Document:

Exhibit 10.27

 

CONFIDENTIAL INFORMATION

 

1290 ASSOCIATES, L.L.C.

 

Landlord

 

TO

 

WARNER COMMUNICATIONS INC.

 

Tenant

 

 

Lease

 

 

Dated as of February 1, 1996

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Premises; Term; Use

  	
   

  
	
  1.01

  	
  Demise

  	
   

  
	
  1.02

  	
  Term

  	
   

  
	
  1.03

  	
  Commencement
  Date

  	
   

  
	
  1.04

  	
  Tenant Delay

  	
   

  
	
  1.05

  	
  Use

  	
   

  
	
  1.06

  	
  Tenant’s Right of Offering

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Rent

  	
   

  
	
  2.01

  	
  Rent

  	
   

  
	
  2.02

  	
  Fixed Rent

  	
   

  
	
  2.03

  	
  Additional
  Charges

  	
   

  
	
  2.04

  	
  Tax Payments

  	
   

  
	
  2.05

  	
  Operating Payments

  	
   

  
	
  2.06

  	
  Tax and Operating Provisions

  	
   

  
	
  2.07

  	
  Electric Charges

  	
   

  
	
  2.08

  	
  Manner of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Landlord Covenants

  	
   

  
	
  3.01

  	
  Landlord Services

  	
   

  
	
  3.02

  	
  Other
  Building Services

  	
   

  
	
  3.03

  	
  General
  Provisions

  	
   

  
	
  3.04

  	
  Additional Covenants

  	
   

  

 

i

 

	
  ARTICLE
  4

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Leasehold Improvements: Tenant Covenants

  	
   

  
	
  4.01

  	
  Initial
  Improvements

  	
   

  
	
  4.02

  	
  Alterations

  	
   

  
	
  4.03

  	
  Landlord’s
  and Tenant’s Property

  	
   

  
	
  4.04

  	
  Access
  and Changes to Building

  	
   

  
	
  4.05

  	
  Repairs

  	
   

  
	
  4.06

  	
  Compliance
  with Laws

  	
   

  
	
  4.07

  	
  Tenant Advertising

  	
   

  
	
  4.08

  	
  Right to
  Perform Tenant Covenants

  	
   

  
	
  4.09

  	
  Noise
  and Vibration

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Assignment and Subletting

  	
   

  
	
  5.01

  	
  Assignment;
  Etc.

  	
   

  
	
  5.02

  	
  Landlord’s
  Right of First Offer

  	
   

  
	
  5.03

  	
  Assignment
  and Subletting Procedures

  	
   

  
	
  5.04

  	
  General
  Provisions

  	
   

  
	
  5.05

  	
  Assignment
  and Sublease Profits

  	
   

  
	
  5.06

  	
  Sublease
  of Space From Other Tenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Subordination; Default; Indemnity

  	
   

  
	
  6.01

  	
  Subordination

  	
   

  
	
  6.02

  	
  Estoppel
  Certificate

  	
   

  
	
  6.03

  	
  Default

  	
   

  
	
  6.04

  	
  Re-entry by Landlord

  	
   

  
	
  6.05

  	
  Damages

  	
   

  
	
  6.06

  	
  Other
  Remedies

  	
   

  
	
  6.07

  	
  Right to
  Injunction

  	
   

  
	
  6.08

  	
  Certain
  Waivers

  	
   

  
	
  6.09

  	
  No Waiver

  	
   

  
	
  6.10

  	
  Holding
  Over

  	
   

  
	
  6.11

  	
  Attorneys’
  Fees

  	
   

  
	
  6.12

  	
  Nonliability
  and Indemnification

  	
   

  

 

ii

 

	
  6.13

  	
  Consequential
  Damages

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Insurance; Casualty: Condemnation

  	
   

  
	
  7.01

  	
  Compliance
  with Insurance Standards

  	
   

  
	
  7.02

  	
  Tenant’s and Landlord’s Insurance

  	
   

  
	
  7.03

  	
  Subrogation
  Waiver

  	
   

  
	
  7.04

  	
  Condemnation

  	
   

  
	
  7.05

  	
  Casualty

  	
   

  
	
  7.06

  	
  Certain
  Termination Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  8

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Miscellaneous Provisions

  	
   

  
	
  8.01

  	
  Notice

  	
   

  
	
  8.02

  	
  Building
  Rules

  	
   

  
	
  8.03

  	
  Severability

  	
   

  
	
  8.04

  	
  Certain
  Definitions

  	
   

  
	
  8.05

  	
  Quiet
  Enjoyment

  	
   

  
	
  8.06

  	
  Limitation
  of Landlord’s Personal Liability

  	
   

  
	
  8.07

  	
  Counterclaims

  	
   

  
	
  8.08

  	
  Survival

  	
   

  
	
  8.09

  	
  Certain
  Remedies

  	
   

  
	
  8.10

  	
  No Offer

  	
   

  
	
  8.11

  	
  Captions;
  Construction

  	
   

  
	
  8.12

  	
  Amendments

  	
   

  
	
  8.13

  	
  Broker

  	
   

  
	
  8.14

  	
  Merger

  	
   

  
	
  8.15

  	
  Successors

  	
   

  
	
  8.16

  	
  Applicable
  Law

  	
   

  
	
  8.17

  	
  No Development
  Rights

  	
   

  
	
  8.18

  	
  Parking

  	
   

  
	
  8.19

  	
  Emergency
  Generator

  	
   

  
	
  8.20

  	
  Signage/Building
  Directory

  	
   

  
	
  8.21

  	
  Capital
  Program

  	
   

  
	
  8.22

  	
  Elevator
  Reconfiguration

  	
   

  

 

iii

 

	
  8.23

  	
  Force
  Majeure

  	
   

  
	
  8.24

  	
  Tenant’s
  Right To Perform Landlord’s Obligations

  	
   

  
	
  8.25

  	
  Tenant Abatement Rights

  	
   

  
	
  8.26

  	
  Tenant
  Termination Rights

  	
   

  
	
  8.27

  	
  Effect
  of Rejection by Landlord

  	
   

  
	
  8.28

  	
  Major
  Rights

  	
   

  
	
  8.29

  	
  Memorandum
  of Lease

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  9

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Renewal Right

  	
   

  
	
  9.01

  	
  Renewal
  Right

  	
   

  
	
  9.02

  	
  Renewal
  Rent and Other Terms

  	
   

  
	
  9.03

  	
  Arbitration

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  10

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Tenant Antenna

  	
   

