Document:

MINERALS TECHNOLOGIES INC

EXHIBIT 10.16

 

 

 

MINERALS TECHNOLOGIES INC.

 

                      

                      

                     NOTE PURCHASE AGREEMENT

 

 

Dated as of July 24, 1996

 

 

 

          $50,000,000 7.49% Guaranteed Senior Notes 

Due July 24, 2006

           

           

           

           

                                         

 

 

 

	 	
TABLE OF CONTENTS
	 
	 	 	
PAGE

	 	 	 
	
1.  
	
PURCHASE AND SALE OF NOTES 
	
1

	
     
	 	
1.1  Issue of Notes 
	
1

	
  
	 	
1.2  The Closing
	
2

	
  
	 	
1.3  Representations of the Purchaser 
	
3

	
     
	 	
1.4  Failure To Deliver, Failure of Conditions 
	
4

	
   
	 	
1.5  Expenses 
	
4

	 	 	 	 
	
2.  
	
REPRESENTATIONS AND WARRANTIES 
	
5

	
   
	 	
2.1  Nature of Business                 
	
5

	
   
	 	
2.2  Financial Statements; Debt; Material Adverse Change
	
6

	
     
	 	 	 
	
   
	 	
2.3  Subsidiaries and Affiliates 
	
6

	
  
	 	
2.4  Pending Litigation 
	
7

	
  
	 	
2.5  Properties; Insurance  
	
8

	
    
	 	
2.6  Patents, Trademarks, Licenses, etc.  
	
8

	
  
	 	
2.7  Taxes    
	
8

	
  
	 	
2.8  Full Disclosure   
	
9

	
   
	 	
2.9  Corporate Organization and Authority  
	
9

	
  
	 	
2.10 Restrictions on the Company, Guarantors and Subsidiaries 

        of the Company
	

10

	
 
	 	
2.11 Compliance with Law       
	
11

	
    
	 	
2.12 ERISA              
	
11

	
  
	 	
2.13 Certain Laws                
	
14

	
 
	 	
2.14 Environmental Compliance      
	
15

	
  
	 	
2.15 Sale is Legal and Authorized; Obligations are Enforceable
	
16

	
  
	 	
2.16 Governmental Consent         
	
17

	
  
	 	
2.17 Private Offering              
	
17

	
  
	 	
2.18 No Defaults    
	
18

	
  
	 	
2.19 Use of Proceeds 
	
18

	
 
	 	
2.20 Relationship of Company, Subsidiaries and Guarantors
	
19

	 	 	 	 
	
3. 
	
CLOSING CONDITIONS 
	
19

	
   
	 	
3.1  Opinions of Counsel             
	
19

	
  
	 	
3.2  Representations and Warranties True; No Prohibited Action
	
20

	
  
	 	
3.3  Officers' Certificates 
	
20

	
  
	 	
3.4  Legality 
	
21

	
   
	 	
3.5  Private Placement Number       
	
21

	
 
	 	
3.6  Expenses         
	
21

	
  
	 	
3.7  Proceedings Satisfactory      
	
21

i

	
   
	 	
3.8  Compliance with this Agreement        
	
22

	
 
	 	
3.9  No Dissolution, Merger or Change in Control  
	
22

	 	 	 	 
	
4. 
	
SPECIAL RIGHTS OF INSTITUTIONS 
	
22

	
  
	 	
4.1  Direct Payment   
	
22

	
  
	 	
4.2  Delivery Expenses       
	
23

	
  
	 	
4.3  Issue Taxes        
	
23

	 	 	 	 
	
5. 
	
PREPAYMENTS   
	
24

	
  
	 	
5.1  Offer to Prepay upon Change in Control     
	
24

	
 
	 	
5.2  Optional Prepayments    
	
25

	
  
	 	
5.3  Notice of Optional Prepayment    
	
25

	
  
	
 
	
5.4  Partial Prepayment Pro Rata 
	
26

	
   
	 	
5.5  Notation of Notes on Prepayment 
	
27

	
   
	 	
5.6  No Other Optional Prepayments 
	
27

	 	 	 	 
	
6. 
	
REGISTRATION; SUBSTITUTION OF NOTES 
	
28

	
  
	 	
6.1  Registration of Notes      
	
28

	
  
	 	
6.2  Exchange of Notes 
	
28

	
    
	 	
6.3  Replacement of Notes 
	
29

	
   
	 	
6.4  Guarantors' Responsibility in respect of New Notes
	
29

	 	 	 
	
7. 
	
COMPANY BUSINESS COVENANTS  
	
29

	
   
	 	
7.1  Payment of Taxes and Claims       
	
29

	
  
	 	
7.2  Maintenance of Properties and Corporate Existence
	
30

	
   
	 	
7.3  Payment of Notes and Maintenance of Office 
	
31

	
   
	 	
7.4  Merger; Acquisition; Sale of Assets     
	
31

	
   
	 	
7.5  Restricted Payments and Restricted Investments
	
34

	
  
	 	
7.6  Subsidiary Debt 
	
35

	
 
	 	
7.7  Consolidated Funded Debt to Consolidated Total 

       Capitalization
	
35

	
   
	 	
7.8  Consolidated Net Worth         
	
36

	
  
	 	
7.9  Liens       
	
36

	
  
	 	
7.10 ERISA      
	
40

	
 
	 	
7.11 Transactions with Affiliates     
	
41

	
   
	 	
7.12 Pro-Rata Offers       
	
42

	
   
	 	
7.13 Private Offering 
	
42

	
  
	 	
7.14 Environmental Compliance 
	
42

	
   
	 	
7.15 Sales of Subsidiary Stock 
	
43

	
   
	 	
7.16 Pari Passu Ranking of Notes 
	
45

	 	 	 

ii

	
8.  
	
INFORMATION AS TO COMPANY 
	
45

	
  
	 	
8.1  Financial and Business Information    
	
45

	
  
	 	
8.2  Officers' Certificates        
	
50

	
 
	 	
8.3  Accountants' Certificates    
	
50

	
   
	 	
8.4  Inspection 
	
51

	
   
	 	
8.5  Report to NAIC 
	
51

	 	 	 	 
	
9. 
	
EVENTS OF DEFAULT 
	
51

	
   
	 	
9.1  Nature of Events   
	
51

	
  
	 	
9.2  Default Remedies          
	
54

	
   
	 	
9.3  Annulment of Acceleration of Notes    
	
57

	
 
	 	
9.4  Application of Acceleration Payments    
	
57

	 	 	 	 
	
10. 
	
GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS OF GUARANTORS
	

58

	
  
	 	
10.1  Guaranteed Obligations            
	
58

	
  
	 	
10.2  Performance by Guarantors      
	
59

	
  
	 	
10.3  Waivers; Subrogation; Offsets     
	
59

	
   
	 	
10.4  Releases                
	
60

	
  
	 	
10.5  Marshaling; Revival of Obligations    
	
61

	
   
	 	
10.6  Subordination          
	
62

	
  
	 	
10.7  No Election               
	
62

	
  
	 	
10.8  Severability            
	
63

	
  
	 	
10.9  Other Enforcement Rights     
	
63

	
    
	 	
10.10 Delay or Omission; No Waiver              
	
63

	
  
	 	
10.11 Restoration of Rights and Remedies    
	
64

	
   
	 	
10.12 Cumulative Remedies             
	
64

	
  
	 	
10.13 Miscellaneous             
	
64

	
   
	 	
10.14 Continuing Guaranty                
	
65

	
  
	 	
10.15 Inspection               
	
65

	
   
	 	
10.16 Maintenance of Properties and Corporate Existence
	
66

	
   
	 	
10.17 Merger; Acquisition           
	
66

	
   
	 	
10.18 Pro-Rata Offers               
	
67

	
  
	 	
10.19 Private Offering              
	
67

	
   
	 	
10.20 Pari Passu Ranking of Guaranty
	
67

	 	 	 
	
11.
	
INTERPRETATION OF THIS AGREEMENT 
	
68

	
    
	 	
11.1 Terms Defined                 
	
68

	
  
	 	
11.2 Directly or Indirectly            
	
88

	
   
	 	
11.3 Section Headings; Table of Contents; Construction
	
88

	
  
	 	
11.4 Governing Law          
	
88

	 	 	 

iii

	
12. 
	
MISCELLANEOUS  
	
88

	
   
	 	
12.1 Communications   
	
88

	
  
	 	
12.2 Reproduction of Documents           
	
90

	
  
	 	
12.3 Survival               
	
90

	
   
	 	
12.4 Successors and Assigns        
	
91

	
  
	 	
12.5 Amendment and Waiver            
	
91

	
   
	 	
12.6 Payments, When Received           
	
93

	
  
	 	
12.7 Entire Agreement 
	
94

	
  
	 	
12.8 Duplicate Originals, Execution in Counterpart
	
94

	
   
	 	
12.9 Confidentiality 
	
94

iv

 

 

MINERALS TECHNOLOGIES INC.

 

                     NOTE PURCHASE AGREEMENT

 

          $50,000,000 7.49% GUARANTEED SENIOR NOTES 

DUE JULY 24, 2006

                                        Dated as of July 24, 1996

 

 

Metropolitan Life Insurance Company

One Madison Avenue

New York, New York 10010

 

Ladies and Gentlemen:

             Each of MINERALS TECHNOLOGIES INC. (together with its successors and assigns, the "Company"), a Delaware corporation, and SPECIALTY MINERALS INC., a Delaware corporation, MINTEQ INTERNATIONAL INC., a Delaware corporation and BARRETTS MINERALS INC., a Delaware corporation (the last three together with their respective successors and assigns, being referred to collectively herein as the "Guarantors" and individually as a "Guarantor"), hereby agrees with you as follows:

1.   PURCHASE AND SALE OF NOTES

              1.1  Issue of Notes.

     The Company has authorized the issuance of Fifty Million Dollars ($50,000,000) in aggregate principal amount of its seven and forty-nine one-hundredths percent (7.49%) Guaranteed Senior Notes due July 24, 2006(the "Notes").  Each Note shall:

              (a)  bear interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof from the date of such Note at the rate of
 

      

 

seven and forty-nine one-hundredths percent (7.49%) per annum, payable semi-annually on the 24th day of each July and the 24th day of each January in each year commencing on January 24, 1997,until the principal amount thereof shall be due and payable, and

              (b)  bear interest, payable on demand, on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate equal to the lesser of

                           (i)  the highest rate allowed by applicable law or

                           (ii) eight and forty-nine one-hundredths percent          (8.49%) per annum,

              (c)  mature on July 24, 2006 and

              (d)  otherwise be in the form of the Note set out in Exhibit          A hereto.

              1.2  The Closing.

                        (a)  Purchase and Sale of Notes.  The Company hereby agrees to sell to you and you hereby agree to purchase from the Company, on the Closing Date, in accordance with the provisions hereof, the principal amount of Notes set forth opposite your name on Annex 1.2 hereto (in the amount or amounts set forth therein) at one hundred percent (100%) of the principal amount thereof.

                        (b)  The Closing.  The closing (the "Closing") of the Company's sale of Notes shall be held on July 24, 1996 (the "Closing Date"), at 10:00 a.m., at the offices of Skadden, Arps,Slate, Meagher & Flom, your special counsel, or at such other time and place as you and the Company shall agree in writing.  At the Closing, the Company shall deliver to you one or more Notes(as set forth opposite your name on Annex 1.2 hereto), in the denominations indicated on Annex 1.2 hereto, in the aggregate principal amount of your purchase, dated the Closing Date and payable to you or payable as indicated on Annex 1.2 hereto, against payment by federal funds wire transfer in immediately available funds of the purchase price

                              2

thereof, as directed by the Company on Annex 1.2 hereto.

              1.3  Representations of the Purchaser.

              (a)  Purchase Other Than For Resale.  You represent to the Company that you are purchasing the Notes listed on Annex 1.2 hereto opposite your name for your own account or for the account of one or more separate accounts maintained by you, with no present intention of distributing the Notes or any part thereof, but without prejudice to your right at all times to

              (i)  sell or otherwise dispose of all or any part of the Notes in a transaction which complies with theregistration requirements, if any, of the Securities Act,     or in a transaction exempt from the registrationrequirements of the Securities Act, and

              (ii) have control over the disposition of all of your assets and sell or otherwise dispose of assets to the     fullest extent required by any applicable insurance law.

It is understood that, in making the representations set out in Section 2.16 and Section 2.17 hereof, the Company is relying, to the extent applicable, upon your representation as aforesaid.

          (b)  ERISA.  You further represent (and each subsequent transferee, by acceptance of a replacement Note, shall be deemed to represent) that either

         (i)  you are acquiring the Notes for your own account with your general corporate assets and that no part of such     assets constitutes assets of an "employee benefit plan" (as     defined in this Section 1.3(b)) or a "plan" (as defined in     this Section 1.3(b)), or

              (ii) you are acquiring the Notes for your own account with general corporate assets and the purchase will be     exempt under the provisions of the Department of Labor     Prohibited Transaction Class Exemption 95-60, issued July     12, 1995 (60 FR 35925).

 

3

 

     As used in this Section 1.3(b), the term "employee benefit plan" has the meaning specified in section 3(3) of ERISA, and the term "plan" has the meaning specified in section 4975(e)(1) of the IRC.

              1.4  Failure To Deliver, Failure of Conditions.

             If at the Closing the Company fails to tender to you the Notes to be purchased by you thereat, or if the conditions specified in Section 3 hereof to be fulfilled prior to or at such Closing have not been fulfilled, you may thereupon elect to be relieved of all further obligations hereunder.  Nothing in this Section 1.4 shall operate to relieve the Company or any of the Guarantors from any of their obligations hereunder or to waive any of your rights against the Company or the Guarantors.

              1.5  Expenses.

                        (a)  Generally.  Whether or not the Notes are sold,          the Company shall promptly (and in any event within          thirty (30) days of receiving any statement or invoice          therefor) pay all fees, expenses and costs relating          hereto, including but not limited to:

                                     (i)   the cost of reproducing this Agreement and               the Notes;

  

                   (ii)  the reasonable fees and disbursements of               your special counsel in an amount not to exceed               $25,000;

                   (iii) the cost of delivering to your home office               or custodian bank, insured to your satisfaction,               the Notes purchased by you at the Closing;

                   (iv)  the fees, expenses, costs and disbursements               incurred complying with each of the conditions to               closing set forth in Section 3 hereof without               duplication of any fees or disbursements included               in Section 1.5(a)(ii) above; and
 

                   (v)   the fees, expenses, costs and disbursements               relating to the consideration, negotiation,               preparation or execution of any amendments,

  

 

4

 

  
               waivers or consents requested by the Company               or occasioned by the occurrence of a Default               or Event of Default pursuant to the provisions               hereof (including, without limitation, the               reasonable fees and disbursements of your special               counsel and the allocated cost of your counsel who               are your employees or your affiliates' employees),               whether or not any such amendments, waivers or               consents are executed.

  

                                  (b)  Counsel.
  Without limiting the generality of     the foregoing, it is agreed and understood that the Company     will pay, at the Closing, the reasonable fees and disbursements of your special counsel, in an amount not to     exceed $25,000, pursuant to an estimate thereof presented at     least three days prior to such Closing, and the Company will     also pay upon receipt of any statement thereof, any     additional reasonable fees and additional disbursements of     your special counsel pursuant to a statement thereof     rendered after the Closing.

                                  (c)  Survival.  The obligations of the Company     under this Section 1.5 (and the Guarantors under Section 10     hereof in respect of this Section 1.5) shall survive the
payment or prepayment of the Notes and the termination hereof.

2.   REPRESENTATIONS AND WARRANTIES

             To induce you to enter into this Agreement and to purchase the Notes designated to be purchased by you on Annex 1.2, the Company and the Guarantors jointly and severally warrant and represent, as of the date hereof, as follows:

              2.1  Nature of Business.

             The Company has delivered to you complete and correct copies of its annual report on Form 10-K for the fiscal year ended December 31, 1994 and 1995  (the "Forms 10-K").  The Forms 10-K correctly describe the general nature of the business and principal Properties of the Company, such Guarantors and the Subsidiaries of the Company as of their respective dates.

 

5

 

              2.2  Financial Statements; Debt; Material Adverse Change.

                        (a)  Financial Statements.  The Consolidated Balance     Sheet of the Company and Subsidiary Companies as of December     31, 1995 and 1994, and the related Consolidated Statements     of Income, Shareholders' Equity and Cash Flows for each of     the years in the three-year period ended December 31, 1995,     all accompanied by the opinion thereon by KPMG Peat Marwick,     independent certified public accountants, have been delivered to you, were prepared in accordance with generally     accepted accounting principles consistently applied, and     present fairly, in all material respects, the consolidated     financial position of the Company and its Subsidiary     Companies as of such dates and the results of their     operations and their cash flows for such periods.  All such     financial statements include the accounts of the Company,     the Guarantors and all Subsidiaries of the Company for the     respective periods during which a subsidiary relationship     has existed.

                        (b)  Neither the Company nor any Guarantors nor any     Subsidiary is liable for the repayment of any Debt other     than the Debt listed on Annex 2.2 as being outstanding on     the date hereof nor in an amount, as to any item or class     of Debt in excess of the amount set forth in Annex 2.2.

                        (c)  Material Adverse Change.  Since December 31, 1995,     there has been no change in the business, prospects,     profits, Properties or condition (financial or otherwise) of     the Company, any of the Guarantors or any of their     respective Subsidiaries except changes in the ordinary     course of business that, individually and in the aggregate,     have not had a Material Adverse Effect; on the date hereof     the fair saleable value of the assets of the Company exceeds     its liabilities and the Company is meeting current     obligations as they mature in the ordinary course of     business.

              2.3  Subsidiaries and Affiliates.

             Annex 2.3 hereto completely and accurately states,

 

6

 

                       (a)  the name of each of the Subsidiaries of the     Company, its jurisdiction of incorporation and the     percentage of its Voting Stock owned by the Company     and/or each of the other Subsidiaries of the Company,     and
 

                       (b)  the name of each of the Affiliates that are corporations, partnerships or joint ventures (other than Subsidiaries of the Company), the percentage of its Voting Stock     or other voting Securities owned by the Company, such     Guarantors and/or the other Subsidiaries of the Company, if     any, and the nature of the affiliation.

             Each of the Company and the Subsidiaries of the Company has good and marketable title to (i) all of the shares it purports to own of the Capital Stock of each of their respective Subsidiaries, free and clear in each case of any Lien, and (ii) the Securities of any Affiliate it purports to own, free and clear in each case of any Lien.  Except as set forth in Annex 2.3, all such shares and/or Securities have been duly issued and are fully paid and non-assessable.  Except as set forth in Annex 2.3, fair saleable value of the assets of each Subsidiary exceeds its liabilities and each Subsidiary is meeting current liabilities as they mature in the ordinary course of business.

              2.4  Pending Litigation.

             There are no proceedings, actions or investigations pending or, to the knowledge of the Company or any of the Guarantors, threatened against or affecting the Company, any Guarantor or any of the Subsidiaries of the Company in any court or before any Governmental Authority or arbitration board or tribunal that, individually or in the aggregate, could have a Material Adverse Effect and the Company has no knowledge of any basis for any of the foregoing.  Neither the Company, any Guarantor nor any of the Subsidiaries of the Company is in default with respect to any judgment, order, writ, injunction, or decree of any court, Governmental Authority or arbitration board or tribunal that, individually or in the aggregate, could have a Material Adverse Effect.

 

7

 

              2.5  Properties; Insurance.

             Individually or collectively, each of the Company, the Guarantors and the Subsidiaries of the Company has good and marketable title in fee simple to all real Property, and good title to all of the other Property which is material to the business or operations of the Company and its Subsidiaries, reflected in the most recent audited balance sheet referred to in Section 2.2 hereof or purported to have been acquired since that date (except as sold or otherwise disposed of in the ordinary course of business), free from Liens not otherwise permitted by Section 7.9 hereof.

             The Company, each Guarantor and each Subsidiary maintains or causes to be maintained with financially sound and reputable insurers, insurance with respect to its Property and business against such casualties and contingencies, of such types including, without limitation, insurance with respect to losses arising out of Property loss or damage, public liability, workers' compensation, business interruption, larceny, embezzlement or other criminal misappropriation) and in such amounts as is customary in the case of corporations of established reputation engaged in the same or a similar business and similarly situated.

              2.6  Patents, Trademarks, Licenses, etc.

             Each of the Company and the Subsidiaries of the Company, owns, possesses or has the unrestricted right to use all of the patents, trademarks, service marks, trade names, copyrights, licenses, and rights with respect thereto, necessary for the conduct of its business as presently conducted or presently proposed to be conducted, without any known conflict with the rights of others.

              2.7  Taxes.

                        (a)  Returns Filed; Taxes Paid.  All tax returns     required to be filed by each of the Company, each Guarantor     and each of the Subsidiaries of the Company or any other     Person insofar as such Person is a Person with which the     Company, any Guarantor or any such Subsidiary files or has     filed a consolidated return in any jurisdiction have in fact     been filed on a timely basis, and all taxes, assessments,

 

8

 

     fees and other governmental charges upon each of the     Company, each Guarantor, each such Subsidiary and any such     Person, and upon any of their respective Properties, income     or franchises, that are due and payable (i) have been paid     or (ii) are being contested in good faith through     appropriate proceedings and no judgment has been entered or     lien filed in respect thereof.  Neither the Company nor any     Guarantor knows of any material proposed additional tax     assessment against it or any such Person.
   

                        (b)  Book Provisions Adequate.  The amount of the     liability for taxes reflected in the consolidated balance     sheet of the Company as of December 31, 1995 referred to in     Section 2.2 hereof is an adequate provision for taxes     (including without limitation, any payment due pursuant to     any tax sharing agreement) as are or may become payable by     any one or more of the Company, the Guarantors and their     respective consolidated Subsidiaries in respect of all tax     periods ending on or prior to such date.

                   2.8  Full Disclosure.

             Except as set forth in Annex 2.8, the Company has timely filed all reports required to be filed by it pursuant to the Securities Exchange Act of 1934.  Such reports and the financial statements referred to in Section 2.2 hereof do not, nor does this Agreement or any written statement furnished by or on behalf of the Company or the Guarantors to you in connection with the negotiation of the sale of the Notes, contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading. There is no fact that the Company or any Guarantor has not disclosed to you in writing that has had or, so far as the Company or such Guarantors can now reasonably foresee, will have a Material Adverse Effect.

                2.9  Corporate Organization and Authority.

         Each of the Company, the Guarantors and the Subsidiaries of the Company,

 

9

 

                       (a)  is a corporation duly incorporated, validly     existing and in good standing under the laws of its     jurisdiction of incorporation,

                       (b)  has all legal and corporate power and authority to     own and operate its Properties and to carry on its business     as now conducted and as presently proposed to be conducted,

                       (c)  has all licenses, certificates, permits,     franchises and other governmental authorizations necessary     to own and operate its Properties and to carry on its     business as now conducted and as presently proposed to be     conducted, except where the failure to have such licenses,     certificates, permits, franchises and other governmental     authorizations, individually or in the aggregate, would not     have a Material Adverse Effect, and

                       (d)  has duly qualified or has been duly licensed, and     is authorized to do business and is in good standing, as a     foreign corporation, in each state where such qualification,     licensing and authorization is required by law, except where     the failure to be so qualified, licensed or authorized,     individually or in the aggregate, would not have a Material     Adverse Effect.

              2.10 Restrictions on the Company, Guarantors and Subsidiaries of the Company.

             Neither the Company, any Guarantor nor any of the Subsidiaries of the Company:

                       (a)  is a party to any contract or agreement, or     subject to any charter or other corporate restriction that     could have a Material Adverse Effect,

                       (b)  is a party to any contract or agreement, other     than this Agreement and the agreements listed on Annex 2.10     hereto, that restricts the right or ability of such     corporation to incur Debt, and no contract or agreement to     which the Company or any of its Subsidiaries is a party is     violated by the issuance of the Notes by the Company or the     execution and delivery of, or compliance with, this     Agreement by the Company and the Guarantors, or

           

     

                              10

 

                       (c)  has agreed or consented to cause or permit in the     future (upon the happening of a contingency or otherwise)     any of its Property, whether now owned or hereafter     acquired, to be subject to a Lien not permitted by Section     7.9 hereof.

              2.11 Compliance with Law.

             Neither the Company, any Guarantor nor any of the Subsidiaries of the Company is in violation of any law, ordinance, governmental rule or regulation to which it is subject, which violations, individually or in the aggregate, could have a Material Adverse Effect.

              2.12 ERISA.

                          (a)  Relationship of Vested Benefits to Pension Plan     Assets.  Except as described in Annex 2.12,

     

  
                                 (i)  the present value of all benefits, determined     as of the most recent valuation date for such benefits as     provided in Section 7.10 hereof, vested under each Pension     Plan does not exceed the value of the assets of such Pension     Plan allocable to such vested benefits, determined as of     such date as provided in Section 7.10 hereof, and               (ii) no Welfare Plan provides benefits, including     without limitation death or medical benefits (whether or not     insured), with respect to current or former employees after     retirement or other termination of service (other than     (i) coverage mandated by applicable law, (ii) death benefits     or retirement benefits under any "employee pension plan," as     that term is defined in section 3 of ERISA, (iii) benefits     accrued as liabilities on the books of the Company or any     ERISA Affiliate, or (iv)benefits, the full cost of which is     borne by the current or former employee (or such employee's     beneficiary).

  

              (b)  ERISA Requirements.  Each of the Company, the     Guarantors and the ERISA Affiliates

 

11

 

  
                                 (i)   has fulfilled all obligations under the          minimum funding standards of ERISA and the IRC with          respect to each Pension Plan,
 

                                 (ii)  has satisfied all of its respective obligations under the minimum funding standards of ERISA          and the IRC in respect of, and all of its other          respective contribution obligations provided for in,          each Multiemployer Plan,
 

                                 (iii) is in compliance in all material respects          with all other applicable provisions of ERISA and the          IRC with respect to each Pension Plan, Welfare Plan and          each Multiemployer Plan, and               (iv)  has not incurred any liability under Title          IV of ERISA to the PBGC (other than in respect of          required insurance premiums, all of which that are due          having been paid), with respect to any Pension Plan,          any Multiemployer Plan or any trust established          thereunder.

  

     No Pension Plan, or trust created thereunder, has incurred     any "accumulated funding deficiency" (as such term is     defined in section 302 of ERISA), whether or not waived, as     of the last day of the most recently ended plan year of such     Pension Plan.

              (c)  Prohibited Transactions.

                   (i)  The purchase of the Notes by you will not          constitute a "prohibited transaction" (as such term is          defined in section 406 of ERISA or section 4975 of the          IRC)that could subject any Person to the penalty or tax          on prohibited transactions imposed by section 502 of          ERISA or section 4975 of the IRC, and neither the          Company, nor any Guarantor nor any ERISA Affiliate, nor          any "employee benefit plan" (as such term is defined in          this Section 2.12(c)) of the Company, any Guarantor or          any ERISA Affiliate or any trust created thereunder or          any trustee or administrator thereof, has engaged in          any "prohibited transaction" that could subject any          such Person, or any other party dealing with such          employee benefit plan or trust, to any
 

 

12

 

          material penalty or tax.  The representation by the          Company and the Guarantors in the preceding sentence is          made in reliance upon and subject to the accuracy of          the representations in Section 1.3(b) hereof as to the          source of funds used by you.

                                 (ii) Annex 2.12 hereto completely lists, as of the          Closing Date, all ERISA Affiliates and all employee          benefit plans, other than those which are of the type          described in   Section 4(b)(4) of ERISA, with respect          to which the Company, any Guarantor or any "affiliate"          of either (as such term is defined in this Section          2.12(c)) is a "party-in-interest" (as such term is          defined in this Section 2.12(c)) or in respect of which          the Notes could constitute an "employer security" (as          such term is defined in this Section 2.12(c)).

     As used in this Section, the terms "employee benefit plan" and "party-in-interest" have the meanings specified in section 3 of ERISA and "affiliate" and "employer security"  have the meanings specified in section 407(d) of ERISA.

                        (d)  Reportable Events.  No Pension Plan or trust     created thereunder has been terminated, and there have been     no "reportable events" (as such term is defined in section     4043 of ERISA), with respect to any Pension Plan or trust     created thereunder, which reportable event or events will or     could result in the termination of such Pension Plan or give     rise to a liability of the Company, any Guarantor or any     ERISA Affiliate in respect thereof.

                        (e)  Multiemployer Plans.  Neither the Company nor any     Guarantor nor any ERISA Affiliate is, or has ever been, an     employer required to contribute to any Multiemployer Plan.

     

                        (f)  Multiple Employer Pension Plans.  Except as set     forth in Annex 2.12 to this Agreement, neither the Company     nor any Guarantor nor any ERISA Affiliate is a "contributing     sponsor" (as such term is defined in section 4001 of ERISA)     in any Multiple Employer Pension Plan and neither the     Company nor any Guarantor nor any ERISA Affiliate has incurred
 

 

13

 

    (without fully satisfying the same), or reasonably expects to incur,
withdrawal liability in respect of any such Multiple     Employer Pension Plan listed in Annex 2.12 to this     Agreement, which withdrawal liability could have a Material     Adverse Effect.

                        (g)  Foreign Pension Plan.  Except as set forth in     Annex 2.12 hereof, the present value of all benefits vested     under each Japanese Foreign Pension Plan and each other     material Foreign Pension Plan, determined as of the most     recent valuation date in respect thereof does not exceed the     value of the assets of such Foreign Pension Plan, and all     required payments in respect of funding such Foreign Pension     Plan have been made.

              2.13 Certain Laws.

                            (a)  Investment Company Act.  Neither the Company nor     any Guarantor nor any of the Subsidiaries of the Company     is, or is directly or indirectly controlled by, or acting on     behalf of any Person which is, an "investment company"     within the meaning of the Investment Company Act of 1940, as     amended.

                            (b)
Holding Company Status.  Neither the Company nor     any Guarantor nor any of the Subsidiaries of the Company is     a "holding company" or an "affiliate" of a "holding     company," or a "subsidiary company" of a "holding company,"     or a "public utility" within the meaning of the Public     Utility Holding Company Act of 1935, as amended.

                            (c)  Absence of Foreign or Enemy Status.  Neither the     Company nor any Guarantor nor any Subsidiary of the Company     is an "enemy" or an "ally of the enemy" within the meaning     of section 2 of the Trading with the Enemy Act (50 U.S.C.     App. Sections 1 et seq.), as amended.  Neither the Company     nor any Guarantor nor any Subsidiary of the Company is in     violation of, and neither the issue and sale of the Notes by     the Company nor its use of the proceeds thereof as     contemplated by this Agreement, will violate, the Trading     with the Enemy Act, as amended, or any executive orders,     proclamations or regulations issued pursuant thereto,     including, without limitation, regulations administered by     the Office of Foreign Asset Control
 

           

14

 

     of the Department of the Treasury (31 C.F.R., Subtitle B,     Chapter V).

              2.14 Environmental Compliance.

             Except as set forth in Annex 2.14 hereto:

                        (a)  Compliance -- each of the Company, the Guarantors     and the Subsidiaries of the Company is in compliance with     all Environmental Protection Laws in effect in each     jurisdiction where each is presently doing business, and in     which the failure so to comply could be reasonably expected     to have a Material Adverse Effect.

     

                        (b)  Liability -- neither the Company nor any Guarantor     nor any of the Subsidiaries of the Company is subject to any     liability under any Environmental Protection Laws that,     individually or in the aggregate, could be reasonably     expected to have a Material Adverse Effect; and

     

                    (c)  Notices -- neither the Company nor any Guarantor     nor any of the Subsidiaries of the Company has received any

     

  
                                 (i)  notice from any Governmental Authority by          which any real Property presently or previously owned          or leased by it has been designated, listed, or identified in any manner by any Governmental Authority          charged with administering or enforcing any          Environmental Protection Law as a Hazardous Substance          disposal or removal site, "Super Fund" clean-up site,          or candidate for removal or closure pursuant to any          Environmental Protection Law,
 

                                 (ii) notice of any Lien arising under or in          connection with any Environmental Protection Law that          has attached to any revenues of, or to, any of its          owned or leased real Properties, or
 

                                 (iii) summons, citation, notice, directive,               letter, or other communication, written or oral,               from any Governmental Authority concerning any               intentional or unintentional action

  

 

15

 

  
               or omission by the Company, any Guarantor or any               Subsidiary in connection with its ownership or               leasing of any real Property and involving the               releasing, spilling, leaking, pumping, pouring,               emitting, emptying, dumping, or other use, storage               or disposition of any Hazardous Substance               resulting in violation of any Environmental               Protection Law, if the effect thereof could be               reasonably expected to have a Material Adverse               Effect.

  

              2.15 Sale is Legal and Authorized; Obligations are Enforceable.

                        (a)  Sale is Legal and Authorized.  Each of the     issuance, sale and delivery of the Notes by the Company, the     issuance, execution and delivery of the Guaranty of each     Guarantor herein and in the Notes, the execution and     delivery of this Agreement by the Company and the     Guarantors, the compliance by the Company and each Guarantor     with all of the provisions hereof and the compliance by the     Company and each Guarantor with all the provisions of the     Notes:

  
                   (i)  is within the corporate powers of each of the          Company and such Guarantors, as the case may be; and
 

                   (ii) is legal and does not conflict with, result          in any breach in any of the provisions of, constitute a          default under, or result in the creation of any Lien          upon any Property of the Company, any Guarantor or any          of the Subsidiaries of the Company under the provisions          of, any agreement, charter instrument, bylaw or other          instrument to which any of the Company, any Guarantor          or any such Subsidiary is a party or by which any of          the Company, the Guarantors or such Subsidiaries or any          of their respective Property, may be bound.

  

                        (b)   Obligations are Enforceable.  This Agreement has     been duly authorized by all necessary action on the part of     each of the Company and the Guarantors, has been executed     and delivered by duly authorized officers of each of the     Company and the Guarantors, and constitutes a legal, valid

 

16

 

     and binding obligation of the Company and of each Guarantor,     enforceable in accordance with its terms, and the Notes and     the Guaranty have been duly authorized by all necessary     action on the part of the Company and the Guarantors, as the     case may be, have been executed and delivered by duly     authorized officers of the Company, and constitute a legal,     valid and binding obligation of the Company, enforceable in     accordance with their terms, except, in each case, that the     enforceability of this Agreement and of the Notes may be:

     

  
                   (i)  limited by applicable bankruptcy,          reorganization, arrangement, insolvency, moratorium, or          other similar laws affecting the enforceability of          creditors' rights generally; and
 

  

                                     (ii) subject to the availability of equitable          remedies.

              2.16 Governmental Consent.

             Neither the legal nature of the Company, any Guarantor or any of the Subsidiaries of the Company, or of any of their respective businesses or Properties, nor any relationship between the Company, any Guarantor or any of the Subsidiaries of the Company and any other Person, nor any circumstance in connection with the offer, issue, sale or delivery of the Notes, the issuance, execution and delivery of the Guaranty of each Guarantor herein and in the Notes, and the execution and delivery of this Agreement, is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority on the part of the Company or any Guarantor as a condition to the execution and delivery of this Agreement or the offer, issue, sale or delivery of the Notes.

              2.17  Private Offering.

             Neither the Company nor any Guarantor has offered any of the Notes or the guaranties of any Guarantors or any similar Security of the Company or any Guarantor for sale to, or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any prospective purchaser, other than you.

 

17

 

              2.18 No Defaults.

                        (a)  The Notes.  No event has occurred and no condition     exists that, upon the execution and delivery of this     Agreement and the issuance and delivery of the Notes     pursuant hereto and the Guaranty of each Guarantor herein     and in the Notes, would constitute a Default or an Event of     Default.

                        (b)  Charter Instruments, Other Agreements.  Neither     the Company nor any Guarantor nor any of the Subsidiaries of     the Company is in violation in any respect of any term of     any charter instrument or bylaw and neither the Company nor     any Guarantor nor any such Subsidiary is in violation in any     material respect of any term in any material agreement or     other instrument to which it is a party or by which it or     any of its Property may be bound.  Except as set forth in     Annex 2.18, all agreements relating to the ownership or     operation of satellite precipitated calcium carbonate     facilities of the Company and its Subsidiaries (the "PCC     Agreements") are in full force and effect and no default by     the Company or any Subsidiary has occurred and is continuing     under any thereof.  Since October 30, 1992 neither the     Company nor any Subsidiary has requested or received any     material waiver or consent (other than consents delivered to     you in connection with the execution and delivery of this     Agreement) in respect of any PCC agreement or any agreement     pursuant to which any Debt of the Company or a Subsidiary     was issued.

              2.19 Use of Proceeds.

                        (a)  Use of Proceeds.  The Company shall apply the     proceeds from the sale of the Notes to refinance commercial     bank debt outstanding and the balance for capital     expenditures and for general corporate purposes of the     Company and the Guarantors.
 

                        (b)  Margin Securities.  None of the transactions     contemplated herein and in the Notes (including, without     limitation, the use of the proceeds from the sale of the     Notes) violates, will violate or will result in a violation     of section 7 of the Exchange Act, including, without     limitation, Regulations G, T, U and X of the Board of     Governors of the Federal Reserve System, 12 C.F.R.,

 

18

 

Chapter II.  Neither the Company nor any Guarantor nor any of the Subsidiaries of the Company owns, or with the proceeds of     the sale of the Notes intends to own, carry or purchase, or     refinance borrowings that were used to own, carry or     purchase, any Margin Security, including Margin Securities     originally issued by the Company, any Guarantor or any such     Subsidiary.  The obligations of the Guarantors under this     Agreement and their respective Guaranties and the Company     under this Agreement and the Notes are not and will not be     secured by any Margin Security, and no Notes are being sold     on the basis of any such collateral.

              2.20 Relationship of Company, Subsidiaries and Guarantors.

             The Guarantors acknowledge that they will receive a direct economic and financial benefit from the transactions contemplated by this Agreement, and such transactions are in the best interest of the Company, the Guarantors and the Subsidiaries of the Company.  In recognition and confirmation thereof, each Guarantor, by specific resolution of its Board of Directors, has caused itself to become obligated in the manner set forth in Section 10 hereof.  Neither the Company nor any of its Subsidiaries is bound or affected by any contract other than this Agreement which prohibits, or upon the occurrence of an event or the passage of time or both would prohibit the declaration or payment of dividends or the return of capital by a Subsidiary to the Company.

     3.   CLOSING CONDITIONS

             Your obligation to purchase and pay for the Notes to be delivered to you at the Closing is subject to the following conditions precedent:

              3.1  Opinions of Counsel.

             You shall have received from

                       (a)  S. Garrett Gray, Esq., General Counsel for the     Company and counsel for the Guarantors, and

                       (b)  Skadden, Arps, Slate, Meagher & Flom, your special     counsel,
 

 

19

 

     closing opinions, each dated as of the Closing Date, and in     the case of the opinion of S. Garrett Gray, Esq.,     substantially in the form set forth in Annex 3.1 hereto, and     as to such other matters as you may reasonably request.      This Section 3.1 shall constitute direction by the Company     and each Guarantor to such counsel named in the foregoing     clause (a) to deliver such closing opinion to you.

              3.2  Representations and Warranties True; No Prohibited Action.

                        (a)  Representations and Warranties True.  The     representations and warranties contained herein shall be     true on the Closing Date with the same effect as though made     on and as of that date.

                        (b)  No Prohibited Action.  On and as of the Closing     Date, neither the Company nor any Guarantor nor any of the     Subsidiaries of the Company shall have taken any action or     permitted any condition to exist that would have been     prohibited by Section 7.5 through Section 7.16, inclusive,     hereof, had such Sections been binding and effective at all     times during the period from December 31, 1995 to and     including the Closing Date.

              3.3  Officers' Certificates.

             You shall have received

                       (a)  a certificate dated the Closing Date and signed by     the President or a Vice-President and the Treasurer or an     Assistant Treasurer of the Company, substantially in the     form of Exhibit B1 hereto certifying, among other things,     that the conditions specified in Sections 3.2 and 3.9 hereof     have been fulfilled,
 

                       (b)  certificates dated the Closing Date and signed by     the President or a Vice-President and the Vice President     Finance of each Guarantor substantially in the form of     Exhibit B2 hereto certifying, among other things, that the     conditions specified in Sections 3.2 and 3.9 hereof have     been fulfilled,

           

20

 

                       (c)  a certificate dated the Closing Date and signed by     the Secretary or an Assistant Secretary of the Company,     substantially in the form of Exhibit C1 hereto, with respect     to the matters therein set forth, and

                       (d)  certificates dated the Closing Date and signed by     the Secretary or an Assistant Secretary of each Guarantor,     substantially in the form of Exhibit C2 hereto, with     respect to the matters therein set forth.

     

              3.4  Legality.

             The Notes shall on the Closing Date qualify as a legal investment for you under applicable insurance law (without regard to any "basket" or "leeway" provisions) and you shall have received such evidence as you may reasonably request to establish compliance with this condition.

              3.5  Private Placement Number.

             The Company shall have obtained or caused to be obtained a private placement number for the Notes from the CUSIP Service Bureau of Standard & Poor's and you shall have been informed of such private placement number.

              3.6  Expenses.

             All fees and disbursements required to be paid pursuant to Section 1.5 hereof shall have been paid in full.

              3.7  Proceedings Satisfactory.

             All proceedings taken in connection with the issuance and sale of the Notes and all documents and papers relating thereto shall be satisfactory to you and your special counsel.  You and your special counsel shall have received copies of such documents and papers as you or they may reasonably request in connection therewith or in connection with your special counsel's closing opinion, all in form and substance satisfactory to you and your special counsel.

 

21

 

              3.8  Compliance with this Agreement.

             Each of the Company, the Guarantors and the Subsidiaries of the Company shall have performed and complied with all agreements and conditions contained herein that are required to be performed or complied with by the Company, such Guarantor or any Subsidiary on or prior to the Closing Date, and such performance and compliance shall remain in effect on the Closing Date.

              3.9  No Dissolution, Merger or Change in Control.

             After the date hereof and through the Closing Date, (a) neither the Company nor any Guarantor shall have dissolved, nor shall any of them have consolidated or merged with, or sold, leased, transferred or otherwise disposed of all or substantially all of its properties and assets to, any Person, whether or not permitted by Section 7.4, and (b) no Change in Control with respect to the Company shall have occurred; and you shall have received on the Closing Date a certificate dated the Closing Date and signed by the President of the Company to such effect and to the effect that no corporate action shall have been taken to initiate or to carry out any of the foregoing.

              3.10 [Reserved].

4.   SPECIAL RIGHTS OF INSTITUTIONS

              4.1  Direct Payment.

             Notwithstanding anything to the contrary herein or in the Notes, the Company shall pay all amounts payable with respect to each Note held by an Institutional Investor (without any presentment of such Notes and without any notation of such payment having been made thereon) by crediting, by federal funds bank wire transfer of immediately available funds, the account of such Institutional Investor in any bank in the United States of America as may be designated in writing by such Institutional Investor, or in such other manner as may be reasonably directed or to such other address in the United States of America as may be reasonably designated in writing by such Institutional Investor.  Your address on Annex 1.2 hereto shall be deemed to constitute notice, direction or designation (as appropriate) to the Company with respect to direct

 

22

 

payments as aforesaid.  In all other cases, all amounts payable with respect to each Note shall be made by check mailed and addressed to the registered holder of each Note at the address shown in the register maintained by the Company pursuant to Section 6.1 hereof.

             Each holder of Notes agrees that in the event it shall sell or transfer any Note

                       (a)  it shall, prior to the delivery of such Note     (unless it shall have already done so), make a notation     thereon of all principal, if any, prepaid on such Note and     shall also note thereon the date to which interest shall     have been paid on such Note, and
 

                       (b)  it shall promptly notify the Company of the name     and address of the transferee of any such Note so     transferred and the effective date of such transfer.

              4.2  Delivery Expenses.

             If any holder of Notes surrenders any Note to the Company pursuant hereto, the Company shall pay the cost of delivering to or from such holder's home office or custodian bank from or to the Company, insured to the reasonable satisfaction of such holder, the surrendered Note and any Note issued in substitution or replacement for the surrendered Note.

              4.3  Issue Taxes.

             The Company and the Guarantors shall pay all taxes in connection with the issuance and sale of the Notes, the execution and delivery of the Guaranties of the Notes pursuant to Section 10 hereof and in connection with any modification of this Agreement, the Notes or the Guaranty of the Notes pursuant to Section 10 hereof, and shall save each holder of Notes harmless without limitation as to time against any and all liabilities with respect to all such taxes.  The obligations of the Company and such Guarantors under this Section 4.3 shall survive the payment or prepayment of the Notes and the termination hereof.

 

23

 

5.   PREPAYMENTS

              5.1  Offer to Prepay upon Change in Control.

                        (a)  Notice and Offer.  In the event of a Change in     Control, and whether pursuant to Section 7.4 or otherwise as     permitted by this Agreement, then the Company and each     Guarantor having knowledge of such Change in Control will,     within three (3) Business Days of such Change in Control     give written notice of such Change in Control to each holder     of Notes by registered mail (with a copy thereof sent via an     overnight courier of national reputation) and,     simultaneously with the sending of such written notice, give     telephonic advice of such Change in Control to an investment     officer or other similar representative or agent of each     such holder specified on Annex 1.2 to this Agreement at the     telephone number specified thereon, or to such other Person     at such other telephone number as any holder of a Note may     specify to the Company and the Guarantors in writing.  Such     notice shall be dated the date on which it is given.  In the     event of a Change in Control, such written notice shall     contain, and such written notice shall constitute, an     irrevocable offer to prepay all, but not less than all, of     the Notes held by such holder on a date specified in such     notice (the "Control Prepayment Date") that is not less than     fifteen (15) days and not more than forty-five (45) days     after the date of such notice. (If the Control Prepayment     Date shall not be specified in such notice, the Control     Prepayment Date shall be the fifteenth (15th) day after the     date of such notice.) If the Company shall not have received     a written response to such notice from each holder of Notes     within ten (10) days after the date of posting of such     notice to such holder of Notes, then a second written notice     shall be immediately sent (via an overnight courier of     national reputation) to each such holder of Notes who shall     have not previously responded to the Company.

                        (b)  Acceptance and Payment.  To accept such offered     prepayment, a holder of Notes shall cause a notice of such     acceptance to be delivered to the Company not later than one     day prior to the Control Prepayment Date and shall designate     in such notice the principal amount of its Notes that it has     elected to 
 

           

24

 

     have prepaid.  If so accepted by such holder, such     offered prepayment in respect of such principal amount of     such Notes shall be due and payable on the Control     Prepayment Date.  Such offered prepayment shall be made at     one hundred percent (100%) of the principal amount of such     Notes so elected to be prepaid, together with interest on     the Notes then being prepaid accrued to the Control     Prepayment Date.

     

                        (c)  Officer's Certificate.  Each offer to prepay the     Notes pursuant to this Section 5.1 will be accompanied by an     officer's certificate, executed by the President or a Vice     President of the Company and dated the date of such offer,     specifying:

                                     (i)    the Control Prepayment Date;

  
    

               (ii)   the principal amount of each Note offered to           be prepaid;

               (iii)  the interest to be paid on each such Note,          accrued to the Control Prepayment Date; and

               (iv)   in reasonable detail, the nature of the          Change in Control.

