:

 

YOUR
APPROVAL OF                             AS
AN ARCHITECT/ENGINEER SHALL

 

BE
DEEMED GIVEN IF YOU FAIL TO APPROVE OR REJECT SUCH PERSON WITHIN FIVE (5) BUSINESS
DAYS FROM THE DATE OF YOUR RECEIPT OF THIS NOTICE.

 

If Landlord fails to approve or reject the
proposed architect or engineers, as the case may be, within five (5) Business
Days after its receipt of such reminder notice, such architect or engineer, as
the came may be, shall be deemed approved by Landlord. Any rejection of an
architect or engineer, as the case may be, by Landlord shall be accompanied by
specific reasons setting forth in reasonable detail the basis for such
rejection.

 

(e)   Approval
of Contractors.

 

(i)   General Standard; Prohibited Persons.
All Construction Work shall be performed and/or managed by one or more
reputable and responsible general contractor(s) (or if Tenant, or any
Subtenant, as the case may be, hires contractors instead of a general
contractor, such contractors) or construction manager(s). No general
contractor, construction manager, Major Contractor or other contractor that is
engaged to do Construction Work shall be a Prohibited Person. Tenant shall
cause such restriction to be inserted in each Sublease.

 

54

 

(ii)   General Contractor(s) and
Construction Manager(s). Each general contractor and/or construction
manager engaged in respect of Tenant’s Construction Work shall be subject to
the approval of Landlord. Landlord approves, on the date hereof, those general
contractors and construction managers listed on Exhibit M attached hereto (it being understood that such
approval of Landlord (A) is valid for a period ending on the earlier of (1) the
date that is five (5) years after the date hereof and (2) the
occurrence of any material change in the ownership of the applicable general
contractor or construction manager, as the case may be and (B) is not an
approval of any proposed general contractor construction manager’s Prohibited
Person status). Tenant shall deliver to Landlord and update as necessary from
time to time upon request therefor, a list identifying to Landlord each general
contractor and construction manager that is a member of the Development Team.
Landlord shall have the right to disapprove any such general contractor or
construction manager only: [a] if such general contractor or construction
manager is a Prohibited Person; or [b] if such general contractor or
construction manager, in Landlord’s reasonable judgment, has demonstrated a
failure, based on prior job performance, to exercise due care in the
performance of the work for which such contractor may be hired in respect of
the New Building (it being agreed that no Person listed on Exhibit M attached hereto may be
disapproved by Landlord on the basis described in this clause (b) of this Section 6.1(e)(ii)). If Landlord fails
to approve or reject any such general contractor or construction manager within
eleven (11) Business Days after the written submission to Landlord of such
Person’s name, address, phone number and EIN (as well as those Principals
thereof) or Landlord fails to make reasonable requests for additional
information related thereto within such time period and thereafter to approve
or reject such general contractor or construction manager within six (6) Business
Days after written submission of such additional information as Landlord shall
have reasonably requested, Tenant shall have the right to give Landlord a
reminder notice, which reminder notice shall contain the following caption in
bold and capitalized type:

 

YOUR
APPROVAL OF                              AS
A MEMBER OF A DEVELOPMENT

 

TEAM
SHALL BE DEEMED GIVEN IF YOU FAIL TO APPROVE OR REJECT SUCH PERSON WITHIN FIVE (5) BUSINESS
DAYS FROM THE DATE OF YOUR RECEIPT OF THIS NOTICE.

 

If Landlord fails to approve or reject such
proposed member of the Development Team within five (5) Business Days
after its receipt of such reminder notice, such proposed member of the
Development Team shall be deemed approved by Landlord. Any rejection of such a
member of the Development Team by Landlord shall be accompanied by specific
reasons setting forth in reasonable detail the bases for such rejection.

 

(iii)   Major Contractors. Prior to the time
at which Tenant solicits any bids for labor or materials for any Construction
Work (other than Interior Construction Work) governed by any element of the DUO
or affecting a Structural Component (other than by having a Nonadverse
Structural Effect), Tenant shall furnish Landlord for its approval (to the
extent hereinafter provided) a list of all Persons Tenant intends to solicit
for any such work who, if so selected, would (a) have a contract in 

 

55

 

respect of the Property amounting to a value
of greater than $1,000,000 (which amount shall be Adjusted for Inflation from
the Substantial Completion Date), or (b) otherwise be responsible for an
item that is governed by the DUO or affects a Structural Component, other than
by having a Nonadverse Structural Effect (any such contractor, a “Major Contractor”). The list shall state
the name, address, phone number and EIN of each such Major Contractor and each
of its Principals and in what capacity such Major Contractors would be
performing work at the Property. Landlord shall have the right to disapprove
any Major Contractor only: (1) if such Major Contractor is a Prohibited
Person; or (2) if such Major Contractor, in Landlord’s reasonable
judgment, demonstrated a failure, based on prior job performance, to exercise
due care in the performance of the work for which such Major Contractor may be
hired in respect of the New Building (it being agreed that no Person listed on Exhibit N attached hereto may be
disapproved by Landlord on the basis described in this clause (2) of this Section 6.1(e)(iii)). If Landlord
fails to approve or reject any Major Contractor within eleven (11) Business
Days after the receipt by Landlord of such Major Contractor’s name, address,
phone number and EIN (and those of its Principals), or Landlord fails to make
reasonable requests for additional information related thereto within such time
period and thereafter to approve or reject such Major Contractor within six (6) Business
Days after written submission of such additional information as Landlord shall
have reasonably requested, Tenant shall have the right to give Landlord a
reminder notice, which reminder notice shall contain the following caption in
bold and capitalized type:

 

YOUR
APPROVAL OF                               AS
A MAJOR CONTRACTOR SHALL BE

 

DEEMED
GIVEN IF YOU FAIL TO APPROVE OR REJECT SUCH PERSON WITHIN FIVE (5) BUSINESS
DAYS FROM THE DATE OF YOUR RECEIPT OF THIS NOTICE.

 

If Landlord fails to approve or reject the
proposed Major Contractor within five (5) Business Days after its receipt
of such reminder notice, such Major Contractor shall be deemed approved by
Landlord. Any rejection of a Major Contractor by Landlord shall be accompanied
by specific reasons set forth in reasonable detail. Landlord approves, on the
date hereof, the Major Contractors listed on Exhibit N attached hereto.

 

Section 6.2            Plans and Specifications.

 

(a)   Approval
of Plans and Specifications,

 

(i)   Approval Standard. In the event that
the Design Architect is Renzo Piano Building Workshop, or a Replacement Design
Architect approved or deemed approved by the Landlord in accordance with the
Replacement Design Architect Approval Criteria, the standard for approval of
all DUO design reviews shall be “Landlord’s reasonable judgment”. In the event
that the Design Architect is not Renzo Piano Building Workshop, or a Replacement
Design Architect approved or deemed approved by the Landlord in accordance with
the Replacement Design Architect Approval Criteria, the standard for all DUO
design reviews shall be “Landlord’s sole discretion”.

 

56

 

(ii)   Approval of Schematic Design Plans.
Prior to the date hereof, Landlord has reviewed the Schematic Design Plans and,
having deemed the Schematic Design Plans (other than the items listed in that
certain letter, dated as of the date hereof, from Landlord to NYTC and Forest
City Ratner Companies (the “December Letter”)
a copy of which is attached hereto as Exhibit 1-3) to be in accordance with the DUO, has
approved the Schematic Design Plans (other than the items listed in the December Letter).
Promptly after the date hereof, Tenant shall submit the items listed in the December Letter
to Landlord, and Landlord shall have the right to approve or disapprove the
same in Landlord’s reasonable discretion with respect to the compliance of same
with the DUO (the items listed in the December Letter, once approved by
Landlord in accordance with this Section 6.2(a)(ii),
together with the Schematic Design Plans, the “Approved Schematic Design Plans”). Landlord
hereby approves the design for Tenant’s Subway Improvements, as such design is
depicted in the Site 8 South Subway Agreement as in effect on the date hereof.

 

(b)   Submission
and Review of Proposed Design Development Plans. Prior to Tenant’s first
submittal of Final Plans and Specifications to the New York City Buildings
Department prior to the Commencement of Construction of the New Building,
Tenant shall submit to Landlord the proposed Design Development Plans (in both
standard architectural drawings and in electronic format (including CAD
drawings)) solely so that Landlord may determine whether the proposed Design
Development Plans conform to the Approved Schematic Design Plans and otherwise
comply with DUO. Landlord’s approval shall be governed by the applicable
provisions of Section 6.2(a)(i) hereof
(it being acknowledged and agreed that the design approval process set forth in
this Section 6.2 is an
iterative process that may require at least six (6) months from submittal
to Landlord of the proposed Design Development Plans until Landlord’s approval
may be obtained). If Landlord determines that the proposed Design Development
Plans conform to the Approved Schematic Design Plans, Landlord shall so notify
Tenant. If Landlord determines that the proposed Design Development Plans do
not so conform, Landlord shall so notify Tenant, specifying in reasonable
detail in what respects the proposed Design Development Plans do not so
conform, and Tenant shall revise them to so conform and shall resubmit the
proposed Design Development Plans to Landlord for review for that purpose.
Landlord shall be deemed to have approved any portions of the proposed Design
Development Plans as to which Landlord does not expressly notify Tenant, as set
forth in the immediately preceding sentence, of such non-conformity. The
initial review by Landlord of the proposed Design Development Plans shall be
carried out within twenty (20) Business Days of the date of the submission
thereof by Tenant and any subsequent review by Landlord of any revisions
thereto shall be carried out within fifteen (15) Business Days of the date of
Tenant’s submission of such revision. In the case of resubmissions or
revisions, Landlord may not disapprove any matter previously submitted and
approved or deemed approved, except to the extent that such resubmission or revision
affects the matter so approved or deemed approved.

 

(c)   Submission
and Review of Proposed Final Plans and Specifications. Prior to Tenant’s
first submittal of Final Plans and Specifications to the New York City
Buildings Department prior to the Commencement of Construction of the New
Building, Tenant shall submit to Landlord proposed Final Plans and
Specifications (in both standard architectural drawings and in electronic
format (including the CAD drawings)) solely so that Landlord may determine whether
the proposed Final Plans and Specifications conform to the Design Development
Plans and otherwise 

 

57

 

comply with
DUO. Landlord’s approval shall be governed by the applicable provisions of Section 6.2(a)(i) hereof (it
being acknowledged and agreed that the design approval process set forth in
this Section 6.2 is an
iterative process that may require at least forty-five (45) days from submittal
to Landlord of the proposed Final Plans and Specifications until Landlord’s
approval may be obtained). If Landlord determines that the proposed Final Plans
and Specifications conform to the Design Development Plans, Landlord shall so
notify Tenant. If Landlord determines that the proposed Final Plans and Specifications
do not so conform, Landlord shall so notify Tenant, specifying in reasonable
detail in what respects the proposed Final Plans and Specifications do not so
conform, and Tenant shall revise them to so conform and shall resubmit the
proposed Final Plans and Specifications to Landlord for review for that
purpose. Landlord shall be deemed to have approved any portions of the proposed
Final Plans and Specifications as to which Landlord does not expressly notify
Tenant, as set forth in the immediately-preceding sentence, of such
non-conformity. The initial review by Landlord of the proposed Final Plans and
Specifications shall be carried out within twenty (20) Business Days of the
date of submission thereof by Tenant and any subsequent review by Landlord of any
revisions thereto shall be carried out within fifteen (15) Business Days of
Tenant’s submission of such revision. In the case of resubmissions or
revisions, Landlord may not disapprove any matter previously submitted and
approved or deemed approved, except to the extent that such resubmission or
revision affects any matter so approved or deemed approved.

 

(d)   Modification
of Approved Schematic Design Plans, Design Development Plans or Final Plans and
Specifications. If Tenant desires to modify the Approved Schematic Design
Plans, Design Development Plans or Final Plans and Specifications after they
have been approved or deemed approved by Landlord pursuant to this Article VI, and either (1) Tenant
has not provided to Landlord an Architect’s Certification, prepared by an
Architect or an Engineer approved (or deemed approved) by Landlord in
accordance with Section 6.1(d)(ii) hereof,
describing the proposed modification and stating that such modification is not
to have been governed by any element of the DUO or does not affect a Structural
Component (other than by having a Nonadverse Structural Effect), or (2) such
modification represents an immaterial field change to such plans (notification
of each such immaterial field change being promptly provided to Landlord by
Tenant together with adequate identification of such change and an explanation
of the change made), Tenant shall submit the proposed modifications to
Landlord, clearly identifying each such modification, together with a statement
of Tenant’s reasons therefor. If (A) Tenant has submitted such aforesaid
Architect’s Certification and such Architect’s Certification has not been
objected to by Landlord within five (5) Business Days after Landlord’s
receipt thereof or (B) such modification represents an immaterial field
change and Tenant has provided the information required in clause (2) of
this Section 6.2(d), then such submission of the proposed modifications
for Landlord’s review and approval is not required. Unless and until a proposed
modification is clearly identified by Tenant, such modification shall not be
considered by Landlord and the prior set of approved plans shall govern in
respect of such modification. Landlord shall not disapprove any matter
previously submitted and approved, or deemed approved by Landlord, except to
the extent that the proposed modification affects any matter so approved or
deemed approved. If Landlord determines, in accordance with the applicable
provisions of Section 6.2(a)(i) hereof, that any proposed modifications are
acceptable to Landlord, Landlord shall so notify Tenant. If Landlord
determines, in accordance with the applicable provisions of Section 6.2(a)(i) hereof,
that such modifications are not otherwise acceptable, Landlord shall so notify
Tenant, setting forth in reasonable detail Landlord’s reasons for such
determination. In the event 

 

58

 

Landlord
determines the modification to be unacceptable, Tenant shall either (i) withdraw
the proposed modification, in which case construction of the New Building shall
proceed on the basis of the submissions previously approved or deemed approved
by Landlord, or (ii) revise the proposed modifications so that they are
acceptable to Landlord and resubmit them to Landlord for review in accordance
with the standards hereinabove set forth. Each review by Landlord under this Section 6.2(d) shall
be carried out within fifteen (15) Business Days of the date of submission of
the proposed modifications to the Approved Schematic Design Plans, Design
Development Plans or the Final Plans and Approved Specifications, as the case
may be, unless the proposed modification substantially alters the Approved
Schematic Design Plans, Design Development Plans or the Final Plans and
Specifications, in which event, so long as Landlord notifies Tenant within such
fifteen (15) Business Day period that Landlord so regards the proposed
modification, Landlord’s review shall be carried out within twenty (20)
Business Days of the date of submission of the proposed modification.

 

(e)   Compliance
with Legal Requirements. The Final Plans and Specifications (and any
modification thereto) shall comply with all Legal Requirements and Insurance
Requirements (but need not comply with the Zoning Resolution, it being understood
that the Construction Work may be constructed without reference to the
provisions of the Zoning Resolution). Landlord’s approval of any such Final
Plans and Specifications (or any modification thereto) drawings shall not be,
nor shall be construed as being, or relied upon as, a determination that any
such Final Plans and Specifications (or any modification thereto) drawings
comply with any Legal Requirements or Insurance Requirements.

 

(f)    Submission
in Triplicate. All drawings submitted to Landlord pursuant to this Section 6.2
shall be submitted in triplicate.

 

(g)   Production
Architect. Notwithstanding any provision of this Lease requiring the
execution by the Design Architect of any certificate or other document,
Landlord agrees that such certificate or other document (including, without
limitation, any Architect’s Certificate and any document with respect to the
determination of the occurrence of Substantial Completion) may be executed, in
lieu thereof, by the Production Architect on behalf of the Design Architect
once approved by the Design Architect.

 

Section 6.3            Performance of Construction Work.

 

(a)   Standards
for Construction Work.

 

(i)   All Construction Work shall be performed with
due diligence, continuity, in a good and workmanlike manner and in accordance
with good construction practice, subject however to Unavoidable Delays.

 

(ii)   All Construction Work shall be performed and
completed in accordance with the DUO, the applicable Final Plans and
Specifications as they relate to the DUO, all Legal Requirements, Insurance
Requirements and the provisions of Articles
VI, VIII and XI hereof,
as applicable.

 

(iii)   From and after the Delivery Date, the
Property shall be free of liens (it being understood that Tenant shall have up
to forty-five (45) days to cause 

 

59

 

any liens imposed on the Property from and
after the Delivery Date to be fully discharged or bonded and to provide
evidence thereof to Landlord).

 

(iv)   All Construction Work, when completed, shall
be of the standard and quality commonly required at Class “A” office
buildings (as understood on the date hereof) in midtown Manhattan.

 

(v)   Tenant shall maintain a complete set of “as
built” plans and specifications or marked construction documents and, if
prepared by or for Tenant or any Person doing such Construction Work, auto CAD
Disks with respect to any such Construction Work, and shall, when and as
requested by Landlord, deliver a copy thereof (together with all change orders,
field changes, and other changes that comprise a complete record of all such
work) to Landlord.

 

(vi)   No temporary or permanent certificate of
occupancy shall be requested by or for Tenant with respect to the Project or
any portion thereof unless the Construction Work for which such certificate is
being sought has been substantially completed in accordance with the applicable
provisions of the DUO.

 

(vii)   Each agreement between Tenant and any
contractor, materialman or other party performing any Construction Work shall
contain a representation made by such contractor, materialman or other party
that such party is not a Prohibited Person and shall contain a termination
right for the benefit of Tenant if such representation shall at any time be
untrue.

 

(b)   Conditions
Precedent to Commencement of Construction Work. Tenant shall not commence
any Tenant Construction Work and shall not permit any Subtenant or any other
Person to commence any Construction Work, (other than Interior Construction
Work and the Demolition Work) governed by any element of the DUO or affecting a
Structural Component (other than by having a Nonadverse Structural Effect),
unless and until:

 

(i)   Approval of Plans. Landlord shall have
approved the Final Plans and Specifications to the extent required in Section 6.2 hereof;

 

(ii)    Permits. Tenant, at its sole cost and
expense, shall have obtained (and thereafter shall maintain) all necessary
permits and authorizations required by Legal Requirements for the commencement
and prosecution of such work and for approval thereof upon completion, and
Tenant shall deliver to Landlord copies of any and all of such permits and/or
authorizations required to commence such work prior to the commencement
thereof;

 

(iii)   Documents. Tenant shall have delivered
to Landlord the following items: (A) copies of all Final Plans and
Specifications which have been stamped as approved by the New York City
Buildings Department (it being agreed that the Final Plans and Specifications
submitted to the New York City Buildings Department for approval may be only
those Final Plans and Specifications approved by Landlord pursuant to Section 6.2(c) hereof); (B) executed
counterparts (or copies thereof) of the Collateral Assignments in respect of
all construction agreements between 

 

60

 

Tenant and any general contractor,
construction manager, the Design Architect and the other Architects; (C) construction
schedules and staging plans; and (D) certificates for the insurance
required by Section 10.1 hereof,
together with evidence reasonably satisfactory to Landlord of the payment of
the premiums therefor;

 

(iv)    Construction Guaranties. With respect
only to Tenant’s Construction Work, including, without limitation, Section 6.6 and Core and Shell “punch
list” items (the “Core and Shell Punchlist”) prepared
by Tenant and delivered to the Major Contractors upon Substantial Completion, a
copy of which Core and Shell Punchlist shall be delivered to Landlord, upon
Substantial Completion (and not with respect to any other Construction Work)
Tenant has caused NYTC and FCE to execute and deliver to Landlord the NYTC
Construction Guaranty and the FCE Construction Guaranty, respectively; provided,
however, that if, prior to or after the commencement of Tenant’s
Construction Work: (w) NYTC Member is the sole member of Tenant, then
Tenant shall only be required to cause the NYTC Construction Guaranty to be
executed and delivered to Landlord pursuant to this Section 6.3(b)(iv); (x) FC Member is the sole member
of Tenant, then Tenant shall only be required to cause the FCE Construction
Guaranty to be executed and delivered to Landlord pursuant to this Section 6.3(b)(iv); (y) ING is
the sole member of Tenant, then Tenant shall only be required to cause the ING
Construction Guaranty to be executed and delivered to Landlord pursuant to this
Section 6.3(b)(iv); and (z) ING
is the sole member of FC Member, then Tenant shall, in addition to the NYTC
Construction Guaranty, be required to cause the ENG Construction Guaranty to be
executed and delivered to Landlord pursuant to this Section 6.3(b)(iv) in lieu of the FCE Construction
Guaranty; and provided further that Landlord agrees that if, after any
Construction Guaranty is provided to Landlord in accordance with this Section 6.3(b)(iv), Tenant delivers to
Landlord a NYTC Construction Guaranty, an FCE Construction Guaranty or an ING
Construction Guaranty pursuant to clauses (w), (x), (y), or (z), as applicable,
then Landlord shall acknowledge in writing to NYTC, FCE or ING Vastgoed B B.V.,
as applicable, promptly after the aforesaid delivery, that any Construction
Guaranty previously delivered to Landlord, and that is to be superseded by the
newly delivered Construction Guaranty, is of no further force or effect); and

 

(v)    There shall be no Default (other than a
Minor Default) or Event of Default hereunder.

 

(c)   Obligations
Following Completion of Construction Work. Promptly following completion of
any Construction Work (or, in respect of Tenant’s Construction Work,
Substantial Completion of Tenant’s Construction Work), Tenant shall furnish to
Landlord:

 

(i)   In respect of any Construction Work governed
by any element of the DUO, an Architect’s Certification (which Architect’s
Certification has not been objected to within ten (10) Business Days of
Landlord’s receipt thereof), prepared by an Architect approved (or deemed
approved) by Landlord in accordance with Section 6.1(d)(ii)
hereof, that (A) the Architect has examined the applicable
Final Plans and Specifications, (B) to its best knowledge, after
appropriate investigation, the Construction Work, as then constructed, has been
completed substantially and in all material respects in accordance with the
applicable Final Plans and Specifications as it 

 

61

 

relates to and complies with the DUO, and (C) with
respect to Tenant’s Construction Work only, indicates in respect to each of (1) the
Project overall, and (2) each element of the Project Components, the total
number of Square Feet and Rentable Square Feet, and indicating which portion of
the difference between Square Feet and Rentable Square Feet is on account of
Discretionary Inside Mechanical Space and which portion is on account of below
grade, Revenue Producing Retail Space;

 

(ii)   A copy or copies of the temporary or
permanent certificate(s) of occupancy for such Construction Work, if
applicable;

 

(iii)   (A) In respect of the entire Project
other than any Subtenant’s initial tenant improvements to its Demised Space, a
complete set of “as built” plans in duplicate (one of such plans being
delivered in electronic format (including CAD drawings)) showing such
construction, as then constructed, if available, and if not available, “marked”
final drawings, and (B) in respect of any Subtenant’s (including, without
limitation, NYTC in its capacity as a Subtenant) initial tenant improvements to
its Demised Space, a complete set of “as built” plans in duplicate (one of such
plans being delivered in electronic format (including CAD drawings)), if
available, and if not available, “marked” final drawings, if available;

 

(iv)   Upon request by Landlord, copies of any
documents filed with the New York City Department of Buildings;

 

(v)   Any permits or authorizations which are required
for such Construction Work as completed;

 

(vi)   Copies of all guaranties or certifications
called for under any construction agreements, promptly after receipt thereof by
Tenant or Tenant’s Related Entities;

 

(vii)   Copies of all New York Board of Fire
Underwriters Certificates (or the equivalent certificate of any successor
organization) for such Construction Work;

 

(viii)   Copies of duly executed waivers of mechanic’s
lien from each provider of materials, supplies, equipment or labor to the Project
relating to such Construction Work or other evidence of payment reasonably
satisfactory to Landlord, promptly after receipt thereof by Tenant;

 

(ix)   In respect of Tenant’s Construction Work, an
easement plan for the applicable portion of the Project showing the location of
all easements affecting the Project (or an “as built” survey providing the same
information), if required by the New York City Department of Buildings for the
issuance of a building permit or certificate of occupancy in respect thereto,
and

 

(x)   Any plans and specifications and other
applicable documents in Tenant’s possession reasonably requested by Landlord to
demonstrate compliance with the DUO.

 

62

 

(d)   No
Responsibility of Landlord. Landlord shall have no responsibility to Tenant
or to any Subtenant, architect, engineer, contractor, subcontractor, supplier,
materialman, workman or other person, firm or corporation who shall engage in
or participate in any construction of any Construction Work. Notice is hereby
given that Landlord shall not be liable for any labor or materials furnished or
to be furnished to Tenant upon credit, and that no mechanic’s or other lien for
any such labor or materials shall attach to or affect the estate or interest of
Landlord in and to the Property. Whenever and as often as any such lien shall
have been filed against the Property, whether or not based upon any action or
interest of Tenant or any Subtenant, or if any conditional bill of sale shall
have been filed for or affecting any materials, machinery or fixtures used in
the construction, repair or operation thereof, or annexed thereto by Tenant,
Tenant shall promptly take such action by bonding, deposit or payment as will
remove or satisfy the lien or conditional bill of sale.

 

(e)   Right
of Inspection. Landlord shall have the right, during the performance of any
Construction Work governed by any element of the DUO or affecting a Structural
Component (other than by having a Nonadverse Structural Effect), to (i) maintain,
at Landlord’s cost, field personnel or other representatives at the Project to
observe Tenant’s construction methods and techniques and to determine that such
Construction Work is being performed in accordance with the provisions of this
Lease, and (ii) have such field personnel or other designers attend
Tenant’s job and/or safety meetings (it being agreed that such Landlord’s field
personnel or other representatives shall not instruct contractors, interfere
with or impede the work of such or other workers in respect of any such
Construction Work). Landlord agrees that the presence and activities of such
field personnel or other representatives shall not impede in any respect the
performance of such Construction Work. No such observation or attendance by
Landlord’s personnel, designers or other representatives shall impose upon
Landlord responsibility for any failure by Tenant to comply with any Legal
Requirements, Insurance Requirements or safety practices in connection with
such Construction Work or constitute an acceptance of any such Construction
Work which does not comply in all respects with the provisions of this Lease.

 

Section 6.4            Use of Plans and Specifications.  Landlord shall have the right to
use without any payment or other compensation by Landlord therefor, solely for
the purposes set forth in the following sentence, (a) the Approved
Schematic Design Plans, the Design Development Plans and the Final Plans and
Specifications, (b) any surveys and “as built” plans showing the applicable
Construction Work, and (c) any other plans and specifications with respect
to such Construction Work.  Landlord
shall have the right to use the items enumerated in clauses (a) through (c) above
to facilitate the exercise of its rights under this Lease and, subsequent to
the expiration or termination of this Lease where Landlord retains title to the
Property, for the construction, use, operation and Alteration of the applicable
Project Component and other purposes incidental thereto; subject, however,
to the following restrictions:

 

(i)   the work product of the Design Architect (the
“DA Work Product”) may be used
only for the completion of the Construction Work in question or for reference
purposes for additions, extensions, remodeling or modification of the
Construction Work in question not designed by the Design Architect; however,
ownership rights to said DA Work Product and rights therefrom may not be
transferred to another party for its use in the design of another project;

 

63

 

(ii)   Design Architect retains all statutory and
reserve rights, including copyright, to typical or standard design details,
depictions, instructions and specifications regularly used by the Design
Architect in the ordinary course of its architectural practice;

 

(iii)   Design Architect retains the right to publish
images and appropriate technical information from Design Architect’s work in
professional journals and for portfolio publicity purposes;

 

(iv)   Design Architect is not responsible for
errors or discrepancies on any electronic portable media on which Design
Architect’s design documents are transferred except to the extent that such
errors or inconsistencies are caused by or contributed to by Design Architect
when it transfers such information to such media or while such media are in
Design Architect’s possession or control;

 

(v)   in connection with any publication of
photographs or other representations of the Construction Work in question where
the design of the Construction Work in question is the subject of the
publication, if applicable, the party causing such publication will endeavor to
see that reference to the Design Architect as architect for the Construction
Work in question is included in any such publication as follows: Renzo Piano
Building Workshop, Design Architects, with Fox and Fowle Architects, Executive
Architect; and

 

(vi)   if the Project is materially modified after
its completion and Design Architect has not consented or participated in such
modification, no reference shall be made to Renzo Piano Building Workshop or
Fox and Fowle Architects, as the architect(s) for the Construction Work in
question, and the owner of the Construction Work in question shall use its
diligent efforts to prevent the dissemination of information regarding such
completion or modification which includes any such reference.

 

Nothing in this Section 6.4 shall permit the selection by Tenant and
approval of a Design Architect other than in accordance with Section 6.1(d) hereof. The
provisions of this Section 6.4 shall
survive any such expiration or earlier termination of this Lease.

 

Section 6.5            Conditions Precedent to Commencement of Demolition,
Asbestos Removal and Lead Abatement.  (a) Tenant
shall not commence any demolition of the Existing Improvements or commence
asbestos removal or lead paint abatement of the Existing Improvements (any such
work, the “Demolition Work”) unless
and until: (i) Tenant shall have obtained and delivered to Landlord true
and complete copies of all necessary permits, consents, certificates and
approval of all necessary Governmental Authorities in respect of such work; and
(ii) Tenant shall have delivered to Landlord satisfactory certificates
evidencing the insurance required by Article X
hereof. Subject to Sections 6.5(b) and
6.5(c) hereof, Tenant
covenants and agrees that once Tenant has initiated the Demolition Work, it
shall thereafter commence Tenant’s Construction Work and continuously,
diligently and without material interruption pursue Tenant’s Construction Work
until completion.

 

64

 

(b)   After
the occurrence of the Delivery Date, Tenant may, at Tenant’s sole election,
demolish specified Existing Improvements in accordance with this Section 6.5(b) and not be subject
to the covenant contained in the last sentence of Section 6.5(a) hereof if:

 

(i)   Based on the internal investigation and
assessment of the New York City Building Department (and not on information
provided by Tenant or any third party related to or otherwise associated with
Tenant), the New York City Building Department deems a condition in an Existing
Improvement to be unsafe and requires immediate demolition of such Existing
Improvement; or

 

(ii)   (A) Tenant provides to Landlord a
statement containing (1) Tenant’s representation that an Existing
Improvement has a condition that is an imminent threat to public safety and (2) reasonably
detailed information (together with any supporting information reasonably
satisfactory to Landlord) demonstrating that Tenant has maintained the Existing
Improvement in a responsible manner and has in no way exacerbated or otherwise
increased the unsafe condition. Within two (2) Business Days of Landlord’s
receipt of such statement, Landlord shall confirm the availability of the
Demolition Engineer and shall forward such statement (together with any
supporting information provided by Tenant therewith and a copy of this
provision) to the Demolition Engineer, requesting the Demolition Engineer to
make its assessment within three (3) Business Days of receipt of such
materials from Landlord;The Demolition Engineer, in a statement to both Tenant
and Landlord (1) finds that the indicated Existing Improvement has a
condition that is an imminent threat to public safety, (2) confirms that
the maintenance of the Existing Improvement by Tenant in no way exacerbated or
otherwise increased the unsafe condition, and (3) provides a scope of work
and an estimate of the most cost-efficient manner for Tenant to remedy the unsafe
condition other than demolition of the applicable Existing Improvements; and

 

(B)   The
estimated cost of remedying the unsafe condition (as estimated by the
Demolition Engineer in accordance with clause (B) above) would exceed (1) 100%
of the Assessed Value of the Existing Improvements if the proposed demolition
would occur between twenty-four (24) months and one day less than eighteen (18)
months prior to the Fixed Construction Commencement Date, (2) 75% of the
Assessed Value of the Existing Improvements if the proposed demolition would
occur between eighteen (18) months and one day less than twelve (12) months
prior to the Fixed Construction Commencement Date, (3) 50% of the Assessed
Value of the Existing Improvements if the proposed demolition would occur
between twelve (12) months and one day less than six (6) months prior to
the Fixed Construction Commencement Date and (4) 25% of the Assessed Value
of the Existing Improvements if the proposed demolition would occur between six
(6) months prior to and the Fixed Construction Commencement Date; provided,
however, that Tenant may elect to deliver to Landlord a certification
accelerating the Fixed Construction Commencement Date, in which event such
accelerated Fixed Construction Commencement Date shall constitute the Fixed
Construction Commencement Date for all purposes under this Lease.

 

(iii)   The term “Demolition
Engineer” shall mean one of (A) Robert Sillman of Robert
Sillman Associates PC, (B) Diane Kaese of Wiss Janney Elstner, (C) Jeff
Smilow of Ysrael Senuk PC or (D) another engineer determined, in any 

 

65

 

event, as set forth in this Section 6.5(b)(iii). In the event that
the first named Demolition Engineer is not available or is unwilling to serve,
the Demolition Engineer next set forth on the list shall be engaged, and so on,
until arriving at an available Demolition Engineer. If none of such listed
Persons is available or willing to serve, the Demolition Engineer shall be
selected by the AAA and shall be an impartial engineer, with at least ten (10) years
current experience in the assessment of safety conditions in commercial
structures in New York City. Tenant shall pay all fees and expenses of the
Demolition Engineer (and, if necessary, AAA’s involvement with the selection
thereof).

 

(c)   Notwithstanding
that the Delivery Date has not occurred, Tenant may, at Tenant’s sole election,
demolish Existing Improvements in accordance with this Section 6.5(c) and not be subject
to the covenant contained in the last sentence of Section 6.5(a) hereof, in the event that: (i) Landlord
has obtained vacant possession of less than all of the Existing Improvements
(any such improvements, the “Vacant Existing
Improvements”); (ii) Tenant provides to Landlord a guaranty of
any Guarantor, substantially in the form of the Construction Guaranties
(modified so as to (x) guaranty (1) completion of all of such
Demolition Work that is commenced by Tenant pursuant to this Section 6.5(c) and (2) Tenant’s
obligations pursuant to the access agreement described in clause (iii) of
this Section 6.5(c) and (y) delete
Section 16 thereof (i.e., the financing contingency)); (iii) Tenant
enters into an access agreement with Landlord in a form mutually agreed upon by
Landlord and Tenant; and (iv) Tenant complies with the requirements of Section 6.5(a) hereof. Provided
that Tenant has satisfied the conditions set forth in clauses (i) through (iv) of
this Section 6.5(c), then
Tenant shall be permitted to undertake the following activities on the
specified Vacant Existing Improvements:

 

(A)  Demolish
the Vacant Existing Improvements on any one or more of Lots 15, 8, 14 and 53;
and/or

 

(B)   Undertake
pre-demolition activities (e.g., asbestos removal, lead paint abatement) in
respect of the other Vacant Existing Improvements.

 

Nothing in this Section 6.5(c)   shall
permit Tenant to undertake any excavation on the Property. In the event that
litigation is commenced against Landlord in respect of the Property and
Landlord reasonably demonstrates that such litigation is directly related to
Tenant’s initiating of demolition of Existing Improvements prior to the removal
of all occupants from the Property, then each Non-Delivery Event shall be
extended by a period of time equal to the duration of such litigation. Tenant
shall indemnify, defend and hold harmless each Public Party and its respective
officers, directors, members, managers, shareholders, agents and affiliates,
and the successor and assigns of each of the foregoing, from and against all
claims, actions, causes of action, losses, damages and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) suffered or
incurred by the Public Parties arising out of or related to (1) the
aforesaid litigation and (2) any additional costs incurred hereunder due
to Demolition Work performed pursuant to this Section 6.5(c).
Upon the request of Landlord, in Landlord’s sole discretion, Tenant
shall promptly cease all Demolition Work implicated in such litigation.
Landlord acknowledges that Tenant’s access to less than all of the Existing
Improvements pursuant to this Section 6.5(c) shall
not be deemed delivery of Possession of the Property or any portion thereof.

 

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Section 6.6                                   Construction
of Tenant’s Subway Improvements.   (a) Tenant
shall perform or cause to be performed any required Construction Work in
respect of the 40th Street subway entrance (including, without limitation, the
relocation thereof) in accordance with the requirements of the Zoning
Resolution as set forth on June 20, 2000 as if such requirements were
applicable to the Property (“Tenant’s Subway
Improvements”). The construction of Tenant’s Subway Improvements
shall be governed by the Site 8 South Subway Agreement and all applicable Legal
Requirements; provided, however, that Landlord shall have the
continuing right to review any modification to the Site 8 South Subway
Agreement and to approve same solely to the extent that any such modification
impacts the DUO. In the event of any conflict between the terms of this Lease
and the terms of the Site 8 South Subway Agreement in respect of the
performance of Tenant’s Subway Improvements, the terms of the Site 8 South
Subway Agreement shall prevail. Landlord acknowledges that substantial
completion of Tenant’s Subway Improvements is not a condition precedent to
Substantial Completion of Tenant’s Construction Work.

 

(b)         Tenant
shall be responsible for all costs in respect of Tenant’s Subway Improvements.
Subject to Section 3.04(b) of the Site 8 South LADA, Tenant’s
allocation (based on an allocation between the tenants of all Severance
Subleases as to which all such tenants have jointly notified Landlord on or
before the Commencement Date) of the actual costs of Tenant’s Subway
Improvements in excess of Four Million Dollars ($4,000,000) shall be reimbursed
to Tenant as a credit against PILOT under this Lease, but only to the extent
that any such excess expenditure was reasonably required, in Landlord’s reasonable
opinion based on a detailed accounting of such costs provided by Tenant to
Landlord, in order to construct the minimum improvements that would be required
under the Zoning Resolution as of June 20, 2000.

 

(c)          In
the event that the completion of Tenant’s Subway Improvements is determined by
the New York City Department of Buildings to be a condition to obtaining a
temporary or permanent certificate of occupancy for the Core and Shell (and,
therefore, is a condition to the achievement of Substantial Completion), and
Tenant is delayed in obtaining any such certificate of occupancy solely due to
a delay actually caused by the New York City Transit Authority (after taking
into account all reasonable measures that were taken or should reasonably have
been taken by Tenant to mitigate the effects thereof), the Fixed Substantial
Completion Date shall be extended for a period reasonably determined by
Landlord, but in no event shall such extension be for a period greater than the
period reasonably caused by such delay.

 

(d)         Prior
to the execution of the Site 8 South Subway Agreement, the Public Parties
shall, at Tenant’s reasonable cost, cooperate with Tenant in any reasonable
way, to facilitate (but without the requirement to expend or to commit to
expend funds) the participation of the New York City Transit Authority with the
Project.

 

Section 6.7                                   Final
Completion; Permanent Certificate of Occupancy. 
Tenant shall, using commercially reasonable efforts, diligently and
continuously pursue the development of the New Building until the New Building
shall be complete and fully operational. Within a reasonable period after the
completion of the initial build out in respect of Demised Space constituting
one hundred percent (100%) of the Square Feet to be occupied in the New
Building, Tenant shall with reasonable diligence obtain (or cause to be
obtained) a permanent certificate of occupancy for the New Building.

 

67

 

Section 6.8                                   Construction
Agreements.  All construction agreements
valued at One Hundred Thousand Dollars ($100,000) or more shall include the
following provisions:

 

(a)          [“Contractor”/”Subcontractor”/”Materialman”]
hereby agrees that immediately upon the purchase by
[“contractor”/”subcontractor”/”materialman”] of any building materials to be
incorporated in the Property (as defined in the Agreement of Lease, dated
                              ,
2009 between Owner and 42nd St. Development Project, Inc. (the “Lease”)),
such materials shall become the sole property of the Landlord (as defined in
the Lease), notwithstanding that such materials have not been incorporated in,
or made a part of, such Property at the time of such purchase; provided,
however, that the Landlord (as defined in the Lease) shall not be liable
in any manner for payment to [“contractor” / “subcontractor” / “materialman”]
in connection with the purchase of any such materials, and Landlord shall have
no obligation to pay any compensation to [“contractor” / “subcontractor” /
“materialman”] by reason of such materials becoming the sole property of the
Landlord.

 

(b)         [“Contractor”
/ “Subcontractor” / “Materialman”] hereby agrees that notwithstanding that
[“contractor” / “subcontractor” / “materialman”] performed work at the Property
(as defined in the Lease) or any part thereof, Landlord shall not be liable in
any manner for payment to [“contractor” / “subcontractor” / “materialman”] in
connection with the work performed at the Property.

 

(c)          [“Contractor”
/ “Subcontractor” / “Materialman”] hereby agrees to make available for
inspection by the Landlord, during reasonable business hours, [“contractor’s” /
“subcontractor’s” / “materialman’s”] books and records relating to the
Alterations / Construction Work / Condemnation Restoration / Restoration (as defined
in the Lease) being performed or the acquisition of any material or equipment
to be incorporated into the Property.

 

(d)         The
Landlord is not party to this [“contract” / “agreement”] and will in no way be
responsible to any party for any claims of any nature whatsoever arising or
which may arise from such [“contract” / “agreement”].

 

(e)          All
covenants, representations, guaranties and warranties of [“contractor” /
“subcontractor” / “materialman”] set forth in the preceding four paragraphs
shall be deemed to be made for the benefit of the Landlord and shall be
enforceable by the Landlord.

 

Section 6.9                                   Construction
Sign.  Within thirty (30) days after
request of Landlord, Tenant shall install, during the period in which Tenant is
undertaking Tenant’s Construction Work, a project sign at the Project that
satisfies the requirements of the DUO, if any, and such sign shall be
maintained at the Project by Tenant thereafter at all times until Substantial
Completion is achieved.

 

Section 6.10                            Project
Area.  Tenant shall require its
general contractor, construction manager, major trade contractors and all other
workers at the Property connected with any Construction Work to work
harmoniously with each other, and with other contractors and workers on the
Project, and Tenant shall not engage in, permit or suffer, any conduct which
may disrupt such harmonious relationship. Tenant shall take commercially
reasonable efforts to (a) enforce the aforesaid requirements and (b) cause
its general contractor, construction manager and

 

68

 

major trade contractors to
minimize any interference with the use, occupancy and enjoyment of the Project
area by other occupants and visitors thereof.

 

Section 6.11                            Title
to Materials.  All materials and
other Equipment incorporated in the Improvements, excluding any Tenant or
Subtenant personal property, shall, effective upon their incorporation into the
Project and at all times thereafter, constitute the property of Landlord and
shall constitute a portion of the Property.

 

Section 6.12                            Nonadverse
Structural Effect.  Tenant may
provide to Landlord a statement of an Architect or an Engineer approved by
Landlord pursuant to this Lease, in the form of Exhibit O attached hereto, certifying that the contemplated
Construction Work shall have no adverse effect on a Structural Component that
is greater than a Nonadverse Structural Effect. Such statement shall be based
solely on such Engineer’s or Architect’s sole assessment of the Construction
Work in question and not on any representations or other statements made by
Tenant or any other party. Landlord shall approve or disapprove of such
Engineer’s or Architect’s statement, in Landlord’s reasonable discretion,
within ten (10) Business Days of Landlord’s receipt thereof.

 

Section 6.13                            Arbitration.  Disputes regarding any aspect of this Article VI, except for those expressly
stated otherwise or those that pertain to the DUO, may be referred to
arbitration pursuant to Section 16.3 hereof.

 

ARTICLE VII

USE AND MAINTENANCE OF THE PROPERTY

 

Section 7.1                                   Permitted
Use.

 

(a)          Use.  The Demised Premises and the Common Elements
shall be used, maintained, occupied and operated (i) in accordance with
the requirements of the DUO, (ii) at a standard of at least that of a Class “A”
office building (as understood on December 12, 2001) in midtown Manhattan,
and (iii) subject to the DUO and except as hereinafter set forth, for any
use permitted by Legal Requirements, including, without limitation, offices,
newsrooms, retail, service, auditoriums, dining facilities, communications
facilities, production facilities, ancillary medical facilities, parking for
not more than ten (10) cars, back office, storage and other uses as are
incidental or ancillary thereto, in accordance with the certificate(s) of
occupancy therefor, and for no use or purpose inconsistent with the DUO or the
operation of a Class “A” office building (as understood on December 12,
2001) in midtown Manhattan (the uses described in clauses (i), (ii) and (iii) above,
the “Permitted Use”), and for no
other use.  Tenant agrees not to use,
permit or suffer the Demised Premises or the Common Elements to be used for any
purposes not expressly permitted under this Section 7.1(a) without
the prior written consent of Landlord.