  
	
  10.01

  	
  Tenant
  Antenna

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Security Deposit

  	
   

  
	
  11.01

  	
   

  	
   

  
	
  11.02

  	
   

  	
   

  
	
  11.03

  	
   

  	
   

  
	
  11.04

  	
   

  	
   

  
	
  11.05

  	
   

  	
   

  

 

 

	
  Exhibit
  A

  	
  Description
  of Land

  
	
  Exhibit
  B-1

  	
  Floor
  Plan: Block A Space

  
	
  Exhibit
  B-2

  	
  Floor
  Plan: Block C Space

  
	
  Exhibit
  B-3

  	
  Floor
  Plan: Block E Space

  
	
  Exhibit
  B-4

  	
  Floor
  Plan: Block B Space

  
	
  Exhibit
  B-5

  	
  Floor
  Plan: Block D Space

  
	
  Exhibit
  B-6

  	
  Floor
  Plan: Block B Space

  

 

iv

 

	
  Exhibit
  B-7

  	
  Floor
  Plan: Block F Space

  
	
  Exhibit
  C

  	
  Rules
  and Regulations

  
	
  Exhibit
  D

  	
  Alterations
  Rules and Regulations

  
	
  Exhibit
  E

  	
  Standard
  Cleaning Specifications

  
	
  Exhibit
  F

  	
  Tenant’s
  Required Work

  
	
  Exhibit
  G

  	
  Landlord’s
  Work

  
	
  Exhibit
  H

  	
  Security
  Desk

  
	
  Exhibit I

  	
  Design
  Specifications for Heat, Ventilation and Air Conditioning

  
	
  Exhibit
  J

  	
  Maintenance
  and Operation of Elevators

  
	
  Exhibit K

  	
  Electric
  Energy Specifications

  
	
  Exhibit L

  	
  Capacity of
  Existing Electricity Feeders

  
	
  Exhibit
  M-1

  	
  Nondisturbance
  and Attornment Agreement

  
	
  Exhibit
  M-2

  	
  Nondisturbance
  and Attornment Agreement - (re: future Superior Mortgagees)

  
	
  Exhibit N

  	
  Partition
  Wall in Building Lobby - See Exhibit H and page 2 of Exhibits S and T

  
	
  Exhibit
  O

  	
  Restrictions
  re: Supplemental Air Conditioning Louvers

  
	
  Exhibit
  P

  	
  Approved
  Contractors

  
	
  Exhibit
  Q

  	
  Assumption
  Agreement

  
	
  Exhibit
  R

  	
  Emergency
  Generator Locations

  
	
  Exhibit
  S

  	
  Location
  of Signage

  
	
  Exhibit
  T

  	
  Design
  Criteria of Signage

  
	
  Exhibit
  U&V

  	
  Phase
  I Capital Program Work and Phase II Capital Program Work

  
	
  Exhibit W

  	
  Intentionally
  Deleted

  
	
  Exhibit
  X

  	
  Rooftop
  Installation Questionnaire

  
	
  Exhibit
  Y

  	
  Antenna

  

 

v

 

INDEX OF DEFINED TERMS

 

	
  Definition

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  75 Rock
  Conduit

  	
   

  	
  124

  
	
  75 Rock
  Passage

  	
   

  	
  58

  
	
  AAA

  	
   

  	
  33

  
	
  Actual
  Charge

  	
   

  	
  36

  
	
  Additional
  Charges

  	
   

  	
  22

  
	
  Additional
  Space

  	
   

  	
  10

  
	
  Additional
  Space Inclusion Date

  	
   

  	
  14

  
	
  Adjacent
  Passage

  	
   

  	
  58

  
	
  Affiliate

  	
   

  	
  71

  
	
  Alterations

  	
   

  	
  51

  
	
  Antenna

  	
   

  	
  124

  
	
  Arbiter

  	
   

  	
  32

  
	
  Assignment
  Consideration

  	
   

  	
  84

  
	
  Available

  	
   

  	
  12

  
	
  Available
  Space

  	
   

  	
  10

  
	
  Available
  Space Notice

  	
   

  	
  10

  
	
  Base
  Operating Amount

  	
   

  	
  25

  
	
  Base
  Operating Year

  	
   

  	
  25

  
	
  Base Tax
  Amount

  	
   

  	
  22

  
	
  Big Six
  Accounting Firm

  	
   

  	
  82

  
	
  Block

  	
   

  	
  2

  
	
  Block A
  Commencement Date

  	
   

  	
  2

  
	
  Block A
  Space

  	
   

  	
  1

  
	
  Block B
  Commencement Date

  	
   

  	
  3

  
	
  Block B
  Space

  	
   

  	
  1

  
	
  Block C and
  B Abatement Percentage

  	
   

  	
  47

  
	
  Block C Commencement
  Date

  	
   

  	
  3

  
	
  Block C
  Space

  	
   

  	
  1

  
	
  Block D
  Commencement Date

  	
   

  	
  3

  
	
  Block D
  Space

  	
   

  	
  2

  
	
  Block E
  Commencement Date

  	
   

  	
  3

  
	
  Block E
  Space

  	
   

  	
  2

  

 

vi

 

 

	
  Definition

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Block F Commencement Date

  	
   

  	
  3

  
	
  Block F Notice

  	
   

  	
  3

  
	
  Block F Space

  	
   

  	
  2

  
	
  Blocks

  	
   

  	
  2

  
	
  Broker

  	
   

  	
  109

  
	
  Building

  	
   

  	
  1

  
	
  Business Days

  	
   

  	
  45

  
	
  Business Hours

  	
   

  	
  45

  
	
  Cafeteria

  	
   

  	
  7

  
	
  Capital Program Work

  	
   

  	
  113

  
	
  Casualty

  	
   

  	
  100

  
	
  Commencement Date

  	
   

  	
  3

  
	
  Companies

  	
   

  	
  87

  
	
  Competitor

  	
   

  	
  74

  
	
  Contractor

  	
   

  	
  102

  
	
  Control

  	
   

  	
  71

  
	
  Curing Party

  	
   

  	
  63

  
	
  Decorating

  	
   

  	
  51

  
	
  Delivered Block

  	
   

  	
  1

  
	
  Delivered Blocks

  	
   

  	
  1

  
	
  Delivery Condition

  	
   

  	
  5

  
	
  Discounted Fair Market Rent

  	
   

  	
  121

  
	
  Dispute

  	
   

  	
  78

  
	
  Elevator Reconfiguration

  	
   