    

  

              5.2  Optional Prepayments.  The Company may prepay the principal amount of the Notes in whole or in part at any time in multiples of One Million Dollars ($1,000,000) (or, if the aggregate outstanding principal amount of the Notes is less than One Million Dollars ($1,000,000) at such time, then such principal amount), together with 
 

                      (i)  an amount equal to the Make-Whole Amount in     respect of the principal amount of the Notes being so     prepaid, and

                           (ii) interest on such principal amount then being     prepaid accrued to the prepayment date.

              5.3  Notice of Optional Prepayment.

             The Company will give notice of any optional prepayment of the Notes to each holder of the Notes not less than thirty (30) days or more than sixty (60) days before the date fixed for prepayment, specifying:

      

25

 

              (a)  such prepayment date;

              (b)  that the prepayment is being made pursuant to     Section 5.2 hereof;

              (c)  the principal amount of each Note to be prepaid on     such date;

              (d)  the interest to be paid on each  such  Note,     accrued to the date fixed for prepayment; and

                       (e)  the Company's calculation of an estimated     Make-Whole Amount, if any, (assuming the date of prepayment     was the date of such notice) due in connection with such     prepayment, accompanied by a copy of any applicable     documentation used in connection with determining the     Make-Whole Discount Rate in respect thereof.

Such notice of prepayment shall also certify all facts that are conditions precedent to any such prepayment.  Notice of prepayment having been so given, the aggregate principal amount of the Notes specified in such notice, together with the Make-Whole Amount, if any, and accrued interest thereon shall become due and payable on the specified prepayment date.  Contemporaneously with such prepayment, the Company shall deliver to each holder of Notes, as of the specified prepayment date, the determination of the Make-Whole Amount referred to in the definition of "Make-Whole Amount" in Section 11.1 hereof (and previously delivered to the Company as provided for in such definition), accompanied by a copy of any applicable documentation likewise previously delivered to the Company and used in connection with determining the Make-Whole Discount Rate in respect of such prepayment. Interest on any overdue prepayment and on any "Make-Whole Amount" to be paid in connection therewith, shall be due to the date of payment, at the rate set forth in Section 1.1(b).

              5.4  Partial Prepayment Pro Rata.

             If at the time any optional prepayment is due under Section 5.2 hereof and there is more than one Note outstanding immediately prior to, as well as after giving effect to, such prepayment, the aggregate principal amount of each optional partial prepayment of the Notes shall be allocated among the holders of the Notes at the time outstanding in proportion, as nearly as practicable, to the.

 

26

 

respective unpaid principal amounts of the Notes outstanding immediately prior to such prepayment, with adjustments, to the extent practicable, to equalize for any prepayments not in such proportion.
  

              5.5  Notation of Notes on Prepayment.

             Upon any partial prepayment of a Note, the holder thereof may (but such holder shall not be compelled to) require that such Note be

                       (a)  surrendered to the Company pursuant to Section 6.2     hereof in exchange for a new Note in a principal amount     equal to the principal amount remaining unpaid on the     surrendered Note,

                       (b)  made  available  to  the  Company  for  notation     thereon of the portion of the principal so prepaid, or
 

                       (c)  marked by such holder with a notation thereon of     the portion of the principal so prepaid.

If any Note is surrendered to the Company pursuant to this Section 5.5 or otherwise hereunder, such Note shall be cancelled and shall not be reissued and no new Note shall be reissued in respect of any principal amount of a surrendered Note that shall have been previously paid.  This Section 5.5 shall not limit or restrict the Company's obligation to effect payment of any partial prepayment of Notes in accordance with requirements of Section 4.1 hereof.

              5.6  No Other Optional Prepayments.

             Except as provided in Section 5.2 hereof or in accordance with an offer made in compliance with Section 5.1 or pursuant to Section 7.4(c) or Section 7.15(c)(ii) hereof, the Company may not make, without the prior written consent of all holders of Notes, any optional prepayment (whether directly or indirectly by purchase or other acquisition) in respect of the Notes.

 

27

 

6.   REGISTRATION; SUBSTITUTION OF NOTES

              6.1  Registration of Notes.

             The Company shall cause to be kept at its office, maintained pursuant to Section 7.3 hereof, a register for the registration and transfer of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in the register.  The Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and neither the Company nor any Guarantor shall be affected by any notice or knowledge to the contrary.  The Company shall deem such subsequent holder to have made the representations and warranties set forth in Section 1.3 hereof and will promptly furnish to any such subsequent holder, upon request made prior to or subsequent to a transfer, the type of information described in Section 2.12(c)(ii) hereof.

              6.2  Exchange of Notes.

             Upon surrender of any Note at the office of the Company maintained pursuant to Section 7.3 hereof duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder's attorney duly authorized in writing, the Company shall execute and deliver, at the Company's expense (except as provided below), new Notes in exchange therefor, in denominations of at least Fifty Thousand Dollars ($50,000) (except as may be necessary to reflect any principal amount not evenly divisible by Fifty Thousand Dollars ($50,000)), in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit A hereto.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.

 

28

 

              6.3  Replacement of Notes.

             Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note and

              (a)  in the case of loss, theft or destruction, of     indemnity reasonably satisfactory to it (provided that if     the holder of such Note is an Institutional Investor, such     holder's own unsecured agreement of indemnity shall be     deemed to be satisfactory), or

              (b)  in the case of mutilation, upon surrender and     cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

              6.4  Guarantors' Responsibility in respect of New Notes.

             Each Guarantor agrees to execute each new Note, as provided for in the form thereof attached hereto as Exhibit A, being exchanged or delivered in accordance with Section 6.2 and Section 6.3 hereof.

7.   COMPANY BUSINESS COVENANTS

             The Company covenants that on and after the Closing Date and so long as any of the Notes shall be outstanding:

              7.1  Payment of Taxes and Claims.

             The Company will, and will cause each of its Subsidiaries to, pay before they become delinquent,

                       (a)  all taxes, assessments and governmental charges or     levies imposed upon it or its Property, and

                       (b)  all claims or demands of materialmen, mechanics,     carriers, warehousemen, landlords and other like Persons     that, if unpaid, might result in the creation of a Lien upon     its Property,

           

29

 

provided, that items in clause (a) and clause (b) above need not be paid

                                 (x)  while being contested in good faith and by          appropriate proceedings as long as adequate book          reserves (as required by GAAP) have been established          and maintained and exist with respect thereto, and

                                 (y)  so long as the title of the Company or any of          its Subsidiaries (as the case may be) to, and its right          to use, such Property, is not materially adversely          affected thereby.

              7.2  Maintenance of Properties and Corporate Existence.

             The Company will, and will cause each of its Subsidiaries to,

                        (a)  Property -- maintain its Property in good     condition, ordinary wear and tear excepted, and make all     necessary renewals, replacements, additions, betterments      and improvements thereto;

                        (b)  Insurance -- maintain, with financially sound and     reputable insurers, insurance with respect to its Property     and business against such casualties and contingencies, of     such types (including, without limitation, insurance with     respect to losses arising out of Property loss or damage,     public liability, workers' compensation, business     interruption, larceny, embezzlement or other criminal     misappropriation) and in such amounts as is customary in     the case of corporations of established reputation engaged     in the same or a similar business and similarly situated;
 

                        (c)  Financial Records -- keep true books of records     and accounts in which full and correct entries shall be made     of all its business transactions and which will permit the     preparation of accurate and complete consolidated financial     statements in accordance with GAAP;

                        (d)  Corporate Existence and Rights -- do or cause to     be done all things necessary to preserve and keep in full     force and effect its corporate existence, rights (charter     and statutory) and franchises, subject
 

           

30

     to Section 7.4 hereof, except where the failure to do so     could not reasonably be expected to have a Material Adverse     Effect;

                        (e)  Compliance with Law -- not be in violation of any     law, ordinance or governmental rule or regulation to which     it is subject and not fail to obtain any license,     certificate, permit, franchise or other governmental     authorization necessary to the ownership of its Properties     or to the conduct of its business if such violation or     failure to obtain could be reasonably expected to have a     Material Adverse Effect; and
 

                        (f)  Rule 144A Eligibility -- not take or omit to take     any action which would cause the Notes not to be eligible     for resale pursuant to Rule 144A(d)(3) and (4) as the same     may be amended from time to time.

              7.3  Payment of Notes and Maintenance of Office.

             The Company will punctually pay, or cause to be paid, the principal of and interest (and Make-Whole Amount, if any) on, the Notes, as and when the same shall become due according to the terms hereof and of the Notes, and will maintain an office at the address of the Company set forth in Section 12.1 hereof where notices, presentations and demands in respect hereof or of the Notes may be made upon it.  Such office will be maintained at such address until such time as the Company will notify the holders of the Notes of any change of location of such office, which will in any event be located within the United States of America.

              7.4  Merger; Acquisition; Sale of Assets.

                        (a)  Merger and Consolidation.  The Company will not,     and will not permit any of its Subsidiaries to, merge with     or into, consolidate with, or sell, lease as lessor,     transfer or otherwise dispose of all or substantially all     of its Property to, any other Person or permit any other     Person to merge with or into or consolidate with it (except     that a Subsidiary of the Company may merge with or into,     consolidate with, or sell, lease, transfer or otherwise     dispose of all or substantially all of its assets to, the     Company or a Wholly-Owned Subsidiary); provided that the     foregoing restriction does not apply to the merger or     consolidation
 

 

31

 

     of the Company with or into, or the sale, lease, transfer or     other disposition by the Company of all or substantially all     of its Property to, another corporation, if:

  

                   (i)  the corporation that results from such merger          or consolidation or that purchases, leases, or acquires          all or substantially all of such Property (the          "Surviving Corporation") shall be organized under the          laws of, and have substantially all of its Property          located in, the United States of America or any          jurisdiction thereof;

                   (ii) the due and punctual payment of the principal          of and Make-Whole Amount, if any, and interest on all          of the Notes, according to their tenor, and the due and          punctual performance and observance of all the          covenants contained herein and in the Notes to be          performed and observed by the Company, shall be          expressly assumed by the Surviving Corporation pursuant          to such agreements or instruments as shall be          satisfactory to the Required Holders;

                   (iii) each Guarantor shall have reconfirmed its          obligations hereunder in writing;

                   (iv)  the Company shall have caused to be          delivered to each holder of Notes an opinion of          independent counsel (which opinion and counsel are          satisfactory in form and substance to the Required          Holders) to the effect that (i) such agreements,          reconfirmations and instruments are enforceable in          accordance with their terms, (ii) no taxable event          or consequence will result to any holder of Notes          solely by virtue of such merger, consolidation,          purchase, lease or acquisition and the assumption          by the Surviving Corporation of the obligations of          he Company hereunder and under the Notes, and (iii)          the obligations of the Guarantors are in full force          and effect; and
 

                   (v)  immediately prior to, and immediately after          the consummation of such transaction, and after giving          effect thereto,

  

                

          

32

 

  
    
                   (A)  no Default or Event of Default shall exist,          and

                   (B)  the Surviving Corporation would be permitted          to incur at least One Dollar ($1.00) of additional          Funded Debt pursuant to Section 7.7 hereof.

    

  

                        (b)  Acquisition of Stock.  The Company will not, and     will not permit any of its Subsidiaries to, acquire any     stock of any corporation if upon completion of such     acquisition such corporation would be a Subsidiary of the     Company, or acquire all of the assets of, or such of the     assets as would permit the transferee to continue any one or     more integral business operations of, any Person unless,     immediately after the consummation of such acquisition, and     after giving effect thereto, no Default or Event of Default     exists or would exist and the Company would be permitted to     incur at least One Dollar ($1.00) of additional Funded Debt     pursuant to Section 7.7 hereof and a Subsidiary of the     Company would be permitted to incur at least One Dollar     ($1.00) of additional Debt pursuant to Section 7.6 hereof.     Upon any corporation becoming a Subsidiary of the Company,     all of its then existing Debt and Liens securing such Debt     shall be deemed incurred for purposes of Section 7.6,     Section 7.7 and Section 7.9 hereof.

                        (c)  Sale of Assets.  The Company will not, and will     not permit any of its Subsidiaries to, sell, lease, abandon     or otherwise dispose of any of its assets (except for sales     and leases in the ordinary course of business, including     sales and leases to customers and dispositions of plant and     equipment in connection with normal closures) unless,     immediately after giving effect to such proposed     disposition, the assets so disposed of by the Company and     its Subsidiaries during the then current fiscal year of the     Company shall have an aggregate net book value (determined     as to particular assets as of the end of the immediately     preceding fiscal year), not in excess of ten percent (10%)     of Consolidated Net Worth at the end of the immediately     preceding fiscal year.  In determining such aggregate value,     there shall be included the value of any assets disposed of     through dispositions of shares pursuant to Section 7.4(a) or

 

33

 

     Section 7.15 but there shall be excluded the value of assets     disposed of to the extent that, after giving effect to such     sale or lease no Default or Event of Default shall exist and     either (i) the Company or such Subsidiary at the time of     such disposition either has previously acquired or is     simultaneously acquiring, in contemplation of such     disposition, substantially similar assets, or has     previously entered into, or is simultaneously entering     into, a binding purchase or lease agreement or agreements     to acquire or lease substantially similar assets, which     assets are acquired or leased within one hundred eighty     (180) days of such disposition or (ii) the Company or such     Subsidiary shall, within such period of one hundred eighty     (180) days, use the proceeds from the disposition to repay     Debt of the Company or such Subsidiary, in which event the     Company shall offer to prepay, at par and in the manner     provided in Section 5.5 hereof, a principal amount of Notes     which bears the same ratio to the aggregate outstanding     amount of all Notes outstanding as other Debt to be repaid     bears to the aggregate outstanding amount of such issues     or series of Debt.

              7.5  Restricted Payments and Restricted Investments.

                        (a)  Limitation on Restricted Payments.  The Company     will not make or incur and will not suffer or permit any of     its Subsidiaries to make or incur (i) any liability to     declare or make any Restricted Payment in respect of its     Capital Stock or the Capital Stock of any of its     Subsidiaries or any Guarantor or (ii) any Restricted     Investment or any undertaking or agreement to make a     Restricted Investment unless immediately after giving     effect to any proposed Restricted Payment or     Restricted Investment,

     

  
                   (A)  the aggregate amount of all Restricted               Investments and Restricted Payments declared, made               or authorized after December 31, 1992 does not               exceed the sum of
 

  

          

  
    
                        (I)  seventy-five percent (75%) of the               aggregate Consolidated Net Income (or, in case               such aggregate Consolidated Net Income shall be a

    

  

                     

34

 

  
    
               deficit, minus 100% of such deficit) for the               period commencing on January 1, 1993 and ending               on the date of such proposed transaction; plus

    

  

               

                                                   (II) Twenty-Five Million Dollars                    ($25,000,000);

  

                   (B)  no Default or Event of Default exists or          would, after giving effect to such Restricted Payment          or Restricted Investment, as the case may be, exist;          and

                   (C)  the Company would  be  permitted  to  incur          at least One Dollar ($1.00) of additional  Funded  Debt          pursuant  to  Section 7.7 hereof and a  Subsidiary          of  the  Company  would  be  permitted to incur at          least One Dollar ($1.00) of additional Debt pursuant          to Section 7.6 hereof.

  

          

                        (b)  Time of Payment.    The Company will not authorize     a Distribution on its Capital Stock that is not payable     within sixty (60) days of authorization.

     

              7.6  Subsidiary Debt.

             The Company will not at any time permit any of its Subsidiaries to create, incur, issue, assume, guarantee or otherwise become liable in respect of any Debt, other than Debt owing to the Company or a Wholly-Owned Subsidiary, unless, (i) immediately after giving effect thereto, Total Subsidiary Debt does not exceed ten percent (10%) of Consolidated Net Worth at such time, and (ii) immediately prior to, and immediately after the consummation of such transaction, and after giving effect thereto, no Default or Event of Default exists or would exist and the Company would be permitted to incur at least One Dollar ($1.00) of additional Funded Debt pursuant to Section 7.7.

              7.7  Consolidated Funded Debt to Consolidated Total Capitalization.

             The Company will not, and will not permit any of its Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become liable in respect of any Funded Debt (other than the Notes) at any time, unless, (i) immediately after giving

      

35

effect thereto, Consolidated Funded Debt does not exceed forty percent (40%) of Consolidated Total Capitalization at such time, and (ii) immediately prior to, and immediately after the consummation of such transaction, and after giving effect thereto, no Default or Event of Default exists or would exist.

              7.8  Consolidated Net Worth.

             The Company will not permit Consolidated Net Worth at the end of any fiscal quarter of the Company to be less than the sum of (i) Three Hundred Twenty-five Million Dollars ($325,000,000) and (ii) twenty-five percent (25%) of Consolidated Net Income earned after December 31, 1995.

              7.9  Liens.

                        (a)  Negative Pledge.  The Company will not, nor will     it permit any of its Subsidiaries to, grant, incur, assume,     create or cause or permit to exist, or agree or consent to     grant, incur, assume, create or cause or permit to exist in     the future (upon the happening of a contingency or     otherwise), a Lien upon any of its Property (including,     without limitation, any Capital Stock of the Subsidiaries     of the Company owned by the Company or any other Subsidiary     of the Company), whether now owned or hereafter acquired,     except:

  

                   (i)  Liens securing the claims or demands of          materialmen, mechanics, carriers, warehousemen,     landlords and other like Persons, provided that the payment     thereof is not at the time required by Section 7.1 hereof;

  

     

  
                   (ii) Liens incurred or deposits made in the     ordinary course of business

    

                        (A)  in connection with workers'               compensation, unemployment insurance, social               security and other like laws, and                    (B)  to secure the performance of letters of               credit, bids, tenders, sales contracts, leases,               statutory obligations, surety and performance               bonds (of a type other than set forth in Section               7.9(a)(iii)
 

    

  

                     

36

 

  
    
               hereof) and other similar obligations not incurred               in connection with the borrowing of money, the               obtaining of advances or the payment of the               deferred purchase price of Property;
 

    

  

                                     (iii) Liens

  
    

                        (A)  arising from judicial attachments and               judgments,

                        (B)  securing appeal bonds or supersedeas               bonds, and

                        (C)  arising in connection with court               proceedings (including, without limitation, surety               bonds and letters of credit or any other               instrument serving a similar purpose),

    

  

provided that (1) the execution or other enforcement of such Liens is effectively stayed, (2) the claims secured thereby are being actively contested in good faith and by appropriate proceedings, (3) adequate reserves (in accordance with GAAP)  have been established and maintained in respect thereof and (4) the existence of the judgment or attachment giving rise to the Lien shall not constitute an Event of Default;

  

                   (iv) Liens on Property of a Subsidiary of the          Company, provided that such Liens secure only          obligations owing to the Company;
 

                   (v)  Liens in the nature of reservations,          exceptions, encroachments, easements, rights-of-way,          covenants, conditions, restrictions, leases and other          similar title exceptions or encumbrances affecting real          Property, provided that such Liens do not individually          or in the aggregate materially detract from the value          of said Properties or materially interfere with the use          by the Company or its Subsidiaries of such Property          in the ordinary conduct of the business of the Company          and such Subsidiaries;

                   (vi) Liens on Property arising in connection with          Capital Leases so long as each such
 

  

                

37

 

  
          Lien encumbers only Property that is the subject of the          related Capital Lease and no other Property of the          Company or any of its Subsidiaries and immediately          before, and after giving effect thereto, no Default or          Event of Default exists or would exist and (A) the          Company would be permitted to incur at least One Dollar          ($1.00) of additional Funded Debt pursuant to Section          7.7 hereof and (B) a Subsidiary of the Company would be          permitted to incur at least One Dollar ($1.00) of          additional Debt pursuant to Section 7.6 hereof;               (vii)  Liens in existence on the Closing Date          securing Debt and listed on Annex 7.9 hereto; and

  

          

  
                   (viii) Purchase Money Liens, if, after giving          effect thereto and to any concurrent transactions:

    

                        (A)  each such Purchase Money Lien secures               Debt of the Company or any of its Subsidiaries in               an amount not exceeding one hundred percent (100%)               of the cost of acquisition of the particular               Property to which such Debt relates (or, in the               case of a Lien existing on any Property of any               corporation at the time it becomes a Subsidiary               of the Company, one hundred percent (100%) of the               Fair Market Value of such Property at such time);

                        (B)  no Default or Event of Default would               exist and (I) the Company would be permitted to               incur at least One Dollar ($1.00) of additional               Funded Debt pursuant to Section 7.7 hereof and               (II) a Subsidiary of the Company would be               permitted to incur at least One Dollar ($1.00)               of additional Debt pursuant to Section 7.6 hereof;

    

  

               

  

                   (ix) Liens incurred in connection with the sale by          the Company or a Subsidiary of accounts receivable of          the Company or a Subsidiary (a "receivables sale")          permitted by Section 7.4(c) or the borrowing of money          by the Company or a
 

  

                

38

 

  
          Subsidiary permitted by Section 7.6 and          Section 7.7 and the repayment of which is secured by          accounts receivable of the Company or a Subsidiary (a          "receivables financing"), including such amount of          accounts receivable as may be in excess of the sale          price or the amount borrowed, provided that: (A) the          Property subject to such Lien shall consist solely of          accounts receivable of the Company or a Subsidiary,
the obligor of which is a Person other than the Company          or a Subsidiary; (B) the purchaser of the accounts          receivable or the lender (the repayment of whose loan          is secured by such accounts receivable, as the case may          be) shall have no recourse to the Company or any          Subsidiary or to any Property of the Company or any          Subsidiary other than such accounts receivable for any          liability arising out of the receivables financing or          receivables sale; and (C) the accounts receivable which          are subject to the Lien permitted hereby shall be          identified at the time the receivables sale or          receivables financing is consummated and additional          receivables shall not thereafter be subjected to the          Lien created at that time; and
 

                   (x)  other Liens on Property of the Company or a          Subsidiary provided that the Debt or other obligations          secured by such Liens shall not at any time exceed ten          percent (10%) of Consolidated Net Worth.

  

                        (b)  Equal and Ratable Lien; Equitable Lien.  In case     any Property shall be subjected to a Lien in violation of     this Section 7.9, the Company will forthwith make or cause     to be made, to the fullest extent permitted by applicable     law, provision whereby the Notes will be secured equally     and ratably with all other obligations secured thereby,     pursuant to such agreements and instruments as shall be     approved by the Required Holders, and the Company will cause     to be delivered to each holder of a Note an opinion of     independent counsel (in form and substance satisfactory     to the Required Holders) to the effect that such agreements     and instruments are enforceable in accordance with their     terms, and in any such case the Notes shall have the     benefit, to the full extent that, and with such priority as,     the holders of Notes may be
 

 

39

 

     entitled under applicable law, of an equitable Lien on such     Property securing the Notes.  Such violation of this Section     7.9 constitutes an Event of Default hereunder, whether or     not any such provision is made pursuant to this Section     7.9(b).

                        (c)  Financing Statements.  The Company will not, and     will not permit any of its Subsidiaries to, sign or file a     financing statement under the Uniform Commercial Code (or     similar statute) of any jurisdiction that names the Company     or such Subsidiary as debtor, or sign any security agreement     authorizing any secured party thereunder to file any such     financing statement, except, in any such case, a financing
statement filed or to be filed to perfect or protect a     security interest that the Company or such Subsidiary is     entitled to create, assume or incur, or permit to exist,     under the foregoing provisions of this Section 7.9 or to     evidence for informational purposes a lessor's interest in     Property leased to the Company or any such Subsidiary.

     

              7.10 ERISA.

                        (a)  Compliance.  The Company will, and will cause each     ERISA Affiliate, at all times with respect to each Pension     Plan and Multiemployer Plan, to make timely payment of     contributions required to meet the minimum funding standard     in respect of such Person set forth in ERISA or the IRC with     respect thereto, and to comply with all other applicable     provisions of ERISA.

                        (b)  Relationship of Vested Benefits to Pension Plan     Assets.  Except as, to the extent and for the period of time     described in Annex 2.12, the Company will not at any time     permit the present value of all employee benefits vested     under each Pension Plan to exceed the assets of such Pension     Plan allocable to such vested benefits at such time, in each     case determined pursuant to Section 7.10(c) hereof, except     to the extent that the Company could, at such time, incur     Debt in the amount of such excess in compliance with Section     7.6 and Section 7.7 and otherwise complies with this Section     7.10.

                        (c)  Valuations.  All assumptions and methods used to     determine the actuarial valuation of vested
 

           

40

 

     employee benefits under Pension Plans and the present value     of assets of Pension Plans will be reasonable in the good     faith judgment of the Company and will comply with all     requirements of law.

                        (d)  Prohibited Actions.  The Company will not, and     will not permit any ERISA Affiliate to:

     

  
                   (i)  engage in any "prohibited transaction" (as          such term is defined in section 406 of ERISA or section          4975 of the IRC) that would result in the imposition of          a tax or penalty;

                   (ii) incur with respect to any Pension Plan any          "accumulated funding deficiency" (as such term is          defined in section 302 of ERISA), whether or not          waived;

                   (iii) terminate any Pension Plan in a manner that          could result in

    

                        (A)  the imposition of a Lien on the Property               of the Company or any of its Subsidiaries pursuant               to section 4068 of ERISA, or
 

                        (B)  the creation of any liability under               section 4062 of ERISA;

    

                             (iv) fail to make any payment required                    by section 515 of ERISA; or

                             (v)  except  as  disclosed  on   Annex                    2.12 hereto, be an "employer" (as such term                    is defined in section 3 of ERISA) required to                    contribute to any Multiemployer Plan or a                    "substantial employer" (as such term is                    defined in section 4001 of ERISA) required to                    contribute to any Multiple Employer Pension                    Plan.

  

              7.11 Transactions with Affiliates.

                       The Company will not, and will not permit any of its     Subsidiaries to, enter into any transaction, including,     without limitation, the purchase, sale or exchange of     Property or the rendering of any service, with any     Affiliate, except in the ordinary course of and pursuant     to the
 

           

41

 

     reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate.

              7.12 Pro-Rata Offers.

                       The Company will not, nor will it permit any of its     Subsidiaries or any Affiliate to, directly or indirectly,     acquire or make any offer to acquire any Notes other than as     permitted by Section 5.7 and then only if the Company or     such Subsidiary or Affiliate shall have offered to acquire     Notes, pro rata, from all holders of the Notes and upon the     same terms.  In case the Company acquires any Notes, such     Notes will thereafter be cancelled and no Notes will be     issued in substitution therefor.

              7.13 Private Offering.

                       The Company will not, nor will it permit any Person     acting on its behalf to, offer the Notes or any part thereof     or any similar Securities for issue or sale to, or solicit     any offer to acquire any of the same from, any Person so as     to bring the issuance and sale of the Notes within the     provisions of section 5 of the Securities Act.

              7.14 Environmental Compliance.

                        (a)  Compliance.  The Company will at all times be, and     will at all times cause its Subsidiaries to be, in     compliance with all Environmental Protection Laws in effect     in each jurisdiction where each such Person is doing     business, if the failure to comply with which could     reasonably be expected to have a Material Adverse Effect.

                        (b)  Liability.  The Company will not permit itself,     nor will it permit any of its Subsidiaries, to be subject     to any liability under any Environmental Protection Laws     that, individually or in the aggregate, could reasonably     be expected to have a Material Adverse Effect.

 

42

 

              7.15 Sales of Subsidiary Stock.

             The Company will not at any time, and will not at any time permit any of its Subsidiaries to, sell or otherwise dispose of any shares of Capital Stock (or any options or warrants to purchase Capital Stock or other Securities exchangeable for or convertible into Capital Stock) of a Subsidiary of the Company (said Capital Stock, options, warrants and other Securities herein called "Subsidiary Stock"), nor will any Subsidiary of the Company issue, sell or otherwise dispose of any shares of its own Subsidiary Stock to any Person other than the Company or a Wholly-Owned Subsidiary; provided that the foregoing restrictions do not apply to:

                       (a)  the issue of directors' qualifying shares;

                       (b)  the sale for an all cash consideration to a Person     (other than directly or indirectly to an Affiliate) of the     entire Investment (whether represented by stock, debt,     claims or otherwise) of the Company and its other     Subsidiaries in any Subsidiary, if all of the following     conditions are met:

  

                        (i)   in the good faith opinion of the Board               of Directors of the Company, the sale is for Fair               Market Value and is in the best interests of the               Company;

                        (ii)  the Subsidiary being disposed of has no               continuing Investment (x) in any other Subsidiary               not being simultaneously disposed of in a               transaction which meets the conditions set forth               in this Section 7.15(b) or (y) in the Company; and

                        (iii) the aggregate book value of all such               Voting Stock (or of the Property or other assets               of the Subsidiary if greater) disposed of by the               Company and its Subsidiaries during the then               current fiscal year of the Company, when added to               the aggregate net book value of assets disposed of               pursuant to Section 7.4(c) during such fiscal               year, shall not exceed ten percent (10%) of               Consolidated Net Worth and immediately after the               consummation of the transaction, and after giving               effect thereto, no Default or Event of
 

  

                     

43

 

  
               Default would exist, and (A) the Company would be               permitted to incur at least One Dollar ($1.00) of               additional Funded Debt pursuant to Section 7.7               hereof and (B) a Subsidiary of the Company would               be permitted to incur at least One Dollar ($1.00)               of additional Debt pursuant to Section 7.6 hereof;               and

  

               

                       (c)  the sale for an all cash consideration to a Person     (other than directly or indirectly to an Affiliate) of the     entire Investment (whether represented by stock, debt,     claims or otherwise) of the Company and its other     Subsidiaries in any Subsidiary, if all of the following     conditions are met:

  

                   (i)  the conditions set forth in Section           7.15(b)(i) and (ii) are met;

                   (ii) the entire consideration received by the          Company shall be used, within one hundred eighty (180)          days of the date of such sale (A) to acquire Property          or assets useful, in the opinion of the Board of          Directors of the Company, in the business of the          Company and being acquired, in the opinion of the Board          of Directors, at not more than the fair market value          thereof or (B) to repay Debt of the Company or its          Subsidiaries (in which event the Company shall offer          to prepay, at par and in the manner provided in Section          5.5 hereof, a principal amount of Notes which bears the          same ratio to the aggregate outstanding amount of all          Notes outstanding as the principal amount of other Debt          to be repaid bears to the aggregate outstanding          principal amount of all such other Debt); and

                   (iii) prior to the consummation of such sale, the          Company shall have furnished to each holder of Notes a          detailed description of the proposed action, together          with a certificate of the President of the Company          attesting to the action of the Board of Directors as          set forth above.

  

                       (d)  the participation by the Company or a Subsidiary     of the Company in joint ventures or other

           

44

 

     commercial endeavors, whether by creation of a minority     interest in the Voting Stock of a Subsidiary or by     contribution of Voting Stock of a Subsidiary to such venture     or endeavor provided that after giving effect to each such     transaction (i) there shall not have occurred a Default or     Event of Default, (ii) the Company shall be in compliance     with the provisions of Section 7.5 and (iii) the aggregate     bookvalue of all such Voting Stock (or of the Property or     other assets of the Subsidiary attributable to such     interest, if greater) shall not exceed ten percent (10%) of     Consolidated Net Worth.

             Without limiting the foregoing, the Company will not permit any Subsidiary to issue or have outstanding any Preferred Stock if such Preferred Stock is to be held by a Person other than the Company or a Wholly-Owned Subsidiary and the Company shall not sell, or permit any Subsidiary to sell, any Preferred Stock of any Subsidiary to any Person other than to the Company or to a Wholly-Owned Subsidiary.

              7.16 Pari Passu Ranking of Notes.

             The Company warrants that its obligations under this Agreement and the Notes do, and undertakes that the same will continue to, rank at least pari passu with all its other present and future unsecured senior obligations.

8.   INFORMATION AS TO COMPANY

             8.1  Financial and Business Information.

                       The Company shall deliver to each holder of Notes:

                        (a)  Quarterly Statements -- as soon as practicable     after the end of each quarterly fiscal period in each     fiscal year of the Company (other than the last quarterly     fiscal period of each such fiscal year), and in any event     within sixty (60) days thereafter, duplicate copies of:

  

                                 (i)  a consolidated balance sheet of the Company          and its Subsidiaries as at the end of such quarter, and

  

          

  
                                 (ii) consolidated statements of income, changes in          shareholders' equity and cash flows
 

                

  

45

 

  
          of the Company and its Subsidiaries for such quarter          and (in the case of the second and third quarters)          for the portion of the fiscal year ending with such          quarter;

  

     (provided that so long as the Company shall continue to file     on a timely basis required reports on Form 10-Q, such reports     may be furnished in satisfaction of the requirements     of this Section 8.1(a)), setting forth in each case in     comparative form the figures for the corresponding periods     in the previous fiscal year, all in reasonable detail,     prepared in accordance with GAAP, and certified as complete     and correct, subject to changes resulting from year-end     adjustments, by a principal financial officer of the     Company, and accompanied by the certificate required by     Section 8.2 hereof;

     

                        (b)  Annual Statements -- as soon as practicable after     the end of each fiscal year of the Company, and in any event     within ninety (90) days thereafter, duplicate copies of:
 

  

                                 (i)  a consolidated balance sheet of the Company          and its Subsidiaries, as at the end of such year, and

  

        

  
                                 (ii) consolidated statements of income, changes in          shareholders' equity and cash flows of the Company and          its Subsidiaries for such year,
 

  

               setting forth in comparative form the figures for the     previous year in the case of the balance sheets referred to     in clause (i) and for the previous two fiscal years in the     case of the consolidated statements referred to in clause     (ii), all in reasonable detail, prepared in accordance with     GAAP, and accompanied by
 

  

                                 (x)  in the case of such consolidated statements,          an opinion thereon of the accountants named in Section          2.2 hereof or other independent certified public          accountants of recognized national standing selected by          the Company, which opinion shall, without qualification          (including, without limitation,
 

                

  

46

 

  
          any qualification with respect to the scope of any          audit), state that such financial statements present          fairly, in all material respects, the financial          position of the companies being reported upon and          their results of operations and cash flows and have          been prepared in conformity with GAAP, and that the          examination of such accountants in connection with          such financial statements has been made in accordance          with generally accepted auditing standards, and that          such audit provides a reasonable basis for such          opinion in the circumstances,
 

                                 (y)  a certification by a principal financial          officer of the Company that such consolidated          statements are complete and correct, and

                                 (z)  the certificates required by Section 8.2 and          Section 8.3 hereof;

  

                        (c)  Audit Reports -- promptly upon receipt thereof, a     copy of each other report (including, without limitation,     any reports to management on internal controls) submitted     to the Company or any of its Subsidiaries by independent     accountants in connection with any annual, interim or     special audit made by them of the books of the Company or     any such Subsidiary;
 

                        (d)  SEC and Other Reports -- promptly upon their     becoming available one copy of each financial statement,     report, notice or proxy statement sent by the Company or any     of its Subsidiaries to stockholders generally, and of each     regular or periodic report and any registration statement,     offering circular, prospectus or written communication     (other than transmittal letters), and each amendment     thereto, in respect thereof filed by the Company or any of     its Subsidiaries with, or received by, such Person in     connection therewith from, the National Association of     Securities Dealers, any securities exchange or the     Securities and Exchange Commission or any successor agency;

   

                        (e)  ERISA -- as soon as possible, and in any event     within ten (10) Business Days after, becoming aware of the     occurrence of any

           

47

 

                                 (i)  "reportable event" (as such term is defined          in section 4043 of ERISA) as to which the 30-day notice          requirement has not been waived by the PBGC or

     

                                 (ii) "prohibited transaction" (as such term is          defined in section 406 or section 4975 of the IRC)
 

          

     in connection with any Pension Plan or any trust created     thereunder, a written notice specifying the nature thereof,     what action the Company is taking or proposes to take with     respect thereto, and, when known, any action taken by the     IRS, the Department of Labor or the PBGC with respect     thereto;

                        (f)  ERISA Waivers -- prompt written notice of and a     description of any request pursuant to section 303 of ERISA     or section 412 of the IRC for, or notice of the granting     pursuant to said section 303 or said section 412 of, a     waiver in respect of all or part of the minimum funding     standard set forth in ERISA or the IRC, as the case may be,     of any Pension Plan, and, in connection with the granting of     any such waiver, the amount of any waived "funding     deficiency" (as such term is defined in said section 303 or     said section 412) and the terms of such waiver, in each of     the cases specified in this clause (f), where the effect of     such conditions or events or of events or conditions related     thereto would reasonably be expected to have a Material Adverse     Effect;

                        (g)  Other ERISA Notices -- prompt written notice of     and, where applicable, a description of
 

  

                            (i)  any notice from the PBGC in respect of the          commencement of any proceedings pursuant to section          4042 of ERISA to terminate any Pension Plan or for the          appointment of a trustee to administer any Pension          Plan,

                                 (ii) any distress termination notice delivered to          the PBGC under section 4041 of ERISA in respect of any          Pension Plan, and any determination of the PBGC in          respect thereof,

  

                

48

 

                                 (iii) the placement of any Multiemployer Plan in          reorganization status under Title IV of ERISA,
 

                                 (iv) any Multiemployer Plan becoming "insolvent"          (as such term is defined in section 4245 of ERISA),

                                 (v)   the whole or partial withdrawal of the          Company or any ERISA Affiliate from any Multiemployer          Plan and the withdrawal liability incurred in          connection therewith, and
 

                                   (vi) the withdrawal of the Company or any ERISA          Affiliate from any Multiple Employer Pension Plan and          the withdrawal liability under ERISA incurred in          connection therewith;

     in each of the cases specified in the foregoing clauses (i)     through (vi), inclusive, where the effect of such conditions     or events or of events or conditions related thereto would     reasonably be expected to have a Material Adverse Effect,

     

                        (h)  Notice of Default or Event of Default --     immediately upon becoming aware of the existence of any     condition or event which constitutes a Default or an Event     of Default, a written notice specifying the nature and     period of existence thereof and what action the Company is     taking or proposes to take with respect thereto;

                        (i)  Notice of Claimed Default -- immediately upon     becoming aware that the holder of any evidence of     indebtedness or other Security of the Company or any of its     Subsidiaries shall have given notice or taken any other     action with respect to a claimed event of default or default     thereunder a written notice specifying the notice given or     action taken by such holder and the nature of the claimed     event of default or default and what action the Company is     taking or proposes to take with respect thereto;

                        (j)  Rule 144A Information -- with reasonable     promptness, such data and information as from time to time     may be reasonably requested to comply with 17 C.F.R.     Section 230.144A, as amended from time to time; and

 

49

 

                        (k)  Other Requested Information -- with reasonable     promptness, such other data and information as from time to     time may be reasonably requested by any Purchaser or by any     other Institutional Investor which is a holder of Notes.

     

              8.2  Officers' Certificates.

             Each set of financial statements delivered to each holder of Notes pursuant to Section 8.1(a) or Section 8.1(b) hereof shall be Accompanied by a certificate of the President or a Vice-President and the Treasurer or an Assistant Treasurer of the Company setting forth:

                        (a)  Covenant Compliance -- the information (including     detailed calculations) required in order to establish     whether the Company was in compliance with the requirements     of Section 7.4 through Section 7.16 hereof, inclusive,     during the fiscal period covered by the income statement     then being furnished (including with respect to each such     Section, where applicable, the calculations of the maximum     or minimum amount, ratio or percentage, as the case may be,     permissible under the terms of such Sections, and the     calculation of the amounts, ratio or percentage then in     existence); and
 

     

                        (b)  Event of Default -- a statement that the signers     have reviewed the relevant terms hereof and have made, or     caused to be made, under their supervision, a review of the     transactions and conditions of the Company and its     Subsidiaries from the beginning of the accounting period     covered by the income statements being delivered therewith     to the date of the certificate and that such review shall     not have disclosed the existence during such period of     any condition or event which constitutes a Default or an     Event of Default or, if any such condition or event existed     or exists, specifying the nature and period of existence     thereof and what action the Company shall have taken or     proposes to take with respect thereto.

              8.3  Accountants' Certificates.

             Each set of annual financial statements delivered pursuant to Section 8.1(b) hereof shall be accompanied by a certificate of the
 

      

50

 

accountants who certify such financial statements, stating that they have reviewed this Agreement and stating further, whether, in making their audit, such accountants have become aware of any condition or event which then constitutes a Default or an Event of Default, and, if such accountants are aware that any such condition or event then exists, specifying the nature and period of existence thereof.

              8.4  Inspection.

             The Company shall permit the representatives of any Purchaser or any other Institutional Investor which is the holder of at least One Million Dollars ($1,000,000) aggregate principal amount of Notes (at the expense of such Person unless a Default or Event of Default shall have occurred and be continuing and then at the expense of the Company and without regard to the aggregate principal amount of Notes held by such holder) upon at least twenty-four (24) hours' prior notice to the Chief Financial Officer of the Company, to visit and inspect any of the Properties of the Company or any of its Subsidiaries, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants (and by this provision the Company authorizes said accountants so to discuss its finances and affairs and the finances and affairs of its Subsidiaries) all at such reasonable times and as often as may be reasonably requested and subject to the provisions of Section 12.9.

              8.5  Report to NAIC.

             Concurrently with the delivery to you of each annual statement required by Section 8.1(b) hereof, the Company shall deliver a copy thereof to: Securities Valuation Office, National Association of Insurance Commissioners, 195 Broadway, New York, New York 10007.

9.   EVENTS OF DEFAULT

              9.1  Nature of Events.

             An "Event of Default" shall exist if any of the following occurs and is continuing:

      

51

 

                        (a)  Principal or Make-Whole Amount Payments -- the     Company shall fail to make any payment of principal or Make-Whole Amount on any Note on or before the date such payment     is due;

                        (b)  Interest Payments -- the Company shall fail to     make any payment of interest on any Note on or before five     (5) Business Days after the date such payment is due;

                        (c)  Default of Guaranty -- the Guaranty set forth in     Section 10 hereof or in the Notes or any provision thereof,     shall cease to be in full force and effect, or any Guarantor     shall deny or disaffirm all or any portion of its     obligations under such Guaranty;

                        (d)  Other Defaults -- the Company or any of its     Subsidiaries shall (i) fail to give any notice required to     be given pursuant to Section 8.1(h) or (ii) fail to perform     or observe any other covenant or to comply with any other     provision hereof, and, in the case of clause (ii) hereof,     such failure continues for more than thirty (30) days;

                        (e)  Warranties or Representations -- any warranty,     representation or other statement by or on behalf of the     Company or any Guarantor contained herein or in any     instrument furnished in compliance with or in reference     hereto shall have been false or misleading in any material     respect when made;

                        (f)  Default on Indebtedness or Other Security --               (i)  the Company, any Guarantor or any of the          Subsidiaries of the Company shall fail to make any          payment on any Debt when due; or               (ii) any event shall occur or any condition shall          exist in respect of any Debt or any  Security of the          Company, any Guarantor or any of the Subsidiaries of          the Company, or under any agreement securing or          relating to such Debt or Security, that immediately or          with any one or more of the passage of time, the giving          of notice or the expiration of waivers or modifications
 

 

52

          granted in respect of such event or condition:

  

                                           (A)  causes (or permits any one or more of               the holders thereof or a trustee therefor to               cause) any such Debt in excess, in the aggregate,               of Ten Million Dollars ($10,000,000) to become due               prior to its stated maturity or prior to its               regularly scheduled date or dates of payment; or
 

                                           (B)  permits any one or more of the holders               thereof or a trustee therefor to require the               Company, any Guarantor or any such Subsidiary to               repurchase such Debt or such Security from such               holder.

                    (g)  Involuntary Bankruptcy Proceedings --
 

                            (iii) a receiver, liquidator, custodian or trustee          of the Company, any Guarantor or any of the          Subsidiaries of the Company, or of all or any of the          Property of any thereof, shall be appointed by court          order and such order remains in effect for more than          ninety (90) days; or an order for relief shall be          entered with respect to the Company, any Guarantor or          any of the Subsidiaries of the Company, or the Company,          any Guarantor or any of the Subsidiaries of the Company          shall be adjudicated a bankrupt or insolvent; or
 

                                 (iv) any of the Property of the Company, any          Guarantor or any of the Subsidiaries of the Company          shall be sequestered by court order and such order          remains in effect for more than ninety (90) days; or

  

  
                               (v)  a petition shall be filed against the Company,          any Guarantor or any of the Subsidiaries of the Company          under any bankruptcy, reorganization, arrangement,          insolvency, readjustment of debt, dissolution or          liquidation law of any jurisdiction, whether now or          hereafter in effect, and shall not be dismissed within          ninety (90) days after such filing;

  

 

53

 

                        (h)  Voluntary Petitions -- the Company, any Guarantor     or any o the Subsidiaries of the Company shall file a     petition in voluntary bankruptcy or seeking relief under     any provision of any bankruptcy, reorganization,     arrangement, insolvency, readjustment of debt,     dissolution or liquidation law of any jurisdiction,     whether now or hereafter in effect, or shall consent to     the filing of any petition against it under any such law;

     

                   (i)  Assignments for Benefit of Creditors, etc. --
the Company, any Guarantor or any of the Subsidiaries          of the Company shall make an assignment for the benefit          of its creditors, or admits in writing its inability,          or fails, to pay its debts generally as they become          due, or shall consent to the appointment of a receiver,          liquidator or trustee of the Company, any Guarantor or          any of the Subsidiaries of the Company or of all or any          part of the Property of any thereof; or
 

                            (j)  Undischarged Final Judgments -- a final judgment     or final judgments for the payment of money aggregating in     excess of Twenty-Five Million Dollars ($25,000,000) is or     are outstanding against one or more of the Company, the     Guarantors and the Subsidiaries of the Company and any     one of such judgments shall have been outstanding for     more than thirty (30) days from the date of its entry and     shall not have been discharged in full or stayed.

     

              9.2  Default Remedies.

          (a)  Acceleration on Event of Default.

              (i)             If an Event of Default specified in clause (g), (h) or     (i) of Section 9.1 hereof shall exist, all of the Notes     at the time outstanding shall automatically become     immediately due and payable together with interest     accrued thereon without presentment, demand, protest or     notice of any kind or any other action whatsoever, all of     which are hereby expressly waived, and the Company shall     forthwith pay to the holder or holders of all the Notes     then outstanding the entire principal of, and interest     accrued on, the Notes and, to the extent permitted
 

              

54

 

     by law, the Make-Whole Amount with respect to such     principal amount of such Notes and,
  

         (ii)    If an Event of     Default other than those specified in clause (g), (h) or     (i) of Section 9.1 hereof shall exist, the holder or     holders of at least twenty-five percent (25%) in     principal amount of the Notes then outstanding (exclusive     of Notes then owned by any one or more of the Company,     any Guarantor, any Subsidiary of the Company or any     Affiliate) may exercise any right, power or remedy     permitted to such holder or holders by law, and shall     have, in particular, without limiting the generality of     the foregoing, the right to declare the entire principal     of, and all interest accrued on, all the Notes then     outstanding to be, and such Notes shall thereupon become,     forthwith due and payable, without any presentment,     demand, protest or other notice of any kind or other action whatsoever, all of which are hereby expressly waived,     and the Company shall forthwith pay to the holder or     holders of all the Notes then outstanding the entire     principal of, and interest accrued on, the Notes and, to     the extent permitted by law, the Make-Whole Amount with     respect to such principal amount of such Notes.

