Document:

Unassociated Document

    EXHIBIT 10.14

    

      
        
          	
                  STANDARD
      FORM OF LOFT LEASE

                  The
      Real Estate Board of New York,
Inc.

                

        

      

       

      Agreement
of Lease, made as of this 14th day of March, 2002. between URBAN DEVELOPMENT
PARTNERS (61) LLC, having an address c/o Urban Management Partners LLC, The
Urban Center, 457 Madison Avenue, New York, New York 10022 party of the
first part, hereinafter referred to as OWNER, and/or LANDLORD, and AP ANTIQUES
CORP., a corporation, having an address at 306 East 61st Street, New York, New
York, party of the second part, hereinafter referred to as TENANT,

       

      Witnesseth:           Owner
hereby leases to Tenant and Tenant hereby hires from Owner the northeasterly and
southeasterly portions of the fourth (4th) floor as more particularly set forth
on the floor plans attached hereto as Exhibits A and B, respectively
(collectively, the “premises” or the “demised premises”), in the building known
as 306 East 61st Street (the “Building”) in the Borough of Manhattan, City of
New York, for the term of nine (9) years and five (5) months (or until such term
shall sooner cease and expire as hereinafter provided) to commence on the 1st
day of June two thousand two (2002), and to end on the 31st day of October two
thousand and eleven (2011), and both dates inclusive, at an annual rental rate
of

       

      See
Paragraph 41, below,

       

      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 day of each month
during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first         monthly
installment(s) on the execution hereof (unless this lease be a
renewal).

       

      In the
event that, at the commencement of the term of this lease, or thereafter, Tenant
shall be in default in the payment of rent to Owner pursuant to the terms of
another lease with Owner or with Owner’s predecessor in interest, Owner may at
Owner’s option and without notice to Tenant add the amount of such arrears to
any monthly installment of rent payable hereunder and the same shall be payable
to Owner as additional rent.

       

      The
parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:

       

      
        	
                Rent:

              	
                1.      Tenant
      shall pay the rent as above and as hereinafter
provided.

              
	 
      	 
      
	
                Occupancy:

              	
                2.      Tenant
      shall use and occupy demised premises for the sale (primarily at
      wholesale) of furniture and accessories and associated offices, provided
      such use is in accordance with the certificate of occupancy for the
      building, if any, and for no other
purpose.

              

      

      

      Alterations:

      

      3.     
 Tenant shall make no changes in or to the demised premises of any nature
without Owner’s prior written consent.  Subject to the prior written
consent of Owner, and to the provisions of this article, Tenant, at Tenant’s
expense, may make alterations, installations, additions or improvements which
are nonstructural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first approved in each instance by
Owner.  Tenant shall, at its expense, before making any alterations,
additions, installations or improvements obtain all permits, approval and
certificates required by any governmental or quasi-governmental bodies and (upon
completion) certificates of final approval thereof and shall deliver promptly
duplicates of all such permits, approvals and certificates to
Owner.  Tenant agrees to carry and will cause Tenant’s contractors and
sub-contractors to carry such workman’s com-pensation, general liability,
personal and property damage insurance as Owner may require.  If any
mechanic’s lien is filed against’ the demised premises, or the building of which
the same forms a part, for work claimed to have been done for, or materials
furnished to, Tenant, whether or not done pursuant to this article, the same
shall be discharged by Tenant within thirty days thereafter, at Tenant’s
expense, by payment or filing the bond required by law or
otherwise.  All fixtures and all paneling, partitions, railings and
like installations, installed in the premises at any tune, either by Tenant or
by Owner on Tenant’s behalf, shall, upon installation, become the property of
Owner and shall remain upon and be surrendered with the demised premises unless
Owner, by notice to Tenant no later than twenty days prior to the date fixed as
the termination of this lease, elects to relinquish Owner’s right thereto and to
have them removed by Tenant, in which event the same shall be removed from the
demised premises by Tenant prior to the expiration of the lease, st Tenant’s
expense.  Nothing in this Article shall be construed to give Owner
title to or to prevent Tenant’s removal of trade fixtures, moveable office
furniture and equipment, but upon-removal of any such from the premises or upon
removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense, repair and restore the premises to the condition
existing prior to installation and repair any damage to the demised premises or
the building due to such removal.  All property permitted or required
to be removed by Tenant at the end of the term remaining in the premises after
Tenant’s removal shall be deemed abandoned and may, at the election of Owner,
either be retained as Owner,s property or removed from the premises by Owner, at
Tenant’a expense.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Repairs:

      

      4.      
Owner shall maintain and repair the exterior of and the public portions of the
building.  Tenant shall, throughout the term of this lease, take good
care of the demised premises including the bathrooms and lavatory facilities (if
the demised premises encompass the entire floor of the building) and the windows
and window frames and, the fixtures and appurtenances therein and at Tenant’s
sole cost and expense promptly make all repairs thereto and to the building,
whether structural or non-structural in nature, caused by or resulting from the
carelessness, omission, neglect or improper conduct of Tenant, Tenant’s
servants, employees, invitees, or licensees, and whether or not arising from
such Tenant conduct or omission, when required by other provisions of this
lease, including Article 6. Tenant shall also repair all damage to the building
and the demised premises caused by the moving of Tenant’s fixtures, furniture or
equipment.  All the aforesaid repairs shall be of quality or class
equal to the original work or construction.  If Tenant fails, after
ten days notice, to proceed with due diligence to make repairs required to be
made by Tenant, the same may be made by the Owner at the expense of Tenant, and
the expenses thereof incurred by Owner shall be collectible, as additional rent,
after rendition of a bill or statement therefor. If the demised premises be or
become infested with vermin.  Tenant shall, at its expense, cause the
same to be exterminated.  Tenant shall give Owner prompt notice of any
defective condition in any plumbing, heating system or electrical lines located
in the demised premises and following such notice, Owner shall remedy the
condition with due diligence, but at the expense of Tenant, if repairs are
necessitated by damage or injury attributable to Tenant, Tenant’s servants,
agents, employees, invitees or licensees as aforesaid.  Except as
specifically provided in Article 9 or elsewhere in this lease, there shall be no
allowance to the Tenant for a diminution of rental value and no liability on the
part of Owner by reason of inconvenience, annoyance or injury to business
arising from Owner, Tenant or others making or failing to make any repairs,
alterations, additions or improvements in or to any portion of the building or
the demised premises or in and to the fixtures, appurtenances or equipment
thereof.  it is specifically agreed that Tenant shall not
be  entitled to any set off or reduction of rent by reason of any
failure of Owner to comply with the covenants of this or any other article of
this lease.  Tenant agrees that Tenant’s sole remedy at law in such
instance will be by way of any action for damages for breach of
contract.  The provisions of this Article 4 with respect to the making
of repairs shall not apply in the case of fire or other casualty with regard to
which Article 9 hereof shall apply.

       

      Window
Cleaning:

      

      5.      
Tenant will not clean nor require, permit, suffer or allow any window in the
demised premises to be cleaned from the outside in violation of Section 202 of
the New York State Labor Law or any other applicable law or of the Rules of the
Board of Standards and Appeals, or of any other Board or body having or
asserting jurisdiction.

       

      Requirements
of Law, Fire Insurance:

      

      6.      
Prior to the commencement of the lease term, if Tenant is then in possession,
and at all times thereafter Tenant shall, at Tenant’s sole cost and expense,
promptly comply with all present and future laws, orders and regulations of all
state, federal, municipal and local governments, departments, commissions and
boards and any direction of any public officer pursuant to law, and all orders,
rules and regulations of the New York Board of Fire Underwriters, or the
Insurance Services Office, or any similar body which shall impose any violation,
order or duty upon Owner or Tenant with respect to the demised premises, whether
or not arising out of Tenant’s use or manner of use thereof, or, with respect to
the building, if arising out of Tenant’s use or manner of use of the demised
premises of the building (including the use permitted under the
lease).  Except as provided in Article 30 hereof, nothing herein shall
require Tenant to make structural repairs or alterations
unless.  Tenant has, by its manner of use of the demised premises or
method of operation therein, violated any such laws, ordinances, orders, rules,
regulations or requirements with respect thereto.  Tenant shall not do
or permit any act or thing to be done in or to the demised premises which is
contrary to law, or which will invalidate or be in conflict with public
liability, fire or other policies of insurance at any time carried by or for the
benefit of Owner.  Tenant shall not keep anything in the demised
premises except as now or hereafter permitted by the Fire Department, Board of
Fire Underwriters, Fire Insurance Rating Organization and other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the commencement of
Tenant’s occupancy.  If by reason of failure to comply with the
foregoing the fire insurance rate shall, at the beginning of this lease or at
any time thereafter, be higher than it otherwise would be, then Tenant shall
reimburse Owner; as additional rent hereunder, for that portion of all fire
insurance premiums thereafter paid by Owner which shall have been charged
because of such failure by Tenant.  In any action or proceeding
wherein Owner and Tenant are parties, a schedule or “make-up” or rate for the
building or demised premises issued by a body making fire insurance rates
applicable to said premises shall be conclusive evidence of the facts therein
stated and of the several items and charges in the fire insurance rates then
applicable to said premises.  Tenant shall not place a load upon any
floor of the demised premises exceeding the floor load per square foot area
which it was designed to carry and which is allowed by law. Owner reserves the
right to prescribe the weight and position of all safes, business machines and
mechanical equipment.  Such installations shall be placed and
maintained by Tenant, at Tenant’s expense, in settings sufficient, in Owner’s
judgement, to absorb and prevent vibration, noise and annoyance.

       

      Subordination:

      

      7.      
This lease is subject and subordinate to all ground or underlying leases and to
all mortgages which may now or hereafter affect such leases or the real property
of which demised premises are a part and to all renewals, modifications,
consolidations, replacements and extensions of any such underlying leases and
mortgages.  This clause shall be self-operative and no further
instrument or subordination shall be required by any ground or underlying lessor
or by any mortgagee, affecting any lease or the real property of which the
demised premises are a part.  In confirmation of such subordination,
Tenant shall from time to time execute promptly any certificate that Owner may
request.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Tenant’s
Liability Insurance Property Loss, Damage, Indemnity:

      

      8.    
  Owner or its agents shall not be liable for any damage to property
of Tenant or of others entrusted to employees of the building, nor for loss of
or damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the negligence of Owner, its agents, servants or
employees; Owner or its agents shall not be liable for any damage caused by
other tenants or persons in, upon or about said building or caused by operations
in connection of any private, public or quasi public work.  If at any
time any windows of the demised premises are temporarily closed, darkened or
bricked up (or permanently closed; darkened or bricked up, if required by law)
for any reason whatsoever including, but not limited to Owner’s own acts, Owner
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 rent
nor shall the same release Tenant from its obligations hereunder nor constitute
an eviction.  Tenant shall indemnify and save harmless Owner against
and from all liabilities, obligations, damages, penalties, claims, costs and
expenses for which Owner shall not be reimbursed by insurance, including
reasonable attorney’s fees, paid, suffered or incurred as a result of any breach
by Tenant, Tenant’s agents, contractors, employees, invitees, or licensees, of
any covenant or condition of this lease, or the carelessness, negligence or
improper conduct of the Tenant, Tenant’s agents, contractors, employees,
invitees or licensees.  Tenant’s liability under this lease extends to
the acts and omissions of any sub-tenant, and any agent, contractor, employee,
invitee or licensee of any sub-tenant.  In case any action or
proceeding is brought against Owner by reason of any such claim, Tenant, upon
written notice from Owner, will, at Tenant’s expense, resist or defend such
action or proceeding by counsel approved by Owner in writing, such approval not
to be unreasonably withheld.

       

      Destruction
Fire and Other Casualty:

      

      9.     
 (a) If the demised premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give immediate notice thereof to Owner and this
lease shall continue in full force and effect except as hereinafter set
forth.  (b) If the demised premises are partially damaged or rendered
partially unusable by fire or other casualty, the damages thereto shall be
repaired by and at the expense of Owner and the rent and.  other items
of additional rent, until such repair shall be substantially completed, shall be
apportioned from the day following the casualty according to the part of the
premises which is usable.  (c) If the demised premises are totally
damaged or rendered wholly unusable by fire or other casualty, then the rent and
other items of additional rent as hereinafter expressly provided shall be
proportionately paid up to the time of the casualty and thenceforth shall cease
until the date when the premises shall have been repaired and restored by Owner
(or sooner reoccupied in part by Tenant then rent shall be apportioned as
provided in subsection (b) above), subject to Owner’s right to elect not to
restore the same as hereinafter provided.  (d) If the demised premises
are rendered wholly unusable or (whether or not the demised premises are damaged
in whole or in part) if the building shall be so damaged that Owner shall decide
to demolish it or to rebuild it, then, in any of such events, Owner may elect to
terminate this lease by written notice to Tenant, given within 90 days after
such fire or casualty, or 30 days after adjustment of the insurance claim for
such fire or casualty, whichever is sooner, specifying a date for the expiration
of the lease, which date shall not be more than 60 days after the giving of such
notice, and upon the date specified in such notice the term of this lease shall
expire as fully and completely as if such date were the date set forth above for
the temination of this lease and Tenant shall forthwith quit, surrender and
vacate the premises without prejudice however, to Owner’s rights and remedies
against Tenant under the lease provisions in effect prior to such termination,
and any rent owing shall be paid up to such date and any payments of rent made
by Tenant which were on account of any period subsequent to such date shall be
returned to Tenant.  Unless Owner shall serve a termination notice as
provided for herein, Owner shall make the repairs and restorations under the
conditions of (b) and (c) hereof, with all reasonable expedition, subject to
delays due to adjustment of insurance claims, labor troubles and causes beyond
Owner’s control.  After any such casualty.  Tenant shall
cooperate with Owner’s restoration by removing from the premises as promptly as
reasonably possible, all of Tenant’s salvageable inventory and movable
equipment, furniture, and other property. Tenant’s liability for rent shall
resume five (5) days after written notice from Owner that the premises are
substantially ready for Tenant’s occupancy, (e) Nothing contained hereinabove
shall relieve Tenant from liability that may exist as a result of damage from
fire or other casualty.  Notwithstanding the foregoing, including
Owner’s obligation to restore under subparagraph (b) above, each party
shall look first to any insurance in its favor before making any claim against
the other party for recovery for loss or damage resulting from fire or other
casualty, and to the extent that such insurance is in force and collectible and
to the extent permitted by law.  Owner and Tenant each hereby releases
and waives all right of recovery with respect to subparagraphs (b), (d) and
(e) above, against the other or any one claiming through or under each of them
by way of subrogation or otherwise.  The release and waiver herein
referred to shall be deemed to include any loss or damage to the demised
premises and/or to any personal property, equipment, trade fixtures, goods and
merchandise located therein.  The foregoing release and waiver shall
be in force only if both releasors’ insurance policies contain a clause
providing that such a release or waiver shall not invalidate the
insurance.  If, and to the extent, that such waiver can be obtained
only by the payment of additional premiums, then the party benefitting from the
waiver shall pay such premium within ten days after written demand or shall be
deemed to have agreed that the party obtaining insurance coverage shall be free
of any further obligation under the provisions hereof with respect to waiver of
subrogation.  Tenant acknowledges that Owner will not carry insurance
on Tenant’s furniture and or furnishings or any fixtures or equipment,
improvements, or appurtenances removable by Tenant and agrees that Owner will
not be obligated to repair any damage thereto or replace the
same.  (f) Tenant hereby waives the provisions of Section 227 of the
Real Property Law and agrees that the provisions of this article shall govern
and control in lieu thereof.