 

(b)         Display
and Signage.  All signage to be
incorporated into the design of the Demised Premises and the Common Elements,
and all lighting to be installed in connection therewith shall comply with the
specific requirements of the DUO; provided, however, that Tenant
shall not be responsible for signage and lighting relating to any Retail Space
other than any Retail Space associated with the Public Amenity.  Tenant shall install and operate, or cause

 

69

 

to be
installed and operated, lights and signs as required by the DUO by the date(s) prescribed
in the DUO applicable to each category of lighting and signage set forth in the
DUO.

 

(c)          Common
Elements.  Subject to the immediately
following sentence, the Common Elements shall not be used for any commercial
purposes.  The Lobby Sublease Space may
be used for commercial purposes, but only in accordance with, and as
contemplated by, Section 34.1
hereof.

 

(d)         Compliance
with the DUO.  Tenant shall maintain
and operate the Demised Premises and the Common Elements in compliance with the
DUO.

 

Section 7.2                                   Restrictions
on Use.  Tenant shall not use,
occupy, maintain or operate the Demised Premises and the Common Elements, nor
permit the same to be used, occupied, maintained or operated, nor do or permit
anything to be done in, on or to the Demised Premises and the Common Elements,
in whole or in part, in a manner which would in any way:

 

(a)          violate
any construction permit or certificate of occupancy affecting the Property;

 

(b)         constitute a public nuisance;

 

(c)          violate
any Legal Requirements or Insurance Requirements; or

 

(d)         violate
any requirements of the DUO.

 

Section 7.3                                   Maintenance
Obligations.

 

(a)          [INTENTIONALLY
OMITTED]

 

(b)         [INTENTIONALLY
OMITTED]

 

(c)          Maintenance
Obligations.  (i)  At all times
during the term of this Lease.  Tenant
shall (and/or shall cause each Subtenant (by incorporating the following
provisions in every Sublease and using all reasonable efforts to enforce the
same) to):

 

(A)      not
cause any waste to or upon the Demised Premises or the Common Elements or any
part thereof, nor permit or suffer any waste to or upon the Demised Premises or
the Common Elements;

 

(B)        not
cause physical damage (other than as part of any Alteration permitted hereunder
or as caused by a Casualty or Taking) to the Demised Premises or the Common
Elements or any part thereof;

 

(C)        take
good care of the Demised Premises and the Common Elements, make all repairs,
restorations and replacements thereto, interior and exterior, structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen, necessary
to (1) comply with all Legal Requirements, Insurance Requirements and the
DUO and (2) maintain and operate the Demised Premises and the Common
Elements to a standard at least of that of {first class

 

70

 

retail space
in} a Class “A” office building (as understood on December 12, 2001)
in midtown Manhattan;

 

(D)       maintain,
repair, keep, use and occupy the Demised Premises and the Common Elements in
compliance with the DUO;

 

(E)         maintain
and keep the Demised Premises and the Common Elements, and sidewalks and curbs
adjacent thereto, free and clear from rubbish, dirt, ice and snow and shall not
impede the use of or obstruct the same or allow the same to be so impeded or
obstructed in any manner;

 

(F)         maintain
and keep the sidewalks and vaults adjacent to the Improvements in good order,
repair and condition (including the prompt repair of cracks therein and the
maintenance of an even level thereof) and at all times keep the same in
compliance with the DUO and Legal Requirements;

 

(G)        [INTENTIONALLY
OMITTED];

 

(H)       [INTENTIONALLY
OMITTED];

 

(I)            prohibit
sales through window openings on the streetwall, except in the case of (1) a
Subtenant whose business is primarily the operation of a newsstand or ticket
sales or (2) the sale of tickets for movies and other attractions, i.e.,
display windows shall be used for display only and not as a point of sale; and

 

(J)           keep
the Demised Premises and the Common Elements free of graffiti and posters.

 

(ii)   If Tenant fails to maintain the cleanliness
of the sidewalks adjacent to the Improvements at least to the level of
cleanliness maintained for the overall area of the Times Square BID, as determined
by the Mayor’s Office of Operations Sanitation Scorecard for as long as the
same exists, or fails to promptly remove from the Demised Premises or the
Common Elements evidence of graffiti and such failure continues for five (5) Business
Days after notice to Tenant specifying in reasonable detail such failure and
setting forth Landlord’s right to remove same on Tenant’s behalf, Landlord
shall, at the end of such five (5) Business Day period, be entitled to
clean such sidewalks or remove such graffiti or cause the same to be cleaned or
removed, as the case may be, at the expense of Tenant.  Any and all costs incurred by Landlord in
connection therewith shall be paid to Landlord’s contractors or reimbursed to
Landlord, as Landlord shall request, and shall accrue interest at the Interest
Rate, in accordance with Section 15.1
hereof.

 

Section 7.4                                   Compliance
with Legal Requirements.  Tenant
shall promptly comply with all Legal Requirements and Insurance Requirements,
foreseen or unforeseen, ordinary as well as extraordinary, structural or
non-structural, with respect to the Demised Premises and the Common
Elements.  Tenant shall have the right to
contest the validity of any Legal Requirement or the application thereof in
accordance with this Section 7.4.  During such contest, compliance with any such
contested Legal Requirement may be deferred by Tenant upon

 

71

 

condition that before
instituting any such proceedings, Tenant shall furnish to Landlord security reasonably
satisfactory to Landlord (it being agreed that an acceptable guaranty of an
Acceptable Guarantor shall be security reasonably satisfactory to Landlord
under this Section 7.4),
securing compliance with the contested Legal Requirement and payment of all
interest, penalties, fines, fees and expenses in connection therewith.  Any such proceeding instituted by Tenant
shall be commenced as soon as is reasonably possible after the issuance of any
notification by the applicable governmental authority with respect to required
compliance with such Legal Requirement and shall be prosecuted to final
adjudication with reasonable diligence. 
Tenant hereby agrees to indemnify Landlord from and against any and all
Claims arising out of such proceeding. 
Notwithstanding the foregoing, Tenant promptly shall comply with any
such Legal Requirement and compliance shall not be deferred if at any time
there is a condition imminently hazardous to human life or health, the
Property, or any part thereof, shall be in danger of being forfeited or lost,
or if Landlord shall be in danger of being subject to criminal and/or civil
liability or penalty (other than a fine which Tenant agrees to pay or in regard
to which Tenant provides to Landlord an indemnity of Landlord by an Acceptable
Guarantor) by reason of noncompliance therewith.  The Obligations of Tenant to indemnify
Landlord under this Section 7.4
shall survive the expiration or earlier termination of this Lease.

 

Section 7.5                                   No
Waste.  Tenant will not do, permit or
suffer any waste to or upon the Demised Premises or the Common Elements or any
part thereof.  Tenant shall have the
right at any time and from time to time to sell or dispose of any Equipment,
subject to this Lease, which may have become obsolete or unfit for use or which
is no longer useful, necessary or economical in the operation of the Demised
Premises or the Common Elements; provided, however, that Tenant
shall have substituted or shall promptly substitute for the property so removed
from the Demised Premises or the Common Elements other Equipment not
necessarily of the same character but at least of equal quality in the
performance of the particular function in question as that of the property so
removed unless, in Tenant’s reasonable opinion as set forth in a written notice
to Landlord, the property so removed was performing an obsolete function or a
function no longer required in connection with the then current use of the
Demised Premises or the Common Elements and replacement thereof is not
necessary or appropriate to maintain, without impairment, the operation or
character of the Demised Premises or the Common Elements, their use and
occupancy by Subtenants or their overall value.

 

Section 7.6                                   Right
of Entry.  Landlord (and its
designee(s)) shall have the right to enter upon the Demised Premises and the
Common Elements, or any part thereof, at any time during the term hereof, for
the purpose of ascertaining the condition of the Demised Premises and/or the
Common Elements or whether Tenant or any Subtenant is observing and performing
their respective obligations hereunder, all without hindrance or molestation
from Tenant or any Person claiming by, through or under Tenant.  The above mentioned rights of entry shall be
exercisable (other than in the case of an emergency) at reasonable times, at
reasonable hours and on reasonable, prior written notice, and Landlord shall
use reasonable efforts to minimize interference with Tenant and any Subtenants,
and shall exercise such right under the supervision of Tenant’s (and any such
Subtenant’s) employees, agents or designees provided the same are made
reasonably available to Landlord for such purpose upon reasonable advance
notice to Tenant and any such Subtenant (as applicable).

 

72

 

Section 7.7                                   Utilities;
Services; No Landlord Responsibility. 
Tenant shall be responsible for all charges for gas, electricity, light,
heat, water, sewerage and power, for protective and security services, for
telephone and other communication services, and for all other public or private
utility services which shall be used, rendered or supplied upon or in
connection with the Demised Premises or the Common Elements, or any part
thereof, at any time during the term of this Lease.  Landlord shall not be required to furnish any
services, utilities or facilities whatsoever to the Demised Premises or the
Common Elements, nor shall Landlord have any duty or obligation to make any
Alteration or repair to the Demised Premises or the Common Elements.  Tenant assumes the full and sole
responsibility for the condition, operation, repair, alteration, improvement,
replacement, maintenance and management of the Demised Premises and the Common
Elements.

 

Section 7.8                                   Environmental.  Tenant shall not undertake, permit or suffer
any Environmental Activity in the Demised Premises or the Common Elements other
than (a) in compliance with all applicable Insurance Requirements and
Legal Requirements and (b) in such a manner as shall keep the Property
free from any lien imposed in respect or as a consequence of such Environmental
Activity.  Tenant shall take all
necessary steps to ensure that any permitted Environmental Activity undertaken
or permitted in the Demised Premises or the Common Elements is undertaken in a
manner as to provide prudent safeguards against potential risks to human health
or the environment or to the Demised Premises or the Common Elements.  Tenant shall notify Landlord within
twenty-four (24) hours after Tenant becomes aware of the release or discharge
of any Hazardous Materials from or at the Demised Premises or the Common
Elements and Tenant shall forthwith remediate or remove such Hazardous
Materials, subject to the last sentence of this Section 7.8. 
Landlord shall have the right from time to time to conduct an
environmental audit of the Demised Premises and/or the Common Elements, provided
Landlord has reasonable cause to believe (i) Hazardous Materials have been
released or discharged or is otherwise present at the Demised Premises or the
Common Elements or (ii) Tenant is otherwise in violation of any Legal
Requirement or Insurance Requirement relating to Hazardous Materials, and
Landlord provides written notice of its intention to conduct an environmental
audit together with a statement setting forth the reasons therefor.  Tenant shall cooperate in the conduct of such
environmental audit.  The cost of such
audit shall be payable by Tenant upon Landlord’s demand therefor; provided,
however, that if Tenant objects to such audit by written notice received
by Landlord prior to the initiation of such audit and such audit (and any
more-detailed environmental audit of the same circumstances (e.g., a so-called
phase II environmental assessment)) fails to identify any Environmental
Activity in violation of Legal Requirements, Landlord shall pay the costs of
such audit.  Such audit shall be
performed at reasonable times, at reasonable hours and on at least five (5) Business
Days notice (except in the case of an emergency), Landlord shall make
reasonable efforts to minimize interference with Tenant and any Subtenants, and
shall require its audit contractor to carry commercial liability insurance in a
commercially reasonable amount, naming Tenant and Landlord as additional
insureds, and to deliver Tenant evidence thereof no less than five (5) Business
Days prior to commencing such audit. 
Notwithstanding anything to the contrary in the foregoing portions of
this Section 7.8: (A) nothing
contained in this Section 7.8
shall require Tenant to remove or remediate any Hazardous Waste unless required
to do so by Legal Requirements applicable to the Demised Premises or the Common
Elements; and (B) Tenant shall have the right, in accordance with Section 7.4, to contest the validity
of any Legal Requirement applicable to the remediation or removal of Hazardous
Materials, provided Tenant forthwith takes all necessary

 

73

 

steps to prevent any further
discharge or release of Hazardous Materials or any other or further deterioration
to the Demised Premises or the Common Elements caused by Hazardous Materials; provided,
however, that, in any event, Tenant may not delay such remediation or
removal during the pendency of such contest if the presence of such Hazardous
Materials poses an imminent threat to the Demised Premises or the Common
Elements or any persons or if such delay could expose Landlord to increased
liability arising from such Hazardous Materials.

 

Section 7.9                                   Equitable
Relief.  Tenant hereby acknowledges
that Landlord may suffer irreparable harm by reason of a breach or threatened
breach of the provisions of this Article VII,
and, accordingly, in addition to any other remedy that Landlord may have under
this Lease or as may be permitted by applicable law, Landlord shall be entitled
to seek to enjoin the action, activity or inaction that gives rise to such
breach or threatened breach by Tenant.

 

Section 7.10                            Windows.  Tenant shall not clean or require, permit,
suffer or allow any window in the Demised Premises or the Common Elements to be
cleaned from the outside in violation of Section 202 of the Labor Law or
any other Legal Requirements or Insurance Requirements.

 

Section 7.11                            Adverse
Possession.  Tenant shall not suffer
or permit the Demised Premises or the Common Elements or any portion thereof to
be used by the public or any Person without restriction or in such manner as
would, with the lapse of time, impair title to the Demised Premises or the
Common Elements or any portion thereof, or create the basis for a legitimate
claim or claims of adverse usage or adverse possession by the public, as such,
or any Person, or of implied dedication of the Demised Premises or the Common
Elements, or any portion thereof.

 

Section 7.12                            [INTENTIONALLY
OMITTED]

 

ARTICLE VIII

REPAIRS

 

Section 8.1                                   Repairs.

 

(a)          Maintenance
of Demised Premises and the Common Elements.  As set forth in Section 7.3 hereof, Tenant shall (i) maintain the
Demised Premises and the Common Elements for their Permitted Uses, and (ii) make
all repairs, restorations and replacements thereto, interior and exterior,
structural and nonstructural, ordinary and extraordinary, and foreseen and
unforeseen.

 

(b)         Quality
of Repairs.  Except as provided in Section 7.4 hereof, all repairs,
restorations and replacements shall be at least equivalent in standard and
quality to the standard and quality of the original work or property replaced,
as the case may be.  All repairs,
restorations and replacements shall be sufficient for the proper maintenance
and operation of the Demised Premises and the Common Elements and shall be made
in compliance with all Legal Requirements and Insurance Requirements, the
requirements of the DUO and in compliance with the applicable provisions of Article IX hereof as if such repairs,
restorations or replacements were Alterations thereunder.

 

74

 

(c)          Equipment;
Access.  Tenant covenants and agrees
that throughout the term of this Lease (i) all Equipment shall be
maintained in good and safe operating order and repair, and (ii) the
Property shall, at all times, have adequate means of ingress and egress to and
from the public streets and the sidewalks used in connection therewith.  Tenant shall obtain and maintain, or cause
the Subtenants to obtain and maintain, any and all permits required in
connection with the operation of all portions of the Demised Premises, the
Common Elements and each Demised Space. 
Landlord shall not be required to furnish or obtain any permits, or to
make any repairs or Alterations, in, or to, the Demised Premises or the Common
Elements or the Equipment during the term of this Lease.  Tenant hereby assumes the full and sole
responsibility for the condition, operation, repair, replacement, maintenance
and management of the Demised Premises, the Equipment and, jointly with the
tenants under the other Severance Subleases, the Common Elements.

 

75

 

 

ARTICLE IX

ALTERATIONS AND COMPLETION OF THE
IMPROVEMENTS

 

Section 9.1                                   Right
to Undertake Alterations.  Subject to
the provisions of this Article IX,
Tenant shall have the right to make Alterations in and to the Demised Premises
and the Common Elements.

 

Section 9.2                                   Performance
of Alterations.

 

(a)          Standards
for All Alterations.

 

(i)   All Alterations shall be performed with due
diligence, continuity, in a good and workmanlike manner and in accordance with
good construction practice, subject however to Unavoidable Delays.

 

(ii)   All Alterations shall be performed and
completed in accordance with the DUO, the applicable Alteration Plans and
Specifications as they relate to the DUO, all Legal Requirements, Insurance
Requirements and the provisions of Articles
VIII and XI hereof, as
applicable.

 

(iii)   The Demised Premises and the Common Elements
shall be free of liens (it being understood that Tenant shall have up to forty
five (45) days to cause any liens imposed on the Demised Premises and the
Common Elements to be discharged or bonded and to provide evidence thereof to
Landlord).

 

(iv)   All Alterations, when completed, shall be of
the standard and quality commonly required at Class “A” office buildings
(as understood on December 12, 2001) in midtown Manhattan.

 

(v)   Tenant shall maintain a complete set of “as
built” plans and specifications or marked construction documents and, if
prepared by or for Tenant or any Person doing such Alterations, auto CAD Disks
with respect to any such Alteration, and shall, when and as requested by
Landlord, deliver a copy thereof (together with all change orders, field
changes, and other changes that comprise a complete record of all such work) to
Landlord.

 

(vi)   No temporary or permanent certificate of
occupancy shall be requested by or for Tenant with respect to the Improvements
or any portion thereof unless the Alteration for which such certificate is
being sought has been substantially completed in accordance with the applicable
provisions of the DUO.

 

(vii)   Each agreement between Tenant and any
contractor, materialman or other party performing any Alteration shall contain
a representation made by such contractor, materialman or other party that such
party is not a Prohibited Person and shall contain a termination right for the
benefit of Tenant if such representation shall at any time be untrue.

 

76

 

(b)         Conditions
Precedent to Commencement of Any Alteration.  Tenant shall not, nor shall Tenant permit any
Subtenant or any other Person, to commence any Alteration (other than Interior
Construction Work) governed by any element of the DUO or affecting a Structural
Component (other than by having a Nonadverse Structural Effect), unless and
until:

 

(i)   Tenant, at its sole cost and expense, shall
have obtained (and thereafter shall maintain) all necessary permits and
authorizations required by Legal Requirements for the commencement and
prosecution of such work and for approval thereof upon completion, and Tenant
shall deliver to Landlord copies of any and all of such permits and/or
authorizations required to commence such work prior to the commencement
thereof;

 

(ii)   Tenant shall have delivered to Landlord the
following items:  (A) copies of all
Alteration Plans and Specifications which have been stamped as approved by the
New York City Buildings Department (it being agreed that the Alteration Plans
and Specifications submitted to the New York City Buildings Department for
approval may be only those Alteration Plans and Specifications approved by
Landlord to the extent required under this Lease); (B) executed
counterparts (or copies thereof) of the Collateral Assignments in respect of
all construction agreements between Tenant and any general contractor,
construction manager, the Design Architect and the other Architects; (C) construction
schedules and staging plans; and (D) certificates for the insurance
required by Section 10.1
hereof, together with evidence reasonably satisfactory to Landlord of the
payment of the premiums therefor; and

 

(iii)   (A) In respect of Alterations within the
Demised Premises, there shall be no Event of Default hereunder, and (B) in
respect of Alterations within the Common Elements, there shall be no Event of
Default hereunder arising from Tenant’s obligations relating to the Common
Elements.

 

(c)          Obligations
Following Completion of Any Alteration. 
Promptly following completion of any Alteration, Tenant shall furnish to
Landlord:

 

(i)   In respect of any Alteration governed by any
element of the DUO, an Architect’s Certification (which Architect’s
Certification has not been objected to within ten (10) Business Days of
Landlord’s receipt thereof), prepared by an Architect approved (or deemed
approved) by Landlord in accordance with Section 9.6(a)(ii) hereof, that (A) the Architect
has examined the applicable Alteration Plans and Specifications, and (B) to
its best knowledge, after appropriate investigation, the Alteration, as then
constructed, has been completed substantially and in all material respects in
accordance with the applicable Alteration Plans and Specifications as it
relates to and complies with the DUO;

 

(ii)   A copy or copies of the temporary or
permanent certificate(s) of occupancy for such Alteration, if applicable;

 

77

 

(iii)   (A)  To the extent not previously
delivered to Landlord, in respect of the entire Demised Premises and Common
Elements other than any Subtenant’s initial tenant improvements to its Demised
Space, a complete set of “as built” plans in duplicate (one of such plans being
delivered in electronic format (including CAD drawings)) showing such
construction, as then constructed, if available, and if not available, “marked”
final drawings, and (B) in respect of any Subtenant’s (including, without
limitation, NYTC or any Affiliate of NYTC in its capacity as a Subtenant)
initial tenant improvements to its Demised Space, a complete set of “as built”
plans in duplicate (one of such plans being delivered in electronic format (including
CAD drawings)), if available, and if not available, “marked” final drawings, if
available;

 

(iv)   Upon request by Landlord, copies of any
documents filed with the New York City Department of Buildings;

 

(v)   Any permits or authorizations which are
required for such Alteration as completed;

 

(vi)   Copies of all guaranties or certifications
called for under any construction agreements, promptly after receipt thereof by
Tenant or any Tenant Related Entities;

 

(vii)   Copies of all New York Board of Fire
Underwriters Certificates (or the equivalent certificate of any successor
organization) for such Alteration;

 

(viii)   Copies of duly executed waivers of mechanic’s
lien from each provider of materials, supplies, equipment or labor to the
Demised Premises and/or the Common Elements relating to such Alteration or
other evidence of payment reasonably satisfactory to Landlord, promptly after
receipt thereof by Tenant; and

 

(ix)   Any plans and specifications and other
applicable documents in Tenant’s possession reasonably requested by Landlord to
demonstrate compliance with the DUO.

 

(d)         No
Responsibility of Landlord.  Landlord
shall have no responsibility to Tenant or to any Subtenant, architect,
engineer, contractor, subcontractor, supplier, materialman, workman or other
person, firm or corporation who shall engage in or participate in any
construction of any Alteration.  Notice
is hereby given that Landlord shall not be liable for any labor or materials
furnished or to be furnished to Tenant upon credit, and that no mechanic’s or
other lien for any such labor or materials shall attach to or affect the estate
or interest of Landlord in and to the Demised Premises.  Whenever and as often as any such lien shall
have been filed against the Demised Premises, whether or not based upon any
action or interest of Tenant or any Subtenant, or if any conditional bill of
sale shall have been filed for or affecting any materials, machinery or
fixtures used in the construction, repair or operation thereof, or annexed thereto
by Tenant, Tenant shall promptly take such action by bonding, deposit or
payment as will remove or satisfy the lien or conditional bill of sale.

 

78

 

(e)          Project
Area.  Tenant shall require its general contractor,
construction manager, major trade contractors and all other workers in the
Demised Premises or the Common Elements connected with any Alteration to work
harmoniously with each other, and with other contractors and workers at the
Property, and Tenant shall not engage in, permit or suffer, any conduct which
may disrupt such harmonious relationship. 
Tenant shall take commercially reasonable efforts to (a) enforce
the aforesaid requirements and (b) cause its general contractor,
construction manager and major trade contractors to minimize any interference
with the use, occupancy and enjoyment of the Property by other occupants and
visitors thereof.

 

(f)            Title
to Materials.  All materials and other Equipment
incorporated in the Demised Premises or the Common Elements, as the case may
be, excluding any Tenant or Subtenant personal property, shall, effective upon
their incorporation into the Demised Premises or the Common Elements, as the
case may be, and at all times thereafter, constitute the property of Landlord
and shall constitute a portion of the Demised Premises or the Common Elements,
as the case may be.

 

Section 9.3                                   Construction
Agreements.  All construction
agreements valued at One Hundred Thousand Dollars ($100,000) or more shall
include the following provisions:

 

(a)          [“Contractor”
/ “Subcontractor” / “Materialman”] hereby agrees that immediately upon the
purchase by [“contractor” / “subcontractor” / “materialman”] of any building
materials to be incorporated in the Demised Premises and the Common Elements
(as such terms are defined in the Agreement of Sublease, dated
                ,
2009, between Owner and 42nd St. Development Project, Inc. (the “Lease”)),
such materials shall become the sole property of the Landlord (as defined in
the Lease), notwithstanding that such materials have not been incorporated in,
or made a part of, such Demised Premises and/or the Common Elements at the time
of such purchase; provided, however, that the Landlord (as
defined in the Lease) shall not be liable in any manner for payment to
[“contractor” / “subcontractor” / “materialman”] in connection with the
purchase of any such materials, and Landlord shall have no obligation to pay
any compensation to [“contractor” / “subcontractor” / “materialman”] by reason
of such materials becoming the sole property of the Landlord.

 

(b)         [“Contractor”
/ “Subcontractor” / “Materialman”] hereby agrees that notwithstanding that
[“contractor” / “subcontractor” / “materialman”] performed work at the Demised
Premises and/or the Common Elements or any part thereof, Landlord shall not be
liable in any manner for payment to [“contractor” / “subcontractor” /
“materialman”] in connection with the work performed at the Demised Premises
and/or the Common Elements.

 

(c)          [“Contractor”
/ “Subcontractor” / “Materialman”] hereby agrees to make available for
inspection by the Landlord, during reasonable business hours, [“contractor’s” /
“subcontractor’s” / “materialman’s”] books and records relating to the
Alterations / Condemnation Restoration / Restoration (as all defined in the
Lease) being performed or the acquisition of any material or equipment to be
incorporated into the Demised Premises and/or the Common Elements.

 

79

 

(d)         The
Landlord is not party to this [“contract” / “agreement”] and will in no way be
responsible to any party for any claims of any nature whatsoever arising or
which may arise from such [“contract” / “agreement”].

 

(e)          All
covenants, representations, guaranties and warranties of [“contractor” /
“subcontractor” / “materialman”] set forth in the preceding four paragraphs
shall be deemed to be made for the benefit of the Landlord and shall be
enforceable by the Landlord.

 

Section 9.4                                   Use
of Plans and Specifications. 
Landlord shall have the right to use, without any payment or other
compensation by Landlord therefor, solely for the purposes set forth in the
following sentence, (a) the Approved Schematic Design Plans, the Design
Development Plans, the Final Plans and Specifications and any Alteration Plans
and Specifications, (b) any surveys and “as built” plans showing the
applicable Alteration, and (c) any other plans and specifications with
respect to such Alteration.  Landlord
shall have the right to use the items enumerated in clauses (a) through (c) above
to facilitate the exercise of its rights under this Lease and, subsequent to
the expiration or termination of this Lease where Landlord retains title to the
Demised Premises or the Common Elements, for the construction, use, operation
and Alteration of the Demised Premises or the Common Elements and other
purposes incidental thereto; subject, however, to the following restrictions:

 

(i)   the work product of the Design Architect (the
“DA Work Product”) may be used
only for the completion of the Alteration in question or for reference purposes
for additions, extensions, remodeling or modification of the Alteration in
question not designed by the Design Architect; however, ownership rights to
said DA Work Product and rights therefrom may not be transferred to another
party for its use in the design of another project;

 

(ii)   Design Architect retains all statutory and
reserve rights, including copyright, to typical or standard design details,
depictions, instructions and specifications regularly used by the Design
Architect in the ordinary course of its architectural practice;

 

(iii)   Design Architect retains the right to publish
images and appropriate technical information from Design Architect’s work in
professional journals and for portfolio publicity purposes;

 

(iv)   Design Architect is not responsible for
errors or discrepancies on any electronic portable media on which Design
Architect’s design documents are transferred except to the extent that such
errors or inconsistencies are caused by or contributed to by Design Architect
when it transfers such information to such media or while such media are in
Design Architect’s possession or control;

 

(v)   in connection with any publication of
photographs or other representations of the Alteration in question where the
design of the Alteration in question is the subject of the publication, if
applicable, the party causing such publication will endeavor to see that
reference to the Design Architect as architect for the Alteration in question
is included in any such publication as follows: Renzo Piano

 

80

 

Building Workshop, Design Architects, with
FXFOWLE (f/k/a Fox and Fowle) Architects, Executive Architect; and

 

(vi)   if the Project is materially modified after
its completion and Design Architect has not consented or participated in such
modification, no reference shall be made to Renzo Piano Building Workshop or
FXFOWLE (f/k/a Fox and Fowle) Architects, as the architect(s) for the
Alteration in question, and the owner of the Alteration in question shall use
its diligent efforts to prevent the dissemination of information regarding such
completion or modification which includes any such reference.

 

Nothing in this Section 9.4
shall permit the selection and approval by Tenant of a Design Architect other
than in accordance with Section 9.6(a) hereof.  The provisions of this Section 9.4 shall survive any such
expiration or earlier termination of this Lease.

 

Section 9.5                                   Major
Alterations.

 

(a)          Conditions
to Performance.  In addition to the
requirements of Section 9.2
hereof (A) if the reasonably estimated cost of any proposed Alteration in
or (1) to the Demised Premises or any portion thereof calculated as a
whole or (2) to the Common Elements or any portion thereof calculated as a
whole, equals or exceeds Two Million Dollars ($2,000,000) (Adjusted for
Inflation from and after the Substantial Completion Date), excluding the cost
of interior cosmetic and decorative items included in such Alteration, either
individually or in the aggregate with other Alterations in or to the Demised
Premises and the Common Elements or any portion thereof undertaken by the same
party during any Lease Year in connection with a single job that is performed
in stages (each, a “$2,000,000+ Alteration”),
(B) to the extent that any portion of any Alteration involves work which
will affect any Structural Component other than by having a Nonadverse
Structural Effect (each, a “Structural
Alteration”), or (C) to the extent that any portion of any
Alteration affects any portion of the Demised Premises or the Common Elements
that is governed by any element of the DUO (each, a “DUO Alteration”; any Alteration described by clauses (B) or
(C) above, a “DUO/Structural Alteration”;
any Alteration described by clauses (A), (B) or (C) above, a “Major Alteration”):

 

(i)   Tenant shall furnish to Landlord the
following, in respect only of a DUO/Structural Alteration, at least thirty (30)
Business Days prior to commencement of any such DUO/Structural Alteration,
complete proposed Alteration Plans and Specifications for such DUO/Structural
Alteration (which shall include complete information and dimensions necessary
for the construction and finishing of the applicable DUO/Structural Alteration
and for any engineering required in connection therewith (both standard
architectural drawings and in electronic format (including CAD drawings))),
prepared by an Architect or by a reputable, licensed professional engineer
selected by Tenant (or any Subtenant, as applicable), which submittal shall
comply with all applicable Legal Requirements and Insurance Requirements, and
any other drawings, information or samples which Landlord may reasonably
request, all of the foregoing to be subject to Landlord’s review and approval (1) in
respect of any DUO Alteration, only for compliance with the DUO in accordance
with the procedures, and within the time periods, applicable to the review and
approval

 

81

 

of “Design Development Plans” and “Final
Plans”, as the case may be, as prescribed in the applicable DUO Exhibit and
(2) in respect of any Structural Alteration, in accordance with the
procedures, and within the time periods, applicable to the review and approval
of “Design Development Plans” and “Final Plans”, as the case may be, as
prescribed in Exhibit E-6
attached hereto; provided, however, (A) Alteration in
connection with any DUO/Structural Alteration shall not commence until Landlord
shall have approved the proposed Alteration Plans and Specifications for such
DUO/Structural Alteration (it being agreed that Landlord’s disapproval of one
or more DUO/Structural Alterations shall not impede Tenant’s right to proceed
pursuant hereto with any Landlord approved DUO/Structural Alteration so long as
the Alteration being pursued is not related in any way to the Alteration that
has not been approved by Landlord), and (B) that Landlord’s approval of
the proposed Alteration Plans and Specifications (or any modifications thereto)
shall not be, nor shall be construed as being, or relied upon as, a
determination that any such proposed Alteration Plans and Specifications (or
any modifications thereto) comply with any Legal Requirements or Insurance
Requirements;

 

(ii)   Tenant shall furnish to Landlord, at least
ten (10) Business Days prior to commencement of any $2,000,000+
Alteration, any one of the following:  (A) cash
or an irrevocable letter of credit in such amount as shall be satisfactory to
Landlord; (B) payment and performance bonds in forms and by sureties
reasonably satisfactory to Landlord; (C) a guaranty in form and from a
creditworthy entity reasonably satisfactory to Landlord; or (D) such other
security as shall be reasonably satisfactory to Landlord (it being agreed that
an acceptable guaranty of an Acceptable Guarantor shall be security reasonably
satisfactory to Landlord under this Section 9.5(a)(ii));

 

(iii)   Each Major Alteration shall be conducted
under the supervision of a reputable and experienced architect, engineer or
construction professional reasonably acceptable to Landlord (it being
acknowledged that, pursuant to Section 9.6(a) hereof,
a DUO/Structural Alteration may require the participation of the Design
Architect, an other Architect or an Engineer); and

 

(iv)   Each Major Alteration subject to this Section 9.5(a) shall conform
substantially and in all material respects to the Alteration Plans and
Specifications approved therefor pursuant to Section 9.5(a)(i) or
Section 9.5(b)(ii) hereof.

 

(b)         Alteration
Plans and Specifications.

 

(i)   Approval Standard.  In the event that the Design Architect is
Renzo Piano Building Workshop, or a Replacement Design Architect approved or
deemed approved by the Landlord in accordance with the Replacement Design
Architect Approval Criteria, the standard for approval of all DUO design
reviews shall be “Landlord’s reasonable judgment”.  In the event that the Design Architect is not
Renzo Piano Building Workshop, or a Replacement Design Architect approved or
deemed approved by the Landlord in accordance with the Replacement Design

 

82

 

Architect Approval Criteria, the standard for
all DUO design reviews shall be “Landlord’s sole discretion”.

 

(ii)   Modification of Alteration Plans and
Specifications.  If Tenant desires to
modify Alteration Plans and Specifications after they have been approved or
deemed approved by Landlord pursuant to Section 9.5(a)(i) hereof,
and either (A) Tenant has not provided to Landlord an Architect’s Certification,
prepared by an Architect or an Engineer approved (or deemed approved) by
Landlord in accordance with Section 9.6(a)(ii) hereof,
describing the proposed modification and stating that such modification is not
to have been governed by any element of the DUO or does not affect a Structural
Component (other than by having a Nonadverse Structural Effect), or (B) such
modification represents an immaterial field change to such plans (notification
of each such immaterial field change being promptly provided to Landlord by
Tenant together with adequate identification of such change and an explanation
of the change made), Tenant shall submit the proposed modifications to
Landlord, clearly identifying each such modification, together with a statement
of Tenant’s reasons therefor.  If (a) Tenant
has submitted such aforesaid Architect’s Certification and such Architect’s
Certification has not been objected to by Landlord within five (5) Business
Days after Landlord’s receipt thereof or (b) such modification represents
an immaterial field change and Tenant has provided the information required in
clause (2) of this Section 9.5(b)(ii),
then such submission of the proposed modifications for Landlord’s review and
approval is not required.  Unless and
until a proposed modification is clearly identified by Tenant, such
modification shall not be considered by Landlord and the prior set of approved
plans shall govern in respect of such modification.  Landlord shall not disapprove any matter
previously submitted and approved, or deemed approved by Landlord, except to
the extent that the proposed modification affects any matter so approved or
deemed approved.  If Landlord determines,
in accordance with the applicable provisions of Section 9.5(a)(i) hereof,
that any proposed modifications are acceptable to Landlord, Landlord shall so
notify Tenant.  If Landlord determines,
in accordance with the applicable provisions of Section 9.5(a)(i)
hereof, that such modifications are not otherwise acceptable,
Landlord shall so notify Tenant, setting forth in reasonable detail Landlord’s
reasons for such determination.  In the
event Landlord determines the modification to be unacceptable, Tenant shall
revise the proposed modifications so that they are acceptable to Landlord and
resubmit them to Landlord for review in accordance with the standards
hereinabove set forth.  Each review by
Landlord under this Section 9.5(b)(ii) shall
be carried out within fifteen (15) Business Days of the date of submission of
the proposed modifications to the Alteration Plans and Specifications unless
the proposed modification substantially alters the Alteration Plans and
Specifications, in which event, so long as Landlord notifies Tenant within such
fifteen (15) Business Day period that Landlord so regards the proposed
modification, Landlord’s review shall be carried out within twenty (20)
Business Days of the date of submission of the proposed modification.

 

(iii)   Compliance with Legal Requirements.  The Alteration Plans and Specifications (and
any modification thereto) shall comply with all Legal Requirements and
Insurance Requirements (but need not comply with the Zoning Resolution, it
being understood that Alteration may be constructed without reference to

 

83

 

the provisions of the Zoning
Resolution).  Landlord’s approval of any
such Alteration Plans and Specifications (or any modification thereto) drawings
shall not be, nor shall be construed as being, or relied upon as, a
determination that any such Alteration Plans and Specifications (or any
modification thereto) drawings comply with any Legal Requirements or Insurance
Requirements.

 

(iv)   Submission in Triplicate.  All drawings submitted to Landlord pursuant
to this Section 9.5
shall be submitted in triplicate.

 

(v)   Production Architect.  Notwithstanding any provision of this Lease
requiring the execution by the Design Architect of any certificate or other
document, Landlord agrees that such certificate or other document (including,
without limitation, any Architect’s Certificate) may be executed, in lieu
thereof, by the Production Architect on behalf of the Design Architect once
approved by the Design Architect.

 

(c)          Right
of Inspection.  Landlord shall have
the right, during the performance of any Alteration governed by any element of
the DUO or affecting a Structural Component (other than by having a Nonadverse
Structural Effect), to (i) maintain, at Landlord’s cost, field personnel
or other representatives at the Demised Premises or in the portions of the
Improvements constituting the Common Elements to observe Tenant’s construction
methods and techniques and to determine that such Alteration is being performed
in accordance with the provisions of this Lease, and (ii) have such field
personnel or other designers attend Tenant’s job and/or safety meetings (it
being agreed that, in respect of both of clauses (i) and (ii) immediately
preceding, such Landlord’s field personnel or other representatives shall not
instruct contractors, interfere with or impede the work of such or other
workers in respect of any such Alteration). 
Landlord agrees that the presence and activities of such field personnel
or other representatives shall not impede in any respect the performance of
such Alteration.  No such observation or
attendance by Landlord’s personnel, designers or other representatives shall
impose upon Landlord responsibility for any failure by Tenant to comply with
any Legal Requirements, Insurance Requirements or safety practices in
connection with such Alteration or constitute an acceptance of any such
Alteration which does not comply in all respects with the provisions of this
Lease.

 

Section 9.6                                   Approval
of Project Participants.

 

(a)          Approval
of Architects.

 

(i)   Design Architect.  The design architect for any Alteration
(other than Interior Construction Work) governed by any element of the DUO
shall be the Design Architect.  If Tenant
shall desire to replace Renzo Piano Building Workshop or any Replacement Design
Architect previously approved by Landlord as the Design Architect, then such
replacement Design Architect proposed by Tenant shall be approved by Landlord
(such approved replacement Design Architect, the “Replacement Design Architect”) so long as the proposed
Replacement Design Architect, in Landlord’s reasonable judgment, meets all of
the following criteria (the “Replacement Design
Architect Approval Criteria”): 
(A)  the proposed

 

84

 

Replacement Design Architect is known for
artistically combining architecture and engineering in inventive and unique
ways; (B)  the proposed Replacement Design Architect is capable of
creating architecture that sensitively and imaginatively addresses the needs of
users of the improvement as well as users of adjacent city sidewalks; (C) 
the proposed Replacement Design Architect is known for sensitive and
imaginative use of materials to resolve problems in new ways; (D)  the
proposed Replacement Design Architect is known for an influential, diverse body
of work, all of which is, as a whole, internationally recognized for high
standards of excellence in architecture; (E)  the proposed Replacement
Design Architect is the recipient of international awards and prizes; (F) 
the proposed Replacement Design Architect has experience in creating
architecture that is responsive to complex urban sites; and (G)  the
proposed Replacement Design Architect will be involved in all phases of the
design, including an active role while the Alteration in question is under
construction.  In the event that Tenant
proposes to replace the Design Architect with an architect that, in Landlord’s
reasonable judgment, does not meet the Replacement Design Architect Approval
Criteria, then Landlord may approve or disapprove the proposed Design Architect
in Landlord’s sole discretion.  Any
proposed Replacement Design Architect shall, in any event, have substantial
experience in construction projects that are comparable in scope and visibility
to the Improvements and shall not be a Prohibited Person.  If Landlord fails to approve or reject any
architect nominated by Tenant to be a Design Architect within sixteen (16)
Business Days after the written submission to Landlord of such architect’s name
and other information (including adequate portfolio information) sufficiently
detailed to permit Landlord to make a reasoned judgment of the appropriateness
of the proposed architect for the 42nd Street Project, or Landlord fails to
make reasonable requests for additional information related thereto within such
time period and thereafter to approve or reject such architect within eleven
(11) Business Days after written submission of such additional information as
Landlord shall have reasonably requested, Tenant shall have the right to give
Landlord a reminder notice, which reminder notice shall contain the following
caption in bold and capitalized type:

 

YOUR
APPROVAL OF
                              
AS THE DESIGN ARCHITECT SHALL BE DEEMED GIVEN IF YOU FAIL TO APPROVE OR REJECT
SUCH PERSON WITHIN FIVE (5) BUSINESS DAYS FROM THE DATE OF YOUR RECEIPT OF
THIS NOTICE.

 

If Landlord fails to approve or
reject the proposed architect within five (5) Business Days after its
receipt of such reminder notice, such architect shall be deemed approved by
Landlord.  Any rejection of an architect
by Landlord shall be accompanied by specific reasons set forth in reasonable
detail.

 

(ii)   Other Architects and Engineers.  Except in respect of the Design Architect
(which shall be approved in accordance with Section 9.6(a)(i) hereof),
the Production Architect and each other architect and engineer proposed to be
engaged in respect to any Alteration (other than Interior Construction Work or
demolition work) (A) governed by any element of the DUO, (B) affecting
a Structural Component (other than by having a Nonadverse Structural Effect),
or (C) of a value of

 

85

 

greater than $1,000,000 (which amount shall
be Adjusted for Inflation from the Substantial Completion Date), shall be
approved by Landlord: (1) in respect of any Alteration subject to clause (A) of
this Section 9.6(a)(ii),
in Landlord’s sole discretion; and (2) in respect of any Alteration
subject only to clause (B) or (C) of this Section 9.6(a)(ii),
in Landlord’s approval, not to be unreasonably withheld.  Each such Architect shall have substantial
experience in construction projects that are comparable in scope to such
architect’s intended work at the Improvements and shall not be a Prohibited
Person.  Each such Engineer shall (x) be
of recognized standing among its peers, (y) have at least ten (10) years
experience in providing engineering services in respect of highrise buildings
in urban centers and (z) not be a Prohibited Person.  If Landlord fails to approve or reject any
architect nominated by Tenant to be an Architect (other than the Design
Architect), or engineer nominated by Tenant to be an Engineer, as the case may
be, within sixteen (16) Business Days after the written submission to Landlord
of such architect’s name and other information (including adequate portfolio
information) sufficiently detailed to permit Landlord to make a reasoned
judgment of the appropriateness of the proposed architect or engineer, as the
case may be, for the 42nd Street Project, or Landlord fails to make reasonable
requests for additional information related thereto within such time period and
thereafter to approve or reject such architect or engineers, as the case may be
within eleven (11) Business Days after written submission of such additional
information as Landlord shall have reasonably requested, Tenant shall have the
right to give Landlord a reminder notice, which reminder notice shall contain
the following caption in bold and capitalized type:

 

YOUR
APPROVAL OF
                              
AS AN ARCHITECT/ENGINEER SHALL BE DEEMED GIVEN IF YOU FAIL TO APPROVE OR REJECT
SUCH PERSON WITHIN FIVE (5) BUSINESS DAYS FROM THE DATE OF YOUR RECEIPT OF
THIS NOTICE.

 

If Landlord fails to approve or
reject the proposed architect or engineers, as the case may be, within five (5) Business
Days after its receipt of such reminder notice, such architect or engineer, as
the came may be, shall be deemed approved by Landlord.  Any rejection of an architect or engineer, as
the case may be, by Landlord shall be accompanied by specific reasons setting
forth in reasonable detail the basis for such rejection.