  	
  114

  
	
  Elevator Reconfiguration Contract

  	
   

  	
  114

  
	
  Emergency Generator

  	
   

  	
  110

  
	
  Equitable Lease

  	
   

  	
  39

  
	
  Estimate

  	
   

  	
  102

  
	
  Eviction

  	
   

  	
  118

  
	
  Exclusive Services

  	
   

  	
  116

  
	
  Existing Rights

  	
   

  	
  12

  
	
  Existing Tenants

  	
   

  	
  12

  
	
  Expiration Date

  	
   

  	
  2

  
	
  Extra Cleaning

  	
   

  	
  42

  
	
  Fair Market Additional Rent

  	
   

  	
  121

  
	
  Fair Market Fixed Rent

  	
   

  	
  121

  
	
  Final Decision

  	
   

  	
  34

  

 

vii

 

	
  Definition

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Final Noise Notification

  	
   

  	
  66

  
	
  Fixed Rent

  	
   

  	
  20

  
	
  Fixed Rent Commencement Date

  	
   

  	
  21

  
	
  Fixture List

  	
   

  	
  57

  
	
  Fixture Notice

  	
   

  	
  57

  
	
  Fixtures

  	
   

  	
  56

  
	
  Force Majeure

  	
   

  	
  115

  
	
  Force Majeure Adjusted Commencement Date

  	
   

  	
  4

  
	
  Fourth Floor Exception

  	
   

  	
  12

  
	
  Fourth Floor Lease

  	
   

  	
  12

  
	
  Future Tenants

  	
   

  	
  13

  
	
  Governmental Approval

  	
   

  	
  51

  
	
  Ground Lease

  	
   

  	
  87

  
	
  Hearing

  	
   

  	
  78

  
	
  Hearing Notice

  	
   

  	
  78

  
	
  Hearing Officer

  	
   

  	
  78

  
	
  Holdover Percentage

  	
   

  	
  92

  
	
  Identified Ancillary Uses

  	
   

  	
  8

  
	
  Improvements and Betterments

  	
   

  	
  56

  
	
  Indemnification Notice

  	
   

  	
  95

  
	
  Indemnified Party

  	
   

  	
  94

  
	
  Indemnitee

  	
   

  	
  95

  
	
  Indemnitor

  	
   

  	
  95

  
	
  Indenture

  	
   

  	
  87

  
	
  Initial Blocks

  	
   

  	
  2

  
	
  Initial Work Allowance

  	
   

  	
  49

  
	
  Interest Rate

  	
   

  	
  64

  
	
  Interruption

  	
   

  	
  116

  
	
  Land

  	
   

  	
  1

  
	
  Landlord

  	
   

  	
  1, 106

  
	
  Landlord Group

  	
   

  	
  93

  
	
  Landlord Obligation Areas

  	
   

  	
  44

  
	
  Landlord Services

  	
   

  	
  38

  
	
  Landlord’s Abatement Plan

  	
   

  	
  65

  
	
  Landlord’s Determination

  	
   

  	
  121

  
	
  Landlord’s List

  	
   

  	
  11

  
	
  Landlord’s Rate

  	
   

  	
  35

  

 

viii

 

	
  Definition

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Landlord’s Statement

  	
   

  	
  25

  
	
  Landlord’s Work

  	
   

  	
  46

  
	
  Laws

  	
   

  	
  61

  
	
  Lessor

  	
   

  	
  133

  
	
  Long Lead Work

  	
   

  	
  103

  
	
  Major Rights

  	
   

  	
  119

  
	
  Major Subtenant

  	
   

  	
  82

  
	
  Major Subtenant Percentage

  	
   

  	
  82

  
	
  Material Alteration

  	
   

  	
  51

  
	
  Medical Waste

  	
   

  	
  7

  
	
  Minimum Charge

  	
   

  	
  36

  
	
  Noise Notification

  	
   

  	
  64

  
	
  Notice

  	
   

  	
  105

  
	
  Offer Space

  	
   

  	
  10

  
	
  Offset Notice

  	
   

  	
  51

  
	
  Operating Expenses

  	
   

  	
  25

  
	
  Operating Payment

  	
   

  	
  30

  
	
  Operating Year

  	
   

  	
  30

  
	
  Other Sublease Considerations

  	
   

  	
  84

  
	
  Outside Date

  	
   

  	
  102

  
	
  Phase I Delay

  	
   

  	
  113

  
	
  Phase I Target Date

  	
   

  	
  113

  
	
  Phase II Capital Program Work

  	
   

  	
  113

  
	
  Phase II Delay

  	
   

  	
  114

  
	
  Phase II Target Date

  	
   

  	
  113

  
	
  Premises

  	
   

  	
  2

  
	
  Prime Rate

  	
   

  	
  64

  
	
  Project

  	
   

  	
  1

  
	
  Punch List Items

  	
   

  	
  5

  
	
  Qualified Tenant

  	
   

  	
  70

  
	
  Qualifying Major Sublease

  	
   

  	
  81

  
	
  Records

  	
   

  	
  31

  
	
  Related Service Providers

  	
   

  	
  71

  
	
  Remaining Additional Charge

  	
   

  	
  126

  
	
  Remaining Fixed Rent

  	
   

  	
  127

  
	
  Remaining Obligation

  	
   

  	
  127

  
	
  Renewal Notice

  	
   

  	
  121

  

 

ix

 

	
  Definition

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Renewal Option

  	
   

  	
  121

  
	
  Renewal Percentage

  	
   

  	
  121

  
	
  Renewal Term

  	
   

  	
  121

  
	
  Rent

  	
   

  	
  20

  
	
  Rent Commencement Date

  	
   

  	
  21

  
	
  Rent Factor

  	
   

  	
  113

  
	
  Rent Notice

  	
   

  	
  121

  
	
  Reoffer Acceptance Notice

  	
   

  	
  17

  
	
  Reoffer Configuration

  	
   

  	
  17

  
	
  Reoffer Notice

  	
   

  	
  17

  
	
  Reoffer Rental

  	
   

  	
  17

  
	
  Reoffer Space

  	
   

  	
  17

  
	
  Reoffer Term Length

  	
   

  	
  17

  
	
  Repeat Noise Notification

  	
   

  	
  65

  
	
  Request for Information

  	
   

  	
  10

  
	
  Required Reoffer Terms

  	
   

  	
  16

  
	
  Required Restoration Work

  	
   

  	
  102

  
	
  Second Commencement Date

  	
   

  	
  47

  
	