       

      Eminent
Domain:

      

      10.     If
the whole or any part of the demised premises shall be acquired or condemned by
Eminent Domain for any public or quasi public use or purpose, then and in that
event, the term of this lease shall cease and terminate from the date of title
vesting in such proceeding and Tenant shall have no claim for the value of any
unexpired term of said lease.  Tenant shall have the right to make an
independent claim to the condemning authority for the value of Tenant’s moving
expenses and personal property, trade fixtures and equipment, provided Tenant is
entitled pursuant to the terms of the lease to remove such property, bade
fixtures and equipment at the end of the term and provided further such claim
does not reduce Owner’s award.

       

      Assignment
Mortgage, Etc.:

      

      11.     Tenant,
for itself, its heirs, distributees, executors, administrators, legal
representatives, successors and assigns, expressly covenants that it shall not
assign, mortgage or encumber this agreement, nor underlet, or suffer or permit
the demised premises or any part thereof to be used by others, without the prior
written consent of Owner in each instance.  Transfer of the majority
of the stock of a corporate Tenant or the majority partnership interest of a
partnership Tenant shall be deemed an assignment.  If this lease be
assigned, or if the demised premises or any part thereof be underlet or occupied
by anybody other than Tenant, Owner may, after default by Tenant, collect rent
from the assignee, under-tenant or occupant, and apply the net amount collected
to the rent herein reserved, but no such assignment, underletting, occupancy or
collection shall be deemed a waiver of this covenant, or the acceptance of the
assignee, undertenant or occupant as tenant, of a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained.  The consent by Owner to an assignment or underletting
shall not in any wise be construed to relieve Tenant from obtaining the express
consent in writing of Owner to any further assignment or
underletting.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Electric
Current:

      

      

      12.     Rates
and conditions in respect to submetering or rent inclusion, as the case may be,
to be added in RIDER attached hereto.  Tenant covenants and agrees
that at all times its use of electric current shall not exceed the capacity of
existing feeders to the building or the risers or wiring installation and Tenant
may not use any electrical equipment which, in Owner’s opinion, reasonably
exercised, will overload such installations or interfere with the use thereof by
other tenants of the building.  The change at any time of the
character of electric service shall in no wise make Owner liable or responsible
to Tenant, for any loss, damages or expenses which Tenant may
sustain.

       

      Access
to Premises:

      

      13.     Owner
or Owner’s agents shall have the right (but shall not be obligated) to enter the
demised premises in any emergency at any time, and, at other reasonable times,
to examine the same and to make such repairs, replacements and improvements as
Owner may deem necessary and reasonably desirable to any portion of the
building, or which Owner may elect to perform in the premises after Tenant’s
failure to make repairs or perform any work which Tenant is obligated to perform
under this lease, or for the purpose of complying with laws, regulations and
other directions of governmental authorities.  Tenant shall permit
Owner to use and maintain and replace pipes and conduits in and through the
demised premises and to erect new pipes and conduits therein provided, wherever
possible, they are within walls or otherwise concealed.  Owner may,
during the progress of any work in the demised premises, take all necessary
materials and equipment into said premises without the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to any damages by reason of loss or interruption of
business or otherwise.  Throughout the term hereof Owner shall have
the right to enter the demised premises at reasonable hours for the purpose of
showing the same to prospective purchasers or mortgagees of the building, and
during the last six months of the term for the purpose of showing the same to
prospective tenants and may, during said six months period, place upon the
demised premises the usual notices “To Let”‘ and “For Sale” which notices Tenant
shall permit to remain thereon without molestation.  If Tenant is not
present to open and permit an entry into the demised premises, Owner or Owner’s
agents may enter the same whenever such entry may be necessary or permissible by
master key or forcibly and provided reasonable care is exercised to safeguard
Tenant’s property, such entry shall not render Owner or its agents liable
therefor, nor in any event shall the obligations of Tenant hereunder be
affected.  If during the last month of the term Tenant shall have
removed all or substantially all of Tenant’s property therefrom, Owner may
immediately enter, alter, renovate or redecorate the demised premises without
limitation or abatement of rent, or incurring liability to Tenant for any
compensation and such act shall have no effect on this lease or Tenant’s
obligation hereunder.

       

      Vault,
Vault Space, Area:

      

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

       

      Occupancy:

      

      15.     Tenant
will not at any time use or occupy the demised premises in violation of the
certificate of occupancy issued for the building of which the demised premises
are a part. Tenant has inspected the premises and accepts them as is, subject to
the riders annexed hereto with respect to Owner’s work, if any.  In
any event, Owner makes no representation as to the condition of the premises and
Tenant agrees to accept the same subject to violations, whether or not of
record.  If any governmental license or permit shall be required for
the proper and lawful conduct of Tenant’s business, Tenant shall be responsible
for and shall procure and maintain such license or permit.

       

      Bankruptcy:

      

      16.     (a)
Anything elsewhere in this lease to the contrary notwithstanding, this lease may
be cancelled by Owner by sending of a written notice to Tenant within a
reasonable time after the happening of any one or more of the following events:
(1) the commencement of a case in bankruptcy or under the laws of any state
naming Tenant as the debtor; or (2) the making by Tenant of an assignment or any
other arrangement for the benefit of creditors under any state statute. Neither
Tenant nor any person claiming through or under Tenant, or by reason of any
statute or order of court, shall thereafter be entitled to possession of the
premises demised but shall forthwith quit and surrender the
premises.  If this lease shall be assigned in accordance with its
terms, the provisions of this Article 16 shall be applicable only to the party
then owning Tenant’s interest in this lease.

       

       
(b) It is stipulated and agreed that in the event of the termination of this
lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any other
provisions of this lease to the contrary, be entitled to recover from Tenant as
and for liquidated damages an amount equal to the difference between the rental
reserved hereunder for the unexpired portion of the term demised and the fair
and reasonable rental value of the demised premises for the same
period.  In the computation of such damages the difference between any
installment of rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum.  If such
premises or any part thereof be relet by the Owner for the unexpired term of
said lease, or any part thereof, before presentation of proof of such liquidated
damages to any court, commission or tribunal, the amount of rent reserved upon
such reletting shall be deemed to be the fair and reasonable rental value for
the part or the whole of the premises so re-let during the term of the
re-letting.  Nothing herein contained shall limit or prejudice the
right of the Owner to prove for and obtain as liquidated damages by reason of
such termination, an amount equal to the maximum allowed by any statute or rule
of law in effect at the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater, equal to, or
less than the amount of the difference referred to above.

       

      
        
          

        
 Rider to be added if necessary

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Default:

      

      17.     (1)
If Tenant defaults in fulfilling any of the covenants of this lease other than
the covenants for the payment of rent or additional rent; or if the demised
premises becomes vacant or deserted “or if this lease be rejected under §235 of
Title 11 of the U.S. Code (bankruptcy code);” or if any execution or attachment
shall be issued against Tenant or any of Tenant’s property whereupon the demised
premises shall be taken or occupied by someone other than Tenant; or if Tenant
shall make default with respect to any other lease between Owner and Tenant; or
if Tenant shall have failed, after five (5) days written notice, to redeposit
with Owner any portion of the security deposited hereunder which Owner has
applied to the payment of any rent and additional rent due and payable hereunder
or failed to move into or take possession of the premises within thirty (30)
days after the commencement of the term of this lease, of which fact Owner shall
be the sole judge; then in any one or more of such events, upon Owner serving a
written fifteen (15) days’ notice upon Tenant specifying the nature of said
default and upon the expiration of said fifteen (15) days, if Tenant shall have
failed to comply with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be completely cured or
remedied within said fifteen (15) day period, and if Tenant shall not have
diligently commenced during such default within such fifteen (15) day period,
and shall not thereafter with reasonable diligence and in good faith, proceed to
remedy or cure such default, then Owner may serve a written five (5) days’ as in
notice of cancellation of this lease upon Tenant, and upon the expiration of
said five (5) days this lease and the term thereunder shall end and expire as
fully and completely as if the expiration of such five (5) day period were the
day herein definitely fixed for the end and expiration of this lease and the
term thereof and Tenant shall then quit and surrender the demised premises to
Owner but Tenant shall remain liable as hereinafter provided.

       

       
(2) If the notice provided for in (1) hereof shall have been given, and the term
shall expire as aforesaid; or if Tenant shall make default in the payment of the
rent reserved herein or any item of additional rent herein mentioned or any part
of either or in making any other payment herein required; then and in any of
such events Owner may without notice, re-enter the demised premises either by
force or otherwise, and dispossess Tenant by summary proceedings or otherwise,
and the legal representative of Tenant or other occupant of demised premises and
remove their effects and hold the premises as if this lease had not been made,
and Tenant hereby waives the service of notice of intention to re-enter or to
institute legal proceedings to that end.  If Tenant shall make default
hereunder prior to the date fixed as the commencement of any renewal or
extension of this lease, Owner may cancel and terminate such renewal or
extension agreement by written notice.

       

      Remedies
of Owner and Waiver of Redemption:

      

      18.     In
case of any such default, re-entry, expiration and/or dispossess by summary
proceedings or otherwise, (a) the rent, and additional rent, shall become due
thereupon and be paid up to the time of such re-entry, dispossess and/or
expiration, (b) Owner may re-let the premises or any part or parts thereof,
either in the name of Owner or otherwise, for a term or terms, which may at
Owner’s option be less than or exceed the period which would otherwise have
constituted the balance of the term of this lease and may grant concessions or
free rent or charge a higher rental than that in this lease, (c) Tenant or the
legal representatives of Tenant shall also pay Owner as liquidated damages for
the failure of Tenant to observe and perform said Tenant’s covenants herein
contained, any deficiency between the rent hereby reserved and or covenanted to
be paid and the net amount, if any, of the rents collected on account of the
subsequent lease or leases of the demised premises for each month of the period
which would otherwise have constituted the balance of the term of this lease.
The failure of Owner to re-let the premises or any part or parts thereof shall
not release or affect Tenant’s liability for damages.  In computing
such liquidated damages there shall be added to the said deficiency such
expenses as Owner may incur in connection with re-letting, such as legal
expenses, reasonable attorneys’ fees, brokerage, advertising and for keeping the
demised premises in good order or for preparing the same for
re-letting.  Any such liquidated damages shall be paid in monthly
installments by Tenant on the rent day specified in this lease and any suit
brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Owner to collect the deficiency for any
subsequent month by a similar proceeding.  Owner, in putting the
demised premises in good order or preparing the same for re-rental may, at
Owner’s option, make such alterations, repairs, replacements, and/or decorations
in the demised premises as Owner, in Owner’s sole judgment, considers advisable
and necessary for the purpose of re-letting the demised premises, and the making
of such alterations, repairs, replacements, and/or decorations shall not operate
or be construed to release Tenant from liability hereunder as
aforesaid.  Owner shall in no event be liable in any way whatsoever
for failure to re-let the demised premises, or in the event that the demised
premises are re-let, for failure to collect the rent thereof under such
re-letting, and in no event shall Tenant be entitled to receive any excess, if
any, of such net rents collected over the sums payable by Tenant to Owner
hereunder.  In the event of a breach or threatened breach by Tenant of
any of the covenants or provisions hereof, Owner shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity as if
re-entry, summary proceedings and other remedies were not herein provided for.
Mention in this lease of any particular remedy, shall not preclude Owner from
any other remedy, in law or in equity.  Tenant hereby expressly waives
any and all rights of redemption granted by or under any present or future
laws.

       

      Fees
and Expenses:

      

      19.     If
Tenant shall default in the observance or performance of any term or covenant on
Tenant’s part to be observed or performed under or by virtue of any of the terms
or provisions in any article of this lease, after notice if required and upon
expiration of any applicable grace period if any, (except in an emergency),
then, unless otherwise provided elsewhere in this lease, Owner may immediately
or at any time thereafter and without notice perform the obligation of Tenant
thereunder.  If Owner, in connection with the foregoing or in
connection with any default by Tenant in the covenant to pay rent hereunder,
makes any expenditures or incurs any obligations for the payment of money,
including but not limited to reasonable attorney’s fees, in instituting,
prosecuting or defending any action or proceedings, and prevails in any such
action or proceeding, then Tenant will reimburse Owner for such sums so paid or
obligations incurred with interest and costs.  The foregoing expenses
incurred by reason of Tenant’s default shall be deemed to be additional rent
hereunder and shall be paid by Tenant to Owner within ten (10) days of rendition
of any bill or statement to Tenant therefor.  If Tenant’s lease term
shall have expired at the time of making of such expenditures or incurring of
such obligations, such sums shall be recoverable by Owner as
damages.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Building
Alterations and Management:

      

      20.     Owner
shall have the right at any time without the same constituting an eviction and
without incurring liability to Tenant therefor to change the arrangement and or
location of public entrances, passageways, doors, doorways, corridors,
elevators, stairs, toilets or other public parts of the building and to change
the name, number or designation by which the building may be
known.  There shall be no allowance to Tenant for diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner or other Tenant making any
repairs in the building or any such alterations, additions and improvements.
Furthermore, Tenant shall not have any claim against Owner by reason of Owner’s
imposition of any controls of the manner of access to the building by Tenant’s
social or business visitors as the Owner may deem necessary for the security of
the building and its occupants.

       

      No
Representations by Owner:

      

      21.     Neither
Owner nor Owner’s agents have made any representations or promises with respect
to the physical condition of the building, the land upon which it is erected or
the demised premises, the rents, leases, expenses of operation or any other
matter or thing affecting or related to the demised premises or the building
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 in
the provisions of this lease.  Tenant has inspected the building and
the demised premises and is thoroughly acquainted with their condition and
agrees to take the same “as is” on the date possession is tendered and
acknowledges that the taking of possession of the demised premises by Tenant
shall be conclusive evidence that the said premises and the building of which
the same form a part were in good and satisfactory condition at the time such
possession was so taken, except as to latent defects.  All
understandings and agreements heretofore made between the parties hereto are
merged in this contract, which alone fully and completely expresses the
agreement between Owner and Tenant and any executory agreement hereafter made
shall be ineffective to change, modify, discharge or effect an abandonment of it
in whole or in part, unless such executory agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.

       

      End
of Term:

      

      22.     Upon
the expiration or other termination of the term of this lease, Tenant shall quit
and surrender to Owner the demised premises, broom clean, in good order and
condition, ordinary wear and damages which Tenant is not required to repair as
provided elsewhere in this lease excepted, and Tenant shall remove all its
property from the demised premises.  Tenant’s obligation to observe or
perform this covenant shall survive the expiration or other termination of this
lease.  If the last day of the term of this Lease or any renewal
thereof, falls on Sunday, this lease shall expire at noon on the preceding
Saturday unless it be a legal holiday in which case it shall expire at noon on
the preceding business day.