 

(b)         Approval
of Contractors.

 

(i)   General Standard; Prohibited Persons.  All Alterations shall be performed and/or
managed by one or more reputable and responsible general contractor(s) (or
if Tenant, or any Subtenant, as the case may be, hires contractors instead of a
general contractor, such contractors) or construction manager(s).  No general contractor, construction manager,
Major Contractor or other contractor that is engaged to do any Alteration shall
be a Prohibited Person.  Tenant shall
cause such restriction to be inserted in each Sublease.

 

(ii)   Major Contractors.  Prior to the time at which Tenant solicits
any bids for labor or materials for any Alteration (other than Interior
Construction Work) governed by any element of the DUO or affecting a Structural

 

86

 

Component (other than by having a Nonadverse
Structural Effect), Tenant shall furnish Landlord for its approval (to the
extent hereinafter provided) a list of all Persons Tenant intends to solicit
for any such work who, if so selected, would (a) have a contract amounting
to a value of greater than $1,000,000 (which amount shall be Adjusted for
Inflation from the Substantial Completion Date), or (b) otherwise be
responsible for an item that is governed by the DUO or affects a Structural
Component, other than by having a Nonadverse Structural Effect (any such
contractor, a “Major Contractor”).  The list shall state the name, address, phone
number and EIN of each such Major Contractor and each of its Principals and in
what capacity such Major Contractors would be performing work at the Demised
Premises or the Common Elements. 
Landlord shall have the right to disapprove any Major Contractor
only:  (1) if such Major Contractor
is a Prohibited Person; or (2) if such Major Contractor, in Landlord’s
reasonable judgment, demonstrated a failure, based on prior job performance, to
exercise due care in the performance of the work for which such Major
Contractor may be hired in respect of the Improvements (it being agreed that no
Person listed on Exhibit I attached hereto may
be disapproved by Landlord on the basis described in this clause (2) of
this Section 9.6(b)(ii)).  If Landlord fails to approve or reject any
Major Contractor within eleven (11) Business Days after the receipt by Landlord
of such Major Contractor’s name, address, phone number and EIN (and those of
its Principals), or Landlord fails to make reasonable requests for additional
information related thereto within such time period and thereafter to approve
or reject such Major Contractor within six (6) Business Days after written
submission of such additional information as Landlord shall have reasonably
requested, Tenant shall have the right to give Landlord a reminder notice,
which reminder notice shall contain the following caption in bold and
capitalized type:

 

YOUR
APPROVAL OF
                              
AS A MAJOR CONTRACTOR SHALL BE DEEMED GIVEN IF YOU FAIL TO APPROVE OR REJECT
SUCH PERSON WITHIN FIVE (5) BUSINESS DAYS FROM THE DATE OF YOUR RECEIPT OF
THIS NOTICE.

 

If Landlord fails to approve or
reject the proposed Major Contractor within five (5) Business Days after
its receipt of such reminder notice, such Major Contractor shall be deemed
approved by Landlord.  Any rejection of a
Major Contractor by Landlord shall be accompanied by specific reasons set forth
in reasonable detail.  Landlord approves,
as of December 12, 2001, the Major Contractors listed on Exhibit I attached hereto.

 

Section 9.7                                   Alterations
Certification.  If Legal Requirements
require that plans be submitted to the New York City Department of Buildings in
respect of a given Alteration, Tenant shall deliver to Landlord at least seven (7) Business
Days prior to the commencement of work in respect thereof a certification (the
“Alterations Certification”)
signed by a Qualified Certifying Party of Tenant (a) describing the
applicable Alteration, (b) setting forth the reasonably estimated cost
thereof and (c) stating whether such Alteration will or will not affect
any Structural Component (or if such Alteration will affect a Structural
Component, stating whether or not such Alteration will have only a Nonadverse
Structural Effect) and will or will not affect any element of the DUO.  A copy of the Alteration Plans and
Specifications, if any, prepared for any such Alteration shall be submitted
with the Alterations

 

87

 

Certification, and the architect
or engineer who prepared such plans and specifications shall also sign the
Alterations Certification.  If the
statement set forth in the Alterations Certification indicates that the
Alteration in question will affect any Structural Component (other than by
having a Nonadverse Structural Effect) or any element of the DUO or is
otherwise untrue, or if Tenant fails to submit an Alterations Certificate, the
applicable Alteration shall be subject to the requirements of Section 9.5(a) hereof and the
commencement of the Alteration without compliance with the requirements of Section 9.5(a) hereof shall
constitute a Default hereunder.

 

Section 9.8                                   Reimbursement
of Expenses of Review.  Tenant shall
reimburse Landlord for the commercially reasonable, actual out-of-pocket fees
and expenses of any Architect or Engineer selected by Landlord to review (i) any
plans and specifications for any Alteration subject to Section 9.5(a) hereof or (ii) the
correctness of the Alterations Certification associated therewith is being contested
by Landlord; provided, however, that (a) such fees and
expenses shall be limited to those incurred in reviewing the portion of such
plans and specifications governed by any element of the DUO or affecting a
Structural Component (other than by having a Nonadverse Structural Effect), and
(b) Tenant’s reimbursement obligation under this Section 9.8 shall not exceed one-half
percent (0.5%) of the cost of such Alteration.

 

Section 9.9                                   Nonadverse
Structural Effect.  Tenant may
provide to Landlord a statement of an Architect or an Engineer approved by
Landlord pursuant to this Lease, in the form of Exhibit J attached hereto, certifying that the
contemplated Alteration shall have no adverse effect on a Structural Component
that is greater than a Nonadverse Structural Effect.  Such statement shall be based solely on such
Engineer’s or Architect’s independent assessment of the Alteration in question
and not on any representations or other statements made by Tenant or any other
party.  Landlord shall approve or
disapprove of such Engineer’s or Architect’s statement, in Landlord’s
reasonable discretion, within ten (10) Business Days of Landlord’s receipt
thereof.

 

Section 9.10                            Completion
of Improvements.

 

(a)          Tenant’s
Subway Improvements. (i)  
Landlord shall have the continuing right to review any modifications to
the Site 8 South Subway Agreement and to approve same solely to the extent that
such modifications do not impact the DUO. 
In the event of any conflict between the terms of this Lease and the
terms of the Site 8 South Subway Agreement in respect of the performance of
Tenant’s Subway Improvements, the terms of the Site 8 South Subway Agreement
shall prevail.

 

(ii)   Tenant shall be responsible for all costs in
respect of Tenant’s Subway Improvements. 
Subject to Section 3.04(b) of the Site 8 South LADA, an amount
equal to Tenant’s allocation (based on an allocation between the tenants of all
Severance Subleases as to which all such tenants have jointly notified Landlord
on or before the Commencement Date) of the actual costs of Tenant’s Subway
Improvements in excess of Four Million Dollars ($4,000,000) shall be reimbursed
to Tenant as a credit against PILOT under this Lease, but only to the extent
that any such excess expenditure was reasonably required, in Landlord’s
reasonable opinion based on a detailed accounting of such costs provided by
Tenant to Landlord, in order to construct the minimum improvements that would
be required under the Zoning Resolution as of June 20, 2000.

 

88

 

 

(b)         Final
Completion; Permanent Certificate of Occupancy.  Tenant shall, using commercially reasonable
efforts, diligently and continuously pursue the development of the Demised
Premises and the Common Elements until the Demised Premises and the Common Elements
shall be complete and fully operational. 
Within a reasonable period after the completion of the initial build out
in respect of Demised Space and the Common Elements constituting one hundred
percent (100%) of the Square Feet to be occupied in the Demised Space and the
Common Elements, Tenant shall with reasonable diligence obtain a permanent
certificate of occupancy for the Demised Premises and the Common Elements.

 

Section 9.11                            Disputes.  Disputes regarding any aspect of this Article IX, other than those expressly
stated otherwise or those that pertain to the DUO, may be referred to
arbitration pursuant to Section 16.3
hereof.

 

ARTICLE X

INSURANCE

 

Section 10.1                            Insurance.  At all times during the term of this Lease,
Tenant shall, in respect of the Demised Premises and the Common Elements, keep
and maintain, or cause to be kept and maintained, policies of:

 

(a)          commercial
property insurance covering, at a minimum, the perils insured under the ISO
special causes of loss form (CP 10 30) (or a substitute form providing
equivalent coverage) (including (i) debris removal, demolition and
increased cost of construction that are caused by operation of Legal
Requirements regulating the construction or repair of damaged facilities, (ii) flood
(subject to Section 10.1(i) hereof)
and, to the extent available at commercially reasonable rates, earth movement
coverage, and (iii) coverage against collapse and including an ordinance
and law endorsement, in an amount not less than the then Full Insurable Value
subject to the foregoing qualification with respect to flood and earthquake
insurance and subject to commercially reasonable deductibles reasonably
approved by Landlord;

 

(b)         commercial
general liability insurance written on ISO occurrence form CG 00 01 (or a
substitute form providing equivalent coverage, which shall include a broad form
CGL endorsement if the substitute form is a 1973 edition CGL form), which shall
cover liability of the Tenant or the Condominium Association, as the case may
be, arising from operations of the Demised Premises or the Common Elements, as
the case may be, independent contractors, products and completed operations,
personal injury and advertising injury and liability assumed under an insured
contract, protecting and indemnifying Tenant (and the Condominium Association,
as applicable) and Landlord, from and against any and all claims for damages or
injury to person or property or for loss of life or of property occurring upon,
in, or about the Demised Premises and the Common Elements applicable and the
adjoining streets, vaults, sidewalks and passageways, such insurance to afford
immediate protection, to the limit of not less than Fifty Million Dollars
($50,000,000) (as such sum shall be Adjusted for Inflation from December 12,
2001) per occurrence and Fifty Million Dollars ($50,000,000) (as such sum shall
be Adjusted for Inflation from December 12, 2001) in the aggregate for all
occurrences within each policy year; such policy shall include a provision that
said aggregate limit shall apply separately at the Demised Premises and the
Common Elements, as applicable, or, alternatively,

 

89

 

such coverage
shall be in an amount not less than One Hundred Million Dollars ($100,000,000)
(as such sum shall be Adjusted for Inflation from December 12, 2001) per
occurrence and in the aggregate, and that said insurer will provide notice to
the Landlord if said aggregate is reduced by either payments of a claim or
establishment of a reserve for claims if said payments or reserves exceed Five
Million Dollars ($5,000,000); Tenant agrees that if the aggregate limit is
reduced by the payment of a claim or establishment of a reserve to take all
practical immediate steps to have the aggregate limit restored by endorsement
to the existing policy or the purchase of an additional insurance policy;

 

(c)          boiler
and pressure vessel insurance including pressure pipes for the Demised Premises
and the Common Elements;

 

(d)         business
interruption insurance in an amount no less than the sum of PILOT and Theater
Surcharge for one (1) year as determined by Tenant, subject to Landlord’s
prior written approval and adjustments from time to time but not more
frequently than once annually for the first five (5) years after December 12,
2001 and thereafter not more frequently than once every two (2) years, and
which insurance shall be payable to Landlord or Tenant, as their respective
interests may appear;

 

(e)          workers’
compensation and employers liability insurance covering all persons employed at
or in respect of the Demised Premises or the Common Elements, as the case may
be, with statutorily required limits; workers’ compensation insurance shall
include policy endorsements providing an extension of the policy to cover the
liability of the insured under the “Other States Coverage”;

 

(f)            business
automobile liability insurance covering liability arising out of any vehicle
(including owned, non-owned, leased, rented and/or hired vehicles) insuring
against liability for bodily injury, death and property damage in an amount not
less than Five Million Dollars ($5,000,000) (as such sum shall be Adjusted for
Inflation every five (5) years after December 12, 2001) each accident
limit;

 

(g)         during
the performance of any Alteration, builder’s risk completed value form
insurance covering the perils insured under the ISO special causes of loss
form, including collapse, water damage, transit, flood (subject to Section 10.1(i) hereof) or
equivalent coverage under Tenant’s “all risk” policy and, to the extent
available at commercially reasonable rates, earth movement coverage, with
deductible reasonably approved by any Recognized Mortgagee (and, if none, by
Landlord), in nonreporting form, covering the total value of work performed and
equipment, supplies and materials furnished (with an appropriate limit for soft
costs in the case of construction) and covering the full insurable value
(exclusive of the cost of noninsurable items, such as excavation, foundations
and footings) of all equipment, supplies and materials at any off-site storage
location used with respect to the Demised Premises or the Common Elements, as
the case may be, (subject to the foregoing qualification with respect to
earthquake insurance) and subject to commercially reasonable deductibles
reasonably approved by Landlord;

 

90

 

(h)         during
the performance of any Alteration, commercial general liability insurance, as
required in Section 10.1(b) hereof,
in an amount of not less than $100,000,000 per occurrence and in the aggregate;

 

(i)             flood
insurance, if the Improvements or any part thereof is located in an area
identified by the Secretary of Housing and Urban Development, or any successor
thereto, as an area having special flood hazards and in which flood insurance
has been made available and to the maximum extent available under the national
Flood Insurance Act of 1968, as amended;

 

(j)             pollution
liability insurance with limits of not less than Five Million Dollars
($5,000,000) (as such sum shall be Adjusted for Inflation from December 12,
2001) per occurrence and in the aggregate with a deductible of no more than
$1,000,000 (as such sum shall be Adjusted for Inflation from December 12,
2001), providing coverage for bodily injury or property damage arising from, or
cleanup of, actual, alleged or threatened emission, discharge, dispersal,
seepage, release or escape of Hazardous Materials from, on, under, in or onto
the Demised Premises or the Common Elements, as the case may be, including any loss,
cost or expense incurred as a result of the investigation, settlement or
defense of any claim, suit, or proceedings against Landlord, including the
payment of any monetary awards of compensatory damages, arising from any such
occurrence;

 

(k)          insurance
to keep all glass in the Demised Premises and the Common Elements, as the case
may be, and in the perimeter and demising walls thereof, and the frames for
such glass, insured against damage (including temporary repairs) subject to
commercially reasonable deductibles reasonably approved by Landlord;

 

(l)             while
any of the Improvements located in the Demised Premises or the Common Elements
or any portions thereof are being removed, in transit or at an off-site
location, trip transit, installation floater and bailee floater insurance (or
any substitute form providing equivalent coverage) covering the perils insured
under the ISO special causes of loss form, including collapse, water damage,
transit, flood (subject to Section 10.1(i) hereof),
and, to the extent available at commercially reasonable rates, earth movement
coverage, with deductible reasonably approved by any Recognized Mortgagee (and
if none, by Landlord), in nonreporting form, covering the Full Insurable Value
of such Improvements; and

 

(m)       such
other insurance and in such amounts as may from time to time be then
customarily carried by owners of comparable Class “A” office buildings (as
understood on December 12, 2001) in midtown Manhattan.

 

Section 10.2                            Requirements
for Policies.  All insurance provided
for in this Article X (and in
any other provision of this Lease) shall:

 

(a)          be
effected under standard form policies issued by insurers of recognized
responsibility, authorized to do business in the State of New York, which are
rated no less than “A-/VII” in the then current edition of Best’s Insurance
Report (or the then equivalent of such rating); provided, however,
that insurers providing coverage in excess of the amounts required by Section 10.1 hereof may have a lower
rating than the rating indicated in this Section 10.2(a) so
long as any such insurers providing such excess coverage and having a lower
rating than is

 

91

 

required by
the first clause of this Section 10.2(a) are
not treated as “co-insurers” hereunder of the amounts set forth in Section 10.1 hereof;

 

(b)         as
to any policies of insurance of the character described in Sections 10.1(a), 10.1(c), 10.1(d),
10.1(g), 10.1(i), 10.1(j),
10.1(k), 10.1(l) and 10.1(m) hereof (if applicable), expressly provide that
any losses thereunder, subject to Section 10.6
hereof, in respect of losses arising in respect of the Common Elements, shall
be adjusted with Landlord and the Condominium Association.  All such insurance shall be carried in the
name of Tenant or an applicable Subtenant and shall name the Landlord, other
Public Parties and any property managers retained by Landlord as additional
insureds thereunder.  Any loss thereunder
shall be made payable to Landlord (provided that if Depositary has been appointed
to receive such funds, then to such Depositary), and Tenant, as their
respective interests may appear; and

 

(c)          to
the extent obtainable, contain an agreement by the insurer that such policy
shall not be cancelled or materially altered to reduce the amount or the extent
of any coverage afforded thereunder without at least thirty (30) days’ prior
written notice to Landlord, and shall provide that any loss otherwise payable
thereunder shall be payable notwithstanding any act or negligence of Landlord
or Tenant which might, absent such agreement, result in a forfeiture of all or
part of the payment of such loss.

 

Section 10.3                            Waiver
of Subrogation.

 

(a)          Waiver
of Subrogation.  Each of the parties
hereto shall include in each of its policies insuring against loss, damage or
destruction by fire or other insured casualty relating to the Demised Premises
and/or the Common Elements a waiver of the insurer’s right of subrogation
against the other party hereto, or, if such waiver is unobtainable (i) an
express agreement that such policy shall not be invalidated if Tenant waives or
has waived before the casualty the right of recovery against the other party
hereto or (ii) any other form of permission for the release of the other
party hereto, provided such waiver, agreement or permission is obtainable under
normal commercial insurance practice at the time.  If such waiver, agreement or permission shall
not be, or shall cease to be, obtainable without additional charge or at all,
the party hereto shall so notify the other party hereto promptly after notice
thereof.  If the other party hereto shall
agree in writing to pay the insurer’s additional charge therefor, such waiver,
agreement or permission shall (if obtainable) be included in the policy.

 

(b)         Waiver
of Right of Recovery.  As long as the
insurance policies of each party hereto include the waiver of subrogation or
agreement or permission to release liability referred to in Section 10.3(a) hereof, such
party, to the extent that such insurance is in force and collectible, hereby
waives, for itself and those claiming through and under it, any right of
recovery against the other party hereto and its agents for any loss occasioned
by fire or other insured casualty.  If at
any time any insurance policies of any party hereto shall not include such or
similar provisions, the waivers set forth in the immediately preceding sentence
shall be of no further force or effect.

 

92

 

Section 10.4                            Delivery
of Policies.

 

(a)          Original
Policies.  As of the Lease Assignment
Date and thereafter not less than thirty (30) days prior to the expiration
dates of the expiring policies theretofore furnished pursuant to this Article X, Tenant shall deliver to
Landlord a certified copy of the policies required by this Article X or insurance certificates
(in forms reasonably acceptable to Landlord) binding the insurer certifying the
issuance of such policies, bearing notations evidencing the payment of premiums
or accompanied by other evidence reasonably satisfactory to Landlord of such
payment, or certificates evidencing same.

 

(b)         Insurer
Certification.  Tenant shall, upon
the written request of Landlord, obtain and deliver to Landlord, within twenty
(20) Business Days after the date of any such request, a written certification
from Tenant’s insurer or independent insurance agent describing in reasonable
detail the insurance policies then being maintained by Tenant in accordance
with the requirements of this Article X.

 

Section 10.5                            Separate
Insurance.  Tenant shall not take out
separate insurance concurrent in form or contributing in the event of loss with
that required in this Article X
to be furnished by, or which may reasonably be required to be furnished by,
Tenant unless Landlord is included therein as an insured, with loss payable as
in this Lease provided.  Tenant shall
immediately notify Landlord of the taking out of any such separate insurance
and shall deliver the policy or policies as provided in Section 10.4 hereof.

 

Section 10.6                            Cooperation;
Adjustment.  (a)  Landlord and
Tenant shall cooperate in connection with the collection of any insurance
monies that may be due in the event of loss in respect of the Demised Premises,
but the same shall be at the sole cost and expense of Tenant.  If Tenant shall fail promptly and with due
diligence to make claim for and use good faith efforts to collect any insurance
monies that are so due, Landlord, upon twenty (20) Business Days prior written
notice to Tenant, may make claim for and collect the same directly on behalf of
and in the name of Landlord and Tenant. 
The aforesaid notice shall include the following, in boldface
print:  “In the event that Tenant fails to make a claim for and to collect
insurance proceeds, as required in Section 10.6 of the Lease, and such
failure continues for twenty (20) Business Days after delivery of this notice,
Landlord shall be entitled to make such claim and collect such proceeds.”.  Landlord (in the event that claim in question
is for an amount in excess of $5,000,000), Tenant and, if required by the terms
of the applicable Recognized Mortgage, the Recognized Mortgagee most senior in
lien, shall be entitled to participate in any negotiations with the insurer
regarding the adjustment of claims for damage to the Demised Premises, and any
settlement agreement shall be subject to the approval of Landlord (in the event
that the claim in question is for an amount in excess of $5,000,000), Tenant
and such Recognized Mortgagee, such approval not to be unreasonably withheld.

 

(b)         Landlord
and the Condominium Association shall cooperate in connection with the
collection of any insurance monies that may be due in the event of loss in
respect of the Common Elements, but the same shall be at the sole cost and
expense of Tenant.  If Tenant shall fail
promptly and with due diligence to make claim for and use good faith efforts to
collect any insurance monies that are so due, Landlord, upon twenty (20)
Business Days prior written notice to Tenant, may make claim for and collect
the same directly on behalf of and in the name of Landlord and Tenant.  The aforesaid notice shall include the
following, in boldface print:  “In the event that Tenant fails to make a claim for and
to collect insurance proceeds, as

 

93

 

required
in Section 10.6 of the Lease, and such failure continues for twenty (20)
Business Days after delivery of this notice, Landlord shall be entitled to make
such claim and collect such proceeds.”  Landlord (in the event that claim in question
is for an amount in excess of $5,000,000), the Condominium Association and, if
required by the terms of the applicable Recognized Mortgage, the Recognized
Mortgagee most senior in lien, shall be entitled to participate in any
negotiations with the insurer regarding the adjustment of claims for damage to
the Common Elements, and any settlement agreement shall be subject to the
approval of Landlord (in the event that the claim in question is for an amount
in excess of $5,000,000), the Condominium Association and such Recognized
Mortgagee, such approval not to be unreasonably withheld.

 

Section 10.7                            Approval
by Landlord.  No approval by Landlord
of any insurer shall be construed to be a representation, certification or
warranty of such insurer’s solvency and no approval by Landlord as to the
amount, type or form of any insurance shall be construed to be a
representation, certification or warranty of such insurance’s sufficiency.  Tenant shall be solely responsible for
covering the deductibles under the insurance policies provided hereunder
regardless of whether Landlord has approved the amount of such deductibles.

 

Section 10.8                            Depositary.  Subject to Section 10.9
hereof, any loss under all policies required by any provision of this Lease
insuring against damage to the Common Elements by fire or other casualty shall
be payable to the Depositary, except that amounts of less than Three Hundred
Fifty Thousand Dollars ($350,000) (as such sum shall be Adjusted for Inflation
from December 12, 2001) shall be payable in trust directly to Tenant for
application to the cost of Restoration in accordance with Article XI hereof.  Any loss under any policies insuring against
damage to any portion of the Demised Premises (exclusive of any portion of the
Common Elements) or any personal property in the Demised Premises shall be
payable to Tenant.

 

Section 10.9                            Security
for Commercial Property Insurance Premium.

 

(a)                                  Tenant
has provided Landlord a guaranty (the “Insurance Guaranty”),
satisfactory to Landlord, by NYTC, of Tenant’s Obligations under Section 10.1(a) hereof,
guarantying such obligations up to $75,000.00 (the “Security
Deposit”).  If on the fifth
anniversary of the Commencement Date, Tenant shall have fully performed its
obligations under Section 10.1(a) hereof, Landlord shall reduce the
maximum liability under the Insurance Guaranty to $37,500.  The maximum liability under the Insurance
Guaranty shall be Adjusted for Inflation once every five (5) years
beginning on the tenth anniversary of the Commencement Date; provided, however,
if prior to the fifth anniversary of the Commencement Date Landlord shall have
sent notice to Tenant that Tenant is or has ever been in default of the
provisions of this Section 10.9, the amount of the maximum liability under
the Insurance Guaranty shall be Adjusted for Inflation once every five (5) years
beginning on the fifth anniversary of the Commencement Date.

 

(b)                                 [INTENTIONALLY
OMITTED]

 

(c)                                  If
Tenant defaults in the full and prompt payment and performance of any of
Tenant’s covenants or obligations under Section 10.4(a) hereof in
respect of the policies to be

 

94

 

maintained
under Section 10.1(a) hereof, Landlord may use, apply or retain the
whole or any part of the Security Deposit and the interest accrued thereon, if
any, to the extent required for the payment of any insurance premium required
to meet Tenant’s obligations under Section 10.1(a) hereof.  If Landlord shall so use, apply or retain the
whole or any part of the Security Deposit and the interest accrued thereon,
Tenant shall upon demand immediately deposit with Landlord a sum equal to the
amount so used, applied or retained.  If
Tenant shall fully and faithfully comply with all of Tenant’s obligations under
Section 10.4(a) hereof in respect of the policies to be maintained
under Section 10.1(a) hereof, the Security Deposit (including
interest thereon) or any balance thereof, shall be returned or paid over to
Tenant after the date on which this Lease shall expire or sooner end or
terminate, and after delivery to Landlord of entire possession of the Demised
Premises.  In the event of any sale of
Landlord’s interest in the Lease, Landlord shall have the right to assign its
interest in the Security Deposit to the transferee or assignee and Landlord
shall thereupon be released by Tenant from all liability for the return or
payment thereof; and Tenant shall look solely to the new landlord for the
return or payment of the same; and the provisions hereof shall apply to every
transfer or assignment made of the same to a new landlord.  Tenant shall not assign or encumber or
attempt to assign or encumber the Security Deposit and neither Landlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

 

ARTICLE XI

DAMAGE AND DESTRUCTION

 

Section 11.1                            Damage
and Destruction.

 

(a)          Restoration.  If, at any time during the term of this
Lease, all or any part of the Common Elements or any portion thereof shall be
destroyed or damaged in whole or in part by fire or other casualty (including
any casualty for which insurance was not obtained or obtainable) of any kind or
nature, ordinary or extraordinary, foreseen or unforeseen (each, a “Casualty”), Tenant shall: (i) give to
Landlord immediate notice thereof, except that no notice shall be required if
the estimated cost of repairs, restorations, replacements and rebuilding,
including temporary repairs or the protection of other property pending the
completion of any repair, restoration, replacement or rebuilding thereof
(collectively, “Restoration”)
shall be less than One Hundred Thousand Dollars ($100,000.00); (ii) file
all required documents and instruments with its insurers, and make such claims
with its insurers as shall be necessary or advisable; and (iii) take such
steps as shall be necessary or advisable to preserve any undamaged portion of
the Common Elements and to insure that the portions of the Common Elements that
are accessible to the public shall be safe and free from conditions hazardous
to life and property.  Subject to Section 11.1(g) hereof, Tenant
shall, whether or not such Casualty shall have been insured, and whether or not
insurance proceeds, if any, shall be sufficient for the purpose of such
Restoration, diligently and with continuity (subject to Unavoidable Delays and
commercially reasonable standards) repair, alter, restore, replace and rebuild
(collectively, “Restore”) the
Common Elements, as nearly as possible to the condition, quality and class of
the Common Elements existing immediately prior to such occurrence (using
materials, equipment and construction techniques which are common at the time
of the damage or destruction), with such Alterations as Tenant (or the
Condominium Association), with the consent of Landlord in accordance with the
standards of review set forth in Article IX
hereof, shall elect to make, provided that after

 

95

 

Restoration,
the Common Elements is in substantial conformity with the applicable Final
Plans and Specifications and in compliance with the DUO.  Each Restoration shall be performed in
accordance with the provisions of this Article XI
and the provisions of Article IX
hereof as if such Restoration were an “Alteration” thereunder.  In any case where this Lease shall expire or
be terminated prior to the completion of a Restoration other than in connection
with the exercise of the Purchase Option, Tenant shall account to Landlord for
all amounts spent in connection with any Restoration which was undertaken and
shall pay over to Landlord, within ten (10) days after demand, the
remainder, if any, of the Restoration Funds previously received by it.  Notwithstanding the foregoing, if a Casualty
occurs during the last three (3) years of the term of this Lease and the
Restoration is estimated pursuant to Section 10.1(d) hereof
to require six (6) months or longer after receipt of the insurance
proceeds to complete, Tenant shall have the right to terminate this Lease by
giving notice to Landlord to such effect no later than ninety (90) days after
the occurrence of such fire or other casualty. 
In the event Tenant gives such notice, this Lease shall be deemed
cancelled and terminated as of the date of the giving of such notice as if such
date were the Scheduled Expiration Date, and neither party shall have any
further rights or Obligations hereunder except such rights and Obligations
which by their express terms survive the termination of this Lease.

 

(b)         Non-Conforming
Restoration.  If Tenant proposes a
Restoration which does not conform to the condition, quality or class of the
Common Elements as they existed immediately prior to the damage or destruction
and such non-conformity would affect any element of the DUO (i.e., if the
Restoration would result in any element of the Demised Premises or the Common
Elements subject to the requirements of the DUO not being in substantially the
same condition after the Restoration as it was immediately prior to the
Casualty) or affects a Structural Component (other than by having a Nonadverse
Structural Effect), Tenant shall give Landlord notice of such proposed
nonconformity, and Landlord shall review and approve or disapprove such
Alteration in accordance with (i) the standard of review and time periods
applicable to a Major Alteration under Section 9.5(a) hereof
and (ii) the applicable portions of the DUO.  If Landlord disapproves such Alteration,
Landlord’s notice of disapproval shall state, in reasonable detail, the grounds
for such disapproval.

 

(c)          Commencement
and Completion of Restoration. 
Subject to Unavoidable Delays and to the applicable provisions of the
Site 8 South Subway Agreement, Tenant shall commence the Restoration within one
hundred eighty (180) days after the date of the occurrence of the applicable
damage or destruction; provided, however, that if Tenant’s
Recognized Mortgagee, together with all Recognized Mortgagees under the other
Severance Subleases, allow Tenant to commence Restoration within a longer
period, but not greater than one (1) year after the date of occurrence of
the applicable damage or destruction, then Tenant shall be permitted to
commence the Restoration required hereunder within one year after the date of
such occurrence.  Once commenced, Tenant
shall diligently and continuously prosecute any such Restoration to completion.

 

(d)         Restoration
Estimate.  Tenant shall, within
ninety (90) days (or such longer period as is permitted by Tenant’s Recognized
Mortgagee, together with all Recognized Mortgagees under the other Severance
Subleases, not to exceed one hundred eighty (180) days) after the occurrence of
damage or destruction to the Common Elements, deliver to Landlord a statement
(the “Initial Restoration Estimate”)
prepared by an Architect or an Engineer,

 

96

 

approved (or
deemed approved) by Landlord pursuant to Section 9.6(a)(ii) hereof,
setting forth such Person’s estimate as to the time required to perform the
Restoration and the estimated cost of the Restoration.  Landlord, at Tenant’s expense, may engage a
registered architect or a licensed professional engineer to prepare its own
Initial Restoration Estimate, and Tenant shall reimburse Landlord for such
expense within ten (10) Business Days after demand therefor by Landlord.

 

(e)          Landlord’s
Rights.  Landlord in no event shall
be obligated to Restore the Improvements or any portion thereof or to pay any
of the costs or expenses thereof.  If
Tenant shall fail or neglect to diligently Restore (subject to Unavoidable Delays)
the Common Elements or the portion thereof so damaged or destroyed, or having
so commenced such Restoration, shall fail to diligently and continuously
complete the same in accordance with the terms of this Lease and any such
failure shall continue for twenty (20) Business Days after written notice to
Tenant specifying such failure in reasonable detail, or if prior to the
completion of any such Restoration by Tenant, this Lease shall expire or be
terminated for any reason (other than the acquisition of fee title by Tenant),
then Depositary shall not make any payment of Restoration Funds to Tenant or
the Condominium Association, as the case may be, hereunder and shall pay any
such Restoration Funds to Landlord who may retain such Restoration Funds without
any claim on the part of Tenant or the Condominium Association, as the case may
be, thereto and shall apply such Restoration Funds in any order Landlord may
elect but only toward the payment of the cost of the Restoration or the payment
of any Charges or other sums due and owing to Landlord hereunder.

 

(f)            Additional
Restoration Requirements.  If the
estimated cost of any Restoration required by the terms of this Article XI is equal to or greater than
Three Hundred Fifty Thousand Dollars ($350,000) and exceeds the Restoration
Funds available for such Restoration, then, prior to the commencement of such
Restoration or thereafter if it is determined that the cost to complete such
Restoration exceeds the unapplied portion of such Restoration Funds, Tenant shall
deposit with Depositary a bond, cash, Letter of Credit or other security
reasonably satisfactory to Landlord in the amount of such excess (it being
agreed that an acceptable guaranty of an Acceptable Guarantor shall be
reasonably acceptable to Landlord for the purpose of this Section 11.1(f) so long as the
estimated cost of Restoration is less than or equal to $10,000,000), to be held
and applied by Depositary in accordance with the provisions of Section 11.3 hereof, as security for
the completion of such Restoration in accordance with this Article XI.

 

(g)         Purchase
Option.  At any time from and after
the tenth (10th)
anniversary of the Delivery Date, in the event of a Substantial Casualty,
Tenant may exercise the Purchase Option in accordance with Article V hereof.  In the event Tenant does (and all of the
other tenants under the Severance Subleases do) so exercise the Purchase
Option, neither Tenant nor the Condominium Association shall be required to
Restore hereunder and Landlord shall be deemed to have waived any of Landlord’s
interest in any Casualty insurance proceeds as set forth in Section 5.2 hereof (and Landlord shall
confirm such waiver in writing to Tenant within ten (10) days of Tenant’s
request for such waiver).

 

(h)         Survival.  Tenant’s obligations under this Section 11.1 shall survive the
expiration or earlier termination of this Lease.

 

97

 

Section 11.2                            Restoration
Funds.

 

(a)          Payment
to Depositary.  Subject to the
provisions of Section 11.3 hereof,
Depositary shall pay over to the Condominium Association from time to time,
upon the following terms, any monies which may be received by Depositary from
insurance obtained or maintained by or for the benefit of Tenant or the
Condominium Association, as the case may be, for the Restoration (other than
rent insurance and except as set forth in the last sentence of Section 10.8 hereof) (the “Restoration Funds”); provided, however,
that Depositary, before paying such monies over to the Condominium Association
or Tenant (in the case of amounts payable pursuant to Section 10.8 hereof) shall be entitled
to reimburse itself, Tenant, the Condominium Association and Landlord therefrom
to the extent, if any, of the necessary, reasonable and proper expenses (including
reasonable attorneys’ fees) paid or incurred by each of the foregoing in the
collection of such monies.  If the
Restoration Funds are Three Hundred Fifty Thousand Dollars ($350,000) or less,
the same shall be paid directly to the Condominium Association in trust for the
Restoration.  If the Restoration Funds
are more than Three Hundred Fifty Thousand Dollars ($350,000), Depositary shall
pay to the Condominium Association, in the manner provided in this Section 11.2 and Section 11.3 hereof, the Restoration
Funds for the Restoration.  If the net
Restoration Funds after payment of the aforementioned expenses of collection
shall be insufficient to pay the entire cost of the Restoration, as determined
in accordance with Section 11.1(d) hereof,
the Tenant shall cause the Condominium Association to deposit the amount of
such shortfall with Depositary to be held and disbursed by Depositary in the
same manner as the other Restoration Funds.

 

(b)         Retainage
of Restoration Funds.  Subject to the
provisions of Section 11.3
hereof and to any provisions of the Recognized Mortgage most senior in lien
setting forth additional, more stringent conditions for the disbursement of the
Restoration Funds or the retainage of Restoration Funds not inconsistent
herewith, the Restoration Funds shall be paid to the Condominium Association in
installments as the Restoration progresses, less retainage equal to ten percent
(10%) until fifty percent (50%) of such Restoration is completed, and five
percent (5%) until such Restoration is fully completed, upon application to be
submitted by the Condominium Association, to Depositary and Landlord showing
the cost of labor and materials (i) purchased and delivered to the
Property for incorporation in such Restoration and that such materials have
been insured by the Condominium Association (including insurance against
vandalism, theft, malicious mischief and the like) for one hundred percent
(100%) of the cost thereof and stored at a reasonably secure and safe location
at the Property, or (ii) incorporated therein since the last previous
application, and due and payable or paid by the Condominium Association.  The Depositary shall release that portion of
the retainage applicable to each trade upon completion by such trade of its
portion of such Restoration.  If any
vendor’s, mechanic’s, laborer’s or materialman’s lien is filed against the
Property or any part thereof, or if any public improvement lien relating to the
Restoration is created or permitted to be created by Tenant or the Condominium
Association, as the case may be, and is filed against Landlord, or any assets
of Landlord, and if such lien is not satisfied or discharged (by bonding or
otherwise) within forty-five (45) days after filing of the lien, the
Condominium Association shall not be entitled to receive any further
installment until such lien is satisfied or discharged (by bonding or
otherwise).  Notwithstanding the
foregoing, the existence of any such lien shall not preclude the Condominium Association
from receiving any installment of Restoration Funds, provided such lien
will be discharged with funds from such installment.

 

98

 

 

(c)          Balance
of Funds.  Upon receipt by Landlord
of evidence satisfactory to it that the Restoration has been completed except
to an immaterial extent and paid for in full and that there are no liens on the
Property as a result thereof and upon compliance with any provisions of the
Recognized Mortgage most senior in lien pursuant to Sections 11.2(b) and 11.3
hereof, the balance of the Restoration Funds shall be paid over to the
Condominium Association.  Landlord shall
recognize any full or partial assignment by the Condominium Association to a
Recognized Mortgagee of any portion of the Restoration Funds payable to the
Condominium Association pursuant to the foregoing sentence.

 

(d)         Restoration
by Landlord.  If Landlord makes the
Restoration at the Condominium Association’s expense, as provided in Section 11.1(e) hereof, then
Depositary shall pay over the Restoration Funds to Landlord, upon request, to
the extent not previously paid to the Condominium Association pursuant to this Section 11.2, and the Condominium
Association shall pay to Landlord, within seven (7) Business Days after
demand, any sums in excess of the portion of the Restoration Funds received by
Landlord necessary to complete the Restoration. 
Upon completion of the Restoration, Landlord shall deliver to the
Condominium Association a certificate setting forth the expenditures made by
Landlord for such Restoration and Landlord shall pay to the Condominium
Association any amount of Restoration Funds received by Landlord in excess of
the amount necessary to complete the Restoration.

 

Section 11.3                            Conditions
Precedent to Disbursement.  The
following shall be conditions precedent to the payment of each installment of
Restoration Funds to the Condominium Association as provided in Section 11.2 hereof, together with any
additional conditions imposed by the Recognized Mortgage most senior in lien
which is required to or has agreed to make such Restoration Funds available for
the cost of Restoration:

 

(a)          there
shall be submitted to Depositary and Landlord the certificate of the aforesaid
Architect or the aforesaid Engineer stating that (i) the sum then
requested to be withdrawn either has been paid by the Condominium Association
or is due and payable to contractors, subcontractors, materialmen, engineers, architects
or other Persons (whose names and addresses shall be stated) who have rendered
or furnished services or materials for the Restoration and giving a brief
description of such services and materials and the principal subdivisions or
categories thereof and the several amounts so paid or due to each of said
Persons in respect thereof, and stating in reasonable detail the progress of
the Restoration up to the date of said certificate, accompanied by invoices
from any such contractors, subcontractors, materialmen, engineers, architects
and other Persons, (ii) no part of such expenditures has been or is being
made the basis, in any previous or then pending requisition, for the withdrawal
of the Restoration Funds or has been made out of the Restoration Funds
previously received by the Condominium Association (iii) the sum then
requested does not exceed the value of the services and materials described in
the certificate, (iv) the materials, fixtures and equipment for which
payment is being requested are in accordance with the applicable plans and
specifications and changes thereto, approved, to the extent required hereunder,
by Landlord, (v) except in the case of the final request for payment by
the Condominium Association the balance of the Restoration Funds held by
Depositary, together with any additional funds provided by the Condominium
Association to the Depositary, will be sufficient upon completion of the
Restoration to pay for the same in full, and stating in reasonable detail an
estimate of the cost of such completion, and (vi) in the case of the final
request for payment by the Condominium Association the Restoration 

 

99

 

shall have
been completed, substantially and in all material respects, in accordance with
the provisions of Article IX
hereof that are applicable to such Restoration;

 

(b)         there
shall be furnished to Landlord an official search, or a certificate of a title
insurance company reasonably satisfactory to Landlord, or other evidence reasonably
satisfactory to Landlord, showing that there has not been filed any (i) vendor’s,
mechanic’s, laborer’s or materialman’s statutory or other similar lien
affecting the Common Elements or any part thereof, or any public improvement
lien with respect to the Common Elements or the Restoration created or
permitted to be created by Tenant or the Condominium Association, as the case
may be, affecting Landlord, or the assets of Landlord which have not been
satisfied or discharged of record (by bonding or otherwise) within forty-five
(45) days after the filing of the lien except such as will be discharged upon
payment of the requisite amount out of the sum then requested to be withdrawn,
and (ii) other liens or encumbrances against the Property other than Permitted
Encumbrances; and

 

(c)          Tenant
or the Condominium Association, as the case may be, shall have delivered to
Landlord and to Depositary waivers of mechanic’s liens with respect to all of
the Restoration, completed prior to the date of the payment application, on
forms reasonably satisfactory to Landlord.

 

Section 11.4                            Section 227
of Real Property Law.  The provisions
of this Article XI shall be
deemed an express agreement governing any case of damage or destruction of the
Demised Premises and/or the Common Elements by fire or other casualty, and Section 227
of the Real Property Law of the State of New York, providing for such a
contingency in the absence of an express agreement, and any other laws of like
import, now or hereafter in force, shall have no application in such case and
are hereby waived by the parties hereto.

 

Section 11.5                            Additional
Requirements for Restoration.  The
applicable provisions of Article IX
hereof shall be applicable to any Restoration as if the same were an Alteration
under such Article.

 

Section 11.6                            Effect
of Casualty on this Lease.  This
Lease shall neither terminate, be forfeited nor be affected in any manner, nor
shall there be a reduction or abatement of Charges by reason of damage to, or
total, substantial or partial destruction of, the Improvements, or by reason of
the untenantability of the Improvements or any part thereof, nor for any reason
or cause whatsoever, except pursuant to the express provisions of this
Lease.  Except as so provided, Tenant’s
obligations hereunder, including the payment of Charges, shall continue as
though the Improvements had not been damaged or destroyed and shall continue
without abatement, suspension, diminution or reduction whatsoever.

 

100

 

ARTICLE XII

CONDEMNATION

 

Section 12.1                            Condemnation.

 

(a)          Substantial Taking.  If, at any time during the term of this
Lease, the whole or Substantially All Of the Demised Premises and/or the Common
Elements shall be the subject of a Taking, by any lawful power or authority by
the exercise of the right of condemnation or eminent domain or by agreement
among Landlord, Tenant and those authorized to exercise such right then, (i) if
such taking occurs after the tenth anniversary of the Delivery Date, Tenant may
exercise the Purchase Option pursuant to the provisions of Article V hereof (and thereupon
relinquish forever its right to be subject to the DUO and receive the
correlative benefits thereof), or (ii) if Tenant does not so exercise the
Purchase Option or if the same is not then exercisable by Tenant hereunder,
this Lease and the term of this Lease shall terminate and expire on the date of
such Taking.  The term “Substantially All Of” shall be deemed to
mean such portion of the Demised Premises and/or the Common Elements as, when
so taken, in Tenant’s reasonable judgment, would leave remaining a balance of
the Demised Premises and/or the Common Elements which, due either to the area
so taken or the location of the part so taken in relation to the part not so taken,
would not under economic conditions, applicable zoning laws or building
regulations then existing or prevailing, and after performance by Tenant of all
covenants, agreements, terms and provisions contained herein or by Legal
Requirements required to be observed or performed by Tenant, readily
accommodate premises of a nature similar to the Demised Premises and capable of
producing a proportionately (i.e., proportional to the Rentable Square Feet not
so taken) fair and reasonable net annual income or capable of supporting
substantially similar activities as the Demised Premises.