  Section 5.01(b) Assignment

  	
   

  	
  128

  
	
  Security

  	
   

  	
  127

  
	
  Security Deposit

  	
   

  	
  127

  
	
  Security Letter

  	
   

  	
  127, 131

  
	
  Stated Block A Commencement Date

  	
   

  	
  2

  
	
  Stated Block B Commencement Date

  	
   

  	
  3

  
	
  Stated Block C Commencement Date

  	
   

  	
  3

  
	
  Stated Block D Commencement Date

  	
   

  	
  3

  
	
  Stated Block E Commencement Date

  	
   

  	
  3

  
	
  Stated Block F Commencement Date

  	
   

  	
  3

  
	
  Stated Commencement Date

  	
   

  	
  3

  
	
  Stated Second Commencement Date

  	
   

  	
  46

  
	
  Sublet Rent

  	
   

  	
  72

  
	
  Substituted Taxes

  	
   

  	
  22

  
	
  Successor Landlord

  	
   

  	
  86

  
	
  Superior Lease

  	
   

  	
  85

  
	
  Superior Lessor

  	
   

  	
  85

  
	
  Superior Mortgage

  	
   

  	
  85

  
	
  Superior Mortgagee

  	
   

  	
  85

  

 

x

 

	
  Definition

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Tangible Net Worth

  	
   

  	
  127

  
	
  Tax and Operating Payments Commencement
  Date

  	
   

  	
  21

  
	
  Tax Bill

  	
   

  	
  24

  
	
  Tax Payment

  	
   

  	
  24

  
	
  Tax Statement

  	
   

  	
  24

  
	
  Tax Year

  	
   

  	
  23

  
	
  Taxes

  	
   

  	
  22

  
	
  Tenant

  	
   

  	
  1

  
	
  Tenant Delay

  	
   

  	
  6

  
	
  Tenant Delivery Date

  	
   

  	
  46

  
	
  Tenant Group

  	
   

  	
  93

  
	
  Tenant Required Work Allowance

  	
   

  	
  48

  
	
  Tenant’s Abatement Plan

  	
   

  	
  65

  
	
  Tenant’s Allowance Work

  	
   

  	
  49

  
	
  Tenant’s Basic Cost

  	
   

  	
  83

  
	
  Tenant’s Counteroffer

  	
   

  	
  14

  
	
  Tenant’s Determination

  	
   

  	
  122

  
	
  Tenant’s Exercise Notice

  	
   

  	
  14

  
	
  Tenant’s Notice

  	
   

  	
  122

  
	
  Tenant’s Offer Notice

  	
   

  	
  72

  
	
  Tenant’s Parking Spaces

  	
   

  	
  109

  
	
  Tenant’s Property

  	
   

  	
  56

  
	
  Tenant’s Qualified Sublet Cost

  	
   

  	
  73

  
	
  Tenant’s Required Work

  	
   

  	
  48

  
	
  Tenant’s Share

  	
   

  	
  23

  
	
  Tenant’s Specified Rental

  	
   

  	
  15

  
	
  Tenant’s Specified RSF

  	
   

  	
  15

  
	
  Tenant’s Specified Term

  	
   

  	
  14

  
	
  Tenant’s Statement

  	
   

  	
  32

  
	
  Term

  	
   

  	
  2

  
	
  Termination Notice

  	
   

  	
  102

  
	
  Transfer Notice

  	
   

  	
  76

  
	
  Unscheduled Available Space

  	
   

  	
  18

  
	
  Unscheduled Available Space Notice

  	
   

  	
  18

  
	
  Waived Space

  	
   

  	
  15

  
	
  Work Allowance

  	
   

  	
  48

  

 

xi

 

LEASE, dated
as of February 1, 1996, between 1290 ASSOCIATES, L.L.C. (“Landlord”), a
New York limited liability company whose address is c/o Olympia & York
Companies (U.S.A.), 237 Park Avenue, New York, New York 10017 and WARNER
COMMUNICATIONS INC. (“Tenant”), a Delaware corporation, whose address is
75 Rockefeller Plaza, New York, New York 10019.

 

W  I  T  N  E  S
S  E  T  H

 

WHEREAS,
Landlord is willing to lease to Tenant and Tenant is willing to hire from
Landlord, on the terms hereinafter set forth, certain space in the office building
located at 1290 Avenue of the Americas, New York, New York (the “Building”)
on the land more particularly described in Exhibit A (the “Land”;
the Land and the Building and all plazas, sidewalks and curbs adjacent thereto
are collectively called the “Project”).

 

NOW,
THEREFORE, Landlord and Tenant agree as follows:

 

ARTICLE 1

 

Premises;
Term; Use

 

1.01        Demise.  (a) Landlord hereby leases to Tenant and
Tenant hereby hires from Landlord, subject to the terms and conditions of this
Lease, the following space:

 

(i)            the entire 23rd
floor of the Building substantially as shown on the plans thereof attached
hereto as Exhibit B-1 (the “Block A Space”),

 

(ii)           the entire 25th and
27th floors of the Building substantially as shown on the plans thereof
attached hereto as Exhibits B-4 and B-6 (collectively, the “Block B
Space”; the portion of the Block B Space which shall have been delivered to
Tenant on the date hereof, together with the Block C Space is herein referred
to as the “Delivered Blocks” and each portion of the Delivered Blocks,
which is on different floors, is individually a “Delivered Block”),

 

(iii)          the entire 24th
floor of the Building substantially as shown on the plans thereof attached
hereto as Exhibit B-2 (the “Block C Space”),

 

 

(iv)          the entire 26th
floor of the Building substantially as shown on the plans thereof attached
hereto as Exhibit B-5 (the “Block D Space”),

 

(v)           the entire 28th
floor of the Building substantially as shown on the plan thereof attached
hereto as Exhibit B-3 (the “Block E Space”),

 

(vi)          the entire 29th
floor of the Building substantially as shown on the plan thereof attached
hereto as Exhibit B-7 (the “Block F Space”; the Block A Space,
the Block B Space, the Block C Space, the Block D Space, the Block E Space and
the Block F Space are individually a “Block” and collectively, the “Blocks”
and together with any other space as and when such other space shall after the
date hereof be included in the demise hereunder, the “Premises”; the
Blocks excluding the Block F Space are collectively the “Initial Blocks”),
and

 

(b)           Landlord and Tenant agree that each
floor comprising the Blocks is conclusively deemed to contain the number of
rentable square feet of space specified therefore on Exhibits B-1 through
B-7 attached hereto. Landlord represents and warrants to Tenant that floors
2 and above of the Building contain in the aggregate 1,793,457 rentable square
feet, determined using the same standard of measurement as that used to
determine the rentable square footage of the Blocks.