       

      Quiet
Enjoyment:

      

      23.     Owner
covenants and agrees with Tenant that upon Tenant paying the rent and additional
rent and observing and performing all the terms, covenants and conditions, on
Tenant’s part to be observed and performed, Tenant may peaceably and quietly
enjoy the premises hereby demised, subject, nevertheless, to the terms and
conditions of this lease including, but not limited to, Article 34 hereof and to
the ground leases, underlying leases and mortgages hereinbefore
mentioned.

       

      Failure
To give Possession:

      

      24.     If
Owner is unable to give possession of the demised premises* on the date of the
commencement of the term hereof, because of the holding-over or retention of
possession of any tenant, undertenant or occupants or if the demised premises
are located in a building being constructed, because such building has not been
sufficiently completed to make the premises ready for occupancy or because of
the fact that a certificate of occupancy has not been procured or if Owner has
not completed any work required to be performed by Owner, or for any other
reason***; Owner shall not be subject to any liability for failure to give
possession on said date and the validity of the lease shall not be impaired
under such circumstances, nor shall the same be construed in any wise to extend
the term of this lease; but the rent payable hereunder shall be abated (provided
Tenant is not responsible for Owner’s inability to obtain possession or complete
any work required)* until after Owner shall have given Tenant** able to deliver
possession in the condition required by this lease. If permission is given to
Tenant to enter into the possession of the demised premises or to occupy
premises other than the demised premises prior to the date specified as the
commencement of the term of this lease, Tenant covenants and agrees that such
possession and/or occupancy shall be deemed to be under all the terms,
covenants, conditions and provisions of this lease, except the obligation to pay
the fixed annual rent set forth in page one of this lease.  The
provisions of this article are intended to constitute an express provision to
the contrary” within the meaning of Section 223-a of the New York Real Property
Law.

       

      No
Waiver:

      

      25.     The
failure of Owner to seek redress for violation of, or to insist upon the strict
performance of any covenant or condition of this lease or of any of the Rules or
Regulations, set forth or hereafter adopted by Owner, shall not prevent a
subsequent act which would have originally constituted a violation from having
all the force and effect of an original violation.  The receipt by
Owner of rent with knowledge of the breach of any covenant of this lease shall
not be deemed a waiver of such breach and no provision of this lease shall be
deemed to have been waived by Owner unless such waiver be in writing signed by
Owner.  No payment by Tenant or receipt by Owner of a lesser amount
than the monthly rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
of any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner’s right to recover the balance of such rent or pursue any
other remedy in this lease provided.  All checks tendered to Owner as
and for the rent of the demised premises shall be deemed payments for the
account of Tenant.  Acceptance by Owner of rent from anyone other than
Tenant shall not be deemed to operate as an attornment to Owner by the payor of
such rent or as a consent by Owner to an assignment or subletting by Tenant of
the demised premises to such payor, or as a modification of the provisions of
this lease.  No act or thing done by Owner or Owner’s agents during
the term hereby demised shall be deemed an acceptance of a surrender of said
premises and no agreement to accept such surrender shall be valid unless in
writing signed by Owner.  No employee of Owner or Owner’s agent shall
have any power to accept the keys of said premises prior to the termination of
the lease and the delivery of keys to any such agent or employee shall not
operate as a termination of the lease or a surrender of the
premises.

       

      * the
northeasterly portion of the demised premises shown on Exhibit A attached hereto
(the “A Portion”)

      ** the
items set forth in subparas.85(i)-(vi) shall be partially abated as set forth
therein.

      *** other
than Owner’s willful failure to deliver possession.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Waiver
of Trial by Jury:

      

      26.     It
is mutually agreed by and between Owner and Tenant that 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 Owner and Tenant,
Tenant’s use of or occupancy of said premises, and any emergency statutory or
any other statutory remedy.  It is further mutually agreed that in the
event Owner commences any proceeding or action for possession including a
summary proceeding for possession of the premises, Tenant will not interpose any
counterclaim of whatever nature or description in any such proceeding including
a counterclaim under Article 4 except for statutory mandatory
counterclaims.

       

      Inability
to Perform:

      

      27.     This
Lease and the obligation of Tenant to pay rent hereunder and perform all of the
other covenants and agreements hereunder on part of Tenant to be performed shall
in no wise be affected, impaired or excused because Owner is unable to fulfill
any of its obligations under this lease or to supply or is delayed in supplying
any service expressly or impliedly to be supplied or is unable to make, or is
delayed in making any repair, additions, alterations or decorations or is unable
to supply or is delayed in supplying any equipment, fixtures or other materials
if Owner is prevented or delayed from doing so by reason of strike or labor
troubles or any cause whatsoever beyond Owner’s sole control including, but not
limited to, government preemption or restrictions or by reason of any rule,
order or regulation of any department or subdivision thereof of any government
agency or by reason of the conditions which have been or are affected either
directly or indirectly, by war or other emergency.

       

      Bills
and Notices:

      

      28.     Except
as otherwise in this lease provided, a bill statement, notice or communication
which Owner  may desire or be required to give to Tenant, shall be
deemed sufficiently given or rendered if, in writing, delivered to Tenant
personally or sent by registered or certified mail addressed to Tenant at the
building of which the demised premises form a part or at the last known
residence address or business address of Tenant or left at any of the aforesaid
premises addressed to Tenant, and the time of the rendition of such bill or
statement and of the giving of such notice or communication shall be deemed to
be the time when the same is delivered to Tenant, mailed, or left at the
premises as herein provided.  Any notice by Tenant to Owner must be
served by registered or certified mail addressed to Owner at the address first
hereinabove given or at such other address as Owner shall designate by written
notice.

       

      Water
Charges:

      

      29.     If
Tenant requires, uses or consumes water for any purpose in addition to ordinary
lavatory purposes (of which fact Tenant constitutes Owner to be the sole judge),
Owner may install a water meter and thereby measure Tenant’s water consumption
for all purposes.  Tenant shall pay Owner for the cost of the meter
and the cost of the installation, thereof and throughout the duration of
Tenant’s occupancy Tenant shall keep said meter and installation equipment in
good working order and repair at Tenant’s own cost and expense in default of
which Owner may cause such meter and equipment to be replaced or repaired and
collect the cost thereof from Tenant, as additional rent.  Tenant
agrees to pay for water consumed, as shown on said meter as and when bills are
rendered, and on default in making such payment Owner may pay such charges and
collect the same from Tenant, as additional rent.  Tenant covenants
and agrees to pay, as additional rent, the sewer rent, charge or any other tax,
rent, levy or charge which now or hereafter is assessed, imposed or a lien upon
the demised premises or the realty of which they are part pursuant to law, order
or regulation made or issued in connection with the use, consumption,
maintenance or supply of water, water system or sewage or sewage connection or
system.  If the building or the demised premises or any part thereof
is supplied with water through a meter through which water is also supplied to
other premises Tenant shall pay to Owner, as additional rent,  on the first day of each month, 5.5% ($
       ) of the total meter charges as
Tenant’s portion.  Independently of and in addition to any of the
remedies reserved to Owner hereinabove or elsewhere in this lease, Owner may sue
for and collect any monies to be paid by Tenant or paid by Owner for any of the
reasons or purposes hereinabove set forth.

       

      Sprinklers:

      

      30.     Anything
elsewhere in this lease to the contrary notwithstanding, if the New York Board
of Fire Underwriters or the New York Fire Insurance Exchange or any bureau,
department or official of the federal, state or city government recommend or
require the installation of a sprinkler system or that any changes,
modification, alterations, or additional sprinkler heads or other equipment be
made or supplied in an existing sprinkler system by reason of Tenant’s business,
or the location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reason, or if any such sprinkler system
installations, modifications, alterations, additional sprinkler heads or other
such equipment, become necessary to prevent the imposition of a penalty or
charge against the full allowance for a sprinkler system in the fire insurance
rate set by any said Exchange or by any fire insurance company, Tenant shall, at
Tenant’s expense, promptly make such sprinkler system installations, changes,
modifications, alterations, and supply additional sprinkler heads or other
equipment as required whether the work involved shall be structural or
non-structural in nature.    Tenant shall pay  to Owner as additional rent the sum of $5.5%, on the first day
of each month during the term of this lease, as Tenant’s portion of the contract
price for sprinkler supervisory service.

       

      Elevators,
Heat, Cleaning:

      

      31.     As
long as Tenant is not in default under any of the covenants of this lease beyond
the applicable grace period provided in this lease for the curing of such
defaults, Owner shall: (a) provide necessary passenger elevator facilities on
business days from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m. to 1 p.m.; (b)
if freight elevator service is provided, same shall be provided only on regular
business days Monday through Friday inclusive, and on those days only between
the hours of 9 a.m. and 12 noon and between 1 p.m. and 5 p.m.; (c) furnish heat,
water and other services supplied by Owner to the demised premises, when and as
required by law, on business days from 8 a.m. to 6 p.m. and on Saturdays from 8
a.m. to 1 p.m.; (d) clean the public halls and public portions of the building
which are used in common by all tenants. Tenant shall, at Tenant’s expense, keep
the demised premises, including the windows, clean and in order, to the
reasonable satisfaction of Owner, and for that purpose shall employ the person
or persons, or corporation approved by Owner. Tenant shall pay to Owner the cost
of removal of any of Tenant’s refuse and rubbish from the
building.  Bills for the same shall be rendered by Owner to Tenant at
such time as Owner may elect and shall be due and payable hereunder, and the
amount of such bills shall be deemed to be, and be paid as, additional
rent.  Tenant shall, however, have the option of independently
contracting for the removal of such rubbish and refuse in the event that Tenant
does not wish to have same done by employees of Owner.  Under such
circumstances, however, the removal of such refuse and rubbish by others shall
be subject to such rules and regulations as, in the judgment of Owner, are
necessary for the proper operation of the building.  Owner reserves
the right to stop service of the heating, elevator, plumbing and electric
systems, when necessary, by reason of accident, or emergency, or for repairs,
alterations, replacements or improvements, in the judgment of Owner desirable or
necessary to be made, until said repairs, alterations, replacements or
improvements shall have been completed.  If the building of which the
demised premises are a part supplies manually operated elevator service, Owner
may proceed diligently with alterations necessary to substitute automatic
control elevator service without in any way affecting the obligations of Tenant
hereunder.

       

      
        
          

        
 Rider to be filled in or deleted.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Security:

      

      

      32.     Tenant
has deposited with Owner the sum of $—0— as security for the faithful
performance and observance by Tenant of the terms, provisions and conditions of
this lease; it is agreed that in the event Tenant defaults in respect of any of
the terms, provisions and conditions of this lease, including, but not limited
to, the payment of rent and additional rent, Owner may use, apply or retain the
whole or any part of the security so deposited to the extent required for the
payment of any rent and additional rent or any other sum as to which Tenant is
in default or for any sum which Owner may expend or may be required to expend by
reason of Tenant’s default 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
accrued before or after summary proceedings or other re-entry by
Owner.  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 returned to Tenant after the date fixed as the end of the
Lease and after delivery of entire possession of the demised premises to
Owner.  In the event of a sale of the land and building or leasing of
the building, of which the demised premises form a part, Owner shall have the
right to transfer the security to the vendee or lessee and Owner shall thereupon
be released by Tenant from all liability for the return of such security; and
Tenant agrees to look to the new Owner solely for the return of said security,
and it is agreed that the provisions hereof shall apply to every transfer or
assignment made of the security to a new Owner.  Tenant further
covenants that it will not assign or encumber or attempt to assign or encumber
the monies deposited hereinas security and that neither Owner nor its successors
or assigns shall be bound by any such assignment, encumbrance, attempted
assignment or attempted encumbrance.

       

      Captions:

      

      33.     The
Captions are inserted only as a matter of convenience and for reference and in
no way define, limit or describe the scope of this lease nor the intent of any
provision thereof.

       

      Definitions:

      

      34.     The
term “Owner” as used in this lease means only the owner of the fee or of the
leasehold of the building, or the mortgagee in possession, for the time being of
the land and building (or the owner of a lease of the building or of the land
and building) of which the demised premises form a part, so that in the event of
any sale or sales of said land and building or of said lease, or in the event of
a lease of said building, or of the land and building, the said Owner shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Owner hereunder, and it shall be deemed and construed without further agreement
between the parties or their successors in interest, or between the parties and
the purchaser, at any such sale, or the said lessee of the building, or of the
land and building, that the purchaser or the lessee of the building has assumed
and agreed to carry out any and all covenants and obligations of Owner
hereunder.  The words “re-enter” and “re-entry” as used in this lease
are not restricted to their technical legal meaning.  The term “rent”
includes the annual rental rate whether so expressed or expressed in monthly
installments, and “additional rent.” “Additional rent” means all sums which
shall be due to Owner from Tenant under this lease, in addition to the
annual  rental rate.  The term “business days” as used in
this lease, shall exclude Saturdays, Sundays and all days observed by the State
or Federal Government as legal holidays and those designated as holidays by the
applicable building service union employees service contract or by the
applicable Operating Engineers contract with respect to HVAC
service.  Wherever it is expressly provided in this lease that consent
shall not be unreasonably withheld, such consent shall not be unreasonably
delayed.

       

      Adjacent
Excavation Shoring:

      

      35.     If
an excavation shall be made upon land adjacent to the demised premises, or shall
be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the demised premises
for the purpose of doing such work as said person shall deem necessary to
preserve the wall or the building of which demised premises form a part from
injury or damage and to support the same by proper foundations without any claim
for damages or indemnity against Owner, or diminution or abatement of
rent.

       

      Rules
and Regulations:

      

      36.     Tenant
and Tenant’s servants, employees, agents, visitors, and licensees shall observe
faithfully, and comply strictly with, the Rules and Regulations annexed hereto
and such other and further reasonable Rules and Regulations as Owner or Owner’s
agents may from time to time adopt.  Notice of any additional rules or
regulations shall be given in such manner as Owner may elect In case Tenant
disputes the reasonableness of any additional Rule or Regulation hereafter made
or adopted by Owner or Owner’s agents, the parties hereto agree to submit the
question of the reasonableness of such Rule or Regulation for decision to the
New York office of the American Arbitration Association, whose determination
shall be final and conclusive upon the parties hereto. The right to dispute the
reasonableness of any additional Rule or Regulation upon Tenant’s part shall be
deemed waived unless the same shall be asserted by service of a notice, in
writing upon Owner within fifteen (15) days after the giving of notice thereof.
Nothing in this lease contained shall be construed to impose upon Owner any duty
or obligation to enforce the Rules and Regulations or terms, covenants or
conditions in any other lease, as against any other tenant and Owner shall not
be liable to Tenant for violation of the same by any other tenant, its servants,
employees, agents, visitors or licensees.

       

      Glass:

      

      37.     Owner
shall replace, at the expense of the Tenant, any and all plate and other glass
damaged or broken from any cause whatsoever in and about the demised
premises.  Owner may insure, and keep insured, at Tenant’s expense,
all plate and other glass in the demised premises for and in the name of
Owner.  Bills for the premiums therefor shall be rendered by Owner to
Tenant at such times as Owner may elect, and shall be due from, and payable by,
Tenant when rendered, and the amount thereof shall be deemed to be, and be paid,
as additional rent.