 

(b)         Substantial Taking;
Award.  If the whole or Substantially
All Of the Demised Premises shall be taken as provided in this Article XII, then the condemnation
award related thereto shall be paid to Tenant, subject to the rights of any
Recognized Mortgagees.  If the whole or
Substantially All Of the Common Elements shall be taken as provided in this Article XII, then the condemnation
award related thereto shall be paid to the Condominium Association.

 

Section 12.2                            Date
of Taking.  For purposes of this Article XII, the “date of Taking” shall be deemed to be the
earlier of: (a) the date on which actual possession of the whole or
Substantially All Of the Demised Premises and/or the Common Elements, or a part
thereof, as the case may be, is acquired by any lawful power or authority
pursuant to the provisions of the applicable federal or New York State law; and
(b) the date on which title to the Demised Premises and/or the Common
Elements or the aforesaid portion thereof shall have vested in any lawful power
or authority pursuant to the provisions of the applicable federal or New York
State law.

 

Section 12.3                            Minor
Taking; Condemnation Restoration.

 

(a)          Condemnation
Restoration.  If less than
Substantially All Of the Demised Premises and/or the Common Elements shall be
taken as provided in this Article XII,
then (i) if such taking involves a portion of the Demised Premises and/or
the Common Elements valued at greater than Five Million Dollars ($5,000,000)
and occurs after the tenth anniversary of the 

 

101

 

Delivery Date, Tenant may
exercise the Purchase Option pursuant to the provisions of Article V hereof, or (ii) if
Tenant does not so exercise or is not then permitted to so exercise hereunder,
this Lease and the term hereof shall continue with a proportionate abatement
(based on the ratio of the value of the portion of the Demised Premises and/or
the Common Elements so taken to the value of the entire Demised Premises and/or
the Common Elements immediately prior to such taking) of the Charges and no
other diminution of any of Tenant’s Obligations hereunder.  Tenant, at its sole cost and expense, whether
or not the award or awards, if any, shall be sufficient for the purpose and
whether or not the Recognized Mortgagees shall permit the award or awards to be
used for the restoration of the Demised Premises and/or the Common Elements,
shall diligently (subject to Unavoidable Delays) restore any remaining part of
Demised Premises and/or the Common Elements not so taken so that the latter
shall be complete, rentable, self-contained architectural units in good
condition and repair with such Alterations as Tenant, with the consent of
Landlord, shall elect to make (such work, a “Condemnation
Restoration”), provided that, after the completion of the
Condemnation Restoration, the Demised Premises and/or Common Elements are in
substantial conformity with the applicable Final Plans and Specifications and
in compliance with the DUO, to the extent practicable, taking into account the
nature and extent of the Taking. 
Provided that the condemnation award is made available to Tenant or the
Condominium Association, Tenant shall commence the Condemnation Restoration
within one hundred eighty (180) days of the date of the Taking and shall
diligently and continuously prosecute such Condemnation Restoration to
completion.  In the event of any Taking
of the nature described in this Section 12.3(a),
the entire award for or attributable to the (A) Demised Premises, shall be
paid to Tenant without deduction for any estate vested in Tenant by this Lease,
and (B) the Common Elements, shall be paid to the Condominium Association,
without deduction for any estate vested in Tenant by this Lease.

 

(b)         Restoration Funds.  Subject to the provisions and limitations in
this Article XII, Depositary
shall make available to Tenant (in respect of a Taking of the Demised Premises)
and to the Condominium Association (in respect of a Taking of the Common
Elements) as much of that portion of the condemnation award actually received
and held by Depositary, if any, less all reasonable expenses paid or incurred
by Depositary, Tenant, the Condominium Association and Landlord in connection
with the condemnation proceedings, as may be necessary to pay the cost of
Condemnation Restoration of the part of the Demised Premises and/or Common
Elements remaining.  Such Condemnation
Restoration, the estimated cost thereof, the payments to Tenant or to the Condominium
Association, as the case may be on account of the cost thereof, Landlord’s
right to perform the same, Tenant’s obligation with respect to condemnation
proceeds held by it, and any additional conditions imposed by the Recognized
Mortgage most senior in lien, shall be done, determined, made and governed in
accordance with and subject to the provisions of Articles IX and XI
hereof as if such amounts were “Restoration Funds” thereunder.  Payments to Tenant or the Condominium
Association, as the case may be, as aforesaid shall be disbursed in the manner
set forth in Sections 11.2(b) and
11.3 hereof.  Any balance of the award held by Depositary
and any cash and the proceeds of any security deposited with Depositary
pursuant to Section 12.4
hereof remaining after completion of the Condemnation Restoration shall be paid
to Tenant, or the Condominium Association, as the case may be, subject to the
rights of Recognized Mortgagees.  Each of
the parties agrees to execute and deliver any and all documents that may be
reasonably required in order to facilitate collection of the awards.  If the portion of the award made available by
Depositary, as aforesaid, is insufficient for the purpose of paying for the
Condemnation Restoration, Tenant or the 

 

102

 

Condominium Association, as the
case may be, shall nevertheless be required to make the Condemnation
Restoration and pay any additional sums required for the Condemnation
Restoration.  Tenant’s or the Condominium
Association’s, as the case may be, failure to supply the amount of any such
deficiency within twenty (20) Business Days from demand of Landlord shall
constitute a default hereunder (it being acknowledged and agreed that if such
failure occurs after the tenth anniversary of the Delivery Date, Tenant will,
in such circumstance, be deemed to have exercised the Purchase Option).  If any portion of the condemnation award
being used as Restoration Funds remains unused after the completion of the
applicable Condemnation Restoration, the Depositary shall disburse such monies
to Tenant or the Condominium Association, as the case may be, subject to the
rights of the Recognized Mortgagees.

 

(c)          Performance of
Condemnation Restoration.  Tenant
shall, within ninety (90) days after the occurrence of any Taking pursuant to
this Section 12.3, deliver to
Landlord a statement (the “Initial Taking
Estimate”) prepared by an Architect or an Engineer, selected by
Tenant and approved (or deemed approved) by Landlord pursuant to Section 9.6(a)(ii) hereof,
setting forth such Person’s estimate as to the time required to perform the
Condemnation Restoration required by such Taking and the estimated cost of such
Condemnation Restoration.

 

Section 12.4                            Additional
Restoration Requirements.  If the
estimated cost of any Condemnation Restoration exceeds the net condemnation
award by an amount equal to the lesser of (a) ten percent (10%) of the
estimated cost of such Condemnation Restoration and (b) $1,000,000, then,
prior to the commencement of such Condemnation Restoration or thereafter if it
is determined that the cost to complete the Condemnation Restoration exceeds
the unapplied portion of such award, Tenant shall deposit with Depositary a
bond, cash, Letter of Credit or other security reasonably satisfactory to
Landlord in the amount of such excess, to be held and applied by Depositary in
accordance with the provisions of Section 12.3
hereof, as security for the completion of the Condemnation Restoration in
accordance with this Article XII.

 

Section 12.5                            Temporary
Taking.  If the temporary use of the
whole or any part of the Demised Premises and/or the Common Elements shall be
taken at any time during the term of this Lease for any public or quasi-public
purpose by any lawful power or authority by the exercise of the right of
condemnation or eminent domain or by agreement between Tenant and those
authorized to exercise such right, Tenant shall give prompt notice thereof to
Landlord and of this Lease shall not be reduced or affected in any way and
Tenant shall continue to pay in full the Charges payable by Tenant hereunder
applicable to any period during the term of this Lease without reduction or
abatement, and Tenant shall be entitled to receive for itself any award or
payments for such use.

 

Section 12.6                            Right
to Compensation.  In case of any
governmental action, not resulting in the Taking of any portion of the Demised
Premises and/or the Common Elements but creating a right to compensation
therefor, such as the changing of the grade or any street upon which the
Improvements abut, then, except as otherwise provided in Section 12.1 hereof, this Lease shall
continue in full force and effect without reduction or abatement of Charges.

 

Section 12.7                            Settlement;
Compromise.  Landlord shall not
settle or compromise any Taking or other governmental action creating a right
to compensation in Tenant 

 

103

 

as provided in this Article XII, and any such right to
settle or compromise shall be solely exercisable by Tenant or a Recognized
Mortgagee.

 

ARTICLE XIII

ASSIGNMENT, SUBLETTING AND TRANSFER

 

Section 13.1                            Transfers
Generally.

 

(a)          Transfers by Tenant.  Except as otherwise provided herein, Tenant
shall not, without the prior written consent of Landlord, which consent may be
withheld by Landlord in its sole discretion, assign, mortgage, encumber or
transfer its interest in this Lease or any of Tenant’s rights or Obligations
hereunder, by Tenant’s action, by operation of law or otherwise, nor sublet, or
permit the subletting of, the Demised Premises or the Common Elements or any
portion thereof, nor enter into any franchise, concession, license or other
occupancy agreement, or grant any franchise, concession, license or other
occupancy rights with respect to the Demised Premises or the Common Elements or
any portion thereof (any of the foregoing, a “Transfer”).  Notwithstanding the foregoing, Tenant may,
subject to the provisions of this Article XIII:

 

(i)               mortgage its
interest in the Lease and the leasehold estate in the Demised Premises and the
Common Elements created hereby to one or more Recognized Mortgagees in
accordance with Article XXXIII hereof;

 

(ii)            [INTENTIONALLY
OMITTED];

 

(iii)         make a Transfer to any
Permitted Transferee (including, without limitation, a deemed Transfer pursuant
to Section 13.1(b) hereof) or
Permitted Developer;

 

(iv)        Transfer interests in
Tenant for the purpose of obtaining financing for the Demised Premises or the
Common Elements;

 

(v)           sublet portions of the
Demised Premises or the Common Elements in accordance with Section 13.2
hereof;

 

(vi)        [INTENTIONALLY OMITTED];

 

(vii)     [INTENTIONALLY OMITTED];

 

(viii)  [INTENTIONALLY OMITTED]; and

 

(ix)          make a Transfer in accordance with Section 13.11 hereof.

 

(b)         Equity Interest
Transfers.  For purposes of this Section 13.1:  (i) the issuance, assignment, transfer
or other disposition of any direct or indirect equity interest in Tenant
(whether stock, partnership interests, interests in a limited liability company
or otherwise) to any Person or group of related Persons, whether in a single
transaction or a series of related or unrelated transactions, in such
quantities that after such issuance, assignment, transfer or other disposition
Control of Tenant, directly or indirectly, shall have changed, shall be deemed
a 

 

104

 

Transfer; (ii) the
entering into by Tenant of a take-over agreement shall be deemed a Transfer;
and (iii) any Person or legal representative of Tenant to whom Tenant’s
interest under this Lease or the applicable Sublease passes by operation of
law, or otherwise, shall be bound by the provisions of this Article XIII.  Notwithstanding the foregoing, a transfer of shares of any entity which
holds an interest in Tenant by Persons other than those deemed “insiders”
within the meaning of the Securities Exchange Act of 1934, as amended, which
transfer of shares is effected through the “over-the-counter market” or through
any recognized stock exchange, shall not be deemed a Transfer.

 

(c)          Documentation.  Tenant shall, at the written request of
Landlord, promptly submit to Landlord such further documentation as Landlord
may reasonably request with respect to any Transfer hereunder which does not
require Landlord’s prior written consent and to evidence Tenant’s compliance
with the provisions of this Section 13.1.

 

(d)         Equitable Relief.  Tenant hereby acknowledges that Landlord may
suffer irreparable harm by reason of a breach or threatened breach of the
provisions of this Article XIII,
and, accordingly, in addition to any other remedy that Landlord may have under
this Lease or as may be permitted by applicable law, Tenant agrees with
Landlord that the seeking of injunctive relief is an appropriate remedy for
such breach or threatened breach by Tenant.

 

(e)          Transfers Void.  Any Transfer by Tenant or other party in
contravention of this Article XIII
shall be void and of no effect.

 

(f)            Notice to Landlord.  In respect of any proposed Transfer that is
subject to Landlord’s approval, Tenant shall give written notice thereof to
Landlord, which notice shall set forth the name of the proposed transferee and
such other information as is reasonably requested by Landlord so as to
determine that the proposed Transfer is permitted hereunder.

 

(g)         Other Conditions.  Notwithstanding any provision of this Article XIII to the contrary, Tenant
shall not make any Transfer unless:  (i) at
the time of such proposed Transfer, a Default (noticed to Tenant as required
hereunder and uncured) with respect to any monetary or material non-monetary
obligation under this Lease shall not have occurred and be continuing (provided,
however, that the condition set forth in this clause (i) shall not
apply to Transfers permitted pursuant to Sections
13.1(a) and 13.1(b) hereof);
and (ii) Tenant shall reimburse Landlord for all reasonable out-of-pocket
costs and expenses incurred by Landlord, including reasonable legal fees and
disbursements, in connection with its examination and review of such proposed
Transfer.

 

(h)         [INTENTIONALLY OMITTED]

 

(i)             [INTENTIONALLY
OMITTED]

 

Section 13.2                            Subleasing.

 

(a)          Conditions to
Sublease.  The following conditions
shall apply to any Sublease for the occupancy of space in the Demised Premises:

 

105

 

(i)               no monetary or
material non-monetary Default and no Event of Default shall then exist;

 

(ii)            the Sublease shall
specifically provide that the Sublease will be subject and subordinate to this
Lease and to all matters to which this Lease is subject and subordinate, and
that in the event of any conflict between this Lease and the Sublease, this
Lease will be controlling;

 

(iii)         no Sublease for Retail
Space shall be for a purpose other than actual occupancy by the named Subtenant
or any affiliates thereof or for the occupancy of concessionaires or licensees
thereunder; provided, however, nothing in the foregoing shall
prohibit underletting by such named Subtenant, pursuant to Subleases that
comply with this Lease after a reasonable period of occupancy by such named Subtenant;

 

(iv)        each Sublease shall (A) specifically
require that Subtenant shall comply with the provisions of Article IX
of this Lease as those provisions pertain to Subtenant’s plans and
specifications, (B) recite that it is for a Permitted Use and that the
Subtenant agrees to be bound by the DUO, (C) contain a specific
acknowledgment that such Subtenant has received a copy of and reviewed this
Lease, the Ground Lease and the DUO and (D) with respect to a Sublease for
Retail Space, shall incorporate in full the provisions of Section 3.13
hereof to the extent applicable to such Subtenant, including the rights and
obligations of such Subtenant and Landlord (and the Comptroller) in respect of
such Subtenant’s books of record and accounts;

 

(v)           the proposed Subtenant
(and the Principals thereof if such proposed Subtenant is not publicly held) is
not a Prohibited Person; and

 

(vi)        the subletting shall end
no later than one (1) day before the Scheduled Expiration Date of this
Lease.

 

(b)         Nondisturbance
Agreement.  So long as Tenant is not
then in monetary or material non-monetary Default hereunder, at the request of
Tenant, Landlord shall enter into a nondisturbance, subordination and
attornment agreement substantially in the form of Exhibit K attached hereto (a “Nondisturbance Agreement”) with each proposed Subtenant under
a proposed Sublease with Tenant of all or any portion of the Demised Premises
which meets the conditions set forth in each of clauses (i) through (vii) below:

 

(i)  
[INTENTIONALLY OMITTED];

 

(ii)  
the space demised by such Sublease is one-half of one full floor of
Office Space or more (provided, however, that, with respect to a
proposed sublease of less than a full floor of Office Space, Landlord’s
obligation to enter into a Nondisturbance Agreement pursuant to this Section 13.2(b) shall apply only
if Tenant shall supply to Landlord, together with Tenant’s Sublet Notice,
evidence reasonably satisfactory to Landlord, that the space to be leased shall
be regular in shape, reasonably accessible in a customary manner, rented at not
less than fair market value and otherwise on terms that are commercially
reasonable and customary in respect of 

 

106

 

similarly situated tenants of space of the size and quality to be
demised under the proposed Sublease), and (2) the proposed Subtenant is of
sufficient financial condition to perform the obligations under the proposed
Sublease, taking into account any security deposit posted by the proposed
Subtenant, and Landlord shall have been furnished with evidence reasonably
satisfactory to Landlord of such financial condition.  For the purposes of this clause (ii),
evidence of “fair market value” and “commercially reasonable and customary”
terms may be provided by the opinion of two (2) or more disinterested real
estate professionals, each having at least ten (10) years of experience in
valuing or leasing commercial real estate in midtown Manhattan).

 

(iii)  
The proposed Subtenant is not a Related Entity of Tenant (except as
permitted in clause (ii)(A) of this Section 13.2(b)).

 

(iv)  
The proposed Subtenant (and the Principals thereof if such proposed
Subtenant is not publicly held) is not a Prohibited Person.

 

(v)  
The proposed Sublease shall provide for no decrease in the amount of
rent payable thereunder over the term of such Sublease except for customary
abatements and offsets of rent.

 

(vi)  
None of (A) the demise of the Demised Space (including any
expansion space) under such Sublease, nor (B) the exclusive or prohibited
use provisions thereof, conflict with [1] the demise under or [2] the exclusive
or prohibited use provisions of, any other Sublease, and Tenant shall deliver
to Landlord a certification to such effect signed by a Qualified Certifying
Party of Tenant.

 

(vii)  
The proposed Sublease contains terms that are commercially reasonable
and customary in respect of similarly situated tenants of space of the size and
quality to be demised under the proposed Sublease, and the rent and other
amounts owed thereunder constitute not less than fair rental value for the
space to be demised thereunder (for the purposes of this clause (vii), evidence
of “commercially reasonable and customary” terms and “fair market value” may be
provided by the opinion of two (2) or more disinterested real estate
professionals, each having at least ten (10) years of experience in
valuing or leasing commercial real estate in midtown Manhattan).

 

For any Sublease by Tenant for which Tenant requests that Landlord
enter into a Nondisturbance Agreement, Tenant shall give written notice thereof
to Landlord (“Tenant’s Sublet Notice”)
accompanied by a copy of the Sublease as fully executed or in executable form
and such information as Landlord may require to determine whether the proposed
Subtenant is a Prohibited Person. 
Tenant’s Sublet Notice shall contain the following information: the name
of the proposed Subtenant, the portion of the Demised Premises to be sublet,
the proposed term of the Sublease (including the effective date thereof), the proposed
Sublease rental and such financial and other background information with
respect to the proposed Subtenant as is reasonably sufficient to allow Landlord
to assess the financial condition, relevant experience, and all other material
economic terms of the proposed Sublease (but only to the extent the same are
conditions under this Section 13.2(b) to
Landlord’s obligation to enter into a Nondisturbance 

 

107

 

Agreement). Landlord shall reasonably cooperate with
Tenant after receiving Tenant’s Sublet Notice to expedite the granting of the
applicable Nondisturbance Agreement. 
Disputes regarding this Section 13.2(b),
may be referred to arbitration pursuant to Section 16.3
hereof.

 

(c)          Subtenant Attornment.  Subject to any applicable Nondisturbance
Agreement, every subletting hereunder is subject to the express condition, and
by accepting a Sublease hereunder of all or any portion of the Demised Premises
each Subtenant shall be conclusively deemed to have agreed, that if this Lease
should be terminated prior to the Scheduled Expiration Date or if Landlord
should succeed to Tenant’s estate in the Demised Premises, then, at Landlord’s
election, to be exercised in Landlord’s sole judgment and discretion, the Subtenant
shall attorn to and recognize Landlord as the Subtenant’s landlord under the
Sublease, provided that Landlord shall not (i) be liable for any
act or omission or negligence of Tenant under such Sublease, (ii) be
subject to any counterclaim, offset or defense which theretofore accrued to
such Subtenant against Tenant, (iii) be bound by any modification or
amendment of such Sublease (unless such modification or amendment shall have
been approved in writing by Landlord), (iv) be bound by any payment of rent
or additional rent for more than one (1) month in advance (unless actually
received by Landlord), (v) be obligated to perform any Alteration in the
Demised Space, (vi) in the event of a Casualty, be obligated to repair or
restore the Demised Premises or any portion thereof, (vii) in the event of
a partial Taking, be obligated to repair or restore the Demised Premises or any
part thereof (except that, in the event that Landlord receives Insurance
Proceeds and determines not to restore in such circumstances, the Subtenant can
terminate its Sublease), (viii) be obligated to make any payment to such
Subtenant (other than any overpayment of rent made to Landlord), or (viii) be
bound by any obligations which Landlord lacks the capacity or reasonable
ability to perform.  The Subtenant shall
promptly execute and deliver any instrument Landlord may reasonably request to
evidence such attornment.  With respect
to any Sublease for which Landlord has entered into a Nondisturbance Agreement,
the foregoing provisions of this Section 13.2(c) shall
be superseded by such Nondisturbance Agreement. 
Upon such a termination of this Lease, Tenant shall pay over to Landlord
all sums held by Tenant for the benefit of Subtenants or as security under the
provisions of then existing Subleases except if such termination of this Lease
results from Tenant’s exercise of the Purchase Option.

 

(d)         Sublease Rent
Requirements.  Each permitted
Sublease hereunder shall require the Subtenant thereunder to make, subject to
the rights of any Recognized Mortgagee, all payments of rents, additional rents
and other sums of money to Landlord upon the occurrence of a monetary or
material nonmonetary Event of Default hereunder and notice from Landlord, and
Landlord shall apply the said payments made to it, first, to retain all amounts
that are due and payable to Landlord pursuant to this Lease, and second, to pay
to Tenant all remaining amounts.

 

(e)          Enforcement of
Subleases.  Tenant shall diligently,
continuously and in good faith, and in accordance with commercially reasonable
practices, enforce the provisions of each Sublease, so that each Subtenant at
all times remains in compliance with the DUO and permits no acts or omissions
that adversely affect any Structural Component. 
If the breach of a Sublease by the Subtenant thereunder constitutes a
material violation of the DUO or any other aspect of this Lease in respect of
Structural Components, Tenant shall promptly commence and diligently prosecute
any and all appropriate legal proceedings necessary to cause such Subtenant to
cure such breach (“Eviction Proceeding”).

 

108

 

(f)            No
Demise of Common Elements.  Tenant
covenants that it shall in no circumstances sublease, license or otherwise
transfer its interest in any portion of the Common Elements to any other
Person, except as such transfer may be expressly permitted hereunder
(including, as permitted in Article XXXIV
hereof).

 

Section 13.3                            Assignments.

 

(a)          Assignee
Obligated.  Each and every assignee
of this Lease,  whether or not approved
by Landlord and whether as assignee or as successor in interest to Tenant named
herein or any subsequent assignee, including any purchaser of the Lease under a
foreclosure of any Mortgage or other lien on this Lease, shall, in the case of
an assignee of the Lease, immediately be and become and remain liable, for the
payment of the Charges and other sums payable under this Lease, and for the due
performance of all of Tenant’s Obligations under this Lease, in each case to
the extent arising from and after the effective date of such assignment to the
full end of this Lease, and each and every provision of this Lease applicable
to Tenant shall also apply to and bind every such assignee and purchaser with
the same force and effect as though such assignee or purchaser were Tenant
named in this Lease.  No Transfer to such
assignee or to such purchaser shall be binding upon Landlord unless such
assignee or purchaser shall deliver to Landlord a recordable instrument (i) agreeing
to indemnify Landlord from and against any Claims for brokerage commissions,
any Claims derived from Landlord’s granting its consent to such assignment in
accordance with the terms hereof and any other Claims not derived from
Landlord’s actions arising out of such assignment (provided, however,
that this subclause (i) shall not apply with respect to a Transfer to a
Recognized Mortgagee pursuant to a foreclosure of the applicable Recognized
Mortgage) and (ii) subject to Article XXXI
hereof, assuming the obligations of Tenant hereunder by said assignee or
purchaser to such effect, but the failure or refusal of such assignee or purchaser
to deliver such instrument shall not release or discharge such assignee or
purchaser from its Obligations as above set forth.

 

(b)         Release
of Assignor.  Upon an assignment of
this Lease in accordance with this Article XIII,
the assignor shall have no further Obligations arising after the effective date
of such assignment and Landlord shall confirm such release in a recordable
instrument promptly delivered to Tenant (but the failure of Landlord to deliver
such confirmation shall not prevent such release from becoming effective); provided,
however, the foregoing release shall not relieve assignor from any
obligation accruing prior to the date of such assignment.

 

Section 13.4                            Collect
Charges from Assignee, Subtenant.  If
this Lease is assigned, whether or not in violation of the provisions of this
Lease, Landlord may and is hereby empowered, subject to the rights of any
Recognized Mortgagee, to collect the Charges and other sums payable to Landlord
hereunder from the assignee and to enforce the Obligations of Tenant hereunder
against such assignee.  If the Demised
Premises or any part thereof is sublet or is used by anyone other than Tenant,
whether or not in violation of this Lease, Landlord may, after an Event of
Default by Tenant and expiration of Tenant’s time to cure such Event of
Default, if any, collect rent from the Subtenant or occupant.  In either event, Landlord may apply the net
amount collected to the Charges and other sums herein reserved or provided for,
but no such assignment or subletting or collection nor any action to enforce
the provisions of this Lease against any such assignee or Subtenant shall be
deemed: (a) a waiver of the covenant herein against Transfer; (b) 

 

109

 

an acceptance of the assignee or Subtenant as
a tenant under this Lease; or (c) a release of Tenant from the further
performance of its Obligations hereunder.

 

Section 13.5                            No
Relief.  Notwithstanding any
provision to the contrary in this Lease and except as set forth in Section 13.3(b) hereof, the
making of any Transfer, in whole or in part, whether or not with the consent of
Landlord, shall not operate to relieve Tenant herein named from its Obligations
under this Lease.  In the event of any
such permitted Transfer, except as provided in Section 13.3(b) hereof, Tenant herein named shall
remain fully responsible and liable for the prompt payment of all Charges and
other sums due hereunder and for the due performance and observance of all of
Tenant’s Obligations under this Lease, to the full end of this Lease, whether
or not there shall have been any prior termination of this Lease by summary
proceedings or otherwise.  Each permitted
Sublease shall expressly be made subject to the provisions of this Lease and no
permitted Transfer shall in any manner affect or reduce any of the obligations
of Tenant hereunder.

 

Section 13.6                            Consent.  Any consent by Landlord herein contained or
hereafter given to any Transfer shall be held to apply only to the specific
Transfer hereby or thereby approved.  No
such consent shall be construed as a waiver of the duty of Tenant, or its
successors or assigns, to obtain from Landlord a consent to any other or
subsequent Transfer or as a modification or limitation of the right of Landlord
with respect to the foregoing covenant by Tenant.

 

Section 13.7                            Costs
and Expenses.  Subject to Section 13.1(g) hereof, Tenant
covenants and agrees to pay all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred in connection
with or arising out of the making of any Transfer, including costs related to
Landlord’s review of any proposed Transfer and the documentation in connection
therewith.  Tenant agrees to pay any federal,
state or local excise, transfer, recording or other tax or fee imposed upon or
applicable to any such Transfer, and to indemnify Landlord from and against any
such cost or expense.  Tenant further
agrees that any consent of Landlord required hereunder may be conditioned upon
receipt by Landlord of reasonable evidence of the payment of any such cost or
expense.  The Obligations of Tenant under
this Section 13.7 (and all
other obligations expressly stated to survive this Lease) shall survive the
expiration or earlier termination of this Lease.

 

Section 13.8                            Prohibited
Persons.  (a)  Notwithstanding
the foregoing provisions, in no event shall Tenant be permitted to make a
Transfer to a Prohibited Person, nor shall any other Subtenant be permitted to
assign its Sublease or sublet or otherwise grant occupancy rights with respect
to its Demised Space or any portion thereof to a Prohibited Person.

 

(b)         Procedure
for Determining Prohibited Person Status. 
If Tenant seeks to determine whether any Person subject to the
restrictions in this Lease regarding Prohibited Persons is a Prohibited Person,
Tenant may submit to Landlord the name of such Person and, except with respect
to any Person that is publicly held, the name of each Principal of such Person,
together with such completed questionnaires or forms as are standard for
Landlord, the City or NYCEDC to request.  
Notwithstanding anything to the contrary contained in this Lease, any
provision in this Lease prohibiting a Person from being a Prohibited Person
shall also apply to the Principals of such Person unless such Person is a
publicly traded entity.  Within fifteen 

 

110

 

(15) Business
Days after receipt of all such names and fully-completed questionnaires or
forms, as applicable, Landlord shall notify Tenant of Landlord’s determination,
which determination shall be limited to whether such Person (and any Principals
thereof) is a Prohibited Person; provided, however, that Landlord will confirm
whether any Person is a Prohibited Person promptly after receiving all of the
information described in this Section 13.8(b).  If Landlord fails to so notify Tenant within
such fifteen-Business-Day period, then such Person shall be deemed not to be a
Prohibited Person; provided, however, with respect to any proposed
assignee of this Lease or any Sublease or any proposed Subtenant of the
Property or any portion thereof, the following shall apply instead:  If Landlord fails to so notify Tenant within
such fifteen-Business-Day period, Tenant shall have the right to give Landlord
a reminder notice, which reminder notice shall contain the following caption in
bold and capitalized type:

 

YOU
SHALL BE DEEMED TO HAVE DETERMINED THAT
                          
IS NOT A PROHIBITED PERSON IF YOU FAIL TO NOTIFY TENANT OF WHETHER SUCH PERSON
IS A PROHIBITED PERSON WITHIN TEN (10) BUSINESS DAYS FROM THE DATE OF YOUR
RECEIPT OF THIS NOTICE.

 

If Landlord fails to notify
Tenant of whether such Person is a Prohibited Person within ten (10) Business
Days after its receipt of such reminder notice, then such Person shall be
deemed not to be a Prohibited Person.

 

Section 13.9                            Constitutive
Documents.  Upon request by Landlord,
Tenant shall deliver to Landlord any Constitutive Documents and any
replacement, amendment, modification or termination (any such act, a “Modification”) of any Constitutive
Documents to the extent reflecting any Transfer, together with such other
information and evidence as shall be reasonably necessary and reasonably
satisfactory to Landlord to confirm the composition and identity of Tenant (or
any member of Tenant) and compliance with the requirements of this Article XIII.  Tenant shall also deliver a certification by
a Qualified Certifying Party of Tenant stating that nothing Tenant has not
shown to Landlord will render the information that Tenant has shown to Landlord
inaccurate or misleading.

 

Section 13.10                     Permitted
Disposition.

 

(a)          Indicted
Party.  If any grand jury impaneled
by any federal or state court files an indictment with such court charging
Tenant or any Principal of Tenant (such indicted Person, the “Indicted Party”) with having committed an
intentional felony in connection with the Demised Premises, then Landlord shall
convene a hearing (the “Hearing”)
before a panel of three persons consisting of (i) the City’s Deputy Mayor
for Finance and Economic Development, or a successor in function designated by
the Mayor of the City, (ii) the President of NYCEDC, or a successor in
function designated by the Mayor of the City, and (iii) the Corporation
Counsel of the City, or their respective duly authorized designees who shall be
disinterested senior officials of their respective department or NYCEDC, as the
case may be (the “Hearing Officers”).

 

(b)         Hearing.  The Hearing shall be held upon not less than
fifteen (15) Business Days prior written notice to the Indicted Party and
Tenant for the purpose of determining whether it is in the best interest of the
City to require the Indicted Party to make a Permitted Disposition of its
interest in this Lease or in Tenant, as the case may be, and, if the Indicted
Party 

 

111

 

is a Principal of Tenant,
resign from any directorship or office held by the Indicted Party in
Tenant.  At the Hearing, Tenant and the
Indicted Party shall each have the opportunity to be represented by counsel and
to make a presentation to the Hearing Officers orally and in writing.  The Hearing Officers shall consider and
address in reaching their determination (i) whether there is a direct
nexus between the conduct charged and this Lease, (ii) the deleterious
effect, if any, which a Permitted Disposition of the Indicted Party’s interest
in this Lease or in Tenant, as the case may be, would have on the economic
development interests of the City which this Lease is intended to promote and
the deleterious effect, if any, such a Permitted Disposition would have on
Tenant as a whole and (iii) any other relevant matters.  The Hearing Officers shall render a decision
in writing within twenty-three (23) Business Days after the last day of the
Hearing and such decision shall set forth in reasonable detail the findings of
the Hearing Officers.  Landlord shall
deliver a true copy of such decision to Tenant and the Indicted Party within
four (4) Business Days after the date thereof.  Such decision shall be final and subject to
review by appropriate lawful means, unless (A) the indictment is amended
in any material respect or (B) a new or superseding indictment is filed,
the basis of which is materially different from the indictment as to which the
Hearing has been held, in which case a new Hearing may be held.  If the Hearing Officers decide by a majority
vote that it is in the best interest of the City to require a Permitted Disposition
by the Indicted Party, (1) the Indicted Party (if the Indicted Party is a
Principal of Tenant) shall resign from any directorship or office held by the
Indicted Party in Tenant within seven (7) Business Days after the date a
true copy of such decision is delivered to it and (2) the Indicted Party
shall make a Permitted Disposition of its interest in this Lease or in Tenant,
as the case may be, within six (6) months after the date a true copy of
such decision is delivered to it.  If the
Permitted Disposition is an Equity Interest Disposition or Assignment, the
Indicted Party may receive the consideration for such Equity Interest
Disposition or Assignment in installment payments, provided that such
consideration (other than interest thereon) shall be for a sum certain and
provided further that, except as otherwise provided below, following such
Equity Interest Disposition or Assignment, the Indicted Party shall have no
further interest in this Lease or Tenant, as the case may be, or in any profits
therefrom.  If the Hearing Officers do
not determine by a majority vote that it is in the best interest of the City to
require a Permitted Disposition by the Indicted Party, then neither the
indictment nor any conviction arising therefrom shall have any effect upon this
Lease or the rights or obligations of the parties hereunder or thereunder.

 

(c)          Default.  Any failure of (i) the Indicted Party to
make a Permitted Disposition of its interest in this Lease or Tenant, as the
case may be, and (if the Indicted Party is a Principal of Tenant) to resign
from directorships or offices, as provided above, or (ii) the Person
acting as a trustee to make a Permitted Disposition of the Indicted Party’s
interest in this Lease or in Tenant, as the case may be, following a
Conviction, within the time and in the manner provided hereunder, shall be
deemed to be an Event of Default by Tenant hereunder.

 

(d)         Permitted
Disposition.  “Permitted Disposition” means any of the
following (the choice among which, to the extent applicable, shall be at
Tenant’s option):  (i) the Assignment
or Equity Interest Disposition of the Indicted Party’s interest in this Lease
or Tenant, as the case may be, to any Person who is (A) not a Prohibited
Person, (B) not a Related Entity or affiliate of the Indicted Party and (C) satisfactory
to Landlord, applying the provisions of Section 13.2
hereof, and to the holder of the Recognized Mortgage most senior in lien (if
required by the terms of such Recognized Mortgage); (ii) if the Indicted
Party is not Tenant, the Equity Interest 

 

112

 

Disposition (or other transfer
or relinquishment) of the Indicted Party’s interest in Tenant, to Tenant, any
other partner(s) of Tenant or any other owners of direct or indirect
ownership interests in Tenant; (iii) the giving of the Indicted Party’s
interest in this Lease or Tenant, as the case may be, to a Person (other than a
Related Entity or an affiliate of the Indicted Party) who is acting in a
fiduciary capacity as an independent trustee for the benefit of the Indicted
Party for the purpose of actively managing this Lease or the Indicted Party’s
interest in Tenant, as the case may be, or (iv) a combination of two or
more of the actions described in clauses (i), (ii) and (iii) above
with respect to portions of the Indicted Party’s interest that constitute, in
the aggregate, the Indicted Party’s entire interest.  The trustee agreement between the Indicted
Party and the trustee contemplated by clause (iii) of the immediately
preceding sentence shall be reasonably satisfactory to Landlord as well as to
the holder of the Recognized Mortgage most senior in lien (if required by the
terms of Recognized Mortgage).  The trust
agreement shall provide as follows:

 

(1)          if (x) the
Indicted Party is found not guilty of the felony for which it is indicted or (y) the
felony charges against such Indicted Party are dismissed or changed or reduced
to charges that do not constitute an intentional felony, then the trustee shall
give back the Indicted Party’s interest in Tenant or in this Lease to the
Indicted Party, and the Indicted Party shall have the right to be a director
and hold office in Tenant;

 

(2)          if (x) the
Indicted Party is found guilty of the felony for which it is indicted and such
verdict is affirmed by the court having ultimate jurisdiction to hear any
appeal of such conviction or the period of appeal expires or the Indicted Party
waives any right to appeal such determination or (y) the Indicted Party
pleads guilty to the felony for which it is indicted or another intentional felony
(as to which a Hearing is held and a determination made that a Permitted
Disposition by the Indicted Party is in the best interest of the City) (either (x) or
(y) above, a “Conviction”),
then the trustee shall assign this Lease or make a sale of the Indicted Party’s
interest in Tenant, as the case may be, within six (6) months after the
date of the Conviction to a Person or Persons permitted under clause(s) (i) and
(ii) above; and

 

(3)          during the
pendency of any such trust, the Indicted Party shall exercise no control over
any portion of the Demised Premises or Tenant, as the case may be, but may make
contributions to the Demised Premises or Tenant, as the case may be, and
receive distributions therefrom.  Landlord
shall be deemed to have determined that a Person is satisfactory to Landlord
under clause (i) above if Landlord shall not have delivered notice to
Tenant that the proposed Person to whom the Permitted Disposition is to be made
is unsatisfactory with forty-five (45) days after Tenant makes a written
request accompanied by such financial and biographical information and other
documentation as Landlord may reasonably require in making the
determination.  Neither the giving of the
Indicted Party’s interest in this Lease or Tenant, as the case may be, to a
Trustee, nor the giving back by a Trustee to the Indicted Party of such
interest, shall constitute an Assignment or Equity Interest Disposition.  No Permitted Disposition which complies with
the requirements of this Section 13.10(d)(3) shall
constitute a default on the part of Tenant under this Lease.

 

(e)          [INTENTIONALLY
OMITTED]

 

113

 

ARTICLE XIV

DEFAULT PROVISIONS

 

Section 14.1                            Conditions
of Limitation.  (a)  This Lease
and the term and estate hereby granted are subject to the limitation that
whenever an Event of Default shall occur, regardless of and notwithstanding the
fact that Landlord has or may have some other remedy under this Lease or by
virtue hereof, or in law or in equity, Landlord may, subject to Section 14.1(b) hereof, give to
Tenant a Termination Notice and, upon the giving of the Termination Notice,
this Lease and the term and estate hereby granted shall expire and terminate
upon the day so specified in the Termination Notice as fully and completely and
with the same force and effect as if the day so specified were the Scheduled
Expiration Date and all rights of Tenant under this Lease shall expire and
terminate, but Tenant shall remain liable for damages as hereinafter provided.  From and after the date upon which Landlord
shall be entitled to give a Termination Notice, Landlord, without further
notice, may re-enter, possess and repossess itself of the Demised Premises as
set forth in Section 23.2
hereof.

 

(b)         The parties hereto
acknowledge and agree that the occurrence of a Default hereunder shall cause
irreparable harm to Landlord and to the 42nd Street Project.  In recognition of such harm to Landlord and
the 42nd Street Project, and in consideration for Landlord’s election to invoke
such remedy, Landlord may elect, in Landlord’s sole discretion, to forego (but
only until, with respect to each such Default, receipt by Tenant of the notice
described in Section 14.1(b)(iii) hereof)
the remedies set forth in Sections 14.1(a) and
14.3(a) hereof, and in lieu
thereof to elect that the following payments be made by Tenant:

 

(i)               In respect of any
Default pursuant to Section 14.2(a) hereof,
Tenant shall pay to Landlord a sum in the amount of $1,000 per day (Adjusted
for Inflation upon the Substantial Completion Date and on every fifth annual
anniversary thereof), which amount shall be reduced to Tenant’s Percentage
Allocation of such amount in the event that the Default in question arose
solely in respect of the Common Elements and Landlord has invoked Section 14.1(b) under
each Severance Sublease against each tenant of the Severance Subleases as a
remedy therefor, from Tenant’s receipt of a First Default Notice until the date
such Default is remedied; and

 

(ii)            In respect of any
Default pursuant to Sections 14.2(b),
14.2(c) and 14.2(d) hereof,
Tenant shall pay to Landlord a sum in the amount of $2,000 per day (Adjusted
for Inflation upon the Substantial Completion Date and on every fifth annual
anniversary thereof), which amount shall be reduced to Tenant’s Percentage
Allocation of such amount in the event that the Default in question arose
solely in respect of the Common Elements and Landlord has invoked Section 14.1(b) under
each Severance Sublease against each tenant of the Severance Subleases as a
remedy therefor, from Tenant’s receipt of a First Default Notice until the date
such Default is remedied; provided, however, that for so long as
Tenant shall not have received First Default Notices regarding any two (2) or
more Defaults (it being understood that, if a Default is later determined not
to have occurred, such Default shall not qualify as one of the two (2) or
more Defaults under this provision) within the preceding twelve (12) month
period (A)  the amounts described in this Section 14.1(b)(ii) shall
not begin to accrue against Tenant unless and until the grace period provided
in Section 14.2(b), 

 

114

 

14.2(c) or 14.2(d) hereof,
as applicable, has expired, and (B) in the event that such underlying
Default is cured prior to the expiration of any grace period provided in Section 14.2(b), 14.2(c) or
14.2(d) hereof, any such amount
payable under this Section 14.1(b)(ii) shall
be waived by Landlord and not imposed against Tenant.

 

(iii)         Landlord may elect, at
any time after Landlord’s election to receive any of the payments described in
clause (i) or (ii) of this Section 14.1(b),
upon delivery to Tenant of another First Default Notice (thereupon reinitiating
the relevant cure periods), to pursue any of the remedies otherwise available
under this Lease with respect to the applicable Default.  In such event, the respective amounts
described in this Section 14.1(b) shall
immediately cease to accrue, with respect to all such Defaults, as of the date
Landlord makes an election to pursue any other remedy, it being understood
that, as to amounts accrued prior to such election, (A) such amounts shall
continue to be owing and (B) Landlord shall have all rights and remedies
under this Lease in respect to Tenant’s failure to pay such accrued sums.  It is further acknowledged and agreed that
Landlord may, at a later date, again forego the remedies set forth in Sections 14.1(a) and 14.3(a) hereof,
and again seek payment from Tenant pursuant to and in accordance with this Section 14.1(b) upon delivery to Tenant of another
First Default Notice (thereupon reinitiating the relevant cure periods).