     

                        (b)  Acceleration on Payment Default.  During the     existence of an Event of Default described in Section 9.1(a)     or Section 9.1(b) hereof, and irrespective of whether the     Notes then outstanding shall have been declared to be due     and payable pursuant to Section 9.2(a)(ii) hereof, and     notwithstanding any action taken by holders of the Notes     pursuant to Section 9.3 hereof, any holder of Notes who or     which shall have not consented to any waiver with respect to     such Event of Default may, at its option, by notice in     writing to the Company, declare the Notes then held by such     holder to be, and such Notes shall thereupon become,     forthwith due and payable together with all interest accrued     thereon, without  any presentment, demand, protest or other     notice of any kind or any other action whatsoever, all of     which are hereby expressly waived, and the Company shall     forthwith
 

           

55

     pay to such holder the entire principal of and interest     accrued on such Notes and, to the extent permitted by law,     the Make-Whole Amount with respect to such principal amount     of such Notes.

     

                        (c)  Valuable Rights.  The Company acknowledges, and     the parties hereto agree, that the right of each holder to     maintain its investment in the Notes free from prepayment by     the Company (except as herein specifically provided for) is     a valuable right and that the provision for payment of a     Make-hole Amount by the Company in the event that the Notes     are prepaid or are accelerated as a result of an Event of     Default is intended to provide compensation for the     deprivation of such right under such circumstances.

                        (d)  Other Remedies.  During the existence of an Event     of Default and irrespective of whether the Notes then     outstanding shall have been declared to be due and payable     pursuant to Section 9.2(a)(ii) hereof and irrespective of     whether any holder of Notes then outstanding shall otherwise     have pursued or be pursuing any other rights or remedies,     any holder of Notes may proceed to protect and enforce its     rights hereunder and under such Notes by exercising such     remedies as are available to such holder in respect thereof     under applicable law, either by suit in equity or by action     at law, or both, whether for specific performance of any     agreement contained herein or in aid of the exercise of any     power granted herein, provided that the maturity of such     holder's Notes may be accelerated only in accordance with     Section 9.2(a) and Section 9.2(b) hereof.

                        (e)  Nonwaiver and Expenses.  No course of dealing on     the part of any holder of Notes nor any delay or failure on     the part of any holder of Notes to exercise any right shall     operate as a waiver of
such right or otherwise prejudice     such holder's rights, powers and remedies.  If the Company     or any Guarantor shall fail to pay when due any principal     of, or Make-Whole Amount or interest on, any Note, or shall     fail to comply with any other provision hereof, the Company     and each such Guarantor shall pay to each holder of Notes,     to the extent permitted by law, such further amounts as     shall be sufficient
 

 

56

     to cover the costs and expenses, including but not     limited to reasonable attorneys' fees, incurred by such     holder in collecting any sums due on such Notes or in     otherwise assessing, analyzing or enforcing any rights or     remedies that are or may be available to it.

              9.3  Annulment of Acceleration of Notes.

             If a declaration is made pursuant to Section 9.2(a)(ii) hereof, then and in every such case, the holders of at least sixty-five (65%) in aggregate principal amount of the Notes then outstanding (exclusive of Notes then owned by any one or more of the Company, any Guarantor, any of the Subsidiaries of the Company and any Affiliates) may, by written instrument filed with the Company or any Guarantor, rescind and annul such declaration, and the consequences thereof, provided that at the time such declaration is annulled and rescinded:

                       (a)  no judgment or decree shall have been entered for     the payment of any moneys due on or pursuant hereto or the     Notes;

                       (b)  all arrears of interest upon all the Notes and all     other sums payable hereunder and under the Notes (except any     principal of, or interest or Make-Whole Amount on, the Notes     which shall have become due and payable by reason of such     declaration under Section 9.2(a)(ii) hereof) shall have been     duly paid; and

                       (c)  each and every other Default and Event of Default     shall have been waived pursuant to Section 12.5 hereof or     otherwise made good or cured,
 

          and provided further that no such rescission and annulment shall extend to or affect any subsequent Default or Event of Default or impair any right consequent thereon or effect any holders' rights under Section 9.1(a) and Section 9.1(b).

              9.4  Application of Acceleration Payments.

             Any payments received by any holder of Notes pursuant to, or in respect of, Section 9.2 hereof shall, at the time of the receipt thereof, be applied by such holder (i) first, to all unpaid expenses

      

57

 

of such holder under Section 1.5, Section 9.2(e) and Section 10.5 hereof, (ii) second, to all accrued and unpaid interest on such holder's Notes, (iii) third, to any Make-Whole Amount payable to such holder in respect of its Notes and (iv) fourth, to the aggregate principal amount of the Notes of such holder then outstanding.

10.  GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS OF GUARANTORS.

             10.1 Guaranteed Obligations.

             Each Guarantor hereby irrevocably and unconditionally guarantees, as and for its own debt, until final and indefeasible payment has been made, the due and punctual payment of the principal and interest and Make-Whole Amount, if any, on all Notes at any time outstanding and the due and punctual payment of all moneys payable, and all other indebtedness owing, by the Company under the Note Purchase Agreement (collectively, the "Guaranteed Obligations") in each case when and as the same shall become due and payable, whether at maturity, pursuant to optional prepayment, by acceleration or otherwise, all in accordance with the terms and provisions thereof; it being the intent of the Guarantors that the guaranty set forth in this Section 10 shall be a guaranty of payment and not a guaranty of collection.  Each Guarantor hereby further unconditionally guarantees the punctual and faithful performance, keeping, observance and fulfillment by the Company of all duties, agreements, covenants and obligations of the Company contained in the Notes and in the Note Purchase Agreement.  In the event the Company fails to make, on or before the due date thereof, any payment to be made of any principal amount of, or interest or Make-Whole Amount (if any) on, or in respect of, the Notes or of any other amounts due under the Notes and/or the Note Purchase Agreement or if the Company shall fail to perform, keep, observe or fulfill any such obligation as aforesaid in the manner provided in any one or more of the Notes and/or the Note Purchase Agreement, each Guarantor shall cause forthwith to be paid the moneys to be paid and shall cause to be performed, kept, observed or fulfilled the obligations to be performed, kept, observed or fulfilled as if such payment or performance, as the case may be, were being made under the Notes or the Note Purchase Agreement, as appropriate.

 

58

 

             10.2 Performance by Guarantors.

             Each Guarantor agrees that its liability under this Section 10 shall be immediate and shall not be contingent upon the exercise or enforcement by any holder of Notes of whatever remedies it may have against the Company or any other guarantor or the enforcement of any Lien or realization upon any security such holder may at any time possess or have available for its benefit.
 

             The Guaranty set forth in this Section 10 is a primary and original joint and several obligation of the Guarantors and is an absolute, unconditional, continuing and irrevocable guaranty of payment and shall remain in full force and effect without respect to future changes in conditions, including change of law, or any invalidity or irregularity with respect to the issuance of any obligations (including, without limitation, any of the Notes) of the Company, or with respect to the execution and delivery of any agreement (including, without limitation, any of the Note Purchase Agreement or the Notes) between the Company and any one or more of the holders of Notes, or with respect to the genuineness, validity, regularity or enforceability of any of the Guaranteed Obligations.

             10.3 Waivers; Subrogation; Offsets.

             Each Guarantor does hereby waive:  notice of acceptance hereof; notice of any purchase of Notes issued under the Note Purchase Agreement or the extension of credit from time to time given by any holder of Notes to the Company and the creation, existence or acquisition of any of the Guaranteed Obligations; notice of the amount of the Guaranteed Obligations, subject, however, to such Guarantor's right to make inquiry of any holder of Notes to ascertain the amount of the Guaranteed Obligations held by such holder at any reasonable time; notice of adverse change in the financial condition of the Company or of any other fact which might increase such Guarantor's risk; notice of presentment for payment, demand, protest and notice thereof as to the Notes or any other instrument; notice of default (including any Default or Event of Default hereunder); all defenses, offsets and counterclaims which a Guarantor may at any time have to any claim of any holder of Notes against the Company; and all other notices and demands to which such
 

      

59

 

Guarantor might otherwise be entitled.  Each Guarantor further waives the rights by statute or otherwise to require any holder of Notes to institute suit against the Company or to exhaust its rights and remedies against the Company or any other guarantor, such Guarantor being bound to the payment of each and all Guaranteed Obligations in respect of each holder of Notes, whether now existing or hereafter accruing, as fully as if such Guaranteed Obligations were directly owing to each such holder of Notes by such Guarantor.  Each Guarantor further waives any defense arising by reason of any disability or other defense of the Company or by reason of the cessation from any cause whatsoever of the liability of the Company in respect of the Guaranteed Obligations.

             Until all of the Guaranteed Obligations shall have been indefeasibly paid in full and subject to Section 10.5 and Section 10.13 hereof, no Guarantor shall have any right of subrogation, reimbursement or indemnity whatsoever and no right of recourse to or with respect to any assets or Property of the Company.  Nothing shall discharge or satisfy the liability of such Guarantor hereunder except the full and final performance and indefeasible payment of the Guaranteed Obligations.

             Each holder of Notes shall have, to the fullest extent permitted by law, the right of set-off in respect of any and all credits and any and all other Property of each Guarantor, now or at any time whatsoever with, or in the possession of, such holder for any and all obligations of such Guarantor hereunder.
 

 

             10.4 Releases.

             Each Guarantor consents and agrees that, without notice to such Guarantor and without affecting or impairing the obligations of such Guarantor hereunder, any holder of Notes may, in the manner provided in the Notes or the Note Purchase Agreement, by action or inaction, directly or indirectly, compromise or settle, extend the period of duration or the time for the payment or discharge or performance of, or may refuse to, or otherwise not, enforce, or may, by action or inaction, release all or any one or more parties to, any one or more of the Notes or the Note Purchase Agreement, or may grant other indulgences to the Company in respect thereof, or may amend or modify in any manner and at any time (or from time to time)

 

60

 

any one or more of the Notes and the Note Purchase Agreement, or may, by action or inaction, release or substitute any one or more of the endorsers or guarantors of the Guaranteed Obligations whether parties hereto or not, or may exchange, enforce, waive or release, by action or inaction, directly or indirectly, any security for, the guaranty in this Section 10 or any Guaranteed Obligation.  Further, no holder of Notes shall have any obligation to, and shall have any liability for failing to, obtain or perfect or to maintain, or cause to be obtained, perfected or maintained, the perfection of any security interest or other Lien on Property to secure the Guaranteed Obligations or the obligations of any guarantor in respect thereof.

             10.5 Marshaling; Revival of Obligations.

             Each Guarantor consents and agrees that no holder of Notes shall be under any obligation to marshall any assets in favor of any Guarantor, or against or in payment of any or all of the Guaranteed Obligations.  Each Guarantor agrees to pay all expenses incurred by each holder of Notes in connection with the evaluation, protection, assertion or enforcement of its rights under the Note Purchase Agreement and the guaranty set forth in this Section 10, including, without limitation, court costs, collection charges and reasonable attorneys' fees and disbursements.

             Each Guarantor further agrees that to the extent the Company makes a payment or payments to any holder of Notes, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required, for any of the foregoing reasons or for any other reason, to be repaid or paid over to a custodian, trustee, receiver or any other party under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the obligation or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made and the Guarantors shall be primarily, jointly and severally liable for such obligation.

 

61

 

             10.6 Subordination.

             In the event that for any reason whatsoever, the Company is now or hereafter becomes indebted to a Guarantor, such Guarantor agrees that the amount of such indebtedness and all interest thereon shall at all times be subordinate as to time of payment and in all other respects to all the Guaranteed Obligations, and that such Guarantor shall not be entitled to enforce or receive payment thereof until all sums then due and owing to the holders of Notes in respect of the Guaranteed Obligations shall have been paid in full.  If any payment shall have been made to a Guarantor by the Company on any said indebtedness during any time that there are Guaranteed Obligations outstanding, such Guarantor shall hold in trust all such payments for the benefit of the holders of Notes and shall make said payment to such holders to be credited and applied against obligations of the Company in accordance with the discretion of, and pursuant to instructions from, the Required Holders.

             10.7 No Election.

             Each holder of Notes shall (individually or collectively with the other holders) have the right to seek recourse against any one or more of the Guarantors to the full extent provided for in this Section 10, and against the Company to the full extent provided for in the Notes and the Note Purchase Agreement.  No election to proceed in one form of action or proceeding, or against any party, or on any obligation, shall constitute a waiver of the right of such holder of Notes, to proceed in any other form of action or proceeding or against other parties unless such holder of Notes has expressly waived such right in writing.  Specifically, but without limiting the generality of the foregoing, no action or proceeding by any holder of Notes against the Company under any document or instrument evidencing Guaranteed Obligations shall serve to diminish the liability of any Guarantor under this Section 10 except to the extent that such holder finally and unconditionally shall have realized payment by such action or proceeding, notwithstanding the effect of any such action or proceeding upon such Guarantor's right of subrogation against the Company.  Each Guarantor is fully aware of the financial condition of the Company.  Each Guarantor is executing and delivering this guaranty based solely upon its own independent investigation and in no part upon any representation or

      

62

 

statement of any one or more of the holders of Notes with respect thereto.  Each Guarantor is in a position to obtain, and hereby assumes full responsibility for obtaining, any additional information concerning the financial condition of the Company as such Guarantor may deem material to its obligations hereunder, and such Guarantor is not relying upon, nor expecting, any holder of Notes to furnish it any information concerning the financial condition of the Company.

             10.8 Severability.

             Subject to Section 9 hereof, each of the rights and remedies granted under this Section 10 to each holder of Notes in respect of the Notes held by such holder may be exercised by such holder without notice to, or the consent of or any other action by, any other holder of Notes.

             10.9 Other Enforcement Rights.

             Each holder of Notes may proceed, as provided in Section 10.8  hereof, to protect and enforce the guaranty of the Guarantors under this Section 10 by suit or suits or proceedings in equity, at law or in bankruptcy, and whether for the specific performance of any covenant or agreement contained herein (including, without limitation, in this Section 10) or in execution or aid of any power herein granted; or for the recovery of judgment for or in respect of the Guaranteed Obligations or for the enforcement of any other proper, legal or equitable remedy available under applicable law.

             10.10  Delay or Omission; No Waiver.

             No course of dealing on the part of any holder of Notes and no delay or failure on the part of any such Person to exercise any right under the Note Purchase Agreement (including, without limitation, this Section 10) shall impair such right or operate as a waiver of such right or otherwise prejudice such Person's rights, powers and remedies hereunder.  Every right and remedy given in or by this Section 10 or by law to any holder of Notes may be exercised from time to time as often as may be deemed expedient by such Person.

 

63

 

             10.11  Restoration of Rights and Remedies.

             If any holder of Notes shall have instituted any proceeding to enforce any right or remedy in this Section 10, otherwise than under the Note Purchase Agreement or under any Note held by such holder and such proceeding shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such holder, then and in every such case each such holder, the Company and each Guarantor shall, except as may be limited or affected by any determination in such proceeding, be restored severally and respectively to its respective former positions hereunder and thereunder, and thereafter the rights and remedies of such holder shall continue as though no such proceeding had been instituted.

             10.12  Cumulative Remedies.

             No remedy under the Note Purchase Agreement (including, without limitation, this Section 10) or the Notes is intended to be exclusive of any other remedy, but each and every remedy shall be cumulative and in addition to any and every other remedy given thereunder.

             10.13  Miscellaneous.

             Each Guarantor (to the fullest extent that it may lawfully do so) expressly waives any claim of any nature arising out of any right of indemnity, contribution, reimbursement or any similar right in respect of any payment made under this Section 10 or in connection with this Section 10, or any claim of subrogation arising in connection with respect to any payment made under this Section 10, against the Company or the estate of the Company (including Liens on the Property of the Company or the estate of the Company), in each case if, and for so long as, the Company is the subject of any proceeding brought under Title 11 of the United States Code, or any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, and further agrees that it will not file any claims against the Company or the estate of the Company in the course of such proceeding in respect of the rights referred to in this paragraph, and further agrees that each holder of Notes may specifically enforce the provisions of this paragraph.

 

64

 

             If an Event of Default exists, then the holders of Notes (as provided in Section 9 hereof) shall have the right to declare all of the Guaranteed Obligations to be, and such Guaranteed Obligations shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which have been expressly waived by the Company and each Guarantor, and notwithstanding any stay, injunction or other prohibition preventing such declaration (or such Guaranteed Obligations from becoming automatically due and payable) as against the Company.  In any such event, the holders of Notes shall have immediate recourse to the Guarantors to the fullest extent set forth herein.

             10.14  Continuing Guaranty.

             The Guarantors' obligations in this Section 10 are continuing obligations and shall apply to all Guaranteed Obligations whenever arising.

             10.15  Inspection.

             Each Guarantor shall permit the representatives of any Purchaser or any other Institutional Investor which is the holder of at least One Million Dollars ($1,000,000) aggregate principal amount of Notes (at the expense of such Person unless a Default or Event of Default shall have occurred and be continuing and then at the expense of the Guarantor), upon at least twenty-four (24) hours' prior written notice to the Guarantor in care of the Chief Financial Officer of the Company to visit and inspect any of the Properties of such Guarantor or any of its Subsidiaries, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants (and by this provision each Guarantor authorizes said accountants to discuss its finances and affairs and the finances and affairs of its Subsidiaries) all at such reasonable times and as often as may be reasonably requested.

 

65

 

             10.16  Maintenance of Properties and Corporate Existence.

             Each Guarantor will

                        (a)  Property -- maintain its Property in good     condition, ordinary wear and tear excepted, and make all     necessary renewals, replacements, additions, betterments     and improvements thereto;

                        (b)  Financial Records -- keep true books of records     and accounts in which full and correct entries shall be made     of all its business transactions and which will permit     the provision of accurate and complete financial     statements in accordance with GAAP;

                        (c)  Corporate Existence and Rights -- do or cause to     be done all things necessary to preserve and keep in full     force and effect its corporate existence, rights (charter     and statutory) and franchises; and
 

                        (d)  Compliance with Law -- not be in violation of any     law, ordinance or governmental rule or regulation to which     it is subject and not fail to obtain any license,     certificate, permit, franchise or other governmental     authorization necessary to the ownership of its Properties     or to the conduct of its business if such violation or     failure to obtain could be reasonably expected to have a     Material Adverse Effect.

             10.17  Merger; Acquisition.

             No Guarantor will merge into, consolidate with, or sell, lease, transfer or otherwise dispose of all or substantially all of its Property to, any other Person or  permit any other Person to consolidate with or merge into it (except that the Company may merge with a Guarantor if the Company is the surviving corporation); provided that the foregoing restriction does not apply to the merger or consolidation of a Guarantor with another corporation, if:

                  (a)  the corporation that results from such merger or     consolidation or that purchases, leases,
 

 

66

 

     or acquires all or substantially all of such Property (the     "Guarantor Surviving Corporation") is organized under the     laws of the United States of America or any jurisdiction     thereof;
 

                  (b)  the due and punctual payment of all the Guaranteed     Obligations and all other obligations of such Guarantor     hereunder and the punctual performance and observance of all     the covenants herein to be performed or observed by such     Guarantor are expressly and effectively assumed by such     Guarantor Surviving Corporation pursuant to such agreements     and instruments as shall be approved by the Required     Holders, and such Guarantor will cause to be delivered to     each holder of Notes an opinion of independent counsel to     the effect that               (i) such agreements and instruments are     enforceable in accordance with their terms and (ii) no     taxable event or consequence will result to any holder of     Notes solely by virtue of such merger, consolidation,     purchase, lease or acquisition and the assumption by such     Guarantor Surviving Corporation of the obligations of such     Guarantor hereunder; and

                  (c)  immediately prior to, and immediately after the     consummation of the transaction, and after giving effect     thereto, no Default or Event of Default exists or would     exist under any provision hereof.

             10.18  Pro-Rata Offers.

             No Guarantor will, nor will it permit any of its Subsidiaries or any Affiliate, directly or indirectly, to acquire or make any offer to acquire any Notes other than as set forth in Section 7.12.

             10.19  Private Offering.

             Each Guarantor will not, nor will it permit any Person acting on its behalf to, take any action so as to bring the issuance and sale of the Notes or the Guaranty within the provisions of section 5 of the Securities Act.

             10.20  Pari Passu Ranking of Guaranty.

             Each Guarantor warrants that its obligations under this Section 10 do, and undertakes that the same will continue to, rank at least pari passu with all its other present and future unsecured senior obligations.

 

67

 

11.  INTERPRETATION OF THIS AGREEMENT

     

             11.1  Terms Defined.

             As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

                        Acceptable Bank -- means any bank or trust company which (a) is organized under the laws of and located in the United States of America or any State thereof, Canada, Japan or a country which is a member of the European Common Market (b) has capital, surplus and undivided profits aggregating at least One Hundred Million Dollars ($100,000,000) and (c) whose long-term unsecured debt obligations (or the long-term unsecured debt obligations of the bank holding company owning all of the capital stock of such bank or trust company) shall have received one of the two highest ratings issued by Moody's Investors Service, Inc. or by Standard & Poor's Corporation or, if neither of such rating agencies is in existence at the time, comparable ratings issued by any other rating agency of national standing and reputation.
 

                        Acceptance -- means, with respect to any Person (the "Obligor"), (a) any outstanding and unpaid sight or time draft maturing not more than three (3) years from the date of its issuance drawn by the Obligor on a bank or trust company and accepted by such bank or trust company, (b) any outstanding and unpaid sight or time draft maturing not more than three (3) years from the  date of its issuance drawn by any Person selling goods or providing services to the Obligor on a bank or trust company which shall have issued a letter of credit to such person for the account of the Obligor, provided that if such bank or trust company shall have paid such sight or time draft and the Obligor shall not have reimbursed such bank or trust company for such payment, the obligation owing from the Obligor to such bank or trust company in respect of such reimbursement shall be deemed to be an Acceptance under this definition, and (c) any outstanding and unpaid sight or time draft drawn by any Person selling goods or providing services to the Obligor on the Obligor and accepted by the Obligor.

                   Affiliate -- means, at any time, a Person (other than a Subsidiary of the Company):
 

 

68

 

                       (a)  that directly or indirectly through one or more     intermediaries controls, or is controlled by, or is under     common control with, the Company,
 

                       (b)  that beneficially owns or holds ten percent (10%)     or more of any class of the Voting Stock of the Company, or
 

                       (c)  ten percent (10%) or more of the Voting Stock (or     in the case of a Person that is not a corporation, five     percent (5%) or more of the equity interest) of which is     beneficially owned or held by the Company or a Subsidiary of     the Company, at such time.

As used in this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

              Agreement, this -- means this agreement, as it may be amended and restated from time to time.

              Board of Directors -- means, at any time, with respect to the Company or a Guarantor, the board of directors of such Person or any committee thereof that, in the instance, shall have the lawful power to exercise the power and authority of such board of directors.

              Business Day -- means, at any time, a day other than a Saturday, a Sunday or, in the case of any Note with respect to which the provisions of Section 4.1 hereof are applicable, a day on which the bank designated (by the holder of such Note) to receive (for such holder's account) payments on such Note is required by law (other than a general banking moratorium or holiday for a period exceeding four (4) consecutive days) to be closed.

              Capital Lease -- means, at any time, a lease or any conditional sale or other title retention agreement with respect to which the lessee or the purchaser thereof is required under GAAP to recognize the acquisition of an asset and the incurrence of a liability.

 

69

 

              Capital Stock -- means any and all shares, interests, participations or other equivalents (however designated) of capital stock of any corporation, including, without limitation, Preferred Stock and Voting Stock of such corporation.

              Change in Control -- means any Acquisition by any Person, or related Persons constituting a "group" for purposes of Section 13(d) of the Securities Exchange Act of 1934, of (a) the power to elect, appoint or cause the election or appointment of at least a majority of the members of the Board of Directors of the Company, or (b) beneficial ownership of thirty percent (30%) of the Voting Stock of the Company or otherwise; provided, however, that a Change in Control shall not be deemed to have occurred if an Acquisition of Voting Stock is made as the result of a public offering by the Company of its shares which is registered under the Securities Act of 1933 and effected in accordance with the rules of each national securities exchange on which the Voting Stock of the Company is listed for trading.  For the purposes of this definition, "Acquisition" of the power stated in the preceding sentence means the earlier of (i) the actual possession thereof and (ii) the taking of any corporate or other action or the consummation of any transaction or of the first of a series of related actions or transactions which, with the passage of time, will give such Person or Persons the actual possession thereof.

              Closing  
-- Section 1.2 hereof.

              Closing Date -- Section 1.2 hereof.

              Company  
-- introductory sentence hereof.

              Consolidated Funded Debt -- means, at any time, the aggregate amount of Funded Debt of the Company and its Subsidiaries determined on a consolidated basis for such Persons at such time.

              Consolidated Net Income -- means, with respect to any fiscal period, net earnings (or loss) after income taxes of the Company and its Subsidiaries determined on a consolidated basis for such Persons for such period in accordance with GAAP but, in any event, excluding:

 

70

                       (a)  Any gains or losses (after giving effect to the     tax effect thereof) arising from the sale or other     disposition of investments or fixed or capital assets;

                       (b)  any extraordinary or nonrecurring gains or losses     (after giving effect to the tax effect thereof);

                       (c)  any gain resulting from any reappraisal,     revaluation or write-up of assets;

                       (d)  net earnings and losses of any Subsidiary of the     Company accrued prior to the date it became a Subsidiary of     the Company;

                       (e)  net earnings and losses of any Person,     substantially all the assets of which have been acquired     in any manner by the Company or any of its Subsidiaries,     realized by such other Person prior to the date of such     acquisition;

                       (f)  net earnings of any Person (other than a      Subsidiary of the Company) in which the Company or any of     its Subsidiaries shall have an ownership interest unless     such net earnings shall have actually been received by the     Company or such Subsidiary in the form of cash     distributions;

                     (g)  any portion of the net earnings of any Subsidiary     of the Company that, by reason of any contract or charter     restriction or applicable law or regulation (or in the good     faith judgment of the Board of Directors for any other     reason), is unavailable for payment of dividends to the     Company or any other Subsidiary of the Company;

                       (h)  the earnings and losses of any Person to which     assets of the Company or any of its Subsidiaries shall have     been sold, transferred or disposed of, or into which the     Company or any of its Subsidiaries shall have been merged,     prior to the date of such merger or consolidation;

                       (i)  any income resulting from the acquisition by the     Company or a Subsidiary of the Company of the equity     interests, Capital Stock or assets of another
 

 

71

 

     Person, in each case where such income is attributable to     the fact that the net book value of the equity investment of     the Company or such Subsidiary in such Person exceeds the     amount invested by the Company or such Subsidiary in such     Person;

                       (j)  any gain or loss arising from the acquisition of     any Securities of the Company or any of its Subsidiaries;          (k)  any portion of the net earnings of the Company or     any of its Subsidiaries that cannot be freely converted into     United States dollars;          (l)  any gain or loss resulting from the receipt of any     proceeds of any insurance policy; and
 

                       (m)  any restoration during such period to income of     any contingency reserve, except to the extent that provision     for such reserve was made during such period out of income     accrued during such period.

              Consolidated Net Worth -- means, at any time, the shareholders equity in the Company and its Subsidiaries, determined in accordance with GAAP.

              Consolidated Total Capitalization -- means, at any time, the sum of

                       (a)   Consolidated Net Worth, plus

                  (b)   Consolidated Funded Debt, determined in each case     at such time.

              Control Prepayment Date -- Section 5.2 hereof.

              Current Debt -- with respect to any Person means, at any time, without duplication

                           (a)  its liabilities for borrowed money,

                       (b)  liabilities secured by any Lien existing on     Property owned by such Person (whether or not such     liabilities have been assumed),

 

72

 

                           (c)  its liabilities in respect of Capital Leases,

     

                       (d)  its liabilities under any other obligations for     borrowed money (including, without limitation, any     liabilities in respect of Acceptances and so-called "take or     pay" obligations), and

                       (e)  its liabilities under Guaranties of obligations     described above in clause (a), clause (b), clause (c) and/or     clause (d) above of other Persons,

provided that, in each such case, such liability is either payable on demand or within one (1) year from the creation thereof and is not renewable or extendible at the option of such Person to a date more than one (1) year from the date of creation thereof.  Any such liability

                       (x)  which is renewable or extendible at the option of     such Person to a date more than one (1) year from the date     of creation thereof, or

                       (y)  which, for any reason (including any renewals or     extensions thereof), shall in fact have been outstanding for     a period ending at such time of more than three hundred     sixty-five (365) consecutive days,

shall, in each case, be deemed to be Funded Debt and not Current Debt.  If any indebtedness in respect of any of the foregoing liabilities is expressed to mature more than one (1) year from the date of its creation but, as of any date of determination, has principal due and payable within one (1) year of such date of determination, "Current Debt" shall not include such principal payable within such one (1) year period but rather the same shall be included in "Funded Debt."  Notwithstanding the foregoing, any Acceptance of such Person shall always be classified as Current Debt under this Agreement.

              Debt -- means, with respect to any Person, at any time, without duplication, all Funded Debt and Current Debt of such Person at such time.

 

73

 

              Default -- means an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

              Environmental Protection Law -- means any federal, state, county, regional or local law, statute, or regulation (including, without limitation, CERCLA, RCRA and SARA) enacted in connection with or relating to the protection or regulation of the environment, including, without limitation, those laws, statutes, and regulations regulating the disposal, removal, production, storing, refining, handling, transferring, processing, or transporting of Hazardous Substances, and any regulations issued or promulgated in connection with such statutes by any Governmental Authority, and any orders, decrees or judgments issued by any court of competent jurisdiction in connection with any of the foregoing.

As used in this definition:

              CERCLA -- means the Comprehensive Environmental     Response, Compensation, and Liability Act of 1980, as     amended from time to time (by SARA or otherwise), and all     rules and regulations promulgated in connection therewith;
 

              RCRA -- means the Resource Conservation and Recovery      Act of 1976, as amended, and any rules and regulations     issued in connection therewith; and

              SARA -- means the Superfund Amendments and     Reauthorization Act of 1986, as amended from time to time,     and all rules and regulations promulgated in connection     therewith.

              ERISA -- means the Employee Retirement Income Security     Act of 1974, as amended from time to time.

              ERISA Affiliate -- means any corporation or trade or     business that

  

                                 (i)  is a member of the same controlled group of          corporations (within the meaning of section 414(b) of     the IRC) as the Company or any Guarantor, or

  

 

74

 

  
                                 (ii) is under common control (within the meaning          of section 414(c) of the IRC) with the Company or any          Guarantor.

  

              Event of Default -- Section 9.1 hereof.

              Exchange Act -- means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated pursuant thereto.

              Fair Market Value -- means, at any time with respect to any Property, the sale value of such Property that would be realized in an arm's-length sale at such time between an informed and willing buyer, and an informed and willing seller, under no compulsion to buy or sell, respectively.

              Foreign Pension Plan -- means any plan, fund or other similar program

                       (a)  established or maintained outside of the United     States of America by any one or more of the Company, any     Guarantor or any of the Subsidiaries of the Company     primarily for the benefit of the employees (substantially     all of whom are aliens not residing in the United States     of America) of the Company, any Guarantor or such     Subsidiaries which plan, fund or other similar program     provides for retirement income for such employees or results     in a deferral of income for such employees in contemplation     of retirement and
 

                           (b)  not otherwise subject to ERISA.

              Funded Debt -- means, with respect to any Person, at any time, Without duplication,

                       (a)  its liabilities for borrowed money, other than     Current Debt;

                       (b)  liabilities secured by any Lien existing on     Property owned by such Person (whether or not such     liabilities have been assumed), other than Current Debt;

                       (c)  its liabilities in respect of Capital Leases,     other than Current Debt;

 

75

 

                       (d)  its liabilities under any other obligations for     borrowed money (including, without limitation, any so-called     "take or pay" obligations), other than Current Debt; and

                       (e)  its liabilities under Guaranties of liabilities of     the type set forth in clause (a), clause (b), clause (c)     and/or clause (d) above of other Persons.

              GAAP  
-- means accounting principles as promulgated from time to time in statements, opinions and pronouncements by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board and in such statements, opinions and pronouncements of such other entities with respect to financial accounting of for-profit entities as shall be accepted by a substantial segment of the accounting profession in the United States of America.

              Governmental Authority -- means

                       (a)  the government of

  

                                 (i)  the United States of America and any  state          or political subdivision thereof, or other

                                 (ii) any other jurisdiction (y) in which any of          the Company, the Guarantors or any of the Subsidiaries          of the Company conducts all or any part of their          respective businesses or (z) that asserts jurisdiction          over the conduct of the affairs or Properties of any          such Person, or

  

                       (b)  any entity exercising executive, legislative,     judicial, regulatory or administrative functions of, or     pertaining to, any such government.

              Guaranteed Obligation -- Section 10.1 hereof.

              Guarantor  
-- the introductory sentence hereof.

              Guarantor Surviving Corporation - Section 10.17 hereof.

     

76

 

              Guaranty  
-- means with respect to any Person (for the purposes of this definition, the "General Guarantor") any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of the General Guarantor guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person (the "Primary Obligor") in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by the General Guarantor:

                       (a)  to purchase such indebtedness or obligation or any     Property or assets constituting security therefor;

                       (b)  to advance or supply funds
 

  

                            (i)  for the purpose of payment of such          indebtedness or obligation, or

                                 (ii) to maintain working capital or other balance          sheet condition or any income statement condition of          the Primary Obligor or otherwise to advance or make          available funds for the purchase or payment of such          indebtedness or obligation;

  

                       (c)  to lease Property or to purchase Securities or     other Property or services primarily for the purpose of     assuring the owner of such indebtedness or obligation of     the ability of the Primary Obligor to make payment of the     indebtedness or obligation; or

                       (d)  otherwise to assure the owner of the indebtedness
or obligation of the Primary Obligor against loss in respect     thereof.

For purposes of computing the amount of any Guaranty in connection with any computation of indebtedness or other liability, it shall be assumed that the indebtedness or other liabilities that are the subject of such Guaranty are direct obligations of the issuer of such Guaranty.

              Hazardous Substances -- means any and all pollutants, contaminants, toxic or hazardous wastes or any
 

 

77

 

other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).

 

              Institutional Investor -- means the Purchasers, any affiliate of any of the Purchasers, and any holder of Notes that is a bank (including but not limited to a commercial bank or an investment bank), trust company, insurance company, pension fund or other similar institutional investor or an entity whose security holders consist solely of Institutional Investors.

              IRC  
-- means the Internal Revenue Code of 1986, together with all rules and regulations promulgated pursuant thereto, as amended from time to time.

              IRS  
-- means the Internal Revenue Service and any successor agency.

              Investment  
-- means any investment, made in cash or by delivery of Property, by the Company or any of its Subsidiaries (a) in any Person, whether by acquisition of stock, indebtedness or other obligation or Security, or by loan, Guaranty, advance or capital contribution, or otherwise, or (b) in any Property.

              Lien  
-- means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes, and the filing of any financing statement under the Uniform Commercial Code of any jurisdiction, or an agreement to give any of the foregoing.  The term "Lien" includes reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting real Property and includes, with respect to stock, stockholder agreements, voting trust agreements,
 

 

78

 

buy-back agreements and all similar arrangements.  For the purposes hereof, the Company and each of its Subsidiaries is deemed to be the owner of any Property that it shall have acquired or holds subject to a conditional sale agreement, Capital Lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes, and such retention or vesting is deemed a Lien.  The term "Lien" does not include negative pledge clauses in agreements relating to the borrowing of money.

              Make-Whole Amount -- means, at any time, with respect to a principal amount of Notes being prepaid (in whole or in part) or accelerated, the greater of

                       (a)  Zero Dollars ($O), and

                       (b)  the remainder of

  

                                 (i)  the sum of the present values of the then          remaining scheduled payments of principal and interestthat would be payable but for the prepayment or          acceleration of such principal amount of Notes being          prepaid or accelerated, minus

                                 (ii) the aggregate principal amount of the Notes          so prepaid or accelerated.

  

In determining such present values, a discount rate equal to the Make-Whole Discount Rate divided by two (2), and a discount period of six (6) months of thirty (30) days each, shall be used.

             The Required Holders shall calculate the Make-Whole Amount in respect of any prepayment under Section 5.2 hereof and shall, immediately prior to the effecting of such prepayment, deliver a copy of such calculation to the holder of each Note being prepaid and to the Company and the Guarantors.  Such calculation of the Make-Whole Amount shall be made on the Business Day immediately preceding the date of such prepayment and shall be binding upon the Company and the Guarantors absent manifest error.

             The Required Holders in respect of the acceleration of all of the Notes under Section 9.2(a) hereof shall
 

      

79

 

calculate the Make-Whole Amount in respect of any such acceleration as of the Business Day immediately preceding the date of payment of such accelerated amount and shall deliver a copy of such calculation to each holder of Notes, the Company and the Guarantors immediately prior to the effecting of the payment of such accelerated amount.  Each calculation referred to in this paragraph shall be binding upon the Company and the Guarantors absent manifest error.

             Each holder of Notes accelerating its Note under Section 9.2(b) hereof shall calculate the Make-Whole Amount in respect of any such acceleration as of the Business Day immediately preceding the date of payment of such accelerated amount and shall deliver a copy of such calculation to the Company and the Guarantors immediately prior to the effecting of payment of such accelerated amount.  Each calculation referred to in this paragraph shall be binding upon the Company and the Guarantors absent manifest error.

             The Required Holders hereby appoint the holder of Notes with the highest aggregate principal amount outstanding, determined as of the date on which any calculation required under this definition is to be made, to effect such calculation on behalf of the Required Holders and to deliver the results of such calculation to the Company, the Guarantors and each other holder of Notes.  Each calculation referred to in this paragraph shall be binding upon the Company, the Guarantors and each other holder absent manifest error.  If any such holder shall decline to discharge the undertakings in this paragraph (and each such holder may elect to so decline), the Required Holders shall, at their option, act collectively in discharging such undertakings, appoint another holder to effect the same or authorize the Company to make such calculations.

             Any failure for any reason whatsoever of any holder of Notes or the Required Holders to deliver a calculation required under this definition to the Company, the Guarantors and/or any other holder of Notes shall not excuse, release or discharge the Company or the Guarantors from their respective payment obligations hereunder and under the Notes, including, without limitation, paying any Make-Whole Amount that may be payable in connection with any prepayment or acceleration of all or some of the
 

      

80

 

Notes.  The Company and the Guarantors shall cooperate with the holders of Notes in making the calculations required in this definition and in coordinating the distribution of such calculations and the effecting of the payments or prepayments referred to above.

              Make-Whole Discount Rate -- means, with respect to the calculation of a Make Whole Amount in respect of any prepayment or acceleration of the Notes the sum of (a) one half of one percent (0.5%) plus (b) the Treasury Rate determined in respect of such calculation.

              Margin Security -- means "margin stock" within the meaning of Regulations G, T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II, as amended from time to time.

              Material Adverse Effect -- means a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of the Company, the Guarantors and the Subsidiaries of the Company, taken as a whole, or the ability of the Company or any Guarantor to perform its obligations set forth herein or the ability of the Company to perform its obligations set forth in the Notes.

              Multiemployer Plan -- means any multiemployer plan (as defined in section 3(37) of ERISA) in respect of which the Company, any Guarantor or any ERISA Affiliate is an "employer" (as such term is defined in section 3 of ERISA).

              Multiple Employer Pension Plan -- means any employee benefit plan within the meaning of section 3(3) of ERISA (other than a Multiemployer Plan), subject to Title IV of ERISA, to which the Company, any Guarantor or any ERISA Affiliate and an employer (as such term is defined in section 3 of ERISA) other than the Company, any Guarantor or an ERISA Affiliate contribute.

              Notes  
-- Section 1.1 hereof.

              Note Purchase Agreement -- Section 1.2 hereof.

              PBGC  
-- means the Pension Benefit Guaranty Corporation and any successor corporation or governmental agency.

 

81

 

              Pension Plan -- means, at any time, any "employee pension benefit plan" (as such term is defined in section 3 of ERISA) maintained at such time by the Company, any Guarantor or any ERISA Affiliate for employees of the Company, any Guarantor or such ERISA Affiliate, excluding any Multiemployer Plan, but including, without limitation any Multiple Employer Pension Plan.

              Person  
-- means an individual, partnership, joint venture, corporation, trust, unincorporated organization or other form of legal entity and shall include a government or agency or political subdivision thereof.

              Preferred Stock -- means, with respect to any corporation, capital stock of such corporation which shall be entitled to preference or priority over any other capital stock of such corporation in respect of either or both of the payment of dividends or the distribution of assets upon liquidation or distribution.

              Property  
-- means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

              Purchase Money Lien -- means

                       (a)  a Lien held by any Person (whether or not the     seller of such assets) on real or personal Property acquired     or constructed by the Company or any of its Subsidiaries,     which Lien secures all or a portion of the related purchase     price or construction costs of such Property and was created     not more than one hundred eighty (180) days after such     Property was acquired or its construction completed,     provided that such Purchase Money Lien
 

  

                           (i)  encumbers only the Property being so purchased          or constructed, and

                                 (ii) is not thereafter extended to any other          Property, and

  

                       (b)  any Lien existing on real or personal Property of     any corporation at the time it becomes a Subsidiary of the     Company, provided that

 

82

 

  
                                 (i)  no such Lien shall extend to or cover any          Property other than the Property subject to such Lien          at the time of any such transaction, and
 

                                 (ii) such Lien was not created in contemplation of          any such transaction.

  

For purposes of this definition and Section 7.9(a)(viii) hereof, a Lien on real Property which also encumbers fixtures and other items of personal Property used in connection with such real Property shall be deemed to be a Lien on real Property.

              Purchaser  
-- means you, Metropolitan Life Insurance Company.

              Required Holders -- means, at any time, the holders of sixty-six and two-thirds percent (66 2/3%) or more in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by any one or more of the Company, any Guarantor any of the Subsidiaries of the Company, any Affiliate and any officer or director of any thereof).

              Restricted Investments -- means, at any time, all Investments except the following:

                       (a)  Investments in one or more of the Company's     Subsidiaries or any corporation that concurrently with such     Investment becomes a Subsidiary of the Company;
 

                       (b)  receivables arising from the sale of goods and     services, and Investments in Property to be used, in each     case in the ordinary course of business of the Company or     the Company's Subsidiary making such Investment;

                       (c)  Investments in direct obligations of the United     States of America, or any agency thereof, or obligations     guaranteed by the United States of America, provided that     such obligations mature within three (3) years from the date     of acquisition thereof;
 

 

83

 

                       (d)  Investments in marketable direct obligations     issued by any state of the United States of America or any     political subdivision of any such state or any public     instrumentality thereof maturing within three (3) years from     the date of acquisition thereof and having as at any date of     determination one of the two highest ratings obtainable from     either Standard & Poor's Corporation or Moody's Investors     Service, Inc. or, if neither of such rating agencies is in     existence at the time, comparable ratings issued by any     other rating agency of national standing and reputation.

                       (e)  Investments in certificates of deposit, time     deposits or banker's Acceptances issued by Acceptable Banks,     provided that such obligations mature within three (3) years     from the date of acquisition thereof; and          (f)  Investments in commercial paper rated "A-1" or     higher by Standard & Poor's Corporation or "P-1" or higher     by Moody's Investors Service, Inc. (or any future comparable     ratings issued by Moody's Investors Service, Inc. or by     Standard & Poor's Corporation), provided that such     obligations mature within two hundred seventy (270) days     from the date of creation thereof.

                       (g)  Investments entered into prior to and existing on     the date of this Agreement, as and to the extent now     outstanding, all as described in Annex 7.5.

                       (h)  Investments not permitted by clauses (a) through

             (g) above; provided that Investments made pursuant to this     clause (h) shall not exceed, in the aggregate and valued at     the higher of cost or fair market value, 10% of Consolidated     Net Worth.

              Restricted Payment -- means

                       (a)  any dividend or other distribution, direct or     indirect, on account of Capital Stock of the Company (except     dividends payable solely in shares of such Capital Stock) or     on account of the Capital Stock of any Guarantor or any     Subsidiary of the Company (except to the extent paid to the     Company), and
 

                       (b)  any redemption, retirement, purchase or other     acquisition, direct or indirect, of any Capital Stock of the     Company, any of its Subsidiaries or any Guarantor, or of any     warrants, rights or other options to acquire any shares of     such Capital Stock.

              Securities Act -- means the Securities Act of 1933, as amended.

              Security  
-- means "security" as defined in section 2(l) of the Securities Act.

              Subsidiary  
-- means, with respect to any Person, a corporation of which such Person owns, directly or indirectly, more than fifty percent (50%) of the Voting Stock.

              Subsidiary Stock -- Section 7.15 hereof.

              Surviving Corporation -- Section 7.4 hereof.

              Total Subsidiary Debt -- means, at any time, the aggregate amount of Debt of all Subsidiaries of the Company determined at such time other than Debt owed to the Company or any Wholly-Owned Subsidiary.

              Treasury Rate -- means, with respect to the calculation of a Make Whole Amount in respect of any prepayment or acceleration of the Notes (a) the yield reported as of 10:00 a.m., New York City time, on the Business Day on which such calculation is being made, on the display page on the Telerate Service (page five hundred (500), Offer Side) or such other display on the Telerate Service as shall replace such page five hundred (500) providing the most current yields for actively traded "On The Run" United States Treasury securities with maturities corresponding most closely to the remaining Weighted Average Life to Maturity of the principal amount of the Notes then being prepaid or accelerated (such Weighted Average Life to Maturity being determined as of the date of such calculation and rounded to the nearest month), or (b) if and only if such Telerate Service ceases to exist or fails to report such yield, such yield as reported on a reasonably comparable electronic service as may be designated
 

 

85

 

by the Required Holders, or (c) if and only if such Telerate Service ceases to exist or fails to report such yield and the Required Holders shall fail to agree upon a comparable electronic service, such yield reported under the heading "This Week" and under the caption "Treasury Constant Maturities" of the maturity corresponding to the remaining Weighted Average Life to Maturity of the principal amount of the Notes then being prepaid or accelerated (such Weighted Average Life to Maturity being determined as of the date of such calculation and rounded to the nearest month) as most recently published and made available to the public in the statistical release designated "H.15(519)" or any successor publication that is published weekly by the Federal Reserve System and that establishes yields on actively traded United States Treasury securities or if no such successor publication is available, then any other source of current information in respect of interest rates on securities of the United States of America that is generally available and, in the judgment of the Required Holders, provides information reasonably comparable to the H.15(519) report.  If no maturity exactly corresponds to such rounded Weighted Average Life to Maturity, yields for the two most closely corresponding published maturities next above and below the rounded Weighted Average life to Maturity of the Notes shall be calculated pursuant to the immediately preceding sentence and the Treasury Rate shall be interpolated from such yields on a straight-line basis, rounding with respect to each such relevant period to the nearest month.

             As used in this definition:

                                  Weighted Average Life to Maturity -- means, at any          time, with respect to a principal amount of Notes being          prepaid or accelerated, the number of years obtained by          dividing the then Remaining Dollar-Years of such          principal amount by such principal amount; and
 

                                  Remaining Dollar-Years -- means, at any time, with          respect to a principal amount of Notes being prepaid or          accelerated the result obtained by

                                     (a)  multiplying

 

86

 

  

                                           (i)  an amount equal to the remainder of (1)               the amount of principal that would have become due               on each scheduled payment date and at maturity if               such prepayment or acceleration had not been made,               minus (2) the amount of principal on the Notes               scheduled to become due on each such date after               giving effect to such prepayment or acceleration               and the application thereof in accordance with the               provisions of this Agreement, by
 

                                           (ii) the number of years (calculated to the               nearest one-twelfth) that will elapse between such               time and the date each such scheduled principal               payment would be due if such prepayment or               acceleration had not occurred, and
 

  

                                      (b)  calculating the summation of each of the          products obtained in the preceding subsection (a).