       

      Estoppel
Certificate:

      

      38.     Tenant,
at any time, and from time to time, upon at least 10 days’ prior notice by
Owner, shall execute, acknowledge and deliver to Owner, and/or to any other
person, firm or corporation specified by Owner, a statement certifying that this
Lease is unmodified in full force and effect (or, if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications); stating the dates to which the rent and additional tent have
been paid, and stating whether or not there exists any default by Owner under
this Lease, and, if so, specifying each such default

       

      
        
          

        
 Rider to be filled in or deleted.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Directory
Board Listings:

      

      39.     If,
at the request of and as accommodation to Tenant, Owner shall place upon the
directory board in the lobby of the building, one or more names of persons other
than Tenant, such directory board listing shall not be construed as the consent
by Owner to an assignment or subletting by Tenant to such person or
persons.

       

      Successors
and Assigns:

      

      40.     The
covenants, conditions and agreements contained in this lease shall bind and
inure to the benefit of Owner and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this lease, their assigns. Tenant shall look only to Owner’s estate
and interest in the land and building for the satisfaction of Tenant’s remedies
for the collection of a judgement (or other judicial process) against Owner in
the event of any default by Owner hereunder, and no other property or assets of
such Owner (or any partner, member, officer or director thereof, disclosed or
undisclosed), shall be subject to levy, execution of other enforcement procedure
for the satisfaction of Tenant’s remedies under or with respect to this lease,
the relationship of Owner and Tenant hereunder, or Tenant’s use and occupancy of
the demised premises.

       

      See rider
annexed hereto and made a part hereof.

       

      In
Witness Whereof, Owner and Tenant have respectively signed and sealed this lease
as of the day and year first above written.

       

      
        
          
            	
                    Witness
      for Owner:

                  	 
      	
                    URBAN
      DEVELOPMENT PARTNERS (61), LLC

                  
	 
      	 
      	
                    Landlord

                  
	 
      	 
      	 
      	 
      
	
                         

                  	 
      	
                         

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	
                    By:  

                  	
                    /s/ Philip Carter

                  
	 
      	 
      	 
      	
                    Philip
      Carter, Managing Member

                  
	 
      	 
      	 
      	 
      
	
                    Witness
      for Tenant

                  	 
      	
                    AP
      ANTIOUES CORP.

                  
	 
      	 
      	 
      	 
      
	
                          

                  	 
      	
                    By:

                  	
                    /s/ Amy Perlin

                  
	 
      	 
      	
                    Name:  

                  	
                    Amy
      Perlin

                  
	 
      	 
      	
                    Title:

                  	
                    President.

                  

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      ACKNOWLEDGEMENTS

       

      
        	
                CORPORATE
      TENANT

              	 
      
	
                STATE
      OF NEW YORK,

              	
                ss.:

              
	
                County
      of

              	 
      

      

      

      On
this           day
of                 ,
19              ,
before me personally
came                                     
to me known, who being by me duly sworn, did depose and say that he
resides                
in that he is the
                             of
                     the
corporation described in and which executed the foregoing instrument, as TENANT;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the Board
of Directors of said corporation, and mat he signed his name thereto by like
order.

       

      ................................................

       

      
        	
                INDIVIDUAL,
      TENANT

              	 
      
	
                STATE
      OF NEW YORK,

              	
                ss.:

              
	
                County
      of

              	 
      

      

      

      On
this           day
of,                       ,
19           , before me
personally came to be known and known to me to be the individual described in
and who, as TENANT, executed the foregoing instrument and acknowledged to me
that he executed the same.

       

      ................................................

      

      
        
          	
                       IMPORTANT
      - PLEASE READ     

                

        

      

      

      RULES
AND REGULATIONS ATTACHED TO AND

      MADE
A PART OF THIS LEASE IN

      ACCORDANCE
WITH ARTICLE 36.

      

      1.      The
sidewalks, entrances, driveways, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or encumbered by any
Tenant or used for any purpose other than for ingress or egress from the demised
premises and for delivery of merchandise and equipment in a prompt and efficient
manner using elevators and passageways designated for such delivery by
Owner.  There shall not be used in any space, or in the public hall of
the building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and sideguards.  If said premises are situated on the ground floor of
the building, Tenant thereof shall further, at Tenant’s expense, keep the
sidewalk and curb in front of said premises clean and tree from ice, snow, dirt
and rubbish.

       

      2.      The
water and wash closets and plumbing fixtures shall not be used for any purposes
other than those for which they were designed or constructed and no sweepings,
rubbish, rags, acids or other substances shall be deposited therein, and the
expense of any breakage, stoppage, or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose clerks, agents, employees
or visitors, shall have caused it.

       

      3.      No
carpet, rug or other article shall be hung or shaken out of any window of the
building; and no Tenant shall sweep or throw or permit to be swept or thrown
from the demised premises any dirt or other substances into any of the corridors
of halls, elevators, or out of the doors or windows or stairways of the building
and Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the demised premises, or permit or suffer the demised
premises to be occupied or used in a manner offensive or objectionable to Owner
or other occupants of the buildings by reason of noise, odors, and or
vibrations, or interfere in any way, with other Tenants or those having business
therein, nor shall any bicycles, vehicles, animals, fish, or birds be kept in or
about the building.  Smoking or carrying lighted cigars or cigarettes
in the elevators of the building is prohibited.

       

      4.      No
awnings or other projections shall be attached to the outside walls of the
building without the prior written consent of Owner.

       

      5.      No
sign, advertisement, notice or other lettering shall be exhibited, inscribed,
painted or affixed by any Tenant on any part of the outside of the demised
premises or the building or on the inside of the demised premises if the same is
visible from the outside of the premises without the prior written consent of
Owner, except that the name of Tenant may appear on the entrance door of the
premises.  In the event of the violation of the foregoing by any
Tenant, Owner may remove same without any liability and may charge the expense
incurred by such removal to Tenant or Tenants violating this
rule.  Interior signs on doors and directory tablet shall be
inscribed, painted or affixed for each Tenant by Owner at the expense of such
Tenant, and shall be of a size, color and style acceptable to
Owner.

       

      6.      No
Tenant shall mark, paint, drill into, or in any way deface any part of the
demised premises or the building of which they form a part.  No
boring, cutting or stringing of wires shall be permitted, except with the prior
written consent of Owner, and as Owner may direct.  No Tenant shall
lay linoleum, or other similar floor covering, so that the same shall come in
direct contact with the floor of the demised premises, and, if linoleum or other
similar floor covering is desired to be used an interlining of builder’s
deadening felt shall be first affixed to the floor, by a paste or other
material, soluble in water, the use of cement or other similar adhesive material
being expressly prohibited.

       

      7.      No
additional locks or bolts of any kind shall be placed upon any of the doors or
windows by any Tenant, nor shall any changes be made in existing locks or
mechanism thereof.  Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost
thereof.

       

      8.      Freight,
furniture, business equipment, merchandise and bulky matter of any description
shall be delivered to and removed from the premises only on the freight
elevators and through the service entrances and corridors, and only during hours
and in a manner approved by Owner.  Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease of which these Rules and Regulations are a part.

       

      9.      No
Tenant shall obtain for use upon the demised premises ice, drinking water, towel
and other similar services, or accept barbering or bootblacking services in the
demised premises, except from persons authorized by Owner, and at hours and
under regulations fixed by Owner.  Canvassing, soliciting and peddling
in the building is prohibited and each Tenant shall cooperate to prevent the
same.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      10.    Owner
reserves the right to exclude from the building all persons who do not present a
pass to the building signed by Owner.  Owner will furnish passes to
persons for whom any Tenant requests same in writing.  Each Tenant
shall be responsible for all persons for whom he requests such pass and shall be
liable to Owner for all acts of such persons.  Notwithstanding the
foregoing, Owner shall not be required to allow Tenant or any person to enter or
remain in the building, except on business days from 8:00 a.m. to 6:00 p.m. and
on Saturdays from 8:00 a.m. to 1:00 p.m.  Tenant shall not have a
claim against Owner by reason of Owner excluding from the building any person
who does not present such pass.

       

      11.    Owner
shall have the right to prohibit any advertising by any Tenant which in Owner’s
opinion, tends to impair the reputation of the building or its desirability as a
loft building, and upon written notice from Owner, Tenant shall refrain from or
discontinue such advertising.

       

      12.    Tenant
shall not bring or permit to be brought or kept in or on the demised premises,
any inflammable, combustible, or explosive, or hazardous fluid, material,
chemical or substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.

       

      13.    Tenant
shall not use the demised premises in a manner which disturbs or interferes with
other Tenants in the beneficial use of their premises

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
      

      RIDER
TO LEASE DATED MARCH 14, 2002

      BETWEEN
URBAN DEVELOPMENT PARTNERS (61), LLC,

      AS
LANDLORD AND/OR OWNER AND

      AP
ANTIQUES CORP., AS TENANT

      

      41.           A.           The
annual rental rate payable hereunder, which shall be paid in equal monthly
installments, in accordance with the “Witnesseth” clause on the first page of
the printed portion of this lease shall be as follows:

       

      
        
          
            
              	
                      Period

                    	 	
                      Base Rent for Period

                    	 	 	
                      Monthly Base Rent

                    	 
	
                      6/1/02
      - 10/31/02

                    	 	$	78,125.00	 	 	$	15,625.00	 
	
                      11/1/02
      - 10/31/03

                    	 	$	192,187.50	 	 	$	16,015.63	 
	
                      11/1/03
      - 10/31/04

                    	 	$	196,992.19	 	 	$	16,416.02	 
	
                      11/1/04
      - 10/31/05

                    	 	$	201,916.99	 	 	$	16,826.42	 
	
                      11/1/05
      - 10/31/06

                    	 	$	206,964.92	 	 	$	17,247.08	 
	
                      11/1/06
      - 10/31/07

                    	 	$	212,139.04	 	 	$	17,678.25	 
	
                      11/1/07
      - 10/31/08

                    	 	$	217,442.52	 	 	$	18,120.21	 
	
                      11/1/08
      - 10/31/09

                    	 	$	222,878.58	 	 	$	18,573.21	 
	
                      11/1/09
      - 10/31/10

                    	 	$	228,450.54	 	 	$	19,037.55	 
	
                      11/1/10
      - 10/31/11

                    	 	$	234,161.81	 	 	$	19,513.48	 

            

          

        

      

       

      B.           Notwithstanding
the recitation of the rental rate in subparagraph (a) above, provided Tenant
shall not be in default of any term, covenant or condition of this Lease, the
rental rate for the first two (2) full calendar months of the term of this lease
shall be abated in the amount of $15,625.00 per month for an aggregate abatement
of $31,250.00, and the rental for the months of November and December 2006 shall
also be abated in the amount of $17,678.25 per month for an aggregate abatement
of $35,356.50.

       

      42.         (a)           Tenant’s
operation of the demised premises shall be for its own account and liability and
Landlord shall in no way be liable for or in any other manner responsible
therefore.  Tenant shall indemnify and save harmless Landlord from and
against any claim, penalty, loss, damage or expense, including reasonable
attorney’s fees, connected with or arising out of Tenant’s use or occupancy of
the demised premises, including but not limited to loss or damage by theft, fire
and any other hazards, normally covered by comprehensive insurance, and from any
damage or injury to persons or property, due to the acts or omissions of Tenant,
its agents, servants, employees or invitees.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      (b)           Without
limiting the indemnities herein contained, Tenant shall, during the term of this
Lease and at all times that Tenant is in possession of the demised premises, at
its sole cost and expense, maintain comprehensive general liability insurance
with respect to the demised premises and its use and occupancy thereof as herein
provided with an insurance company or companies satisfactory to Landlord
providing coverage in limits of no less than $2,000,000 for bodily injury, and
no less than $1,000,000 for property damage.  Tenant shall also
maintain all farther insurance coverage in such limits as are customarily
maintained by comparable operations.  Tenant shall keep all such
insurance naming Landlord, Landlord’s managing agent, any superior lessor, any
mortgagees designated by Landlord and Tenant, as insureds.  Said
insurance shall provide that the insurer will give Landlord ten (10) days’
notice in advance of any cancellation or reduction of coverage and that copies
of all endorsements issued after the date of each policy will be forwarded to
Landlord.  Tenant shall deliver to Landlord, prior to the commencement
of the Lease term and upon request while this paragraph 42 (b) applies a
certificate of endorsement of the aforesaid policies.  If at any time,
Tenant shall neglect or fail to provide and keep in force such coverage as
required hereunder, Landlord may, but is not obligated to, obtain such insurance
as the agent of Tenant, the premiums therefore to be deemed Additional Rent
hereunder, and the Tenant shall, upon demand, reimburse Landlord therefore, as
Additional Rent.  Tenant’s failure to maintain the aforesaid policies
shall be a material default hereunder.

       

      (c)           Tenant
shall also obtain, as its own cost and expense, naming both Landlord, Landlord’s
managing agent, any superior lessor, any mortgagees designated by Landlord, and
Tenant as named insured, fire insurance for all personal property which may be
affixed to the realty now located in the leased premises and including any
future installations.

       

      (d)           Notwithstanding
anything herein to the contrary, nothing herein shall prevent Landlord from
recovering in the event of fire or other loss under Landlord’s fire or other
insurance coverage for all betterments and improvements by Tenant so affixed to
the demised premises that are considered part of the realty under
law.

       

      (e)           Tenant
hereby releases Landlord, Landlord’s partners and principals, disclosed or
undisclosed, and its agents and their respective employees in respect of any
claim (including a claim for negligence) which it might otherwise have against
Landlord, Landlord’s partners, and principals, disclosed or undisclosed, and its
agents and their respective employees, for loss, damage or destruction with
respect to Tenant’s property by fire or other casualty (including rental value
or business interest as the case may be) occurring during the term of this Lease
and normally covered under a fire insurance policy with extended coverage
endorsement in the form normally used in respect of similar property in New York
County.