 

Section 14.2                            Events
of Default.  An “Event of Default” shall have occurred (in
each case, upon the occurrence of the following:  (x) Tenant receiving notice (it being
agreed that (1) in the event Landlord is barred (by an automatic stay or
court order) from giving any notice referred to in this Section 14.2 by reason of or in
connection with the bankruptcy or insolvency of Tenant or proceedings in
respect thereof, such notice shall be deemed automatically waived by Tenant for
all purposes of this Lease and (2) Landlord shall deliver such notice in
connection with a Default relating to the Common Elements to Tenant and to all
of the tenants under the Severance Subleases substantially simultaneously) from
Landlord (a “First Default Notice”)
substantially in the form of Exhibit M
attached hereto stating that (1) Tenant is in Default hereunder and
stating the period, if any, set forth in the following subsections of this Section 14.2, during which Tenant must
cure such Default and (y) Tenant receiving, at any time after the cure
period described in the relevant First Default Notice shall have elapsed
without Tenant having cured the delineated Default, a notice from Landlord,
substantially in the form of Exhibit N attached
hereto, indicating that if, within five (5) Business Days after receipt of
such second notice, the Default in question has not been cured to Landlord’s
satisfaction, an Event of Default shall have occurred; any time after such five
(5) Business Day period, Landlord may, but is not obligated to, send a
notice to Tenant (the “Termination Notice”),
specifying a day that the term of this Lease shall end), after any of the following
have occurred (Landlord’s right to invoke its remedies hereunder in respect of
any such Event of Default being subject to suspension pursuant to Section 14.1(b) hereof):

 

(a)          whenever Tenant shall
default in the payment of any installment of Charges on any day upon which the
same is required to be paid, and any such default shall continue for five (5) Business
Days after Landlord shall have delivered to Tenant a First Default Notice; or

 

(b)         whenever Tenant shall
fail to comply with Tenant’s Obligations to maintain adequate insurance in
respect of the Condominium Unit as required pursuant to Article X hereof, 

 

115

 

and Tenant shall fail to remedy
the same within seven (7) Business Days after Landlord shall have given
Tenant a First Default Notice; or

 

(c)          whenever Tenant shall
do, or permit anything to be done, whether by action or inaction, contrary to
any of Tenant’s Obligations under this Lease (except as otherwise provided in
this Section 14.2), and Tenant
shall fail to remedy the same within thirty (30) days after Landlord shall have
given Tenant a First Default Notice, unless the remedying thereof requires work
to be done, action to be taken, or conditions to be satisfied, which cannot, by
their nature, reasonably be performed, done or satisfied by Tenant within such
30-day period (it being agreed that Landlord may, at a commercially-reasonable
cost (to be paid by Tenant), retain a disinterested, third-party consultant to
oversee the action to be taken to cure the underlying Default by Tenant or
Tenant’s designees during such extended period, and to advise Landlord as to
the necessity of and diligent prosecution of such actions during such
extension; while such consultant’s advice to Landlord shall not be binding on
Tenant, it is understood that such advice may be relied upon by Landlord in
Landlord’s determination of the reasonableness and duration of any extension
under this Section 14.2(c)),
in which case no Event of Default shall be deemed to exist as long as Tenant,
within such 30-day period, has commenced and thereafter diligently and
continuously prosecutes to completion all steps necessary to remedy the same;
or

 

(d)         if any of the
representations made by Tenant in Section 30.1(a) hereof
are proven to have been false or incorrect in any material respect as of the
date made and if, within thirty (30) days after Tenant’s receipt of a First
Default Notice in respect thereto, Tenant fails to rectify the state of facts
giving rise to such false or incorrect representation, provided that no Event
of Default shall be deemed to exist (i) if such a state of facts cannot,
by its nature, reasonably be rectified within such thirty 30-day period, so
long as Tenant has commenced rectifying such state of facts within such thirty
30-day period and shall be diligently and continuously proceeding to rectify
such state of facts or (ii) if the only loss or damage Landlord has
sustained or incurred can be cured by the payment of a sum of money and Tenant
has made such payment; or

 

(e)          whenever an involuntary
petition shall be filed against Tenant under any bankruptcy or insolvency law
or under the reorganization provisions of any law of like import, or a receiver
of Tenant or of or for the property of Tenant shall be appointed without the
acquiescence of Tenant, or whenever this Lease or the estate hereby granted or
the unexpired balance of this Lease would, by operation of law or otherwise,
except for this provision, devolve upon or pass to any Person other than Tenant
or as provided in this Lease, and such situation under this Section 14.2(e) shall continue
and shall remain undischarged or unstayed for an aggregate period of one
hundred twenty (120) days (whether or not consecutive) or shall not be remedied
by Tenant within one hundred twenty (120) days; or

 

(f)            if final,
non-appealable judgment for the payment of money shall be rendered against
Tenant, and (i) such final judgment shall be for an amount greater than or
equal to $25,000,000 and Tenant shall not discharge said judgment or cause it
to be discharged (by bonding or otherwise) within sixty (60) days from the
entry thereof or (ii) if Tenant shall appeal from such judgment or from
the order, decree or process upon which or pursuant to which such judgment was
entered and shall secure a stay of execution pending such appeal, within sixty
(60) days after such appeal shall be decided or such stay removed; or

 

116

 

(g)         if Tenant shall fail to
Commence Construction of Tenant’s Construction Work by the Fixed Construction
Commencement Date, as the same may be extended by Unavoidable Delays; or

 

(h)         if Tenant shall fail to
Substantially Complete Tenant’s Construction Work by the Fixed Substantial
Completion Date, as the same may be extended by Unavoidable Delays; or

 

(i)             if there shall occur
a default on the part of Tenant following any applicable notice and cure period
under the Site 8 South LADA, the Site 8 South Subway Agreement (with respect to
Tenant’s operation or maintenance obligations thereunder) or any provision of
the Project Agreement but only with respect to those provisions under which
Tenant has obligations thereunder (Landlord acknowledging that no other default
of Tenant under any other Project Document that does not otherwise give rise to
a Default hereunder shall be deemed a Default hereunder).

 

Section 14.3                            Rights
of Landlord.

 

(a)          Enforcement of
Performance.  If an Event of Default
occurs, Landlord may elect to proceed by appropriate judicial proceedings,
either at law or in equity, to enforce performance or observance by Tenant of
the applicable provisions of this Lease and/or to recover damages for breach
hereof.

 

(b)         Payment of Damages.  It is covenanted and agreed by Tenant that in
the event of termination of this Lease or re-entry by Landlord, under any of
the provisions of this Article XIV
or pursuant to Legal Requirements, by reason of default hereunder on the part
of Tenant, Tenant shall pay Landlord’s actual damages to Landlord, at the
election of Landlord.

 

(c)          Recovery of Damages.  Landlord shall be entitled to recover from
Tenant each monthly deficiency as the same shall arise and no suit to collect
the amount of the deficiency for any month shall prejudice Landlord’s right to
collect the deficiency for any subsequent month by a similar proceeding.  Suit or suits for the recovery of any and all
damages, or any installments thereof, provided for hereunder may be brought by
Landlord from time to time at its election, and nothing contained herein shall
be deemed to require Landlord to postpone suit until the Scheduled Expiration
Date, or under any provisions of law, or had Landlord not re-entered the
Demised Premises.

 

(d)         No Limit.  Nothing herein contained shall be construed
as limiting or precluding the recovery by Landlord against Tenant of any sums
or damages to which Landlord may lawfully be entitled in any case other than
those particularly provided for above (other than consequential damages, which
are waived by Tenant and Landlord in respect of all matters under this Lease).

 

(e)          Construction
Guaranty; Collateral Assignment. 
Subject to the rights of all Recognized Mortgagees, upon the occurrence
of an Event of Default, Landlord shall have the right to exercise its rights
under the Construction Guaranties and any Collateral Assignments to the extent
that the same are then in effect

 

117

 

(f)            Funds Held by
Depositary.  If this Lease terminates
as a result of one or more Events of Default and all of the other Severance
Subleases also have been terminated, any funds held by Depositary in respect
solely of this Lease or the Common Elements shall, subject to the rights of any
Subtenants with respect to which Landlord has entered into a Nondisturbance
Agreement, be paid to Landlord, which it may keep as liquidated damages free of
any claim by Tenant, or any Person claiming by, under or through Tenant.

 

(g)         Percentage Rent Calculation.  The
average annual Percentage Rent paid or payable by Tenant during the Stabilized
Lease Years immediately preceding such termination or re-entry (such average
calculated by increasing the Percentage Rent for each applicable year by the
Discount Rate applied from the date such rent was paid in full to the date such
average is determined), shall, for purposes of calculating Charges under this Section 14.3, be deemed to be the
Percentage Rent which would be payable by Tenant for each Lease Year during the
balance of the original term.  As used in
this Section 14.3(g), “Stabilized Lease Year” shall mean each full
Lease Year commencing not less than twelve (12) months following the
Substantial Completion Date, excluding any Lease Year all or any part of which
falls within the period commencing upon the occurrence of a significant casualty
or Taking and ending twelve (12) months after the Substantial Completion Date
following such casualty or Taking.  For
purposes of calculating the deemed Percentage Rent pursuant to this Section 14.3(g), the number of
Stabilized Lease Years shall be the lesser of ten (10) or the actual
number of Stabilized Lease Years preceding such termination or re-entry.

 

(h)         Plans and
Specifications.  Upon the occurrence
of an Event of Default and termination of this Lease, subject to Section 9.4 hereof, Tenant’s rights to
the Final Plans and Specifications shall be deemed automatically assigned to
Landlord, without cost, subject, however, to any rights of any Recognized
Mortgagee to such plans and specifications.

 

(i)             Assignment of
Construction Agreements.  Upon termination
of this Lease by reason of the occurrence of an Event of Default, at the
request of Landlord and subject to the rights, if any, of any Recognized
Mortgagee, Tenant shall assign to Landlord, without cost, and Landlord shall
assume, all of Tenant’s interest in any or all agreements with respect to any
Restoration, Condemnation Restoration or Alterations in or to the Demised
Premises and the Common Elements or any portion thereof which are not then
subject to any Collateral Assignment. 
Upon the request of Landlord, the respective contractors, materialmen
and suppliers who are parties to any such agreements shall, subject to the
rights of all Recognized Mortgagees, attorn to Landlord and any agreements
entered into between Tenant and such parties shall specifically provide for
such attornment upon Landlord’s request.

 

(j)             Assignment of
Right to Excess Site Acquisition Costs Reimbursement (Allocated).  Upon termination of this Lease by reason of
the occurrence of an Event of Default, at the request of Landlord, Tenant shall
assign to Landlord, without cost, and Landlord shall assume, all of Tenant’s
interest in any right to reimbursement of Excess Site Acquisition Costs
(Allocated).

 

Section 14.4                            Waiver
of Right of Redemption.  Tenant, for
Tenant and on behalf of any and all Persons claiming through or under Tenant,
including creditors of all kinds, does hereby waive and surrender all right and
privilege which they or any of them might have 

 

118

 

under or by reason of any present or future
law, to redeem the Demised Premises or to have a continuance of this Lease for
the term hereby demised after being dispossessed or ejected therefrom by
process of law or under the terms of this Lease or after the termination of
this Lease as herein provided.  Nothing
in the foregoing portions of this Section 14.4
shall affect the rights of any Recognized Mortgagees under Article XXXI hereby.

 

Section 14.5                            No
Waiver.  Failure of either party
hereto to declare any default immediately upon its occurrence or delay in
taking any action in connection with such default shall not waive such default
but such party shall have the right to declare any such default at any time
thereafter.  After an Event of Default,
any amounts paid by Tenant to Landlord may be applied by Landlord, in its sole
discretion, to any items then owing by Tenant to Landlord under this
Lease.  Receipt of a partial payment
shall not be deemed to be an accord and satisfaction or waiver of the failure
to make full payment.

 

Section 14.6                            Remedies
Under Bankruptcy and Insolvency Codes. 
If an order for relief is entered or if any stay of proceeding or other
act becomes effective in favor of Tenant or Tenant’s interest in this Lease in
any proceeding commenced by or against Tenant under the present or any future
United States Bankruptcy Code or in a proceeding which is commenced by or
against Tenant seeking a reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any other present
or future applicable federal, state or other bankruptcy or insolvency statute
or law, Landlord shall be entitled to invoke any and all rights and remedies
available to it under such bankruptcy or insolvency code, statute or law of
this Lease, including such rights and remedies as may be necessary to
adequately protect Landlord’s right, title and interest in and to the Demised
Premises or any part thereof and adequately assure the complete and continuous
future performance of Tenant’s Obligations under this Lease.  Adequate protection of Landlord’s right,
title and interest in and to the Demised Premises, and adequate assurance of
the complete and continuous future performance of Tenant’s Obligations under
this Lease, shall include all of the following requirements:

 

(a)          that Tenant shall comply
with all of its Obligations under this Lease;

 

(b)         that Tenant shall
continue to use the Demised Premises only in the manner permitted by this
Lease; and

 

(c)          that if Tenant’s
trustee, Tenant or Tenant as debtor-in-possession assumes this Lease and
proposes to assign it (pursuant to Title 11 U.S.C. Section 365, as it may
be amended) to any Person who has made a bona fide offer therefor, the notice
of such proposed Assignment, giving (i) the name and address of such
Person, (ii) all of the terms and conditions of such offer, and (iii) the
adequate assurance to be provided Landlord to assure such Person’s future
performance under this Lease, including the assurances referred to in Title 11
U.S.C. Section 365[b](3), as it may be amended, and such other assurances
as Landlord may reasonably require, shall be given to Landlord by the trustee,
Tenant or Tenant as debtor-in-possession of such offer, not later than twenty
(20) days before the date that the trustee, Tenant or Tenant as
debtor-in-possession shall make application to a court of competent
jurisdiction for authority and approval to enter into such Assignment, and
Landlord shall thereupon have the prior right and option, to be exercised by
notice to the trustee, Tenant and Tenant as debtor-in-possession, given at any
time before the effective date of such proposed Assignment, to accept an
Assignment of this 

 

119

 

Lease upon the same terms and
conditions and for the same consideration, if any, as the bona fide offer made
by such Person, less any brokerage commissions which may be payable out of the
consideration to be paid by such Person for the Assignment of this Lease .  Landlord shall have no obligation to pay such
brokerage commissions.  If Tenant
attempts to arrange such an Assignment of this Lease, then as an element of the
required adequate assurance to Landlord, and as a further condition to Tenant’s
right to make such an Assignment, Tenant’s agreement(s) with brokers
shall, to Landlord’s reasonable satisfaction, provide that Landlord shall have
no obligation to pay a brokerage commission if Landlord exercises Landlord’s
rights under this Section 14.6.

 

Section 14.7                            Relationship
Among Severance Tenants.

 

(a)          Except with respect to
the obligations hereunder with respect to the Common Elements, the obligation
of each tenant under a Severance Sublease is separate and distinct from the
obligations of all other tenants under the Severance Subleases, and except for
a Default arising with respect to the Common Elements, no Default by a tenant
under a Severance Sublease shall of itself constitute a Default by any other
tenant under the Severance Subleases.

 

(b)         Each tenant under a
Severance Sublease shall be jointly and severally obligated with respect to all
Defaults arising with respect to the Common Elements (it being acknowledged
that the sums set forth in Section 14.1(b) hereof
for such Defaults per day shall be calculated without regard to the number of
tenants under the Severance Subleases). 
Landlord shall exercise its rights and remedies under this Article XIV in respect of a Default
relating to the Common Elements simultaneously against all tenants under the
Severance Subleases; provided, however, that Landlord’s rights
and remedies hereunder in respect of Tenant shall not be decreased or in any
other way impaired, and Landlord shall not be prevented from doing so by reason
of any bar (by automatic stay or court order) by reason of or in connection
with the bankruptcy or insolvency of any other tenant under a Severance
Sublease or proceedings in respect thereof.

 

120

 

ARTICLE XV

LANDLORD’S RIGHT TO PERFORM

 

Section 15.1                            Right
to Perform.  If Tenant shall fail to
pay any Imposition or Charges or make any other payment required to be made
under this Lease or shall default in the performance of any other Obligations
of Tenant herein contained, Landlord, without being under any obligation to do
so and without thereby waiving such default, may make such payment and/or
remedy such other default for the account and at the expense of Tenant, (a) immediately
and without notice in the case of any failure to pay any Imposition or any
other amount due a third party, if such failure would result in the creation of
a lien on the Demised Premises and/or the Common Elements or any part thereof
or any loss or impairment of Landlord’s estate hereunder or in and to the
Demised Premises and/or the Common Elements, or in the case of any failure to
perform any of Tenant’s Obligations hereunder which creates an imminent threat
to public health or safety, or (b) in any other case, only after (i) Landlord
shall have notified Tenant once of such default or failure and Tenant shall
have failed to make such payment or remedy such default within the applicable
grace period under this Lease, and (ii) Landlord shall have notified
Tenant a second time and Tenant shall have failed to make such payment or
remedy such default within ten (10) Business Days following such second
notice; provided, however, with respect to any default covered by
clause (b) above, Landlord shall not be entitled to remedy the same if and
for so long as Tenant has commenced and thereafter diligently and with
continuity prosecutes to completion all steps necessary to remedy such
default.  In furtherance of its rights
hereunder, in the event of an imminent threat to human life or safety, Landlord
shall have the right to enter upon the Demised Premises and/or the Common
Elements in accordance with Section 23.2
hereof, including for the purpose of making repairs or performing work required
of Tenant hereunder.  The limitations
imposed by the foregoing provisions of this Section 15.1
on Landlord’s right to remedy Tenant’s defaults shall not apply to
Landlord’s rights to remedy Tenant’s failures under the last paragraphs of Sections 7.3(a) and (b) hereof.  Bills for any expenses incurred by Landlord
in connection therewith, and bills for all costs, expenses and disbursements of
every kind and nature whatsoever, including counsel fees, involved in
collecting or endeavoring to collect any Charges or other sums due hereunder,
or any part thereof, or involved in enforcing or endeavoring to enforce any
right against Tenant under or in connection with this Lease, any Sublease or
pursuant to law, including any such cost, expense and disbursement involved in
instituting and prosecuting summary proceedings, as well as bills for any
property, material, labor or services provided, furnished or rendered, or
caused to be, by Landlord to Tenant, with respect to the Demised Premises
and/or the Common Elements or equipment used in connection therewith (together
with interest at the Interest Rate, from the respective dates of Landlord’s
making of each such payment or incurring of each such cost or expense), may be
sent by Landlord to Tenant monthly, or immediately, at Landlord’s option, and
shall be due and payable in accordance with the terms of said bills (or, in the
case of payments to reimburse Landlord, within twenty-three (23) Business Days
of demand) and if not paid when due the amount thereof shall immediately become
due and payable as additional rent under this Lease.  The Obligations of Tenant to pay such bills
or to reimburse Landlord under this Section 15.1
shall survive the expiration or earlier termination of this Lease.

 

Section 15.2                            Additional
Remedies.  The mention herein of any
particular remedy shall not preclude either party hereunder from any other
remedy it might have either in law or in equity.  Any right or remedy of such party in this
Lease specified and any other right or 

 

121

 

remedy that such party may have at law, in
equity or otherwise, upon breach of any of the other party’s Obligations
hereunder shall be distinct, separate and cumulative rights or remedies, and no
one of them, whether exercised by Landlord or not, shall be deemed to be in
exclusion of any other.

 

Section 15.3                            Strict
Performance.  No failure by either
party to insist upon the other party’s strict performance of any covenant,
agreement, term or condition of this Lease, or the failure of Landlord to
exercise any right or remedy available to Landlord by reason of a Default or
Event of Default, or the failure of Tenant to exercise any right or remedy
available to Tenant by reason of Landlord’s default, and no payment or
acceptance of full or partial Charges during the continuance of any Default or
Event of Default, constitutes a waiver of any such Default or Event of Default
or of either party’s right to strict performance of such covenant, agreement,
term or condition.

 

Section 15.4                            Right
to Enjoin Defaults or Threatened Defaults. 
In the event of any breach or threatened breach by either party of any
of the covenants, agreements, terms or conditions contained in this Lease, the
other party shall be entitled to bring an action to enjoin such breach or
threatened breach or to compel specific performance of any covenant, agreement,
term or condition herein, which right shall be cumulative with such party’s
other rights and remedies.

 

122

 

ARTICLE XVI

ARBITRATION

 

Section 16.1                            Generally.  Unless otherwise expressly permitted
hereunder, all disputes hereunder to be resolved by arbitration shall be
resolved in accordance with this Article XVI.

 

Section 16.2                            Standard
Arbitration.  (a)  If either
party hereto desires to invoke the arbitration procedure set forth in this Section 16.2, the party invoking the
arbitration procedure shall give a notice (the “Arbitration Notice”) to the other party stating that the party
sending the Arbitration Notice desires to meet within seven (7) Business
Days to attempt to agree on a single arbitrator (the “Arbitrator”) to determine the question at
issue.  The Arbitrator appointed shall be
competent, qualified by training and experience, disinterested and independent,
and an individual having not less than ten (10) years experience relating
to commercial real estate in New York City. 
If the parties hereto have not agreed on the Arbitrator within ten (10) Business
Days after the giving of the Arbitration Notice, then either party hereto, on
behalf of both, may apply to the New York City office of the American
Arbitration Association or any organization which is the successor thereto (the
“AAA”) for appointment of the
Arbitrator, or, if the AAA shall not then exist or shall fail, refuse or be
unable to act such that the Arbitrator is not appointed by the AAA within
twenty-three (23) Business Days after application therefor, then either party
may apply to the presiding Justice of the Appellate Division of the Supreme
Court of the State of New York, First Department (the “Court”), for the appointment of the
Arbitrator and the other party shall not raise any question as to the Court’s
full power and jurisdiction to entertain the application and make the
appointment.  The date on which the Arbitrator
is appointed by the agreement of the parties, by appointment by the AAA or by
appointment by such court is referred to herein as the “Appointment Date”.  If any Arbitrator appointed hereunder shall
be unwilling or unable, for any reason, to serve, or continue to serve, a
replacement Arbitrator shall be appointed in the same manner as the original
Arbitrator.

 

(b)         The arbitration shall be
conducted in accordance with the then prevailing commercial arbitration rules of
the AAA, modified as follows:

 

(i)               To the extent that
the New York State Civil Practice and Law Rules (the “CPLR”),
or any successor statute, imposes requirements different from those of the AAA
in order for the decision of the Arbitrator to be enforceable in the courts of
the State of New York, such requirements shall be complied with in the
arbitration.

 

(ii)            Before hearing any
testimony or receiving any evidence, the Arbitrator shall be sworn by an
officer authorized to administer an oath to hear and decide the controversy
faithfully and fairly and a written copy thereof shall be delivered to Landlord
and Tenant.

 

(iii)         Within twenty-three (23)
Business Days after the Appointment Date, the parties hereto shall deliver to
the Arbitrator two (2) copies of their respective written determinations
of the appropriate resolution of the issue in question (each, a “Determination”), together with such affidavits, appraisals,
reports 

 

123

 

and other written evidence relating thereto as the submitting party
deems appropriate.  After the submission
of any Determination, the submitting party may not make any additions to or
deletions from, or otherwise change, such Determination or the affidavits,
appraisals, reports and other written evidence delivered therewith.  If either party fails to so deliver its
Determination within such time period, such party shall be deemed to have
irrevocably waived its right to deliver a Determination and the Arbitrator,
without holding a hearing, shall accept the Determination of the submitting
party as the appropriate resolution of the issue in question.  If each party submits a Determination with
respect to the appropriate resolution of the issue in question, within the
thirty-day period described above, the Arbitrator shall, promptly after its
receipt of the second Determination, deliver a copy of each party’s
Determination to the other party.

 

(iv)        Not
more than twenty-three (23) Business Days after the earlier to occur of (A) the
expiration of the thirty-day period provided for in clause (iii) above or (B) the
Arbitrator’s receipt of both of the Determinations from the parties (such
earlier date is referred to herein as the “Submission Date”),
and upon not less than seven (7) Business Days’ notice to the parties, the
Arbitrator may hold one or more hearings with respect to the determination of
the appropriate resolution of the issue in question.  The hearings shall be held in the Borough of
Manhattan at such location and time as shall be specified by the
Arbitrator.  Each of the parties shall be
entitled to present all relevant evidence and to cross-examine witnesses at the
hearings.  The Arbitrator shall have the
authority to adjourn any hearing to such later date as the Arbitrator shall
specify, provided that in all events all hearings with respect to the
determination of the appropriate resolution of the issue in question shall be
concluded not later than sixty (60) days after the Submission Date.

 

(v)           The
Arbitrator shall be instructed, and shall be empowered only, to select one of
the Determinations which the Arbitrator believes is the more appropriate
resolution of the issue at hand.  Without
limiting the generality of the foregoing, in rendering her or his decision, the
Arbitrator shall not add to, subtract from, or otherwise modify the provisions
of this Lease or either of the Determinations.

 

(vi)        The
Arbitrator shall render his or her determination as to the selection of a
Determination in a signed and acknowledged written instrument, original
counterparts of which shall be sent simultaneously to the parties hereto,
within seven (7) Business Days after the earlier to occur of (A) his
or her determination of the appropriate resolution of the issue in question
pursuant to clause (iii) above or (B) the conclusion of the hearing(s) referred
to in clause (iv) of this subsection.

 

(c)          The arbitration
decision, determined as provided in this Section 16.2,
shall be conclusive and binding on the parties, shall constitute an “award” by
the Arbitrator within the meaning of the AAA rules and applicable law and
judgment may be entered thereon in any court of 
competent jurisdiction.

 

(d)         Each party shall pay its
own fees and expenses relating to the arbitration described herein (including,
without limitation, the fees and expenses of its counsel and of 

 

124

 

experts and witnesses retained
or called by it).  Each party shall pay
one-half of the fees and expenses of the AAA and of the Arbitrator; provided
that if either party fails to submit a Determination within the period provided
therefor, such non-submitting party shall pay all of such fees and expenses.

 

(e)          Time shall be of the
essence as to all obligations of Landlord and Tenant set forth in this Section 16.2.

 

Section 16.3                            Expedited
Arbitration.  (a)  If either
party hereto desires to invoke the arbitration procedure set forth in this Section 16.3, the party invoking the
arbitration procedure shall give an Arbitration Notice to the other party
stating that the party sending the Arbitration Notice desires to meet within
three (3) Business Days to attempt to agree on an Arbitrator to determine
the question at issue.  The Arbitrator
appointed shall be competent, qualified by training and experience,
disinterested and independent, and an individual having not less than ten (10) years
experience relating to commercial real estate in New York City.  If the parties hereto have not agreed on the
Arbitrator within three (3) Business Days after the giving of the
Arbitration Notice, then either party hereto, on behalf of both, may apply to
the AAA for appointment of the Arbitrator, or, if the AAA shall not then exist
or shall fail, refuse or be unable to act such that the Arbitrator is not
appointed by the AAA within twenty (20) Business Days after application therefor,
then either party may apply to the Court, for the appointment of the Arbitrator
and the other party shall not raise any question as to the Court’s full power
and jurisdiction to entertain the application and make the appointment.  The date on which the Arbitrator is appointed
by the agreement of the parties, by appointment by the AAA or by appointment by
such court is referred to herein as the “Appointment
Date”.  If any Arbitrator
appointed hereunder shall be unwilling or unable, for any reason, to serve, or
continue to serve, a replacement Arbitrator shall be appointed in the same
manner as the original Arbitrator.

 

(b)         The arbitration shall be
conducted in accordance with the then prevailing commercial arbitration rules of
the AAA for expedited arbitration, modified as follows:

 

(i)               To the extent that
the CPLR, or any successor statute, imposes requirements different from those
of the AAA in order for the decision of the Arbitrator to be enforceable in the
courts of the State of New York, such requirements shall be complied with in
the arbitration.

 

(ii)            Before hearing any
testimony or receiving any evidence, the Arbitrator shall be sworn by an
officer authorized to administer an oath to hear and decide the controversy
faithfully and fairly and a written copy thereof shall be delivered to Landlord
and Tenant.

 

(iii)         Within ten (10) Business
Days after the Appointment Date, the parties hereto shall deliver to the
Arbitrator two (2) copies of their respective Determinations, together
with such affidavits, appraisals, reports and other written evidence relating
thereto as the submitting party deems appropriate.  Such ten Business-Day period may not be
extended by the Arbitrator.  After the
submission of any Determination, the submitting party may not make any
additions to or deletions from, or otherwise change, such Determination or the
affidavits, appraisals, reports and other 

 

125

 

written evidence delivered therewith. 
If either party fails to so deliver its Determination within such time
period, such party shall be deemed to have irrevocably waived its right to
deliver a Determination and the Arbitrator, without holding a hearing, shall
accept the Determination of the submitting party as the appropriate resolution
of the issue in question.  If each party
submits a Determination with respect to the appropriate resolution of the issue
in question, within the ten Business-Day period described above, the Arbitrator
shall, promptly after its receipt of the second Determination, deliver a copy
of each party’s Determination to the other party.

 

(iv)        Not more than ten (10) Business
Days after the earlier to occur of (A) the expiration of the ten
Business-Day period provided for in clause (iii) above or (B) the Submission
Date, and upon not less than three (3) Business Days’ notice to the
parties, the Arbitrator may hold one hearing with respect to the determination
of the appropriate resolution of the issue in question.  The hearing shall be held in the Borough of Manhattan
at such location and time as shall be specified by the Arbitrator.  Each of the parties shall be entitled to
present all relevant evidence and to cross-examine witnesses at the hearing.  The Arbitrator shall have the authority to
adjourn any hearing to such later date as the Arbitrator shall specify, provided
that in all events all hearings with respect to the determination of the
appropriate resolution of the issue in question shall be concluded not later
than thirty (30) days after the Submission Date.

 

(v)             The Arbitrator shall be
instructed, and shall be empowered only, to select one of the Determinations
which the Arbitrator believes is the more appropriate resolution of the issue
at hand.  Without limiting the generality
of the foregoing, in rendering her or his decision, the Arbitrator shall not
add to, subtract from, or otherwise modify the provisions of this Lease or
either of the Determinations.

 

(vi)        The
Arbitrator shall render his or her determination as to the selection of a
Determination in a signed and acknowledged written instrument, original
counterparts of which shall be sent simultaneously to the parties hereto,
within three (3) Business Days after the earlier to occur of (A) his
or her determination of the appropriate resolution of the issue in question
pursuant to clause (iii) above or (B) the conclusion of the hearing(s) referred
to in clause (iv) of this subsection.

 

(c)          The arbitration
decision, determined as provided in this Section 16.3,
shall be conclusive and binding on the parties, shall constitute an “award” by
the Arbitrator within the meaning of the AAA rules and applicable law and
judgment may be entered thereon in any court of competent jurisdiction.

 

(d)         Each party shall pay its
own fees and expenses relating to the arbitration described herein (including,
without limitation, the fees and expenses of its counsel and of experts and
witnesses retained or called by it). 
Each party shall pay one-half of the fees and expenses of the AAA and of
the Arbitrator; provided that if either party fails to submit a Determination
within the period provided therefor, such non-submitting party shall pay all of
such fees and expenses.

 

126

 

(e)          Time shall be of the
essence as to all obligations of Landlord and Tenant set forth in this Section 16.3.

 

Section 16.4                            Single
Arbitration.  The parties hereto
acknowledge that the scope and requirements of certain obligations under each
Severance Sublease may result in a dispute, governed by Article XVI of
each applicable Severance Sublease, between Landlord and the tenants under more
than one Severance Sublease.  The parties
hereto agree that:  (a) Landlord may
join Tenant as a party to an arbitration proceeding initially commenced in
respect of another Severance Sublease (and Tenant expressly submits to such
joining and waives any rights it might have to dispute such joining) if the
failure to so join would materially and adversely affect the Public Parties’
administration of the Severance Subleases, would result in the need for
duplicative proceedings to resolve the same matter or could result in
conflicting determinations with respect to Common Elements; (b) Landlord
may join other tenants under Severance Subleases to an arbitration proceeding
initially commenced in respect of Tenant (and Tenant expressly submits to such
joining and waives any rights it might have to dispute such joining) if the
failure to so join would materially and adversely affect the Public Parties’
administration of the Severance Subleases, would result in the need for
duplicative proceedings to resolve the same matter or could result in
conflicting determinations with respect to Common Elements; and (c) Tenant
may join any arbitration initiated between Landlord and any other tenant under
a Severance Sublease (and Landlord expressly submits to such joining and waives
any rights it might have to dispute such joining).  Moreover, in the event that Tenant joins or
is joined in any arbitration preceding described in this Section 16.4, Tenant agrees that
Tenant shall:  (i) not initiate (or
attempt to initiate) a separate arbitration or other action, whether hereunder
or otherwise, in respect of the same dispute; (ii) make any decision or
proposal required of Tenant under this Article XVI
solely in concert with any other tenants under Severance Subleases so joined if
the failure to so act in concert would materially and adversely affect the
Public Parties’ administration of the Severance Subleases, would result in the
need for duplicative proceedings to resolve the same matter or could result in
conflicting determinations with respect to the Common Elements; and (iii) comply
with any decision rendered by the arbitrator pursuant to such arbitration,
regardless of whether Tenant fails to participate in the arbitration
proceeding.

 

127

 

ARTICLE XVII

INDEMNITY; LIMITATION ON LIABILITY

 

Section 17.1                            Indemnification
by Tenant.  To the fullest extent
permitted by law, Tenant shall indemnify Landlord and the Public Parties for,
and hold Landlord and all of the Public Parties harmless from and against, any
and all claims that may be imposed upon or incurred by or asserted against
Landlord or any of the Public Parties by reason of any of the following, (x) except
with respect to (i) actions taken or claimed to have been taken by, or on
behalf of, Landlord with respect to all or any portion of the Property prior to
the Delivery Date, (ii) the physical condition, prior to the Delivery
Date, of any Improvements existing on the Land prior to the Delivery Date, (iii) any
claims for compensation by condemnees as a result of the Condemnation or (iv) any
claims by third parties that relate to the Property and which arose prior to
the Delivery Date, or (y) unless caused by the gross negligence or
intentionally tortious acts of Landlord, the Public Parties or their respective
agents or employees, or by the actions of Landlord, the Public Parties, or
their respective agents or employees in its or their governmental capacity:

 

(a)          any accident, injury to
or death of Persons or loss of or damage to property occurring on or about the
Demised Premises and/or the Common Elements or as a result of any act or
omission occurring on or with respect to the Property or any other matter or
thing arising out of the use, repair, maintenance, operation or occupation of
the Demised Premises and/or the Common Elements, or the use, repair,
maintenance, operation and occupation by Tenant of the streets, sidewalks or
service roads, as applicable, adjacent thereto;

 

(b)         performance of any
Alterations or act done in, on or about the Demised Premises and/or the Common
Elements or any part thereof;

 

(c)          any lien or claim that
may be alleged to have arisen against or on the Demised Premises and/or the
Common Elements, or any lien or claim created or permitted by Tenant or any
Subtenant or any of its or their officers, agents, contractors, servants,
employees, licensees or invitees against any assets of, or funds appropriated
to, Landlord;

 

(d)         any claim for brokerage
commissions, fees or other compensation by any person who alleges to have acted
or dealt with Tenant in connection with this Lease or the transactions
contemplated by this Lease or any Transfers;

 

(e)          any failure on the part
of Tenant to perform or comply with any of Tenant’s Obligations;

 

(f)            any failure or alleged
failure on the part of Tenant or a Related Entity to perform or comply with any
agreement between Tenant or a Related Entity and a third party; and

 

(g)         any claim that Landlord
is in default of any obligations under the Condominium Documents.

 

Notwithstanding the above, Tenant shall have
no duty to indemnify Landlord or any of the Public Parties from such Claims to
the extent such Claims (1) arise from a failure or alleged failure on the
part of Landlord to perform or comply with any agreement between Landlord and a

 

128

 

third party not covered by this Lease, or (2) in
respect of Sections 17.1(a) and
17.1(b) hereof, arise prior
to the Delivery Date (provided, however, the limitation contained
in this clause (2) shall not apply to the extent such Claims are based on
Tenant’s negligence, willful misconduct, alleged violation of Legal
Requirements or failure to comply with the terms of this Lease).

 

Section 17.2                            Indemnification
Generally.

 

(a)          Indemnified Parties.  Wherever in this Lease a party shall be
obligated to indemnify the other party, then such party shall indemnify, defend
and hold harmless the other party and its respective commissioners, members,
directors, officers, agents, employees, partners and/or shareholders
(collectively, the “Indemnified Parties”),
to the full extent lawful, from and against all Claims which shall be paid,
incurred, related to or arising from the indemnified matter.  The foregoing indemnification shall be in
addition to any liability which such party may otherwise have.  If indemnification were for any reason not to
be available with respect to any matter, the indemnifying party shall contribute
to the settlement, loss or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
Indemnified Parties, on the other hand, as well as any other relevant equitable
considerations.

 

(b)         Proceedings.  The indemnifying party under this Lease shall
defend the applicable Indemnified Party with counsel reasonably satisfactory to
such Indemnified Party (unless the indemnified Claim is covered by insurance,
in which event counsel shall be attorneys for, or approved by, the insurance
carrier), shall keep the Indemnified Party apprised of all legal proceedings
and shall not enter into any settlement without the Indemnified Party’s prior
written consent, which shall not be unreasonably withheld.  Promptly after receipt by the Indemnified
Party of notice of any claim or the commencement of any action or proceeding
covered by the indemnity pursuant to this Section 17.2,
the Indemnified Party shall notify the indemnifying party in writing of such
claim or the commencement of such action or proceeding.

 

(c)          Payment of Costs.  Tenant’s Obligations with respect to any
matter under this Lease as to which Tenant is indemnifying Landlord shall not
be affected in any way by the absence of insurance coverage, the amount of any
deductible, or by the failure or refusal of any insurance carrier to perform an
obligation on its part under insurance policies procured by or on behalf of
Tenant.  Any amounts that become payable
by Tenant to Landlord under this Lease with respect to any such matter and that
are not paid within ten (10) Business Days after demand therefor following
payment of such amounts by Landlord shall bear interest at the Interest Rate
from the date of such payment by Landlord.

 

Section 17.3                            Recourse
Only to Landlord’s Estate in the Demised Premises and the Common Elements.  Notwithstanding anything to the contrary
contained herein, in the event of any default by Landlord hereunder, Tenant
shall look only to Landlord’s estate in the Demised Premises and Tenant’s
undivided interest in the Common Elements (or the proceeds thereof), and no
other property or assets of Landlord or its agents, officers, directors,
shareholders, partners or principals, disclosed or undisclosed, shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant’s remedies under or with respect to this Lease, the relationship of
Landlord and Tenant hereunder or under law or Tenant’s use or occupancy of the
Demised Premises and the Common Elements or any other liability of 

 

129

 

Landlord to Tenant.  Tenant in any event hereby waives any right
to collect from Landlord any indirect, consequential, special or punitive
damages whatsoever, whether or not Landlord was or should have been aware of
the probability or magnitude of such damages, unless a court of competent
jurisdiction finally determines that Landlord has acted in bad faith in respect
of the claim made against Landlord. 
Tenant’s foregoing waiver constitutes a material inducement to Landlord
to enter into the Project Documents.

 

Section 17.4                            Recourse
Only to Tenant’s Estate in the Demised Premises and the Common Elements.  Notwithstanding anything to the contrary
contained herein, Landlord shall look only to Tenant’s interest in the Demised
Premises and the Common Elements (or the proceeds thereof) and any funds held
by the Depositary pursuant to the terms of this Lease, in the event of the
occurrence of any Event of Default by Tenant hereunder, and no other property
or assets of Tenant or its Principals shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Landlord’s remedies under
or with respect to this Lease.  The foregoing
limitation on liability against other property and assets of Tenant shall not
be applicable to:

 

(a)          loss or damage suffered
by Landlord to the extent of any insurance proceeds, Adjusted Gross Revenues,
rents, condemnation awards, security deposits, downpayments or trust funds
applied by Tenant or its Principals in violation of applicable law or the
provisions of this Lease or loss or damage suffered by Landlord on account of
any criminal acts, fraud or intentional misrepresentation by Tenant or its
Principals;

 

(b)         any loss from damage to the
Demised Premises, the Common Elements or Tenant Subway Improvements resulting
from intentional waste, the willful destruction, willful damage by or on behalf
of Tenant to the Core and Shell or Tenant Subway Improvements;

 

(c)          the cost of remediation
or removal of Hazardous Materials and reasonable attorney fees and
disbursements and other professional fees incurred by Landlord  in connection with any matter under Section 7.8 hereof;

 

(d)         any loss or damage
suffered by Landlord in connection with any claim by Tenant that the
relationship of Tenant and Landlord is that of joint venturers or any other
relationship other than that of landlord and tenant;

 

(e)          any loss or damage
suffered by Landlord arising from a Transfer by Tenant to any Prohibited
Person;

 

(f)            loss, damage or
liability in connection with the Demised Premises and/or the Common Elements to
the extent such loss, damage or liability would have been covered by insurance
if Tenant had maintained the insurance policies required to be maintained hereunder
by Tenant; or

 

(g)         Charges accruing after an
Event of Default and before any termination of this Lease by reason of the use
or occupancy by Tenant prior to reentry by Landlord.

 

130

 

Notwithstanding anything to the contrary in
the foregoing, Landlord shall not have recourse to the assets or property of
any Principal of Tenant that is an individual for satisfaction of any claim
under this Lease.

 

Section 17.5                            Survival.  The provisions of this Article XVII shall survive the
expiration or earlier termination of this Lease.

 

131

 

ARTICLE XVIII

QUIET ENJOYMENT; TRANSFER OF LANDLORD’S
INTEREST

 

Section 18.1         Quiet Enjoyment.  Landlord covenants that if and so long as
Tenant duly keeps and performs each and every Obligation of Tenant hereunder,
Tenant shall quietly enjoy the Demised Premises and its undivided interest in
the Common Elements without hindrance or molestation by Landlord, subject to
the covenants, agreements, terms, provisions and conditions of this Lease.

 

Section 18.2         Transfer of Landlord’s Interest.  Except as set forth in this Section 18.2, Landlord shall not
convey or assign its interest or estate in this Lease, the Property, or any
portion thereof, to a third party, other than, after the Lease Assignment Date,
its right to receive any amounts payable to Landlord hereunder, and as
permitted in Sections 1.01 and 10.09 of the Site 8 South Project
Agreement.  Landlord may transfer its
interest in the Demised Premises and this Lease to any Government Authority; provided,
however, that no assignment or transfer permitted hereunder shall result
in a decrease (other than to a de  minimis extent) in any of
Tenant’s or Tenant’s Related Entities’ rights or benefits under any of the
Project Documents or an increase (other than to a de  minimis
extent)in Tenant’s or its Related Entities’ obligations, liabilities or costs
under any of the Project Documents.  It
is expressly understood and agreed that “Landlord”, as used in this Lease,
means only the owner for the time being of the Demised Premises and this Lease,
and in the event of the sale, assignment or transfer by such owner of its or
their interest in the Demised Premises and this Lease and in this Lease, such
owner shall thereupon be released and discharged from all of Landlord’s
Obligations thereafter accruing; but such Obligations shall be binding upon
each new owner of the Demised Premises and this Lease.

 

132

 

ARTICLE XIX

WAIVER OF JURY TRIAL; COUNTERCLAIMS

 

Section 19.1         Waiver of Jury Trial.  The parties hereto waive a trial by jury of
any and all issues arising in any action or proceeding between them or their
successors or assigns under or connected with this Lease or any of its
provisions or any negotiations in connection therewith or Tenant’s use or
occupancy of the Demised Premises and the Common Elements, except when such
action or proceeding arises from personal injury suffered on or resulting from
the Demised Premises and the Common Elements.

 

Section 19.2         No Counterclaims.  Tenant shall not interpose any counterclaims
in a summary proceeding or in any action based on nonpayment by Tenant of
Charges other than compulsory counterclaims.

 

Section 19.3         Survival.  The provisions of this Article XIX shall survive the
expiration or earlier termination of this Lease.

 

133

 

ARTICLE XX

NOTICES

 

Section 20.1         Notices.  Each written notice, demand, request or other
communication required or permitted hereunder shall be in writing and shall be
deemed  to have been duly given and
received (a) if personally delivered with proof of delivery thereof (any
notice or communication so delivered being deemed to have been received at the
time delivered on a Business Day or, if not a Business Day, the next succeeding
Business Day), or (b) by nationally recognized overnight courier (any
notice or communication so sent being deemed to have been received on the first
succeeding Business Day subsequent to the day so sent), addressed to the
respective parties as follows:

 

(a)   if to Landlord:

 

42nd St. Development Project, Inc.