 

1.02        Term.  (a) The term of this Lease (the “Term”)
shall commence on the date hereof, and shall end with respect to the entire
Premises, unless sooner terminated as herein provided, on June 30, 2012 (such
date, as the same may be extended pursuant to Article 9, is called the “Expiration
Date). Possession of each Block will, subject to the terms of this Lease,
be delivered by Landlord to Tenant on the Commencement Date applicable to such
Block in the condition required in this Lease. Tenant’s obligations under the
terms of this Lease with respect to any Block, shall not commence until the
Commencement Date for such Block.

 

1.03        Commencement Date.  (a) (i) “Block A Commencement Date”
means February 1, 1996 (“Stated Block A Commencement Date”) as such date
may be extended pursuant to Section 1.03(b) hereof.

 

2

 

(ii)           “Block B Commencement Date”
means with respect to the Delivered Blocks the date of this Lease and with
respect to the remainder of the Block B Space, February 1, 1996 (“Stated
Block B Commencement Date”) as such date may be extended pursuant to Section
1.03(b) hereof.

 

(iii)          “Block C Commencement Date”
means the date of this Lease (“Stated Block C Commencement Date”).

 

(iv)          “Block D Commencement Date” means
March 1, 1996 (“Stated Block D Commencement Date”) as such date may be
extended pursuant to Section 1.03(b) hereof.

 

(v)           “Block E Commencement Date”
means January 15, 1996 (“Stated Block E Commencement Date”) as such date
may be extended pursuant to Section 1.03(b) hereof.

 

(vi)          “Block F Commencement Date”
means the earlier of (A) June 30, 1998 (the “Stated Block F Commencement
Date”) and (B) the Early Block F Commencement Date as such dates may be
extended pursuant to Section 1.03(b) hereof. The Early Block F
Commencement Date shall mean the date specified by Landlord in a notice to
Tenant (the “Block F Notice”) which Block F Notice Landlord may, but
shall not be obligated to, provide to Tenant on or prior to January 31, 1998,
advising Tenant that either the Block F Space has been vacated by and is free
of any possessory right (including, without limitation, Bank of New York) or
that Landlord reasonably anticipates the Block F Space to be vacated and free
of any such rights prior to May 31, 1998 and that the Block F space shall
become part of the Premises on the date specified in the Block F Notice, which
specified date shall be at least one hundred twenty (120) days after the giving
of such notice unless Tenant and Landlord mutually agree on adding the Block F
Space to the Premises prior to the expiration of such 120 day period. (Each of
the Stated Block A Commencement Date, the Stated Block B Commencement Date, the
Stated Block C Commencement Date, the Stated Block D Commencement Date, the
Stated Block E Commencement Date and the Stated Block F Commencement Date is
called a “Stated Commencement Date” and each of the Block A Commencement
Date, the Block B Commencement Date, the Block C Commencement Date, the Block D
Commencement Date, the Block E Commencement Date and the Block F Commencement
Date is called a “Commencement Date”).

 

(b)           If Landlord shall be unable to
deliver possession of any Blocks (other than the Delivered Blocks) to Tenant on
or before the applicable Stated Commencement Date (or the Early Block F
Commencement Date, if applicable) for such Block by reason of a

 

3

 

holdover tenancy in all or any
portion of such Block, Tenant Delay, Force Majeure, or otherwise, Landlord
shall notify Tenant thereof and the applicable Commencement Date of such Block
(other than the Delivered Blocks) shall be extended by one day for each day
that Landlord shall be unable to deliver possession thereof (the Stated
Commencement Date (or the Early Block F Commencement Date, if applicable) as
extended by Force Majeure is the “Force Majeure Adjusted Commencement Date”).
If any Stated Commencement Date or Early Block F Commencement Date, each as set
forth in clause (a), is extended pursuant to this clause (b),
promptly after the occurrence of each Commencement Date, Landlord shall notify
Tenant thereof and Landlord and Tenant shall confirm such Commencement Date by
a separate instrument; provided, that the failure to execute and deliver
any such instrument shall not affect the determination of any such dates in
accordance with this Article 1. Pending the resolution of any dispute as
to a Commencement Date, Tenant shall pay Rent based upon Landlord’s
determination. Any dispute as to a Commencement Date shall be resolved by arbitration
in accordance with Section 9.03 hereof.

 

(c)           If for any reason Landlord shall be
unable to deliver possession of the Premises to Tenant, in Delivery Condition,
on any date specified in this Lease for such delivery, Tenant’s sole rights and
remedies therefor shall be as expressly set forth in clauses (d) and (e)
and the validity of this Lease shall not be impaired, nor shall the Term be
extended, by reason thereof. This Section 1.03 shall be an express
provision to the contrary for purposes of Section 223-a of the New York Real
Property Law and any other law of like import now or hereafter in effect.

 

(d)           If Landlord is unable to deliver to
Tenant possession of any Block (or in the case of the Block B Space and the
Block C Space, the portion thereof other than the Delivered Blocks), in
Delivery Condition, on or prior to the Stated Commencement Date for such Block
by reason of Force Majeure, then the Rent Commencement Date for such
undelivered Block (or in the case of the Block B Space and the Block C Space,
the portion thereof other than the Delivered Blocks) shall be postponed by one
day for each day that such failure continues beyond the Stated Commencement
Date.

 

(e)           If Landlord is unable to deliver to
Tenant possession of any Block (or in the case of the Block B Space and the
Block C Space, the portion thereof other than the Delivered Blocks), in
Delivery Condition on or before the applicable Stated Commencement Date for
such Block by reason other than Force Majeure or Tenant Delay, then the Rent Commencement
Date for such undelivered Block (or in the case of the Block B Space and the
Block C Space, the portion thereof other than the Delivered Blocks) shall be
postponed by (i) one day for each day that such failure continues for such
undelivered Block or portion thereof to and including the 90th day of such
delay, (ii) 1.1 days for each day that such failure

 

4

 

continues beyond the 90th day
of such delay to and including the 120th day of such delay, (iii) 1.2 days
for each day that such failure continues beyond the 120th day of such delay, to
and including the 150th day of such delay, (iv) 1.3 days for each day that such
failure continues beyond the 150th day of such delay, to and including the 180th
day of such delay, (v) 1.4 days for each day that such failure continues beyond
the 180th day of such delay, to and including the 210th day of such delay, and
(vi) 1.5 days for each day that such failure continues beyond the 210th day of
such delay.(1) In no event shall the Rent Commencement Date for such
undelivered Block be extended by reason of Tenant Delay.