  

              Voting Stock -- means capital stock of any class or classes of a corporation the holders of which (a) are ordinarily, in the absence of contingencies, entitled to elect corporate directors (or Persons performing similar functions) and (b) are not otherwise limited in the exercise of the voting rights in respect of such capital stock.

              Welfare Plan -- means, at any time, any "employee welfare benefit plan" (as such term is defined in section 3 of ERISA) maintained at such time by the Company, any Guarantor or any ERISA Affiliate for employees of the Company or any Subsidiaries, including any multiple employer welfare arrangements (as such term is defined in section 3 of ERISA).

              Wholly-Owned Subsidiary -- means, at any time, any Subsidiary of the Company one hundred percent (100%) of all of the Capital Stock (except directors' qualifying shares) of which are owned by any one or more of the Company and the Company's other Wholly-Owned Subsidiaries at such time.

 

87

 

              11.2 Directly or Indirectly.

             Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, including actions taken by or on behalf of any partnership in which such Person is a general partner.

              11.3 Section Headings; Table of Contents; Construction.

              (a)  Section Headings and Table of Contents, etc.  The     titles of the Sections and the Table of Contents appear as a     matter of convenience only, do not constitute a part hereof     and shall not affect the construction hereof.  The words     "herein," "hereof," "hereunder" and "hereto" refer to this     Agreement as a whole and not to any particular Section or     other subdivision.

              (b)  Construction.  Each covenant contained herein     shall be construed (absent an express contrary provision     herein) as being independent of each other covenant     contained herein, and compliance with any one covenant shall     not (absent such an express contrary provision) be deemed to     excuse compliance with one or more other covenants.

              11.4 Governing Law.

             THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK.

12.  MISCELLANEOUS

              12.1 Communications.

                        (a)  Method; Address.  All communications hereunder or     under the Notes (i) shall be in writing, (ii) shall be both     (A) hand delivered, deposited into the United States mail     (registered or certified mail), postage prepaid, or sent by      overnight courier of national standing and (B)     electronically "telecopied" or "faxed", and (iii) shall be     addressed,
 

 

88

 

  
               (i)  if to the Company,  

    
               405 Lexington Avenue

Chrysler Building

20th Floor

New York, N.Y. 10174

Attn: General Counsel 

Fax: (212) 878-1804

                    if to one or more of the Guarantors,

                    c/o Minerals Technologies Inc. 

405 Lexington Avenue

Chrysler Building

20th Floor

New York, N.Y. 10174

Attn: General Counsel 

Fax: (212) 878-1804

    

  

     or at such other address as the Company and/or a Guarantor     shall have furnished in writing to all holders of the Notes     at the time outstanding, and

                                 (ii) if to any of the holders of the Notes,

  

                                           (A)  if such holders are the Purchaser, at               the address set forth on Annex 1.2 hereto, and               further including any parties referred to on such               Annex 1.2 that are required to receive notices in               addition to such holders of the Notes, and

                                           (B)  if such holders are not the Purchaser,               at their respective addresses set forth in the               register for the registration and transfer of               Notes maintained pursuant to Section 7.3 hereof,     or to any such party at such other address as such party may     designate by notice duly given in accordance with this     Section 12.1 to the Company and the Guarantors (which other     address shall be entered in such register).

  

                        (b)  When Given.  Any communication so addressed and     deposited in the United States mail,
 

     

89

 

     postage prepaid, by registered or certified mail (in each     case, with return receipt requested) shall be deemed to be     received on the third (3rd) succeeding Business Day after     the day of such deposit (not including the date of such     deposit).  Any notice so addressed and otherwise delivered     shall be deemed to be received when actually received at the     address of the addressee.

              12.1 Reproduction of Documents.

     This Agreement and all documents relating thereto,     including, without limitation,
 

                       (a)  consents, waivers and modifications that may     hereafter be executed,

                       (b)  documents received by you at the Closing  (except     the Notes themselves), and

                       (c)  inancial statements, certificates and other     information previously or hereafter furnished to you or any     other holder of Notes,

may be reproduced by any holder of Notes by any photographic, photostatic, microfilm, micro-card, miniature photographic, digital or other similar process and each holder of Notes may destroy any original document so reproduced.  The Company and the Guarantors agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such holder of Notes in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  Nothing in this Section 12.2 shall prohibit the Company, any Guarantor or any holder of Notes from contesting the accuracy of any such reproduction.
 

              12.3 Survival.

             All warranties, representations, certifications, statements and covenants made by the Company and/or the Guarantors herein or in any certificate or other instrument delivered by any of them or on their behalf hereunder
 

 

90

 

or otherwise made for your benefit in connection herewith shall be considered to have been relied upon by you and shall survive the delivery to you of the Notes regardless of any investigation made by you or on your behalf.  All such statements shall constitute warranties and representations by the Company and/or such Guarantor hereunder.

              12.4 Successors and Assigns.

             This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.  The provisions hereof are intended to be for the benefit of all holders, from time to time, of Notes, and shall be enforceable by any such holder, whether or not an express assignment to such holder of rights hereunder shall have been made by you or your successor or assign.

              12.5 Amendment and Waiver.

                        (a)  Requirements.  This Agreement may be amended, and     the observance of any term hereof may be waived, with (and     only with) the written consent of the Company, the     Guarantors and the Required Holders; provided that no such     amendment or waiver of any of the provisions of Section 1     through Section 4 hereof, inclusive, or of Section 6, or any     defined term to the extent used in any of the foregoing     Sections, shall be effective as to any holder of Notes     unless consented to by such holder in writing; and provided     further that no such amendment or waiver shall, without the     written consent of the holders of all Notes (exclusive of     Notes held by the Company, such Guarantors, any of the     Subsidiaries of the Company or any Affiliate) at the time     outstanding,
 

  

                                 (i)  subject to Section 9.3 hereof, change the          amount or time of any prepayment or payment of          principal or Make-Whole Amount or the rate or time of     payment of interest,

                                 (ii) amend Section 5.6, Section 9 or Section 10          hereof,

  

91

 

  
                                 (iii) amend the definition of "Required Holders,"          or

                                 (iv)  amend this Section 12.5.

  

The holder of any Note may specify that any such written consent executed by it shall be effective only with respect to a portion of the Notes held by it (in which case it shall specify, by dollar amount, the aggregate principal amount of Notes with respect to which such consent shall be effective) and in the event of any such specification such holder shall be deemed to have executed such written consent only with respect to the portion of the Notes so specified.

                        (b)  Solicitation of Noteholders.

  
                                  (i)  Solicitation.  Neither the Company nor any          Guarantor shall, and the Company shall not permit any          of its Subsidiaries to, solicit, request or negotiate          for or with respect to any proposed waiver or amendment          of any of the provisions hereof or the Notes unless          each holder of the Notes (irrespective of the amount of          Notes then owned by it) shall be informed thereof by          the Company or such Guarantor with sufficient          information to enable it to make an informed decision          with respect thereto.  Executed or true and correct          copies of any waiver or consent effected pursuant to          the provisions of this Section 12.5 shall be delivered          by the Company to each holder of outstanding Notes          forthwith following the date on which the same shall          have been executed and delivered by all holders of          outstanding Notes required to consent or agree to such          waiver or consent.

                                  (ii) Payment. Neither the Company nor any          Guarantor shall, and the Company shall not permit any          of its Subsidiaries, directly or indirectly, to pay or          cause to be paid any remuneration, whether by way of          supplemental or additional interest, fee or otherwise,          or grant any   security, to any holder of Notes as          consideration for or as an inducement to the entering          into by any holder of Notes of any waiver or amendment          of any of the terms and provisions
 

                

  

92

 

  
          hereof unless such remuneration is concurrently paid,          or security is concurrently granted, on the same terms,          ratably to the holders of all Notes then outstanding.
 

                                  (iii) Scope of Consent.  Any consent made pursuant          to this Section 12.5 by a holder of Notes that has          transferred or has agreed to transfer its Notes to the          Company, a Guarantor, any of the Subsidiaries of the          Company or any Affiliate and has provided or has agreed          to provide such written consent as a condition to such          transfer shall be void and of no force and effect          except solely as to such holder, and any amendments          effected or waivers granted or to be effected or          granted that would not have been or would not be so          effected or granted but for such consent (and the          consents of all other holders of Notes that were           acquired under the same or similar conditions) shall          be void and of no force and effect, retroactive to the          date such amendment or waiver initially took or takes          effect, except solely as to such holder.

  

                        (c)  Binding Effect.  Except as provided in Section     12.5 hereof, any amendment or waiver consented to as     provided in this Section 12.5 shall apply equally to all     holders of Notes and shall be binding upon them and upon     each future holder of any Note and upon the Company and the
Guarantors whether or not such Note shall have been marked     to indicate such amendment or waiver.  No such amendment or     waiver shall extend to or affect any obligation, covenant,     agreement, Default or Event of Default not expressly amended     or waived or impair any right consequent thereon.
 

              12.6 Payments, When Received.

                        (a)  Payments Due on Non-Business Days.  If any payment     due on, or with respect to, any Note shall fall due on a day     other than a Business Day, then such payment shall be made     on the first Business Day following the day on which such     payment shall have so fallen due; provided that if all or     any portion of such payment shall consist of a payment of     interest, for purposes of calculating such interest, such     interest shall accrue to (but not including) the originally
 

 

93

 

     scheduled day of its payment notwithstanding that it shall     be payable on such first following Business Day, and the     amount of the next succeeding interest payment shall be     accrued from (and including) such originally scheduled day     of payment as if all interest and principal originally     scheduled to be paid on such day had been paid thereon.
If any payment is to be made on the first Business Day     following the day on which the same shall have fallen due,     as provided in this paragraph, and is not so paid on such     first Business Day, interest shall accrue thereon (to the     extent permitted by applicable law) at the rate of eight and     forty-nine one-hundredths percent (8.49%) per annum from the     originally scheduled day of its payment.
 

                       (b)  Payments, When Received.  Any payment to be made     to the holders of Notes hereunder or under the Notes shall     be deemed to have been made on the Business Day such payment     actually becomes available to such holder at such holder's     bank prior to 11:00 a.m. (local time of such bank).

              12.7 Entire Agreement.

             This Agreement constitutes the final written expression of all of the terms hereof and is a complete and exclusive statement of those terms.

              12.8 Duplicate Originals, Execution in Counterpart.

             Two or more duplicate originals hereof may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument.  This Agreement may be executed in two or more counterparts and shall be effective when at least one counterpart shall have been executed by each party hereto, and each set of counterparts which, collectively, show execution by each party hereto shall constitute one duplicate original.

              12.9 Confidentiality.

             Each holder shall use reasonable efforts to ensure that any information concerning the Company or any of its Subsidiaries which is designated in writing by the Company or such Subsidiary as being proprietary and confidential and which is in good faith disclosed to or learned by the representatives of such holder during the course of inspections pursuant to Section 8.4 or Section 10.15 is not (without the prior written consent of the
 

 

94

 

Company) disclosed to any person not a party to this Agreement unless such information: (a) has become generally available to the public through no action or fault of such holder, (b) is included or referred to in good faith in a report, statement or testimony submitted to any municipal, state, Canadian provincial or federal regulatory body having or claiming to have jurisdiction over any holder or submitted to the National Association of Insurance Commissioners, the Office of the Superintendent of Financial Institutions or similar organizations or their successors in which case it shall continue to be subject to any protective order or order of confidentiality which may be imposed by such body, (c) is disclosed in response to any summons or subpoena or in connection with any litigation in which case it shall continue to be subject to any protective order or order of confidentiality which may be imposed by the court in which such litigation is pending, (d) is disclosed by any holder in good faith to a third party who had an independent contractual right to obtain such information, (e) is believed by any holder to be appropriately disclosed in order to protect its investment in the Notes (provided that in the case of confidential information with respect to proprietary processes or formulae of the Company, this exception shall apply only if a Default or Event of Default shall have occurred or be threatened or if disclosure is required in order to avoid potential liability under applicable state, federal or Canadian provincial securities laws), or in order to comply with any law, order regulation or ruling applicable to it, (f) is disclosed to a prospective transferee in connection with any contemplated transfer of the Notes if such prospective transferee agrees to abide by confidentiality provisions substantially the same as set forth in this Section 12.9 or (g) was known to such holder at the time of disclosure by the Company or any of its Subsidiaries or becomes known to such holder from a Person (other than the Company or a Subsidiary of the Company) not, to the knowledge of such holder, in violation of any confidentiality agreement between such Person and the Company or one of its Subsidiaries.  Each holder shall be free to disclose such information to and discuss it with such holder's retained or employed accountants, attorneys and similar consultants and experts when such disclosure is, in the holder's good faith judgment, necessary to the performance of services being furnished to the holder by any such Person, if such service provider agrees to abide by confidentiality provisions substantially the same as those set forth in this Section 12.9.
 

     [Remainder of Page Intentionally Blank.  Next page is signature page.]

 

95

 

             If this Agreement is satisfactory to you, please so indicate by signing the acceptance at the foot of a counterpart hereof and returning such counterpart to the Company, whereupon this Agreement shall become binding between us in accordance with its terms.

                         Very truly yours,

 

                         MINERALS TECHNOLOGIES INC.

 

                         By /S/John R. Stack

Name: John R. Stack

Title: Vice President-Finance

                            

 

                         SPECIALTY MINERALS INC., as

Guarantor

 

                         By /S/John R. Stack

Name: John R. Stack

Title: Vice President-Finance

 

                         MINTEQ INTERNATIONAL INC., as

Guarantor

 

                         By /S/John R. Stack

Name: John R. Stack

Title: Vice President-Finance

                          

                     

96

 

 

                         BARRETTS MINERALS INC., 

as Guarantor

 

                         By /S/John R. Stack

Name: John R. Stack

Title: Vice President-Finance

 

The foregoing Agreement  

is hereby agreed to as of the  

date hereof.

METROPOLITAN LIFE INSURANCE COMPANY

Purchaser

 

By:/s/ Joseph A. Augustin

Name: Joseph A. Augustin

Title: Vice President

 

 

 

 

97Number

EXHIBIT 10.18

ORIGINAL

Number   4       

of 6 Executed 

Counterparts

 

 

______________________________________________________________________________

 

 

 

 

 

AGREEMENT OF LEASE

between

COOKE PROPERTIES INC., Landlord,

and

MINERALS TECHNOLOGIES INC., Tenant.

 

 

 

 

 

PREMISES:

The Chrysler Building

405 Lexington Avenue

New York, New York  10174

The Entire 19th and 20th Floors

 

 

	
TABLE OF CONTENTS

	 	 
	
Article
	
Page

	 	 
	
ARTICLE 1
	 
	
DEMISE, PREMISES, TERM, RENT, LANDLORD'S WORK 
	
1

	 	 
	
ARTICLE 2
	 
	
USE AND OCCUPANCY 
	
3

	 	 
	
ARTICLE 3
	 
	
ALTERATIONS
	
4

	 	 
	
ARTICLE 4
	 
	
REPAIRS-FLOOR LOAD 
	
9

	 	 
	
ARTICLE 5
	 
	
WINDOW CLEANING 
	
11

	 	 
	
ARTICLE 6
	 
	
REQUIREMENTS OF LAW 
	
11

	 	 
	
ARTICLE 7
	 
	
SUBORDINATION 
	
12

	 	 
	
ARTICLE 8
	 
	
RULES AND REGULATIONS 
	
15

	 	 
	
ARTICLE 9
	 
	
INSURANCE, PROPERTY LOSS OR DAMAGE REIMBURSEMENT
	
15

	 	 
	
ARTICLE 10
	 
	
DESTRUCTION, FIRE OR OTHER CAUSE
	
18

	 	 
	
ARTICLE 11
	 
	
EMINENT DOMAIN
	
22

-i-

	
Article
	
Page

	 	 
	
ARTICLE 12
	 
	
ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.
	
24

	

    Rent Per Square Foot
	
31

	

    Sublease Profit
	
31

	

    Sublease Rent
	
31

	

    Sublease Expenses
	
31

	

    Sublease Rent Per Square Foot
	
31

	 	 
	
ARTICLE 13
	 
	
ELECTRICITY
	
35

	 	 
	
ARTICLE 14
	 
	
ACCESS TO PREMISES
	
38

	 	 
	
ARTICLE 15
	 
	
CERTIFICATE OF OCCUPANCY
	
40

	 	 
	
ARTICLE 16
	 
	
DEFAULT
	
40

	 	 
	
ARTICLE 17
	 
	
REMEDIES AND DAMAGES
	
44

	 	 
	
ARTICLE 18
	 
	
LANDLORD FEES AND EXPENSES
	
47

	 	 
	
ARTICLE 19
	 
	
NO REPRESENTATIONS BY LANDLORD
	
47

	 	 
	
ARTICLE 20
	 
	
END OF TERM
	
48

	 	 
	
ARTICLE 21
	 
	
QUIET ENJOYMENT
	
49

	 	 
	
ARTICLE 22
	 
	
FAILURE TO GIVE POSSESSION
	
49

	 	 
	
ARTICLE 23
	 
	
NO WAIVER
	
49

-ii-

	
Article
	
Page

	 	 
	
ARTICLE 24
	 
	
WAIVER OF TRIAL BY JURY
	
50

	 	 
	
ARTICLE 25
	 
	
INABILITY TO PERFORM
	
50

	 	 
	
ARTICLE 26
	 
	
BILLS AND NOTICES
	
51

	 	 
	
ARTICLE 27
	 
	
ESCALATION
	
52

	

    Assessed Valuation
	
52

	

    Base Operating Expenses
	
52

	

    Base Operating Year
	
52

	

    Base Taxes
	
52

	

    Building
	
52

	

    Operating Expenses
	
52

	

    Operating Statement
	
57

	

    Operating Year
	
58

	

    Taxes
	
58

	

    Tax Statement
	
58

	

    Tax Year
	
58

	 	 
	
ARTICLE 28
	 
	
SERVICES
	
63

	 	 
	
ARTICLE 29
	 
	
[RESERVED]
	
68

	 	 
	
ARTICLE 30
	 
	
VAULT SPACE
	
69

	 	 
	
ARTICLE 31
	 
	
SECURITY DEPOSIT
	
69

	 	 
	
ARTICLE 32
	 
	
CAPTIONS
	
71

	 	 
	
ARTICLE 33
	 
	
PARTIES BOUND
	
71

-iii-

	
Article
	
Page

	 	 
	
ARTICLE 34
	 
	
BROKER
	
71

	 	 
	
ARTICLE 35
	 
	
INDEMNITY
	
72

	 	 
	
ARTICLE 36
	 
	
ADJACENT EXCAVATION-SHORING
	
73

	 	 
	
ARTICLE 37
	 
	
MISCELLANEOUS
	
73

	 	 
	
ARTICLE 38
	
75

	

    Additional Space
	
75

	

    Additional Space Commencement Date
	
75

	

    Additional Space Notice
	
75

	

    Additional Space Sublease
	
75

	

    Affiliate
	
75

	

    Alterations
	
76

	

    Appraiser
	
76

	

    Applicable Rate
	
76

	

    Assessed Valuation
	
76

	

    Assignment Proceeds
	
76

	

    Assignment Statement
	
76

	

    Bankruptcy Code
	
76

	

    Base Amount
	
76

	

    Base Operating Expenses
	
76

	

    Base Operating Year
	
76

	

    Base Rate
	
76

	

    Base Taxes
	
76

	

    Broker
	
76

	

    Building
	
76

	

    Building Systems
	
77

	

    Business Days
	
77

	

    Combined Property
	
77

	

    Commencement Date
	
77

	

    Consumer Price Index
	
77

	

    Control or control
	
77

	

    Cost per Kilowatt Hour
	
77

	

    Current Year
	
77

-iv-

	
Article
	
Page

	 	 
	

    Deficiency
	
77

	

    Electricity Additional Rent
	
78

	

    Electricity Fee
	
78

	

    Electricity Inclusion Charge
	
78

	

    Escalation Rent
	
78

	

    Essential Services
	
78

	

    Event of Default
	
78

	

    Expiration Date
	
78

	

    Existing Subtenant
	
78

	

    Exchange Sublease
	
78

	

    Fair Rental Value of Premises
	
78

	

    Fixed Expiration Date
	
78

	
                         Fixed Rent
	
78

	
                           Governmental Authority (Authorities)
	
78

	
                           Ground Lease
	
78

	
                         Ground Rent
	
79

	

    HVAC
	
79

	

    HVAC Systems
	
79

	

    Indemnitees
	
79

	

    Initial Alterations
	
79

	

    Kent Building
	
79

	

    Kent Property
	
79

	

    Labor Costs
	
79

	

    Landlord
	
79

	

    Landlord's Determination
	
79

	

    Landlord's Preliminary Work
	
79

	

    Landlord's Work
	
79

	

    Lessor(s)
	
79

	

    Mortgage(s)
	
80

	

    Mortgagee(s)
	
80

	

    Mutual Determination
	
80

	

    Non-disturbance Agreement
	
80

	

    Operating Expenses
	
80

	

    Operating Payment
	
80

	

    Operating Year
	
80

	

    Operation of the Combined Property
	
80

	

    Option Tenant
	
80

	

    Overtime Periods
	
80

	

    Parties
	
80

	

    Person(s) or person(s)
	
80

-v-

	
Article
	
Page

	 	 
	

    Premises
	
80

	

    Real Property
	
80

	

    Recapture Space
	
80

	

    Recapture Sublease
	
80

	

    Renewal Notice
	
81

	

    Renewal Option
	
81

	

    Renewal Term
	
81

	

    Rent Commencement Date
	
81

	

    Rent Notice
	
81

	

    Rent Per Square Foot
	
81

	

    Rental
	
81

	

    Requirements
	
81

	

    Rules and Regulations
	
81

	

    Second Additional Space
	
81

	

    Space Factor
	
81

	

    Specialty Alterations
	
81

	

    Sublease Expenses
	
81

	

    Sublease Profit
	
82

	

    Sublease Rent
	
82

	

    Sublease Rent Per Square Foot
	
82

	

    Superior Lease(s)
	
82

	

    Taxes
	
82

	

    Tax Payment
	
82

	

    Tax Statement
	
82

	

    Tax Year
	
82

	

    Tenant
	
82

	

    Tenant's Acceptance Notice
	
82

	

    Tenant's Delay
	
82

	

    Tenant's Determination
	
82

	

    Tenant Fund
	
82

	

    Tenant Statement
	
82

	

    Tenant's Operating Share
	
82

	

    Tenant's Property
	
82

	

    Tenant's Tax Share
	
83

	

    Tentative Monthly Escalation Charge
	
83

	

    Term
	
83

	

    Unavoidable Delays
	
83

-vi-

	
Article
	
Page

	 	 
	
ARTICLE 39
	 
	
CONSTRUCTION OF TERMS
	
83

	

    include
	
83

	

    including
	
83

	

    such as
	
83

	

    obligations of this Lease
	
83

	

    Tenant's obligations hereunder
	
83

	

    Landlord's obligations hereunder
	
83

	

    performance
	
83

	

    no liability to Tenant
	
83

	

    without liability to Tenant
	
83

	

    repair
	
83

	

    termination of this Lease
	
84

	

    ejusdem generis
	
84

	 	 
	
ARTICLE 40
	 
	
OPTION TO RENEW
	
84

	 	 
	
ARTICLE 41
	 
	
ADDITIONAL SPACE OPTION
	
87

	 	 
	
SCHEDULE A
	 
	
Rules And Regulations
	
SKD. 1-1

	 	 
	
SCHEDULE B
	 
	
HVAC Specifications
	
SKD. B-1

	 	 
	
SCHEDULE C
	 
	
Cleaning Specifications
	
SKD. C-1

	 	 
	
EXHIBIT A
	 
	
Floor Plan
	
EXH. A-1

	 	 
	
EXHIBIT B
	 
	
Letter Of Credit
	
EXH. B-1

	 	 
	
EXHIBIT C
	 
	
Landlord's Work
	
EXH. C-1

-vii-

	
Article
	
Page

	 	 
	
EXHIBIT D
	 
	
Form of Non-Disturbance,
	 
	
Attornment and Subordination Agreement
	
EXH. D-1

	 	 
	
EXHIBIT E
	 
	
Certificate of Occupancy
	 
	
for The Chrysler Building
	
EXH. E-l

	 	 
	
EXHIBIT F
	 
	
Overtime Charges
	
EXH. F-1

	 	 
	
EXHIBIT G
	 
	
Additional Space
	
EXH. G-1

	 	 
	
APPENDIX 1
	 
	
Communications Equipment License
	
APP. 1-1

	 	 

-viii-

 

AGREEMENT OF LEASE, made as of the 24th day of May, 1993, between Landlord and Tenant.

W I T N E S S E T H :

 

The parties hereto, for themselves, their legal representatives, successors and assigns, hereby, covenant as follows.

ARTICLE 1

DEMISE. PREMISES. TERM. RENT, LANDLORD'S WORK

           
Section  
1.1 Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
Premises for the Term to commence on the date (the "Commencement Date") that
Landlord shall substantially complete Landlord's Preliminary Work (as described
in Section 1.2 hereof) and, subject to Section 1.3, to end on February 28, 2010
(the "Fixed Expiration Date"), at an annual rent (the "Fixed Rent") of:

                        (i) One Million Sixty-Six Thousand Dollars ($1,066,000.00) per year, ($88,833.33 per month) for the period commencing on the date which is thirty (30) months after the Commencement Date (the "Rent Commencement Date") and ending on February 28, 2000 (subject to Section 1.3);

                        (ii) One Million One Hundred Eighty-Nine Thousand Dollars ($1,189,000.00) per year, ($99,083.33 per month) for the period commencing March 1, 2000 and ending on February 28, 2005 (subject to Section 1.3);

                        (iii) One Million Three Hundred Twelve Thousand Dollars ($1,312,000.00) per year, ($109,333.33 per month) for the period commencing on March 1, 2005 and ending on the Fixed Expiration Date (subject to Section 1.3); 

which Tenant agrees to pay in lawful money of the United States which shall be legal tender in payment of all debts and dues, public and private, at the time of payment, in equal monthly installments in advance, on the first (1st) day of each calendar month during the Tern commencing on the Rent Commencement Date, at the office of Landlord or such other place as Landlord may designate, without any set-off, offset, abatement or deduction whatsoever.

           
Section 1.2 Landlord shall exercise all reasonable efforts to complete the work in the Premises which is described on Exhibit C hereto and hereinafter referred to as "Land-lord's Work" by the earliest possible date. Tenant acknowledges that only certain items of Landlord's Work are required to be completed prior to the Commencement Date (such work being herein referred to as "Landlord's Preliminary Work") and that other items of Landlord's Work shall be completed by Landlord during the course of Tenant's Initial Alterations, Landlord and Tenant agreeing to cooperate with each other with respect to the scheduling of their.respective work so that the balance of Landlord's Work other than Landlord's Preliminary Work may be substantially competed without interfering or delaying the Initial Alterations. Landlord shall not be obligated to undertake any other work or to furnish any installations, facilities, material or other items to the Premises (including, without limitation, to the existing restrooms currently located therein), it being understood and agreed that all such other work, installations, facilities and materials necessary or desirable to prepare the Premises for Tenant's occupancy shall be Tenant's sole responsibility and shall be part of Tenant's Initial Alterations.

            Section 1.3  The Premises shall be deemed ready for occupancy by Tenant on the date that Landlord's Preliminary Work in the Premises shall have been substantially completed. Landlord's Work (including Landlord's Preliminary Work) shall be deemed to have been substantially completed notwithstanding the fact that minor or insubstantial details of construction, mechanical adjustment, or decoration remain to be performed, the then uncompleted condition of which and the subsequent work of completion of which do not materially interfere with Tenant's Initial Alterations. Subject to Unavoidable Delays and to the occurrence of a Tenant's Delay (as hereinafter defined), if Landlord's Preliminary Work is not substantially completed by July 1, 1993, then, at any time thereafter, but prior to substantial completion of Landlord's Preliminary work, Tenant shall have the right at its election, to terminate this Lease by giving to Landlord notice of its intention to do so. If Tenant gives to Landlord notice of its intention to terminate this lease as aforesaid, then, unless Landlord shall substantially complete Landlord's Preliminary Work by July 15, 1993, this Lease shall terminate and be of no further force or effect as of July 15, 1993 and neither party shall any claims against the other with respect to the Lease, it being agree that Tenant's right to so terminate this Lease is Tenant's sole and exclusive remedy in the event of Landlord's failure to substantially complete Landlord's Preliminary Work by July 15, 1993. If Landlord actually substantially completes Landlord's Preliminary Work by July 15, 1993, Tenant's notice shall be null, void and of no further force or effect and this Lease shall continue in full force and effect. Without limiting the foregoing, if Tenant does not elct to send to Landlord a notice terminating this Lease as aforesaid, if Landlord fails to substantially complete Landlord's Preliminary Work by July 15, 1993, then the Rent Commencement Date shall be extended two (2) days for each day between July 15, 1993 and the date that Landlord's Preliminary Work shall be substantially completed. If Landlord's Work (excluding Landlord's Preliminary Work) shall be delayed due to any act or omission of Tenant or any of its employees, agents, representatives or contractors (a "Tenant's Delay"), then Landlord's Work shall be deemed to have been substantially completed on the date when same would have been substantially completed but for such Tenant's Delay. Landlord shall notify Tenant within five (5) Business Days of the occurrence of any act or omission of Tenant or any of its employees, agents, representatives or contractors which, in Landlord's opinion, constitutes a Tenant's Delay. When Tenant shall take actual possession of the Premises, it shall be conclusively presumed that the same were in satisfactory condition and that Landlord's Preliminary Work was satisfactorily completed as of the date of such taking of possession, unless within seven (7) days after such date of actual possession, Tenant shall give Landlord a written certification by Tenant's architect (who shall have been approved by Landlord 

 

-2-

as set forth in Section 3.1) specifying in detail all respects in which Landlord's Preliminary Work was not substantially completed. Without limiting the foregoing, the balance of Landlord's Work shall be conclusively presumed to have been satisfactorily completed unless within seven (7) days after the completion of the balance of Landlord's Work and Landlord's notice to Tenant thereof, Tenant's architect, as aforesaid, shall give to Landlord a written certification specifying, in reasonable detail, all respects in which the balance of Landlord's Work was not satisfactorily completed. 

            Section 1.4 When the Commencement Date shall be determined, Landlord and Tenant shall both execute and exchange a written instrument to confirm the Commencement Date and the Rent Commencement Date.

 

ARTICLE 2

USE AND OCCUPANCY

           
Section 2.1 Tenant shall use and occupy the Premises as general and executive offices, uses incidental thereto and for no other purpose.

          
 Section 2.2

                        (a) Tenant shall not use the Premises or any part thereof, or permit the Premises or any part thereof to be used by the United States Government, the City or the State of New York, any foreign government, the United Nations or any agency or department of any of the foregoing or any other Person having sovereign or diplomatic immunity.

                        (b) Tenant shall not use or permit the use of the Premises or any part thereof in any way which would violate any of the covenants, agreements, terms, provisions and conditions of this Lease or any Requirements or for any unlawful purposes or in any unlawful manner or in violation of the certificate of occupancy for the Premises or the Building (Landlord being obligated to maintain the certificate of occupancy so as to permit the use of the Premises by Tenant in accordance with the provisions hereof). Tenant shall not suffer or permit the Premises or any part thereof to be used in any manner or anything to be done therein or anything to be brought into or kept therein which, in the reasonable judgment of the Landlord, shall in any way impair or interfere with any of the Building services or with the use of any of the other areas of the Building by Landlord or any of the other tenants or occupants of the Building.

                        (c) In connection with, and incidental to, Tenant's use of the Premises for general and executive offices as provided in this Article 2, Tenant, at its sole cost and expense and upon compliance with all applicable Requirements, may install in the Premises up to four (4) "dwyer" or similar units per each full floor of the Premises for the purpose of warming food

 

-3-

for the employees and guests of Tenant (but not for use as a public restaurant), provided that Tenant shall obtain all permits required by any Governmental Authorities for the operation thereof and such installation shall comply with the provisions of this Lease, including, without limitation, Article 3 hereof. Tenant may also install, at its sole cost and expense and subject to and in compliance with the provisions of Articles 3 and 4 hereof, vending machines for the exclusive use of the officers, employees and guests of Tenant. Each vending machine which dispenses any beverages or other liquids or refrigerates shall have a waterproof pan located thereunder, connected to a drain.

                        (d) Simultaneously herewith, Landlord and Tenant have entered into a "Communications Equipment License Agreement" dated as of even date herewith, a copy of which is annexed hereto as Appendix 1.

            
Section 2.3 If any governmental license or permit shall be required for the proper and lawful conduct of Tenant's business or other activity carried on in the Premises (as distinct from the certificate of occupancy permitting the use of the Premises for the purpose set forth in Section 2.1, which shall be the responsibility of Landlord), and if the failure to secure such license or permit, might or would, in any way, affect Landlord, then Tenant, at Tenant's expense, shall duly procure and thereafter maintain such license or permit and submit the same for inspection by Landlord. Tenant, at Tenant's expense, shall, at all times, comply with the requirements of each such license or permit.

 

ARTICLE 3

ALTERATIONS

           
Section 3.1

                        (a) Tenant shall not make any Alterations without Landlord's prior consent. Landlord shall not unreasonably withhold or delay its consent to any proposed interior, nonstructural Alterations, provided that such Alterations (i) are not visible from the outside of the Premises or the streets outside of the Building, (ii) do not adversely affect any part of the Building other than the Premises, (iii) do not adversely affect any service required to be furnished by Landlord to Tenant or to any other tenant or occupant of the Building, and (iv) do not affect the proper functioning of any Building System other than to a de minimis extent. Tenant may not make any structural Alteration of any nature. The restrictions against Tenant making any structural alterations shall not apply to the installation by Tenant as part of Tenant's Initial Alterations, of an interior staircase between the 19th and 20th floors. If Tenant elects to install such interior staircase, the provisions of Section 3.01(b)(i) shall be applicable as if such Alteration was a non-structural Alteration.

 

-4-

                        (b)     (i) Prior to making any Alterations, including, without limitation, the Initial Alterations, Tenant shall (A) submit to Landlord detailed plans and specifications (including layout, architectural, mechanical and structural drawings) for each proposed Alteration and shall not commence any such Alteration without first obtaining Landlord's approval of such plans and specifications [Landlord agreeing to respond within the time periods set forth in clause (ii) of this Section 3. 1(b)], which, in the case of nonstructural Alterations which meet the criteria set forth in Section 3. 1(a) above, shall not be unreasonably withheld or delayed, (B) at Tenant's expense, obtain all permits, approvals and certificates required by any Governmental Authorities, it being agreed that all filings with Governmental Authorities to obtain such permits, approvals and certificates shall be made, at Tenant's expense, by a Person designated by Tenant and reasonably acceptable to Landlord and (C) furnish to Landlord duplicate original policies or certificates thereof of worker's compensation (covering all persons to be employed by Tenant, and Tenant's contractors and subcontractors in connection with such Alteration) and comprehensive public liability (including property damage coverage) insurance in such form, with such companies, for such periods and in such amounts as Landlord may reasonably approve, naming Landlord and its agents, any Lessor and any Mortgagee, as additional insureds.  Upon completion of such Alteration, Tenant, at Tenant's expense, shall obtain certificates of final approval of such Alteration required by any Governmental Authority and shall furnish Landlord with copies thereof, together with the plans and specifications as filed with New York City and "as-built" plans and specifications for such Alterations (Landlord agreeing to accept "shop drawings" in lieu of the "as-built" plans with respect to minor deviations from the plans as filed with New York City). All Alterations shall be made and performed substantially in accordance with the plans and specifications therefor as approved by Landlord, all Requirements, the Rules and Regulations, and all rules and regulations relating to Alterations promulgated by Landlord in its reasonable judgment. All materials and equipment to be incorporated in the Premises as a result of any Alterations or a part thereof shall be first quality and no such materials or equipment (other than Tenant's Property) shall be subject to any lien, encumbrance, chattel mortgage or title retention or security agreement. All Alteration(s) requiring the consent of Landlord shall be performed only under the supervision of an independent licensed architect approved by Landlord, which approval shall not be unreasonably withheld.

                            (ii) Landlord agrees to use all reasonable efforts to respond to Tenant's  request for approval of the detailed plans and specifications with respect to Tenant's Initial Alterations within seven (7) Business Days following Landlord's receipt of such detailed plans and specifications. If Landlord fails to respond within said seven (7) Business Day period, unless Landlord shall respond within an additional five (5) Business Days, Landlord shall be deemed to have approved said detailed plans and specifications for Tenant's Initial Alterations. As to Alterations subsequent to Tenant's Initial Alterations, Landlord agrees to use all reasonable efforts to respond to Tenant's request for approval of the detailed plans and specifications therefor within fifteen (15) Business Days following Landlord's receipt of such detailed plans and specifications. If Landlord fails to respond within said fifteen (15) Business Day period, unless Landlord shall respond within an additional five (5) Business Days, Landlord shall be 

 

-5-

deemed to have approved the detailed plans and specifications for such Alteration. Landlord reserves the right to disapprove any plans and specifications in part, to reserve approval of items shown thereon pending its review and approval of other plans and specifications, and to condition its approval upon Tenant making revisions to the plans and specifications or supplying additional information. If Landlord shall disapprove, in whole or in part, any plans or
specifications, Landlord shall specify, in reasonable detail, the minimum respects in which said plans and specifications must be revised in order to be approved. Any review or approval by Landlord of any plans and specifications with respect to any Alteration is without any representation or warranty whatsoever to Tenant or any other Person with respect to the adequacy, correctness or efficiency thereof or otherwise.

                            (c) Tenant shall be permitted to perform Alterations at any time, including without limitation, during the hours of 8:00 A.M. to 5:00 P.M. on Business Days, provided that such work shall not interfere with or interrupt the operation and maintenance of the Building, other than to a de minimis extent, or unreasonably interfere with or interrupt the use and occupancy of the Building by other tenants in the Building. If such interruption or interference occurs, Alterations shall be performed at such times and in such manner as Landlord may from time-to-time reasonably designate. AU Tenant's Property installed by Tenant and all Alterations in and to the Premises (except for that portion of Tenant's Initial Alterations for which Landlord has supplied payment in the form of the Tenant Fund) which may be made by Tenant at its own cost and expense prior to and during the Term, shall remain the property of Tenant. Upon the Expiration Date, Tenant shall remove from the Premises Tenant's Property and Tenant shall repair and restore in a good and workmanlike manner to good condition any damage to the Premises or the Building caused by such removal.

                            (d)     (i) All Alterations (other than Landlord's Work) shall be performed, at Tenant's sole cost and expense, by Landlord's contractor(s) or by contractors, subcontractors or mechanics approved by Landlord (which approval shall not be unreasonably withheld or delayed). Prior to making an Alteration subsequent to Tenant's Initial Alterations, at Tenant's request, Landlord shall furnish Tenant with a list of contractors, subcontractors or mechanics who may perform Alterations to the Premises on behalf of Tenant. Landlord has provided Tenant with a list of such approved parties with respect to Tenant's Initial Alterations. If Tenant engages any contractors, subcontractors or mechanics set forth on such list, Tenant shall not be required to obtain Landlord's consent for such party unless, prior to the date that Tenant shall enter into a contract with such party, Landlord shall notify Tenant that such contractor, subcontractor or mechanic has been removed from the list. If Tenant shall enter into a contract with any contractor, subcontractor or mechanic set forth on the list, Landlord's consent to such party shall be deemed to have been granted. Landlord reserves the right to change the list of approved contractors, subcontractors or mechanics, from time-to-time provided, however, that if Landlord changes the list after the date that Tenant shall have entered into a contract with any party theretofore on the list, Landlord's consent to such party shall be deemed granted notwithstanding removal of such party from the approved contractor list. At Tenant's request,

 

-6-

Landlord shall advise Tenant of any changes to the approved contractor list. In addition to the foregoing, Tenant shall have the right to submit to Landlord for Landlord's approval, the names of contractors, subcontractors or mechanics which Tenant desires to use in connection with an Alteration and, in such event, Landlord shall not unreasonably withhold or delay its consent to Tenant's use of such contractors, subcontractors or mechanics. 

                                    (ii) Notwithstanding the foregoing, with respect to any Alteration affecting any Building System (merely tying into a Building System shall not be deemed to "affect" it for such purposes), (A) Tenant shall select a contractor from a list of approved contractors furnished by Landlord to Tenant (containing at least three (3) contractors), and (B) the Alteration shall be designed by Landlord's engineer for the relevant Building System, at Tenant's reasonable cost and expense (which shall not be greater than the cost if Tenant were not required to use Landlord's engineer).

                             (e) Any mechanic's lien filed against the Premises or the Real Property for work claimed to have been done for, or materials claimed to have been furnished to, Tenant shall be discharged by Tenant within thirty (30) days after Tenant shall have received notice thereof (or such shorter period as Landlord may advise Tenant is required by the terms of any Superior Lease or Mortgage), at Tenant's expense, by payment or filing the bond required by law. Tenant shall not, at any time prior to or during the Term, directly or indirectly employ, or permit the employment of, any contractor, mechanic or laborer in the Premises, whether in connection with any Alteration or otherwise, if such employment would interfere or cause any conflict with other contractors, mechanics or laborers engaged in the construction, maintenance or operation of the Building by Landlord, Tenant or others, or of any adjacent property owned by Landlord. In the event of any such interference or conflict, Tenant upon demand of Landlord, shall cause all contractors, mechanics or laborers causing such interference or conflict to leave the Building immediately.

           
Section 3.2 Tenant shall reimburse Landlord on demand as additional rent, Land-lord's reasonable out-of-pocket expenses for professional fees of its architects and/or engineers for reviewing any plans and specifications of Tenant for Alterations, including those relating to Tenant's Initial Alterations provided, however, that Tenant's reimbursement to Landlord with respect to Tenant's Initial Alterations shall not exceed Five Thousand Dollars ($5,000.00). In addition, Tenant shall pay any reasonable out-of-pocket expenses incurred by the Lessor under the presently existing Superior Lease or by any Mortgagee in connection with their respective outside professional engineers or architects reviewing the plans and specifications of such Alterations (including the Initial Alterations) or inspecting the progress of completion of the same.

           
Section 3.3 Upon the request of Tenant, Landlord, at Tenant's cost and expense, shall join in any applications for any permits, approvals or certificates required to be obtained by Tenant in connection with any permitted Alteration (provided that the provisions of the

 

-7-

applicable Requirement shall require that Landlord join in such application) and shall otherwise cooperate with Tenant in connection therewith, provided that Landlord shall not be obligated to incur any cost or expense, including, without limitation, attorneys' fees and disbursements, or suffer any liability in connection therewith.

           
Section 3.4

                (a) Subject to the provisions of this Section 3.4, Landlord shall contribute an amount not to exceed Eight Hundred Ninety Five Thousand Dollars ($895,000.00) (the "Tenant Fund") toward the so-called "hard" costs for labor and materials for the performance of Tenant's Initial Alterations. Property paid for from the Tenant Fund shall be deemed Landlord's property. Promptly following the approval by Landlord of the plans and specifications for Tenant's Initial Work, Landlord and Tenant shall confirm in writing those items in connection with the performance of Tenant's Initial Alterations which shall be deemed Landlord's property. Provided, however, that the ownership of such property by Landlord shall not, in any way, affect the respective repair obligations of either Landlord or Tenant as set forth in Article 4.

                (b) Landlord shall disburse successive portions of the Tenant Fund to Tenant from time-to-time, within thirty (30) days after receipt of the items set forth in Section 3.4(c) hereof, provided that on the date of disbursement from the Tenant Fund, no Event of Default shall have occurred and be continuing. Disbursements from the Tenant Fund shall not be made more frequently than monthly, and shall be in respective amounts equal to the aggregate amounts theretofore paid or payable (as certified by Tenant's independent licensed architect) to Tenant's contractors, subcontractors and materialmen, which have not been the subject of a previous disbursement from the Tenant Fund.

                (c) Landlord's obligation to make each successive disbursement from the Tenant Fund shall be subject to Landlord's receipt of each of the following in respect of each such disbursement: (i) a request for such disbursement from Tenant, (ii) the certificate of Tenant's independent licensed architect as required by Section 3.4(b) hereof, and (iii) a certificate of Tenant's independent licensed architect stating that, in his or her opinion, the portion of the Tenant's Initial Alterations theretofore completed and for which the disbursement is requested was substantially in accordance with the final detailed plans and specifications for Tenant's Initial Alterations, as approved by Landlord. 

                (d) In no event shall the aggregate amount paid by Landlord to Tenant under this Section 3.4 exceed the amount of the Tenant Fund. Tenant shall complete Tenant's Initial Alterations, at its sole cost and expense, whether or not the Tenant Fund is sufficient to fund such completion.

 

-8-

                (e) Within sixty (60) days after completion of Tenant's Initial Alterations, Tenant shall deliver to Landlord general releases and waivers of lien from all contractors, subcontractors and materialmen involved in the performance of Tenant's Initial Alterations and the materials furnished in connection therewith, and a certificate from Tenant's independent licensed architect certifying that, in his or her opinion, Tenant's Initial Alterations have been completed in accordance with the final detailed plans and specifications for Tenant's Initial Alterations as approved by Landlord.

 

ARTICLE 4

REPAIRS-FLOOR LOAD

           
Section 4.1 Landlord shall operate, maintain and make all necessary repairs (both structural and nonstructural) to the part of Building Systems which provide service to the Premises (but not to the distribution portions of such Building Systems located within the Premises) and the public portions of the Building, both exterior and interior, in conformance with standards applicable to "class A" office buildings in midtown Manhattan.

           
Section 4.2 Tenant, at Tenant's sole cost and expense, shall take good care of the Premises and the fixtures, equipment and appurtenances therein and the distribution systems (other than those portions of the Building Systems which Landlord is required to maintain such as the fan rooms for the HVAC System) and shall make all nonstructural repairs thereto as and when needed to preserve them in good working order and condition, except for reasonable wear and tear, obsolescence and damage for which Tenant is not responsible pursuant to the provisions of Article 10 hereof. In addition, notwithstanding the provisions of Section 4. 1, all damage or injury to any part of the Building other than the Premises and to the Building Systems, or to Building's fixtures, equipment and appurtenances, whether requiring structural or nonstructural repairs, caused by or resulting from carelessness, omission, neglect or improper conduct of Tenant (except damage for which Tenant is not responsible pursuant to the provisions of Article 10 hereof), or Alterations made by, Tenant, Tenant's agents, employees, invitees or licensees, shall be repaired by Landlord, at Tenant's sole cost and expense. All repairs by Tenant shall be of first quality and of a class consistent with midtown Manhattan "class A" office building work or construction and shall be made in accordance with the provisions of Article 3 hereof. If Tenant fails after ten (10) days' notice (or such shorter period as Landlord may be permitted pursuant to any Superior Lease or Mortgage or such shorter period as may be required due to an emergency) to proceed with due diligence to make repairs required to be made by Tenant, the same may be made by Landlord at the expense of Tenant, and the expenses thereof incurred by Landlord, with interest thereon at the Applicable Rate, shall be forthwith paid to Landlord as additional rent after rendition of a bill or statement therefor. Tenant shall, promptly after becoming aware of same, give Landlord notice of any defective condition in the Building or of any Building System, located in, servicing or passing through the Premises.