633 Third Avenue, 33rd floor

New York, New York  10017

Attention:  President

 

With copies to:

 

(i)                                     1.
New York City Economic Development Corporation

110 William Street

New York, New York  10038

Attention:  President

 

(ii)                                  New
York City Law Department

100 Church Street

New York, New York  10007

Attention:  Chief, Economic Development
Division

 

(iii)                               Shearman &
Sterling LLP

599 Lexington Avenue

New York, New York  10022-6069

Attention:  Chris M. Smith, Esq.
(3578/13)

 

(iv)                              Goulston &
Storrs, PC

750 Third Avenue

22nd Floor

New York, NY 10017

Attention:  Max Friedman, Esq.

 

(v)                                 New
York State Urban Development Corporation

d/b/a Empire State Development Corporation

633 Third Avenue

New York, New York  10017

Attention:  42nd Street Development
Project, Inc.

 

134

 

(b)                                 if
to Tenant:

 

NYT Real Estate
Company LLC

c/o The New York Times Company

620 Eighth Avenue

New York, New York 10018

Attention:  General Counsel

 

With copies to:

 

(i)                                     The
New York Times Company

620 Eighth Avenue

New York, New York 10018

Attention:  Director of Real Estate

 

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, New York 10020

Attention:  Martin D. Polevoy, Esq.

 

or to such other address as may
be specified by written notice sent in accordance herewith.  No notice, demand, request or other
communication hereunder shall be effective unless given as aforesaid.

 

135

 

ARTICLE XXI

ESTOPPEL CERTIFICATE

 

Section 21.1         Certificate of Tenant.  Tenant shall, within ten (10) Business
Days after notice (which notice may not be given more often than three (3) times
in any twelve month period) by Landlord, execute, acknowledge and deliver to
Landlord or to any other Person specified by Landlord, a statement in writing
(which may be relied upon by such Person or by any other Person designated in
such notice) (a) certifying (i) that this Lease is unmodified and in
full force and effect (or if there are modifications, that this Lease, as modified,
is in full force and effect, stating the date of each such modification and
providing a copy thereof, if requested), and (ii) the date to which each
item of Charges payable by Tenant hereunder has been paid, and (b) stating
(i) whether, to the best knowledge of Tenant, any event has occurred that,
with the giving of notice or the passage of time, or both, would constitute a
default by Landlord in the performance of any covenant, agreement, obligation
or condition contained in this Lease, and (ii) whether, to the best
knowledge of Tenant, Landlord is in default in performance of any covenant,
agreement, obligation or condition contained in this Lease, and, if so,
specifying in detail each such default.

 

Section 21.2         Certificate of Landlord.  Landlord shall, within ten (10) Business
Days after notice (which notice may not be given more often than three (3) times
in any twelve-month period) by Tenant or any Recognized Mortgagee, execute,
acknowledge and deliver to Tenant or any Recognized Mortgagee, or such other
Person designated by Tenant or such Recognized Mortgagee in such notice, a
statement in writing (which may be relied upon by such Person and by current
and prospective Recognized Mortgagees, Subtenants and Assignees (other than
Prohibited Persons)): (a) certifying (i) that this Lease is
unmodified and in full force and effect (or if there are modifications, that
this Lease, as modified, is in full force and effect, stating the date of each
such modification and providing a copy thereof, if requested), and (ii) the
date to which each item of Charges payable by Tenant hereunder to Landlord has
been paid; and (b) stating (i) whether, to the best knowledge of
Landlord, an Event of Default has occurred or any event has occurred that, with
the giving of notice or the passage of time, or both, would constitute an Event
of Default and (ii) whether, to the best knowledge of Landlord, a Default
has occurred in Tenant’s performance of any covenant, agreement, obligation or
condition contained in this Lease, and, if so, specifying, in detail, each such
Default or Event of Default.

 

Section 21.3         [INTENTIONALLY
OMITTED]

 

136

 

ARTICLE XXII

SEVERABILITY

 

Section 22.1         Severability.  If any term or provision of this Lease or the
application thereof to any Person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to Persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law.

 

137

 

ARTICLE XXIII

END OF TERM; TITLE TO IMPROVEMENTS

 

Section 23.1         Surrender.

 

(a)   Upon the expiration or
earlier termination of this Lease other than by virtue of Tenant’s exercise of
the Purchase Option, or upon the re-entry of Landlord upon the Demised Premises
pursuant to Section 23.2 hereof,
Tenant shall, without any payment to or allowance by Landlord whatsoever,
peaceably and quietly leave, surrender and deliver unto Landlord the Demised
Premises, the Common Elements and any Improvements and Equipment constructed
therein or located thereon from time to time, in good order, condition and
repair, reasonable wear and tear excepted, free and clear of (i) all
lettings and occupancies, other than Subleases expiring after the Expiration
Date with respect to which Landlord has entered into a Nondisturbance
Agreement, and (ii) all agreements, easements, encumbrances or other
liens, other than the Permitted Encumbrances and those created or consented to
in writing by Landlord.  If the Demised
Premises and the Common Elements is not so surrendered at the end of this
Lease, Tenant shall compensate Landlord for all damages which Landlord shall
suffer by reason thereof (but excluding consequential damages), and shall
indemnify Landlord from and against all Claims resulting from or arising in
connection with Tenant’s failure to surrender the Demised Premises and the
Common Elements, including any Claim made by any succeeding tenant against
Landlord founded upon delay by Landlord in delivering possession of the Demised
Premises and the Common Elements to such succeeding tenant, so far as such
delay is occasioned by the failure of Tenant to surrender the Demised Premises
and the Common Elements.  Notwithstanding
anything to the contrary contained in this Lease, upon the expiration or
earlier termination of this Lease other than by virtue of Tenant’s exercise of
the Purchase Option, Tenant shall not be obligated to remove Equipment or to
restore the Demised Premises and the Common Elements to its condition prior to
any Alterations, but Tenant shall, upon Landlord’s request, be required to
remove any personal property of Tenant or any Subtenant, and any Subtenant
shall be entitled to remove any Improvement or Equipment made or installed by
or on behalf of such Subtenant (other than a Subtenant that is a Related Entity
of Tenant) as long as after such removal all elements of the Demised Premise
and the Common Elements (1) remain in working order, condition and good
repair, reasonable wear and tear excepted and (2) continues to provide all
necessary services to the Improvements.

 

(b)   In the event of any
surrender in accordance with Section 23.1(a) hereof,
Tenant shall deliver to Landlord (i) Tenant’s executed counterparts of all
Subleases (if applicable) and any management, service and maintenance contracts
then affecting the Demised Premises or the Common Elements, nothing herein
implying that any such Subleases or other agreements may encumber the Demised
Premises or the Common Elements after the Expiration Date, (ii) complete
maintenance records for the Demised Premises or the Common Elements, (iii) all
original licenses and permits then pertaining to the Demised Premises or the
Common Elements to the extent in Tenant’s possession or otherwise available, or
if such originals are not in Tenant’s possession or available, true and
complete copies thereof certified by a Qualified Certifying Party of Tenant, (iv) permanent
or temporary certificates of occupancy then in effect for the Improvements (and
transfer documents relating thereto), (v) all warranties and guaranties
then in effect which Tenant has received in connection with any work or
services performed or Equipment installed in the Improvements, (vi) all
financial reports, books and records required 

 

138

 

by this Lease and any and all
other documents of every kind and nature whatsoever relating to the operation
of the Demised Premises or the Common Elements, to the extent in Tenant’s
possession or otherwise obtainable by Tenant upon request, and (vii) all
keys to the Demised Premises or the Common Elements.

 

(c)   In the event this Lease
terminates prior to the Scheduled Expiration Date, Tenant shall execute and
deliver to Landlord such instruments of surrender, assignment and transfer, as
the case may be, as Landlord may deem reasonably necessary to evidence the same
pursuant to Section 23.1(b) hereof.

 

(d)   Except as otherwise provided
in Sections 5.2 and 14.3(f) hereof, any funds held by
Depositary, including any Restoration Funds that shall not have been applied to
Restoration, any other Restoration Funds then being held by Tenant, and any
other insurance proceeds or condemnation awards then payable in respect of a
Casualty or condemnation (net, to the extent not otherwise deducted, of
reasonable, actual out-of-pocket costs of collection, if any, incurred by
Tenant), shall be paid to Landlord free and clear of any claim by Tenant, or
any Person claiming by, under or through Tenant, subject, however, to the
rights, if any, of any Recognized Mortgagee or Subtenant with which Landlord
has entered into a Recognized Mortgage or Nondisturbance Agreement, as
applicable.  By executing this Lease,
Tenant shall be deemed to have agreed, subject, however, to the rights, if any,
of any Subtenant with which Landlord has entered into a Nondisturbance
Agreement, to assign all proceeds and awards, and the right to receive the
same, to Landlord effective as of the Expiration Date, and Tenant shall, at
Landlord’s request, execute and deliver to Landlord such instruments of
assignment as Landlord may request (in form reasonably satisfactory to
Landlord) to evidence such assignment. 
The execution and delivery of such instruments, however, shall not be
required to effect the assignment of such proceeds or awards to Landlord.

 

(e)   The provisions of this Section 23.1 shall survive the
expiration or earlier termination of this Lease.

 

Section 23.2         Re-Entry.  From and after any date upon which Landlord
shall be entitled to give a Termination Notice, Landlord may, without further
notice, enter upon, re-enter, possess and repossess itself of the Demised
Premises and the Common Elements, by force, summary proceedings, ejectment or
otherwise, and may dispossess and remove Tenant and all other persons and
property from the Demised Premises and the Common Elements and may have, hold
and enjoy the Demised Premises and the Common Elements and the right to receive
all rental and other income of and from the same.  As used in this Lease the words “enter” and
“re-enter” are not restricted to their technical legal meanings.

 

Section 23.3         Removal of Property.  Any personal property of Tenant, any Manager
or any Subtenant which shall remain on or in the Demised Premises or the Common
Elements after the Expiration Date and the removal of Tenant and such Subtenant
from the Demised Premises or the Common Elements, may, at the option of
Landlord, after thirty (30) days prior Notice to Tenant from Landlord, be
deemed to have been abandoned by Tenant, such Manager or such Subtenant and may
either be retained by Landlord as its property or be disposed of, without
accountability, in such manner as Landlord may see fit.  However, Landlord shall also have the right
to require Tenant to remove any such personal property of Tenant, such 

 

139

 

Manager or such Subtenant at
any such time at Tenant’s own cost and expense, provided that Landlord
shall give Tenant at least thirty (30) days prior written notice requesting the
removal of any such personal property of Tenant, such Manager or such Subtenant
from the Demised Premises and the Common Elements.  From and after the Expiration Date, Landlord
shall not be responsible for any loss or damage occurring to any property owned
by Tenant, such Manager or any Subtenant.

 

Section 23.4         Title to Improvements.  Title to the Improvements within the Demised
Premises and the Common Elements, shall remain, and immediately upon erection
or installation thereof on the Land shall become, the property of Landlord.

 

140

 

ARTICLE XXIV

COVENANTS BINDING

 

Section 24.1         Covenants Binding.  The covenants, agreements, terms, provisions
and conditions of this Lease shall be binding upon and inure to the benefit of
the successors and assigns of Landlord and, except as otherwise provided
herein, the successors and assigns of Tenant.

 

141

 

ARTICLE XXV

ENTIRE AGREEMENT; NO WAIVER

 

Section 25.1         Entire Agreement.  This Lease and the Project Documents contain
all the covenants, representations, warranties and conditions made by or
between the parties hereto with respect to the subject matter hereof.  This Lease may not be (a) changed orally
but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought or (b) amended
in respect of the Common Elements without the consent of the other tenants
under the Severance Subleases, as provided for in Article XXIII, Section 4
of the Condominium Declaration.

 

Section 25.2         No Waiver.

 

(a)   Receipt of Charges.  The payment or receipt of any amounts due
hereunder from the other party hereto, with knowledge of any breach of this
Lease by such other party or of any default on the part of such other party in
the observance, performance or compliance with any of such other party’s
Obligations shall not be deemed to be a waiver of any of the terms, covenants
or conditions of this Lease.  In the
event that Tenant is in arrears in the payment of any Charges or other sum
payable hereunder, Tenant waives Tenant’s right, if any, to designate the items
against which any payments made by Tenant are to be credited, and Tenant agrees
that Landlord may apply any payments made by Tenant to any items Landlord sees
fit irrespective of and notwithstanding any designation or request by Tenant as
to the items against which any such payments shall be credited.

 

(b)   Enforcement of Terms.  No failure on the part of any party hereunder
to enforce any term, covenant or condition herein contained, nor any waiver of
any right hereunder by any party hereunder, unless in writing, shall discharge
or invalidate such term, covenant or condition, or affect the right of such
party to enforce the same in the event of any subsequent breach or
default.  The consent of Landlord to any
act or matter must be in writing and shall apply only with respect to the
particular act or matter to which such consent is given and shall not relieve
the other party hereunder from the obligation wherever required under this
Lease to obtain the consent of such party to any other act or matter.  The receipt by Landlord of any Charges or any
other sum of money or any other consideration hereunder paid by or on behalf of
Tenant after the termination, in any manner, of this Lease, or after the giving
by Landlord of any notice hereunder to effect such termination, shall not
reinstate, continue or extend the term of this Lease or destroy or in any
manner impair the efficacy of any such notice of termination as may have been
given hereunder by Landlord to Tenant prior to the receipt of any such sum of
money or other consideration, unless so agreed to in writing and signed by
Landlord.  No act or thing done by
Landlord or any employee, agent or representative of Landlord during the term
of this Lease shall be deemed to be an acceptance of a surrender of the
Condominium Unit, excepting only an agreement in writing signed by Landlord
accepting or agreeing to accept such a surrender.

 

142

 

ARTICLE XXVI

NO MERGER

 

Section 26.1         No Merger.  There shall be no merger of this Lease or of
the leasehold estate hereby created with the fee estate or any leasehold estate
in the Property by reason of the fact that the same person acquires or holds,
directly, this Lease or the leasehold estate hereby created or any interest
herein or in such leasehold estate as well as the fee estate or any leasehold
estate in the Property.

 

143

 

ARTICLE XXVII

ENCUMBRANCES

 

Section 27.1         Encumbrances.  Tenant will not, without the consent of
Landlord, which consent Landlord may withhold in its sole and absolute
discretion (except in respect of utility or comparable easements necessary for
the day-to-day operation of the Demised Premises and the Common Elements, in
which case Landlord’s consent shall not be unreasonably withheld), impose any
restrictive covenants, liens or encumbrances upon the Demised Premises and the
Common Elements or any part thereof. 
Nothing in the foregoing shall restrict Tenant’s right to encumber the
leasehold estate in the Demised Premises and the Common Elements created hereby
in accordance with the terms hereof.

 

144

 

ARTICLE XXVIII

CONSENTS; APPROVALS

 

Section 28.1         Reasonable Standard.  Wherever it is specifically provided in this
Lease that Landlord’s or Tenant’s consent shall not be unreasonably withheld,
Landlord or Tenant, as applicable, must be reasonable in granting its consent
and a response to a request for such consent shall not be unreasonably delayed
or conditioned.  If a request is received
in writing by Landlord or Tenant for a consent or approval required under this
Lease or for information to which the party making such request shall be
entitled, the party receiving such request shall act with reasonable promptness
thereon and shall not unreasonably delay notifying the party making such
request as to the granting or withholding of such consent or approval or
furnishing to such party the information requested.  Except where it is specifically provided in
this Lease that Landlord’s consent shall not be unreasonably withheld, whenever
Landlord’s consent or approval shall be required hereunder for any matter, the
decision as to whether or not to consent to or approve the same shall be in the
sole discretion of Landlord.

 

Section 28.2         No Damages.  Tenant hereby waives any claim for damages
against Landlord which it may have based upon any assertion that Landlord has
unreasonably withheld or unreasonably delayed any consent that, pursuant to
specific provisions of this Lease, is not to be unreasonably withheld or otherwise
to act reasonably in the performance of Landlord’s Obligations, except where
Landlord has withheld such consent due to Landlord’s bad faith or in an
arbitrary and capricious manner (as determined by a court of competent
jurisdiction after all permitted appeals taken).  In any such case, Tenant’s sole remedy shall
be an action or proceeding to enforce any such provision or for specific
performance, injunction or declaratory judgment.  Tenant agrees that if Tenant shall request
such a consent from Landlord and Landlord shall fail or refuse to give such
consent or shall delay the giving of such consent, Tenant shall not be entitled
to any damages for such withholding or delay, except where Landlord has
withheld such consent due to Landlord’s bad faith or in an arbitrary and
capricious manner (as determined by a court of competent jurisdiction after all
permitted appeals taken).

 

Section 28.3         Deemed Consent.  (a)  Except as set forth in Section 28.3(b) hereof, whenever
it is provided in this Lease that Landlord shall respond to Tenant’s request
for Landlord’s consent within a specified period of time, Landlord’s consent
shall be deemed given if Landlord shall have not responded to such request
within such specified period, provided that Tenant’s request shall contain the
following notice in bold and capitalized type:

 

YOUR
CONSENT TO THE [DESCRIBE REQUEST] SHALL BE DEEMED GIVEN IF YOU FAIL TO RESPOND
TO THIS REQUEST WITHIN [SPECIFIED PERIOD] FROM THE DATE OF YOUR RECEIPT OF THIS
NOTICE.

 

Whenever the period of time for
Landlord to respond to Tenant’s request for Landlord’s consent is not
specified, such period of time shall be deemed to be twenty-three (23) Business
Days from receipt of Tenant’s notice requesting such consent, and Landlord’s
consent shall be deemed given if Landlord shall have not responded to such
request within such twenty-three Business Day period, provided that Tenant’s
request shall contain the aforementioned notice, appropriately modified.  The provisions of this Section 28.3(a) shall not apply
to consents covered by Section 28.3(b) hereof
or to any other provision of this Lease that specifically 

 

145

 

provides for additional or
other conditions for the granting of Landlord’s deemed consent.  Notwithstanding anything to the contrary in
the foregoing, if within the period specified for Landlord to respond to
Tenant’s consent request Landlord makes a reasonable request to Tenant for
additional information regarding the subject matter of such consent request,
the period of time for Landlord to respond to Tenant’s request shall not
commence until Landlord receives the requested information.

 

(b)   With respect to Tenant’s
requests for Landlord’s consents required under Sections 9.5, 9.6 or 13.1
or this Article XXVIII, the
following shall apply:   Whenever the
period of time for Landlord to respond to Tenant’s request for Landlord’s
consent is not specified, Tenant’s request for Landlord’s consent shall contain
the following notice in bold and capitalized type:

 

THIS
CONSENT REQUEST IS SUBJECT TO THE “DEEMED CONSENT” PROVISIONS OF SECTION 28.3(B) OF
THE LEASE.

 

If Landlord fails to respond to
Tenant’s request within twenty-three (23) Business Days from receipt of
Tenant’s notice requesting Landlord’s consent, or Landlord fails to make a
reasonable request for additional information related thereto within such
thirty-day period and thereafter to respond to such request within twenty-three
(23) Business Days after written submission of such additional information as
Landlord shall have reasonably requested, Tenant shall have the right to give
Landlord a reminder notice, which reminder notice shall contain the following
caption  in bold and capitalized type:

 

YOUR
CONSENT TO THE [DESCRIBE REQUEST] SHALL BE DEEMED GIVEN IF YOU FAIL TO RESPOND
TO THIS REQUEST WITHIN FIVE (5) BUSINESS DAYS FROM THE DATE OF YOUR
RECEIPT OF THIS NOTICE.

 

If Landlord fails to grant or
deny the requested consent within five (5) Business Days after its receipt
of such reminder notice, Landlord’s consent thereof shall be deemed given.  Whenever in the above-enumerated provisions
of this Lease the period of time for Landlord to respond to Tenant’s request
for Landlord’s consent is specified, the foregoing provisions of this Section 28.3(b) shall apply,
except that all references above to twenty-three (23) Business Days shall be
replaced by the period of time so specified.

 

146

 

ARTICLE XXIX

NON-DISCRIMINATION AND AFFIRMATIVE ACTION

 

Section 29.1         Incorporation by Reference.   To the extent it pertains to the Common
Elements and to the Demised Premises, the provisions set forth on Exhibit O attached hereto are
incorporated herein as if fully set forth herein.

 

147

 

ARTICLE XXX

REPRESENTATIONS, WARRANTIES AND COVENANTS,
AND OTHER AGREEMENTS

 

Section 30.1         Representations
and Warranties.

 

(a)   Tenant’s Representations
and Warranties.  Tenant represents
and warrants to Landlord that as of the date hereof:

 

(i)   Tenant is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
New York and has full power and authority to conduct its business as presently
conducted and to enter into this Lease and the terms, provisions, covenants and
obligations of Tenant as set forth in the Lease are legally binding on and
enforceable against Tenant;

 

(ii)   the execution, delivery and performance of
this Lease do not and will not (A) violate or conflict with the Constitutive
Documents of Tenant, (B) violate or conflict with any judgment, decree or
order of any court applicable to or affecting Tenant, (C) breach the
provisions of, or constitute a default under, any contract, agreement,
instrument or obligation to which Tenant is a party or by which Tenant is
bound, or (D) violate or conflict with any law or governmental regulation
or permit applicable to Tenant;

 

(iii)   Exhibit P
attached hereto correctly sets forth the identity of the members of Tenant and
the holders of the direct equity interests in such members; none of Tenant’s
members, partners, shareholders, or members, partners or shareholders thereof,
or officers, are Prohibited Persons; and

 

(iv)   Tenant has made available to Landlord true
and complete copies of the Constitutive Documents, and such Constitutive
Documents are in full force and effect, and have not been replaced, amended,
modified or terminated.

 

(b)   Landlord’s
Representations and Warranties. 
Landlord represents and warrants to Tenant that as of the date hereof
Landlord is duly organized and validly existing under the laws of New York and
has full power and authority to conduct its business as presently conducted and
to enter into this Lease and the terms, provisions, covenants and obligations of
Landlord as set forth in the Lease are legally binding on and enforceable
against Landlord;

 

(c)   Acknowledgment of No
Other Representations or Warranties. 
(i)  Tenant acknowledges that, except for the representations
contained in this Lease, in the other Project Documents and in any other
documents executed contemporaneously with this Lease (A) no
representations, statements or warranties, express or implied, have been made
by, or on behalf of, 42DP, ESDC, NYCEDC or the City with respect to the Demised
Premises or the Common Elements or the transaction contemplated by this Lease,
the status of title to the Demised Premises or the Common Elements, the
physical condition thereof, the tenants and occupants thereof, the zoning or
other laws, regulations, rules and orders applicable thereto or the use
that may be made of the Demised Premises or the Common Elements, (B) Tenant
has relied on no such other representations, statements or warranties, and (C) none
of Landlord, ESDC, 

 

148

 

NYCEDC or the City in no event
whatsoever shall be liable for any latent or patent defects in the Demised
Premises or the Common Elements.

 

(ii)   Landlord acknowledges that, except for the
representations and warranties contained in Section 30.1(a) hereof, the balance of the Lease,
in the other Project Documents and in any other documents executed
contemporaneously with this Lease, (A) no representations, statements or
warranties, express or implied, have been made by, or on behalf of, Tenant with
respect to the Demised Premises or the Common Elements or the transaction
contemplated by this Lease, and (B) Landlord has relied on no such
representations, statements or warranties.

 

Section 30.2         Possession.  It is not a condition of this Lease that
Landlord deliver full or partial Possession.

 

Section 30.3         Covenants of Tenant.  In addition to any other covenants of Tenant
set forth in this Lease, Tenant hereby agrees and covenants to:  make available to the Public Parties,
promptly upon execution thereof but not later than ten (10) days after
execution:  (i) any amendments to
Tenant’s Constitutive Documents and (ii) any Operative Agreements and any
amendments thereto.  Subject to Section 32.2 hereof, any amendments to
Tenant’s Constitutive Documents and the Operative Agreements shall be subject
to review and the reasonable approval by the Public Parties, within thirty (30)
days of the Public Parties’ gaining access thereto, solely to confirm (A) compliance
with the transfer provisions set forth in Article XIII
hereof, (B) the composition and identify of Tenant, and (C) compliance
with Sections 30.1(a)(ii) and
30.1(a)(iv) hereof.

 

Section 30.4         [INTENTIONALLY
OMITTED]

 

Section 30.5         Other Agreements.

 

(a)           Construction Guaranties.  [INTENTIONALLY OMITTED].

 

(b)           Project
Participants.  Tenant covenants to
inform Landlord whenever the identity of a Project Participant is first
identified or changes.  All Project
Participants shall be subject to the reasonable approval of Landlord, in
accordance with the requirements set forth in this Section 30.5(b) and
in Article I hereof in respect of permissible Project Participants.  Tenant shall not at any time be a Person that
is not a Permitted Developer; provided, however, that Landlord hereby approves
Tenant and Tenant’s Control Affiliates (as constituted on the date hereof) as
permissible Project Participants.

 

149

 

ARTICLE XXXI

PERMITTED FINANCING

 

Section 31.1         Recognized
Mortgage.

 

(a)   Right of Tenant.  Tenant, from time to time during the term of
this Lease, may make one or more Recognized Mortgages, provided that:

 

(i)   Tenant or the Recognized Mortgagee shall
deliver to Landlord within seven (7) Business Days after the execution
thereof, in the manner herein provided for the giving of notice to Landlord, a
copy of the mortgage financing commitment and any amendments thereto and a true
copy of such Recognized Mortgage and of any subsequent modification, amendment
or assignment thereof and recorded copies thereof and shall notify Landlord of
the address of the Recognized Mortgagee to which notices may be sent;

 

(ii)   such Recognized Mortgage shall contain
provisions permitting the disposition and application of insurance proceeds and
condemnation awards in a manner consistent with the provisions of this Lease;

 

(iii)   such Recognized Mortgage shall specifically
include provisions requiring written notice to Landlord of any defaults
thereunder, permitting Landlord to cure any such defaults and to be subrogated
to the rights of the Recognized Mortgagee to the extent thereof and prohibiting
any modification, amendment, extension or consolidation of the Recognized
Mortgage without delivering a copy thereof to Landlord; and

 

(iv)   no Recognized Mortgage shall extend to,
affect, or be a lien or encumbrance upon, the estate and interest of Landlord
in the Demised Premises or the Common Elements, in this Lease or any part
thereof and each Recognized Mortgage shall expressly provide that at all times
it shall be subject and subordinate to this Lease.

 

(b)   Payment of Indebtedness.  Any modification, amendment, extension or
consolidation of a Recognized Mortgage shall be permitted only if the same
shall comply in all respects with the requirements of Section 31.1(a) hereof.

 

(c)   Notices.  In the event that Tenant’s interest under
this Lease is subject to any Recognized Mortgage, Landlord will give to the
Recognized Mortgagee a copy of each notice of default from Landlord to Tenant
hereunder at the time of giving such notice 
to Tenant, and Landlord will give to the Recognized Mortgagee a copy of
each notice received by Landlord of any rejection of this Lease by any trustee
in bankruptcy of Tenant.  No notice of
default hereunder from Landlord shall be effective against any Recognized
Mortgagee unless and until a copy of such notice has been given to such
Recognized Mortgagee in the manner provided in this Lease for the giving of
notices.

 

150

 

(d)   Mortgage Recording Tax.  Subject to Section 3.4
hereof, in no event shall Tenant, or any party claiming by, through or under
Tenant, claim any exemption from Mortgage Recording Tax with respect to a
Recognized Mortgage.

 

(e)   Defaults of Other Tenants.  Landlord agrees that Tenant and/or the
Condominium Association, as applicable, shall be deemed a Recognized Mortgagee
hereunder with respect to any lien arising by virtue of Tenant’s or the
Condominium Association’s exercise of its right to cure the default of another
tenant under a Severance Sublease or as permitted under Section 2 of Article XXI
of the Condominium Declaration.  As such,
Tenant and/or the Condominium Association, as applicable, shall enjoy all of
the rights of a Recognized Mortgagee hereunder, with a lien priority determined
in accordance with applicable Legal Requirements and the Condominium
Declaration.

 

Section 31.2         Right and Time to Cure.  (a)  Each Recognized Mortgagee shall
have a period of (i) ten (10) days more, in the case of any default
in the payment of Charges, and (ii) thirty (30) days more, in the case of
any other default of Tenant’s Obligations, than is given Tenant under the
provisions of this Lease, to remedy such a default, which periods shall begin
to run upon the giving of the notice to the Recognized Mortgagee specifying
such default.  In addition, with respect
to defaults for which possession of the Demised Premises is required to cure
such default, or in the case of  defaults
that are not reasonably susceptible of being cured by a Recognized Mortgagee (such
as the bankruptcy of Tenant), the period to remedy such defaults shall be
extended for such time as is necessary for a Recognized Mortgagee to promptly
institute foreclosure proceedings, and thereafter, subject to Unavoidable
Delay, continuously prosecute the foreclosure proceedings with reasonable
diligence and continuity to obtain possession and, upon obtaining possession of
the Demised Premises, promptly commence to cure the default (other than a
default which is not reasonably susceptible of being cured by a Recognized
Mortgagee) and prosecute such cure to completion with diligence and continuity,
subject to Unavoidable Delay.  With
respect to defaults not reasonably susceptible to cure by the Recognized Mortgagee,
the completion of such foreclosure proceeding shall be deemed to remedy such
defaults.

 

(b)   No Recognized Mortgagee
shall be entitled to the additional remedy periods provided in clause (ii) of
Section 31.2(a) hereof
unless within thirty (30) days after the giving of the notice referred to in Section 31.2(a) hereof such
Recognized Mortgagee delivers to Landlord a written commitment to cure or cause
to be cured such defaults (other than a default which is not reasonably
susceptible of being cured by a Recognized Mortgagee).  At any time within thirty (30) days after the
delivery of the aforementioned commitment, such Recognized Mortgagee may notify
Landlord, in writing, that it no longer intends to cure a default, and, in such
event the liability of such Recognized Mortgagee for the period prior to
delivery of such notice shall be limited as set forth in Section 17.4 hereof as if “Recognized
Mortgagee” were “Tenant” and the Recognized Mortgagee shall have no further
liability under such commitment from and after the date on which it delivers such  notice to the Landlord.  Thereupon the Recognized Mortgagee shall have
no further right to cure and, subject to Section 31.7
hereof, Landlord shall have the right to terminate this Lease and to take any
other action permitted under this Lease it deems appropriate by reason of any
Event of Default, and, upon any such termination, the provisions of Section 31.6 hereof shall apply.

 

151

 

Section 31.3         Notice to Landlord.  Notwithstanding any of the provisions of this
Article XXXI, Landlord shall
not be required to comply with any of the provisions of this Article XXXI unless Landlord has
received prior written notice of the existence of the Recognized Mortgage and
such Recognized Mortgage remains a recorded lien on the Demised Premises (or
other satisfactory evidence of the lien of the Recognized Mortgage), together
with copies of the Recognized Mortgage and the name and address of the Recognized
Mortgagee to which notices shall be sent and, if such address changes from time
to time, the new address of such Recognized Mortgagee to which notices may be
sent.

 

Section 31.4         Acceptance of Performance.  Landlord shall accept performance by a Recognized
Mortgagee of any covenant, condition or agreement on Tenant’s part to be
performed hereunder with the same force and effect as though performed by
Tenant.

 

Section 31.5         Other Defaults.  While a Recognized Mortgagee is exercising
any right to cure Tenant’s defaults pursuant to Sections 31.2 and 31.4
hereof, Landlord shall not be precluded from exercising any rights or remedies
it may have with respect to other defaults of Tenant’s Obligations that may
arise from time to time hereunder, subject in each case to the Recognized
Mortgagee’s rights to cure such other defaults pursuant to said Sections 31.2 and 31.4 hereof.

 

Section 31.6         Execution of New Lease.

 

(a)   Notice of Termination.  If this Lease is terminated by reason of an
Event of Default, Landlord shall, as soon as practicable thereafter, give
notice of such termination to each Recognized Mortgagee.  Such notice shall set forth in reasonable
detail a description of all defaults, to the actual knowledge of Landlord, in
existence at the time this Lease was terminated.

 

(b)   Request for New Lease.  If, within twenty-three (23) Business Days
after the giving of the notice referred to in Section 31.6(a) hereof,
a Recognized Mortgagee requests a new lease, then, subject to the provisions of
Sections 31.6(c) and 31.7 hereof, within twenty-three (23)
Business Days after Landlord has received such request, Landlord shall execute
and deliver a new lease of the Demised Premises and Tenant’s undivided interest
in the Common Elements for the remainder of this Lease to the Recognized
Mortgagee, or to any designee or nominee of the Recognized Mortgagee which (i) is
not a Prohibited Person or Related Entity of Tenant and (ii) agrees to
assume the Obligations of Tenant hereunder. 
The new lease shall have the same priority of lien as this Lease and,
with the exception of the name of the tenant, shall contain the same covenants,
conditions, limitations and agreements contained in this Lease, but Landlord
shall not be deemed to have represented or covenanted that such new lease shall
be superior to the claims of any prior tenant, its creditors, a judicially
appointed receiver or trustee for such tenant, or any other person or entity
claiming priority, by operation of law or otherwise, through, under, or by
virtue of the acts of, any prior tenant.

 

(c)   Conditions Precedent to
New Lease.  The provisions of Section 31.6(b) hereof
notwithstanding, Landlord is not obligated to enter into a new lease with a
Recognized Mortgagee: (i) unless the Recognized Mortgagee pays to Landlord,
concurrently with the execution and delivery of such new lease, all Charges due
under this Lease up to and including the date of the commencement of such new
lease and all expenses, including reasonable 

 

152

 

attorneys’ fees and
disbursements and court costs, incurred by Landlord in connection with (A) the
enforcement of Landlord’s rights and remedies with respect to all defaults or
Events of Default in existence at the time of the termination of the Lease (to
the extent set forth in the notice to be delivered pursuant to Section 31.6(a) hereof), (B) the
termination of this Lease and (C) the preparation of such new lease; (ii) unless
Landlord concurrently receives an assumption in writing by such Recognized
Mortgagee, its designees or nominee of Tenant’s obligations, if any, under the
Project Documents; and (iii) if Landlord is not then allowed to enter into
such new lease by order of a court of competent jurisdiction.  To the extent not set forth in the notice
given to the Recognized Mortgagee pursuant to Section 31.6(a) hereof,
Landlord agrees to notify the Recognized Mortgagee, concurrently with the
giving of such new lease, of any unperformed Obligations of, and/or defaults
by, Tenant, which, to the best of Landlord’s knowledge, then exist.

 

(d)   No Waiver of Default.  The execution of a new lease shall not
constitute a waiver of any default existing immediately before the termination
of this Lease, except for defaults under Sections
14.2(d), 14.2(e), and 14.2(f) hereof, and the tenant under
the new lease shall cure, within the longer of (i) the period of cure
remaining to the Recognized Mortgagee pursuant to Section 31.2 hereof or (ii) the applicable periods
set forth in the provision of such new lease relating to events of default
thereunder (which applicable periods shall commence with the execution and
delivery of the new lease or, if notice of such defaults had not then been
given, upon the giving of such notice), all other defaults existing under this
Lease immediately before its termination of which such tenant has been or, to
the extent any such defaults were not then known by Landlord, is thereafter
given notice.  Notwithstanding anything
to the contrary, if after the Recognized Mortgagee requests a new lease
pursuant to this Section 31.6
the Recognized Mortgagee is given notice of a default existing before the
termination of this Lease and which default was not noticed to the Recognized
Mortgagee prior to the date of such request, then at any time within ten (10) days
after such notice of default is given, the Recognized Mortgagee may rescind
such request in writing to Landlord, or if the new lease has then already been
executed and delivered, the new tenant may relinquish possession of the Demised
Premises and cancel the new lease by notice to Landlord.  Thereupon, Landlord shall have the right,
subject to Section 31.7
hereof, to terminate the new lease, and the Recognized Mortgagee shall have no
further right to a new lease.

 

(e)   Assignment of Proceeds.  Concurrently with the execution and delivery
of a new lease pursuant to the provisions of Section 31.6(b) hereof,
Landlord shall assign to the tenant named therein all of its right, title and
interest in and to monies (including insurance proceeds and condemnation
awards), if any, then held by, or payable to, Landlord that Tenant would have
been entitled to receive but for the termination of this Lease or the
occurrence of an Event of Default, other than any such amounts theretofore
applied under this Lease to the discharge of Tenant’s Obligations to Landlord
hereunder, subject to the rights, if any, of the prior Tenant therein and to
the provisions of such new lease.

 

(f)    No Obligation to Deliver
Possession.  Nothing contained herein
shall be deemed to obligate Landlord to remove any liens, encumbrances or other
defects in title to the Property or to deliver possession of the Demised
Premises or the Common Elements to the tenant under any such new lease, except
for the delivery of possession free and clear of the 

 

153

 

claims of persons or entities
claiming through or under Landlord, other than Tenant and those claiming by,
through or under Tenant.

 

(g)   Assignment of Subleases.  Upon the execution and delivery of a new
lease pursuant to the provisions of this Section 31.6,
all Subleases that may have been assigned to Landlord and all leases that
Landlord makes directly shall be assigned and transferred, without recourse, to
the tenant named in the new lease. 
Between the date of termination of this Lease and the date of the
execution and delivery of the new lease, if a Recognized Mortgagee has timely
requested a new lease as provided in this Section 31.6,
Landlord shall not materially modify or amend, or cancel, any Sublease or
accept any cancellation, termination or surrender thereof (unless such
termination occurs as a matter of law upon the termination of this Lease or
pursuant to the express terms of the Sublease) or enter into any new Sublease
without the consent of the Recognized Mortgagee or such designee or nominee.

 

(h)   Credits.  Any rent credits to which Tenant is entitled
under this Lease and which have not been exhausted at the time this Lease is
terminated, and interest thereon shall inure to the benefit of the tenant under
any new lease granted pursuant to Section 31.6(b) hereof.

 

(i)    Continuation of this
Lease in Lieu of Entering into New Lease.

 

(i)   Termination Notice.  A Recognized Mortgagee shall have the right,
within fifteen (15) days after the delivery of the Termination Notice to such
Recognized Mortgagee pursuant to Section 31.6(a) hereof,
to elect to continue this Lease in lieu of requesting a new lease by notice to
Landlord, subject to the further conditions of this Section 31.6(i).  Such right may be exercised by a Recognized
Mortgagee, or any designee or nominee thereof which satisfies the conditions
set forth in clauses (i) and (ii) of this Section 31.6(i).

 

(ii)   Election to Continue Lease.   If a Recognized Mortgagee elects to continue
this Lease by notice given to Landlord within such 15-day period (the “Continuation Notice”), then effective upon the delivery of
such notice, Tenant shall be deemed to have assigned to such Recognized
Mortgagee, or any such designee or nominee thereof, as the case may be, all of
Tenant’s right, title and interest in and to this Lease and the leasehold
estate in the Demised Premises and Tenant’s undivided interest in the Common
Elements created hereunder, including the Subleases and security deposits
thereunder referred to Section 31.6(i)(vii),
and Tenant shall, at Landlord’s request, execute and deliver to Landlord and
such Recognized Mortgagee such instruments of assignment and related transfer
tax documents as Landlord and such Recognized Mortgagee may request (in form
reasonably satisfactory to Landlord and such Recognized Mortgagee) to evidence
such assignment.  If Tenant fails to
execute and deliver any such instrument of assignment or related transfer tax
documents, such Recognized Mortgagee shall be entitled to do so on Tenant’s
behalf, and Tenant hereby appoints such Recognized Mortgagee as its
attorney-in-fact, which appointment shall be deemed to be coupled with an
interest and is irrevocable, for the sole purpose of executing and delivering
such assignment and any transfer tax documents. 
The execution and delivery of such instruments, however, shall not be 

 

154

 

required to effect the assignment of this
Lease to such Recognized Mortgagee or such nominee or designee.

 

(iii)   Conditions Precedent to New Lease.  The provisions of Sections 31.6(i)(i) and 31.6(i)(ii) hereof
notwithstanding, a Recognized Mortgagee shall have no right to continue this
Lease unless the Recognized Mortgagee pays to Landlord, concurrently with the
delivery of the Continuation Notice, all amounts due to Landlord under this
Lease up to and including the date of the Continuation Notice and all expenses,
including reasonable attorneys’ fees and disbursements and court costs,
incurred by Landlord in connection with (1) the enforcement of Landlord’s
rights and remedies with respect to all defaults or Events of Default in
existence at the time of the Termination Notice, and (2) the review of any
assignments and other instruments or documents prepared in connection with the
Recognized Mortgagee’s election, nor shall the Recognized Mortgagee have the
right to such new lease if  by order
of a court of competent jurisdiction the parties are not entitled to continue
this Lease and effect the assignment thereof to the Recognized Mortgagee.  To the extent not set forth in the notice
given to the Recognized Mortgagee pursuant to Section 31.6(a) hereof,
Landlord agrees to notify the Recognized Mortgagee, concurrently with the
delivery of such new lease, of any unperformed Obligations of, and/or defaults
by, Tenant, which, to the best of Landlord’s knowledge, then exist.

 

(iv)   No Waiver of Default.  The assignment of this Lease pursuant to this
Section 31.6(i) shall
not constitute a waiver of any default existing immediately before the
termination of this Lease, except for defaults under Sections
14.2(d), 14.2(e), and 14.2(f) hereof, and the tenant under the assigned Lease
shall cure all other defaults existing under this Lease immediately before its
assignment of which the Recognized Mortgagee has been given notice of or, to
the extent any such defaults were not then known by Landlord, is thereafter
given notice.  Such cure shall be
accomplished within the longer of (A) the period of cure remaining to the
Recognized Mortgagee pursuant to Section 31.2
hereof or (B) the applicable periods set forth in Section 14.2
(Events of Default) of this Lease (which applicable periods shall commence with
the execution and delivery of the assignment of this Lease (or upon the deemed
assignment of this Lease, as applicable) for each such default of which the
Recognized Mortgagee received notice prior to the delivery of the Continuation
Notice or, if notice of any such default had not then been given until after
delivery of the Continuation Notice, upon the delivery of such notice);
provided, however, with respect to any default under Sections 14.2(g), 14.2(h) and 14.2(i) hereof existing immediately before its
assignment, the period of cure shall be such time as is necessary for the
assignee to promptly commence to cure such default following the assignment of
this Lease thereto and to prosecute such cure to completion with diligence and
continuity, subject to Unavoidable Delay. 
Notwithstanding anything to the contrary, if after the Recognized
Mortgagee delivers a Continuation Notice pursuant to Section 31.6(i)(ii) the
Recognized Mortgagee is given notice of a default existing before the
Continuation Notice and which default was not noticed to the Recognized
Mortgagee prior to the date of such Continuation Notice, then at any time
within ten (10) days after such notice is given the assignee may
relinquish possession of the Property and cancel this Lease by notice to
Landlord.  Thereupon, Landlord shall have
the unrestricted right to 

 

155

 

terminate this Lease, subject to Section 31.7 hereof, without offering the Recognized
Mortgagee a new lease pursuant to Section 31.6(a) and
31.6(b) hereof, and the Recognized
Mortgagee shall have no further rights to a new lease thereunder.

 

(v)   Assignment of Proceeds.  Concurrently with the assignment of this
Lease pursuant to the provisions of this Section 31.6(i), Landlord shall assign to the assignee
of this Lease all of its right, title and interest in and to monies (including
insurance proceeds and condemnation awards), if any, then held by, or payable
to, Landlord that Tenant would have been entitled to receive but for the
occurrence of an Event of Default and the expiration of any cure periods, other
than any such amounts theretofore applied under this Lease to the discharge of
Tenant’s Obligations to Landlord hereunder, subject to the rights, if any, of
the prior Tenant therein.

 

(vi)   No Obligation to Deliver Possession.  Nothing contained herein shall be deemed to
obligate Landlord to remove any liens, encumbrances or other defects in title
to the Property or to deliver possession of the Demised Premises to the
assignee under any such assignment, except for the delivery of possession free
and clear of the claims of persons or entities claiming through or under
Landlord, other than Tenant and those claiming by, through or under Tenant.