       

      43.         Neither
Landlord nor Tenant shall be liable to the other party or to any insurance
company (by way of subrogation or otherwise) for any (1) loss or damage to any
building, structure, or other tangible property; (ii) liability for personal
injury; or (iii) losses under worker’s compensation laws and benefits, even
though such loss, damage, or liability might be caused by the negligence of such
party, its agents, contractors, invitees, or employees.  Both Landlord
and Tenant shall endeavor to obtain a waiver of subrogation from their insurance
company.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      44.           (a)           Landlord
will not furnish any electricity or gas for Tenant at the demised premises and
Tenant shall pay for all electricity or gas consumed, as billed by the public
utility or, if a meter is shared with an adjacent Tenant, shall pay applicable
and agreed upon apportioned charges to the Tenant as billed.  Landlord
will furnish heat to the demised premises at the same time Landlord furnishes
heat to the building of which the demised premises forms a
part.  Landlord shall maintain, repair and replace the two air
conditioning units now existing in and serving the demised premises (the
“Existing Units”) during the term of the Lease and Tenant shall pay a monthly
fee to Landlord of $100 therefor, provided, however, that if any repair to or
replacement of the Existing Units is required because of the negligence or
willful acts of Tenant or its employees, agents, contractors or invitees, Tenant
shall be liable for the reasonable costs of such repair or
replacement.  Notwithstanding the foregoing, if Tenant performs
substantial alterations or renovations to the demised premises that necessitate
the replacement of the Existing Units, then Tenant, at Tenant’s sole cost and
expense, shall replace the Existing Units with one or more air conditioning
unit(s) sufficient to cool the demised premises.  Tenant shall be
responsible for all maintenance of, repair to and replacements of the new air
conditioning unit(s) installed by Tenant, and Tenant, effective on the earlier
of the date upon which the Existing Units are replaced or the date upon which
Tenant ceases to use the Existing Units, shall no longer pay to Landlord the
$100 monthly fee as set forth above.  Notwithstanding anything to the
contrary contained in this Lease, Tenant shall, at Tenant’s sole cost and
expense, maintain, and promptly make all repairs, structural or otherwise
ordinary and extraordinary, to all components of the electrical system from and
including meters to and within the demised premises.  Tenant shall not
be released or excused from the performance of any of its obligations under this
Lease for any failure or for interruption or curtailment of electrical or gas
service, for any reason whatsoever, and no such failure, interruption or
curtailment shall constitute a constructive or partial eviction.

       

      (b)           Landlord
shall furnish freight elevator facilities on weekdays on Monday through Friday
from 9:00 a.m. to 5:00 p.m., except on legal holidays, and self-service
passenger elevator facilities at all times.

       

      (c)           Landlord
at its expense shall remove Tenant’s ordinary waste generated solely by office
functions from the demised premises at such regular times as Landlord shall from
time to time establish.

       

      45.         All
signs and lettering except those wholly within and not visible from outside the
demised premises will be of a type and manner approved by Landlord to conform
with the nature and character of the building.

       

      46.         Tenant
agrees (a) the business to be conducted at, through and from the demised
premises, the kind and quality of merchandise and services offered in the
conduct of such business, the sales methods in such business, as well as other
elements of merchandising, display and advertising and the appearance of the
demised premises and the furniture, fixtures, and decoration therein, and of any
signs, lettering, announcements, price schedules, tags or any other kind of
forms of inscriptions displayed in or about demised premises, will be dignified
and in conformity with the highest standards of practice at the time in question
among first-class establishments dealing in the same or similar merchandise, and
(b) not affix any signs on windows or doors of the premises with
tape.

       

      47.         Tenant
shall use and occupy the demised premises only for the purposes stated in
Article 2 of the Lease and for no other purposes.  Without limiting
the generality of the foregoing, it is an express condition of this Lease and
Tenant expressly warrants and agrees that at no time and in no event may the
demised premises, or any part thereof, be used for residential
purposes.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      48.           Tenant
may make alterations, additions or improvements in or to the demised premises
with the written consent of the Landlord, which consent shall not be
unreasonably withheld.  All such work, at any time undertaken by
Tenant, shall be in compliance with all rules, orders, regulations or
requirements of governmental authorities, having jurisdiction there over and in
a good and workmanlike manner.  Workers compensation insurance
covering all persons employed by Tenant in this connection and general liability
insurance, in such limits as may be reasonably requested by Landlord from time
to time, shall be maintained by Tenant at Tenant’s sole cost and expense at all
times while such work is in progress and Landlord shall be named as an
additional insured thereunder.

       

      49.           Any
alterations, additions, or improvements, in whole or in part, undertaken by
Tenant shall at the completion of the term of this Lease (or any extension or
renewal thereof) the demised premises shall be returned to the physical
condition (in whole or in part) that it was received in.

       

      50.           Landlord
shall have the right at any time, without the same constituting an actual or
constructive eviction, and without incurring any liability to Tenant, to change
the arrangement and/or location of entrances of passageways, corridors,
elevators, stairs, toilets, or other public parts of the building, and to change
the name or number by which the building is known so long as such change does
not reduce the size of the demised Premises.

       

      51.           Tenant
has examined the demised premises and agrees to take possession of same “As Is”
condition on the date hereof, except that the A Portion (as hereinafter defined)
of the demised premises (i.e., the northeasterly portion) shall be vacant and
broom clean.  Except as may be expressly provided herein to the
contrary, Landlord shall have no obligation to furnish, render, or supply any
work, labor, services, materials, fixtures, furniture, equipment or decoration
to make the demised premises ready or suitable for Tenant’s
occupancy.

       

      52.           (a)           Except
as may be otherwise specifically set forth herein, Tenant shall not enter into a
sublease with any party for all or any portion of the Demised Premises or assign
its interest in this Agreement without Landlord’s prior consent, such consent
not to be unreasonably withheld, delayed or conditioned.  Upon
Tenant’s request for Landlord’s consent, Tenant shall submit to Landlord, in
writing, a counterpart of the proposed assignment or sublease, as the case may
be, and the name of the proposed assignee or subtenant, the name and character
of its business (which business must be in related interior design area and/or
the sale of furniture, furnishings and/or decorative merchandise), the terms of
the proposed assignment or sublease and such information as to the proposed
assignee’s or subtenant’s financial responsibility and standing and any other
information Landlord may reasonably request, including, without limitation,
prior 2 years’ tax returns, prior 2 years’ financial statements, a bank
reference, and a copy of the previous month’s bank statement.  Upon
receipt of such requested information from Tenant, Landlord shall have the
option, to be exercised by written notice within 20 days after Tenant’s request
for consent, to either (i) terminate this Lease as of the day immediately
preceding the proposed commencement date of the assignment or sublease, as the
case may be, or (ii) grant or withhold its consent (provided that there is a
reasonable basis therefor) to such proposed assignment or sublease, as the case
may be.  Notwithstanding anything to the contrary set forth above in
this paragraph (a), Landlord shall only have the right to terminate this Lease
in connection with a proposed sublease of a portion of the Demised Premises if,
and only if, the rent to be paid by the proposed sublessee to Tenant pursuant to
the proposed sublease shall exceed, on a dollar per square foot basis, the rent
then payable by Tenant to Landlord for the same space.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (b)         If
Landlord shall exercise such option, Tenant shall surrender possession of the
entire demised premises, or the portion which is the subject of the option, as
the case may be, on the date set forth in such notice in accordance with the
provisions of this Lease relating to surrender of the demised premises at the
expiration of the term.  If the Lease shall be canceled as to a
portion of the demised premises only, the rent and Additional Rent payable by
Tenant under this Lease shall be abated proportionately according to the ratio
that the rentable area in the portion of the space surrendered bears to the
rentable area of the entire demised premises.

       

      (c)         In
the event of a proposed assignment or subletting in connection with the sale of
Tenant’s business or, in the event Landlord shall not exercise the option to
cancel the Lease in whole or in part as above required, and Tenant is not in
default of any portion of this Lease, then Landlord’s consent to such request
shall not be unreasonably withheld or delayed, provided assignee or subtenant
conforms to the use permitted by this Lease and with the general tenancy of the
building; and

       

      (i)         The
proposed assignee or subtenant shall use the demised premises, or the relevant
part thereof, solely for business dealing directly with interior design,
architects, builders and the like and in conformity with the general tenancy of
the building in which the demised premises form a part and, in the Landlord’s
sole judgment, reasonably exercised, the proposed assignee or subtenant is
engaged in a business and the premises to be sublet or assigned will be used in
a manner which, is in keeping with the then standard of the building; and will
not violate any negative covenant concerning “use” contained in any other Lease
in the building; however, such “use” restrictions are to be construed solely
against the Tenant and shall not affect the Landlord’s right to demise the
premises, or any relevant part thereof, for such purposes as are permitted by
law,

       

      (ii)        The
proposed assignee or subtenant is a reputable person of good character, with
sufficient proven financial worth to meet the continuing obligation of this
Lease; and

       

      (iii)       The
proposed assignee or subtenant is not a person with whom the Landlord is then
negotiating a Lease for space in the building; and

       

      (iv)       The
form and substance of the proposed sublease or assignment shall be in the form
reasonably satisfactory to Landlord and shall comply with the applicable
provisions of this paragraph; and

       

      (v)        Tenant
shall reimburse Landlord for any reasonable costs incurred by Landlord in
connection with such assignment or subletting, including, without limitation,
any credit check or other investigation performed by Landlord, as to the
acceptability of the proposed assignee or subtenant, and any legal fees incurred
in connection therewith, which costs shall be deemed Additional Rent
hereunder.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (d)           In
no event shall any assignment or subletting to which Landlord may have or may
not have consented, release Tenant from its obligations under this
Lease.  The Tenant’s right to sublet under this paragraph is personal
solely to the within named Tenant and confers no such right on any sublessee of
the named Tenant.

       

      (e)           If
the Landlord shall consent to any proposed assignment or sublease, or shall
decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise any of its options under subparagraph (a) of this
paragraph, Tenant shall indemnify, defend and hold harmless Landlord against and
from any and all loss, liability, damages, costs and expenses (including,
without limitation, reasonable attorney’s fees and expenses) resulting from any
claims that may be made against Landlord by the proposed assignee or subtenant
or by any brokers or other persons claiming a commission or similar compensation
in connection with the proposed assignment or sublease.

       

      (f)         
  In the event that (i) Landlord fails to exercise its option under
subparagraph (a) of this paragraph and consents to a proposed assignment or
sublease, and (ii) Tenant fails to execute and deliver the assignment or
sublease to which Landlord consented within sixty (60) days after the giving of
such consent, then Tenant shall again comply with all of the provisions and
conditions of subparagraph (a) of this paragraph before assigning this Lease or
subletting all or part of the demised premises.  In no event shall any
sublessee or assignee take possession of the demised premises until Landlord’s
approval has been granted and a fully executed
original sublease or assignment, approved by Landlord, has been delivered to
Landlord.

       

      (g)           If
Landlord fails to consent to Tenant’s proposed sublease or sublease amendment
with respect to the Demised Premises or to a proposed assignment of Tenant’s
interest in this Lease and either Landlord or Tenant is found by a court of
competent jurisdiction to have acted in bad faith, then the party found to have
so acted in bad faith shall reimburse the other party for all of the successful
party’s legal fees (including, without limitation, reasonable attorneys’ fees
and disbursements and court filing fees) incurred by the successful
party.  Except as set forth in the immediately preceding sentence, the
provisions of Paragraph 74 of the Lease remain in full force and
effect.

       

      (h)           Notwithstanding
anything to the contrary set forth in this Paragraph 52, Tenant may (subject to
the provisions hereinbelow set forth), without first obtaining Landlord’s
consent thereto (but nevertheless on five (5) days’ prior notice to Landlord)
and without giving rise to Landlord’s right to recapture the demised premises or
any portion thereof, sublet the demised premises or any portion thereof to Amy
Perlin Antiques, Inc. or Wiltshire-Faye Ltd. or any other entity in which Amy
Perlin owns 100% of the equity (which subletting entity is hereinafter referred
to as a “100% Affiliate”).  Landlord agrees that it shall have no
recourse against a 100% Affiliate for a breach by Tenant of its obligations
under this Lease (but the parties nevertheless agree that the 100% Affiliate in
possession of any portion of the demised premises shall be and remain fully
liable to Landlord for such 100% Affiliate’s wrongful actions or inactions under
this Lease giving rise to property damage or injury to, or death of one or more
person(s) while in possession of any portion of the demised
premises.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      53.           An
assignment of more than 50% of stock, partnership interest or membership
interest of Tenant may be construed by Landlord as a request to assign or sublet
pursuant to paragraph 52 entitling Landlord at its option to terminate this
Lease and review the acceptability of such assignee or subtenant under paragraph
52(a).  Notwithstanding such prohibition, Tenant may assign to members
of his family no more than one-third degree of consanguinity so long as said
assignees are reputable and financially responsible.

       

      54.           If,
at the request of and as an accommodation to Tenant, Landlord shall place upon
such directory board, as Landlord may from time to time maintain in the lobby of
the building, one or more names of persons, firms or corporations other than
Tenant, this shall not be deemed to operate as an attornment to Landlord or as a
consent by Landlord to an assignment or subletting by Tenant of all or any
portion of the demised premises to such persons, firms or
corporations.

       

      55.           (a)           In
the event that the amount of real estate taxes, assessments, sewer rents, rates
and charges, county taxes, transit taxes or any other governmental charge,
general, special, ordinary or extraordinary, foreseen and unforeseen
(hereinafter collectively called “taxes”), which may now or hereafter be levied
or assessed upon the land and building of which the demised premises form a
part, (hereinafter called the “real property,”) attributable to any tax year
(July 1 to June 30) shall be greater than the amount of taxes on the real
property for the fiscal year July 1, 2002 to June 30, 2003 (hereinafter referred
to as the “base year”), then the Tenant shall pay to the Landlord, as Additional
Rent, 5.5 % of the increase in taxes for each such year.

       

      (b)           The
Landlord shall take the benefit of the provisions of any statute or ordinance
permitting any assessment to be paid over a period of time, and the Tenant shall
be obliged to pay only its proportionate share, determined as aforesaid, of the
installments of any such assessment as shall become due and payable during the
term of this Lease or any renewal hereof.

       

      (c)           Any
amount due the Landlord under the provisions of this paragraph shall be deemed
to be Additional Rent payable by Tenant and collectible by the Landlord as such
and shall be paid within ten (10) days after the Landlord shall have submitted a
bill to the Tenant showing in detail the computation of the amounts due the
Landlord.  Such bill shall be submitted prior to the payment by the
Landlord of each installment of real estate taxes imposed on the real
property.  Any delay or failure of Landlord in hilling any amount
payable under this paragraph shall not constitute a waiver or in any way impair
the continuing obligation of Tenant to make all payments hereunder.

       

      (d)           If
the Landlord shall receive any tax refund in respect of any tax year following
the base years, the Landlord may retain out of such tax refund any reasonable
expense incurred by it in obtaining such tax refund.  Out of the
remaining balance of such tax refund, the Landlord may retain the amount of its
proportionate share of the total tax paid for such tax year.  The
Landlord shall pay to the Tenant, or apply against Fixed Annual Rent or
Additional Rent due Landlord hereunder, its proportionate share of such
remaining balance of such tax refund, such share to be determined as the
proportionate share of total tax paid (before giving effect to the refund) by
the Tenant for the year affected by such tax refund.  Any reasonable
and proper expense incurred by the Landlord in contesting the validity or the
amount of the assessed valuation, which shall not be offset by a tax refund,
shall be added to the taxes due Landlord for the tax year in which such contest
shall finally be determined.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (e)           The
term “real estate taxes” shall mean all taxes and assessments levied, assessed
or imposed at any time by the City of New York or any other governmental
authority upon or against the land and/or building of which the demised premises
form a part, and also any tax or assessment levied, assessed or imposed at any
time by any governmental authority in connection with the receipt of income or
rents from said land and/or building to the extent that same shall be in lieu of
all or a portion of any of the aforesaid taxes or assessments upon or against
said land and/or building.  If, due to a future change in the method
of taxation or in the taxing authority, a franchise, license, income, transit,
profit or other tax, fee or governmental imposition, however designated, shall
be levied, assessed or imposed against Landlord in substitution, in whole or in
part, for said real estate taxes, or in lieu of additional real estate taxes,
then such franchise, license, income, transit, profit, or other tax fee, or
governmental imposition shall be deemed to be included within the definition of
“real estate taxes” for the purposes hereof.