 

-9-

           
Section 4.3 Tenant shall not place a load upon any floor of the Premises exceeding the "live load" limitations set forth in the certificate of occupancy for the Premises. Tenant shall not move any safe, heavy machinery, heavy equipment, business machines, freight, bulky matter or fixtures into or out of the Building without Landlord's prior consent, which consent shall not be unreasonably withheld, and shall make payment to Landlord of Landlord's reasonable out-of-pocket costs in connection therewith. If such safe, machinery, equipment, freight, bulky matter or fixtures requires special handling, Tenant shall employ only persons holding a Master Rigger's license to do said work. All work in connection therewith shall comply with all Requirements and the Rules and Regulations, and shall be done during such hours as Landlord may reasonably designate. Business machines and mechanical equipment shall be placed and maintained by Tenant at Tenant's expense in settings sufficient in Landlord's reasonable judgment to absorb and prevent vibration, noise and annoyance.

           
Section 4.4 Except as expressly provided in this Lease, there shall be no allowance to Tenant for a diminution of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord, Tenant or others making, or failing to make, any repairs, alterations, additions or improvements in or to any portion of the Building or the Premises, or in or to fixtures, appurtenances or equipment thereof.

           
Section 4.5 Landlord, when making any repairs, alterations, additions or improvements, shall use reasonable efforts to minimize interference with Tenant's use and occupancy of the Premises ; provided, however, that Landlord shall have no obligation to employ contractors or labor at so-called overtime or other premium pay rates or to incur any other overtime costs or expenses whatsoever, except that Landlord, at its expense but subject to recoupment of Tenant's Operating Share pursuant to Article 27 hereof, shall employ contractors or labor at so-called overtime or other premium pay rates if necessary to make any repair required to be made by it hereunder to remedy any condition that either (a) results in a denial of access to the Premises, (b) threatens the health or safety of any occupant of the Premises, or (c) subject to the provisions of Article 10, materially interferes with Tenant's ability to conduct its business in the Premises.

           
Section 4.6 Both the design and decoration of the elevator areas and the public corridors of any floor of the Premises occupied by more than one (1) occupant (for any reason, including, without limitation, as a result of a subletting or occupancy arrangement, if any, in accordance with Article 12 hereof) shall be subject to Landlord's approval, which approval shall not be unreasonably withheld, and such elevator areas and public corridors shall be maintained and kept clean by Landlord pursuant to the cleaning specifications referred to in Section 28.4 hereof.

 

-10-

ARTICLE 5

WINDOW CLEANING

           
Section 5.1 Tenant shall not clean, nor require, permit, suffer or allow any window in the Premises to be cleaned from the outside in violation of Section 202 of the Labor Law, or any other Requirement, or of the rules of the Board of Standards and Appeals, or of any other board or body having or asserting jurisdiction.

 

ARTICLE 6

REQUIREMENTS OF LAW

           
Section 6.1

                (a) Tenant, at its sole cost and expense, shall comply with all Requirements applicable to Tenant's manner of use and occupancy of the Premises (other than, and as distinguished from, mere use as general offices) including, without limitation, those applicable to the making of any Alterations (including Tenant's Initial Alterations) therein, including but not limited to local laws #5, #16 and #58 and the Americans With Disabilities Act. Tenant shall not do or permit to be done any act or thing upon the Premises which will invalidate or be in conflict with a standard "all-risk" insurance policy; and shall not do, or permit anything to be done in or upon the Premises, or bring or keep anything therein, except as now or hereafter permitted by the New York City Fire Department, New York Board of Fire Underwriters, the Insurance Services Office or other authority having jurisdiction, or use the Premises in a manner (as opposed to mere use as general "offices") which shall increase the rate of fire insurance on the Building, in effect on the Commencement Date. If by reason of Tenant's failure to comply with the provisions of this Article, the fire insurance rate shall be higher than it otherwise would be, then Tenant shall desist from doing or permitting to be done any such act or thing and shall reimburse Landlord, as additional rent hereunder, for that part of all fire insurance premiums thereafter paid by Landlord which shall have been charged because of such failure by Tenant, and shall make such reimbursement upon demand by Landlord which demand shall be accompanied by information in reasonable detail explaining any such increase. In any action or proceeding wherein Landlord and Tenant are parties, a schedule or "make up" of rates for the Building or the Premises issued by the Insurance Services Office, or other body fixing such fire insurance rates, shall be conclusive evidence of the facts therein stated and of the several items and charges in the fire insurance rates then applicable to the Building.

                (b) Landlord, at its sole cost and expense (but subject to recoupment of Tenant's Operating Share thereof as provided in Article 27 hereof), shall comply with all other Requirements applicable to the Premises and the Building, subject to Landlord's right to contest the applicability or legality thereof.

 

-11-

           
Section 6.2  Tenant, at its sole cost and expense and after notice to Landlord, may contest by appropriate proceedings prosecuted diligently and in good faith, the legality or applicability of any Requirement affecting the Premises, provided that (a) Landlord (or any Indemnitee) shall not be subject to prosecution for a crime, nor shall the Real Property or any part thereof be subject to being condemned or vacated, nor shall the certificate of occupancy for the Premises or the Building be suspended or threatened to be suspended by reason of noncompliance or by reason of such contest; (b) before the commencement of such contest, if Landlord (or any Indemnitee) may be subject to any civil fines or penalties or criminal penalties or if Landlord may be liable to any independent third party as a result of such noncompliance, Tenant shall furnish to Landlord either (i) a bond of a surety company satisfactory to Landlord, in form and substance reasonably satisfactory to Landlord, and in an amount equal to one hundred twenty percent (120%) of the sum of (A) the cost of such compliance, (B) the criminal or civil penalties or fines that may accrue by reason of such noncompliance (as reasonably estimated by Landlord), and (C) the amount of such liability to independent third parties (as reasonably estimated by Landlord), and shall indemnify Landlord (and any Indemnitee) against the cost of such compliance and liability resulting from or incurred in connection with such contest or non-compliance (except that Tenant shall not be required to furnish such bond to Landlord if it has otherwise furnished any similar bond required by law to the appropriate Governmental Authority and Landlord is protected thereby) or (ii) other security reasonably satisfactory in all respects to Landlord; (c) such noncompliance or contest shall not constitute or result in a violation (either with the giving of notice or the passage of time or both) of the terms of any Mortgage or Superior Lease, or if such Superior Lease or Mortgage shall condition such non-compliance or contest upon the taking of action or furnishing of security by Landlord, such action shall be taken or such security shall be furnished at the expense of Tenant; and (d) Tenant shall keep Landlord regularly advised as to the status of such proceedings. Without limiting the applicability of the foregoing, Landlord (or any Indemnitee) shall be deemed subject to prosecution for a crime if Landlord (or any Indemnitee), a Lessor, a Mortgagee or any of their officers, directors, partners, shareholders, agents or employees is subject to prosecution for a crime of any kind whatsoever, unless such charges are withdrawn ten (10) days before Landlord (or any Indemnitee), such Lessor or such Mortgagee or such officer, director, partner, shareholder, agent or employee, as the case may be, is required to plead or answer thereto.

 

ARTICLE 7

SUBORDINATION

           
Section 7.1 This Lease shall be subject and subordinate to each Superior Lease and each Mortgage, subject to non-disturbance of Tenant by the holders thereof, as to the Ground Lease in accordance with its terms, and as to the Lessor under any Superior Lease entered into after the date of execution of this Lease and the holder of each and every Mortgage, on and subject to terms and conditions substantially the same as the terms and conditions contained in the non-disturbance and attornment agreement annexed hereto as Exhibit D. In

 

-12-

confirmation of the foregoing, Tenant and the holder of each Mortgage entered into after the date hereof, shall execute and deliver to each other a non-disturbance and attornment agreement in the form of the agreement annexed hereto as Exhibit D and Tenant and the Lessor under each Superior Lease entered into after the date hereof shall execute and deliver to each other an agreement substantially in the same form as the agreement annexed hereto as Exhibit D. Subject to the foregoing, the subordination of this Lease to each Superior Lease and to each Mortgage shall be self-operative. If the holder of a Mortgage or Lessor under a Superior Lease shall agree to execute and deliver an agreement substantially in the form annexed hereto as Exhibit D, and Tenant shall fail or refuse to do so, Tenant shall be deemed to have executed such agreement and this Lease shall be subject and subordinate to such Superior Lease or Mortgage. Subject to the foregoing, Landlord represents to Tenant that there are not now and agrees that there shall not in the future be any provisions in any Superior Lease or Mortgage, which would be violated by any act or omission by Tenant unless such act or omission is expressly provided herein to be a default by Tenant hereunder. If, in connection with the financing of the Real Property, the Building or the interest of the lessee under any Superior Lease, or if in connection with the entering into of a Superior Lease, any lending institution or Lessor shall request reasonable modifications of this Lease that do not increase Tenant's monetary obligations under this Lease, or adversely affect or diminish the rights (except to a de minimis extent),
or increase any non-monetary  obligations, of Tenant under this Lease, Tenant shall make such
modifications. 

           
Section 7.2 If at any time prior to the expiration of the Term, any Superior Lease shall terminate or be terminated for any reason or any Mortgagee comes into possession of the Real Property or the Building or the estate created by any Superior Lease by receiver or other-wise, Tenant shall attorn to any such Person acquiring the interest of Landlord as a result thereof, upon the then executory terms and conditions of this Lease, subject to the provisions of the non-disturbance agreement entered into by the parties (both in the case of a Mortgagee or a Lessor), Section 7.1 hereof and this Section 7.2, for the remainder of the Term, provided that such Person shall then be entitled to possession of the Premises and provided further that such Person, or anyone claiming by, through or under such Person, shall not be:

                 (a) liable for any act or omission of any prior landlord (including, without limitation, the then defaulting landlord), or

                (b) subject to any defense or offsets which Tenant may have against any prior landlord (including, without limitation, the then defaulting landlord), or 

                (c) bound by any payment of Rental which Tenant may have made to any prior landlord (including, without limitation, the then defaulting landlord) more than thirty (30) days in advance of the date upon which such payment was due, or

                (d) bound by any obligation to perform any work or to make improvements to the Premises, except for (i) repairs and maintenance pursuant to the

 

-13-

provisions of Article 4, (ii) repairs to the Premises or any part thereof as a result of damage by fire or other casualty pursuant to Article 10 hereof, but only to the extent that such repairs can be made from the net proceeds of any insurance actually made available to such owner, Lessor or Mortgagee, and (iii) repairs to the Premises as a result of a partial condemnation pursuant to Article 11 hereof, but only to the extent that such repairs can be made from the net proceeds of any award made available to such owner, Lessor or Mortgagee, or

                (e) bound by any amendment or modification of this Lease made without its consent, or

                (f) bound to return Tenant's security deposit, if any, until such deposit has come into its actual possession and Tenant would be entitled to such security deposit pursuant to the terms of this Lease. 

The provisions of this Article 7 shall enure to the benefit of Tenant and any such owner, Lessor or Mortgagee, shall be self-operative, and no further instrument shall be required to give effect to said provisions. Tenant, upon demand of any such owner, Lessor or Mortgagee, shall execute, at Tenant's expense, from time-to-time, instruments, in recordable form, in confirmation of the foregoing provisions of this Section 7.2, satisfactory to any such owner, Lessor or Mortgagee, acknowledging such attornment and setting forth the terms and conditions of its tenancy.

           
Section 7.3 From time-to-time, within ten (10) Business Days next following request by Landlord, any Mortgagee or any Lessor, Tenant shall deliver to Landlord, such Mortgagee or such Lessor a written statement executed by Tenant in form reasonably satisfactory to Landlord, such Mortgagee or such Lessor, and from time-to-time within ten (10) Business Days next following request by Tenant, Landlord shall deliver to Tenant a written statement executed by Landlord, in form reasonably satisfactory to Tenant: (1) stating that this Lease is then in full force and effect and has not been modified (or if modified, setting forth all modifications), (2) setting forth the date to which the Fixed Rent, additional rent and other items of Rental have been paid, (3) stating whether or not, to the best knowledge of the party which issues the statement, it or the other party is in default under this Lease, and, if it claims that it or the other party or it is in default, setting forth the specific nature of all such defaults, and (4) as to any other matters reasonably requested by the party requesting same. Tenant acknowledges that any statement delivered by Tenant pursuant to this Section 7.3 may be relied upon by any purchaser or owner of the Real Property or the Building, or Landlord's interest in the Real Property or the Building or any Superior Lease, or by any Mortgagee, or by an assignee of any Mortgagee, or by any Lessor. Landlord acknowledges that any statement delivered by it pursuant to this Section 7.3 may be relied on by Tenant, any permitted sublessee or assignee of Tenant and any banking institution or other lender which requests in writing such statement from Landlord 

 

-14-

and which indicates, in its request to Landlord, that it requires same in connection with a then existing or prospective loan to, or business relationship with, Tenant. Section 7.4 While any Superior Lease or Mortgage shall exist, if by reason of any act or omission of Landlord Tenant shall have a right to seek to terminate this Lease, Tenant shall not seek to so terminate this Lease by reason of any such act or omission of Landlord until Tenant shall have given written notice of such act or omission to all Lessors and Mortgagees at such addresses as shall have been furnished to Tenant by such Lessors and Mortgagees provided that any such Lessor or Mortgagee, shall notify Tenant within thirty (30) days following receipt of such notice that it shall remedy such act or omission, and within a reasonable period of time thereafter, due consideration being given to the necessity for such Lessor or Mortgagee to obtain possession of the Building, the Lessor or Mortgagee commences to cure same and prosecutes such cure to completion with diligence and continuity and, in such event, so long as such Lessor or Mortgagee shall be diligently and continually prosecuting such cure, Tenant shall not and shall not have the right to terminate this Lease.

 

ARTICLE 8

RULES AND REGULATIONS

           
Section 8.1 Tenant and Tenant's contractors, employees, agents, visitors, invitees and licensees shall comply with the Rules and Regulations. In case of any conflict or inconsistency between the provisions of this Lease and any of the Rules and Regulations, the provisions of this Lease shall control. Nothing in this Lease contained shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations or terms, covenants or conditions in any other lease against any other tenant, and Landlord shall not be liable to Tenant for violation of the same by any other tenant, its employees, agents, visitors or licensees, except that Landlord shall not enforce any Rule or Regulation against Tenant unless Landlord shall enforce it against all other office tenants in the Building. If there is a conflict between the manner of enforcement of any future Rules and Regulations and the provisions of this Lease relating thereto, this Lease shall prevail.

 

ARTICLE 9

INSURANCE. PROPERTY LOSS OR DAMAGE REIMBURSEMENT

           
Section 9.1

                (a) Any Building employee to whom any property shall be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's agent with respect to such property and Landlord and its agents shall neither be liable for any damage to property of Tenant or of 

 

-15-

others entrusted to employees of the Building, nor for the loss of or damage to any property of Tenant by theft or otherwise. Neither Landlord nor its agents shall be liable for any injury (or death) to persons or damage to property, or interruption of Tenant's business, resulting from fire or other casualty; nor shall Landlord or its agents be liable to Tenant for any such injury (or death) to persons or damage caused by other tenants or persons in the Building or caused by construction of any private, public or quasi-public work; nor shall Landlord be liable for any injury (or death) to persons or damage to property or improvements, or interruption of Tenant's business, resulting from any latent defect in the Premises or in the Building. Tenant shall not be liable to Landlord for injury (or death) to persons or damage to property resulting from fire or other casualty which shall be covered by the then standard form of "all risk" insurance policy, regardless of whether such insurance policy is then in effect (unless same was cancelled due to the acts or omissions of Tenant or any party claiming by, through or under Tenant).

                (b) If at any time a significant number of the windows of the Premises are temporarily closed, darkened or bricked-up for a period not exceeding three (3) consecutive months by reason of repairs, maintenance, alterations, or improvements to the Building, Landlord shall not be liable for any damage Tenant may sustain thereby and Tenant shall not be entitled to any compensation therefor, nor abatement or diminution of Fixed Rent or any other item of Rental, nor shall the same release Tenant from its obligations hereunder, nor constitute an actual or constructive eviction, in whole or in part, by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise, nor impose any liability upon Landlord or its agents. Without limiting the foregoing, if a significant numbers of windows of the Premises are darkened or bricked up even if for a period exceeding three (3) consecutive months if due to a Requirement, Landlord shall not be liable for any damage Tenant may sustain thereby. If at any time the windows of the Premises are temporarily closed, darkened or bricked-up, as aforesaid, Landlord shall perform such repairs, maintenance, alterations or improvements and comply with the applicable Requirements with reasonable diligence and otherwise take such action as may be reasonably necessary to minimize the period during which such windows are temporarily closed, darkened, or bricked-up.

                (c) Tenant shall, immediately upon its knowledge thereof, notify Landlord of any fire or accident in the Premises.

           
Section 9.2 Tenant shall, on or before the Commencement Date obtain, and thereafter keep in full force and effect during the Term (a) an "all risk" fire and casualty insurance policy with extended coverage for Tenant's Specialty Alterations and Tenant's Property at the Premises, and (b) a policy of commercial general liability and property damage insurance on an occurrence basis, with a broad form contractual liability endorsement. Such policies shall provide that Tenant is named as the insured. Landlord, Landlord's managing agent, and any Lessors and any Mortgagees (whose names shall have been furnished to Tenant) shall be added as additional insureds, as their respective interests may appear with respect to the insurance required to be carried pursuant to clause (a) above, and only to the extent of the

 

-16-

named insured's negligence with respect to the insurance required to be carried pursuant to clause (b) above. Such policy with respect to clause (b) above shall include a provision under which the insurer agrees to indemnity and hold Landlord, Landlord's managing agent, and such Lessors and Mortgagees harmless from and against, subject to the limits of liability set forth in this Section 9.2, all cost, expense and liability arising out of, or based upon, any and all claims, accidents, injuries and damages mentioned in Article 35. In addition, the policy required to be carried pursuant to clause (b) above shall contain a provision that (i) no act or omission of Tenant shall affect or limit the obligation of the insurer to pay the amount of any loss sustained, and (ii) the policy shall be non-cancellable with respect to Landlord, Landlord's managing agent, and such Lessors and Mortgagees (to the extent that their names and addresses shall have been furnished to Tenant) unless thirty (30) days' prior written notice shall have been given to Landlord by certified mail, return receipt requested, which notice shall contain the policy number and the names of the insured and additional insureds. In addition, upon receipt by Tenant of any notice of cancellation or any other notice from the insurance carrier which may adversely affect the coverage of the insureds under such policy of insurance, Tenant shall immediately deliver to Landlord and any other additional insured hereunder a copy of such notice. The minimum amounts of liability under the policy of insurance required to be carried pursuant to clause (b) above shall be a combined single limit with respect to each occurrence in an amount not less than Three Million Dollars ($3,000,000) for injury (or death) to persons and damage to property, which amount shall be increased from time-to-time to that amount of insurance which is then being customarily carried by prudent tenants of comparable premises in comparable "class A" office buildings in midtown Manhattan. All insurance required to be carried by Tenant (and Landlord) pursuant to the terms of this Lease shall be effected under valid and enforceable policies issued by reputable and independent insurers permitted to do business in the State of New York, and rated in Best's Insurance Guide, or any successor thereto (or if there be none, an organization having a national reputation) as having a general policyholder rating of "A" and a financial rating of at least "XII", or a comparable rating from a successor or alternative organization.

           
Section 9.3   On or prior to the Commencement Date, Tenant shall deliver to Landlord and Landlord shall deliver to Tenant appropriate certificates of insurance, including evidence of waivers of subrogation or consent to waivers of rights of recovery required pursuant to Section 10.6 hereof, required to be carried pursuant to this Article 9. Evidence of each renewal or replacement of a policy shall be delivered to the party entitled to receive same at least thirty (30) days prior to the expiration of such policy.

           
Section 9.4

                (a) Tenant acknowledges that Landlord shall not carry insurance on, and shall not be responsible for damage to, Tenant's Property or Specialty Alterations (other than those Specially Alterations which were part of Tenant's Initial Alterations), and that Landlord 

 

-17-

shall not carry insurance against, or be responsible for any loss suffered by Tenant due to interruption of Tenant's business.

                (b) Landlord shall, during the term of this Lease, maintain an "all risk" policy fire and casualty insurance with extended coverage, in an amount equal to at least 80% of the then full insurable value (that is actual replacement cost without deduction for physical depreciation, exclusive of the cost of excavations, foundations, footings, underground pipes, conduits, flues and drains) of the Building, but in any event in an amount sufficient to prevent Landlord from becoming a co-insurer under the provisions of the applicable policy.

 

ARTICLE 10

DESTRUCTION, FIRE OR OTHER CAUSE

            Section 10.1

                (a) If the Premises (including Alterations, but only to the extent provided for in Section 10.7), shall be damaged by fire or other casualty, and if Tenant shall give prompt notice thereof to Landlord, the damage shall be diligently repaired by and at the expense of Landlord to substantially the condition prior to the damage, and until such repairs which are required to be performed by Landlord shall be substantially completed (of which substantial completion Landlord shall promptly notify Tenant) (i) the Fixed Rent and Space Factor shall be reduced in the proportion which the ratio between the area of the part of the Premises which is not usable by Tenant, bears to the total area of the Premises immediately prior to such casualty, and (ii) Tenant's Operating Share and Tenant's Tax Share shall be redetermined based upon the ratio which the rentable area of the Premises remaining after such casualty bears to the rentable area of the Building remaining after such casualty; provided, however, that if fifty percent (50 %) or more of any entire floor within the Premises shall be wholly untenantable such that Tenant or any Person claiming by, through or under Tenant may not reasonably occupy, and is unable to conduct its usual and customary business in, the remainder of the floor and Tenant and all Persons claiming by, through or under Tenant in fact do not occupy, and do not conduct their usual and customary business in, the remainder of the floor, then the entire floor shall, for purposes of this Section 10.1, be considered untenantable and the adjustments provided for in clauses (i) and (ii) above shall be effected accordingly. Landlord shall have no obligation to repair any damage to, or to replace, any Specialty Alterations (other than Specially Alterations which were part of Tenant's Initial Alterations) or any of Tenant's Property. In addition, Landlord shall not be obligated to repair any damage to, or to replace, any Alterations unless Tenant shall have theretofore notified Landlord of the completion of such Alterations and the cost thereof, and shall have maintained adequate records with respect to such Alterations, it being the intention of the parties that Tenant shall cause its contractors, subcontractors or mechanics to obtain and maintain in full force and effect so-called "builder's risk" insurance which shall cover the costs to repair or to replace any such Alterations. Landlord shall use its
 

-18-

reasonable efforts to minimize interference with Tenant's use and occupancy in making any repairs pursuant to this Section 1O.1(a). No damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance arising from any repair or restoration of any portion of the Premises or of the Building pursuant to this Article 10.  Landlord shall use its best efforts to effect such repair or restoration promptly and in such manner as not unreasonably to interfere with Tenant's use and occupancy. Anything contained herein to the contrary notwithstanding, if the Premises (including any Alterations) are damaged by fire or other casualty at any time prior to the completion of Tenant's Initial Alterations, Landlord's obligation to repair the Premises (and any Alterations) shall be limited to repair of (w) the part of the Building Systems serving the Premises on the Commencement Date, but not the distribution portions of such Building Systems located within the Premises, (x) the floor and ceiling slabs of the Premises, (y) the exterior walls of the Premises, and (z) to the extent not included in the foregoing, those items constituting Landlord's Work, all to substantially the same condition which existed on the Commencement Date, it being the intention of the parties that Tenant shall cause its contractors, subcontractors or mechanics to obtain and maintain in full force and effect so-called "builder's risk" insurance which shall cover the costs to repair or to replace Tenant's Initial Alterations until notice to Landlord of the completion thereof. 

                (b) Prior to the substantial completion of Landlord's repair obligations set forth in Section 10.1(a) hereof, Landlord shall provide Tenant and Tenant's contractor, subcontractors and mechanics access to the Premises to perform repairs which Landlord is not obligated to perform (but not to occupy the same for the conduct of business), on the following terms and conditions:

                        (i) Tenant shall not commence work in any portion of the Premises until the date specified in a notice from Landlord to Tenant stating that the repairs required to be made by Landlord have been or will be completed to the extent reasonably necessary, in Landlord's discretion, to permit the commencement of the repairs which Landlord is not obligated to perform (or Alterations, if Landlord is not obligated to repair same pursuant to the provisions hereof) then prudent to be performed in accordance with good construction practice in the portion of the Premises in question without material interference with, and consistent with the performance of, the repairs remaining to be performed by Landlord.

                        (ii) Such access by Tenant shall be deemed to be subject to all of the applicable provisions of this Lease.

                        (iii) If Landlord shall be prevented from substantially completing the repairs it is required to perform under this Article 10 due to any acts of, or work by, Tenant, its agents, servants, employees or contractors, by reason of Tenant's failure or refusal to comply or to cause its architects, engineers, designers and contractors to comply with any of Tenant's obligations described or referred to in this Lease, in either event within such reasonable time as may be specified for that purpose in a written notice to Tenant, or if such repairs are not

 

-19-

completed because under good construction scheduling practice such repairs should be performed after completion of any work Tenant is obligated to perform, then such repairs shall be deemed substantially complete on the date when the repairs would have been substantially completed but for such delay and the expiration of the abatement of the Tenant's obligations hereunder shall not be postponed by reason of such delay. Any additional costs to Landlord to complete any repairs occasioned by such delay shall be paid by Tenant to Landlord as additional rent within ten (10) days after demand, which demand shall be accompanied by reasonably detailed statement describing such additional costs.

                (c) If any casualty damage to the Premises occurs during the period prior to the Rent Commencement Date, other than casualty damage caused by or resulting from neglect or improper conduct of Tenant, Tenant's agents, employees, contractors, subcontractors, mechanics, subtenants, invitees or licensees, the Rent Commencement Date shall be delayed by a period equal to the period it shall take Landlord (or in the case of work by Tenant, the period it would take, acting with diligence and continuity) to restore the Premises to their condition immediately prior to the occurrence of such casualty.

           
Section 10.2  Anything contained in Section 10.1 hereof to the contrary notwithstanding, if (a) all or substantially all of the Building or the Premises shall be damaged or destroyed by fire or other casualty, or (b) the Building shall be so damaged or destroyed by fire or other casualty (whether or not the Premises have been so damaged or destroyed) as to require a reasonably estimated expenditure for the repair or restoration thereof of more than forty percent (40%) of the full insurable value of the Building immediately prior to the casualty, then, in either of such events, Landlord, at Landlord's option, may, if a similar notice of termination is given to all other tenants of the Building, not later than ninety (90) days following the damage, give Tenant a notice in writing terminating this Lease. If Landlord elects to terminate this Lease, the Term shall expire upon a date set by Landlord in such notice, but not sooner than the tenth (10th) day after such notice is given, and Tenant shall vacate the Premises and surrender the same to Landlord in accordance with the provisions of Article 20 hereof.  Upon the termination of this Lease under the conditions provided for in this Section 10.2, the Fixed Rent and Escalation Rent shall be apportioned and any prepaid portion of Fixed Rent and Escalation Rent for any period after such date shall be refunded by Landlord to Tenant. Except as expressly set forth in this Section 10.2, and in Section 10.3, Landlord shall have no options to terminate this Lease under this Article 10.

           
Section 10.3

                (a) Within forty-five (45) days after notice to Landlord of any damage described in Section 10.1 hereof, Landlord shall deliver to Tenant a statement prepared by a reputable contractor setting forth such contractor's estimate as to the time required to repair such damage, exclusive of time required to repair any items which are Tenant's obligation to repair. If the estimated time period exceeds nine and two-thirds (9 2/3) months from the date of such

 

-20-

statement, Tenant may elect to terminate this Lease by notice to Landlord not later than twenty (20) days following receipt of such statement. If Tenant makes such election, the Term shall expire upon the later of the twentieth (20th) day after notice of such election is given by Tenant, and the date that Tenant shall vacate the Premises and surrender the same to Landlord in accordance with the provisions of Article 20 hereof. If Tenant shall not terminate this Lease pursuant to this Article 10 (or is not entitled to terminate this Lease pursuant to this Article 10), the damage shall be diligently repaired by and at the expense of Landlord as set forth in Section 10.1 hereof. Except as expressly set forth in this Section 10.3, Tenant shall have no options to terminate this Lease under this Article 10.

                (b) If the Premises shall be substantially damaged during the last two (2) years of the Term, Landlord and Tenant shall each have the right to elect by notice, given within thirty (30) days after the occurrence of such damage, to terminate this Lease and if either makes such election, the Term shall expire upon the later of the thirtieth (30th) day after notice of such election is given and the date that Tenant shall vacate the Premises and surrender the same to Landlord in accordance with the provisions of Article 20 hereof.

            Section 10.5  If Landlord does not terminate this Lease in accordance with the provisions of Section 10.2 or Section 10.3, or Tenant shall not terminate this Lease pursuant to Section 10.3, the damage to the Building or the Premises (exclusive of Tenant's Property or items which are required to be repaired by Tenant pursuant to this Lease) shall be diligently repaired by and at the expense of Landlord as set forth in Section 10.1 hereof. 

            Section 10.6  This Article 10 constitutes an express agreement governing any case of damage or destruction of the Premises or the Building by fire or other casualty, and Section 227 of the Real Property Law of the State of New York, which provides for such contingency in the absence of an express agreement, and any other law of like nature and purpose now or hereafter in force shall have no application in any such case.

            Section 10.7  The parties hereto shall procure an appropriate clause in, or endorsement on, any fire or extended coverage insurance covering the Premises, the Building and personal property, fixtures and equipment located thereon or therein, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery and will not make any claim against or seek to recover from the other for any loss or damage to its property or the property of others resulting from fire or other "all risk" extended coverage hazards. Tenant acknowledges that Landlord shall not carry insurance on and shall not be responsible for damage to, Tenant's Property, Specialty Alterations (other than Specialty Alterations which were part of Tenant's Initial Alterations), or any other Alteration (including Tenant's Initial Alterations) prior to (a) the completion thereof, (b) notice to Landlord of the completion thereof, and (c) delivery to Landlord of complete "as-built" plans and specifications (or shop drawings if permitted by this Lease) therefor, and that Landlord shall not carry insurance against, or be responsible for any loss suffered by Tenant due to, interruption of Tenant's business.

 

-21-

ARTICLE 11

EMINENT DOMAIN

           
Section 11.1  If the whole of the Real Property, the Building or the Premises shall be acquired or condemned for any public or quasi-public use or purpose, this Lease and the Term shall end as of the date of the vesting of title with the same effect as if said date were the Expiration Date. If only a part of the Real Property and not the entire Premises shall be so acquired or condemned then, (a) except as hereinafter provided in this Section 11.1, this Lease and the Term shall continue in force and effect, but, if a part of the Premises is included in the part of the Real Property so acquired or condemned, from and after the date of the vesting of title, (i) the Fixed Rent and the Space Factor shall be reduced in the proportion which the area of the part of the Premises so acquired or condemned bears to the total area of the Premises immediately prior to such acquisition or condemnation, (ii) Tenant's Operating Share shall be redetermined based upon the proportion in which the ratio between the rentable area of the Premises remaining after such acquisition or condemnation bears to the rentable area of the Building remaining after such acquisition or condemnation and (iii) Tenant's Tax Share shall be redetermined based upon the proportion in which the ratio between the rentable area of the Premises remaining after such acquisition or condemnation bears to the rentable area of the Building remaining after such acquisition or condemnation; (b) whether or not the Premises shall be affected thereby, Landlord, at Landlord's option, may give to Tenant, within sixty (60) days next following the date upon which Landlord shall have received notice of vesting of title, a thirty (30) days' notice of termination of this Lease if Landlord shall elect to terminate leases (including this Lease), affecting at least twenty-five percent (25%) of the rentable area of the Building (excluding any rentable area leased by Landlord or its Affiliates); and (c) if the part of the Real Property so acquired or condemned shall contain more than fifteen percent (15%)  of the total area of the Premises immediately prior to such acquisition or condemnation, or if, by reason of such acquisition or condemnation, Tenant no longer has reasonable means of access to the Premises, Tenant, at Tenant's option, may give to Landlord, within sixty (60) days next following the date upon which Tenant shall have received notice of vesting of title, a thirty (30) days' notice of termination of this Lease. If any such thirty (30) days' notice of termination is given by Landlord or Tenant, this Lease and the Term shall come to an end and expire upon the expiration of said thirty (30) days with the same effect as if the date of expiration of said thirty (30) days were the Expiration Date. If a part of the Premises shall be so acquired or condemned and this Lease and the Term shall not be terminated pursuant to the foregoing provisions of this Section 11.1, Landlord, at Landlord's expense, shall restore that part of the Premises not so acquired or condemned to a self-contained rental unit inclusive of Tenant's Alterations other than Specialty Alterations (provided, however, that Landlord shall not be obligated to restore or replace any Alterations unless Tenant shall have theretofore notified Landlord of the completion of such Alterations and the cost thereof, and shall have maintained adequate records with respect to such Alterations), except that if such acquisition or condemnation occurs prior to completion of the Initial Alterations, Landlord shall only be required to restore that part of the Premises not

 

-22-

so acquired or condemned to a self-contained rental unit exclusive of Tenant's Alterations. Upon the termination of this Lease and the Term pursuant to the provisions of this Section 11. 1, the Fixed Rent and Escalation Rent shall be apportioned and any prepaid portion of Fixed Rent and Escalation Rent for any period after such date shall be refunded by Landlord to Tenant.

           
Section 11.2  In the event of any such acquisition or condemnation of all or any part of the Real Property, Landlord shall be entitled to receive the entire award for any such acquisition or condemnation, including any award made for the value of the estate vested in Tenant by, or the unexpired term of, this Lease, Tenant shall have no claim against Landlord or the condemning authority for the value of any unexpired portion of the Term and Tenant hereby expressly assigns to Landlord all of its right in and to any such award. Nothing contained in this Section 11.2 shall be deemed to prevent Tenant from making a separate claim in any condemnation proceedings for the then value of any Tenant's Property included in such taking, and for any moving expenses.

           
Section 11.3  If the whole or any part of the Premises shall be acquired or condemned temporarily during the Term for any public or quasi-public use or purpose, Tenant shall give prompt notice thereof to Landlord and the Term shall not be reduced or affected in any way and Tenant shall continue to pay in full all items of Rental payable by Tenant hereunder without reduction or abatement, and Tenant shall be entitled to receive for itself any award or payments for such use, provided, however, that: 

                    (a) if the acquisition or condemnation is for a period not extending beyond the Term and if such award or payment is made less frequently than in monthly installments, the same shall be paid to and held by Landlord as a fund which Landlord shall apply from time-to-time to the Rental payable by Tenant hereunder, except that, if by reason of such acquisition or condemnation changes or alterations are required to be made to the Premises which would necessitate an expenditure to restore the Premises, then a portion of such award or payment considered by Landlord as appropriate to cover the expenses of the restoration shall be retained by Landlord, without application as aforesaid, and applied toward the restoration of the Premises as provided in Section 11.1 hereof, or

                    (b) if the acquisition or condemnation is for a period extending beyond the Term, such award or payment shall be apportioned between Landlord and Tenant as of the Expiration Date; Tenant's share thereof, if paid less frequently than in monthly installments, shall be paid to Landlord and applied in accordance with the provisions of clause (a) above, provided, however, that the amount of any award or payment allowed or retained for restoration of the Premises shall remain the property of Landlord if this Lease shall expire prior to the restoration of the Premises.

 

-23-

ARTICLE 12

ASSIGNMENT. SUBLETTING. MORTGAGE, ETC.

            Section 12.1

                    (a) Without the prior consent of Landlord in each instance, which consent, in the case of clauses (i), (iii) or (iv) below (and subject to compliance by Tenant with the provisions of Sections 12.6, 12.7 and 12.8 below), shall not be unreasonably withheld or delayed, Tenant shall not (i) assign its rights or delegate its duties under this Lease (whether by operation of law, transfers of interests in Tenant or otherwise), (ii) mortgage or encumber its interest in this Lease, in whole or in part, (iii) sublet, or permit the subletting of, the Premises or any part thereof, or (iv) permit the Premises or any part thereof to be occupied or used for desk space, mailing privileges or otherwise, by any Person other than Tenant.

                    (b) Notwithstanding the provisions of Section 12. 1(a), provided that no Event of Default shall have occurred and be continuing, Tenant shall have the right, without Landlord's consent (but upon not less than ten (10) Business Day's prior written notice to Landlord as hereinafter set forth), to assign this Lease or to sublease all or a portion or portions of the Premises (for uses permitted to Tenant under Article 2) to any "Affiliate" (hereinafter defined) of Tenant, but only for such period as such Affiliate remains an Affiliate of Tenant. For the purposes of this Article 12, an "Affiliate" of Tenant shall mean a corporation, partnership or other entity which controls, or is controlled by, or is under common control with, Tenant. If Tenant shall assign this Lease or sublease all or any part of the Premises to any Affiliate of Tenant in accordance with this Section 12.1(b), the notice to Landlord as set forth above shall be accompanied by proof in reasonable detail that such person is an Affiliate of Tenant and by the Tenant Statement required by Section 12.6, or the Assignment Statement required by Section 12.7, as appropriate, together with a copy of either the sublease or the assignment agreement, as appropriate. Any such assignment to or sublease with an Affiliate of Tenant shall be subject to the terms and conditions of Sections 12.6 and 12.7 as to a sublease and Section 12.8 as to an assignment.

                    (c) If this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, any and all monies or other consideration payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord and shall not constitute property of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any and all monies or other consideration constituting Landlord's property under the preceding sentence not paid or delivered to Landlord shall be held in trust for the benefit of Landlord and shall be promptly paid to or turned over to Landlord.

 

-24-

  

            Section 12.2

                    (a) If Tenant's interest in this Lease is assigned in violation of the provisions of this Article 12, such assignment shall be void and of no force and effect against Land-lord; provided, however, that Landlord may collect an amount equal to the then Fixed Rent plus any other item of Rental from the assignee as a fee for its use and occupancy, and shall apply the net amount collected to the Fixed Rent and other items of Rental reserved in this Lease. If the Premises or any part thereof are sublet to, or occupied by, or used by, any Person other than Tenant, whether or not in violation of this Article 12, Landlord, after default by Tenant under this Lease, including, without limitation, a subletting or occupancy in violation of this Article 12, may collect any item of Rental or other sums paid by the subtenant, user or occupant as a fee for its use and occupancy, and shall apply the net amount collected to the Fixed Rent and other items of Rental reserved in this Lease. No such assignment, subletting, occupancy or use, whether with or without Landlord's prior consent, nor any such collection or application of Rental or fee for use and occupancy, shall be deemed a waiver by Landlord of any term, coven-ant or condition of this Lease or the acceptance by Landlord of such assignee, subtenant, occupant or user as tenant hereunder. The consent by Landlord to any assignment, subletting, occupancy or use shall not relieve Tenant from its obligation to obtain the express prior consent of Landlord to any further assignment, subletting, occupancy or use. 

                    (b) Tenant shall, subject to the following sentence, reimburse Landlord on demand for any reasonable out-of-pocket expenses that may be incurred by Landlord in connection with any proposed assignment of Tenant's interest in this Lease or any proposed subletting of the Premises or any part thereof (as distinct from and in addition to the reimbursement to Landlord of its out-of-pocket expenses in connection with the review by Landlord of plans and specifications in connection with any Tenant's Alterations in connection with the occupancy of the subtenant or assignee), including, without limitation, any reasonable attorneys' fees and disbursements. In the case of any particular assignment or subletting, such reimbursement shall not exceed Two Thousand Dollars ($2,000.00) during the first year of the term of this Lease, which sum shall increase during each subsequent year by increases in the Consumer Price Index.

                    (c) Neither any assignment of Tenant's interest in this Lease nor any subletting, occupancy or use of the Premises or any part thereof by any Person other than Tenant, nor
any collection of Rental by Landlord from any Person other than Tenant as
provided in this Section 12.2, nor any application of any such Rental as provided in this Section 12.2 shall, in any circumstances, relieve Tenant of its obligations under this Lease on Tenant's part to be observed and performed.

                    (d) Any Person to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment. Any such assignee shall execute and deliver to Landlord upon demand an instrument confirming such assumption.

 

-25-

No assignment of this Lease shall relieve Tenant of its obligations hereunder and, subsequent to any assignment, Tenant's liability hereunder shall continue notwithstanding any subsequent modification or amendment hereof or the release of any subsequent tenant hereunder from any liability, to all of which Tenant hereby consents in advance.

           
Section 12.3

                    (a) If Tenant assumes this Lease and proposes to assign the same pursuant to the provisions of the Bankruptcy Code to any Person who shall have made an offer to accept an assignment of this Lease on terms acceptable to Tenant, then notice of such proposed assignment shall be given to Landlord by Tenant no later than twenty (20) days after receipt by Tenant, but in any event no later than ten (10) days prior to the date that Tenant shall make application to a court of competent jurisdiction for authority and approval to enter into such assignment and assumption. Such notice shall set forth (i) the name and address of such Person,
(ii) all of the terms and conditions of such offer, and (iii) adequate assurance
of future performance by such Person under the Lease as set forth in Paragraph (B) below, including, without limitation, the assurance referred to in Section 365(b) (3) of the Bankruptcy Code. Landlord shall have the prior right and option, to be exercised by notice to Tenant given at any time prior to the effective date of such proposed assignment, to accept an assignment of this Lease upon the same terms and conditions and for the same consideration, if any, as the offer made by such Person, less any brokerage commissions which would otherwise be payable by Tenant out of the consideration to be paid by such Person in connection with the assignment of this Lease.

                    (b) The term "adequate assurance of future performance" as used in this Lease shall mean that any proposed assignee shall, among other things, (i) deposit with Land-lord on the assumption of this Lease a sum equal to one half of the then annual Fixed Rent as security for the faithful performance and observance by such assignee of the terms and obligations of this Lease, which sum shall be held by Landlord, (ii) furnish Landlord with a financial statement of such assignee for the prior fiscal year of such proposed assignee, as finally determined after an audit and certified as correct by a certified public accountant, together with a financial statement covering the period from the end of the prior fiscal year to and including the month prior to the month in which notice is given to Landlord pursuant to Section 12.3(a), each of which financial statements shall show a net worth of at least six (6) times the then annual Fixed Rent for each of such year, and (iii) provide such other information or take such action as Landlord, in its reasonable judgment shall determine is necessary to provide adequate assurance of the performance by such assignee of its obligations under the Lease.

           
Section 12.4  Either a transfer (including the issuance of treasury stock or the creation and issuance of new stock or a new class of stock) of a controlling interest in the shares of stock of Tenant (if Tenant is a corporation or trust) or a transfer of a majority of the interests in or Control of Tenant (if Tenant is a partnership or other entity) at any one time or over a period of time through a series of transfers, shall be deemed an assignment of this Lease and

 

-26-

shall be subject to all of the provisions of this Article 12, including, without limitation, the requirement that Tenant obtain Landlord's prior consent thereto. The transfer of shares of Tenant (if Tenant is a corporation or trust) for purposes of this Section 12.4 shall not include the sale of shares by persons other than those deemed "insiders" within the meaning of the Securities Exchange Act of 1934, as amended, which sale is effected through the "over-the-counter market" or through any recognized stock exchange.

           
Section 12.5  If, at any time after the originally named Tenant herein shall have
assigned Tenant's interest in this Lease, this Lease shall be disaffirmed or
rejected in any proceeding of the types described in paragraph (e) of Section
16.1 hereof, or in any similar proceeding, or in the event of termination of this Lease by reason of any such proceeding or by reason of lapse of time following notice of termination given pursuant to said Article 16 based upon any of the Events of Default set forth in such paragraph, any prior Tenant, including, without limitation, the originally named Tenant, upon request of Landlord given within thirty (30) days next following any such disaffirmance, rejection or termination (and actual notice thereof to Landlord in the event of a disaffirmance or rejection or in the event of termination other than by act of Landlord), shall (a) pay to Landlord all Fixed Rent, Escalation Rent and other items of Rental due and owing by the assignee to Landlord under this Lease to and including the date of such disaffirmance, rejection or termination, and (b) as "tenant", enter into a new lease with Landlord of the Premises for a term commencing on the effective date of such disaffirmance, rejection or termination and ending on the Expiration Date, unless sooner terminated as in such lease provided, at the same Fixed Rent and upon the then executory terms, covenants and condi-tions as are contained in this Lease, except that (i) Tenant's rights under the new lease shall be subject to the possessory rights of the assignee under this Lease and the possessory rights of any person claiming through or under such assignee or by virtue of any statute or of any order of any court, (ii) such new lease shall require all defaults existing under this Lease to be cured by Tenant with due diligence, and (iii) such new lease shall require Tenant to pay all Escalation Rent reserved in this Lease which, had this Lease not been so disaffirmed, rejected or terminated, would have accrued under the provisions of Article 27 hereof after the date of such disaffirmance, rejection or termination with respect to any period prior thereto. If any such prior Tenant shall default in its obligation to enter into said new lease for a period of ten (10) days next following Landlord's request therefor, then, in addition to all other rights and remedies by reason of such default, either at law or in equity, Landlord shall have the same rights and remedies against such Tenant as if such Tenant had entered into such new lease and such new lease had thereafter been terminated as of the commencement date thereof by reason of such Tenant's default thereunder.

           
Section 12.6

                    (a) As a condition to the effectiveness of any sublease, every subletting hereunder is subject to the following conditions:

 

-27-

                            (i) no Event of Default shall have occurred and be continuing both at the time that Tenant shall have requested Landlord's consent to the subletting and at the commencement of the term of the proposed sublease;

                            (ii) on the day Tenant delivers the Tenant Statement to Landlord and upon the date immediately preceding the commencement date of any sublease approved by Landlord, the proposed subtenant shall have a financial standing which is reasonable in comparison with the obligations of the subtenant contemplated under the sublease and shall be of good character;

                            (iii) the Premises shall not have been listed or otherwise advertised in a manner which would reflect detrimentally on the Building or Landlord;

                            (iv) the proposed subtenant (or any Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with, the proposed subtenant) shall not be a tenant, subtenant or occupant of any space in the Building or the Kent Building, nor shall the proposed subtenant (or any Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with, the proposed subtenant) be a Person with whom Landlord is negotiating or discussing the lease of space in the Building or the Kent Building; if Tenant shall propose to sublease space and is about to commence negotiations with a tenant, subtenant, occupant or prospective subtenant, Tenant shall advise Landlord of the identity of such prospective subtenant and Landlord shall promptly advise Tenant if the execution of a sublease with such tenant, subtenant, occupant or prospective subtenant would violate the provisions of this clause (iv);

                            (v) the sublease shall expressly provide that (and whether or not the sublease shall so provide, it shall be deemed that) it is subject to all of the terms, covenants, conditions and obligations on Tenant's part to be observed and performed under this Lease (including the provisions of Article 2) and the further condition and restriction that the sublease shall not be modified without the prior written consent of Landlord, which consent, as to non-material modifications, shall not be unreasonably withheld, or assigned, encumbered or otherwise transferred or the subleased premises further sublet by the subtenant in whole or in part, or any part thereof suffered or permitted by the subtenant to be used or occupied by others, without the prior written consent of Landlord in such instance;

                            (vi) an executed copy of the proposed sublease shall have been submitted to Landlord together with the Tenant Statement required by Section 12.6(b); 

                            (vii) at no time shall there be more than six (6) occupants, including Tenant, in the entire Premises; and

 

-28-

                            (viii) the sublease shall expressly provide that (and whether or not the sublease shall so provide, it shall be deemed that) in the event of termination, re-entry or dispossess of Tenant by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublessor under such sublease, and such subtenant, at Landlord's option, shall attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be:

                                    (1) liable for any act or omission of Tenant under such sublease, or

                                    (2) subject to any defense or offsets which such subtenant may have against Tenant, or

                                    (3) bound by any previous payment which such subtenant may have made to Tenant of more than thirty (30) days in advance of the date upon which such payment was due, unless previously approved by Landlord, or

                                    (4) bound by any obligation to make any payment to or on behalf of such subtenant, or

                                    (5) bound by any obligation to perform any work or to make improvements to the Premises, or portion thereof demised by such sublease, or 

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

                                    (7) bound to return such subtenant's security deposit, if any, until such deposit has come into its actual possession and such subtenant would be entitled to such security deposit pursuant to the terms of such sublease.