 

(f)            If Landlord is unable to deliver to
Tenant possession of any Block (or in the case of the Block B Space and the
Block C Space, the portion thereof other than the Delivered Blocks) in Delivery
Condition on or before the date required for such delivery pursuant to this
Lease by reason of a holdover tenancy in all or any portion of such Block,
Landlord shall use commercially reasonable efforts (including commencement and
prosecution with reasonable diligence, summary dispossess or other appropriate
proceedings), to terminate such holdover tenancy.

 

(g)           “Delivery Condition” means
with respect to any Blocks that Landlord’s Work with respect to such Blocks is
deemed to have been substantially completed in accordance with this Section
1.03(g). Landlord’s Work with respect to any Block shall be deemed to have
been substantially completed on the later of the third business day after
Landlord notifies Tenant that the Landlords’s Work is substantially completed
and the date upon which such Landlord’s Work has in fact been substantially
completed. Landlord’s work shall be deemed substantially completed when
Landlord’s Work has been completed other than minor details or adjustments (“Punch
List Items”) which do not interfere in material respect with Tenant’s
ability to prepare the applicable Block for Tenant’s initial occupancy thereof,
those items which as set forth in Exhibit G are not a condition to
delivery of such Blocks and (iii) any part of Landlord’s Work to the extent not
completed due to Tenant Delay.

 

(1)           By way of illustration of the application of the
provisions of Sections 1.03(d) and (e), if delivery of Block A is
delayed beyond the Stated Block A Commencement Date for twenty (20) days due to
causes other than Tenant Delay and Force Majeure, followed by thirty (30) days
due to Force Majeure, followed by twenty (20) days due to Tenant Delay and one
hundred ten (110) days due to causes other than Tenant Delay and Force Majeure;
then the Block A Rent Commencement Date will be delayed for a total of one
hundred sixty-five (165) days computed as follows: thirty (30) days due to
Force Majeure and one hundred thirty five (135) days for the delay caused by reasons
other than Force Majeure or Tenant Delay (day for day for the first ninety (90)
days, thirty-three (33) days (30 x 1.1) for the next thirty (30) days and
twelve (12) days (10 x 1.2) for the next ten (10) days.

 

5

 

Landlord and Tenant, within ten
(10) days after the relevant Commencement Date with respect to the Block A
Space, the Block B Space (other than the Delivered Blocks), the Block D Space,
the Block E Space and the Block F Space, and within ten (10) days after the
portion of Block B Space which is a Delivered Block and the Block C Space are
delivered to Tenant on the applicable Second Commencement Date, shall jointly
inspect such Block and note any Punch List Items with respect to such Blocks. Landlord
shall promptly complete any and all such Punch List Items.

 

1.04        Tenant Delay.  “Tenant Delay” means any delay which
Landlord may encounter in the performance of Landlord’s obligations under this
Lease (i) as the direct result of any breach by Tenant of its obligations under
this Lease or (ii) by reason of any negligence or wrongful act or omission of
any nature of Tenant, its Affiliates, Related Service Providers occupying all
or any part of the Premises, the Tenant Group or any of their agents, employees,
contractors or invitees. Tenant shall pay to Landlord any costs or expenses
incurred by Landlord by reason of any Tenant Delay which are in excess of the
costs and expenses which Landlord would have incurred had the Tenant Delay not
occurred. Landlord shall give Tenant notice of any alleged Tenant Delay which
is actually known to the Building manager. During any period that the Building
manager or Landlord’s construction supervisor, if any, actually knows of the
Tenant Delay, no Tenant Delay shall be deemed to exist until the later of (i)
the actual commencement of such Tenant Delay and (ii) fifteen days prior to (or
in the case of an alleged Tenant Delay in connection with Sections 1.03(e)
and (g), five days prior to) the date Landlord shall have given Tenant such
notice of Tenant Delay. Notwithstanding the immediately preceding sentence, (i)
during any period of time that the Tenant Delay is unknown by the Building
manager and Landlord’s construction supervisor, if any, such Tenant Delay shall
be deemed to exist notwithstanding that no notice thereof has been delivered by
Landlord to Tenant and (ii) any Tenant Delay in connection with Section
1.03(b) shall be deemed to exist notwithstanding that no notice thereof has
been delivered by Landlord to Tenant. Any dispute with respect to Tenant Delay
may be resolved by arbitration pursuant to Section 9.03 hereof.

 

1.05        Use.  The Premises shall be used and occupied by
Tenant (and its permitted subtenants, Affiliates and Related Service Providers)
solely as general and executive offices (including such ancillary uses in
connection therewith as shall be reasonably required in the operation of their
businesses) and the following (but only to the extent such uses are ancillary
to use of the Premises as general and executive offices) are permitted by Law
in the Premises and are for the benefit of Tenant’s employees or the employees
of Tenant’s permitted subtenants, Affiliates and Related Service Providers, in
each case occupying any part of the Premises and reasonable numbers of guests,
of the foregoing Affiliates or Related Service Providers. In no event shall any
of such uses be made available to employees of Tenant,

 

6

 