       

      (f)           In
no event shall any rent adjustment hereunder result in a decrease in the Fixed
Annual Rent.

       

      (g)          Only
Landlord shall be eligible to institute tax reduction or other proceedings to
reduce the assessed valuation of the Land or the Building.  Should
Landlord be successful in any such reduction proceedings and obtain a rebate for
any Tax Year for which Tenant has paid installments of the Tax Payment,
Landlord, after deducting the expenses shall credit Tenant’s Percentage of such
rebate against the next monthly installments of the Fixed Annual Rent payable
under this Lease.  In the event that the assessed valuation which had
been utilized in computing the Real Estate Taxes payable for the Base Tax Year
is reduces (as a result of settlement, final determination of legal proceedings
or otherwise) then (i) the Real Estate Taxes for the Base Tax Year shall be
retroactively adjusted to reflect such reduction, (ii) the monthly installments
of Additional Rent shall be increased accordingly, and (iii) all retroactive
Additional Rent resulting from such adjustment shall be payable by Tenant within
ten (10) days after the rendition of a bill therefor.

       

      56.       
  Intentionally
Omitted.

       

      57.     
    In the event that the cost to Landlord for fuel oil
and/or gas for heating and/or hot water in the Building during any calendar year
during the Term of this Lease shall exceed the cost incurred by Landlord for the
fuel oil and/or gas for heating and/or hot water in the Building during the
calendar year 2001, then Tenant shall pay to Landlord, as additional rent, 2.75%
of each and every such increase.  Landlord shall provide to Tenant, no
later than three months following the end of each calendar year during the Term
of this Lease (including the calendar year 2001), copies of all bills and other
reasonable evidence setting forth Landlord’s costs for fuel oil and/or gas for
heating and/or hot water during such year and the year 2001, together with
Landlord’s statement of the amount due from Tenant, and Tenant shall, within
twenty (20) days after the receipt of such evidence and statement, pay to
Landlord such amount.  Because the additional rent for fuel oil and/or
gas for heating and/or hot water for the first ten months of 2011 cannot be
calculated until November 2011, commencing January 1, 2011 and each month
thereafter until the expiration date of this Agreement, Tenant shall pay to
Landlord an estimated amount as additional rent for fuel oil and/or gas for
heating and/or hot water for calendar year 2011 equal to one-twelfth of the
payment calculated on the prior calendar year.  In November of 2011
the payments for calendar year 2011 shall be adjusted by comparing the actual
costs for fuel oil and/or gas for heating and/or hot water for the first ten
months for calendar year 2011 to the actual costs for fuel oil and/or gas for
the first ten months of calendar year 2001.

      
        
           

        

        
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      58.      
   Intentionally
Omitted.

       

      59.     
    All Additional Rent Payments.  (1) Subject to
Tenant’s rights as set forth herein to dispute the mathematical correctness of
any statement, bill or demand furnished by Landlord with respect to any item of
Additional Rent provided for in this Lease, Tenant’s obligation to make any
Additional Rent payments provided for in this Lease shall be absolute and not
conditioned on the happening of any act, thing, or occurrence, including without
limitation the time or timeliness at or with which such statement, bill or
demand is furnished to or made upon Tenant, other than the occurrence of cost
increases giving rise to the obligation to make such
payments.  Landlord’s failure during the term of this Lease to prepare
and delivery any statements or bills, required to be delivered to Tenant
hereunder, or Landlord’s failure to make a demand under any other provision of
this Lease shall not in any way be deemed to be a waiver of, or cause Landlord
to forfeit or surrender its rights to collect any Additional Rent which may have
become due pursuant to any provisions herein during term of this Lease and shall
survive the expiration or sooner termination of this Lease.

       

      (2)           In
no event shall any adjustment of any payments payable by Tenant in accordance
with the provisions of this Lease result in a decrease in Fixed Annual Rent, nor
shall any adjustment of any Additional Rent payable by Tenant pursuant to any
provision of this Lease result in a decrease in any other Additional Rent
payable by Tenant pursuant to any provisions of this Lease, it being agreed and
understood that the payment of Additional Rent under this Lease is an obligation
supplemental to Tenant’s obligations to pay Fixed Annual Rent and any Additional
Rent pursuant to any other provision of this Lease.

       

      (3)           A
lease year shall end after the expiration or termination of this
Lease.  The Additional Rent payable by Tenant in respect thereof shall
be prorated to correspond to that portion of such Year occurring within the term
of this Lease.

       

      60.       
  If there now is, or shall be installed in the building a “sprinkler
system” and said system or any of its appliances shall be damaged or injured or
not in proper
working order by reason of any act or omission of Tenant, Tenant’s agents,
servants, employees, licensees, or visitors, Tenant shall forthwith restore the
same to working condition at its own expense, and if the New York Board of Fire
Underwriters or the New York Fire Exchange or any bureau, department or official
of the State or City government requires or recommends that any changes,
modifications, alterations or additional sprinkler heads, or other equipment be
made or supplied by reason of Tenant’s business, the location of partitions,
trade fixtures or other contents of the demised premises or for any other reason
or if any such changes, modifications, alterations, additional sprinkler heads
or other equipment became necessary to prevent the imposition of a penalty or
charge against the full allowance for a sprinkler system in the Fire insurance
rate so fixed by said exchange or by any fire insurance company, Tenant shall,
at its own expense, promptly make and supply such changes, modifications,
alterations, additional sprinkler heads, or other equipment.

      
        
           

        

        
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      61.      
   (a)           If
the demised premises, or any part thereof, are partially damaged by fire or
other casualty, rent, until such damage is repaired, shall be apportioned as
described in Article 9 of this Lease only to the extent that the demised
premises are rendered untenable.

       

      (b)          In
addition to the events described in Article 9(d) of the Lease, if the repair of
any damage to the building would, in Landlord’s judgment, require an expenditure
of more than forty (40%) percent of the full insurable value of the building
immediately prior to the fire or other casualty, Landlord will have the options
given to it pursuant to Paragraph 9, subsection (d) of the Lease.

       

      62.         (a)           If
Tenant is in arrears in payment of rent or Additional Rent, Tenant waives
Tenant’s right, if any, to designate the items against which any payments made
by Tenant are to be credited, and Tenant agrees that Landlord may apply any
payments made by Tenant to any items Landlord see fit, irrespective of and
notwithstanding any designation or request by Tenant as to the items against
which any such payments shall be credited.

       

      (b)           In
case Tenant shall default in payment of any fixed rent, percentage rent,
Additional Rent or any other charge payable hereunder by Tenant to Landlord on
any date upon which the same becomes due, and such default shall continue for
five (5) days after Landlord shall have given to Tenant a written notice
specifying such default, then Tenant shall have ten (10) days from such notice
in which to notify Landlord that it disputes the changes.  Landlord
shall have ten (10) days to respond.  In the event the issue is not
resolved or joined within thirty (30) days, Landlord may give to Tenant a
notice of intention to end the term of this Lease at the expiration of three (3)
days from the date of the giving of such notice, and, in the event such notice
is given, this lease and the term stated hereby granted (whether or not the term
shall have commenced) shall expire and terminate upon the expiration of said
three (3) days with the same effect as if that day were the date hereinbefore
set for the expiration of the term of this Lease, but Tenant shall remain liable
for damages as provided in paragraph 18 of this Lease.

       

      63.         In
the event any payment under this Lease shall be made in the form of a check from
any other person, firm or corporation other than the person, firm or corporation
named in this Lease, the acceptance of same by Landlord shall not, under any
circumstances, be deemed recognition of a subletting or any assignment of this
Lease, regardless of the number of times that such payment shall be made by such
other person, firm or corporation.

       

      64.         (a)           If
Tenant shall fail to pay all or any part of any installment of Fixed Annual Rent
for more than ten (10) days after the same shall become due and payable, Tenant
shall pay as Additional Rent hereunder to Landlord a late charge of three (3)
cents for each dollar of the amount of such Fixed Annual Rent or Additional Rent
which shall not have been paid to Landlord within five (5) days after becoming
due and payable.

       

      (b)           In
every case in which Tenant is required by the terms of this Lease to pay to
Landlord a sum of money (including, without limitation, payment of Fixed Annual
Rent and Additional Rent) and payment is not made within fifteen (15) days after
the same shall become due, Tenant shall pay as Additional Rent hereunder,
interest on such sum or so much thereof as shall be unpaid from the date it
becomes due until it is paid.  Such interest shall be computed at a
rate which shall be one (1%) percent per month; provided, however, in no event
shall such interest be in excess of the highest rate of interest which shall
from time to time be permitted under the laws of the State of New York to be
charged on late payments of sums of money due pursuant to the terms of a
Lease.
 

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      (c)           The
late charge payable pursuant to sub-paragraph (a) above and the interest payable
pursuant to sub-paragraph (b) above shall be (1) payable on demand and
(ii) without prejudice to any of Landlord’s rights and remedies hereunder,
at law or in equity for nonpayment or late payment of rent or other sum and in
addition to any such rights and remedies.  No failure by Landlord to
insist upon the strict performance by Tenant of Tenant’s obligations to pay late
charges and interest as provided in this paragraph shall constitute a waiver by
Landlord of its right to enforce the provisions of this paragraph in any
instance thereafter occurring.  The provisions of this paragraph shall
not be construed in any way to extend the grace periods or notice periods
provided for in paragraph 17 of this Lease.

       

      65.         Notwithstanding
anything to the contrary contained in this Lease, any monies due Landlord other
than the annual rent are deemed to be Additional Rent, and any default in the
payment of Additional Rent shall give to Landlord the same remedies as it has
with respect to a default in the payment of rent.

       

      66.         In
the event the rent or Additional Rent or any part hereof provided to be paid by
Tenant under the provisions of this Lease shall become uncollectible or shall be
reduced or required to be reduced or refunded by virtue of any Federal, State,
County or City law, order, or regulation, or by any direction of a public
officer or body pursuant to law, or the orders, rules, codes or regulations of
any organization or entity formed pursuant to law, whether such organization or
entity be public or private, then Landlord, at its option, may at any time
thereafter terminate this Lease, by not less than thirty (30) days’ written
notice to Tenant, on a date set forth in said notice, in which event this Lease
and the term hereof shall terminate and come to an end on the date fixed in said
notice as if the said date were the date originally fixed herein for the
termination of this Lease.  Landlord shall not have the right to
terminate this Lease if Tenant within such period of, thirty (30) days shall, in
writing, lawfully agrees that the rental and Additional Rental herein reserved
is a reasonable rental and additional rental, and agrees to continue to pay such
rental and additional rental and if such agreement by Tenant shall then be
legally enforceable by Landlord.

       

      67.         If,
in connection with obtaining financing for the building, a bank, insurance
company or other lending institution shall request reasonable modifications in
this Lease as a condition to such financing, Tenant will not unreasonably
withhold, delay, or defer its consent thereto, provided that such modifications
do not increase the obligations of Tenant hereunder or materially adversely
affect the leasehold interest hereby created.

       

      68.         Intentionally
Omitted.

       

      69.         (a)           Tenant
agrees it shall indemnify and save Landlord harmless against all costs, claims,
loss or liability, including reasonable attorney’s fees and expenses, resulting
from delay by Tenant in surrendering the demised premises upon the expiration or
earlier termination of this Lease, including, without limitation, any claims by
any succeeding Tenant founded on such delay.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (b)           The
parties recognize and agree that the damage to Landlord resulting from any
failure by Tenant’s timely surrender of the demised premises will be
substantial, will exceed the amount of monthly rent theretofore payable
hereunder, and will be impossible of accurate measurement.  Tenant
therefore agrees that if possession of the demised premises is not surrendered
to Landlord within thirty (30) days after the date of the expiration or earlier
termination of the terms of this Lease, then Tenant will pay Landlord, as
liquidated damages, for each month and for each portion of any month during
which Tenant holds over in the demised premises after expiration or termination
of the term of this Lease, a sum equal to one point five (1.5) times the average
rent and Additional Rent which was payable per month under this Lease during the
last six (6) months of the term hereof.

       

      (c)           The
provisions of sub-paragraphs (a) and (b) above are independent of one another
and Tenant agrees that payments made pursuant to sub-paragraph (b) shall not in
any way reduce Tenant’s obligation to indemnify Landlord pursuant to
subparagraph (a).  The payments required to be made by Tenant pursuant
to subparagraphs (a) and (b) above shall be (i) payable on demand, and (ii)
without prejudice to any of Landlord’s rights and remedies hereunder at law or
in equity for Tenant’s delay in surrendering the demised premises in accordance
with the terms of this Lease upon the expiration or earlier termination of this
Lease.

       

      70.         Notwithstanding
paragraph 28 of the printed portion of this Lease, all notices by either party
to the other shall be given by registered or certified mail, return receipt
requested.  A refusal to accept delivery shall be deemed
notification.

       

      71.         Tenant
shall give notice to Landlord, in writing, promptly after Tenant learns of any
accident in or about the demised premises.  This notification shall
not be deemed to imply or impose any liability upon Landlord relating to such
accident.

       

      72.         Tenant
agrees, at any time and from time to time, as requested by Landlord, upon not
less than ten (10) days prior notice, to execute and deliver a statement
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications that the same is in full force as modified and
stating the modifications), certifying the dates to which the rent and
Additional Rent have been paid, and stating whether or not, to the best
knowledge of Tenant, Landlord is in default in performance of any of its
obligations under this Lease, and, if so, specifying each such default of which
Tenant may have knowledge, and stating whether or not, to the best knowledge of
Tenant, any event has occurred which the giving of notice or passage of time, or
both, would constitute such a default, and if so, specifying each such event, it
being intended that any such statement delivered pursuant hereto shall be deemed
a representation and warranty to be relied upon by Landlord and by others with
whom Landlord may be dealing, regardless of independent
investigation.

       

      73.         Tenant
shall look only to Landlord’s estate and property in the building for the
satisfaction of Tenant’s remedies for the collection of a judgment (or other
judicial process) requiring the payment of money by Landlord in the event of any
default or breach of Landlord hereunder, and no other property or assets of
Landlord or its partners or principals, disclosed or undisclosed, shall be
subject to lien, levy, execution or other enforcement procedure for the
satisfaction of Tenant’s remedies under or with respect to this Lease, the
relationship of Landlord and Tenant hereunder or Tenant’s use or occupancy of
the demised premises; and if Tenant shall acquire a lien on such other property
or assets by judgment or otherwise, Tenant shall promptly release such lien by
executing and delivering to Landlord an instrument to that effect prepared by
Landlord.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      74.           If
Tenant shall request Landlord’s approval or consent and Landlord shall fail or
refuse to give such approval or consent, Tenant shall not be entitled to any
damages for any withholding or delay of such approval or consent by Landlord, it
being intended that Tenant’s sole remedy shall be an action for injunction or
specific performance (the rights to money damages or other injunction being
hereby specifically waived), and that such remedy shall be available only in
those cases where Landlord shall have expressly agreed in writing not to
unreasonably withhold its consent or approval or where as matter of law Landlord
may not unreasonably withhold its consent or approval.