If Tenant proposes to sublet a portion of the Premises then, unless the context otherwise requires, references in this Section 12.6 to the Premises shall be deemed to refer to the portion of the Premises proposed to be sublet by Tenant.

                    (b) At least fifteen (15) Business Days prior to the proposed commencement date of any proposed subletting of all or any portion of the Premises, Tenant shall submit a statement to Landlord (a "Tenant Statement") containing the following information: (i) the name and address of the proposed subtenant, (ii) a description of the portion of the Premises to be sublet, (iii) the terms and conditions of the proposed subletting, including, without limitation, the rent payable and the value of any improvements (including any demolition to be performed) to the Premises for occupancy by such subtenant [which requirement may be satisfied by Tenant submitting to Landlord a copy of the proposed sublease provided that such 

 

-29-

sublease has all of the terms and conditions of the proposed subletting as required by this clause (iii)], (iv) the nature and character of the business of the proposed subtenant, and (v) any other information that Landlord may reasonably request, together with a statement specifically directing Landlord's attention to the provisions of this Section 12.6(b) requiring Landlord to respond to Tenant's request within fifteen (15) Business Days after Landlord's receipt of the Tenant Statement. Landlord shall respond in writing to Tenant's request within fifteen (15) Business Days after Landlord's receipt of the Tenant Statement, advising whether Landlord consents to the proposed subletting. If Landlord shall fail to notify Tenant within said fifteen (15) Business Day period of Landlord's consent to or disapproval of the proposed subletting, Tenant shall have the right to sublease that portion of the Premises to such proposed subtenant on the same terms and conditions set forth in the Tenant Statement. If Tenant shall not enter into such sublease within sixty (60) days after the delivery of the Tenant Statement to Landlord, then the provisions of Section 12.1 hereof and this Section 12.6 shall again be applicable to such unconsummated sublease and any other proposed subletting.

           

Section 12.7

                    (a) In connection with any subletting of all or any portion of the Premises, Tenant shall pay to Landlord, sums in respect of Sublease Profit derived therefrom, as follows:

                            (i) Landlord shall not be entitled to the payment of any Sublease Profit derived from a subletting of (or sublettings totalling in the aggregate) ten thousand two hundred fifty (10,250) rentable square feet or less;

                            (ii) at such time as there shall be in existence, sublettings which, in the aggregate, are for more than ten thousand two hundred fifty (10,250) square feet and less than or equal to twenty thousand five hundred (20,500) square feet, Landlord shall be entitled to payment of an amount equal to thirty-seven and one-half percent (37 1/2%) of all Sublease Profit derived from all such sublettings; and 

                            (iii) at such time as there shall be in existence, sublettings which, in the aggregate, exceed twenty thousand five hundred (20,500) square feet, Landlord shall be entitled to payment of an amount equal to fifty percent (50%) of all Sublease Profit derived from all such sublettings.

All sums payable hereunder by Tenant shall be calculated on an annualized basis, but shall be paid to Landlord, as additional rent, within five (5) days after receipt thereof by Tenant. Tenant shall use all reasonable efforts to collect all rent and additional rent from any subtenants. For the purposes of this Section 12.7(a), Tenant's "reasonable efforts" shall include, under those circumstances where it is reasonable and prudent, the institution of legal actions or proceedings;

 

-30-

                    (b) For purposes of this Lease:

                            (i) "Rent Per Square Foot" shall mean the sum of the then Fixed Rent and Escalation Rent divided by the Space Factor;

                            (ii) "Sublease Profit" shall mean the product of (x) the Sublease Rent Per Square Foot less the Rent Per Square Foot, and (y) the number of rentable square feet constituting the portion of the Premises sublet by Tenant;

                            (iii) "Sublease Rent" shall mean any rent or other consideration paid to Tenant (no amount shall be included therein in respect of free rent periods) directly or indirectly by any subtenant or any other amount received by Tenant from or in connection with any subletting, including, but not limited to, sums paid for the sale or rental, or consideration received on account of any contribution, of Tenant's Property or sums paid in connection with the supply of electricity or HVAC less the Sublease Expenses;

                            (iv) "Sublease Expenses" shall mean: (A) in the event of a sale of Tenant's Property, the then fair market value thereof, (B) the actual reasonable out-of-pocket costs and expenses of Tenant in making such sublease, such as brokers' fees, attorneys' fees, and advertising fees paid to unrelated third parties (which costs and expenses shall not exceed the cost and expenses which are then usual and customary in Manhattan for subleases of comparable space), (C) any sums paid to Landlord pursuant to Section 12.2(b) hereof, (D) the cost of improvements or alterations made by Tenant expressly and solely for the purpose of preparing that portion of the Premises for such subtenancy if not used by Tenant subsequent to the expiration of the term of the sublease (other than for a de minimis period of time), (E) any other commercially reasonable and marketing costs (which are usual and customary in connection with the marketing of comparable space) incurred by Tenant in connection with a subletting, and (F) the then fair rental value of any Tenant's Property leased to and used by such subtenant. In determining Sublease Rent, the costs set forth in clauses (B), (C) and (D) shall be amortized on a straight-line basis over the period of time same is required to be amortized by Tenant for federal income tax purposes and the costs set forth in clause (E) shall be amortized on a straight line basis over the shorter of the period of time required to be amortized by Tenant for federal income tax purposes and the term of the sublease;

                            (v) "Sublease Rent Per Square Foot" shall mean the Sublease Rent divided by the rentable square feet of the space demised under the sublease in question; 

                    (c) Sublease Profit shall be recalculated from time-to-time to reflect any corrections in a prior calculation thereof due to (A) subsequent payments received or made by Tenant, (B) the final adjustment of payments to be made by or to Tenant, and (C) mistake.  Promptly after receipt or final adjustment of any such payments or discovery of any such mistake, Tenant shall submit to Landlord a recalculation of the Sublease Profit, and an adjustment

 

-31-

shall be made between Landlord and Tenant, on account of prior payments made or credits received pursuant to this Section 12.7. In addition, if Sublease Expenses utilized for the purpose of calculating Sublease Profit included an amount attributable to the cost of the improvements made by Tenant expressly and solely for the purpose of preparing the Premises or a portion thereof for the occupancy of the subtenant and subsequent to the expiration of the sublease such improvements and/or alterations were not demolished and/or removed, Sublease Profits shall be recalculated as if the cost of such improvements and/or alterations were not, to the extent of the value thereof then remaining, incurred by Tenant and Tenant promptly shall pay to Landlord the applicable percentage of the additional amount of such Sublease Profit, resulting from such recalculation.

            Section 12.8

                    (a) As a condition to the effectiveness of any assignment of this Lease, every assignment of this Lease is subject to the following conditions:

                            (i) no Event of Default shall have occurred and be continuing both at the time that Tenant shall have requested Landlord's consent to the assignment and on the effective date of such assignment;

                            (ii) on the day Tenant delivers the Assignment Statement to Landlord and upon the date immediately preceding the effective date of any assignment approved by Landlord, the proposed assignee shall have a financial standing which is reasonable in comparison with the obligations of the proposed assignee under this Lease and shall be of good character; 

                            (iii) the Premises shall not have been listed or otherwise advertised in a manner which would reflect detrimentally on the Building or Landlord;

                            (iv) the proposed assignee (or any Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with, the proposed assignee) shall not be a tenant, subtenant or occupant of any space in the Building or the Kent Building, nor shall the proposed assignee (or any Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with, the proposed subtenant) be a Person with whom Landlord is negotiating or discussing the lease of space in the Building or the Kent Building at the time of receipt of an Assignment Statement. If Tenant shall propose to assign this Lease and is about to commence negotiations with a prospective assignee, Tenant shall advise Landlord of the identity of such prospective assignee and Landlord shall promptly (but in no event more than five (5) days after being so advised), advise Tenant whether Landlord is then so negotiating with such prospective assignee;

 

-32-

                            (v) an executed copy of the proposed assignment and assumption agreement shall have been submitted to Landlord along with the Assignment Statement required by Section 12.8(b); and

                            (vi) the proposed assignment and assumption agreement shall expressly provide that (and whether or not the proposed assignment and assumption agreement shall so provide, it shall be deemed that) the assignee shall agree to assume all of the obligations of Tenant under this Lease from and after the date of the assignment.

                    (b)     (i) At least fifteen (15) Business Days prior to the effective date of any proposed assignment, Tenant shall submit a statement to Landlord (the
"Assignment Statement") containing the following information; (A) the name and address of the proposed assignee, (B) the essential terms and conditions of the proposed assignment, including, without limitation, the consideration payable for such assignment and the value of any improvements (including any demolition to be performed) to the Premises proposed to be made by Tenant to prepare the Premises for occupancy by such assignee, Landlord agreeing that Tenant may satisfy such obligation by submitting a copy of the proposed assignment and assumption agreement (provided that the proposed assignment and assumption agreement contains all of the terms and conditions required by this clause 12.8(b)(i)(B)), (C) the nature and character of the business of the pro-posed assignee, and (D) any other information that Landlord may reasonably request, together with a statement specifically directing Landlord's attention to the provisions of this Section 12.8(b) requiring Landlord to respond to Tenant's request within fifteen (15) Business Days after Landlord's receipt of the Assignment Statement. The Assignment Statement shall be executed by Tenant and the proposed assignee and shall indicate both parties' intent (but not necessarily binding obligation) to enter into an assignment agreement conforming to the terms and conditions of the Assignment Statement and on such other terms and conditions to which the parties may agree which are not inconsistent with the essential terms set forth in the Assignment Statement. 

                            (ii) Landlord shall respond in writing to Tenant within fifteen (15) Business Days after Landlord's receipt of the Assignment Statement, advising whether Landlord consents to the proposed assignment.

                            (iii) If Landlord shall fail to notify Tenant within said fifteen (15) Business Day period of Landlord's consent to or disapproval of the proposed assignment, or if Landlord shall consent to such assignment as provided in Section 12.8(a) hereof, Tenant shall have the right to assign this Lease to such proposed assignee on the same terms and conditions set forth in the Assignment Statement. If Tenant shall not enter into such assignment within sixty (60) days after the delivery of the Assignment Statement to Landlord, then the provisions of this Section 12.8 shall again be applicable in their entirety to any proposed assignment.

                            (iv) If Tenant shall assign this Lease, Tenant shall deliver to Landlord, within five (5) days after execution thereof, (A) a duplicate original instrument of assignment

 

-33-

in form and substance reasonably satisfactory to Landlord, duly executed by Tenant, and (B) an instrument in form and substance reasonably satisfactory to Landlord, duly executed by the assignee, in which such assignee shall assume observance and performance of, and agree to be bound by, all of the terms, covenants and conditions of this Lease on Tenant's part to be observed and performed. 

                            (v) Tenant shall pay to Landlord, upon Tenant's receipt thereof, an amount equal to fifty percent (50%) of all Assignment Proceeds. For purposes of this paragraph (v), "Assignment Proceeds" shall mean all consideration payable to Tenant, directly or indirectly, by any assignee, or any other amount received by Tenant from or in connection with any assignment (including, but not limited to, sums paid for the sale or rental, or consideration received on account of any contribution, of Tenant's Property) after deducting therefrom: (A) in the event of a sale (or contribution) of Tenant's Property, the then fair market value thereof, (B) the reasonable out-of-pocket costs and expenses of Tenant in making such assignment, such as brokers' fees, attorneys' fees, and advertising fees paid to unrelated third parties (which costs and expenses shall not exceed the cost and expenses which are then usual and customary for assignments of leases of comparable space in class A office buildings in midtown Manhattan), (C) any payments required to be made by Tenant in connection with the assignment of its interest in this Lease pursuant to Article 31-B of the Tax Law of the State of New York or any real property transfer tax of the United States or the City or State of New York (other than any income tax), (D) any sums paid by Tenant to Landlord pursuant to Section 12.2(B) hereof, (E) the reasonable cost of improvements or alterations made by Tenant expressly and solely for the purpose of preparing the Premises for such assignment (provided that such costs are both reasonable and customary in connection with leases then being entered into for comparable space in class A office buildings in midtown Manhattan), (F) the unamortized or undepreciated cost of any Tenant's Property leased to and used by such assignee, and (G) any other commercially reasonably marketing costs (which costs and expenses shall not exceed the cost and expenses which are then usual and customary in Manhattan for subleases of comparable space) incurred by Tenant in connection with Tenant's assignment of the Lease. If the consideration paid to Tenant for any assignment shall be paid in installments, then the expenses specified in this paragraph (vi) shall be amortized over the period during which such installments shall be payable. With respect to the costs amortized pursuant to clause (F) above, the unamortized or undepreciated costs shall be determined on a straight-line basis utilizing the method of amortization used by Tenant for federal income tax purposes.

                     (c) Landlord shall have the right to require that the assignee deposit with Landlord, in the manner contemplated by Article 31 hereof, a security deposit in the amount of two (2) monthly installments of the Fixed Rent due and payable as of the effective date of the proposed assignment.

  

-34-

           
Section 12.9 Tenant shall not occupy any space in the Building or the Kent Building (by assignment, sublease or otherwise) other than the Premises, except with the prior written consent of Landlord in each instance.

 

ARTICLE 13

ELECTRICITY

           
Section 13.1

                    (a) Tenant shall at all times comply with the rules, regulations, terms and
conditions applicable to service, equipment, wiring and requirements of the
public utility company supplying electricity to the Building. The risers serving the Premises shall be capable of supplying seven (7) watts of electricity per rentable square foot of the Premises (exclusive of power for HVAC service through the Building Systems), and Tenant shall not use any electrical equipment which, in Landlord's reasonable judgment, would exceed such capacity or interfere with the electrical service to other tenants of the Building.

                    (b) If Tenant's electrical requirements exceed seven (7) watts per rentable square foot to such an extent as, in Landlord's reasonable judgment, would necessitate installation of an additional riser, risers or other proper and necessary equipment, Landlord shall so notify Tenant of same. Within five (5) Business Days after receipt of such notice, Tenant shall either cease such use of such additional electricity or shall request that additional electrical capacity (specifying the amount requested) be made available to Tenant. Landlord, in Landlord's sole (but reasonable) judgment, shall determine whether to make available such additional electrical capacity to Tenant and the amount of such additional electrical capacity to be made available. If Landlord shall agree to make available additional electrical capacity and the same necessitates installation of an additional riser, risers or other proper and necessary equipment, including, without limitation, any switch-gear, the option which is least expensive to Tenant shall be installed by Landlord. Any such installation shall be made at Tenant's sole cost and expense, and shall be chargeable and collectible as additional rent and paid within thirty (30) days after the rendition of a bill to Tenant therefor. Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electric service furnished to the Premises by reason of any requirement, act or omission of the utility company serving the Building or for any other reason not attributable to the gross negligence or willful malfeasance of Landlord, whether electricity is provided by public or private utility company or by any electricity generation system owned and operated by Landlord.

           
Section 13.2

                    (a) Unless Landlord elects or is required to have Tenant obtain electricity from the public utility company furnishing electricity to the Building pursuant to the provisions of Section 13.4 hereof, electricity shall be supplied by Landlord to the Premises and, for the

 

-35-

period from and after the Rent Commencement Date, Tenant shall pay to Landlord, as additional rent for such service, the amounts (the "Electricity Additional Rent") as determined by a meter or submeter (installed by Landlord as part of Landlord's Work for the purpose of measuring such consumption) at the Cost Per Kilowatt Hour under the service classification in effect pursuant to which Landlord purchases electricity, plus an amount equal to three percent (3%) of the Electricity Additional Rent as Landlord's administrative charge for overhead and supervision. In no event shall Tenant be required to pay any Electricity Additional Rent or administrative charge thereon for the period from the Commencement Date to the Rent Commencement Date.

                    (b) Where more than one meter measures the electricity supplied to Tenant, the electricity rendered through each meter may be computed and billed separately in accordance with the provisions of Section 13.2(a). Bills for the Electricity Additional Rent and the administrative charge based thereon shall be rendered to Tenant from time to time at such times as Landlord may elect, and Tenant shall pay the amount shown thereon to Landlord within ten (10) days after receipt of such bill. Upon Tenant's request, Landlord shall provide to Tenant a copy of the utility bill utilized by Landlord to determine the Costs Per Kilowatt Hour which was, in turn, utilized to determine the Electricity Additional Rent for the then current bill therefor.

                    (c) If electricity shall hereafter be supplied to the Building on a "primary service" basis from the public utility company, Tenant shall not be required to pay to Landlord, as Escalation Rent or otherwise, any portion of the costs incurred by Landlord in converting the Building to such "primary service," and in such event, the 3% charge provided for in Section 13.2 (a) above shall no longer apply.

            Section 13.3

                    (a) If Tenant shall, in good faith, believe that the electrical meters or submeters servicing the Premises are not accurately measuring Tenant's electricity consumption in the Premises, Tenant shall have the right, upon written notice to Landlord, to have a reputable, licensed and independent electrical consultant inspect the meters or submeters, at Tenant's sole expense, to determine the accuracy of such meters or submeters. If Tenant's consultant determines that the meters or submeters are not accurately measuring Tenant's electricity consumption in the Premises, Tenant shall immediately give written notice thereof to Landlord, which notice shall be accompanied by a written report and certification by Tenant's electrical consultant specifying in detail all respects in which the electric meters or submeters are not accurately (to ANSI standards) measuring Tenant's electrical consumption in the Premises and any specific deficiencies in the meters or submeters. Upon receipt of Tenant's electrical consultant's report and certification, Landlord shall have the right to have Landlord's reputable, licensed and independent electrical consultant inspect, at Landlord's sole expense, the electric meters and submeters servicing the Premises. Upon completion of the inspection by

 

-36-

Landlord's electrical consultant, Landlord shall provide to Tenant a copy of the written report and certification of Landlord's consultant. If the reports and certifications of the two electrical consultants do not agree, they shall together promptly seek to resolve any differences. If the two consultants cannot resolve their differences, they shall choose a third reputable, licensed and independent electrical consultant, the cost of which shall be shared equally by Landlord and Tenant, to make a similar inspection of the electric meters and submeters, and the determination of the third electrical consultant (which shall be made by means of a similar written report and certification) shall be binding upon Landlord and Tenant.

                    (b) If pursuant to Section 13.3(a) it shall be determined that the electric meters or submeters servicing the Premises are not accurately (to ANSI standards) measuring Tenant's electricity consumption in the Premises, Landlord shall, at its cost and expense, make such repairs (or replacements) to the electric meters or submeters as shall be necessary so that such meters or submeters are accurate to ANSI standards. Until the date that such repairs (or replacements) are completed, Tenant shall continue to pay to Landlord the Electricity Additional Rent and administrative charge as billed by Landlord to Tenant pursuant to Section 13.2(a). Following completion of such repairs, Landlord and Tenant shall adjust the payments of Electricity Additional Rent and the administrative charge for the period from the date of Tenant's notice to Landlord (given pursuant to Section 13.3(a)), to and including the date of completion of the repairs (or replacements) to the electric meters or submeters, and the amount of any overpayment by Tenant shall be automatically credited against the next succeeding installments of Electricity Additional Rent thereafter due. In no event shall Tenant be entitled to any adjustment for Electricity Additional Rent for any period prior to the date of Tenant's notice to Landlord. 

           
Section 13.4  If Landlord shall be required to discontinue furnishing electricity to Tenant (which it shall only do if it is required to do so and only if it shall simultaneously discontinue furnishing electricity to all other tenants of the Building), Landlord shall give Tenant notice thereof and this Lease shall continue in full force and effect and shall be unaffected thereby, except that from and after the effective date of such discontinuance, Landlord shall not be obligated to furnish electricity to Tenant and Tenant shall not be obligated to pay the Electricity Additional Rent. Landlord shall not discontinue furnishing electricity to the Premises until Tenant shall be able to obtain electricity directly from the public utility company and any necessary installations to enable Tenant to do so have been made. If Landlord so discontinues furnishing electricity to Tenant, Tenant shall make all necessary arrangements to obtain electric energy directly from the public utility company furnishing electric service to the Building. The costs of such service shall be paid by Tenant directly to such public utility. Such electricity may be furnished to Tenant by means of the existing electrical facilities serving the Premises, at no charge, to the extent the same are available, suitable and safe for such purposes as determined by Landlord. All meters and all additional panel boards, feeders, risers, wiring and other conductors and equipment which may be required for Tenant to obtain electricity directly shall be installed by Landlord and the actual, reasonable out-of-pocket costs incurred by Landlord so

 

-37-

doing shall be shared equally by Landlord and Tenant (should any such feeders, risers, wiring and other conductors and equipment service other premises in addition to the Premises, the costs thereof shall be allocated pro rata to each of the premises serviced thereby, including the Premises, and the portion of such costs which are allocated to the Premises shall be shared equally by Landlord and Tenant, as aforesaid), Tenant's portion thereof being payable to Landlord as additional rent within thirty (30) days following demand therefore, which demand shall be accompanied by reasonably satisfactory evidence of such costs.

ARTICLE 14

ACCESS TO PREMISES

            Section 14.1

                    (a) Tenant shall permit Landlord, Landlord's agents, representatives, con-tractors and employees and public utilities servicing the Building to erect, use and
maintain, concealed ducts, pipes and conduits in and through the Premises. Landlord, Landlord's agents, representatives, contractors, and employees and the agents, representatives, contractors, and employees of public utilities servicing the Building shall have the right to enter the Premises at all reasonable times upon reasonable prior notice (except in the case of an emergency in which event Landlord and Landlord's agents, representatives, contractors, and employees may enter without prior notice to Tenant), which notice may be oral, to examine the same, to show them to prospective purchasers, or prospective or existing Mortgagees or Lessors, and to make such repairs, alterations, improvements, additions or restorations (i) as Landlord may deem necessary to the Premises or to any other portion of the Building, or (ii) which Landlord may elect to perform following ten (10) days after notice, except in the case of an emergency (in which event Landlord and Landlord's agents, representatives, contractors, and employees may enter without prior notice to Tenant), following Tenant's failure to make repairs or perform any work which Tenant is obligated to make or perform under this Lease after any applicable notice and/or grace period herein provided, or (iii) for the purpose of complying with any Requirements, a Superior Lease or a Mortgage, and Landlord shall be allowed to take all material into and upon the Premises that may be required therefor without the same constituting an eviction or constructive eviction of Tenant in whole or in part and the Fixed Rent (and any other item of Rental) shall in no way abate while said repairs, alterations, improvements, additions or restorations are being made (except if the Premises are thereby rendered wholly untenantable and then only to the extent specifically set forth in this Lease), nor shall Landlord be liable to Tenant by reason of loss or interruption of business of Tenant, or otherwise. In connection with entry to the Premises, Landlord shall use all reasonable efforts to minimize any interference with Tenant's use and occupancy of the Premises and its business operations therein.

 

-38-

                    (b) Any work performed or installations made pursuant to this Article 14 shall be made with reasonable diligence and otherwise pursuant to the provisions of Section 4.3 hereof.

                    (c) Except as hereinafter provided, any pipes, ducts, or conduits installed in or through the Premises pursuant to this Article 14 shall be concealed behind, beneath or within partitioning, columns, ceilings or floors located or to be located in the Premises. Notwithstanding the foregoing, any such pipes, ducts, or conduits may be furred at points immediately adjacent to partitioning columns or ceilings located or to be located in the Premises, provided that the same are completely furred and that the installation of such pipes, ducts, or conduits, when completed, shall not reduce the usable area of the Premises or the height of the ceiling of the Premises beyond a de minimis amount.

           
Section 14.2  During the twelve (12) month period immediately preceding the Expiration Date or the expiration of any renewal or extended term, Landlord may exhibit the Premises to prospective tenants thereof on reasonable advance notice to Tenant.

           
Section 14.3  If Tenant shall not be present when entry into the Premises shall be necessary, Landlord or Landlord's agents, representatives, contractors or employees may enter the same without rendering Landlord or such agents liable therefor if during such entry Landlord or Landlord's agents shall accord reasonable care under the circumstances to Tenant's Property, and without in any manner affecting this Lease. Nothing herein contained, however, shall be deemed or construed to impose upon Landlord any obligation, responsibility or liability whatsoever, for the care, supervision or repair of the Building or any part thereof, other than as herein provided.

           
Section 14.4  Landlord also shall have the right at any time, without the same constituting an actual or constructive eviction and without incurring any liability to Tenant therefor, to change the arrangement or location of entrances or passageways, doors and doorways, and corridors, elevators, stairs, toilets, or other public parts of the Building and to change the name, number or designation by which the Building is commonly known, provided any such change does not (a) materially reduce, interfere with or deprive Tenant of access to the Building or the Premises or (b) reduce the usable area of the Premises, except by a de minimis amount. If Tenant's access to the Building or the Premises shall be materially affected by work of a nature contemplated by this Section 14.4, Landlord shall give to Tenant reasonable advance notice of such work, except under emergency circumstances. All parts (except surfaces facing the interior of the Premises) of all walls, windows and doors bounding the Premises (including exterior Building walls, exterior core corridor walls, exterior doors and entrances), all balconies, terraces and roofs adjacent to the Premises, all space in or adjacent to the Premises used for shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, heating, air cooling, plumbing and other mechanical facilities, service closets and other Building facilities are not part of the Premises, and Landlord shall have the use thereof, as well as access thereto through the

 

-39-

Premises for the purposes of operation, maintenance, alteration and repair, provided that in connection with any such access, Landlord shall use all reasonable efforts to minimize interference with Tenant's use and occupancy of the Premises and its business operations therein. Neither this Lease nor any use by Tenant shall give Tenant any easement or other right in or to the use, if any, of any door or any passage or any concourse or any plaza connecting the Building with any subway or any other building or to any public conveniences, and the use of such doors, passages, concourses, plazas and conveniences may without notice to Tenant be regulated or discontinued at any time by Landlord.

           
Section 14.5  For purposes of this Article 14, the term "Landlord" shall include the Lessors, the Mortgagees, and Landlord's managing agent for the Building. 

 

ARTICLE 15

CERTIFICATE OF OCCUPANCY

            Section 15.1 Tenant shall not at any time use or occupy the Premises in violation of the certificate of occupancy at such time issued for the Premises or for the Building and in the event that any Governmental Authority shall hereafter contend or declare by notice, violation, order or in any other manner whatsoever that the Premises are used for a purpose which is a violation of such certificate of occupancy, Tenant, upon five (5) Business Days' written notice from Landlord or any Governmental Authority, shall immediately discontinue such use of the Premises. Landlord represents that a copy of the Building's certificate of occupancy in effect as of the date of this Lease is attached hereto as Exhibit E and that Landlord shall maintain a certificate of occupancy in effect for the Building throughout the term of this Lease, which certificate of occupancy will permit the Premises to be used for the use permitted by Section 2.1 hereof, provided, however, neither such certificate, nor any provision of this Lease, nor any act or omission of Landlord, shall be deemed to constitute a representation or warranty that the Premises, or any part thereof, lawfully may be used or occupied for any particular purpose or in any particular manner, in contradistinction to mere "office" use.

 

ARTICLE 16

DEFAULT

           
Section 16.1  Each of the following events shall be an "Event of Default" hereunder:

                    (a) If Tenant shall default in the payment when due of any installment of Fixed Rent and such default shall continue for ten (10) days after notice of such default is given to Tenant, or in the payment when due of any other item of Rental and such default shall continue for ten (10) days after notice of such default is given to Tenant, except that if Landlord

 

-40-

shall have given two (2) such notices in any twelve (12) month period, Tenant shall not be entitled to any further notice of its delinquency in the payment of Rental until such time as twelve (12) consecutive months shall have elapsed without Tenant having defaulted in any such payment; or

                    (b) if the Premises are deserted or abandoned; or

                    (c) if all or substantially all of the Premises shall be vacant for a period in excess of 120 more or less consecutive days, except if such vacancy (i) is occasioned by casualty damage to the Premises as contemplated by Article 10, a "taking" of space in the Premises as contemplated by Article 11, or the interruption of any "Essential Services" as defined in Section 28.7(b), or (ii) under circumstances where Tenant shall be actively marketing the Premises and using its best efforts to obtain a subtenant of the Premises or assignee of the Lease (in accordance with the provisions of Article 12 hereof); or

                    (d) if Tenant's interest or any portion thereof in this Lease shall devolve upon or pass to any person, whether by operation of law or otherwise, except as expressly permitted under Article 12 hereof; or

                    (e)    (i) if Tenant shall admit in writing its inability to generally pay its debts as they become due; or

                            (ii) if Tenant shall commence or institute any case, proceeding or other action (A) seeking relief on its behalf as debtor, or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property; or

                            (iii) if Tenant shall make a general assignment for the benefit of creditors; or 

                            (iv) if any case, proceeding or other action shall be commenced or instituted against Tenant (A) seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, which in either of such cases (i) results in any such entry of an order for relief, adjudication of

 

-41-

bankruptcy or insolvency or such an appointment or the issuance or entry of any other order having a similar effect or (ii) remains undismissed for a period of ninety (90) days; or

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

                            (vi) if Tenant shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clauses (ii), (iii), (iv) or (v) above; or

                            (vii) if a trustee, receiver or other custodian is appointed for any substantial part of the assets of Tenant which appointment is not vacated or stayed within seven (7) Business Days; or

                    (f) if Tenant shall fail more than two (2) times during any twelve (12) month period to pay any installment of Fixed Rent or any item of Rental when due, after receipt of the notice and the expiration of the applicable grace period pursuant to the provisions of paragraph (a) above, if such notice and grace period are then required; or

                    (g) if Tenant shall fail to pay any installments of Fixed Rent or items of Rental when due, after receipt of the notice and the expiration of the applicable grace period pursuant to the provisions of paragraph (a) above, and Landlord shall bring more than one (1) summary dispossess proceeding during any twelve (12) month period; or

                    (h) if Tenant shall default in the due keeping, observing or performance of any covenant, agreement, provision or condition of Section 2.1 or subsections 2.2(a) and 2.2(b) hereof on the part of Tenant to be kept, observed or performed and if such default shall continue and shall not be remedied by Tenant within forty eight (48) hours after Landlord shall have given to Tenant a notice specifying the same; or

                    (i) if Tenant shall default in the observance or performance of any other term, covenant or condition of this Lease on Tenant's part to be observed or performed and Tenant shall fail to remedy such default within thirty (30) days after notice by Landlord to Tenant of such default, or if such default is of such a nature that it cannot with due diligence be completely remedied within said period of thirty (30) days and Tenant shall not commence within said period of thirty (30) days, or shall not thereafter diligently prosecute to completion, all steps necessary to remedy such default.

 

-42-

 

           
Section 16.2

                    (a) This Lease and the term and estate hereby granted are subject to the limitation that if an Event of Default (i) described in Section 16.1(e) hereof shall occur, or (ii) described in Sections 16. 1(a), (b), (c), (d), (f), (g), (h) or (i) shall occur, Landlord, at any time thereafter, at its option, may give written notice to Tenant stating that this Lease and the Term shall expire and terminate on the date specified in such notice (which date shall not be less than three (3) days after the date of such notice), then this Lease and the Term and all rights of Tenant under this Lease shall expire and terminate as if the date on which the Event of Default described in clause (i) above occurred or the date set forth in such notice, pursuant to clause (ii) above, as the case may be, were the Fixed Expiration Date and Tenant immediately shall quit and surrender the Premises, but Tenant shall nonetheless be liable for all of its obligations hereunder, as provided for in Articles 17 and 18 hereof. Anything contained herein to the contrary notwithstanding, if such termination shall be stayed by order of any court having jurisdiction over any proceeding described in Section 16.1(e) hereof, or by federal or state statute, then, following the expiration of any such stay, or if the trustee appointed in any such proceeding, Tenant or Tenant as debtor-in-possession shall fail to assume Tenant's obligations under this Lease within the period prescribed therefor by law or within one hundred twenty (120) days after entry of the order for relief or as may be allowed by the court, or if said trustee, Tenant or Tenant as debtor-in-possession shall fail to provide adequate protection of Landlord's right, title and interest in and to the Premises or adequate assurance of the complete and continuous future performance of Tenant's obligations under this Lease as provided in Section 12.3(b), Landlord, to the extent permitted by law or by leave of the court having jurisdiction over such proceeding, shall have the right, at its election, to terminate this Lease on five (5) days' notice to Tenant, Tenant as debtor-in-possession or said trustee and upon the expiration of said five (5) day period this Lease shall cease and expire as aforesaid and Tenant, Tenant as debtor-in-possession or said trustee shall immediately quit and surrender the Premises as aforesaid.

                    (b) If this Lease shall be terminated as provided in Section 16.2(a) hereof, Landlord, without notice, may reenter and repossess the Premises using such force for that purpose as may be necessary without being liable to indictment, prosecution or damages therefor and may dispossess Tenant by summary proceedings or otherwise.

           
Section 16.3  If at any time, (a) Tenant shall comprise two (2) or more Persons, or (b) Tenant's obligations under this Lease shall have been guaranteed by any Person other than Tenant, or (c) Tenant's interest in this Lease shall have been assigned, the word "Tenant", as used in Section 16.1(e), shall be deemed to mean only the Persons primarily liable for Tenant's obligations under this Lease. For the purposes of the proceeding sentence, a guarantor or surety of a Person who shall then be the tenant under this Lease shall be deemed to be a Person "primarily liable" for Tenant's obligations under this Lease. Any monies received by Landlord from or on behalf of Tenant during the pendency of any proceeding of the types referred to in

 

-43-

Section 16. 1(e) shall be deemed paid as compensation for the use and occupation of the Premises and the acceptance of any such compensation by Landlord shall not be deemed an acceptance of Rental or a waiver on the part of Landlord of any rights under Section 16.2.

 

ARTICLE 17

REMEDIES AND DAMAGES

           
Section 17.1

                    (a) If there shall occur any Event of Default, and this Lease and the Term shall expire and come to an end as provided in Article 16 hereof:

                            (i) Tenant shall quit and peacefully surrender the Premises to Landlord, and Landlord and its agents may immediately, or at anytime after such default or after the date upon which this Lease and the Term shall expire and come to an end, re-enter the Premises or any part thereof, without notice, either by summary proceedings, or by any other applicable action or proceeding, or by force or otherwise (without being liable to indictment, prosecution or damages therefor), and may repossess the Premises and dispossess Tenant and any other persons from the Premises and remove any and all of their property and effects from the Premises; and

                            (ii) Landlord, at Landlord's option (but without any obligation to do so), may relet the whole or any portion or portions of the Premises from time-to-time, either in the name of Landlord or otherwise, to such tenant or tenants, for such term or terms ending before, on or after the Expiration Date, at such rental or rentals and upon such other conditions,

which may include concessions and free rent periods, as Landlord, in its sole discretion, may determine; provided, however, that Landlord shall have no obligation to relet the Premises or any part thereof and shall in no event be liable for refusal or failure to relet the Premises or any part thereof, or, in the event of any such reletting, for the refusal or failure to collect any rent due upon any such reletting, and no such refusal or failure shall operate to relieve Tenant of any liability under this Lease or otherwise affect any such liability, and Landlord, at Landlord's option, may make such repairs, replacements, alterations, additions, improvements, decorations and other physical changes in and to the Premises as Landlord, in its sole discretion, considers advisable or necessary in connection with any such reletting or proposed reletting, without relieving Tenant of any liability under this Lease or otherwise affecting any such liability.

                    (b) Tenant hereby waives the service of any notice of intention to reenter or to institute legal proceedings to that end which may otherwise be required to be given under any present or future law. Tenant, on its own behalf and on behalf of all persons claiming through or under Tenant, including all creditors, does further hereby waive any and all rights which Tenant and all such persons might otherwise have under any present or future law to

 

-44-

redeem the Premises, or to re-enter or repossess the Premises, or to restore the operation of this Lease, after (i) Tenant shall have been dispossessed by a judgment or by warrant of any court or judge, or (ii) any re-entry by Landlord, or (iii) any expiration or termination of this Lease and the Term, whether such dispossess, re-entry, expiration or termination shall be by operation of law or pursuant to the provisions of this Lease. The words "re-enter," "re-entry" and "re-entered" as used in this Lease shall not be deemed to be restricted to their technical legal meanings. In the event of a breach or threatened breach by Tenant, or any persons claiming through or under Tenant, of any term, covenant or condition of this Lease, Landlord shall have the right to enjoin such breach and the right to invoke any other remedy allowed by law or in equity as if re-entry, summary proceedings and other special remedies were not provided in this Lease for such breach. The right to invoke the remedies hereinbefore set forth are cumulative and shall not preclude Landlord from invoking any other remedy allowed at law or in equity.

            Section 17.2

                    (a) If this Lease and the Term shall expire or if Landlord shall re-enter the Premises as hereinabove provided, then, in either of said events:

                            (i) Tenant shall pay to Landlord all Fixed Rent, Escalation Rent and other items of Rental payable under this Lease by Tenant to Landlord to the date upon which this Lease and the Term shall have expired or to the date of re-entry upon the Premises by Landlord, as the case may be;

                            (ii) Tenant also shall be liable for and shall pay to Landlord, as damages, any deficiency (referred to as "Deficiency") between the Rental for the period which otherwise would have constituted the unexpired portion of the Term and the net amount, if any, of rents collected under any reletting effected pursuant to the provisions of clause (ii) of Section 17.1(a) for any part of such period (first deducting from the rents collected under any such reletting all of Landlord's expenses in connection with the termination of this Lease, Landlord's re-entry upon the Premises and with such reletting, including, but not limited to, all reasonable repossession costs, brokerage commissions, legal expenses, attorneys' fees and disbursements, alteration costs, contribution to work and other expenses of preparing the Premises for such reletting); any such Deficiency shall be paid in monthly installments by Tenant on the days specified in this Lease for payment of installments of Fixed Rent, 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; and

                            (iii) whether or not Landlord shall have collected any monthly Deficiency as aforesaid, Landlord shall be entitled to recover from Tenant, and Tenant shall pay to Landlord, on demand, in lieu of any further Deficiency as and for liquidated and agreed final damages with respect to the Rentals due hereunder, a sum equal to the amount by which the

 

-45-

Rental for the period which otherwise would have constituted the unexpired portion of the Term exceeds the then fair and reasonable rental value of the Premises for the same period, both discounted to present worth at the Base Rate less the aggregate amount of Deficiencies theretofore collected by Landlord pursuant to the provisions of clause (a)(ii) of this Section 17.2 for the same period; if, before presentation of proof of such liquidated damages to any court, commission or tribunal, the Premises, or any part thereof, shall have been relet by Landlord for the period which otherwise would have constituted the unexpired portion of the Term, or any part thereof, the amount of rent reserved upon such reletting shall be deemed, prima facie, to be the fair and reasonable rental value for the part or the whole of the Premises so relet during the term of the reletting.

                    (b) If the Premises, or any part thereof, shall be relet together with other space in the Building, the rents collected or reserved under any such reletting and the expenses of any such reletting shall be equitably apportioned for the purposes of this Section 17.2. Tenant shall in no event be entitled to any rents collected or payable under any reletting, whether or not such rents shall exceed the Fixed Rent reserved in this Lease. Solely for the purposes of this Article 17, the term "Escalation Rent" as used in Section 17.2 (a) shall mean the Escalation Rent in effect immediately prior to the Expiration Date, or the date of reentry upon the Premises by Landlord, as the case may be, adjusted to reflect any increase pursuant to the provisions of Article 27 hereof for the Operating Year immediately preceding such event. Nothing contained in Article 16 hereof or this Article 17 shall be deemed to limit or preclude the recovery by Landlord from Tenant of the maximum amount allowed to be obtained as damages by any statute or rule of law, or of any sums or damages to which Landlord may be entitled in addition to the damages set forth in this Section 17.2.

 

-46-

           
Section 17.3  Suit or suits for the recovery of damages, or any installments thereof, may be brought by Landlord from time-to-time at its election, and nothing contained herein shall be deemed to require Landlord to postpone suit until the date when the Term would have expired if it had not been so terminated under the provisions of Article 16, or under any provision of law, or had Landlord not re-entered the Premises. Nothing herein contained shall be construed to limit or preclude recovery by Landlord against Tenant for any sums of damages to which, in addition to the damages particularly provided above, Landlord may lawfully be entitled by reason of any default hereunder on the part of Tenant. Nothing herein contained shall be construed to limit or prejudice the right of Landlord to prove for and obtain for the default of Tenant under this Lease, an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, such damages are to be proved whether or not such amount be greater, equal to, or less than any of the sums referred to in Section 17.2.

 

ARTICLE 18

LANDLORD FEES AND EXPENSES

           
Section 18.1 If Tenant shall be in default under this Lease or if Tenant shall do or permit to be done any act or thing upon the Premises which would cause Landlord to be in default under any Superior Lease or Mortgage, Landlord may (a) as provided in Section 14.1 hereof, perform the same for the account of Tenant, or (b) make any reasonable expenditure or incur any reasonable obligation for the payment of money, including, without limitation, reason-able attorneys' fees and disbursements in instituting, prosecuting or defending any action or pro-ceeding, and the cost thereof, with interest thereon at the Applicable Rate, shall be deemed to be additional rent hereunder and shall be paid by Tenant to Landlord within thirty (30) days of rendition of any bill or statement to Tenant therefor, and if the term of this Lease shall have expired at the time of making of such expenditures or incurring of such obligations, such sums shall be recoverable by Landlord as damages.

           
Section 18.2  If Tenant shall fail to pay any installment of Fixed Rent, Escalation Rent or any other item of Rental within ten (10) days of the date such payment was due, Tenant shall pay to Landlord, in addition to such installment of Fixed Rent, Escalation Rent or other item of Rental, as the case may be, as a late charge and as additional rent, a sum equal to interest at the Applicable Rate on the amount unpaid, computed from the date such payment was due to and including the date of payment.

 

ARTICLE 19

NO REPRESENTATIONS BY LANDLORD

            Section 19.1 Landlord and Landlord's agents and representatives have made no representations or promises with respect to the Building, the Real Property or the Premises except as herein expressly set forth, and no rights, easements or licenses are acquired by Tenant by implication or otherwise except as expressly set forth herein. Tenant shall accept possession of the Premises in the condition which shall exist on the Commencement Date "as is" (subject to the provisions of Section 1.3 hereof ), and Landlord shall have no obligation to perform any work or make any installations in order to prepare the Premises for Tenant's occupancy other than Landlord's Work. All references in this Lease to the consent or approval of Landlord shall be deemed to mean the written consent or approval of Landlord and no consent or approval of Landlord shall be effective for any purpose unless such consent or approval is set forth in a written instrument executed by Landlord.

 

-47-

ARTICLE 20

END OF TERM

           
Section 20.1  Upon the expiration or other termination of this Lease, Tenant shall quit and surrender to Landlord the Premises, vacant, broom clean, in good order and condition, ordinary wear and tear and damage for which Tenant is not responsible under the terms of this Lease excepted, and otherwise in compliance with the provisions of Article 3 hereof. If the last day of the Term or any renewal thereof falls on Saturday or Sunday, this Lease shall expire on the Business Day immediately preceding. Tenant expressly waives, for itself and for any person claiming through or under Tenant, any rights which Tenant or any such person may have to a "stay" under the provisions of Section 2201 of the New York Civil Practice Law and Rules and of any successor law of like import then in force in connection with any holdover summary proceedings which Landlord may institute to enforce the foregoing provisions of this Article 20.  Tenant acknowledges that possession of the Premises must be surrendered to Landlord on the Expiration Date. Tenant agrees to indemnify and save Landlord harmless from and against all claims, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees and disbursements) resulting from delay by Tenant in so surrendering the Premises, including, without limitation, any claims made by any succeeding tenant founded on such delay. The parties recognize and agree that the damage to Landlord resulting from any failure by Tenant to timely surrender possession of the Premises as aforesaid will be extremely substantial, will exceed the amount of the monthly installments of the Fixed Rent and Escalation Rent theretofore payable hereunder, and will be impossible to measure accurately. Tenant therefore agrees that if possession of the Premises is not surrendered to Landlord within twenty-four (24) hours after the Expiration Date, in addition to any other rights or remedies Landlord may have hereunder or at law, and without in any manner limiting Landlord's right to demonstrate and collect any damages suffered by Landlord and arising from Tenant's failure to surrender the Premises as provided herein, Tenant shall pay to Landlord on account of use and occupancy of the Premises for each month and for each portion of any month during which Tenant holds over in the Premises after the Expiration Date, a sum equal to two (2) times the aggregate of that portion of the Fixed Rent, Escalation Rent and other items of Rental which were payable under this Lease during the last month of the Term. Nothing herein contained shall be deemed to permit Tenant to retain possession of the Premises after the Expiration Date or to limit in any manner Landlord's right to regain possession of the Premises through summary proceedings, or otherwise, and no acceptance by Landlord of payments from Tenant after the Expiration Date shall be deemed to be other than on account of the amount to be paid by Tenant in accordance with the provisions of this Article 20. The provisions of this Article 20 shall survive the Expiration Date.

 

-48-

ARTICLE 21

QUIET ENJOYMENT

           
Section 21.1  Provided no Event of Default has occurred and is continuing, Tenant may peaceably and quietly hold, occupy and enjoy the Premises subject, nevertheless, to the terms and conditions of this Lease.

 

ARTICLE 22

FAILURE TO GIVE POSSESSION

           
Section 22.1 Except to the extent specifically set forth in Article 1 of this Lease, and only to such extent, Tenant waives any right to rescind this Lease under Section 223-a of the New York Real Property Law or any successor statute of similar nature and purpose then in force, and further waives the right to recover any damages which may result from Landlord's failure for any reason to deliver possession of the Premises on the date set forth in Section 1.1 hereof for the commencement of the Term.

 

ARTICLE 23

NO WAIVER

            Section 23.1 No act or thing done by Landlord or Landlord's agents during the Term shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender shall be valid unless in writing signed by Landlord. No employee of Landlord or of Landlord's agents shall have any power to accept the keys to the Premises prior to the termination of this Lease. The delivery of keys to any employee of Landlord or of Landlord's agents shall not operate as a termination of this Lease or a surrender of the Premises. In the event Tenant at any time desires to have Landlord sublet the Premises for Tenant's account, Landlord or Landlord's agents are authorized to receive said keys for such purpose without releasing Tenant from any of the obligations under this Lease, and Tenant hereby relieves Landlord of any liability for loss of or damage to any of Tenant's effects in connection with such subletting.