Affiliates or Related Service
Providers who are not located at the Building (other than reasonable numbers of
senior executives) or to the general public: The Identified Ancillary uses are
intended to benefit and to be ancillary to the use of the Premises and not to
benefit persons not located in the Premises, other than incidentally and in
limited numbers): (i) an employee cafeteria (the “Cafeteria”); provided,
that if cooking will be done (other than only microwave cooking) (A) Tenant
shall install all flues, vents, grease traps and ansul systems and other
similar items reasonably requested by Landlord, (B) Tenant shall install an
exhaust system that, in Landlord’s reasonable judgment, is consistent with the
standards of a first class office building in midtown Manhattan, (C) all ducts
and flues shall be installed within the Premises and shall exit the Building
from a location reasonably acceptable to Landlord, (D) Tenant shall clean all
grease traps as appropriate, (E) Tenant shall bag all wet garbage, place such
garbage in containers that prevent the escape of odors, and provide for a
refrigerated waste facility to store such garbage pending disposal and (F)
Landlord shall cause such Cafeteria to be serviced on a regular basis by the
Building’s exterminator, provided such exterminator is competent and the
price for its services is reasonable, and Tenant shall pay to Landlord within
thirty (30) days after demand, the cost of providing any additional
extermination service required by reason of such Cafeteria; and  further
provided (whether or not cooking will be done), (v) Tenant shall not
allow any odors to escape from the Premises to other portions of the Project,
(w) Tenant shall otherwise maintain and operate the Cafeteria consistent with
the standards of a first class office building in midtown Manhattan, and (x)
the entire floor on which such cafeteria is located and the entire floor
immediately above and the entire floor immediately below the floor on which
such cafeteria is located shall be fully leased by Tenant or its Affiliates or
Related Service Providers (provided, once completed consistent with this clause
(x), Tenant shall not be required to move such cafeteria to satisfy such
requirement that it be located between floors fully leased by Tenant, it
Affiliates or Related Service Providers and (y) the Cafeteria shall consist of
no more than 15,000 rentable square feet in the aggregate; and (ii) an
infirmary; provided, Tenant shall (A) regularly dispose of all medical
materials, medical rubbish, medical waste, “red bag waste,” infectious waste
and other materials that require special disposal (“Medical Waste”)
generated in connection with Tenant’s use of the Premises as an infirmary to
comply with all Laws, (B) at its cost and expense engage the service of a
contamination waste disposal firm for regular disposal of such medical waste,
(C) not use or operate in the Premises any equipment, machinery or other
device, including without limitation x-ray and radiation machines, electronic
scanners, which emit radiation or other objectionable emissions outside of such
infirmary, (D) not store or use substances (other than in limited quantities
which are customary in infirmaries in first class, midtown Manhattan office
buildings), which could be deemed dangerous or combustible, including without
limitation, high pressure gases, (E) store all medicines and drugs (whether
prescription or otherwise), in a safe secure place, under lock and key; (iii) a
health and fitness facility consisting of no more than 8,000 rentable square
feet in the aggregate; provided, that

 

7

 

(A) no noise or vibration from
the health and fitness facility shall emanate from the Premises so that the
same shall annoy or disturb other tenants in the Building and the entire floor
on which such health and fitness facility is located and the entire floor
immediately above and the entire floor immediately below the floor on which
such health and fitness facility is located shall be fully leased by Tenant or
its Affiliates or Related Service Providers (provided, once completed
consistent with this clause (A) Tenant shall not be required to move
such health and fitness facility to satisfy such requirement that it be located
between floors fully leased by Tenant, its Affiliates or Related Service
Providers), upon completion of such health and fitness facility, and (B) the
location, the size and configuration of the space utilized, the placement and
type of equipment and construction of the health and fitness facility shall be
subject to the reasonable recommendations of Landlord’s consultants (which
consultants shall be paid by Tenant, provided such consultant is
competent and its charges for its services are reasonable), be in conformity
with the standards of a first-class midtown Manhattan office building and its
use shall not cause any harmonic sway in the Building; (iv) a childcare
facility (not to exceed 5,000 rentable square feet in the aggregate); (v)
library (including video and audio); (vi) wholesale sale of limited quantities
of Tenant’s products so as to constitute samples and a representative product
and licensing of products and services and showrooms therefor, provided
that such sales and any storage of products in connection therewith are only
incidental to the use of the Premises as general and executive offices; (vii)
travel agency solely for use of Tenant, its Affiliates and Related Service
Providers occupying space in the Premises; (viii) pantries (with no cooking
facilities other than microwave cooking); and (ix) a computer center (the ancillary
uses described in clauses (i)-(ix) above are called the “Identified
Ancillary Uses”)). Notwithstanding anything in Section 4.06 or
elsewhere in this Lease to the contrary, Tenant shall be responsible for
complying with all Laws applicable to the use of the Premises for the
Identified Ancillary Uses (including, without limitation, any structural and
nonstructural alterations to the Premises or Building required by such Laws)
and for obtaining, at Tenant’s sole cost and expense, all consents, approvals
and permits (including, without limitation, any amendment to the certificate of
occupancy for the Building and any public assembly permit) required by reason
of any such use and Landlord makes no representation to Tenant as to the
suitability of the Premises for any of the Identified Ancillary Uses. Landlord,
at Tenant’s expense, shall cooperate with Tenant’s efforts to obtain any such
consents, approvals and permits, including, without limitation, executing and
delivering any documents or instruments reasonably required by Tenant in
connection therewith. The entire floor on which any music, sound or video
demonstration areas of Tenant, its subtenants, Affiliates or Related Service
Providers are located and the entire floor immediately above and the entire floor
immediately below shall be fully leased by Tenant, its subtenants, Affiliates
or Related Service Providers (once any demonstration area is completed, Tenant
shall not be required to move such demonstration area to satisfy such
requirement that it be located between floors leased by Tenant, its Affiliates
or Related Service Providers; provided Tenant shall take such actions as

 

8

 

are reasonably required by
Landlord to ensure that any noise or vibration generated within the
demonstration area does not disturb other tenants in the Building, including
installing soundproofing materials). Nothing in this Section 1.05 which
permits the Premises or any part thereof to be used for Identified Ancillary
Uses shall be interpreted to mean that Tenant is permitted to make any
Alterations other than in compliance with all of the terms and conditions set
forth in Section 4.02 including the requirement to obtain Landlord’s
prior consent where required in Section 4.02.

 

In no event
shall the Premises be used for any of the following: (a) a banking, trust
company, safe deposit business, savings bank, a savings and loan association,
or a loan company, except as general and executive offices and not as a branch
open to the public, (b) the sale of travelers’ checks and/or foreign exchange
except to employees of Tenant, its Affiliates or members of the Related Service
Providers, (c) a stock brokerage office or for stock brokerage purposes except
as general and executive offices and not as a branch open to the public, (d) a
restaurant, bar or for the sale of food or beverages, except for reasonable
quantities of pantries (with no cooking facilities, other than microwave
cooking), vending machines for drinks, candy and snacks to service employees of
Tenant, its Affiliates and Related Service Providers in each case which are
occupying space in the Premises and as otherwise specifically provided herein,
(e) photographic reproductions and/or offset printing, other than such
reproduction or film processing (subject, in the case of film processing, to
the reasonable requirements of Landlord in connection with storage, disposal
and ventilation) which is ancillary to the use of the Premises as general and
executive offices, (f) an employment or travel agency, other than a travel
agency to service solely employees of Tenant, its Affiliates and Related
Service Providers in each case which are occupying space in the Premises in
connection with travel related to said parties’ business, (g) a school or
classroom except for training facilities for the use by the employees of
Tenant, its Affiliates or members of the Related Service Providers which in
each case are occupying space in the Premises, (h) medical or psychiatric
offices except as provided in the preceding paragraph, (i) conduct of an
auction, (j) gambling activities, (k) conduct of obscene, pornographic or
similar disreputable activities, (1) offices of an agency, department or bureau
of the United States Government, any state or municipality within the United
States or any foreign government, or any political subdivision of any of them,
(m) offices of any charitable, religious, union or other not-for-profit
organization which would cause adverse federal, state or local income tax or
other tax consequences to Landlord; provided, that, in no event
shall the rentable square feet occupied by charitable, religious, union or
other not-for-profit organizations and any entity set forth in clause (n)
below exceed 25,000 rentable square feet in the aggregate, or (n) offices of
any tax exempt entity within the meaning of Section 168(h)(2) of the Internal
Revenue Code of 1986, as amended, or any successor or substitute statute, or
rule or regulation applicable thereto which would cause adverse federal, state
or local income