       

      75.           Tenant
shall and hereby does waive its right and agrees not to interpose any
counterclaim or offset, of whatever nature and description, in any proceeding or
action which may be instituted by Landlord against Tenant to recover rent,
Additional Rent, other charges, or for damages, or in connection with any
matters or claims whatsoever arising out of or in any way connected with this
Lease, or any renewal, extension, holdover, or modification thereof, the
relationship of Landlord and Tenant, or Tenant’s use or occupancy of said
premises.  This clause, as well as the “waiver of jury trial”
provision of this Lease, shall survive the expiration, early termination, or
cancellation of this Lease or the terms thereof.  Nothing herein
contained, however, shall be construed as a waiver of Tenant’s right to commence
a separate action on a bona fide claim against Landlord.

       

      76.           Tenant
expressly acknowledges and agrees that Landlord has not made and is not making,
and Tenant, in executing and delivering this Lease, is not relying upon any
warranties, representations, promises, or statements, except to the extent that
the same are expressly set forth in this Lease.

       

      77.           If
any conflict shall arise between any of the provisions of this Rider and any of
the terms, printed or typewritten, of the printed portion of the Lease to which
this Rider is attached, all such conflicts shall be resolved in favor of the
provisions of this Rider.

       

      78.           This
Lease shall be governed by and construed in accordance with the laws of the
State of New York.  If any provisions of this Lease or the application
thereto to any person or circumstances for any reason and to any extent, be
invalid or unenforceable, the remainder of this Lease and the application of the
provisions to other persons or circumstances shall not be affected but rather
shall be enforced to the extent permitted by law.  This Lease shall be
construed without regard to any presumption or other rule requiring construction
against the party causing this Lease or any part thereof to be
drafted.  Each covenant, agreement, obligation, or other provision of
this Lease on Tenant’s part to be performed shall be deemed and construed as a
separate and independent covenant of Tenant, not dependent on any other
provisions of this Lease.  All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the content may
require.

      
        
           

        

        
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      79.           Definitions
and captions.  The captions, numbers and definitions herein are
inserted only as a matter of convenience and are not intended to define, limit,
construe or describe the scope or intent of any paragraph, nor in any way affect
this Lease.  In conjunction therewith, the defined term “Landlord” as
used in this Rider shall be deemed to be one and the same as the defined term
“Owner” as used in the printed portion of this Lease.

       

      80.           This
Lease shall not be binding upon Landlord unless and until it has been duly
executed by Landlord and delivered by Landlord to Tenant.

       

      81.           Except
as otherwise specifically stated in this Lease, all rent due under this Lease,
whether base rent or additional rent, is due on the first of each month, in
advance.

       

      82.           If
Landlord shall incur any expense (whether paid or not) arising from either
(a) its performance of any act which Tenant is required to perform
hereunder; or (b) enforcement of any of its legal rights or remedies against
Tenant, whether related to a default by Tenant hereunder or otherwise, and
whether or not formal legal action or proceedings be commenced; or (c) its
successful defense of any action or proceeding brought by Tenant whether such
action he related to a provision of this Lease or otherwise; or (d) its
successful prosecution of any counterclaim or third party claim i the context of
an action or third party action brought against it by tenant, such expense,
context of action or third party action brought against it by Tenant, such
expense, including attorney’s fees and disbursements, shall be paid by the
tenant to the Landlord on demand as Additional Rent.  The terms
“successful defense” and “successful prosecution” as used herein shall mean any
determination on the merits by a Court of competent jurisdiction in favor of the
Landlord or, in the event of default by Tenant, the entry of default judgment
against him, her or it.

       

      83.           Tenant
covenants, represents and warrants that Tenant has had no dealings or
negotiations with any broker or agent in connection with the negotiation or
consummation of this Lease, and Tenant covenants and agrees to pay, hold
harmless and indemnify Landlord from and against any and all cost, expense
(including, without limitation, attorney’s fees and expenses) or liability for
compensation with respect to this Lease or the negotiation thereof.

       

      84.           Tenant
agrees that the demised premises are to be used solely as a showroom and
associate office, as stated in paragraph 2, and for no other
purpose.  Accessory activities such as repair or restoration of
inventory and packing or assembling of boxes shall be conducted in such a
manner, at such times, and to such an extent so as not to create fumes, odors,
noise, dirt or dust, damage to the building or its equipment, or disturbance or
annoyance to other Tenants and occupants of the building.  Further to
the foregoing, it is strictly understood and agreed that Tenant will not cut or
saw lumber or engage in hammering; nor will Tenant store or utilize packing
materials (including but not limited to excelsior) in such a manner or in such
quantities that dirt, dusk or risk of fire is created; and only hand tools will
be utilized in the repair or restoration of inventory.  All of the
foregoing shall be conditioned on Tenant’s compliance with a) existing or future
laws, b) existing or future codes, rules, and regulations of any governmental
agency having jurisdiction thereon, and c) with the requirements of Landlord’s
insurance carrier and applicable insurance regulations.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      85.           Subject
to the provisions of paragraph 24 of this Lease, Landlord shall use commercially
reasonable efforts, including litigation to remove or evict any tenant or
occupant, to deliver to Tenant vacant, broom clean legal possession of the A
Portion of the demised premises (i.e., the northeasterly portion) on June 1,
2002 or as soon thereafter as Landlord obtains possession thereof in accordance
with this paragraph.  It is understood and agreed that, in the event
Landlord is delayed in delivering to Tenant possession of the A Portion as
aforesaid, this lease shall nevertheless commence on June 1, 2002 with respect
to the southeasterly portion of the demised premises as set forth on Exhibit B
attached hereto (the “B Portion”) on all of the terms and conditions set forth
in this Lease, except that, until the date Landlord shall deliver to Tenant
possession of the A Portion as aforesaid, which date shall be not less than
three (3) calendar days following written notice by Landlord to
tenant:

       

      (i)           the
base annual rent set forth in Paragraph A of Article 41 hereof shall be reduced
by forty (40%) (and any payments of the base rent made on account of the A
Portion shall be credited against the next subsequent installment(s) of rent
payable hereunder);

       

      (ii)          Tenant’s
proportionate share of real estate taxes, as set forth in Article 55 hereof,
shall be reduced to 3.3%;

       

      (iii)         Tenant’s
proportionate share of increases in fuel costs, as set forth in Article 57
hereof, shall be reduced to 1.65%; and

       

      (iv)         40%
of each rent abatement referred to in Paragraph B of Article 41 hereof
shall be deferred as follows:

       

      (A)        with
respect to the two (2) $15,625,00 abatements set forth in paragraph B of Article
41 above, such abatements shall be applied to the first two months after
Landlord delivers possession of the A Portion as aforesaid; and

       

      (B)         with
respect to the two (2) $17,687.25 abatements set forth in said paragraph B of
Article 41 above, if Landlord shall deliver possession of that Portion as
aforesaid after the dates of such abatements were originally scheduled to occur
as set forth in said Paragraph B of Article 41, then such abatements shall be
applied to the first two months following delivery of possession by Landlord,
or, if Landlord shall deliver possession of the A Portion as aforesaid prior to
the dates such abatements were originally scheduled to occur as set forth in
Paragraph B of Article 41 above, then such abatements shall be applied on
the dates such abatements were originally scheduled to occur as set forth in
said Paragraph B of Article 41 above.

       

      (v)           Tenant’s
monthly payment to Landlord pursuant to paragraph 44 hereof, if any, shall be
reduced to $50 and Tenant’s additional rent for water charges and sprinkler
supervisory service pursuant to paragraphs 29 and 30, respectively, shall each
be reduced to 3.3%; and

       

      (vi)          until
Landlord delivers to Tenant, possession of the A Portion as aforesaid, all of
the other obligations of Tenant hereunder relating to the demised premises shall
apply only to the B Portion.

      
        
           

        

        
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      86.           INTENTIONALLY
DELETED.

       

      87.           Tenant
understands that the terms and conditions of this Lease are unique and special
to Landlord.  Tenant agrees to instruct its employees and agents not
to divulge or reveal the terms hereof to any third party, entity or
individual.  The obligations of Tenant under this Article 87 shall
constitute substantial obligations of Tenant under this Lease and Tenant
acknowledges that the Landlord hereunder may be materially damaged if Tenant
breaches the aforesaid covenant.

       

      
        
          	
                  URBAN
      DEVELOPMENT PARTNERS (61), LLC

                
	
                  Landlord

                
	 
      
	
                  By:  

                	
                  /s/ Philip Carter

                
	 
      	
                  Philip
      Carter, Managing Member

                
	 
      
	
                  AP
      ANTIQUES CORP.

                
	 
      
	
                  By:

                	
                  /s/ Amy Perlin

                
	 
      	
                  Name:  Amy
      Perlin

                
	 
      	
                  Title:  President

                

        

      

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      

      
        	
                STATE
      OF NEW YORK

              	
                )

              
	 
      	
                )
      ss.:

              
	
                COUNTY
      OF NEW YORK  

              	
                )

              

      

      

      On the
14th day of March in the year 2002 before me, the undersigned, a Notary Public
in and for said State, personally appeared AMY PERLIN, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is (are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the
instrument.

          

      
        
          	
                  By:  

                	
                  /s/Susan K. Bloom

                
	 
      	
                  Notary
      Public

                

        

      

      
        
           

        

        
          17a6383582ex10-1.htm

Exhibit 10.1

 

 SECOND AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”), dated August 4, 2010 (the “Effective Date”), is entered into by and between Matthew J. Lambiase (the “Executive”) and Annaly Capital Management, Inc., a Maryland corporation (the “Company”).

 

WHEREAS, the Company and the Executive entered into an employment agreement, dated June 6, 2006, and amended and restated such employment agreement in an amended and restated employment agreement, dated September 1, 2007; and

 

WHEREAS, the Company desires to establish its right to the continued services of the Executive upon the Effective Date, in the capacity described below, on the terms and conditions and subject to the rights of termination hereinafter set forth, and the Executive is willing to accept such employment on such terms and conditions.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties agree to the Agreement in its entirety to read as follows:

 

In consideration of the mutual agreements hereinafter set forth, the Executive and the Company have agreed and do hereby agree as follows:

 

1.             Definitions.  Capitalized terms used in this Agreement shall have the respective meanings assigned to them below:

 

1.1           “Book Value” of the Company shall be equal to the aggregate amounts reported as Stockholders Equity on the Company’s balance sheet as of the end of each fiscal year determined in accordance with generally accepted accounting principles (GAAP) but without taking into account any valuation reserves (i.e., changes in the value of the Company’s portfolio of investments as a result of mark-to-market valuation changes, referred to in the financial statements as “Accumulated Other Comprehensive Gain or Loss”).

 

1.2           “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

1.3           “Compensation Committee” shall mean the Compensation Committee of the Board of Directors of the Company.

 

1.4           “Good Reason” shall mean the occurrence of one or more of the following without the Executive’s written consent: (i) a material breach of this Agreement by the Company, or (ii) a materially significant change in the Executive’s duties, authorities or responsibilities, or (iii) the relocation of the Executive’s principal place of employment more than 60 miles from New York, New York, or (iv) the failure of the Company to obtain the assumption in writing of its obligations to perform this Agreement by any successor to all or substantially all of the assets or business of the Company within fifteen (15) days upon a merger, consolidation, sale or similar transaction, provided however that none of the events specified in (i), (ii) or (iii) shall constitute Good Reason unless the Executive shall have notified the Company in writing describing the events which constitute Good Reason and the Company shall have failed to cure such event within a reasonable period, not to exceed thirty (30) days, after the Company’s actual receipt of such written notice.

 

  

  

  

 

2.             Employment as Managing Director of the Company.  The Company hereby employs and engages the Executive as Managing Director of the Company, and the Executive does hereby accept and agree to such employment and engagement.  The Executive’s duties as Managing Director shall be such duties typically required of a managing director, and as shall from time to time be agreed upon by the Executive and the Board of Directors of the Company.  The Executive shall report solely and directly to the Company’s Chief Operating Officer.  The Executive’s services shall be performed in the Company’s offices in New York, New York or such other location as the Company and Executive shall agree.  Except for periods of Disability (as defined below), during the Term, the Executive shall devote substantially all of his business time, attention and energies to the performance of his duties under this Agreement; provided, however, that the Executive shall be allowed, to the extent such activities do not substantially interfere with the performance by the Executive of his duties and responsibilities hereunder, (a) to manage the Executive’s personal, financial and legal affairs, and (b) serve on civic or charitable boards or committees.  Furthermore, the Executive shall exercise due diligence and care in the performance of his duties to the Company under this Agreement.

 

3.             Term of Agreement.

 

(a)           Effective Date.  The term (“Term”) of this Agreement shall commence as of the Effective Date and shall continue through the first anniversary of the Effective Date.  From and after such first anniversary and upon each anniversary thereafter, the Term of the Agreement shall automatically be extended for successive one-year periods unless, not later than three months prior to such first anniversary or any subsequent anniversary, as applicable, either party shall have given written notice to the other that it does not wish to extend the Term of the Agreement.

 

4.             Compensation.

 

(a)           Base Salary.  The Company shall pay the Executive, and the Executive agrees to accept from the Company, in payment for his services to the Company, a base salary equal to a per annum amount of $750,000 (“Base Salary”), payable in equal biweekly installments or at such other time or times as the Executive and the Company shall agree.  The Base Salary can be increased (but not decreased) at any time by the Compensation Committee or the Board of Directors of the Company, as the case may be.  The Executive’s salary as increased shall be deemed to be the Base Salary for all purposes under this Agreement.

 

(b)           Performance Bonus.  With respect to each fiscal year, the Executive shall be eligible to receive an amount equal to the sum of: (A) the excess, if any, of (i) 0.050% of the Book Value of the Company for such fiscal year over (ii) the Executive’s Base Salary as of the last day of such fiscal year; provided, however, that the Compensation Committee must approve such amount, plus (B) additional amounts as may be recommended by management and approved by the Compensation Committee (such sum  being the “Performance Bonus”).

 

  

- 2 -

  

 

(c)           Annual Review.  The Board of Directors shall, at least annually, review the Executive’s entire compensation package to determine if it should be increased (but not decreased) in order for it to continue to meet the Company’s compensation objectives.

 

5.             Fringe Benefits.  The Executive shall be entitled to participate in any benefit programs adopted from time to time by the Company for the benefit of its senior executive employees, and the Executive shall be entitled to receive such other fringe benefits as may be granted to his from time to time by the Compensation Committee or the Board of Directors of the Company, as the case may be.

 

(a)           Benefit Plans.  The Executive shall be entitled to participate in any benefit plans relating to stock options, stock purchases, awards, pension, thrift, profit sharing, life insurance, medical coverage, education, or other retirement or employee benefits available to other senior executive employees of the Company, subject to any restrictions (including waiting periods) specified in such plans.

 

(b)           Vacation.  The Executive shall be entitled to such number of weeks of paid vacation per calendar year as determined by the Board of Directors of the Company after review of industry standards, but shall in no event be entitled to fewer than five weeks of paid vacation per calendar year.