            Section 23.2  The failure of Landlord to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease, or any of the Rules and Regulations shall not prevent a subsequent act, which would have originally constituted a violation of the provisions of this Lease, from having all of the force and effect of an original violation of the provisions of this Lease. The receipt by Landlord of Fixed Rent, Escalation Rent or any other item of Rental with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach. The failure of Landlord to enforce any of the Rules and Regulations against Tenant or any other tenant in the Building shall not be deemed

 

-49-

a waiver of any such Rules and Regulations (but Landlord shall not discriminate against Tenant in the enforcement of Rules and Regulations). No provision of this Lease shall be deemed to have been waived by Landlord, unless such waiver is in writing and signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly Fixed Rent or other item of Rental herein stipulated shall be deemed to be other than on account of the earliest stipulated Fixed Rent or other item of Rental, or as Landlord may elect to apply same, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Fixed Rent or other item of Rental be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Fixed Rent or other item of Rental or to pursue any other remedy provided in this Lease.

 

ARTICLE 24

WAIVER OF TRIAL BY JURY

           
Section 24.1 The respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other (except for personal injury or property damage) on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, or for the enforcement of any remedy under any statute, emergency or otherwise. If Landlord commences any summary proceeding against Tenant, Tenant will not interpose any counterclaim of whatever nature or description in any such proceeding (unless failure to interpose such counterclaim would preclude Tenant from asserting in a separate action the claim which is the subject of such counterclaim), and will not seek to consolidate such proceeding with any other action which may have been or will be brought in any other court by Tenant.

 

ARTICLE 25

INABILITY TO PERFORM

           
Section 25.1  This Lease and the obligation of Tenant to pay Rental hereunder and to perform all of the other covenants and agreements hereunder on the part of Tenant to be performed shall, except as otherwise specifically herein provided, in no wise be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease expressly or impliedly to be performed by Landlord or because Landlord is unable to make, or is delayed in making any repairs, additions, alterations, improvements or decorations or is unable to supply or is delayed in supplying any equipment or fixtures, if Landlord is prevented or delayed from so doing by reason of strikes or labor troubles or by accident, or by any cause whatsoever beyond Landlord's control, including, but not limited to, force majeure, laws, governmental preemption in connection with a national emergency or by reason of any 

 

-50-

Requirements of any Governmental Authority or by reason of failure of the HVAC, electrical, plumbing, or other Building Systems in the Building, or by reason of the conditions of supply and demand which have been or are affected by war or other emergency (collectively, "Unavoidable Delay").

           
Section 25.2  Without limiting the provisions of Section 25. 1, in any case where either party hereto is required to do any act (other than make a payment of money), delays caused by Unavoidable Delays shall not be counted in determining the time when the performance of such act must be completed, whether such time be designated by a fixed time, a fixed period of time or a "reasonable time." In any case where work is to be paid for out-of-insurance proceeds or condemnation awards, due allowance shall be made, both to the party required to perform such work and to the party required to make such payment, for delays in the collection of such proceeds and awards.

 

ARTICLE 26

BILLS AND NOTICES

           
Section 26.1  Except as otherwise expressly provided in this Lease (including without limitation Section 37.10), any bills, statements, consents, notices, demands, requests or other communications given or required to be given under this Lease shall be in writing and shall be deemed sufficiently given or rendered if delivered by hand (against a signed receipt) or if sent by registered or certified mail (return receipt requested) addressed:

                    (a) if to Tenant (i) at Tenant's address set forth in this Lease, Attention: General Counsel, if given prior to Tenant's taking possession of the Premises, or (ii) at the Building, Attention: General Counsel, if given subsequent to Tenant's taking possession of the Premises, or (iii) at any place where Tenant or any agent or employee of Tenant may be found if given subsequent to Tenant's vacating, deserting, abandoning or surrendering the Premises; and

                    (b) if to Landlord at Landlord's address set forth in this Lease, Attn.: Mr. Michael R. Dillow; and 

                    (c) if to each Mortgagee and Lessor which shall have requested same, by notice given in accordance with the provisions of this Article 26, at the address(es) designated by such Mortgagee or Lessor; or to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may designate as its new address(es) for such purpose by notice given to the other in accordance with the provisions
of this Article 26. Any such bill, statement, consent, notice, demand, request
or other communication shall be deemed to have been rendered or given on the date when it shall have been

 

-51-

personally delivered or, in the case of mailed items, the earlier of the date upon which the addressee shall have first failed or refused to accept delivery thereof as specified in the official return receipt and two (2) Business Days from when it shall have been mailed as provided in this Article 26. Anything contained herein to the contrary notwithstanding, any Operating Statement, Tax Statement or any other bill, statement, consent, notice, demand, request or other communication from Landlord to Tenant with respect to any item of Rental (other than any "default notice" if required hereunder) or given to all tenants or other occupants of the Building may be sent to Tenant by regular United States mail or hand delivered without obtaining a receipt therefor.

 

ARTICLE 27

ESCALATION

           
Section 27.1  For the purposes of this Article 27, the following terms shall have the meanings set forth below.

                    (a) "Assessed Valuation" shall mean the amount for which the Real Property is assessed pursuant to applicable provisions of the New York City Charter and of the Administrative Code of the City of New York for the purpose of determining Taxes.

                    (b) "Base Operating Expenses" shall mean the Operating Expenses for the Base Operating Year.

                    (c) "Base Operating Year" shall mean the calendar year ending December 31, 1994.

                    (d) "Base Taxes" shall mean Taxes payable for the Tax Year commencing July 1, 1993 and ending June 30, 1994.

                    (e) "Building" shall mean the Building and, only for the purposes of  determining Operating Expenses pursuant to this Article 27, the Kent Building.

                    (f) "Operating Expenses" shall mean the aggregate of those costs and expenses (and taxes, if any, thereon, including without limitation, sales and value added taxes) paid or incurred by or on behalf of Landlord (whether directly or through independent contractors) in respect of the Operation of the Combined Property which, are properly chargeable to the Operation of the Combined Property together with and including (without limitation) the costs of gas, oil, steam, water, sewer rental, electricity for the "non-tenant" portions of the Combined Property (i.e. the areas thereof not leased to or occupied by others and available and intended for rental and occupancy), HVAC and other utilities furnished to the Building and utility taxes, and the expenses incurred in connection with the Operation of the

 

-52-

Combined Property such as Labor Costs for employees of Landlord or Landlord's managing agent who are engaged in the Operation of the Combined Property, insurance premiums, attorneys' fees and disbursements (exclusive of any such fees and disbursements incurred in applying for any reduction of Taxes), auditing, consulting and other professional fees and expenses, repair and maintenance for the Building Systems, cleaning and window cleaning, management fees for Landlord and/or Landlord's managing agent, protection and security, lobby decorations, interior and exterior landscape repair and maintenance, trash removal and snow removal, painting of "non-tenant" areas of the Building (i.e. areas not leased to or occupied by others and available and intended for rental and occupancy), dues or fees for associations, and telephone usage, but specifically excluding: 

  
    
      

(1)Taxes,

(2)interest on and amortization of debts, late charges,       penalty interest or other similar charges in connection      with debts, mortgages or otherwise,

      

    

  

(3)leasing commissions,

  
    
      

(4)the cost of any item which is, or should in accordance with generally accepted accounting principles, consistently applied, be, capitalized on the books of Landlord, except that the cost of any labor or cost saving capital improvements with respect to the Operating Expenses shall be included in the Operating Expenses in an annual amount equal to the amount determined by dividing the cost thereof (including reasonable financing costs actually incurred) by either the years of useful life of the labor or cost saving improvements, or the number of years as shall be required to absorb the actual savings resulting from such item (provided that the portion of the costs of any such item to be included in Operating Expenses for any Operating Year shall not exceed the labor or cost savings effected for such Operating Year),
(5) the cost of electrical energy furnished to Tenant and other
        tenants of or tenantable space (i.e. space leased to or occupied by others or available and intended for rental and occupancy) in the Building,

      

    

  

 

-53-

  
    
      

 (6)the cost of tenant installations including, without  limitation, any incurred in connection with preparing space for a new tenant, 

(7)Labor Costs of personnel above the grade of building manager and any general or administrative overhead of Landlord, 

(8)rent paid under Superior Leases, except that "Operating Expenses" shall include all increases in the rent payable under the Ground Lease (adjustments are scheduled for calendar years 1995 and 2005) in excess of the rent payable under the Ground Lease for the calendar year 1994, provided, however, that in no event shall Tenant's Operating Share with respect to each of the two scheduled increases (and any increase in the renewal term, if applicable) exceed twenty-five cents ($0.25) per each square foot of the Premises per year (i.e. the cumulative increases during the original term could be no more than fifty cents ($0.50) per each square foot of the Premises per year),

(9)any expense for which Landlord is otherwise compensated through the proceeds of insurance or is otherwise compensated by any tenant (including Tenant) of the Building (except pursuant to provisions similar to this Article 27) for services in excess of the services Landlord is obligated to furnish to Tenant hereunder,

(10)legal fees incurred in connection with any negotiation of, or disputes arising out of, any space lease in the Building,

(11)depreciation, except as provided herein, 

(12)Landlord's advertising and promotional costs for the Building,

(13)brokerage commissions, origination fees, points, mortgage recording taxes, title charges and other costs or fees incurred in connection with any conveyance, financing or refinancing,

      

    

  

 

-54-

  
    
      

(14)payments to Landlord or Landlord's affiliates for goods and services, to the extent that such payments exceed the amounts customarily paid for goods and services of like kind in the absence of such relationship,

(15)fines or penalties payable by Landlord with respect to compliance with Requirements that Landlord is required to comply with,

(16)attorneys' fees and disbursements and other costs in connection with any judgment, settlement or arbitration resulting from any tort liability and the amount of such settlement or judgment,

(17)the costs of constructing any addition which adds leasable area to the Combined Property after the Term Commencement Date,

(18)litigation and arbitration expenses (other than with respect to actions which are for the benefit of tenants in the Building generally, esg, actions against adjoining land-owners for creating a nuisance),

(19)rent, additional rent or other charges under any lease or sublease to or assumed by Landlord,

(20)costs in connection with the acquisition of "air" or "development" rights,

(21)costs and expenses (including attorneys' fees and disbursements) incurred by Landlord in connection with any obligation of Landlord to indemnify Tenant pursuant to this Lease,

(22)supervision and administrative costs with respect to tenant improvements,

(23)costs incurred in connection with a systematic one-time program for the removal, encapsulation or other remedial treatment of all or substantially all asbestos containing material in the Building,

      

    

  

 

-55-

  
    
      

(24)costs of curing violations of law and other requirements of public authorities existing on the date hereof,

(25)damages awarded to a tenant of the Building against Landlord by reason of Landlord's breach of such tenant's lease,

(26)any compensation paid by Landlord to induce operators of  commercial concessions to operate in the Building,

(27)costs and expenses that relate exclusively to retail space in the Building,

(28)the portion of any expenses otherwise includable in  Operating Expenses which are fairly allocable to any other properties of Landlord or an affiliate other than the
Combined Property, e.g. the portion of the premiums for any insurance under "blanket" or similar policies to the extent allocable to any property other than the Combined Property,

(29)the costs of purchasing or leasing objects of art for display in the public areas of the Building,

(30)the cost of a one-time systematic (as opposed to occasional) program to repair or replace all or substantially all of the Building's exterior windows (subject, however, to Landlord's right to include a portion thereof if same is properly includable under subsection 27.1(f)(4) above),

(31)the fees of any appraiser or of any attorney engaged in connection with litigation with tenants of the Building, and

(32)the cost of operating and maintaining any "health club", studio or other similar specialty facility in the Building; 

      

    

  

except, however, that if Landlord is not furnishing any particular work or service (the cost of which if performed by Landlord would constitute an Operating Expense) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional

 

-56-

Operating Expenses which reasonably would have been incurred during such period by Landlord if it had at its own expense furnished such work or services to such tenant. Any costs incurred in performing work or furnishing services for any tenant (including Tenant) whether at such tenant's or Landlord's expense, to the extent that such work or service is in excess of any work or service that Landlord is obligated to furnish to Tenant at Landlord's expense shall be deducted from Operating Expenses otherwise chargeable to the Operation of the Combined Property. Any insurance proceeds received with respect to any item previously included as an Operating Expense shall be deducted from Operating Expenses for the Operating Year in which such proceeds are received; provided, however, to the extent any insurance proceeds are received by Landlord in any Operating Year with respect to any item which was included in Operating Expenses during the Base Operating Year, the amount of insurance proceeds so received shall be deducted from Base Operating Expenses and (1) the Base Operating Expenses shall be retroactively adjusted to reflect such deduction and (2) all retroactive Operating Payments resulting from such retroactive adjustment shall be due and payable when billed by Landlord.  Until such time as the electricity supplied to each floor of the Building and the common and public areas of the Building (including, without limitation, the Building Systems) shall be separately metered or sub-metered, Operating Expenses shall include an amount equal to (x) (i) Landlord's Cost Per Kilowatt Hour (utilizing the electrical rates applicable to the Building including energy charges, demand charges, time-of-day charges, fuel adjustment charges, rate adjustment charges, sales tax and any other factors used by the public utility company in computing its charges to Landlord) of furnishing electric current to the entire Building, multiplied by (ii) the number of kilowatt hours of electric current furnished to the public and common areas of the Building (including, without limitation, the Building Systems and the building systems of the Kent Property) and other areas not available for occupancy as determined by a survey prepared by an independent, reputable electrical engineer selected by Landlord, plus (y) an amount equal to three percent (3%) of the amount determined pursuant to clause (x), as Landlord's administrative charge for overhead and supervision.

In determining the amount of Operating Expenses for the Base Operating Year or any Operating Year, if less than all of the Building rentable area shall have been occupied by tenant(s) at any time during the Base Operating Year or any such Operating Year, Operating Expenses shall be determined for the Base Operating Year or such Operating Year to be an amount equal to the like expenses which would normally be expected to be incurred had all such areas been occupied throughout the Base Operating Year or such Operating Year, as applicable.

                    (g) "Operating Statement" shall mean a statement in reasonable detail setting forth a comparison of the Operating Expenses for an Operating Year with the Base Operating Expenses and the Escalation Rent for the preceding Operating Year pursuant to the provisions of this Article 27.

 

-57-

                    (h) "Operating Year" shall mean the calendar year within which the Commencement Date occurs and each subsequent calendar year for any part or all of which Escalation Rent shall be payable Pursuant to this Article 27.

                     (i) "Taxes" shall me an the aggregate amount of real estate taxes (ie., the amount determined by multiplying the Assessed Valuation by the real property tax rate applicable to the Borough of Manhattan for such Tax Year) and any general or special assessments imposed upon the Real Property (including, without limitation, (1) any fee, tax or charge imposed by any Governmental Authority for any vaults, vault space or other space within or outside the boundaries of the Real Property, and (2) any taxes or assessments levied after the date of this lease in whole or in part for public benefits to the Real Property or the Building) without taking into account any discount that Landlord may receive by virtue of any early payment of Taxes; provided, that if because of any change in the taxation of real estate, any other tax or assessment, however denominated (including, without limitation, any franchise, income, profit, sales, use, occupancy, gross receipts or rental tax) is imposed upon Landlord or the owner of the Real Property or the Building, or the occupancy, rents or income therefrom, in substitution for or in addition to any of the foregoing Taxes, such other tax or assessment shall be deemed part of Taxes computed as if Landlord's sole asset were the Real Property. With respect to any Tax Year, all reasonable expenses, including attorneys' fees and disbursements, experts' and other witnesses' fees, incurred in contesting the validity or amount of any Taxes or in obtaining a refund of Taxes shall be considered as part of the Taxes for such Tax Year. Anything contained herein to the contrary notwithstanding, Taxes shall not be deemed to include (w) any taxes on Landlord's income, (x) franchise taxes, (y) estate or inheritance taxes or (z) any similar taxes imposed on Landlord, unless such taxes are levied, assessed or imposed in lieu of or as a substitute for or in addition to the whole or any part of the taxes, assessments, levies, impositions which now constitute Taxes.

                    (j) "Tax Statement" shall mean a statement in reasonable detail setting forth a comparison of the Taxes for a Tax Year with the Base Taxes. 

                    (k) "Tax Year" shall mean the period July 1 through June 30 (or such other period as hereinafter may be duly adopted by the Governmental Authority then imposing taxes as its fiscal year for real estate tax purposes), any portion of which occurs during the Term.

            Section 27.2

                    (a) If the Taxes payable for any Tax Year (any part or all of which falls within the Term) shall represent an increase above the Base Taxes, then Tenant shall pay as additional rent for such Tax Year and continuing thereafter until a new Tax Statement is rendered to Tenant, Tenant's Tax Share of such increase (the "Tax Payment") as shown on the Tax Statement with respect to such Tax Year. The Taxes shall be computed initially on the basis of the Assessed Valuation in effect at the time the Tax Statement is rendered (as the Taxes
 

-58-

may have been settled or finally adjudicated prior to such time), regardless of any then pending application, proceeding or appeal respecting the reduction of any such Assessed Valuation, but shall be subject to subsequent adjustment as provided in Section 27.3(a) hereof. Tenant hereby waives any rights that Tenant may have to be exempt from the payment of Taxes or the Tax Payment by virtue of diplomatic status or otherwise. Notwithstanding the foregoing, Tenant hereby specifically acknowledges that due to the tax exempt status of the Lessor of the Ground Lease, in lieu of the payment of real estate taxes to the Lessor (or on the Lessor's behalf, to the City of New York), Landlord is obligated by the Ground Lease to make a tax equivalent payment or payment in lieu of Taxes. Tenant shall pay Tenant's Tax Payment pursuant to this Section 27.2 notwithstanding the amount or amounts Landlord pays or is obligated to pay pursuant to the Ground Lease.

                    (b) Within a reasonable period of time after all necessary information shall be available to Landlord to determine Tenant's Tax Share, Landlord shall render to Tenant a Tax Statement or Statements showing (i) a comparison of the Taxes for the Tax Year with the Base Taxes and (ii) the amount of the Tax Payment resulting from such comparison. Tenant shall pay to Landlord, in two (2) equal installments, in advance, on January 1st and July 1st of each year, the Tax Payment shown thereon. If Taxes are required to be paid on any other date or dates than as presently required by the Governmental Authority imposing the same, then the due date of the installments of the Tax Payment shall be correspondingly accelerated or revised so that the Tax Payment (or the two (2) installments thereof) is due at least thirty (30) days prior to the date the corresponding payment is due to the Governmental Authority. If the Tax Year established by the applicable Governmental Authority shall be changed, any Taxes for the Tax Year prior to such change which are included within the new Tax Year and which were the subject of a prior Tax Statement shall be apportioned for the purpose of calculating the Tax Payment payable with respect to such new Tax Year. Landlord's failure to render a Tax Statement during or with respect to any Tax Year shall not prejudice Landlord's right to render a Tax Statement during or with respect to any subsequent Tax Year, and shall not eliminate or reduce Tenant's obligation to make Tax Payments for such Tax Year. Landlord shall use all reasonable efforts to render to Tenant a Tax Statement or Statements at least annually.

           
Section 27.3

                    (a) Only Landlord shall be eligible to institute tax reduction or other proceedings to reduce the Assessed Valuation. In the event that after a Tax Statement has been sent to Tenant, an Assessed Valuation which had been utilized in computing the Taxes for a Tax Year is reduced (as a result of settlement, final determination of legal proceedings or otherwise), and as a result thereof a refund of Taxes is actually received by or on behalf of Landlord, then, promptly after receipt of such refund, Landlord shall send Tenant a Tax Statement adjusting the Taxes for such Tax Year (taking into account the expenses mentioned in Section 27.1 (h) hereof) and setting forth Tenant's Tax Share of such refund and Tenant shall be entitled to receive such Share either, at Landlord's option, by way of a credit against the Fixed Rent next becoming due
 

-59-

after the sending of such Tax Statement or by a refund to the extent no further Fixed Rent is due; provided, however, that Tenant's Tax Share of such refund shall be limited to the portion of the Tax Payment, if any, which Tenant had theretofore paid to Landlord attributable to increases in Taxes for the Tax Year to which the refund is applicable on the basis of the Assessed Valuation before it had been reduced.

                    (b) In the event that, after a Tax Statement has been sent to Tenant, the Assessed Valuation which had been utilized in computing the Base Taxes is reduced (as a result of settlement, final determination of legal proceedings or otherwise) then, and In such event: (i) the Base Taxes shal1 be retroactively adjusted to reflect such reduction, and (ii) all retroactive Tax Payments resulting from such retroactive adjustment shall be due and payable when billed by Landlord. Landlord promptly shall send to Tenant a statement setting forth the basis for such retroactive adjustment and Tax Payments.

            Section 27.4

                    (a) If t Operating Expenses for any Operating Year (any part or all of which fills within the Term from and after the first anniversary of the Commencement Date) shall be greater than the Base Operating Expenses, then Tenant shall pay as additional rent for such Operating Year and continuing thereafter until a new Operating Statement is rendered to Tenant, Tenant's Operating Share of such increase (the "Operating Payment') as hereinafter provided.

                    (b) Within a reasonable time following the end of each Operating Year during the Term, and within a reasonable time after the Expiration Date, Landlord shall render to Tenant an Operating Statement or Statements showing (i) a comparison of the Operating Expenses for the Operating Year In, question with the Base Operating Expenses, and (Hi) the amount of the Operating Payment resulting from such comparison. Landlord's failure to render an Operating Statement during or with respect to any Operating Year shall not prejudice Landlord's right to render an Operating Statement with respect to such Operating Year or during or with respect to any subsequent Operating Year, and shall not eliminate or reduce Tenant's obligation to pay Operating Payments which are due pursuant to this Article 27 for any Operating Year.

                    (c) On the first day of the month following the furnishing to Tenant of an Operating Statement, Tenant shall pay to Landlord a sum equal to 1/12th of the Operating Payment shown thereon to be due for the preceding Operating Year multiplied by the number of months (and any fraction thereof) of the Term then elapsed since the commencement of the then current Operating Year in which such Operating Statement is delivered, less the total of the monthly installments of the Operating Payment theretofore made by Tenant for the then current Operating Year and thereafter, commencing with the then current monthly installment of Fixed Rent and continuing monthly thereafter until rendition of the next succeeding Operating

 

-60-

Statement, Tenant shall pay on account of the Operating Payment for such Operating Year an amount equal to 1/12th of the Operating Payment shown thereon to be due for the preceding Operating Year. Any Operating Payment shall be collectible by Landlord in the same manner as Fixed Rent.

                    (d)     (i) As used in this Section 27.4, (A) "Tentative Monthly Escalation Charge" shall mean a sum equal to 1/12th of the product of (a) Tenant's Operating Share, and (b) the difference between (x) the Base Operating Expenses and (y), Landlord's estimate of Operating Expenses for the Current Year, and (B) "Current Year" shall mean the Operating Year in which a demand is made upon Tenant for payment of a Tentative Monthly Escalation Charge.

                            (ii) At any time in any Operating Year, Landlord, at its option, in lieu of the payments required under Section 27.4(c) hereof, may demand and collect from Tenant, as additional rent, a sum equal to the Tentative Monthly Escalation Charge multiplied by the number of months in the Current Year preceding the demand and reduced by the sum of all payments theretofore made under Section 27.4(c) with respect to the Current Year, and thereafter, commencing with the month in which the demand is made and continuing thereafter for each month remaining in the Current Year, the monthly installments of Fixed Rent shall be deemed increased by the Tentative Monthly Escalation Charge. Any amount due to Landlord under this Section 27.4(d) may be included by Landlord in any Operating Statement rendered to Tenant as provided in Section 27.4(b) hereof.

                    (e)     (i) After the end of the Current Year and at any time that Landlord renders an Operating Statement or Statements to Tenant as provided in Section 27.4(b) hereof with respect to the comparison of the Operating Expenses for said Operating Year or Current Year, with the Base Operating Expenses, as the case may be, the amounts, if any, collected by Landlord from Tenant under Section 27.4(b) or (d) on account of the Operating Payment or the Tentative Monthly Escalation Charge, as the case may be, shall be adjusted, and, if the amount so collected is less than or exceeds the amount actually due under the Operating Statement for the applicable Operating Year, a reconciliation shall be made as follows: Tenant shall be debited with any Operating Payment shown on such Operating Statement and credited with the amounts, if any, paid by Tenant on account in accordance with the provisions of subsection (c) and subsection (d)(ii) of this Section 27.4 for the Operating Year in question. Tenant shall pay any net debit balance to Landlord within fifteen (15) days next following rendition by Landlord of an invoice for such net debit balance; any net credit balance shall be applied against the next accruing monthly installments of Fixed Rent. Provided that no Event of Default shall have occurred and shall be continuing, any amount determined to be owed to Tenant after the Expiration Date shall be paid to Tenant within thirty (30) days after a final determination has been made of the amount due to Tenant.

 

-61-

                            (ii) If the sum of the Tentative Monthly Escalation Charges and payments made by Tenant in accordance with subsection (c) of this Section 27.4 for any Operating Year shall have exceeded the Operating Payment for such Operating Year by more than ten percent (10%), interest at the Applicable Rate on the overpayment determined as of the respective dates of such payments by Tenant and calculated from such respective dates to the dates on which such amounts are credited against the monthly installments of Fixed Rent, shall be so credited. Any amount owing to Tenant subsequent to the Term shall be paid to Tenant within ten (10) Business Days after a final determination has been made of the amount due to Tenant. Provided that this Lease was not sooner terminated due to the occurrence of an Event of Default, or that upon the Fixed Expiration Date, a monetary Event of Default shall not exist, any amount determined to be owed to Tenant after the Expiration Date shall be paid to Tenant within thirty (30) days after a final determination has been made of the amount due to Tenant.

           
Section 27.5  Any Operating Statement sent to Tenant shall be conclusively binding upon Tenant unless, within one (1) year after such Statement is sent, Tenant shall send a written notice to Landlord objecting to such Statement and specifying the respects in which such Statement is disputed. If Tenant shall timely send such notice, time being of the essence, Tenant (together with its independent certified public accountants, which need not be Tenant's regular auditors, but which shall be a reputable accounting firm which shall be reasonably acceptable to Landlord) may examine Landlord's books and records relating to the Operation of the Combined Property to determine the accuracy of the Operating Statement. Tenant recognizes the confidential nature of such books and records and agrees to maintain (and shall cause its independent accounts who shall be examining Landlord's books to agree in writing to maintain) the information obtained from such examination in strict confidence. If after such examination, Tenant still disputes such Operating Statement, either party may give notice to the other requesting arbitration and the parties hereto agree to allow the then President of the Real Estate Board of New York, Inc. (or any successor organization serving a similar function) to designate one of the so-called "big-six" public accounting firms to resolve the dispute, and the decision of such accountants shall be conclusively binding upon the parties. The fees and expenses involved in such decision shall be borne by the unsuccessful party (and if both parties are partially successful, such fees and expenses shall be apportioned between Landlord and Tenant in inverse proportion to the amount by which such decision is favorable to each party). The independent public accounting firm selected to arbitrate the dispute shall be bound to render a decision solely in accordance with the terms of this Lease and shall not by such award or decision, increase, decrease or limit the obligations of the parties hereunder. Pending the resolution of any such dispute, Tenant shall pay to Landlord when due the amount shown on any such Operating Statement, as provided in Section 27.4 hereof. 

           
Section 27.6  The expiration or termination of this Lease during any Operating Year or Tax Year shall not affect the rights or obligations of the parties hereto respecting any Payments of Operating Payments for such Operating Year and any payments of Tax Payments for such Tax Year, and any Operating Statement relating to such Operating Payment and any

 

-62-

Tax Statement relating to such Tax Payment, may be sent to Tenant subsequent to, and all such rights and obligations shall survive, any such expiration or termination. In determining theamount of the Operating Payment for the Operating Year or the Tax Payment for the Tax Year in which the Term shall expire, the payment of the Operating Payment for such Operating Year or the Tax Payment for the Tax Year shall be prorated based on the number of days of the Term which fall within such Operating Year or Tax Year, as the case may be. Any payments due under such Operating Statement or Tax Statement shall be payable within twenty (20) days after such Statement is sent to Tenant.

 

ARTICLE 28

SERVICES

           
Section 28.1

                    (a) Landlord shall provide passenger elevator service to the Premises, on Business Days from 8:00 A.M. to 6:00 P.M. ("Business Hours"), and have an elevator subject to call at all other times, in each instance, so as to provide passenger elevator service comparable to similar "class A" office buildings in midtown Manhattan.

                    (b) There shall be one (1) freight elevator serving the Premises and the entire Building on call on a "first come, first served" basis on Business Days from 8:00 A.M. to 4:45 P.M. (except for the Period from 12:00 noon to 1:00 P.M.), and on a reservation, "first come, first served" basis from 4:45 P.M. to 8:00 A.M. on Business Days and at any time on days other than Business Days. If Tenant shall use the freight elevators serving the Premises between 4:45 P.M. and 8:00 A.M. on Business Days or at any time on any other days, Tenant shall pay Landlord, as additional rent for such use, the standard rates then fixed by Landlord for the Building. The Overtime Period charges for use of the freight elevators as of the date of this Lease are set forth on Exhibit F.

                    (c) Landlord shall not be required to furnish any freight elevator services during the hours from 4:45 P.M. to 8:00 A.M. on Business Days and at any time on days other than Business Days unless Landlord has received advance notice from Tenant requesting such services prior to 2:00 P.M. of the day upon which such service is requested or by 2:00 P.M. of the preceding Business Day if such periods are to occur on a day other than a Business Day.

                    (d) Anything to the contrary appearing in the foregoing subsections (a), (b) and (c) notwithstanding:

                            (i) During and in connection with Tenant's Initial Alterations, Tenant shall have the use of the freight elevators and Tenant shall not be required to pay for such freight elevator use, or for elevator operators, loading dock workers or other Building workers

 

-63-

in connection therewith. Provided that Tenant has made a reservation in accordance with Section 28.1 (c), and dependent upon the needs of other tenants of the Building, as well as Landlord's requirements with respect to the operation of the Building, Landlord shall use reasonable efforts to have both freight elevators available to accommodate Tenant's needs during Overtime Periods during the course of Tenant's Initial Alterations.

                            (ii) During and in connection with Tenant's initial move into the Premises, provided that Tenant shall have given Landlord at least three (3) Business Day's notice prior to the move-in date, Tenant shall have the use of both of the freight elevators and, further provided that Tenant shall take steps reasonably satisfactory to Landlord to protect the interior surfaces of the passenger elevators from any damage resulting from Tenant's use and that Tenant uses the passenger elevators solely for cartons and other "lighter" items which do not exceed the load limitations of the passenger elevator cars (such items to be subject to Landlord's reasonable direction and control), the use of two passenger elevators. Tenant shall not be required to pay for such freight elevator or passenger elevator use, or for elevator operators, loading dock workers or other Building workers in connection with Tenant's initial move into the Premises. Subject to the foregoing, provided that Tenant's move occurs during Overtime Periods, Landlord shall use reasonable efforts to have at least one freight elevator available for Tenant's exclusive use during the move-in.

           
Section 28.2  Landlord, at Landlord's expense (but subject to recoupment of Tenant's Operating Share thereof pursuant to Article 27 hereof), shall furnish to trunk lines from the interior fan rooms and Building system and by means of the perimeter fan coil units of the HVAC System (for distribution by Tenant within the Premises) on a year round basis during Business Hours on Business Days HVAC service which will be sufficient for a properly designed and constructed distribution system to provide HVAC service to the Premises which shall meet the specifications set forth in Schedule B annexed hereto (assuming Tenant's due compliance with the last sentence of this Section 28.2 and the applicable Rules and Regulations with respect thereto). Landlord, throughout the Term, shall have free access to any and all mechanical installations of Landlord, including, but not limited to, air-condition, fan, ventilating and machine rooms and electrical closets; Tenant shall not construct partitions or other obstructions which may interfere with Landlord's free access thereto, or interfere with the moving of Landlord's equipment to and from the enclosures containing said installations. Neither Tenant, nor its agents, employees or contractors shall at any time enter the said enclosures or tamper with, adjust or touch or otherwise in any manner affect said mechanical installations. Tenant shall draw and close the draperies or blinds for the windows of the Premises whenever the HVAC System is in operation and the position of the sun so required and shall at all times cooperate fully with Landlord and abide by all of the Regulations and Requirements which Landlord may prescribe for the proper functioning and protection of the HVAC System. 

           
Section 28.3  The Fixed Rent does not reflect or include any charge to Tenant for the furnishing of any HVAC to the Premises as provided in Section 28.1 during periods other

 

-64-

than on Business Days during Business Hours (any period other than on Business Days during Business Hours being herein referred to as "Overtime Periods"). Accordingly, if Landlord shall furnish HVAC to the Premises at the request of Tenant during Overtime Periods, Tenant shall pay Landlord, as additional rent for such use, the standard rates then fixed by Landlord for the Building. The rate for HVAC service to the Premises during Overtime Periods as of the date of this Lease is set forth on Exhibit F). Landlord shall not be required to furnish any such services during any Overtime Periods unless Landlord has received advance notice from Tenant requesting such services prior to 2:00 P.M. of the day upon which such services are requested or by 2:00 P.M. of the preceding Business Day if such Overtime Periods are to occur on a day other than a Business Day. If Tenant fails to give Landlord such advance notice, then, failure by Landlord to furnish or distribute any such services during such Overtime Periods shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Rental, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business or otherwise. 

           
Section 28.4

                    (a) Landlord, at Landlord's expense (but subject to recoupment of Tenant's Operating Share thereof pursuant to Article 27 hereof), shall cause the Premises, including, at no extra cost to Tenant, the handicap-access bathrooms (one per each floor of the Premises) and the "dwyer" units referenced in Article 2 of this Lease (but not any coffee stations, appliances, dishes, cups, cutlery or similar items associated with the use of such "dwyer" units), but otherwise excluding any portions thereof used for the storage, preparation, service or consumption of food or beverages, to be cleaned in accordance with the cleaning specifications annexed hereto as Schedule C. Tenant shall pay to Landlord on demand the actual out-of-pocket costs incurred by Landlord for (a) extra cleaning work in the Premises required because of (i) misuse or neglect on the part of Tenant or its employees or visitors, (ii) use of portions of the Premises for preparation, serving or consumption of food or beverages, private lavatories or toilets or (iii) other special purposes requiring greater or more difficult cleaning work than office areas, and (b) cleaning services used by Tenant on days other than Business Days. Landlord, its cleaning contractor and their employees shall have access to the Premises during Overtime Periods and the use (at Tenant's expense) of light, power and water in the Premises as reasonably required for the purpose of cleaning the Premises in accordance with Landlord's obligations hereunder. Tenant, at Tenant's sole cost and expense, shall cause all portions of the Premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner reasonably satisfactory to Landlord, and to be exterminated against infestation by vermin, rodents or roaches regularly and, in addition, whenever there shall be evidence of any infestation. Any such exterminating shall be done at Tenant's sole cost and expense, in a manner reasonably satisfactory to Landlord, and by persons reasonably approved by Landlord. If Tenant shall perform any cleaning services in addition to the services provided by Landlord as aforesaid, Tenant shall employ the cleaning contractor providing cleaning
 

-65-

services to the Building on behalf of Landlord or such other cleaning contractor as shall be reasonably approved by Landlord. Tenant shall comply with any recycling program and/or refuse disposal program (including, without limitation, any program related to the recycling, separation or other disposal of paper, glass or metals) which Landlord shall impose on all Tenants of the Building or which shall be required pursuant to any Requirements. 

                    (b) Landlord shall, upon request by Tenant from time-to-time, change light bulbs and ballasts and Tenant shall pay Landlord its standard Building rates for same. Tenant shall not be obligated to obtain such services from Landlord, but may perform such services for itself or through others.

           
Section 28.5  If the New York Board of Fire Underwriters or the Insurance Services Office or any Governmental Authority, department or official of the state or city government shall require or recommend that any changes, modifications, alterations or additional sprinkler heads or other equipment be made or supplied by reason of Tenant's particular use or manner of use of the Premises (as opposed to mere "office" use), or the location of the partitions, trade fixtures, or other contents of the Premises, Landlord, at Tenant's cost and expense, shall promptly make and supply such changes, modifications, alterations, additional sprinkler heads or other equipment.

            Section 28.6  Landlord shall provide to the Premises hot and cold water for ordinary drinking, cleaning and lavatory purposes and for the "dwyer" units referred to in Article 2 and 4.1 and a shower which might be installed by Tenant in the Premises. If Tenant consumes water for any other purpose, Landlord may install a water meter and thereby measure Tenant's water consumption for all such additional purposes. In such event (a) Tenant shall pay Landlord for the actual reasonable cost of the meter and the installation thereof and through the duration of Tenant's occupancy Tenant shall keep said meter and equipment in good working order and repair at Tenant's own cost and expense; (b) Tenant shall pay, as additional rent, the cost for water consumed as shown on said meter, at the rates payable by Landlord for such water, and on default in making such payment Landlord may pay such charges and collect the same from Tenant; and (c) Tenant shall pay the sewer rent, charge or any other tax, rent, levy or charge which now or hereafter is assessed, imposed or shall become a lien upon the Premises or the Real Property of which they are a part pursuant to any Requirement made or issued in connection with any such metered use, consumption, maintenance or supply of water, water system, or sewage or sewage connection or system. Any bill rendered by Landlord for the above shall be based upon Tenant's consumption and shall be payable by Tenant as additional rent within ten (10) days after rendition.

            Section 28.7

                    (a) Landlord reserves the right to stop service of the HVAC System or the elevator, electrical, plumbing or other Building Systems when and to the extent necessary, by

 

-66-

reason of accident or emergency, or for repairs, additions, alterations, replacements or improvements which, in the reasonable judgment of Landlord, are necessary or desirable, until said repairs, alterations, replacements or improvements shall have been completed (which repairs, additions, alterations, replacements and improvements shall be performed with a minimum of interference with Tenant's use and occupancy of the Premises and its business operations therein). Landlord shall have no responsibility or liability for interruption, curtailment or failure to supply HVAC, elevator, electrical, plumbing or other Building Systems when prevented by Unavoidable Delays or by any Requirement of any Governmental Authority or, except as is specifically set forth in Section 28.7(b), due to the exercise of its right to stop service as provided in this Article 28. The exercise of such right or such failure by Landlord shall not constitute an actual or constructive eviction, in whole or in part, or, except as is specifically set forth in Section 28.7(b), entitle Tenant to any compensation or to any abatement or diminution of Rental or, under any circumstances, relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise.

                    (b) If any one or more of the electrical, elevator, water or heat utility or service (each an "Essential Service" and collectively, the "Essential Services") to the Premises are interrupted and, as a direct and proximate result thereof, Tenant is prevented from occupying the entire Premises and conducting its usual and customary business therein in substantially the same manner in which same was conducted immediately prior to the interruption of an Essential Service and, in fact, Tenant does not occupy the entire Premises or conduct its usual and customary business therein, then the following shall apply:

                            (i) if an Essential Service was interrupted by reason of an Unavoidable Delay and same shall continue to be interrupted for a period of seven (7) consecutive Business Days after the date that both the Unavoidable Delay shall have ceased and Landlord shall no longer be prevented from restoring same by reason of an Unavoidable Delay, or

                            (ii) if an Essential Service was interrupted by reason of a cause or causes within Landlord's control and such interruption shall continue for a period of seven (7) consecutive Business Days, then, in either event, as Tenant's sole and exclusive remedy, the Rentals payable by Tenant under this Lease shall be abated one day for each day after the appropriate seven (7) consecutive Business Day period until such time as the affected Essential Service to the Premises shall have been sufficiently restored to permit Tenant to resume its occupancy of the Premises and conduct its usual and customary business therein in substantially the same manner as same was conducted immediately prior to the interruption of the Essential Service. Notwithstanding the foregoing, if the interruption of the Essential Service is due to an Unavoidable Delay and Landlord is prevented by reason of an Unavoidable Delay from restoring same, Tenant shall not be entitled to any abatement or diminution of the Rental payable hereunder, Landlord shall have no

 

-67-

responsibility or liability for such interruption, such interruption shall not constitute an actual or constructive eviction, in whole or in part, entitle Tenant to any compensation or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise. 

            Section 28.8  Landlord shall, at the request of Tenant and at Tenant's expense, maintain listings on the Building directory of the names of Tenant, the names of Tenant's officers or employees and the names of Tenant's three main U.S. Affiliates. Tenant shall be entitled to listings for not less than nineteen (19) names provided, however, that if the size of the Premises shall increase, the number of listings to which Tenant shall be entitled shall be equal to that proportion of the capacity of the Building directory which the aggregate number of square feet of rentable area of the Premises bears to the aggregate number of square feet of rentable area of the Building, but in no event less than nineteen (19). The listing of any name other than that of the Tenant (and as to the Building Directory, those other Persons specifically permitted by this Section 28.8), whether on the doors of the Premises, on the Building directory, or otherwise shall not operate to vest any right or interest in this Lease or in the Premises or be deemed to be the written consent of the Landlord, it being expressly understood that any such other listing shall be deemed a privilege extended by Landlord revocable at will by written notice to Tenant. Notwithstanding the foregoing, Landlord shall not have the right to revoke Tenant's (as opposed to any third party's) privilege to have listings on the Building directory unless Landlord shall revoke such privilege for all other tenants of the Building.

            Section 28.9  Annexed hereto as Exhibit F and made a part hereof is a schedule of Landlord's rates, as of the date of this Lease for "extra" Building charges, including certain charges for Overtime Periods referred to in this Article 29. Landlord agrees that for a period of thirty (30) months after the Commencement Date, Landlord shall not increase such charges to Tenant in excess of the charges set forth on said Exhibit F. 

            Section 28.10  The provisions of this Article 28 shall be considered express agreements governing the services to be furnished by Landlord, and Tenant agrees that any Requirements, now or hereafter in force, shall have no application in connection with any enlargement of Landlord's obligations with respect to such services.

 

ARTICLE 29

[RESERVEDl

 

 

 

 

-68-

 

ARTICLE 30

VAULT SPACE

           
Section 30.1  Notwithstanding anything contained in this Lease or indicated on any sketch, blueprint or plan, any vaults, vault space or other space outside the boundaries of the Real Property are not included in the Premises. Landlord makes no representation as to the location of the boundaries of the Real Property. All vaults and vault space and all other space outside the boundaries of the Real Property which Tenant may be permitted to use or occupy are to be used or occupied under a revocable license, and if any such license shall be revoked, or if the amount of such space shall be diminished or required by any Governmental Authority or by any public utility company, such revocation, diminution or requisition shall not constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Rental, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord. Any fee, tax or charge imposed by any Governmental Authority for any such vaults, vault space or other space occupied by Tenant shall be paid by Tenant.

 

ARTICLE 31

SECURITY DEPOSIT

            Section 31.1  Subject to Section 31.2 below, Tenant has deposited with Landlord the sum of ZERO DOLLARS ($00.00) as security for the faithful performance and observance by Tenant of the terms, provisions, covenants and conditions of this Lease; it is agreed that in the event of an assignment of this Lease, the assignee's deposit of security as elsewhere in this Lease provided, and such assignee's default beyond the expiration of applicable notice, grace or cure periods in respect of any of the terms, provisions, covenants and conditions of this Lease, including, but not limited to, the payment of Rental, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any Rental or any other sum as to which Tenant (the term "Tenant," as used in this Article 31, meaning only any such assignee) is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default beyond the expiration of applicable notice, grace or cure periods in respect of any of the terms, provisions, covenants and conditions of this Lease, including but not limited to, any damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the security shall be refunded to Tenant after the date fixed as the end of the term of this Lease and after delivery of entire possession of the Premises to Landlord as provided hereunder. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. In the event Landlord applies or retains any portion or all of the security deposited, Tenant shall forthwith restore the amount so applied or retained so that at all times 

 

-69-

the amount deposited shall be the full amount of the security deposit required at the relevant time. The security shall be deposited in an interest-bearing account in a bank selected by Landlord, and interest earned on the account (less an administrative fee allowed by law which may be retained by Landlord) shall, provided Tenant is not in default hereunder beyond the expiration of applicable notice, grace or cure periods, be paid to Tenant upon request but no more frequently than annually.

           
Section 31.2  In lieu of the cash security deposit referred to in Section 31.1 above, Tenant may deliver to Landlord, and shall maintain in effect at all times during the term following delivery thereof, a clean, unconditional and irrevocable letter of credit, in substantially the form annexed hereto as Exhibit B in the amount of ZERO DOLLARS ($00.00) issued by a banking corporation ("Bank") reasonably satisfactory to Landlord and which is a member of the New York Clearing House Association or successor thereto. Such letter of credit shall have an expiration date no earlier than the first anniversary of the date of issuance thereof and it shall be automatically renewed from year-to-year unless terminated by the Bank by notice to Landlord given not less than sixty (60) days prior to the then expiration date therefor. It is agreed that in the event Tenant defaults in respect of any of the terms, covenants or provisions of this Lease, including, but not limited to, the payment of any Rental, and such default continues beyond the applicable grace or cure period, if any, or if any letter of credit is terminated by the Bank and is not replaced within thirty (30) days prior to its expiration date that (i) Landlord shall have the right to require the Bank to make payment to Landlord of so much of the entire proceeds of the letter of credit as shall be reasonably necessary to cure the default (or the entire proceeds if notice of termination is given as aforesaid and the letter of credit is not replaced as aforesaid), and (ii) Landlord may apply said sum so paid to it by the Bank to the extent required for the payment of any Rental or any other sum as to which Tenant is in default beyond applicable grace and cure periods or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default beyond applicable grace and cure periods in respect of any of the terms, covenants and conditions of this Lease, including, but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrues before or after summary proceedings or other re-entry by Landlord, without thereby waiving any other rights or remedies of Landlord with respect to such default. If Landlord applies any part of the proceeds of a letter of credit, Tenant, upon demand, shall deposit with Landlord promptly the amount so applied or retained (or increase the amount of the letter of credit) so that the Landlord shall have the full deposit on hand at all times during the term of this Lease. If a letter of credit is drawn upon, any proceeds received by Landlord which are not applied to the curing of the default shall be held by Landlord subject to the provision of Section 31.1 above. If Tenant shall fully and faithfully comply with all of the terms, covenants and provisions of this Lease, any letter of credit, or any remaining portion of any sum collected by Landlord hereunder from the Bank, together with any other portion or sum held by Landlord as security shall be refunded to Tenant within thirty (30) days after the expiration date of this Lease and after delivery of the entire possession of the Premises to Landlord. Tenant shall have the right to substitute one letter

 

-70-

of credit for another provided that at all times the letter of credit shall meet the requirements of this Section 31.2.

           
Section 31.3  In the event of an assignment by Landlord of its interest under this Lease, Landlord shall have the right to transfer the security to the assignee, and Landlord shall thereupon be released by Tenant from all liability for the return of such security. In such event, Tenant agrees to look solely to the new landlord for the return of said security. The provisions hereof shall apply to every transfer or assignment made of the security to a new landlord.

           
Section 31.4  Tenant acknowledges that, as a condition to Landlord's consent to an assignment of this Lease as contemplated by Section 12.8(a), Landlord shall have the right to require that the assignee deposit with Landlord, in the manner contemplated by this Article 31, a security deposit in the amount of two (2) monthly installments of the Fixed Rent due and payable as of the effective date of the proposed assignment.

 

ARTICLE 32

CAPTIONS

           
Section 32.1 The captions are inserted only as a matter of convenience and for reference and in no way define, at or describe the scope of this Lease nor the intent of any provision thereof.

 

ARTICLE 33

PARTIES BOUND

           
Section 33.1  The covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and their respective legal representatives, successors, and, except as otherwise provided in this Lease, their assigns.