 

(vii)   Assignment of Subleases.  Upon the assignment
of this Lease pursuant to the provisions of this Section 31.6(i),
all Subleases shall concurrently therewith be assigned and transferred,
together with any security or other deposits held by Tenant and not applied
under such Subleases.

 

(viii)   No Extension of Cure Rights in Favor of Tenant.  Notwithstanding anything to the contrary
contained herein and without limiting the assignee’s rights under Section 31.6(i)(iv) above, the rights granted
under this Section 31.6(i) are not
intended to, and shall not, extend any periods granted to Tenant under Section 14.2 hereof to cure any Event of Default
occurring prior to the delivery of any such Termination Notice.

 

(ix)   Effect of Failure to Elect to Continue
Lease on Recognized Mortgagee’s Right to Request a New Lease.  Notwithstanding anything to the contrary
contained in this Section 31.6,
if a Recognized Mortgagee fails to elect to continue this Lease within the
15-day period referred to in Section 31.6(i)(i),
then, subject to Section 31.7 hereof, this
Lease shall terminate effective upon the expiration of such 15-day period.  Notwithstanding anything to the contrary
contained in Section 31.6(b), such
Recognized Mortgagee shall have fifteen (15) days after the delivery of the
termination notice referred to in Section 31.6(b) hereof
to request a new lease, and if such Recognized Mortgagee fails to request a new
lease within such fifteen (15)-day period, then such Recognized Mortgagee’s
rights to enter into a new lease shall terminate.

 

Section 31.7         Recognition of Most Senior Recognized
Mortgagee.  If
more than one Recognized Mortgagee has exercised any of the rights afforded by
this Article XXXI, then,
unless otherwise provided in the Recognized Mortgage most senior in lien (or
otherwise acknowledged in writing by the holder thereof) or consented to by the
holder thereof, only that 

 

156

 

Recognized Mortgagee, to the
exclusion of all other Recognized Mortgagees, whose Recognized Mortgage is most
senior in lien shall be recognized by Landlord as having exercised such right,
for so long as such Recognized Mortgagee shall be exercising its rights under
this Lease with respect thereto, with reasonable diligence, and thereafter,
successively, the Recognized Mortgagees whose Recognized Mortgages are next
most senior in lien shall be recognized by Landlord, in order of seniority,
unless any such Recognized Mortgagee has designated, in writing, a Recognized
Mortgagee whose Recognized Mortgage is junior in lien to exercise such right.  If the parties shall not agree on which
Recognized Mortgage is prior in lien, such dispute shall be determined by a
then current certificate of title obtained by Landlord or Tenant, at Tenant’s
sole expense, issued by a title insurance company licensed to do business in
the State of New York and selected by Landlord, and such determination shall
bind the parties.

 

Section 31.8         No Rights of Other Mortgagees.  A mortgagee that is not a Recognized
Mortgagee shall have no rights hereunder, and Landlord shall have no
obligations to any mortgagee other than a Recognized Mortgagee.

 

Section 31.9         Miscellaneous Mortgage Provisions.

 

(a)   No Liability.  No holder of a Recognized Mortgage shall
become liable under the provisions of this Lease unless and until such time as
it becomes, and then only for so long as it remains, the owner of a leasehold
estate created hereby or pursuant to Section 31.6(d) hereof;
provided, however, that no Recognized Mortgagee shall be
responsible for any amounts due under Section 14.1(b) hereof
that accrue from and after the date that Landlord receives notice that such
Recognized Mortgagee has initiated foreclosure proceedings with respect to its
Recognized Mortgage.

 

(b)   Nominee.  A Recognized Mortgagee shall have the right
to assign any Recognized Mortgage held by it to a nominee controlled by, or
under common control with, it, prior to and in anticipation of the foreclosure
of such Recognized Mortgage, and shall not thereby lose its status as a
Recognized Mortgagee unless and until such time as such nominee becomes the
owner of the leasehold estate created hereby.

 

(c)   Foreclosure.  Nothing contained herein shall be deemed to
require the holder of a Recognized Mortgage to continue with any foreclosure or
other proceedings, or in the event it shall otherwise acquire possession of the
Demised Premises, to continue such possession.

 

(d)   Lease Amendments.  No amendment or modification of this Lease
shall be effective as against a particular Recognized Mortgagee unless a copy
of the proposed amendment or modification shall have been delivered to such
Recognized Mortgagee, such notice to include the statement “THIS NOTICE IS THE NOTICE OF THE RECOGNIZED
MORTGAGEE’S RIGHT TO APPROVE AN AMENDMENT OF THE LEASE PURSUANT TO SECTION 31.9(d) OF
THE LEASE, WHICH APPROVAL SHALL BE DEEMED GIVEN TWENTY-THREE BUSINESS DAYS
AFTER RECOGNIZED MORTGAGEE’S RECEIPT OF THIS NOTICE,” and such
Recognized Mortgagee shall have either:  (i) approved
the amendment or modification in writing or (ii) failed to disapprove the
amendment or modification in writing within twenty-three (23) Business Days
after receipt of a copy thereof.

 

157

 

Section 31.10       Delegation by Tenant.  Tenant may delegate irrevocably to a
Recognized Mortgagee the authority to exercise any or all of Tenant’s rights
hereunder, but no such delegation shall be binding upon Landlord unless and
until either Tenant or such Recognized Mortgagee shall give to Landlord an
executed counterpart of the written instrument effecting such delegation.  Such delegation of authority may be effected
by the terms of the Recognized Mortgage itself, in which case, the service upon
Landlord of an executed counterpart or certified copy of such Recognized
Mortgage in accordance with this Article XXXI,
together with a written notice specifying the provisions thereof which delegate
such authority to such Recognized Mortgagee, shall be sufficient to give
Landlord notice of such delegation.  In
such event, Landlord shall be entitled to rely upon such delegation of
authority until Landlord shall have received written notice from Tenant and
such Recognized Mortgagee indicating that such delegation of authority shall
have been revoked or terminated.  Any
provisions of this Lease which give to a Recognized Mortgagee the privilege of
exercising a particular right of Tenant hereunder on condition that Tenant
shall have failed to exercise such right shall not be deemed to diminish any
privilege which such Recognized Mortgagee may have, by virtue of a delegation
of authority from Tenant, to exercise such right without regard as to whether
or not Tenant shall have failed to exercise such right.

 

Section 31.11       Survival.  The provisions of Sections 31.6 and 31.7
hereof shall survive the termination of this Lease.

 

158

 

ARTICLE XXXII

CONDOMINIUM DOCUMENTS

 

Section 32.1         Condominium Conversion.  [INTENTIONALLY OMITTED]

 

Section 32.2         Condominium Documents.  (a)  If Tenant shall desire to amend,
modify or supplement any Condominium Document, such Person shall submit same to
Landlord and, so long as such proposed amendment, modification or supplement
would not, in Landlord’s reasonable opinion, affect a substantive right of any
Public Party or of any party thereto to an extent that is greater than de
minimis and the form of such amendment, modification or supplement is otherwise
reasonably acceptable to Landlord, Landlord shall so amend, modify or
supplement such Condominium Document.

 

(b)   It shall be Tenant’s
responsibility to assure that the Condominium Documents comply with all Legal
Requirements, including, without limitation, the rules and regulations of
the New York State Department of Law. 
Landlord’s determination that the Condominium Documents conform to the
provisions of this Lease shall not be, nor shall it be construed to be or
relied upon by Tenant or any other Person as, a determination that the
Condominium Documents comply with all Legal Requirements, including, without
limitation, the rules and regulations of the New York State Department of
Law.

 

(c)   The parties hereto
acknowledge that despite Tenant covenanting hereunder to undertake specific
actions and responsibilities in respect of the Common Elements, the Condominium
Association (and not Tenant) controls the Common Elements.  Notwithstanding Tenant’s lack of control of
the Common Elements, Tenant shall perform (or cause, pursuant to the
Condominium Declaration or otherwise, the Condominium Association to perform)
every Tenant Obligation in respect of any portion of the Common Elements.  It is expressly agreed that Tenant’s lack of
control of the Common Elements shall not be deemed or construed to be evidence
of a Tenant Obligation being “beyond the control” of Tenant for any purposes of
this Lease and that Tenant’s failure to comply with any Tenant Obligation set
forth herein shall be a default of Tenant hereunder.

 

159

 

ARTICLE XXXIII

MISCELLANEOUS

 

Section 33.1         Recording and Transfer Tax.  Landlord and Tenant, each upon the written
request of the other or of any Recognized Mortgagee, shall execute, acknowledge
and deliver a memorandum of this Lease in the form set forth on Exhibit R attached hereto, and of each
modification of this Lease, each in proper form for recordation.  Tenant shall not record this Lease without
the prior written consent of Landlord. 
Tenant shall be solely responsible for the timely payment of any
transfer or similar taxes that may be payable as a result of this Lease, and
Tenant shall indemnify the Public Parties from and against any and all Claims
related thereto.

 

Section 33.2         Brokers.

 

(a)   Landlord’s and Tenant’s
Representations.  Each of Landlord
and Tenant represents and warrants to the other that it has not dealt with any
broker, finder or other party entitled to a broker’s or finder’s fee, or other
commissions or compensation arising out of or in connection with the execution
of this Lease.

 

(b)   Tenant’s Obligations.  Tenant shall be liable for, and shall
indemnify each of the Public Parties against all brokerage commissions or other
compensation due to any broker, finder or other party if such broker, finder or
other party alleges that it (i) has acted for, or at the direction of,
Tenant, whether or not such broker, finder or other party also alleges that it
has dealt with the Public Parties, or (ii) has dealt exclusively with
Tenant, arising out of the execution of this Lease or any transactions relating
thereto.

 

(c)   [Intentionally Omitted]

 

(d)   General.  Notwithstanding anything to the contrary
contained in Article XVIII
hereof, any party seeking indemnification under this Section 33.2 shall provide the indemnifying party with
prompt service of such claim within a reasonable time after the party seeking
indemnification first becomes aware of the existence thereof.  If (i) the indemnifying party is Tenant,
any such claim may be defended by counsel reasonably acceptable to the Public
Parties (or, if insured, by counsel designated by Tenant’s insurer, as
applicable), or (i) the indemnifying parties are the Public Parties, by
counsel to the Public Parties.  No
settlement of any such claim shall be entered into unless (A) the
indemnified party would have no liability as a consequence of such settlement
or (B) the indemnifying party consents to such settlement.

 

(e)   Survival.  This Section 33.2
shall survive the expiration or earlier termination of this Lease.

 

Section 33.3         [INTENTIONALLY
OMITTED]

 

Section 33.4         Relationship of Landlord and Tenant.  No provision of this Lease is not to be
construed to create a partnership or joint venture between the parties, it
being the intention of the parties hereto only to create a landlord and tenant
relationship.

 

160

 

Section 33.5         Person Acting on Behalf of a Party Hereunder.  Either party hereunder may require the other
party hereunder to provide evidence reasonably satisfactory to such party of
the authority of any Person acting on behalf of the other party.

 

Section 33.6         Third Party Beneficiary.  Nothing contained herein is intended to be
for, or to inure to, the benefit of any Person other than Landlord, Tenant and
Recognized Mortgagees and their respective successors and assigns, except as
otherwise expressly provided in this Lease. 
No Person other than Landlord or the City is entitled, as a consequence
of any term, condition, covenant or agreement contained in this Lease or of
Tenant’s failure to observe or perform the same, to seek, claim or recover
damages or any other legal or equitable remedy against Tenant.

 

Section 33.7         Proprietary Capacity Only.  Landlord (including any successor Landlord),
if a governmental entity or instrumentality, enters into this Lease in
Landlord’s “proprietary” capacity only. 
Nothing in this Lease shall be deemed in any way to expand, restrict,
burden, or waive any right, privilege, obligation, claim or immunity that any
Governmental Authority would possess, be subject to, or be entitled to exercise
if the lessor under this Lease were a private party.  Without limiting the effect of the
immediately preceding sentence, nothing in this Lease is intended to burden or
restrict the exercise by any Governmental Authority of its “police power” or
impose any liability upon any Governmental Authority for (or entitle Tenant to
any credit, offset, defense, claim or counterclaim on account of) the exercise
of such “police power.” In keeping therewith, Tenant’s relations with all
Governmental Authorities, when acting in their capacity as Governmental
Authorities, shall be governed by otherwise applicable law.

 

161

 

ARTICLE XXXIV

LOBBY SUBLEASE SPACE

 

Section 34.1                            Generally.

 

(a)          Tenant
may, subject to Section 13.2 hereof and this Article XXXIV,
permit the Condominium Association, on behalf of all of the tenants under the
Severance Subleases, to sublease portions of the Improvements specified in this
Article XXXIV.

 

(b)         [INTENTIONALLY
OMITTED]

 

(c)          Tenant
may permit the Condominium Association, on behalf of all of the tenants under
the Severance Subleases, to enter into up to three (3) subleases of up to
an aggregate of 600 Square Feet of space located in or adjacent to the lobby of
the Improvements, such location to be specified by the Design Architect and
reasonably approved by Landlord (collectively, the “Lobby Sublease Space”). 
All Lobby Sublease Space shall be designed in accordance with the
DUO.  Upon finalization of plans and
specifications for any portion of the Lobby Sublease Space, Tenant shall
provide to Landlord (for Landlord’s approval prior to the construction of same)
a statement of the Production Architect (i) certifying that such final
plans and specifications conform to the Lobby Sublease Space design guidelines
prepared in accordance with the DUO and (ii) attaching a complete copy of
the final plans and specifications. 
Landlord shall notify Tenant of its approval or disapproval of such
certification within fifteen (15) Business Days of its receipt thereof.  Upon Landlord’s acceptance of such
certification, all Lobby Sublease Space shall be constructed in conformity with
the final plans and specifications certified to by the Production Architect and
approved by Landlord in accordance with the immediately preceding
sentence.  Except as expressly set forth
in this Article XXXIV, the
provisions of this Article XXXIV
shall not affect Tenant’s obligation to treat the Lobby Sublease Space as a
Common Element under this Lease.

 

Section 34.2                            Defined
Terms.

 

(a)          “Budgeted Lobby Sublease Space Construction Costs”
means the total, actual cost to construct the Lobby Sublease Space as
reasonably approved by Tenant’s construction lender (so long as such
construction lender is a Lending Institution) or as reasonably by Landlord (if,
in respect of the Lobby Sublease Space, Tenant has no construction lender which
is a Lending Institution), as indicated on a final construction budget
approved, as the case may be, by such construction lender or by Landlord (the
construction budget for the Lobby Sublease Space having been prepared
separately from the overall construction budget for the Improvements, and
having been provided to Landlord as a Verified Statement), including the
Transaction Price and all other hard and soft costs (other than land
acquisition costs above the Transaction Price), in each case, reasonably
allocable, on a square foot basis, to the Lobby Sublease Space.

 

(b)         [INTENTIONALLY
OMITTED]

 

(c)          “Lobby Sublease Space Adjusted Gross Revenue”
means all (A) revenues, receipts and income of whatever kind and nature of
Tenant or any Related Entity, as determined in accordance with Accounting
Principles, in any Lease Year, generated from the ownership,

 

162

 

operation,
leasing, use or occupancy of any Lobby Sublease Space including (1) license
fees or other amounts received from any subtenant of such Lobby Sublease Space
or its affiliate for the right to maintain signage on the façade of the New
Building (but not from the granting of such signage rights to any third party),
(2) rentals, fees or other payments from Subtenants (subject to clause (9) below),
including any common area maintenance and operating expense, but specifically
excluding payments received in reimbursement of utility, PILOT, Theater
Surcharge or BID payments made by Tenant, or any Related Entity, (3) the
proceeds of insurance received by Tenant with respect to business interruption
or rent insurance (but not liability or casualty insurance received by Tenant),
(4) security and other deposits which secure other revenues, receipts or
income qualifying as Lobby Sublease Space Adjusted Gross Revenues when and to
the extent Tenant, after the final resolution of any Subtenant dispute over
whether Tenant has the right to retain such security and other deposits, either
has the right to retain the same or Tenant has no obligation to refund the same
(and excluding security and other deposits to the extent applied by Tenant to
reimburse Tenant for reasonable costs incurred in remedying a non-monetary
default by the provider of such security or deposit), (5) interest or
other investment income earned from time to time by Tenant on deposits or other
revenues, receipts or income qualifying as Lobby Sublease Space Adjusted Gross
Revenues, (6) amounts recovered in any legal action or proceeding or
settlement thereof which reimburses Tenant for a loss of revenues, receipts or
income qualifying as Lobby Sublease Space Adjusted Gross Revenues (and
excluding any such amounts to the extent reimbursing Tenant for reasonable
costs incurred in remedying a non-monetary default by the defendant in such
action), (7) construction fees from the performance by Tenant or any
Related Entity of construction or construction management services for
Subtenants, but only to the extent such fees exceed customary amounts (and
excluding such fees to the extent they do not exceed such customary amounts), (8) leasing
or brokerage commissions paid to Tenant or any Related Entity in connection
with the entering into of a Sublease or the renewal thereof or the expansion of
the Demised Space thereunder, but only to the extent Tenant or such Related Entity
is not the procuring broker, or if Tenant or such Related Entity is the
procuring broker, only to the extent such commissions exceed customary amounts
(and excluding such commissions to the extent they do not exceed such customary
amounts), and (9) with respect to any Related Entity that is a Subtenant
in possession and actual use of its Demised Space, the greater of [a] the
rentals, fees or other payments made to Tenant by such Subtenant, including any
common area maintenance and operating expense, but specifically excluding
payments received in reimbursement of utility, PILOT, Theater Surcharge or BID
payments made by Tenant and [b] the fair market rental value of such Demised
Space (and with respect to a Related Entity that is a Subtenant not in possession
and actual use of its Demised Space, all revenues, receipts and income of
whatever kind and nature of such Related Entity generated from the Project, as
provided above, shall be included in Lobby Sublease Space Adjusted Gross
Revenues) less (B) refunds made upon transactions included within the
revenues described in clause (A) above. 
“Lobby Sublease Space Adjusted Gross Revenues” shall not include any
management fee in a customary amount paid by Tenant to any Related Entity to
manage the Property.

 

(d)         [INTENTIONALLY
OMITTED]

 

163

 

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

 

	
   

  	
  Landlord:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  42nd
  ST. DEVELOPMENT PROJECT, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Naresh Kapadia

  
	
   

  	
   

  	
  Name:
  Naresh Kapadia

  	
   

  
	
   

  	
   

  	
  Title:
  Assistant VP, Planning and Design

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Tenant:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NYT
  REAL ESTATE COMPANY LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Kenneth A. Richieri

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  A. Richieri

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
					

 

 

SCHEDULE 1

 

PILOT SCHEDULE

 

	
  PILOT Year

  	
   

  	
  Office PILOT

  (per Taxable Square Foot)

  	
   

  	
  Retail PILOT

  (per Taxable Square Foot)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  1.00

  	
   

  
	
  2

  	
   

  	
  3.00

  	
   

  	
  3.00

  	
   

  
	
  3

  	
   

  	
  5.00

  	
   

  	
  5.00

  	
   

  
	
  4

  	
   

  	
  7.00

  	
   

  	
  7.00

  	
   

  
	
  5

  	
   

  	
  10.00

  	
   

  	
  12.00

  	
   

  
	
  6

  	
   

  	
  10.05

  	
   

  	
  12.06

  	
   

  
	
  7

  	
   

  	
  10.15

  	
   

  	
  12.18

  	
   

  
	
  8

  	
   

  	
  10.31

  	
   

  	
  12.37

  	
   

  
	
  9

  	
   

  	
  10.51

  	
   

  	
  12.62

  	
   

  
	
  10

  	
   

  	
  10.78

  	
   

  	
  12.93

  	
   

  
	
  11

  	
   

  	
  11.04

  	
   

  	
  13.25

  	
   

  
	
  12

  	
   

  	
  11.32

  	
   

  	
  13.59

  	
   

  
	
  13

  	
   

  	
  11.60

  	
   

  	
  13.92

  	
   

  
	
  14

  	
   

  	
  11.89

  	
   

  	
  14.27

  	
   

  
	
  15

  	
   

  	
  12.19

  	
   

  	
  14.63

  	
   

  
	
  16

  	
   

  	
  12.50

  	
   

  	
  15.00

  	
   

  
	
  17

  	
   

  	
  12.81

  	
   

  	
  15.37

  	
   

  
	
  18

  	
   

  	
  13.13

  	
   

  	
  15.75

  	
   

  
	
  19

  	
   

  	
  13.46

  	
   

  	
  16.15

  	
   

  
	
  20

  	
   

  	
  13.79

  	
   

  	
  16.55

  	
   

  
	
  21

  	
   

  	
  14.14

  	
   

  	
  16.97

  	
   

  
	
  22

  	
   

  	
  14.49

  	
   

  	
  17.39

  	
   

  
	
  23

  	
   

  	
  14.85

  	
   

  	
  17.82

  	
   

  
	
  24

  	
   

  	
  15.23

  	
   

  	
  18.27

  	
   

  
	
  25

  	
   

  	
  15.61

  	
   

  	
  18.73

  	
   

  
	
  26

  	
   

  	
  16.00

  	
   

  	
  19.20

  	
   

  
	
  27

  	
   

  	
  16.40

  	
   

  	
  19.68

  	
   

  
	
  28

  	
   

  	
  16.81

  	
   

  	
  20.17

  	
   

  
	
  29

  	
   

  	
  17.83

  	
   

  	
  20.67

  	
   

  
								

 

 

EXHIBIT A

 

THE PROJECT
DOCUMENTS (Recitals)

 

(1)          Agreement
of Lease, dated as of December 12, 2001, by and between 42nd St. Development Project, Inc. (“42DP”)
and The New York Times Building LLC (“Developer”).

 

(2)          Site 8
South Land Acquisition and Development Agreement, dated as of December 12,
2001, by and among New York State Urban Development Corporation d/b/a Empire
State Development Corporation (“ESDC”), 42DP and Developer.

 

(3)          [Intentionally
Omitted]

 

(4)          Site 8
South Declaration of Design, Use and Operation, dated as of December 12,
2001, by and among ESDC, 42DP and Developer.

 

(5)          [Intentionally
Omitted]

 

(6)          [Intentionally
Omitted]

 

(7)          Site 8
South Project Agreement, dated as of the December 12, 2001, by and among
ESDC, 42DP, The City of New York, Developer, NYT Real Estate Company LLC and FC
Lion LLC.

 

(8)          Agreement
of Sublease (NYT), dated as of the date hereof, by and among 42nd St.
Development Project, Inc. and NYT Real Estate Company LLC.

 

(9)          Agreement,
dated as of December 12, 2001, by and among the Metropolitan Transit
Authority and Developer.

 

(10)    Vault
Sublicense, dated as of December 12, 2001, by and among the 42DP and
Developer.

 

(11)    Condominium
Board of Managers Assumption Agreement, dated as of August 15, 2006

 

A-1

 

EXHIBIT B

 

APPROVED
CERTIFIED PUBLIC ACCOUNTING FIRMS (§ 1.1(a)(xxxi))

 

1.               Ernst &
Young

2.               Pricewaterhouse Coopers

 

B-1

 

EXHIBIT C

 

FORM OF
COLLATERAL ASSIGNMENT (§ 1.1(a)(xxxv))

 

THIS AGREEMENT, made this       
day of
              ,
        , by and among
                                                          
(“Third Party”), a [insert State] [insert type of entity] having an
office at
                                ,
[Tenant] (“Assignor”), a
                            having an office at
[                                        ],
and 42ND ST. DEVELOPMENT PROJECT, INC. (“Assignee”), a subsidiary of New
York State Urban Development Corporation (“UDC”) d/b/a Empire State
Development Corporation, a corporate governmental agency of the State of New
York constituting a political subdivision and public benefit corporation  having an office at 633 Third Avenue, 33rd floor, New York, New York 10017.

 

W  I  T  N  E  S  S
E  T  H

 

WHEREAS, UDC and The City of New York (the “City”)
have developed, and are in the process of implementing, a rehabilitation and
renewal plan for an area of midtown Manhattan surrounding West 42nd Street
between Broadway and Eighth Avenue, commonly known as the 42nd Street
Development Project; and

 

WHEREAS, pursuant to an Agreement of Sublease (the “Lease”)
(the terms defined therein and not otherwise defined herein being used herein
as therein defined), dated as of
                      
    , 2009, between Assignee, as landlord, and Assignor, as
tenant, Assignee leased and demised to Assignor certain premises more
particularly described in Exhibit F-2 annexed to the Lease (the “Property”)
and all right, title and interest of Assignee in and to all improvements
thereon, for the development and operation of the Property in accordance with
the terms of the Lease; and

 

WHEREAS, pursuant to the [construction agreement to be
assigned] (the “Agreement”), dated as of
                ,
between Assignor and Third Party, Third Party has agreed to provide [construction
management] services in connection with the Property; and

 

WHEREAS, as collateral security for payment and
performance of Assignor’s obligations under the Lease (the “Obligations”),
Assignor desires to collaterally assign to Assignee all right, title and
interest of Assignor in and to the Agreement.

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto hereby agree as follows:

 

1.                                       Assignor
and Third Party hereby consent to the collateral assignment of the Agreement to
Assignee pursuant to and on the terms and conditions of this Agreement.

 

2.                                       Third
Party hereby agrees and confirms that the Agreement and all of its rights and
interests thereunder, including, but not limited to, rights to payment or fees,
are and, at all times shall be, subject and subordinate to the Lease.

 

C-1

 

3.                                       Subject
to the provisions of Paragraph 4
hereof, Assignor hereby grants, transfers and assigns to Assignee all of
Assignor’s right, title and interest in and to, and the right to have
uninterrupted use and enjoyment of the benefits under, the Agreement and all present
and future amendments thereto.  The
foregoing assignment is subject to any assignment by Assignor of the Agreement
to any Recognized Mortgagee and the rights of any Recognized Mortgagee
thereunder.  Assignor and Third Party
covenant and agree to execute such further and additional instruments and
assignments as may be requested by Assignee to vest in Assignee all rights and
interest of Assignor under the Agreement. 
The Agreement is assigned hereunder for the purpose of securing the
payment and performance by Assignor of its Obligations.

 

4.                                       This
Assignment is made upon the condition that for so long as there shall be no
Event of Default on the part of Assignor or reentry upon the Property by
Assignee pursuant to the terms of the Lease, Assignor shall have the right to
exercise all rights, options and privileges extended to Assignor under the
terms of the Agreement.  Such right of
Assignor shall be automatically revoked upon the occurrence of an Event of
Default and thereafter, subject to the rights of any Recognized Mortgagee to
which the Agreement has been assigned, the right is hereby expressly given to
Assignee to enforce the terms of the Agreement in the same manner and with the
same force and effect as if Assignee had originally executed the Agreement as
the owner of the Property.  After the
occurrence of an Event of Default and the failure of the Recognized Mortgagee(s) to
cure such Event of Default, Assignee may elect by written notice to Third Party
given within sixty (60) days after such failure by the Recognized Mortgagee(s) (i) to
terminate the Agreement effective upon such notice or (ii) to assume all
of the rights and obligations of Assignor under the Agreement.  If Assignee shall assume such rights and
obligations, the Agreement shall thereby be deemed amended to reflect the
following:

 

(a)                                  All
rights, interests, benefits and other privileges of Assignor under the
Agreement shall terminate and Assignee shall succeed to and shall have all the
rights, interests, benefits and other privileges of Assignor under the
Agreement and Third Party shall perform all of its obligations and agreements
under the Agreement for the benefit of Assignee.  All references in the Agreement to Assignor
shall be read to apply to Assignee.

 

(b)                                 Other
than a monetary default by Assignor under the Agreement, Assignee shall not be
responsible or liable for any representation or warranty made by Assignor or
any act, omission or default by Assignor which occurred prior to the assumption
by Assignee of the Agreement, and each such act, omission or default shall be
deemed to have been waived by Third Party and shall not constitute grounds for
the termination of the Agreement by Third Party or for any other claim or
liability against Assignee.

 

(c)                                  The
obligations, responsibilities and liabilities of Assignee under the Agreement
shall be limited to and enforceable only against Assignee’s interest in the
Property and not out of or against any other assets or properties of Assignee.

 

5.                                       Assignor
and Third Party, jointly and separately, hereby warrant and represent to
Assignee as follows:

 

C-2

 

(a)                                  Each
of them has the full and complete right, power and authority to execute,
deliver and perform this Assignment and has taken all necessary corporate and
partnership action, to authorize the execution, delivery and performance of
this Agreement;

 

(b)                                 Neither
of them has made a prior assignment, pledge or hypothecation of any of the
rights under the Agreement except to a Recognized Mortgagee;

 

(c)                                  The
Agreement is in full force and effect on the date hereof, has not been amended
or modified in any way and the performance of the other party thereto is
subject to no defenses, set-offs or counterclaims whatsoever and this
Assignment and the Agreement constitute the valid, binding and enforceable
obligations of the parties thereto;

 

(d)                                 There
exists no event, condition or occurrence which constitutes, or which with
notice and/or the passage of time would constitute, a material breach of or
default under any term or condition of the Agreement; and

 

(e)                                  Neither
of them has done, nor shall either of them perform any acts or omissions which
might prevent Assignee from exercising its rights under this Agreement, or
which might limit Assignee in such exercise.

 

6.                                       Assignor
and Third Party agree faithfully to observe and perform each and every one of
the obligations and agreements imposed upon them under the Agreement.  From and after the date hereof and without
the prior written consent of Assignee, not to be unreasonably withheld or
delayed, (a) no term or provision of the Agreement (including any exhibit
thereto) may be altered, modified or amended in any material respect, (b) Assignor
may not waive any material right under the Agreement, (c) neither Assignor
nor Third Party may terminate or cancel the Agreement, and (d) neither
Assignor nor Third Party may assign any interest, right or obligation under the
Agreement or consent to any assignment by the other party of any such interest,
right or obligation (other than an assignment to a Recognized Mortgagee or to
or by Assignee ), and any of the foregoing acts, if done without such consent
of Assignee, shall be null and void ab  initio.

 

7.                                       Assignee
shall not be obligated to perform or discharge, nor shall it by acceptance of
this Assignment be deemed in any manner to have assumed any of the duties or
obligations under, the Agreement or be under any obligation to perform or
discharge any of the obligations thereunder, unless and until Assignee elects
to assume, subject to Paragraph 4(b) hereof,
all of the rights and obligations of Assignor under the Agreement, nor shall
Assignee be liable to any person by reason of any default by any party under
the Agreement, including any default by Assignor or any other person arising
prior to such assumption by Assignee. 
Assignor shall perform and discharge all such duties, obligations, and
liabilities and hereby agrees to indemnify and hold Assignee harmless from and
against any and all liability, loss, cost, damage or expense (including,
without limitation, reasonable attorneys’ fees and expenses) which Assignee may
incur under or by reason of this Assignment, or for any action taken by
Assignee hereunder, or by reason of or in defense of any and all claims and
demands whatsoever which may be asserted against Assignee arising out of the
Agreement.  In the event Assignee incurs
any such liability, loss, cost, damage or expense, the amount thereof together
with all reasonable

 

C-3

 

attorneys’ fees and disbursements shall be payable by
Assignor to Assignee immediately, without demand.

 

8.                                       All
notices and other communications required or permitted to be given to, or
served pursuant to, this Agreement, or otherwise, shall be in writing and shall
be deemed to have been duly given and delivered for all purposes (a) when
personally delivered to a party or authorized representative of a party, (b) when
received, if delivered by a nationally recognized overnight courier service,
delivery prepaid, (c) three (3) days after deposited in the United
States mail, if delivered by registered or certified United States mail,
postage prepaid, return receipt requested, or (d) when received, by
telecopy (and confirmed by mail in the manner described above) addressed to the
party to be notified at such party’s address set forth herein.  All notices and other communications under
this Agreement shall be given to the parties hereto at the address set forth
below, or such other address as may be specified in a notice designated as a
notice of change of address.

 

	
   

  	
  if to Third Party:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  if to Assignor:

  	
  The New York Times Company

  
	
   

  	
   

  	
  620 Eighth Avenue

  
	
   

  	
   

  	
  New York, New York 10018

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Fax No. (212) 556-4634

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The New York Times Company

  
	
   

  	
   

  	
  620 Eighth Avenue

  
	
   

  	
   

  	
  New York, New York 10018

  
	
   

  	
   

  	
  Attention: Director of Real Estate

  
	
   

  	
   

  	
  Fax No. (212) 556-4634

  

 

C-4

 

	
   

  	
   

  	
  DLA Piper LLP (US)

  
	
   

  	
   

  	
  1251 Avenue of the Americas

  
	
   

  	
   

  	
  New York, New York 10020

  
	
   

  	
   

  	
  Attention: Martin D. Polevoy, Esq.

  
	
   

  	
   

  	
  Fax No. (212) 884-8505

  
	
   

  	
   

  	
   

  
	
   

  	
  if to Assignee:

  	
  42nd St. Development Project, Inc.

  
	
   

  	
   

  	
  633 Third Avenue, 33rd floor

  
	
   

  	
   

  	
  New York, New York 10017

  
	
   

  	
   

  	
  Attn: President

  
	
   

  	
   

  	
  Fax No. (212) 803-3838

  
	
   

  	
   

  	
   

  
	
   

  	
  with copies to:

  	
  New York City Economic Development Corporation

  
	
   

  	
   

  	
  110 William Street

  
	
   

  	
   

  	
  New York, New York 10038

  
	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
  Fax No. (212) 312-3913

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  New York City Law Department

  
	
   

  	
   

  	
  100 Church Street

  
	
   

  	
   

  	
  New York, New York 10007

  
	
   

  	
   

  	
  Attention: Chief, Economic Development Division

  
	
   

  	
   

  	
  Fax No. (212) 227-5648

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Shearman & Sterling LLP

  
	
   

  	
   

  	
  599 Lexington Avenue

  
	
   

  	
   

  	
  New York, New York 10022-6069

  
	
   

  	
   

  	
  Attention: Chris M. Smith, Esq. (3578/13)

  
	
   

  	
   

  	
  Fax No. (212) 848-7300

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Goulston & Storrs, PC

  
	
   

  	
   

  	
  750 Third Avenue

  
	
   

  	
   

  	
  22nd Floor

  
	
   

  	
   

  	
  New York, NY 10017

  
	
   

  	
   

  	
  Attention: Max Friedman, Esq.

  
	
   

  	
   

  	
  Fax No. (212) 878-5524

  

 

C-5

 

	
   

  	
   

  	
  New York State Urban Development Corporation

  
	
   

  	
   

  	
  d/b/a Empire State Development Corporation

  
	
   

  	
   

  	
  633 Third Avenue

  
	
   

  	
   

  	
  New York, New York 10017

  
	
   

  	
   

  	
  Attention: 42nd St. Development Project, Inc.

  
	
   

  	
   

  	
  Fax No. (      )

  

 

9.                                       The
acceptance of this Assignment shall not constitute a waiver of any of the
rights and remedies of Assignee under the Lease.  Further, nothing contained in this Assignment
and no act or action taken or done, or omitted to be taken or done, by Assignee
pursuant to the powers and rights granted it hereunder shall be deemed to be a
waiver by Assignee of any of its rights and remedies against Assignor in
connection with, or in respect of, any of the Obligations.  The right of Assignee to collect and enforce
collection and performance of the Obligations and to enforce any other security
and collateral therefor held by it may, to the extent permitted by law, be
exercised by Assignee either prior to, simultaneously with, or subsequent to
any action taken by Assignee hereunder.

 

10.                                 Assignor
shall execute and deliver, or cause to be executed and delivered, to Assignee
all other instruments, certificates and agreements as Assignee may reasonably
require, including, but not limited to, estoppel certificates stating that this
Assignment or the Agreement is in full force and effect and that there are no
defenses or offsets thereto (or if this Assignment or the Agreement is not in
full force and effect or there are any defenses or offsets thereto, specifying
in reasonable detail such matters), to effect, confirm or assure the rights and
remedies intended to be granted to Assignee under this Assignment.

 

11.                                 If
all or any portion of any provision of this Assignment shall be held to be
invalid, illegal or unenforceable in any respect or in any jurisdiction, then
such invalidity, illegality or unenforceability shall not affect any other
provision hereof and such provision shall be limited and construed in such
jurisdiction as if such invalid, illegal or unenforceable provision or portion
thereof were not contained herein.

 

12.                                 This
Assignment may not be changed or terminated except by an agreement in writing,
signed by the party against whom enforcement of the change is sought.  This Assignment shall be governed by and
construed in accordance with the law of the State of New York.  All terms and words used in this Assignment,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.

 

13.                                 This
Assignment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns and to the City of New
York as holder of a reversionary estate in the Property.

 

14.                                 No
director, member, officer, employee, agent or other person authorized to act on
behalf of any of the parties to this Agreement shall have any personal
liability in connection with this Assignment or any failure of any of the
parties hereto to perform its

 

C-6

 

respective obligations under this Assignment.  The liability of Assignor, EDC, ESDC, 42DP
and the City under this Assignment shall be limited pursuant to Articles 17 and
18 of the Lease.

 

[Signature Page Follows]

 

C-7

 

IN WITNESS WHEREOF, the parties hereto have duly
executed this Assignment as of the day and year first above written.

 

	
   

  	
  [Tenant]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  42ND
  ST. DEVELOPMENT PROJECT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name
  of Third Party]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-8

 

EXHIBIT F-1

DEMISED PREMISES (§ 1.1 (a) (lxi))

 

The Condominium Units (in the Building located at and known as THE NEW YORK TIMES BUILDING
CONDOMINIUM and by Street Number 620-628 8TH AVENUE, NEW YORK, NEW YORK),
designated and described as Units (SEE SCHEDULE ANNEXED) (hereinafter called
the “Units”) in the Declaration Establishing
a Plan of Leasehold Condominium Ownership of Premises made by The New York
Times Building LLC, as Declarant, under the Condominium Act of The State of New
York (Article 9-B of the Real Property Law of the State of New York),
dated as of August 4, 2006 and recorded August 15, 2006 in the Office
of the Register The City of New York (the “Register”), as
CRFN 2006000460293, as amended by First Amendment to Declaration dated January 29,
2007 and recorded as CRFN 2007000075106, and Second Amendment to Declaration
dated October 11, 2007 and recorded as CRFN 2008000008734, and Third
Amendment to Declaration dated March 6, 2009 and to be recorded with the
Register (which Declaration, and any further amendments thereto, are
hereinafter collectively called the “Declaration”),
establishing a plan for leasehold condominium ownership of said Building and
the land upon which the same is erected (hereinafter sometimes collectively
called the “Property”) and also designated and
described as Tax Lots No. (SEE SCHEDULE ANNEXED), Block 1012 Section 4,
Borough of MANHATTAN on the Tax Map of the Real Property Assessment Department
of the City of New York and on the floor plans of said Building certified by
Daniel Kaplan, approved by the Real Property Assessment Bureau on August 13,
2006 and filed as Condominium Plan No. 1595 on August 15, 2006 in the
aforesaid Register’s Office.

 

TOGETHER with an undivided percentage
interest (SEE SCHEDULE ANNEXED) in the Common Elements and the NYTC Limited
Common Elements (as such terms are defined in the Declaration) of the New York
Times Building Condominium, recorded as CRFN 2006000460293 as amended.

 

 

SCHEDULE
OF UNITS

 

Description of Demised Premises Units

 

	
  Unit Designation

  	
   

  	
  Tax Lot

  	
   

  	
  Percentage Interest In

  Common Elements

  	
   

  
	
  21-A

  	
   

  	
  1028

  	
   

  	
  1.7711%

  	
   

  
	
  22-A

  	
   

  	
  1029

  	
   

  	
  1.7711%

  	
   

  
	
  23-A

  	
   

  	
  1030

  	
   

  	
  1.7711%

  	
   

  
	
  24-A

  	
   

  	
  1031

  	
   

  	
  1.7711%

  	
   

  
	
  25-A

  	
   

  	
  1032

  	
   

  	
  1.7711%

  	
   

  
	
  26-A

  	
   

  	
  1033

  	
   

  	
  1.7711%

  	
   

  
	
  27-A

  	
   

  	
  1034

  	
   

  	
  1.7711%

  	
   

  

 

 

EXHIBIT F-2

 

THE LAND (§ 1.1(a)(cxxv))

 

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

 

BEGINNING at the corner formed by the intersection of the northerly
line of West 40th Street with the easterly line of 8th Avenue;

 

RUNNING THENCE northerly along said easterly line of 8th Avenue ,197
feet 6 inches to the corner formed by the intersection of the easterly side of
8th Avenue with the southerly line of West 41st Street;

 

THENCE easterly along said southerly line of West 41st Street, 400
feet;

 

THENCE southerly and parallel to said easterly line of 8th Avenue, 197
feet 6 inches to the northerly line of West 40th Street;

 

THENCE westerly along said northerly line of West 40th Street, 400 feet
to the point or place of BEGINNING.

 

 

EXHIBIT G

 

PERMITTED
ENCUMBRANCES (§ 1.1(a)(clxxxi))

1.              Public and
governmental utility facilities having a physical manifestation within the area
of the Property; all recorded easements, licenses and other agreements, if any,
existing as of the date hereof for such public and governmental utility
facilities; and reasonable rights of access to such public and governmental
utility facilities necessary for the maintenance, operation, repair,
replacement or use of the same whether or not embodied in recorded instruments.

 

2.              The right, title and
interest of the City to property lying within the lines of any street, avenue
or public place, as the same is shown on the present City map.

 

3.              All equipment and
other property of the City, including but not limited to police and fire
communication lines, necessary for the maintenance of the public health and
safety and having a physical manifestation within the area being leased; all
recorded easements, licenses and other agreements, if any, existing as of the
date hereof for such equipment and other property of the City; and reasonable
rights of access to all such equipment and other property of the City necessary
for the maintenance, operation, repair, replacement or use of the same whether
or not embodied in recorded instruments.

 

4.              All rights, title
and interest of The New York City Transit Authority (the “T.A.”) in and to the
following property, if any to the extent located within the property being
acquired:  (A) routes, tracts,
tunnels, switches, siding, extensions, connections, platform, structures or
terminals; (b) wires, conduits, pipes, ducts, telephone, signal and other
communication or service facilities; (c) column, footings, bracing,
foundations and other structural members; and (d) any other devices,
equipment and facilities used in connection with the operation or maintenance
of the subway system.

 

5.              The general project
plan with respect to the development of the 42nd Street Development Project
(including the Property), adopted by the directors of UDC in June 1981,
and thereafter amended, as approved by the City (as the same may be further
amended and approved).

 

6.              Any other matters
shown on the acquisition map used in connection with ESDC’s condemnation of the
Property, and which are specifically excluded on such map from the acquisition
in connection therewith (provided, however, that no such matters materially
impair the ability to construct a new building on the Property).

 

7.              Site 8 South Project
Agreement, dated as of December 12, 2001 by and among ESDC, 42DP, the
City, NYTB, NYT Real Estate Company LLC and FC Lion LLC.

 

8.              Site 8 South Land
Acquisition and Development Agreement, dated as of December 12, 2001, by
and among ESDC, 42DP and NYTB, as amended by First Amendment to Site 8 

 

G-1

 

South Land Acquisition and Development Agreement,
dated as of February 14, 2003 by 42DP, ESDC and NYTB.

 

9.              Site 8 South
Declaration of Design, Use and Operation, dated as of December 12, 2001 by
and among ESDC, 42DP and NYTB.

 

10.        Agreement, dated as of December 12,
2001, by and among 42DP, The New York City Transit Authority, NYTB and the
City.

 

11.        The lien for any BID
assessments not yet due and payable (subject to adjustment as provided in this
Lease).

 

12.        Sewer Easement recited in
Deed recorded in Liber 959 Cp. 298, if existing.

 

13.        Declaration of Covenants
and Restrictions made by New York State Urban Development Corporation dated as
of June 21, 1988, recorded April 20, 1990 in Reel 1686 Page 383.