 

6.             Business Expenses.  The Company shall reimburse the Executive for any and all necessary, customary and usual expenses, properly receipted in accordance with Company policies, incurred by Executive on behalf of the Company.

 

7.             Termination of Executive’s Employment.

 

(a)           Death.  If the Executive dies while employed by the Company, his employment shall immediately terminate.  The Company’s obligation to pay the Executive’s Base Salary shall cease as of the date of Executive’s death, except that any earned, but unpaid Base Salary and Performance Bonus shall be paid to the Executive’s beneficiaries as soon as practicable after his death.  In addition, the Executive’s beneficiaries shall receive the pro rata portion of the Performance Bonus for the year of the Executive’s death, which shall be equal to the Performance Bonus (as determined at the end of the year of the Executive’s death) multiplied by a ratio equal to (A) the number of days the Executive was employed in the year of his death, divided by (B) 365.   The Performance Bonus shall be paid to the Executive’s beneficiaries at the same time and in the same manner as such Performance Bonus would have been paid to the Executive had the Executive not died or been terminated.  Thereafter, Executive’s beneficiaries or his estate shall receive benefits in accordance with the Company’s retirement, insurance and other applicable programs and plans then in effect.

 

  

- 3 -

  

 

(b)           Disability.  If, as a result of the Executive’s incapacity due to physical or mental illness (“Disability”), Executive shall have been absent from the full-time performance of his duties with the Company for six (6) consecutive months, and, within thirty (30) days after written notice is provided to him by the Company, the Executive shall not have returned to the full-time performance of his duties, the Executive’s employment under this Agreement may be terminated by the Company for Disability.  With respect to the period during which begins when the Executive is first absent from the full-time performance of his duties with the Company due to Disability and ends upon the later of (i) the date he is terminated from employment in accordance with the foregoing sentence, or, (ii) the date he begins receiving long-term disability payments under the Company’s long term disability plan for senior executives (“Salary Continuation Period”), the Company shall continue to pay the Executive his Base Salary at the rate in effect at the commencement of such period of Disability.  In addition, the Executive shall receive the pro rata portion of the Performance Bonus for the year of the Executive’s termination due to Disability, which shall be equal to the Performance Bonus (as determined at the end of the year in which the Executive is terminated by reason of Disability) multiplied by a ratio equal to (A) the number of days the Executive was employed in the year of his termination for Disability, divided by (B) 365.   The Performance Bonus shall be paid to the Executive at the same time and in the same manner as such Performance Bonus would have been paid had the Executive not been terminated by reason of Disability.  Upon the end of the Salary Continuation Period, the Executive’s benefits shall be determined under the Company’s retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs

 

(c)           Termination by the Company for Cause.  The Company may terminate the Executive’s employment under this Agreement for “Cause,” at any time prior to expiration of the Term of the Agreement, only in the event of (i)  the Executive’s failure to substantially perform the duties described in this Agreement, (ii) acts or omissions constituting recklessness or willful misconduct on the part of the Executive in respect of his fiduciary obligations to the Company which is materially and demonstrably injurious to the Company, or (iii) the Executive’s conviction for fraud, misappropriation or embezzlement in connection with the assets of the Company.  In the case of clause (i) only, it shall also be a condition precedent to the Company’s right to terminate the Executive’s employment for Cause that (1) the Company shall first have given the Executive written notice stating with specificity the reason for the termination (“breach”) at least 60 days before the meeting of the Board of Directors called to make such determination and the Executive and his counsel are given the opportunity to answer such grounds for termination in person, at a hearing or in writing delivered to the Chairman of the Board, in the Executive’s discretion, before a vote by the Board of Directors on the existence of Cause; and (2) if such breach is susceptible to cure or remedy, a period of 60 days from and after the giving of the notice described in (1) shall have elapsed without the Executive having effectively cured or remedied such breach during such 30-day period, unless such breach cannot be cured or remedied within 60 days, in which case the period for remedy or cure shall be extended for a reasonable time (not to exceed an additional 30 days), provided the Executive has made and continues to make a diligent effort to effect such remedy or cure.  In the case of clause (iii) above, the Executive’s employment under this Agreement may be terminated immediately without any advance written notice.  Upon a determination that grounds exist for a termination for Cause by the Board of Directors and that the breach cannot be cured, or immediately in the case of clause (iii) above, the Company’s obligation to pay the Executive’s Base Salary, any Performance Bonus and benefits shall immediately cease, except to the extent any Base Salary or Performance Bonus has been earned but has not yet been paid.

 

  

- 4 -

  

 

7.2.           Termination by the Executive.  The Executive may at any time during the Term of this Agreement terminate his employment hereunder for any reason or no reason by giving the Company notice in writing not less 90 days in advance of such termination.  The Executive shall have no further obligations to the Company after the effective date of his termination, as set forth in the notice.  In the event of a termination by the Executive under this Section, the Company will pay only the portion of Base Salary or previously awarded Performance Bonus unpaid as of the termination date.  Benefits which have accrued and/or vested on the termination date will continue in effect according to their terms, but no additional accrual or vesting will take place.  Notwithstanding the foregoing, if the Executive terminates his employment for Good Reason, the notice period provided in Section 7.2 above shall not apply and the Executive will be entitled to the severance detailed in Section 8.

 

8.             Compensation Upon Termination by the Company Other Than for Cause or Upon Termination by the Executive for Good Reason.  If the Executive’s employment shall be terminated by the Company other than for Cause or by the Executive for Good Reason, the Executive shall be entitled to the following benefits:

 

(a)           Payment of Unpaid Base Salary.  The Company shall immediately pay the Executive any portion of the Executive’s Base Salary or previously awarded Performance Bonus not paid prior to the termination date.

 

(b)           Severance Payment.  The Company shall pay the Executive an amount (the “Severance Amount”) equal to three (3) times the greater of (i) the Executive’s combined Base Salary and actual Performance Bonus for the preceding fiscal year or (ii) the average for the three preceding years of the Executive’s combined actual Base Salary and Performance Bonus.  Fifty percent of the Severance Amount shall be paid within five (5) days after the date the Executive terminates for Good Reason or is terminated by the Company for any reason other than Cause, and the remaining 50% of the Severance Amount shall be paid in three equal monthly installments beginning on the first business day of the month following the month of such termination.

 

(c)           Immediate Vesting of Stock Options.  The Company shall take all appropriate action to ensure that all stock options on the Company’s stock owned by the Executive as of his termination date, and which have not been exercised prior to the termination date become immediately exercisable by the Executive, whether or not the right to exercise such stock options would otherwise then be vested in the Executive, provided, however, an option that is an incentive stock option within the meaning of Code Section 422(b) (“ISO”) shall not be exercisable for the first time in a calendar year to the extent that the aggregate fair market value of stock (as determined under Code Section 422(b)(3)) with respect to which ISO’s are exercisable by the Executive during such calendar year exceeds $100,000.  All such vested options shall be exercisable for a 90 day period after the termination date and shall be automatically cancelled if not exercised within such 90 day period. The provisions of this Section 7(c) shall constitute an amendment to any existing stock option agreements (including award certificates) of the Company as of the termination date.

 

  

- 5 -

  

 

(d)           Maximization of Payment in the Event of a Change in Control.   The Company shall make the payments and provide the benefits to be paid and provided under this Agreement; provided, however, that if all or any portion of the payments and benefits provided under this Agreement, either alone or together with other payments and benefits which the Executive receives or is then entitled to receive from the Company or otherwise, would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), the Company shall reduce such payments hereunder and such other payments to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision); but only if, by reason of such reduction, the net after-tax benefit to the Executive shall exceed the net after-tax benefit if such reduction were not made.  The payments or benefits shall be reduced in the manner and order determined by the Executive, subject to the consent of the Company, which consent shall not be unreasonably withheld.  The determination of whether the payments shall be reduced as provided in this Section 8(d) and the amount of such reduction shall be made at the Company’s expense by a public accounting firm retained by the Company at the time the calculation is to be performed, or one selected by the Company from among the four (4) largest public accounting firms in the United States (the “Accounting Firm”).  The Accounting Firm shall provide its determination, together with detailed supporting calculations and documentation to the Company and the Executive within twenty (20) business days of the payment of the initial installment of the Severance Amount.  The Executive may review these calculations for a period of twenty days and may retain another accounting firm (at his own expense) for such review and submit objections during such twenty-day review period.

 

(e)           No Other Entitlement to Benefits Under Agreement.  Except as set forth in Section 7 or Section 8 of this Agreement, following a termination governed by Section 7 or Section 8, the Executive shall not be entitled to any other compensation or benefits, except as may be separately negotiated by the parties and approved by the Board of Directors of the Company in writing in conjunction with the termination of Executive's employment.

 

9.             Noncompetition Provisions.

 

(a)           Noncompetition.  The Executive agrees that during the Term of employment under this Agreement prior to any termination of his employment hereunder and, in the event of termination of the Executive’s employment by the Company for Cause or voluntary termination of employment by the Executive (other than for Good Reason), for a period of one year following such termination, the Executive will not, directly or indirectly, without the prior written consent of the Company, manage, operate, join, control, participate in, or be connected as a stockholder (other than as a holder of shares publicly traded on a stock exchange or the NASDAQ National Market System), partner, or other equity holder with, or as an officer, director or employee of, any private or public investment firm, broker dealer or real estate investment trust whose business strategy is based on or who engages in the trading, sales or management of mortgage-backed securities (the “Business”) in any geographical region in which the Company engages in the Business (a “Competitor”).  It is further expressly agreed that the Company will or would suffer irreparable injury of the Company in violation of the preceding sentence of this Agreement and that the Company would by reason of such competition be entitled to injunctive relief in a court of appropriate jurisdiction, and the Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting the Executive from competing with the Company or any subsidiary or affiliate of the Company, in the areas of business set forth above, in violation of this Agreement.

 

  

- 6 -

  

 

(b)           Right to Company Materials.  The Executive agrees that all styles, designs, lists, materials, books, files, reports, correspondence, records, and other documents (“Company Materials”) used, prepared, or made available to the Executive in connection with his employment by the Company shall be and shall remain the property of the Company.  Upon the termination of employment or the expiration of the Term of employment under this Agreement, all Company Materials shall be returned immediately to the Company, and the Executive shall not make or retain any copies thereof.

 

(c)           Soliciting Executives.  The Executive promises and agrees that he will not directly or indirectly solicit any of the Company Executives to work for any Competitor during the one-year period following his termination of employment unless such termination is by the Company for reasons other than Cause or by the Executive for Good Reason.

 

(d)           Corporate Opportunities.  The Executive agrees, in accordance with Maryland law, to first offer to the Company corporate opportunities learned of solely as a result of his service as an officer of the Company.

 

10.           Notices.  All notices and other communications under this Agreement shall be in writing and shall be given by fax or first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three (3) days after mailing or twenty-four (24) hours after transmission of a fax to the respective persons named below:

 

	
If to the Company:

	
Michael A. J. Farrell

Chairman and Chief Executive Officer

Annaly Capital Management, Inc.

1211 Avenue of the Americas

Suite 2902

New York, NY 10036

Phone: (212) 696-0100

Fax:  (212) 696-9809

	 	 
	
If to the Executive:

	
Matthew J. Lambiase

200 Central Park South 5B

New York, NY  10019

Phone: (212) 744-5761

Either party may change such party’s address for notices by notice duly given pursuant hereto.

11.           Attorneys’ Fees.  In the event judicial determination or arbitration (as provided in Section 22) is necessary for any dispute arising as to the parties’ rights and obligations hereunder, the Company shall pay to the Executive his costs incurred (including attorney’s fees) in deciding such dispute provided that he has substantially prevailed.

 

12.           No Mitigation or Offset.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.  The Company shall not be entitled to set off against the amounts payable to the Executive under this Agreement any amounts earned by the Executive in other employment after termination of employment with the Company, or any amounts which might have been earned by the Executive in other employment had such other employment been sought.

 

  

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13.           Termination of Prior Agreements.  This Agreement terminates and supersedes any and all prior agreements and understandings between the parties with respect to employment or with respect to the compensation of the Executive by the Company.

 

14.           Assignment; Successors.  This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided that, in the event of the merger, consolidation, transfer, or sale of all or substantially all of the assets of the Company with or to any other individual or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.

 

15.           Governing Law.  This Agreement and the legal relations thus created between the parties hereto shall be governed by and construed under and in accordance with the laws of the State of New York.

 

16.           Entire Agreement; Headings.  This Agreement embodies the entire agreement of the parties respecting the matters within its scope and may be modified only in writing.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

17.           Waiver; Modification.  Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.  This Agreement shall not be modified in any respect except by a writing executed by each party hereto.

 

18.           Severability.  In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, only the portions of this Agreement that violate such statute or public policy shall be stricken.  All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect.  Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement.

 

19.           Indemnification; Directors and Officers Insurance.  The Company shall indemnify and hold Executive harmless to the maximum extent permitted by Section 2-418 of the Maryland General Corporations Law or its successor statute.  During the Term and for six years following the date of the Executive’s termination as an officer of the Company, the Company (or any successor thereto) shall provide comprehensive coverage under the Company’s officers and directors insurance policy (or policies) on substantially the same terms and levels that it provides to its senior executive officers, at the Company’s sole cost.

 

  

- 8 -

  

 

20.           Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

21.           Successor Sections.  References herein to sections, rules or regulations of the Code or other applicable law shall be deemed to include any successor sections, rules or regulations.

 

22.           Arbitration.  Any dispute, claim or controversy arising out of or in relation to this Agreement, which the Executive and the Company are unable to resolve shall be determined by the decision of a board of arbitration consisting of three (3) members (the “Board of Arbitration”) selected by the American Arbitration Association upon application made to it for such purpose by either the Company or the Executive.  The arbitration proceedings shall take place in New York, New York or such other place as shall be agreed to by the parties.  The Board of Arbitration shall reach and render a decision in writing.  In connection with rendering its decision, the Board of Arbitration shall adopt and follow such rules and procedures as a majority of the members of the Board of Arbitration deems necessary or appropriate.  Any award shall be rendered on the basis of the substantive law governing this Agreement and shall be concurred in by a majority of the arbitrators.  To the extent practical, decisions of the arbitrators shall be rendered no more than thirty (30) calendar days following commencement of the arbitration proceedings with respect thereto.

 

Any decision made by the Board of Arbitration (either prior to or after the expiration of such thirty (30) calendar day period) shall be final, binding and conclusive on the Executive and the Company and entitled to be enforced to the fullest extent permitted by law and entered in any court of competent jurisdiction.  The Company shall bear all of the costs of arbitration, except for the attorneys’ fees incurred by the Executive, which fees shall be subject to Section 11 hereof.

 

[REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK]

 

  

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Executive has hereunto signed this Agreement, as of the date first above written.

 

 

	  	
ANNALY CAPITAL MANAGEMENT, INC.

	  	  
	  	  
	  	
By:        /s/ Michael A.J. Farrell      

	  	
                  Michael A.J. Farrell

	  	  
	  	  
	  	  
	  	  
	  	
By:        /s/ Matthew J. Lambiase      

	  	
                Matthew J. Lambiase

 

 

- 10 -

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