 

ARTICLE 34

BROKER

           
Section 34.1 Landlord and Tenant covenant, represent, and warrant, each to the other, that it has had no dealings or negotiations with any broker, or agent other than Cushman & Wakefield, Inc. in connection with the consummation of this Lease. Landlord and Tenant covenant and agree to indemnify, defend and hold harmless the other party from and against any and all costs, expenses (including reasonable attorneys' fees and disbursements) claims or liability for any compensation, commissions or charges claimed with respect to this Lease or the negotiation thereof, by any broker or agent other than Cushman & Wakefield, Inc. due to a

 

-71-

breach of this representation. Landlord will pay any commissions due to Cushman & Wakefield, Inc., in connection with this Lease based upon the terms of the Agency Agreement between Cooke Properties Inc and Cushman & Wakefield, Inc.

 

ARTICLE 35

INDEMNITY

            Section 35.1  Tenant shall not do or permit any act or thing to be done upon the Premises which may subject Landlord to any liability or responsibility for injury, damages to persons or property or to any liability by reason of any violation of any Requirement, and shall exercise such control over the Premises as to fully protect Landlord against any such liability. Tenant shall indemnify and save the Indemnitees harmless from and against (a) all claims of whatever nature against the Indemnitees arising from any act, omission or negligence of Tenant, its contractors, licensees, agents, servants, employees, invitees or visitors, (b) all claims against the Indemnitees arising from any accident, injury or damage whatsoever caused to any person or to the property of any person and occurring during the Term in or about the Premises, (c) all claims against the Indemnitees arising from any accident, injury or damage occurring outside of the Premises but anywhere within or about the Real Property, where such accident, injury or damage results or is claimed to have resulted from an act, omission or negligence of Tenant or Tenant's contractors, licensees, agents, servants, employees, invitees or visitors, and (d) any breach, violation or non-performance of any covenant, condition or agreement in this Lease set forth and contained on the part of Tenant to be fulfilled, kept, observed and performed. This indemnity and hold harmless agreement shall include indemnification of the Indemnitees from and against any and all liability, fines, suits, demands, costs and expenses of any kind or nature (including, without limitation, attorneys' fees and disbursements) incurred in or in connection with any such claim or proceeding brought thereon, and the defense thereof, except (i) with respect to claims in connection with bodily injury or death, Tenant's indemnity shall be limited to the extent any insurance proceeds collectible by Landlord under policies owned by Landlord or such injured party with respect to such damage or injury are insufficient to satisfy same and (ii) with respect to claims in connection with property damage which is covered by policies of "all risk" insurance with extended coverage as set forth in Article 10 hereof.

           
Section 35.2  If any claim, action or proceeding is made or brought against Landlord, which claim, action or proceeding Tenant shall be obligated to indemnify Landlord against pursuant to the terms of this Lease, then, upon demand by Landlord, Tenant, at its sole cost and expense, shall resist or defend such claim, action or proceeding in Landlord's name, if necessary, by such attorneys as Landlord shall approve, which approval shall not be unreasonably withheld. Attorneys for Tenant's insurer are hereby deemed approved for purposes of this Section 35.2. Notwithstanding the foregoing, Landlord may retain its own attorneys to defend or assist in defending any claim, action or proceeding involving potential liability of Three Million Dollars ($3,000,000) or more, and Tenant shall pay the reasonable fees and

 

-72-

disbursements of such attorneys. The provisions of this Article 35 shall survive the expiration or earlier termination of this Lease.

 

ARTICLE 36

ADJACENT EXCAVATION-SHORING

            Section 36.1 If an excavation shall be made upon land adjacent to the Premises, or shall be authorized to be made, Tenant, upon reasonable advance notice, shall afford to the person causing or authorized to cause such excavation, a license to enter upon the Premises for the purpose of doing such work as said person shall deem necessary to preserve the wall or the Building from injury or damage and to support the same by proper foundations, without any claim for damages or indemnity against Landlord, or diminution or abatement of Rental, provided that Tenant shall continue to have access to the Premises and the Building.

 

ARTICLE 37

MISCELLANEOUS

           
Section 37.1  This Lease is offered for signature by Tenant and it is understood  that this Lease shall not be binding upon Landlord or Tenant unless and until Landlord and Tenant shall have executed and unconditionally delivered a fully executed copy of this Lease to each other.

           
Section 37.2  The obligations of Landlord under this Lease shall not be binding upon Landlord named herein after the sale, conveyance, assignment or transfer by such Landlord (or upon any subsequent landlord after the sale, conveyance, assignment or transfer by such subsequent landlord) of its interest in the Building or the Real Property, as the case may be, and in the event of any such sale, conveyance, assignment or transfer, Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations of Landlord hereunder. The partners, shareholders, directors, officers and principals, direct and indirect, of Landlord (collectively, the "Parties") shall not be liable for the performance of Landlord's obligations under this Lease. Tenant shall look solely to Landlord to enforce Landlord's obligations hereunder and shall not seek any damages against any of the Parties. The liability of Landlord for Landlord's obligations under this Lease shall be limited to Landlord's interest in the Real Property and Tenant shall not look to any other property or assets of Landlord or the property or assets of any of the Parties in seeking either to enforce Landlord's obligations under this Lease or to satisfy a judgment for Landlord's failure to perform such obligations.

           
Section 37.3  Notwithstanding anything contained in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not

 

-73-

expressly denominated Fixed Rent, Escalation Rent, additional rent or Rental, shall constitute rent for the purposes of Section 502 (b) (7) of the Bankruptcy Code.

            Section 37.4  Tenant's liability for all items of Rental shall survive the Expiration Date.

           
Section 37.5  Tenant shall reimburse Landlord as additional rent, within ten (10) days after rendition of a statement, for all expenditures made by, or damages or fines sustained or incurred by, Landlord, due to any default by Tenant under this Lease, with interest thereon at the Applicable Rate.

           
Section 37.6  Neither this Lease nor a memorandum of this Lease shall be recorded.

           
Section 37.7 Tenant shall not, except with the prior written consent of Landlord, use or permit to be used the words "Chrysler Building" or any combination or simulation thereof for any purpose whatsoever including, but not limited to, as or for any corporate, firm or trade name, trademark or designation or description of merchandise or services, provided, however, that nothing contained in this Section 37.7 shall restrict Tenant's use of the words "Chrysler Building" solely as part of Tenant's address or as part of an address.

           
Section 37.8  This Lease contains the entire agreement between the parties, supersedes all prior understandings, if any, with respect thereto and all prior negotiations and agreements, if any, are merged herein. Any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect an abandonment of this Lease in whole or in part unless such executory agreement is in writing and executed by both parties.

           
Section 37.9 [Reserved]

           

Section 37.10  Unless Landlord shall render written notice to Tenant to the contrary in accordance with the provisions of Article 26 hereof, Cushman & Wakefield, Inc. is authorized to act as Landlord's agent in connection with the performance of this Lease, including, without limitation, the receipt and delivery of any and all notices and consents in accordance with Article 26. Tenant shall direct all correspondence and requests to, and shall be entitled to rely upon correspondence received from, Cushman & Wakefield, Inc., as agent for the Landlord in accordance with Article 26. Tenant acknowledges that Cushman & Wakefield, Inc. is acting solely as agent for Landlord in connection with the foregoing, and neither Cushman & Wakefield, Inc. nor any of its direct or indirect partners, officers, shareholders, directors or employees shall have any liability to Tenant in connection with the performance of Landlord's obligations under this Lease and Tenant waives any and all claims against any such party arising out of, or in any way connected with, this Lease or the Real Property.

 

-74-

           
Section 37.11

                    (a) All of the Schedules and Exhibits attached hereto are incorporated in and made a part of this Lease, but, in the event of any inconsistency between the terms and provisions of this Lease and the terms and provisions of the Schedules and Exhibits hereto, the terms and provisions of this Lease shall control. Wherever appropriate in this Lease, personal pronouns shall be deemed to include the other genders and the singular to include the plural. All Article and Section references set forth herein shall, unless the context otherwise specifically requires, be deemed references to the Articles and Sections of this Lease.

                    (b) If any term, covenant, condition or provision of this Lease, or the application thereof to any person or circumstance, shall ever be held to be invalid or unenforceable, then in each such event the remainder of this Lease or the application of such term, covenant, condition or provision to any other Person or any other circumstance (other than those as to which it shall be invalid or unenforceable) shall not be thereby affected, and each term, covenant, condition and provision hereof shall remain valid and enforceable to the fullest extent permitted by law.

           
Section 37.12  Tenant, on behalf of itself and any and all persons claiming through or under Tenant, including creditors of all kinds, does hereby waive and surrender all right and privilege which they or any of them might have under or by reason of any present or future law, to redeem the 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.

 

ARTICLE 38

DEFINITIONS

            "Additional Space" shall have the meaning set forth in Section 41.1 hereof.

            "Additional Space Commencement Date" shall have the meaning set forth in Section 41.1 hereof.

            "Additional Space Notice" shall have the meaning set forth in Section 41.1 hereof.

            "Additional Space Sublease" shall have the meaning set forth in Section 41.5 hereof.

            "Affiliate" of a Person shall mean a Person which shall (1) Control, (2) be under the Control of, or (3) be under common Control with the Person in question.

 

-75-

            "Alterations" shall mean installations, improvements, additions or other physical changes (other than decorations which shall include the installation of wall coverings or floor coverings and painting) in or about the Premises.

            "Appraiser" shall have the meaning set forth in Section 40.3 hereof.

            "Applicable Rate" shall mean the lesser of (x) two (2) percentage points above the then current Base Rate, and (y) the maximum rate permitted by applicable law.

            "Assessed Valuation" shall have the meaning set forth in Section 27.1 hereof.

            "Assignment Proceeds" shall have the meaning set forth in Section 12.8 hereof.

            "Assignment Statement" shall have the meaning set forth in Section 12.8 hereof.

            "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., or any statute of similar nature and purpose.

            "Base Amount" shall have the meaning set forth in Section 31.4 hereof.

            "Base Operating Expenses" shall have the meaning set forth in Section 27.1 hereof.

            "Base Operating Year" shall have the meaning set forth in Section 27.1 hereof.

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

            "Base Taxes" shall have the meaning set forth in Section 27.1 hereof.

            "Broker" shall have the meaning set forth in Article 34 hereof.

            "Building" shall mean all the buildings, equipment and other improvements and appurtenances of every kind and description now located or hereafter erected, constructed or placed upon the land and any and all alterations, and replacements thereof, additions thereto and substitutions therefor, known by the address of 405 Lexington Avenue, New York, New York 10174.

 

-76-

            "Building Systems" shall mean the mechanical, gas, electrical, sanitary heating, air conditioning, ventilating, elevator, escalator, plumbing, life-safety and other service systems of the Building.

            "Business Days" shall mean all days, excluding Saturdays, Sundays and all days observed by either the State of New York or the Federal Government and by the labor unions servicing the Building as legal holidays.

            "Combined Property" shall mean the Real Property and Kent Property.

            "Commencement Date" shall have the meaning set forth in Section 1.1

            "Consumer Price Index" shall mean the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor, New York, N.Y. - Northeastern N.J. Area, All Items (1982-84 = 100), or any successor index thereto, appropriately adjusted. In the event that the Consumer Price Index is converted to a different standard reference base or otherwise revised, the determination of adjustments provided for herein shall be made with the use of such conversion factor, formula or table for converting the Consumer Price Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then with the use of such conversion factor, formula or table as may be published by Prentice Hall, Inc., or any other nationally recognized publisher of similar statistical information. If the Consumer Price Index ceases to be published, and there is no successor thereto, such other index as Landlord and Tenant shall agree upon in writing shall be substituted for the Consumer Price Index. If Landlord and Tenant are unable to agree as to such substituted index, such matter shall be submitted to the American Arbitration Association or any successor organization for determination in accordance with the regulations and procedures thereof then obtaining for commercial arbitration.

            "Control" or "control" shall mean ownership of more than fifty percent (50%) of the outstanding voting stock of a corporation or other majority equity and control interest if not a corporation and, in either case, the possession of power to direct or cause the direction of the management and policy of such corporation or other entity, whether through the ownership of voting securities, by statute or according to the provisions of a contract.

            "Cost per Kilowatt Hour" shall mean the total cost for electricity incurred by Landlord to service the Building (including all applicable surcharges, demand charges, energy charges, fuel adjustment charges, time of day charges, taxes and other sums payable in respect thereof) divided by the total kilowatt hours purchased by Landlord.

            "Current Year" shall have the meaning set forth in Section 27.4 hereof.

"Deficiency" shall have the meaning set forth in Section 17.2 hereof.

 

-77-

            "Electricity Additional Rent" shall have the meaning set forth in Section 13.2 hereof.

            "Electricity Fee" shall have the meaning set forth in Section 13.3 hereof.

            "Electricity Inclusion Charge" shall have the meaning set forth in Section 13.3 hereof.

            "Escalation Rent" shall mean, individually or collectively, the Tax Payment and the Operating Payment.

            "Essential Services" shall have the meaning set forth in Section 28.7 hereof.

            "Event of Default" shall have the meaning set forth in Section 16.1 hereof.

            "Expiration Date" shall mean the Fixed Expiration Date, as may be extended pursuant to Article 40 hereof, or such earlier date on which the Term shall sooner end pursuant to any of the terms, conditions or covenants of this Lease or pursuant to law.

            "Existing Subtenant" shall have the meaning set forth in Section 41.5 hereof.

            "Exchange Sublease" shall have the meaning set forth in Section 41.5 hereof.

            "Fair Rental Value of Premises" shall have the meaning set forth in Section 40.3.

            "Fixed Expiration Date" shall have the meaning set forth in Section 1.1 hereof.

            "Fixed Rent" shall have the meaning set forth in Section 1.1 hereof.

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

            "Ground Lease" shall mean that certain lease dated as of May 1, 1953, originally between The Cooper Union For the Advancement of Science and Art, as lessor, and W.P. Chrysler Building Corporation, as tenant, the lessee's interest of which is currently owned by Landlord.

 

-78-

            "Ground Rent" shall mean any ground rent payable by Landlord pursuant to the Ground Lease.

            "HVAC" shall mean heat, ventilation and air conditioning.

            "IHVAC Systems" shall mean the Building Systems providing HVAC.

            "Indemnitees" shall mean Landlord or Tenant, as the case may be, and its respective shareholders, officers, directors, employees, agents and contractors.

            "Initial Alterations" shall mean the Alterations to be made by Tenant to initially prepare the Premises for Tenant's occupancy including, without limitation, any Alterations in the existing restrooms in the Premises.

            "Kent Building" shall mean the building located at 666 Third Avenue, New York, New York 10017, known as the Kent Building.

            "Kent Property" shall mean the building known as the Kent Building together with the plot of land upon which it stands.

            "Labor Costs" shall mean, without limitation, the cost and expense of salaries, wages, payroll taxes and other so-called "fringe" benefits which include, without limitation, medical benefits, surgical benefits, general welfare benefits, group insurance benefits, retirement plans, pension plans, vacation pay, sick pay.

            "Landlord" on the date as of which this Lease is made, shall mean Cooke Properties Inc, a California corporation, having an office at 405 Lexington Avenue, New York, New York 10174, but thereafter, "Landlord" shall mean only the owner of the lessee's interest under the Ground Lease at the time in question.

            "Landlord's Determination" shall have the meaning set forth in Section 40.3 hereof.

            "Landlord's Preliminary Work" shall have the meaning set forth in Section 1.3 hereof.

            "Landlord's Work" shall have the meaning set forth in Section 1.3 hereof.

            "Lease" shall mean this Agreement of Lease.

            "Lessor(s)" shall mean a lessor under a Superior Lease.

 

-79-

            "Mortgage(s)" shall mean any trust indenture or mortgage which may now or hereafter affect the Real Property, the Building or any Superior Lease and the leasehold interest created thereby, and all renewals, extensions, supplements, amendments, modifications, consolidations and replacements thereof or thereto, substitution therefor, and advances made thereunder.

            "Mortgagee(s)" mean any trustee, mortgagee or holder of a Mortgage.

            "Mutual Determination" shall have the meaning set forth in Section 40.3 hereof.

            "Non-disturbance Agreement" shall have the meaning set forth in Section 7.1 hereof.

            "Operating Expenses" shall have the meaning set forth in Section 27.1 hereof.

            "Operating Payment" shall have the meaning set forth in Section 27.4 hereof.

            "Operating Year" shall have the meaning set forth in Section 27.1 hereof.

            "Operation of the Combined Property" shall mean the maintenance, repair and management of the Combined Property and the plazas, curbs, sidewalk and areas adjacent thereto.

            "Option Tenant" shall have the meaning set forth in Section 41.4 hereof.

            "Overtime Periods" shall have the meaning set forth in Section 28.3 hereof.

            "Parties" shall have the meaning set forth in Section 37.2 hereof.

            "Person(s) or person(s)" shall mean any natural person or persons, a partnership, a corporation and any other type of legal entity.

            "Premises" shall mean, subject to the provisions of Section 14.4 hereof, the entire rentable area on the nineteenth (19th) floor and the twentieth (20th) floor of the Building, as denoted on the floor plan attached hereto and made a part hereof as Exhibit "A".

            "Real Property" shall mean the Building, together with the plot of land upon which it stands.

            "Recapture Space" shall have the meaning set forth in Section 41.5 hereof.

            "Recapture Sublease" shall have the meaning set forth in Section 41.5 hereof.

 

-80-

            "Renewal Notice" shall have the meaning set forth in Section 40.1 hereof.

            "Renewal Option" shall have the meaning set forth in Section 40.1 hereof.

            "Renewal Term" shall have the meaning set forth in Section 40.1 hereof.

            "Rent Commencement Date" shall have the meaning set forth in Section 1.1 hereof.

            "Rent Notice" shall have the meaning set forth in Section 40.3 hereof.

            "Rent Per Square Foot" shall have the meaning set forth in Section 12.7 hereof.

            "Rental" shall mean and be deemed to include Fixed Rent, Escalation Rent, all additional rent and any other sums payable by Tenant hereunder.

            "Requirements" shall mean all present and future laws, rules, orders, ordinances, regulations, statutes, requirements, codes and executive orders, extraordinary as well as ordinary, of all Governmental Authorities now existing or hereafter created, and of any and all of their departments and bureaus, and of any applicable fire rating bureau, or other body exercising similar functions, affecting the Real Property, or any street, avenue or sidewalk comprising a part of or in front thereof or any vault in or under the same, or requiring removal of any encroachment, or affecting the maintenance, use or occupation of the Real Property.

            "Rules and Regulations" shall mean the rules and regulations annexed hereto and made a part hereof as Schedule A, and such other and further rules and regulations and modifications thereto as Landlord may from time-to-time adopt for general applicability to tenants of the Building and communicate on reasonable notice to tenants.

            "Second Additional Space" shall have the meaning set forth in Section 41.4 hereof.

            "Space Factor" shall mean forty one thousand (41,000) square feet, as the same may be increased or decreased pursuant to the terms hereof.

            "Specialty Alterations" 
shall mean Alterations consisting of kitchens, raised computer floors, computer installations, vaults, libraries, internal staircases, dumbwaiters, and other Alterations of a similar character.

"Sublease Expenses" shall have the meaning set forth in Section 12.7 hereof.

 

-81-

            "Sublease Profit" shall have the meaning set forth in Section 12.7 hereof.

            "Sublease Rent" shall have the meaning set forth in Section 12.7 hereof.

            "Sublease Rent Per Square Foot" shall have the meaning set forth in Section 12.7 hereof.

            "Superior Lease(s)" shall mean the Ground Lease and all ground or underlying leases of the Real Property or the Building heretofore or hereafter made by Landlord and all renewals, extensions, supplements, amendments and modifications thereof.

            "Taxes" shall have the meaning set forth in Section 27.1 hereof.

            "Tax Payment" shall have the meaning set forth in Section 27.2 hereof.

            "Tax Statement" shall have the meaning set forth in Section 27.1 hereof. 

            "Tax Year" shall have the meaning set forth in Section 27.1 hereof.

            "Tenant" on the date as of which this Lease is made, shall mean Minerals Technologies, Inc., a Delaware corporation, having an office at 235 East 42nd Street, New York, New York 10017, but thereafter "Tenant" shall mean only the tenant under this Lease at the time in question.

            "Tenant's Acceptance Notice" shall have the meaning set forth in Section 41.1 hereof.

            "Tenant's Delay" shall have the meaning set forth in Section 1.5 hereof.

            "Tenant's Determination" shall have the meaning set forth in Section 40.3 hereof.

            "Tenant Fund" shall have the meaning set forth in Section 3.4 hereof.

            "Tenant Statement" shall have the meaning set forth in Section 12.6 hereof.

            "Tenant's Operating Share" shall mean three percent (3 %), as the same may be increased or decreased pursuant to the terms hereof.

            "Tenant's Property" shall mean Tenant's movable fixtures and movable partitions, telephone and other equipment, furniture, furnishings, decorations and other items of personal property.

 

-82-

            "Tenant's Tax Share" shall mean four and thirty-seven one hundredths percent (4.37%), as the same may be increased or decreased pursuant to the terms hereof.

            "Tentative Monthly Escalation Charge" 
shall have the meaning set forth in Section 27.4 hereof.

            "Term" shall mean a term which shall commence on the Commencement Date and shall expire on the Expiration Date.

            "Unavoidable Delays" shall have the meaning set forth in Article 25 hereof.

 

ARTICLE 39

CONSTRUCTION OF TERMS

           
Section 39.1  The terms include, including, and such as shall each be construed as if followed by the phrase "without being limited to".

           
Section 39.2  The term obligations of this Lease, and words of like import, shall mean the covenants to pay rent and additional rent under this Lease and all of the other covenants and conditions contained in this Lease. Any provision in this Lease that one party or the other or both shall do or not do or shall cause or permit or not cause or permit a particular act, condition or circumstance shall be deemed to mean that such party so covenants or both parties so covenant, as the case may be.

           
Section 39.3  The term Tenant's obligations hereunder, and words of like import, and the term Landlord's obligations hereunder, and words of like import, shall mean the obligations of this Lease which are to be performed or observed by Tenant, or by Landlord, as the case may be. Reference to performance of either party's obligations under this Lease shall be construed as "performance and observance".

           
Section 39.4  Reference to Landlord as having no liability to Tenant or being
without liability to Tenant shall mean that Tenant is not entitled to terminate this Lease, or to claim actual or constructive eviction, partial or total, or to receive any abatement or diminution of rent, or to be relieved in any manner of any of its other obligations hereunder, or to be compensated for loss or injury suffered or to enforce any other kind of liability whatsoever against Landlord under or with respect to this Lease or with respect to Tenant's use or occupancy of the Premises.

           
Section 39.5  The term repair shall be deemed to include restoration and replacement as may be necessary to achieve and/or maintain good working order and condition.

 

-83-

           
Section 39.6  Reference to termination of this Lease includes expiration or earlier termination of the Term or cancellation of this Lease pursuant to any of the provisions of this Lease or to law. Upon a termination or expiration of this Lease, the Term and estate granted by this Lease shall end at noon of such date of termination or expiration and neither party shall have any further obligation or liability to the other after such termination (i) except as shall be expressly provided for in this Lease, or (ii) except for such obligation as by its nature or under the circumstances can only be, or by the provisions of this Lease, may be, performed after such termination, and, in any event, unless expressly otherwise provided in this Lease, any liability for a payment which shall have accrued to or with respect to any period ending at the time of termination shall survive the termination of this Lease.

           
Section 39.7  Words and phrases used in the singular shall be deemed to include the plural and vice versa, and nouns and pronouns used in any particular gender shall be deemed to include any other gender.

           
Section 39.8 The rule of ejusdem generis shall not be applicable to limit a general statement following or referable to an enumeration of specific matters to matters similar to the matters specifically mentioned.

 

ARTICLE 40

OPTION TO RENEW

           
Section 40.1 Tenant shall have the option (the "Renewal Option") to extend the term of this Lease for one (1) additional period of five (5) years (the "Renewal Term"), which Renewal Term shall commence on the date immediately succeeding the Fixed Expiration Date and end on the fifth (5th) anniversary of the Fixed Expiration Date, provided that on the date Tenant gives Landlord written notice (the "Renewal Notice") of Tenant's election to exercise the Renewal Option and on the first day of the Renewal Term (a) this Lease shall be in full force and effect, (b) no Event of Default shall have occurred and be continuing (including on the Fixed Expiration Date), and (c) Tenant shall itself occupy and be conducting business in at least seventy-five percent (75 %) of the Premises. Such Renewal Option may be exercised with respect to the entire Premises only and shall be exercisable by Tenant delivering the Renewal Notice to Landlord at least one (1) year prior to the Fixed Expiration Date. Time is of the essence with respect to the giving of the Renewal Notice whether or not Landlord shall have taken any action in reliance upon Tenant's failure to deliver said Renewal Notice. Upon the giving of the Renewal Notice, Tenant shall have no further right or option to extend or renew the Term.

           
Section 40.2  If Tenant exercises the Renewal Option, the Renewal Term shall be upon the same terms, covenants and conditions as those contained in this Lease, except that (a) the Fixed Rent shall be deemed to mean the Fixed Rent as determined pursuant to Section 40.3 

 

-84-

hereof, (b) the provisions of Section 40.1 relative to Tenant's right to renew the Term of this Lease shall not be applicable during the Renewal Tern, and the provisions of Sections 1.2, 1.3, 1.4 and 3.4 shall not be applicable to the Renewal Tern.

           
Section 40.3  For the Renewal Term, the Fixed Rent shall be determined as follows:

                    (a) The Fixed Rent for the Premises for the Renewal Term shall be an amount equal to ninety-five percent (95 %) of the annual fair rental value of the Premises (the "Fair Rental Value of the Premises") as of the first day of the Renewal Term. The Fair Rental Value of the Premises shall be determined on the basis of the highest and best use of the Premises as offices assuming that the Premises are free and clear of all leases and tenancies (including this Lease), that the Premises are available in the then rental market for comparable first class office buildings in midtown Manhattan, that Landlord has had a reasonable time to locate a tenant willing to enter into a lease for the Premises, that neither Landlord nor the prospective tenant is under any compulsion to rent, and taking into account all relevant factors concerning the Premises and the rental market at the time (but without the requirement that the same be specifically identified or enumerated in the determination) including without limitation:

                            (i) the fact that (x) the Base Taxes shall be the Taxes payable for the second half of the Tax Year commencing July 1, 2009 and ending June 30, 2010 (i.e. January 1, 2010 - June 30, 2010) and the first half of the Tax Year commencing July 1, 2010 and ending June 30, 2011 (i.e. July 1, 2010 - Dec. 31, 2010) for the purpose of calculating Tenant's Tax Payment, and (y) the Base Operating Year shall be the calendar year 2010 for the purpose of calculating Tenant's Operating Expense Payment, both of which payments shall continue to be made during the Renewal Term;

                            (ii) the fact that as of the first day of the Renewal Tern, Tenant shall not be required to pay, the Escalation Rent presently provided for under this Lease, or other escalation payments which Landlord is then charging tenants under other leases or offers for leases in the Building or such other escalation payments which other landlords are then charging tenants under leases or offers for leases in other office buildings which are similar in character or location to the Building;

                            (iii) the fact that Tenant shall have no further right to renew this Lease; and

                            (iv) the fact that Landlord is obligated to pay a brokerage commission with respect to the Renewal Term to Cushman & Wakefield, Inc., based upon the terms of the Agency Agreement between Cooke Properties Inc and Cushman & Wakefield, Inc.

 

-85-

                    (b) For purposes of determining the Fair Rental Value of the Premises, the following procedure shall apply:

                            (i) Landlord and Tenant shall each contemporaneously deliver to the other, at Landlord's office, a written notice (each a "Rent Notice"), on a date mutually to be agreed upon, but in no event later than one hundred eighty (180) days prior to the Fixed Expiration Date, and if no date is mutually agreed upon, then on the one hundred eightieth (180th) day prior to the Fixed Expiration Date, which Rent Notice shall set forth each of their respective determinations of the Fair Rental Value of the Premises (Landlord's determination of the Fair Rental Value of the Premises is referred to as "Landlord's Determination" and Tenant's determination of the Fair Rental Value of the Premises is referred to as "Tenant's Determination").

                            (ii) If Landlord's Determination and Tenant's Determination are not equal, Landlord and Tenant shall attempt to agree upon the Fair Rental Value of the Premises. If Landlord and Tenant shall mutually agree upon the determination (the "Mutual Determination") of the Fair Rental Value of the Premises their determination shall be the Fixed Rent for the Renewal Term, and shall be final and binding upon the parties. If Landlord and Tenant shall be unable to reach a Mutual Determination within ten (10) Business Days after delivery of the respective Determinations to each party, Landlord and Tenant shall jointly select an independent real estate broker, consultant or appraiser (the "Appraiser") whose fee shall be borne equally by Landlord and Tenant and whose determination shall be binding on both. The Appraiser appointed pursuant to this Article shall be an independent real estate appraiser, broker or consultant with at least ten (10) years' experience in leasing and valuation of properties which are similar in character to the Building, and a member of either the American Institute of Appraisers, the National Association of Real Estate Boards, or the Society of Real Estate Appraisers. If Landlord and Tenant shall be unable to jointly agree on the designation of the Appraiser within five (5) Business Days after they are requested to do so by either party, then the parties agree to allow the president of the Real Estate Board of New York, Inc., or any successor organization serving a similar function, to designate the Appraiser and have the Appraiser determine the Fair Rental Value of the Premises in accordance with the provisions of this Lease, such determination to be conducted pursuant to the rules, regulations and/or procedures then obtaining of the American Arbitration Association or any successor organization. Each party shall have the right to submit the matter to the president of the Real Estate Board of New York, Inc. for designation of the Appraiser and a determination of the Fair Rental Value of the Premises, which determination shall be binding on the parties.

                            (iii) The Appraiser shall conduct such hearings and investigations as he or she may deem appropriate and shall, within thirty (30) days after the date of designation of the Appraiser, choose either Landlord's or Tenant's Determination or make a determination of the Fair Rental Value of the Premises which determination shall be an amount between Landlord's Determination or Tenant's Determination, and such choice by the Appraiser shall be

 

-86-

conclusive and binding upon Landlord and Tenant. Each party shall pay its own counsel fees and expenses, if any, in connection with any arbitration or appraisal under this Article. The Appraiser shall not have the power to add to, modify or change any of the provisions of this Lease.

                    (c) After a determination has been made of the Fair Rental Value of the Premises for the Renewal Term, the parties shall execute and deliver to each other an instrument setting forth the Fixed Rent for the Renewal Term as hereinabove determined.

                    (d) If the final determination of the Fair Rental Value of the Premises shall not be made on or before the first day of the Renewal Term in accordance with the provisions of this Article, pending, such final determination Tenant shall continue to pay, as the Fixed Rent for such Renewal Term, an amount equal to the Fixed Rent then payable by Tenant as of the Fixed Expiration Date. If,
based upon the final determination of the Fair Rental Value of the Premises pursuant to this Article 40, the payments made by Tenant on account of the Fixed Rent for such portion of the Renewal Term were greater or lower than the Fixed Rent determined to be payable for the Renewal Term, the amount of any overpayment shall be automatically credited against the next succeeding installment(s) of Fixed Rent thereafter becoming due or the amount of any underpayment shall become due and payable with the next succeeding installment of Fixed Rent thereafter becoming due.

 

ARTICLE 41

ADDITIONAL SPACE OPTION

            Section 41.1

                    (a) Provided that (i) Minerals Technologies, Inc. is the Tenant, (ii) Tenant shall itself then occupy and shall be conducting its business in at least seventy-five (75 %) of the Premises, and (iii) no Event of Default shall have occurred and then be continuing hereunder, subject to Section 41.4, during the original term of this Lease only (and not during the Renewal Term), if all or any part of the space on the 21st floor of the Building, which is shown on the floor plan of the 21st floor of the Building annexed hereto as Exhibit G and denoted thereon as the "Additional Space" (and, for the purposes of this Article 41, the term "Additional Space" shall mean the entire Additional Space or such portions of the Additional Space as may, from time-to-time during the original term of the Lease become vacant and available for occupancy as contemplated by this Article 41), becomes vacant and available for occupancy, then prior to entering into a lease for such Additional Space with any other Person, Landlord shall give to Tenant a notice ("Additional Space Notice") that the Additional Space is available for leasing by Tenant on the same terms and conditions as set forth in this Lease, except as otherwise provided in this Article 41.
 

-87-

                    (b) Landlord's Additional Space Notice shall set forth the date upon which the Additional Space is expected to be available for occupancy by Tenant ("Additional Space Commencement Date") and a recalculation of Tenant's Operating Share and Tenant's Tax Share based upon the addition of the Additional Space to the Premises (the Base Operating Year, Base Operating Expenses and Base taxes with respect to the Additional Space being as set forth in Article 27 of this Lease). Tenant shall have the right to inspect the Additional Space upon receipt of the Additional Space Notice. If Tenant desires to lease all, but not less than all, of the Additional Space to which Landlord's Additional Space Notice shall apply, Tenant shall notify Landlord in writing to that effect ("Tenant's Acceptance Notice") within five (5) Business
Days after Tenant receives Landlord's Additional Space Notice. Time shall be of the essence with respect to Tenant's delivery of Tenant's Acceptance Notice to Landlord. Under no circumstances shall Tenant have the right to lease less then all of the Additional Space to which Landlord's Additional Space Notice shall apply.

                    (c) If Tenant elects to lease the Additional Space, as of the Additional Space Commencement Date, (i) the Additional Space shall be added to and be deemed to be part of the Premises for all purposes of this Lease, except as otherwise set forth in this Article 41, (ii) the Fixed Rent under the Lease shall be increased by an amount equal to the Fixed Rent for the Additional Space as determined pursuant to Section 41.3 hereof, (iii) the Fixed Rent under the Lease as increased by the operation of this Article 41 shall be payable commencing on the Additional Space Commencement Date and within five (5) Business Days thereafter, Tenant shall pay to Landlord the difference between the Fixed Rent payable prior to the Additional Space Commencement Date and the Fixed Rent payable commencing as of the Additional Space Commencement Date, (iv) the Additional Space shall be delivered to and accepted by Tenant in its then "as-is" condition. Tenant expressly acknowledges and agrees that Landlord shall not be obligated to perform any work or to furnish any installations, facilities, material or other items to the Additional Space, any and all such work, installations, facilities and materials necessary or desirable to prepare the Additional Space for Tenant's occupancy shall be Tenant's sole responsibility, and that Tenant shall not be entitled to any credit or abatement against the Fixed Rent with respect to the Additional Space.

                    (d) If Tenant shall fail to give to Landlord Tenant's Acceptance Notice within the ten (10) Business Day period, time being of the essence, or if Tenant shall notify Landlord within such ten (10) Business Day period that it elects not to lease such Additional Space, then, in either event, Tenant shall have no further rights hereunder with respect to such Additional Space, Landlord shall have the right to lease such Additional Space on any terms and conditions that Landlord, in its sole discretion, shall determine, without any limitation or restriction whatsoever, and Tenant's option with respect to such Additional Space shall be null, void and of no further force or effect.

            Section 41.2  If an Additional Space Notice provided by Landlord shall apply to less than all of the Additional Space, the provisions of Section 41.1 shall, in the first instance,

 

-88-

be applicable only to that portion of the Additional Space which is the subject of Landlord's Additional Space Notice and Tenant's rights with respect to the balance of the Additional Space shall continue in accordance with the provisions of Section 41.1.

           
Section 41.3 The Fixed Rent for any Additional Space added to the Premises as set forth in Section 41.1 shall be an amount equal to the annual fair rental value of the Additional Space (which shall be determined in the same manner as the "Fair Rental Value of the Premises" is determined pursuant to Article 40 of this Lease. Once the Fixed Rent for the Additional Space shall be determined, it shall be deemed part of the Fixed Rent of the Premises for all purposes of the Lease and shall increase from time-to-time throughout the term of the Lease as if the Additional Space were originally part of the Premises. If the determination of the fair rental value of the Additional Premises shall not be made on or before the Additional Space Commencement Date, pending such determination, Tenant shall pay an amount equal to the Fixed Rent equal to the product of (a) the Fixed Rent payable with respect to the Premises on the date Tenant delivers Tenant's Acceptance Notice, divided by the square footage comprising the Premises on the date that Tenant delivers Tenant's Acceptance Notice and (b) the square footage comprising the Additional Space which is subject to Tenant's Acceptance Notice. If, based upon the final determination of the annual fair rental value of the Additional Space pursuant to this Section 41.3, the payments made by Tenant on account of Fixed Rent for the period after the Additional Space Commencement Date were greater or lower than the Fixed Rent determined to be payable for such period, the amount of any overpayment shall be automatically credited against the next succeeding installment(s) of Fixed Rent thereafter becoming due hereunder and the amount of any underpayment shall become due and payable with the next succeeding installment of Fixed Rent thereafter becoming due.

           
Section 41.4 The portion of the Additional Space which is cross-hatched on Exhibit G and denoted thereon as the "Second Additional Space" is subject to a first right and option in favor of the current tenant on the 21st floor (the "Option Tenant") whose premises are denoted on Exhibit G as the "Option Tenant". If and only to the extent that the Option Tenant does not exercise its right and option with respect to the Second Additional Space, the Second Additional Space shall, as and when same shall become vacant and available for occupancy, be deemed part of the Additional Space and shall then be subject to the provisions of this Article 41.

            Section 41.5

                    (a) Notwithstanding the provisions of Article 12 or any other provision of this Lease to the contrary, Tenant shall not, and shall not have the right, to sublet any portion of the Additional Space, except as may be specifically set forth in this Section 41.5. 

                    (b) Notwithstanding the provisions of Section 41.5(c), Tenant shall be permitted to sublease any portion of the Additional Space to a then subtenant of a portion of the

 

-89-

19th or 20th floors of the Premises ("Existing Subtenant") pursuant to an existing sublease (made in compliance with Article 12) between Tenant and such Existing Subtenant solely to accomplish an exchange of space with the Existing Subtenant, immediately after which exchange Tenant shall itself occupy the space previously occupied by the Existing Subtenant (such sublease with the Exchange Subtenant being herein referred to as an "Exchange Sublease"). If Tenant desires to enter into an Exchange Sublease, Tenant shall give to Landlord not less than fifteen (15) Business days prior written notice of its intention to effect such Exchange Sublease, which notice shall be accompanied by a copy of the proposed Exchange Sublease and any other documents or instruments which will impact upon, implement or otherwise affect the Exchange Sublease. Each Exchange Sublease shall comply with the provisions of clauses (v) and (viii) of Section 12.6(a) and shall in all respects be made and entered into in compliance with the provisions Section 12.6(a) (other than clause (iv) thereof) and Section 12.7 of this Lease.

                    (c) Except for an Exchange Sublease or Recapture Sublease (as hereinafter defined), any sublease of all or any portion of the Additional Space ("Additional Space Sublease") shall be subject to, and shall be made solely in compliance with, the provisions of Sections 12.1, 12.2, 12.6(a) and 12.7 and, in addition thereto, the provisions of this Section 41.5(c). The provisions of Section 12.6(b) shall not be applicable to any Additional Space Sublease and, in lieu thereof, the following shall apply (but not in the case of an Exchange Sublease for which the provisions of Section 41.5(b) shall apply):

                            (i) At least fifteen (15) Business Days prior to the effective date of Additional Space Sublease, Tenant shall submit to Landlord a Tenant Statement complying with the requirements of Section 12.6(b). Landlord shall have the right, exercisable within fifteen (15) Business Days after Landlord's receipt of the Tenant Statement, to sublet (in its own name or that of its designee) that portion of the Additional Space intended to be sublet by Tenant as provided in the Tenant Statement ("Recapture Space") from Tenant on the terms and conditions set forth in the Tenant Statement, subject to the further provisions of this Section 41.5(c). Landlord shall respond in writing to Tenant's request within fifteen (15) Business Days after Landlord's receipt of the Tenant Statement, advising whether Landlord intends to exercise its "recapture" rights pursuant to this Section 41.5(c) or of Landlord's consent to or disapproval of the proposed Additional Space Sublease pursuant to the Tenant Statement. If Landlord shall fail to notify Tenant within said fifteen (15) Business Day period of Landlord's intention to exercise its rights pursuant to this Section 41.5(c) or of Landlord's consent to or disapproval of the proposed Additional Space Sublease pursuant to the Tenant Statement, Tenant shall have the right to sublease that portion of the Additional Space to such proposed subtenant on the same terms and conditions set forth in the Tenant Statement, subject to the terms and conditions of this Lease, including, without limitation, those in Section 12.6(a) and Section 4.7. If Tenant shall not enter into such Additional Space Sublease within sixty (60) days after the delivery of the Tenant Statement to Landlord, then the provisions of Section 12.1 of this Lease and this Section 41.5(c) shall again be applicable to any other proposed Additional Space Sublease. If Tenant shall enter into such Additional Space Sublease within said sixty (60) day period, as aforesaid, Tenant shall deliver a true, complete and fully executed counterpart of such Additional Space Sublease to Landlord within five (5) days after execution thereof. 

 

-90-

                            (ii) If Landlord exercises its option to sublet the Recapture Space, such sublease to Landlord or its designee as subtenant (each, a "Recapture Sublease") shall:

                                    (1) be at a rental equal to the lesser of (A) the sublease rent set forth in the Tenant Statement and (B) the Fixed Rent and Escalation Rent then payable pursuant to this Lease, and otherwise be upon the same terms and conditions as those contained in this Lease (as modified by the Tenant Statement), except such as are irrelevant or inapplicable and except as otherwise expressly set forth to the contrary in this clause (ii);

                                    (2) give the subtenant the unqualified and unrestricted right,  without Tenant's permission, to assign such sublease and to further sublet the Recapture Space or any part thereof and to make any and all changes, alterations, and improvements in the Recapture Space;

                                    (3) provide in substance that any such changes, alterations, and improvements made in the Recapture Space by Landlord or its subtenant in connection with the Recapture Sublease may be removed, in whole or in part, prior to or upon the expiration or other termination of the Recapture Sublease provided that any material damage and injury caused thereby shall be repaired by Landlord or such subtenant;

                                    (4) provide that (A) the parties to such Recapture Sublease expressly negate any intention that any estate created under such Recapture Sublease be merged with any other estate held by either of said parties, (B) prior to the commencement of the term of the Recapture Sublease, Tenant, at its sole cost and expense (unless the Tenant Statement provides otherwise), shall make such alterations as may be required or reasonably deemed necessary by the subtenant to physically separate the Recapture Space, if such Space constitutes a portion of the Additional Space, from the balance of the Additional Space and to provide appropriate means of ingress to and egress thereto and to the public portions of the balance of the floor such as toilets, janitor's closets, telephone and electrical closets, fire stairs, elevator lobbies, etc., and (C) at the expiration of the term of such Recapture Sublease, Tenant shall accept the Recapture Space in its then existing condition, broom clean; and

                                    (5) provide that the subtenant or occupant may use and occupy the Recapture Space for any lawful purpose (without regard to any limitation set forth in the Tenant Statement).

                            (iii) Performance by Landlord, or its designee, under a Recapture Sublease shall be deemed performance by Tenant of any similar obligation under this Lease, and Tenant shall not be liable for any default under this Lease or deemed to be in default hereunder if such default is occasioned by or arises from any act or omission of the subtenant under the Recapture Sublease or is occasioned by or arises from any act or omission of any occupant under the Recapture Sublease.

 

-91-

                            (iv) If Landlord is unable to give Tenant possession of the Recapture Space at the expiration of the term of the Recapture Sublease by reason of the holding over or retention of possession of any tenant or other occupant, then (1) Landlord shall continue to pay all charges previously payable, and comply with all other obligations, under the Recapture Sublease until the date upon which Landlord shall give Tenant possession of the Recapture Space free of occupancies, (2) neither the Expiration Date nor the validity of this Lease shall be affected, (3) Tenant waives any rights under Section 223-a of the Real Property Law of New York, or any successor statute of similar import, to rescind this Lease and further waives the right to recover any damages from Landlord which may result from the failure of Landlord to deliver possession of the Recapture Space at the end of the term of the Recapture Sublease, and (4) Landlord, at Landlord's expense, shall use its reasonable efforts to deliver possession of the Recapture Space to Tenant and in connection therewith, if necessary, shall institute and diligently and in good faith prosecute holdover and any other appropriate proceedings against the occupant of the Recapture Space.

                            (v) Notwithstanding the foregoing provisions of this Section 41.5(c), if the proposed Additional Space Sublease is for a term which is equal to substantially the balance of the Term of this Lease, Landlord shall have the right to recapture the Recapture Space from Tenant by notice given within the time period set forth in subsection 41.5(c)(i) in which event, from and after the effective date of such notice, Tenant shall surrender the Recapture Space to Landlord in the manner required by this Lease and, thereupon, the Recapture Space shall no longer be a part of the Premises and Fixed Rent and additional rent payable hereunder shall be adjusted accordingly.

            Section 41.6

                    (a) If Landlord is unable to give possession to Tenant of all or any portion of the Additional Space on the date set forth in Landlord's Additional Space Notice as the Additional Space Commencement Date because of the holding over or retention of possession of any tenant or occupant thereof, Landlord shall not be subject to any liability for such failure, the validity of this Lease shall not be impaired under such circumstances and such failure shall not be construed to extend the term of this Lease. Without limiting the generality of the foregoing, Tenant waives the right to recover any damages which may result from the failure of Landlord to deliver possession of the Additional Space and agrees that the provisions of this Section 41.6 shall constitute "an express provision to the contrary" within the meaning of Section 223(a) of the New York Real Property Law and the Additional Space Commencement Date shall be postponed until five (5) Business Days after Landlord shall give Tenant notice that such Additional Space is vacant and available to Tenant's occupancy.

                    (b) If Landlord is unable to deliver possession of any Additional Space to Tenant within six (6) months after the date set forth in Landlord's Additional Space Notice as the Additional Space Commencement Date, Tenant, by notice to Landlord given within ten (10) Business Days after the expiration of said six (6) month period, may terminate its lease for such

 

-92-

Additional Space. Time shall be of the essence with respect to Tenant's right to terminate its lease of such Additional Space. If Tenant shall elect in a timely manner to so terminate its lease of such Additional Space as aforesaid, then, as Tenant's sole remedy, Tenant's Acceptance Notice shall be deemed rescinded immediately, and in such event, Landlord and Tenant shall be released and discharged of all rights, liabilities and obligations with respect to such Additional
Space and Tenant shall have no further right to lease such Additional Space pursuant to this Article 41. If Tenant shall fail to timely terminate its lease to such Additional Space, Tenant shall be deemed to have waived its right to do so and said Additional Space shall be delivered to Tenant and added to the Premises in accordance with the terms and conditions of this Article 41.

           
Section 41.7 In addition to such other provisions of this Lease as are specifically made inapplicable to the Additional Space, the following provisions of this Lease shall not be applicable to the Additional Space: Section 1.2, 1.3, 1.4 and 3.4.

 

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

 

  
    
      
        
          
            COOKE PROPERTIES INC.

             

By:  /s/Michael R. Dillow             

Name:    Michael R. Dillow

Title:      Vice President

 

 

MINERALS TECHNOLOGIES INC.

 

By: /s/Howard R. Crabtree                      
            

            Name:    Howard R. Crabtree

            Title:       Vice President

          

        

      

    

  

 

 

-93-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]