 

14.        Reversionary estate of the
City.

 

G-2

 

EXHIBIT H

 

FORM OF
NOTICE OF UNREIMBURSED ESAC (§ 3.1(b)(ii))

 

[Tenant letterhead]

 

as of       ,
200    [each PILOT payment date]

 

VIA HAND

 

42nd St. Development Project, Inc.

633 Third Avenue, 33rd floor

New York, New York 10017

Attention:  President

 

Site 8 South — Unreimbursed ESAC (Allocated)

 

Ladies and Gentlemen:

 

Reference is made to that certain Agreement of Lease
(as it hereinbefore and hereafter may be amended, the “Lease”),
dated as of
              ,
2009, by and between 42nd St. Development Project, Inc. (“Landlord”) and [Tenant] (“Tenant”).  Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Lease.

 

Pursuant to Section 3.1(b)(ii) of the Lease
and in connection with Tenant’s current payment of PILOT, Tenant hereby
certifies to Landlord that:

 

(a)          Tenant will offset 85%
of the PILOT payment due under the Lease as of the date hereof against Tenant’s
outstanding balance of unreimbursed Excess Site Acquisition Costs (Allocated);

 

(b)         Tenant’s outstanding
balance of unreimbursed Excess Site Acquisition Costs (Allocated) as of
                ,
the closing date of the last Quarterly ESAC Report (as defined in the Site 8
South LADA), is
$                          ;
and

 

(c)          An amount of
unreimbursed Excess Site Acquisition Costs (Allocated)equal to or greater than
the offset amount set forth in (a) above remains to be credited.

 

	
   

  	
  Yours
  Truly,

  
	
   

  	
   

  
	
   

  	
  [Tenant]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

H-1

 

	
  cc:

  	
   

  	
  President — New York City Economic Development Corporation

  
	
   

  	
   

  	
  Chief, Economic Development Division — New York City Law Department

  
	
   

  	
   

  	
  Chris M. Smith, Esq. - Shearman & Sterling LLP

  
	
   

  	
   

  	
  Max Friedman, Esq. — Goulston & Storrs, PC

  
	
   

  	
   

  	
  42nd St. Development Project, Inc. — New
  York State Urban Development Corporation

  

 

H-2

 

EXHIBIT I

 

APPROVED MAJOR CONTRACTORS (§ 9.6 (b)(ii))

 

Mayrich
Construction Corp.

Urban
Foundation/Engineering LLC

Canron
Construction Corp.

SMI
Owen Steel Co.

Kline
Iron & Steel

Sorbara
Construction Corp.

Northside
Corp.

Pinnacle
Concrete

E.
Patti & Sons

C&D
Fireproofing & Plastering

Permasteelisa
Cladding Technologies

GlassAlum
International Corp.

Harmon
Ltd.

Benson
Industries, Inc.

Wolkow
Braker Roofing Corp.

JP
Patti Company, Inc.

Eagle
One Roofing

NY
Roofing Co.

Nastasi &
Associates

Woodword
Construction

Component
Assembly Systems

ASM
Electric & Machine Corp.

Fresh
Meadows Mech. Corp.

Centrifugal
Mechanical

FW
Sims

Fred
Geller Electrical, Inc.

Zwicker
Electric

EJ
Electric

Sirina
Fire Protection

Belrose
Fire Suppression

Rael
Automatic Sprinkler Co., Inc.

Almar
Plumbing & Heating Corp.

Olympic
Plumbing & Heating

Schindler
Elevator Corp.

Otis
Elevator Co.

ThyssekKrupp
Elevator

Fujitech

 

 

EXHIBIT J

 

FORM OF
“NON ADVERSE STRUCTURAL EFFECT” STATEMENT OF ENGINEER

OR ARCHITECT
(§ 9.9)

 

[Engineer’s/Architect’s letterhead]

 

as of       ,
200   

 

VIA HAND

 

42nd St. Development Project, Inc.

633 Third Avenue, 33rd floor

New York, New York 10017

Attention:  President

 

Site 8 South — Alterations

 

Ladies and Gentlemen:

 

Reference is made to that certain Agreement of Lease
(as it hereinbefore may have been and hereafter may be amended, the “Lease”), dated as of
              ,
2009, by and between 42nd St. Development Project, Inc. (“Landlord”) and [Tenant] (“Tenant”).  Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Lease.

 

Pursuant to Section 9.9 of the Lease, the
undersigned hereby certifies that: (a) it has reviewed Section 9.9 of
the Lease and is familiar therewith; (b) it has assessed the Alterations
listed on Schedule A attached
hereto; and (c) based solely on such assessment, and without regard to any
representations or other statements made by Tenant or any other party, such
Alterations shall have no adverse effect on a Structural Component that is
greater than a Nonadverse Structural Effect.

 

Yours Truly,

 

[Signature block of Engineer/Architect]

 

	
  cc:

  	
   

  	
  President — New York City Economic Development Corporation

  
	
   

  	
   

  	
  Chief, Economic Development Division — New York City Law Department

  
	
   

  	
   

  	
  Chris M. Smith, Esq. - Shearman & Sterling LLP

  
	
   

  	
   

  	
  Max Friedman, Esq. — Goulston & Storrs, PC

  
	
   

  	
   

  	
  42nd Street Development Project, Inc. — New
  York State Urban Development Corporation

  

 

 

Schedule A to Exhibit J

 

Alterations

 

[Insert description of Alterations]

 

 

EXHIBIT K

 

FORM OF
NONDISTURBANCE AGREEMENT (§ 13.2(b))

 

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
AGREEMENT (this “Agreement”),
dated as of
                ,
200   , between 42ND ST. DEVELOPMENT PROJECT, INC., a New
York corporation, having an office at 633 Third Avenue, 33rd Floor, New York,
New York 10017 (the “Ground Lessor”),
and                                     ,
a
                        ,
having an office at
                                                    
(the “Landlord”), and
                                      ,
a                                             
having an office at                                                       
(the “Tenant”).

 

W  I  T  N
E  S  S  E  T  H :

 

WHEREAS, Tenant has entered into a lease dated
                
, 20     between Landlord, as sublandlord, and Tenant, as
subtenant, with respect to certain space (the “Demised Premises”) in the building located at
                            ,
New York, New York (the “Premises”)
(said sublease, as heretofore or hereafter amended and supplemented, the “Lease”);

 

WHEREAS, Ground Lessor is the ground lessor of the
Premises pursuant to that certain Agreement of Lease dated as of
                                  ,
2001, between Ground Lessor and
                                        
(the “Ground Lease”); and

 

WHEREAS, Ground Lessor, Landlord and Tenant desire to
enter into this Agreement upon the terms, covenants and conditions contained
herein.

 

NOW, THEREFORE, in consideration of the premises and
the agreements of the parties contained herein, the parties hereto hereby
covenant and agree as follows:

 

1.             Except
as expressly stated herein, nothing in this Agreement shall be construed to be
an approval by Ground Lessor of the provisions of the Lease.

 

2.             Tenant
agrees that the Lease is and shall be subject and subordinate to the Ground
Lease and all renewals, amendments, modifications, consolidations, replacements
and extensions thereof.

 

3.             Ground
Lessor hereby agrees that so long as the Lease shall be in full force and
effect, Tenant shall not be in default in the payment of rent or additional
rent due under the Lease and Tenant shall not be in default in the performance
or observance of any of the other obligations or conditions of the Lease beyond
any applicable cure period (the “Nondisturb
Conditions”): (a) Ground Lessor shall not join Tenant as a
party defendant in any action or proceeding which may be instituted or taken by
Ground Lessor under the Ground Lease, by reason of any default by Landlord
thereunder, to terminate the Ground Lease, to remove or evict the Landlord or
to recover possession of the Premises, unless required by law in order to make
such action or proceeding effective; (b) Tenant shall not be evicted from
the Demised Premises; and (c) Tenant’s subleasehold estate under the Lease
shall not be diminished, interfered with, disturbed or terminated.

 

 

4.             Tenant
hereby agrees that in the event of any act or omission by Landlord which would
give Tenant the right, either immediately or after the lapse of a period of
time, to terminate the Lease, or to claim a partial or total eviction, Tenant
shall not exercise any such right: (a) until it has given written notice
of such act or omission to Ground Lessor; and (b) until a reasonable
period for remedying such act or omission shall have elapsed following such
giving of notice. Tenant from and after the date hereof shall send a copy of
any notice of default or notice in connection with the commencement of any
action to terminate the Lease or similar statement under the Lease to Ground
Lessor at the same time such notice or statement is sent to Landlord under the
Lease and agrees that, notwithstanding any provisions of the Lease to the
contrary, such notice shall not be effective unless Ground Lessor shall have
been given such notice and shall have failed to cure such default as herein
provided.  All notices given under this
Agreement shall be sent by certified or registered mail, postage prepaid,
return receipt requested, or shall be delivered to the parties at the following
addresses set forth above (or at such other addresses as the parties hereto
shall specify in a written notice to the other parties at the addresses
specified herein).  Any notices hereunder
shall be deemed to be given on the earlier to occur of: (i) the day of
receipt; and (ii) three (3) days after deposit in the mail.

 

5.             Tenant
and Ground Lessor hereby agree that, in the event that Ground Lessor shall
enter into and become possessed of the Premises by reason of default on the
part of Landlord under the Ground Lease or by reason of the termination of the
Ground Lease, then, so long as the Nondisturb Conditions shall be satisfied,
the Lease shall continue as a direct lease between Ground Lessor and Tenant
upon all of the terms, covenants, conditions and agreements as set forth in the
Lease, and Tenant agrees to be bound thereby and to attorn to Ground Lessor and
recognize Ground Lessor as its landlord; provided, however, that
Ground Lessor shall not:

 

(a)           be
liable for any act or omission or negligence of any prior landlord under the
Lease;

 

(b)           be
subject to any counterclaim, offset or defense, which theretofore accrued to
the Tenant against the prior landlord under the Lease;

 

(c)           be
subject to any counterclaim, offset or defense at any time during the term of
the Lease with respect to the payment of rent or additional rent by Tenant;

 

(d)           be
bound by any modification or amendment of such Lease (unless Ground Lessor
shall have theretofore received a copy of and consented in writing to such modification
or amendment);

 

(e)           be
bound by any payment of rent or additional rent for more than one (1) month
in advance (unless actually received by Ground Lessor);

 

(f)            be
liable for any security deposit given by Tenant under the Lease, unless and to
the extent actually received by Ground Lessor;

 

(g)           be
obligated to perform any work of any kind in the Demised Premises or the
Premises;

 

K-2

 

(h)           in
the event of a casualty, be obligated to repair or restore the Premises or any
portion thereof beyond such repair or restoration as may be reasonably
accomplished from the net insurance proceeds actually made available to Ground
Lessor;

 

(i)            in
the event of a partial condemnation, be obligated to repair or restore the
Premises or any part thereof beyond such repair or restoration as may be
reasonably accomplished from the net proceeds of any award actually made
available to Ground Lessor;

 

(j)            be
subject to any right of cancellation or termination which requires payment by
the landlord thereunder of a charge, fee or penalty for such cancellation or
termination, except if Ground Lessor voluntarily exercises such right of
cancellation or termination other than as a result of a casualty or
condemnation;

 

(k)           be
subject to any right of first refusal or first offer to purchase the Premises
or any portion thereof;

 

(l)            be
obligated to give Tenant all or any portion of any insurance proceeds or
condemnation awards received by Ground Lessor as a result of a casualty or
condemnation;

 

(m)          be
subject to liability for any amounts in excess of the amounts set forth in Article 17
of the Ground Lease; or

 

(n)           be
bound for a term in excess of ten (10) years from the commencement date of
the Lease.

 

Upon the request of either
Tenant or Ground Lessor, Tenant or Ground Lessor, as the case may be, shall
promptly execute and deliver to the other an agreement or other instrument in
recordable form which may be necessary or appropriate to evidence such
attornment.

 

6.             Landlord
and Tenant shall not change, or consent to a change in, the terms, covenants,
conditions and agreements of the Lease in any manner which would be binding on
Ground Lessor without the express consent in writing of Ground Lessor.

 

7.             Tenant
further acknowledges that pursuant to Section 13.4 of the Ground Lease,
the Ground Lessor may elect to collect rent and all other sums due under the
Lease under certain circumstances.  In
the event that the Ground Lessor elects to collect rent or other charges under Section 13.4
of the Ground Lease, then from and after such election, until further notice
from Ground Lessor, Tenant shall pay its rent, additional rent and all other
sums due under the Lease directly to Ground Lessor.

 

8.             This
Agreement may not be modified, amended or terminated unless in writing and duly
executed by the party against whom the same is sought to be asserted and
constitutes the entire agreement between the parties with respect to the
subject matter hereof.

 

9.             This
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

 

K-3

 

10.           This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to agreements made and to be performed
entirely within said state.

 

[SIGNATURES ON NEXT PAGE]

 

K-4

 

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

 

	
   

  	
  Ground Lessor:

  
	
   

  	
   

  
	
   

  	
  42ND ST. DEVELOPMENT PROJECT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tenant:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Landlord:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                  ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

K-5

 

EXHIBIT M

 

FORM OF
NOTICE OF DEFAULT (§ 14.2)

 

42ND ST. DEVELOPMENT PROJECT, INC.
 633 Third Avenue, 33rd Floor

New York, New York 10017

 

as of       ,
200   

 

VIA HAND

 

NYT Real Estate Company LLC

c/o The New York Times Company

620 Eighth Avenue

New York, New York 10018

Attention:  General Counsel

 

Site 8 South — NOTICE OF DEFAULT

 

Ladies and Gentlemen:

 

Reference is made to that certain Agreement of Lease
(as it hereinbefore may have been and hereafter may be amended, the “Lease”), dated as of
              ,
2009, by and between 42nd St. Development Project, Inc. (“Landlord”) and [Tenant] (“Tenant”).  Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Lease.

 

Pursuant to Section 14.2 of the Lease, Tenant is
hereby given notice that it is in default under Section       
of the Lease for [STATE DEFAULT].  Under
the Lease, Tenant has [STATE PERIOD] in which to cure this Default.

 

Nothing in this letter shall be construed to be a
waiver of any right or remedy available to Landlord under the Lease, at law or
in equity, all of which are hereby expressly reserved.

 

	
   

  	
  Yours
  Truly,

  
	
   

  	
   

  
	
   

  	
  42ND ST. DEVELOPMENT PROJECT, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  cc:

  	
   

  	
  Director of Real Estate — The New York Times Company

  
	
   

  	
   

  	
  Martin D. Polevoy, Esq. — DLA Piper LLP (US)

  
	
   

  	
   

  	
  Max Friedman, Esq. — Goulston & Storrs, PC

  

 

M-1

 

EXHIBIT N

 

FORM OF
SECOND NOTICE OF DEFAULT (§ 14.2)

 

42ND ST. DEVELOPMENT PROJECT, INC.
 633 Third Avenue, 33rd Floor

New York, New York 10017

 

as of       ,
200   

 

VIA HAND

 

NYT Real Estate Company LLC

c/o The New York Times Company

620 Eighth Avenue

New York, New York 10018

Attention:  General Counsel

 

Site 8 South — SECOND NOTICE OF DEFAULT

 

Ladies and Gentlemen:

 

Reference is made to that certain Agreement of Lease
(as it hereinbefore may have been and hereafter may be amended, the “Lease”), dated as of
              ,
2009, by and between 42nd St. Development Project, Inc. (“Landlord”) and [Tenant] (“Tenant”).  Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Lease.

 

Pursuant to Section 14.2 of the Lease, Tenant is
hereby given notice that Tenant’s Default under Section       
of the Lease for [STATE DEFAULT] has not been cured within the cure period for
such Default under the Lease.  If Tenant
has not cured the aforesaid Default within 5 Business Days of [DATE OF THIS
NOTICE IF SENT ON BUSINESS DAY OR DATE OF NEXT SUCCEEDING BUSINESS DAY IF DATE
OF THIS NOTICE IS NOT A BUSINESS DAY], an Event of Default shall be deemed to
have occurred.

 

Nothing in this letter shall be construed to be a
waiver of any right or remedy available to Landlord under the Lease, at law or
in equity, all of which are hereby expressly reserved.

 

	
   

  	
  Yours Truly,

  
	
   

  	
   

  
	
   

  	
  42ND ST. DEVELOPMENT PROJECT, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  cc:

  	
   

  	
  Director of
  Real Estate — The New York Times Company

  
	
   

  	
   

  	
  Martin D.
  Polevoy, Esq. — DLA Piper LLP (US)

  
	
   

  	
   

  	
  Max
  Friedman, Esq. — Goulston & Storrs, PC

  

 

N-1

 

EXHIBIT R

 

FORM OF
MEMORANDUM OF LEASE (§ 33.1)

 

MEMORANDUM OF AGREEMENT OF SUBLEASE

 

By and Between

 

42nd ST. DEVELOPMENT PROJECT, INC.,

as Landlord

 

and

 

NYT REAL ESTATE COMPANY LLC,

as Tenant

 

Premises:

 

Block: 1012

 

Lots: 1028, 1029, 1030, 1031, 1032, 1033,
1034

 

Address:

 

620 Eighth Avenue

 

Borough of Manhattan

County, City and State of New York

 

RECORD AND RETURN TO:

 

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, New York 10020

Attention: Marc Hurel, Esq.

 

 

MEMORANDUM OF AGREEMENT OF SUBLEASE

 

MEMORANDUM OF AGREEMENT OF SUBLEASE (this “Memorandum”), is made as of the 6th day of
March, 2009, by and between 42ND ST. DEVELOPMENT PROJECT, INC. (“42DP”), a subsidiary of New York State Urban Development
Corporation (“UDC”) d/b/a Empire State Development
Corporation (“ESDC”), a corporate governmental
agency of the State of New York constituting a political subdivision and public
benefit corporation, having an office at 633 Third  Avenue, 33rd floor, New York, New York 10017,
as landlord (in such capacity, “Landlord”), and
NYT REAL ESTATE COMPANY LLC, a New York limited liability company, having an
office at c/o The New York Times Company, 620 Eighth Avenue, New York, New York
10018, as tenant (in such capacity “Tenant”).

 

W I T N E S S E T H :

 

WHEREAS, Landlord and The New
York Times Building LLC entered into that certain Agreement of Lease dated as
of December 12, 2001, as amended by letter dated April 8, 2004 (the “Initial Ground Lease”) with respect to certain land more
particularly therein and all improvements then or thereafter located thereon;

 

WHEREAS, NYTB, as landlord,
entered into that certain Agreement of Sublease dated as of December 12,
2001 with Tenant, as tenant (the “Initial NYTC Sublease”),;

 

WHEREAS, NYTB submitted the
Initial Ground Lease to a leasehold condominium structure pursuant to Article 9-B of the Real Property Law of the
State of New York;

 

WHEREAS, pursuant to that
certain Assignment and Assumption Agreement dated as of August 15, 2006
(being the “Lease Assignment Date” under the
Initial Ground Lease) between NYTB and Landlord (the “Assignment”),
NYTB assigned to Landlord all of NYTB’s right, title and interest in and to the
Initial Ground Lease and the Initial NYTC Sublease;

 

WHEREAS, pursuant to the
provisions of the Initial Ground Lease and the Assignment, the Assignment did
not cause a merger of the interests of landlord and tenant under the Initial
Ground Lease, which interests are and remain separate and distinct;

 

WHEREAS, the Initial Ground
Lease was amended and restated pursuant to Amended and Restated Agreement of
Lease dated as of August 15, 2006 and recorded in the Office of the City
Register of the City of New York on November 20, 2006 as CRFN
2006000644736, which Amended and Restated Agreement of Lease was amended by
First Amendment to Amended and Restated Agreement of Lease dated as of January 29,
2007 and recorded in the Office of the City Register of the City of New York on
February 22, 2007 as CRFN 2007000100154;

 

 

WHEREAS, the Initial NYTC
Sublease was amended pursuant to First Amendment to Agreement of Sublease (NYT)
dated as of August 15, 2006 between Landlord and Tenant and recorded in
the Office of the City Register of the City of New York on November 20,
2006 as CRFN 2006000644735 and by Second Amendment to Agreement of Sublease
(NYT) dated as of January 29, 2007 between Landlord and Tenant and
recorded in the Office of the City Register of the City of New York on February 22,
2007 as CRFN 2007000100157 (the Initial NYTC Sublease, as so amended, and as
further amended by the Third Amendment, hereinafter defined, the “Existing NYTC Sublease”);

 

WHEREAS, by Third Amendment to Agreement of Sublease
(NYT) dated of even date herewith and intended to be recorded in the
Office of the City Register of the City of New York (the “Third Amendment”), Landlord and
Tenant further modified the Existing NYTC Sublease, inter alia, to
remove from the premises demised thereunder a portion of the NYTC Collective
Unit (as defined in the Condominium Declaration) consisting of Units 21-A,
22-A, 23-A, 24-A, 25-A, 26-A and 27-A, together their undivided percentage
interest in the Common Elements and the NYTC Limited Common Elements, as more
particularly described on Exhibit A
annexed hereto (the “Demised Premises”),
upon the condition that Landlord and Tenant enter into a new sublease covering
the Demised Premises on substantially the same terms and conditions of the
Existing NYTC Sublease;

 

WHEREAS, in satisfaction of such
condition, Tenant and Landlord have entered into that certain Agreement of
Sublease (NYT-2) dated of even date herewith covering the Demised Premises (the “Severance Lease”);
and

 

WHEREAS, in accordance with
Sections 291-c and 294(7) of the New York State Real Property Law and Section 33.1
of the Severance Lease, the parties desire to record a memorandum summarizing
certain (but not all) of the provisions, covenants and conditions set forth in
the Severance Lease.

 

NOW, THEREFORE, Landlord and
Tenant declare as follows:

 

1.             The name and address of Landlord is:

 

42ND ST. DEVELOPMENT
PROJECT, INC.

633 Third  Avenue, 33rd floor

New York, New York 10017

 

2.             The name and address of the Tenant is:

 

NYT REAL ESTATE COMPANY
LLC

c/o The New York Times
Company

620 Eighth Avenue

New York, New York 10018

 

3.             The premises under the Severance Lease are the Demised
Premises.

 

 

4.                                       The
term of the Severance Lease commenced on March 6, 2009 (the “Commencement Date”) and ends on December 11, 2100
(unless sooner terminated in accordance with the terms, covenants or conditions
of the Severance Lease or pursuant to law) (the “Expiration
Date”).

 

5.                                       Pursuant
to and in accordance with the Severance Lease, after the Scheduled PILOT
Conversion Date (as defined in the Severance Lease) or as otherwise expressly
permitted under the Severance Lease, Tenant, simultaneously with the tenants
under all other Severance Subleases (as defined in the Severance Lease), shall
have the right, which right shall be exercised by notice to Landlord (the “Purchase Option Notice”), to purchase (or have a designee
purchase) all of the interest of 42DP (if any) and the City in the portion of
the Land and the Improvements comprising the Demised Premises, and the
undivided interest in the Common Elements associated therewith (the “Purchase Option”) on a date identified in
the Purchase Option Notice and being no less than ninety (90) days after the
date of the Purchase Option Notice (such date, the “Purchase Option Closing Date”) and on the terms and conditions
set forth in Article V of the Severance Lease.  The Purchase Option Notice may be delivered
prior to the Scheduled PILOT Conversion Date so long as the Purchase Option
Closing Date set forth therein occurs on or subsequent to the Scheduled PILOT
Conversion Date.

 

6.                                       This
Memorandum is subject to all of the terms, conditions and provisions of the
Severance Lease and shall not be construed to vary or otherwise affect such
terms, conditions and provisions or the rights and obligations of the parties
thereto.  In the event of any conflict
between the terms, conditions and provisions of the Severance Lease and this
Memorandum, the terms, conditions and provisions of the Severance Lease shall
control.

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have duly
executed this Memorandum on the date hereinabove first set forth.

 

 

	
   

  	
  Landlord:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  42nd
  ST. DEVELOPMENT PROJECT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tenant:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NYT REAL ESTATE
  COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:   Manager

  

 

 

ACKNOWLEDGMENTS

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  	
   

  

 

On the
       day of March, in the year 2009, before me,
the undersigned, a Notary Public in and for said State, personally appeared
                                        ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  Commission Expires

  

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  	
   

  

 

On the
       day of March, in the year 2009, before me,
the undersigned, a Notary Public in and for said State, personally appeared
                                  ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  Commission Expires

  

 

 

EXHIBIT A

DEMISED PREMISES

 

The Condominium Units (in the Building located at and known as THE NEW YORK TIMES BUILDING
CONDOMINIUM and by Street Number 620-628 8TH AVENUE, NEW YORK, NEW YORK),
designated and described as Units (SEE SCHEDULE ANNEXED) (hereinafter called
the “Units”) in the Declaration Establishing
a Plan of Leasehold Condominium Ownership of Premises made by The New York
Times Building LLC, as Declarant, under the Condominium Act of The State of New
York (Article 9-B of the Real Property Law of the State of New York),
dated as of August 4, 2006 and recorded August 15, 2006 in the Office
of the Register The City of New York (the “Register”), as
CRFN 2006000460293, as amended by First Amendment to Declaration dated January 29,
2007 and recorded as CRFN 2007000075106, and Second Amendment to Declaration
dated October 11, 2007 and recorded as CRFN 2008000008734, and Third
Amendment to Declaration dated March 6, 2009 and to be recorded with the
Register (which Declaration, and any further amendments thereto, are
hereinafter collectively called the “Declaration”),
establishing a plan for leasehold condominium ownership of said Building and
the land upon which the same is erected (hereinafter sometimes collectively
called the “Property”) and also designated and
described as Tax Lots No. (SEE SCHEDULE ANNEXED), Block 1012 Section 4,
Borough of MANHATTAN on the Tax Map of the Real Property Assessment Department
of the City of New York and on the floor plans of said Building certified by
Daniel Kaplan, approved by the Real Property Assessment Bureau on August 13,
2006 and filed as Condominium Plan No. 1595 on August 15, 2006 in the
aforesaid Register’s Office.

 

The land upon which the Building containing
the Units is erected as follows:

 

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

 

BEGINNING at the corner formed by the
intersection of the northerly line of West 40th Street with the easterly line
of 8th Avenue,

 

RUNNING THENCE northerly along said easterly
line of 8th Avenue, 197 feet 6 inches to the corner formed by the intersection
of the easterly side of 8th Avenue with the southerly line of West 41st Street;

 

THENCE easterly along said southerly line of
West 41st Street, 400 feet;

 

THENCE southerly and parallel to said
easterly line of 8th Avenue, 197 feet 6 inches to the northerly line of West
40th Street;

 

THENCE westerly along said northerly line of
West 40th Street, 400 feet to the point or place of BEGINNING,

 

 

TOGETHER with an undivided percentage
interest (SEE SCHEDULE ANNEXED) in the Common Elements and the NYTC Limited
Common Elements (as such terms are defined in the Declaration) of the New York
Times Building Condominium, recorded as CRFN 2006000460293 as amended.

 

 

SCHEDULE
OF UNITS

 

	
  UNIT DESIGNATION

  	
   

  	
  TAX LOT

  	
   

  	
  PERCENTAGE INTEREST

  IN COMMON ELEMENTS

  	
   

  
	
  21-A

  	
   

  	
  1028

  	
   

  	
  1.7711%

  	
   

  
	
  22-A

  	
   

  	
  1029

  	
   

  	
  1.7711%

  	
   

  
	
  23-A

  	
   

  	
  1030

  	
   

  	
  1.7711%

  	
   

  
	
  24-A

  	
   

  	
  1031

  	
   

  	
  1.7711%

  	
   

  
	
  25-A

  	
   

  	
  1032

  	
   

  	
  1.7711%

  	
   

  
	
  26-A

  	
   

  	
  1033

  	
   

  	
  1.7711%

  	
   

  
	
  27-A

  	
   

  	
  1034

  	
   

  	
  1.7711%Exhibit 10.6

 

FIRST AMENDMENT TO
AGREEMENT OF SUBLEASE (NYT-2)

 

By and Between

 

42ND ST. DEVELOPMENT PROJECT, INC.,

as Landlord

 

and

 

NYT BUILDING
LEASING COMPANY LLC,

as Tenant

 

Premises:

 

Block:  1012

 

Lots:       1028-1034 (formerly part of Lot 1)

 

Address

 

620-628 8th Avenue

263-267 and
241-261 West 40th Street

242-244 West 41st Street

231-235 West 40th Street

248-256, 260-262
and 268 West 41st Street

634 and 630-632 8th Avenue

 

Borough of
Manhattan

County, City and
State of New York

 

RECORD AND RETURN
TO:

 

DLA Piper LLP (US)

1251 Avenue of the
Americas

New York, New
York  10020

Attention:  Marc Hurel, Esq.

 

 

FIRST
AMENDMENT TO AGREEMENT OF SUBLEASE (NYT-2)

 

THIS
FIRST AMENDMENT TO AGREEMENT OF SUBLEASE (NYT) (this “Amendment”)
is made as of the
       day of March, 2009, by and between 42ND ST. DEVELOPMENT
PROJECT, INC. (“42DP”), a subsidiary of New York State Urban Development
Corporation (“UDC”) d/b/a Empire State Development Corporation (“ESDC”),
a corporate governmental agency of the State of New York constituting a
political subdivision and public benefit corporation, having an office at 633
Third Avenue, 33rd floor,
New York, New York 10017, as landlord (in such capacity, “Landlord”),
and NYT BUILDING LEASING COMPANY LLC, a New York limited liability company
having an office at c/o The New York Times Company, 620 Eighth Avenue, New
York, New York  10018, as tenant (in such
capacity, “Tenant”).

 

W  I 
T  N  E 
S  S  E 
T  H  :

 

WHEREAS,
Landlord and The New York Times Building LLC (“NYTB”) entered into that
certain Agreement of Lease dated as of December 12, 2001, as amended by
letter dated April 8, 2004 (the “Initial Ground Lease”), with
respect to certain land and improvements more particularly described in the
Initial Ground Lease, a memorandum of which was recorded October 24, 2003
in the Office of the City Register of the City of New York (the “Office of
the City Register”) as CRFN 2003000433122;

 

WHEREAS,
NYTB, as landlord, entered into

 

(a)           that certain Agreement of Sublease
(NYT) dated as of December 12, 2001 with NYT Real Estate Company LLC (“NYTRE”),
as tenant, a memorandum of which was recorded October 24, 2003 as CRFN
2003000433125 in the Office of the City Register (the “Initial NYTC Sublease”),  which Initial NYTC Sublease was amended by
First Amendment to Agreement of Sublease (NYT) dated as of August 15, 2006
between Landlord and NYTRE and recorded in the Office of the City Register of
the City of New York on November 20, 2006 as CRFN 2006000644735, and by
Second Amendment to Agreement of Sublease (NYT) dated as of January 29,
2007 between Landlord and NYTRE and recorded in the Office of the City Register
of the City of New York on February 22, 2007 as CRFN 2007000100157,  and by Third Amendment to Agreement of
Sublease (NYT) (the “Third NYTC Amendment”) dated as of March 6,
2009 between Landlord and NYTRE and recorded in the Office of the City Register
of the City of New York on March     , 2009 as CRFN
                                  ,
the tenant’s interest in which Initial NYTC Sublease as so amended was assigned
to and assumed by 620 Eighth NYT (NY) Limited Partnership, a Delaware limited
partnership (“620 Eighth”) pursuant to that certain Assignment and
Assumption of Sublease dated as of March 6, 2009 between NYTRE, as
assignor, and 620 Eighth, as assignee, and recorded in the Office of the City
Register of the City of New York on March     , 2009
as CRFN
                                  ,  and as further amended by that certain Fourth
Amendment to Agreement of Sublease (NYT) between Landlord and 620 Eighth dated
of even date herewith and intended to be recorded in the Office of the City
Register of the City of New York (the Initial NYTC Sublease, as so amended and
assigned, the “NYTC Sublease”);

 

 

(b)           that certain Agreement of Sublease (Office)
dated as of December 12, 2001 with FC Lion LLC (“FC Lion”), as
tenant, a memorandum of which was recorded October 24, 2003 as CRFN
2003000433123 in the Office of the City Register (the “Initial FC Office
Sublease”), the tenant’s interest in which Initial FC Office Sublease was
assigned to and assumed by FC Eighth Ave., LLC, a Delaware limited liability
company (“FC Eighth”) pursuant to that certain Assignment and Assumption
of Sublease Agreement dated as of August 15, 2006 between FC Lion, as
assignor, and FC Eighth, as assignee, and recorded in the Office of the City
Register of the City of New York on November 20, 2006 as CRFN
2006000644730, and which Initial FC Office Sublease was amended by First
Amendment to Agreement of Sublease (Office) dated as of August 15, 2006
between Landlord and FC Eighth and recorded in the Office of the City Register
of the City of New York on November 20, 2006 as CRFN 2006000644733, by
Second Amendment to Agreement of Sublease (Office) dated as of January 29,
2007 between Landlord and FC Eighth and recorded in the Office of the City
Register of the City of New York on February 22, 2007 as CRFN
2007000100155, by Third Amendment  to
Agreement of Sublease (Office) dated as of October 11, 2007 between
Landlord and FC Eighth and recorded in the Office of the City Register of the
City of New York on January 8, 2008 as CRFN 2008000008732, and by Fourth
Amendment to Agreement of Sublease (Office) dated as of March 6, 2009
between Landlord and FC Eighth and recorded in the Office of the City Register
of the City of New York on March     , 2008 as CRFN
                              ,
and by Fifth Amendment to Agreement of Sublease (Office) even date herewith and
intended to be recorded in the Office of the City Register of the City of New
York (the Initial FC Office Sublease, as so assigned and amended, the “FC
Office Sublease”); and

 

(c)           that certain Agreement of Sublease
(Retail) dated as of December 12, 2001 with FC Lion, as tenant, a
memorandum of which was recorded October 24, 2003 as CRFN 2003000433124 in
the Office of the City Register (the “Initial FC Retail Sublease”), the
tenant’s interest in which Initial FC Retail Sublease was assigned to and
assumed by FC Eighth pursuant to that certain Assignment and Assumption of
Sublease Agreement dated as of August 15, 2006 between FC Lion, as
assignor, and FC Eighth, as assignee, and recorded in the Office of the City
Register of the City of New York on November 20, 2006 as CRFN
2006000644731, and which Initial FC Retail Sublease was amended by First
Amendment to Agreement of Sublease (Retail) dated as of August 15, 2006
between Landlord and FC Eighth and recorded in the Office of the City Register
of the City of New York on November 20, 2006 as CRFN 2006000644734, by
Second Amendment to Agreement of Sublease (Retail) dated as of January 29,
2007 between Landlord and FC Eighth and recorded in the Office of the City
Register of the City of New York on February 22, 2007 as CRFN
2007000100156, by Third Amendment  to
Agreement of Sublease (Retail) dated as of October 11, 2007 between
Landlord and FC Eighth and recorded in the Office of the City Register of the
City of New York on January 8, 2008 as CRFN 2008000008733, and by Fourth
Amendment to Agreement of Sublease (Retail) dated as of March 6, 2009
between Landlord and FC Eighth and recorded in the Office of the City Register
of the City of New York on March     , 2008 as CRFN
                              ,
and by Fifth Amendment to Agreement of Sublease (Retail) even date herewith and
intended to be recorded in the Office of the City Register of the City of New
York (the Initial FC Retail Sublease, as so assigned and amended, the “FC
Retail Sublease”);

 

2

 

WHEREAS, NYTB
submitted the Initial Ground Lease to a leasehold condominium structure
pursuant to Article 9-B of the Real Property Law of the State of New York;

 

WHEREAS,
pursuant to that certain Assignment and Assumption Agreement dated as of August 15,
2006 (being the “Lease Assignment Date” under the Initial Ground Lease) between
NYTB and Landlord (the “Assignment”), NYTB assigned to Landlord all of
NYTB’s right, title and interest in and to the Initial Ground Lease and the
NYTC Sublease, the FC Office Sublease and the FC Retail Sublease;

 

WHEREAS,
pursuant to the provisions of the Initial Ground Lease and the Assignment, the
Assignment did not cause a merger of the interests of landlord and tenant under
the Initial Ground Lease, which interests are and remain separate and distinct;

 

WHEREAS, the
Initial Ground Lease was amended and restated pursuant to Amended and Restated
Agreement of Lease dated as of August 15, 2006 and recorded in the Office
of the City Register of the City of New York on November 20, 2006 as CRFN
2006000644736, which Amended and Restated Agreement of Lease was amended by
First Amendment to Amended and Restated Agreement of Lease dated as of January 29,
2007 and recorded in the Office of the City Register of the City of New York on
February 22, 2007 as CRFN 2007000100154;

 

WHEREAS,
pursuant to the Third NYTC Amendment, Landlord and NYTRE modified the
Initial  NYTC Sublease, inter alia, to
remove from the premises demised thereunder a portion of the NYTC Collective
Unit (as defined in the Condominium Declaration) consisting of Units 21-A,
22-A, 23-A, 24-A, 25-A, 26-A and 27-A, together their undivided percentage
interest in the Common Elements and the NYTC Limited Common Elements (the “New
NYTC Sublease Premises”);

 

WHEREAS, Landlord
and NYTRE entered into that certain Agreement of Sublease (NYT-2) dated as of March 6,
2009 with respect to the New NYTC Sublease Premises, a memorandum of which
Agreement of Sublease (NYT-2) was recorded March 
    , 2009 as CRFN
                                  
in the Office of the City Register, the tenant’s interest in which Agreement of
Sublease (NYT-2) was assigned to and assumed by Tenant, pursuant to that
certain Assignment and Assumption of Sublease dated as of March 6, 2009
between NYTRE, as assignor, and, NYTBLC, as assignee, and recorded in the
Office of the City Register of the City of New York on March     ,
2009 as CRFN
                                  
(said Agreement of Sublease (NYT-2), as so assigned and as amended hereby, the “NYTC-2
Sublease”);

 

WHEREAS,
simultaneously herewith the Unit Owners (as defined in the Condominium
Declaration) are executing a Fourth Amendment to Declaration of Leasehold
Condominium to reflect (i) some minor adjustments, corrections and
modifications with respect to the percentage interest in the Common Elements
allocated to the Units; and (ii) the combination of Units 1-E (tax lot
1007) and 1-A (tax lot 1003) into one unit to be known as Unit 1-A (tax lot
1003); and

 

3

 

WHEREAS,
Landlord and Tenant desire to amend the NYTC-2 Sublease for the purposes
hereinafter set forth.

 

NOW, THEREFORE,
in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

 

1.     Definitions.  All capitalized terms used herein without
definition shall have the meanings ascribed to them in the NYTC Sublease.

 

2.     Legal Description.   “Exhibit A” to the Third
Amendment is hereby deleted and replaced in its entirety by the document
attached hereto as Exhibit A. 
All references to “Exhibit A” in the First Amendment, Second
Amendment and Third Amendment shall be deemed to refer to the document attached
hereto as Exhibit A.

 

3.     Recording.  Landlord and Tenant agree that Tenant shall
cause this Amendment to be recorded and that Tenant shall pay any transfer or
similar taxes that may be payable as a result of this Amendment.

 

4.     No Other Amendments.  As modified by this Amendment, the NYTC-2
Sublease remains in full force and effect.

 

[the remainder of this page is
intentionally blank]

 

4

 

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

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  42ND ST.
  DEVELOPMENT PROJECT, INC., as Landlord

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Naresh Kapadia

  
	
   

  	
   

  	
  Name: Naresh Kapadia

  
	
   

  	
   

  	
  Title: Assistant VP,
  Planning and Design

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  NYT BUILDING LEASING
  COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth A. Richieri

  
	
   

  	
   

  	
  Name: Kenneth A. Richieri

  
	
   

  	
   

  	
  Title: Manager

  

 

5

 

ACKNOWLEDGMENTS

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  	
   

  

 

On the
     day of
             in the
year 2009, before me, the undersigned, a Notary Public in and for said State,
personally appeared
                            ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that _he executed the same in h_ capacity, and that by h__
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  Commission
  Expires

  

 

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  	
   

  

 

On the
     day of
             in the
year 2009, before me, the undersigned, a Notary Public in and for said State,
personally appeared                             ,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that _he executed the same in h_ capacity, and that by h__
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  Commission
  Expires

  

 

6

 

EXHIBIT A

 

LEGAL
DESCRIPTION

 

The Condominium Units (in the Building located at and known as THE NEW YORK TIMES BUILDING
CONDOMINIUM and by Street Number 620-628 8TH AVENUE, NEW YORK, NEW YORK),
designated and described as Units (SEE SCHEDULE ANNEXED) (hereinafter called
the “Units”) in the Declaration Establishing
a Plan of Leasehold Condominium Ownership of Premises made by The New York
Times Building LLC, as Declarant, under the Condominium Act of The State of New
York (Article 9-B of the Real Property Law of the State of New York),
dated as of August 4, 2006 and recorded August 15, 2006 in the Office
of the Register The City of New York (the “Register”), as
CRFN 2006000460293, as amended by First Amendment to Declaration dated January 29,
2007 and recorded as CRFN 2007000075106, and Second Amendment to Declaration
dated October 11, 2007 and recorded as CRFN 2008000008734, and Third
Amendment to Declaration dated March 6, 2009 and recorded as CRFN
                    ,
and Fourth Amendment to Declaration dated March 6, 2009 to be recorded
with the Register (which Declaration, and any further amendments thereto, are
hereinafter collectively called the “Declaration”),
establishing a plan for leasehold condominium ownership of said Building and
the land upon which the same is erected (hereinafter sometimes collectively
called the “Property”) and also designated and
described as Tax Lots No. (SEE SCHEDULE ANNEXED), Block 1012 Section 4,
Borough of MANHATTAN on the Tax Map of the Real Property Assessment Department
of the City of New York and on the floor plans of said Building certified by
Daniel Kaplan, approved by the Real Property Assessment Bureau on August 13,
2006 and filed as Condominium Plan No. 1595 on August 15, 2006 in the
aforesaid Register’s Office.

 

The land upon which the Building containing
the Units is erected as follows:

 

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

 

BEGINNING at the corner formed by the
intersection of the northerly line of West 40th Street with the easterly line
of 8th Avenue,

 

RUNNING THENCE northerly along said easterly
line of 8th Avenue, 197 feet 6 inches to the corner formed by the intersection
of the easterly side of 8th Avenue with the southerly line of West 41st Street;

 

THENCE easterly along said southerly line of
West 41st Street, 400 feet;

 

THENCE southerly and parallel to said
easterly line of 8th Avenue, 197 feet 6 inches to the northerly line of West
40th Street;

 

THENCE westerly along said northerly line of
West 40th Street, 400 feet to the point or place of BEGINNING,

 

 

TOGETHER with an undivided percentage
interest (SEE SCHEDULE ANNEXED) in the Common Elements and the NYTC Limited
Common Elements (as such terms are defined in the Declaration) of the New York
Times Building Condominium, recorded as CRFN 2006000460293 as amended.

 

8

 

SCHEDULE
OF UNITS

 

	
  UNIT DESIGNATION

  	
   

  	
  TAX LOT

  	
   

  	
  PERCENTAGE INTEREST

  IN COMMON ELEMENTS

  	
   

  
	
  21-A

  	
   

  	
  1028

  	
   

  	
  1.7819

  	
  %

  
	
  22-A

  	
   

  	
  1029

  	
   

  	
  1.7819

  	
  %

  
	
  23-A

  	
   

  	
  1030

  	
   

  	
  1.7819

  	
  %

  
	
  24-A

  	
   

  	
  1031

  	
   

  	
  1.7819

  	
  %

  
	
  25-A

  	
   

  	
  1032

  	
   

  	
  1.7819

  	
  %

  
	
  26-A

  	
   

  	
  1033

  	
   

  	
  1.7819

  	
  %

  
	
  27-A

  	
   

  	
  1034

  	
   

  	
  1.7819

  	
  %

  

 

9

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