 

9

 

tax or other tax consequences
to Landlord; provided, that, in no event shall the rentable square feet
occupied by such tax exempt entities together with the rentable square feet
occupied by the entities set forth in clause (m) above exceed 25,000
rentable square feet in the aggregate. The Premises shall not be used for any
purpose which would be inconsistent with the first class character of the
Building, create unreasonable or excessive elevator or floor loads, constitute
a public or private nuisance or interfere with any other tenant or Landlord.

 

1.06        Tenant’s Right of Offering.

 

(a)           During the Term and
provided that:

 

(i)            This Lease shall
not have terminated,

 

(ii)           Tenant, together
with any Affiliates of Tenant (and any Related Service Providers occupying
space leased by Tenant or any Affiliate of Tenant), shall be in actual
occupancy of not less than 80% of the aggregate rentable square feet of the
Blocks and the space currently leased by Tenant on the fourth floor in the
Building, and

 

(iii)          Tenant shall not be
in default hereunder beyond the expiration of any applicable notice and grace
period (provided, that Landlord, in its sole discretion, may waive this
requirement);

 

then, Tenant may lease
additional space for its own use and occupancy or that of its Affiliates, even
though such space may not be available for a term that is coterminous with this
Lease (herein called “Additional Space”) in accordance with this Section
1.06.

 

(b)           If during the Term any separately
leasable units of office space (as determined by Landlord) on floors two (2)
through and including nine (9) of the Building (the “Offer Space”)
become Available (as such term is hereinafter defined) or are anticipated by
Landlord to become Available within twelve (12) months (herein, for so long as
such separately leasable units of office space remains Available, called “Available
Space”) Landlord shall promptly provide Tenant with a written listing (the
“Available Space Notice”) specifying the date on which each such
separately leasable unit of Available Space is anticipated to become Available;
and the configuration (including the rentable square footage, floor plan and
floor) of each such separately leasable unit of Available Space. Within ten
(10) days after the giving of the Available Space Notice, Tenant shall either
(x) give to Landlord a notice (the “Request for Information”) in which
Tenant shall request that Landlord deliver to Tenant the

 

10

 

Landlord’s List for any or all
of the separately leasable units of Available Space designated on the Available
Space Notice, or (y) refrain from giving a Request for Information. In the
event Tenant refrains from giving a Request for Information, Tenant’s rights
with respect to all Available Space described in such Available Space Notice
shall terminate and Landlord shall be free to lease all or any portion of such
space to others at such rental and upon such terms and conditions as Landlord
in its sole discretion may desire and Landlord shall have no obligation to
include on any future Available Space Notice such space unless such space is
leased to an entity other than Tenant and once again becomes Available Space.
If Tenant gives to Landlord a Request for Information, then Landlord shall,
within twenty (20) days after the giving of such Request for Information
provide Tenant with a written listing (“Landlord’s List”) specifying the
following with respect to the Available Space listed on the Request for
Information:

 

(i)            the date on which
each such separately leasable unit of Available Space listed on the applicable
Request for Information is anticipated to become Available,

 

(ii)           the term for which
each such separately leasable unit of Available Space listed on the applicable
Request for Information is available for leasing (it being acknowledged and
agreed by Tenant that, except for the Fourth Floor Exception, such term may be
substantially longer or shorter than the term then remaining on this Lease and
that Tenant shall not have the right to require Landlord to lease to Tenant any
separately leasable unit of Available Space for a term that is coterminous with
the term of this Lease).

 

(iii)          any terms and
conditions on which each such separately leasable unit of Available Space
listed on the applicable Request for Information is Available that are in
variance with the terms of this Lease (e.g., if Landlord will have a
cancellation option with respect to all or a portion of such Available Space),

 

(iv)          the number of
rentable square feet (computed by the same manner as rentable square feet was
computed for the Blocks) contained in and the configuration of each such
separately leasable unit of Available Space listed on the applicable Request
for Information (it being acknowledged and agreed by Tenant that its right to
lease any separately leasable unit of Available Space

 

11

 

shall be with
respect to such space as so configured and sized in the Landlord’s List and
that such space may consist of a combination of more than one contiguous
floor),

 

(v)           the rental for such
Available Space (taking into account all relevant factors such as free rent
periods and construction allowances and the base year, base amount and other
calculations in connection with Taxes, Operating Payments and electricity and
other elements of the economic package offered by Landlord),

 

(vi)          the renewal rights,
if any, that will be applicable with respect to such Available Space, and

 

(vii)         such other matters
as Landlord may deem appropriate for such Landlord’s List.

 

The “Fourth
Floor Exception” shall mean that at all times that Tenant or its Affiliates
are leasing the space which Tenant is currently leasing on the fourth floor of
the Building (whether pursuant to the existing lease or a new lease; the “Fourth
Floor Lease”), if any Offer Space shall become Available Space for all or
any part of the balance of such fourth floor, then such Offer Space shall, if
added to the Premises pursuant to this Section, be added to the Premises for a
term which is coterminous with the terms of the Fourth Floor Lease and the
terms and conditions, under which such Offer Space is added to the Premises,
shall be appropriately adjusted to reflect that the term thereof is coterminous
with the term of the Fourth Floor Lease rather than the term which such Offer
Space is otherwise Available for leasing.

 

(c)           Any given separately leasable unit of
Offer Space shall be “Available” as of any date only to the extent that
it is not then:

 

(i)            subject to a lease
with a scheduled expiration date more than twelve (12) months after the giving
of Landlord’s List,

 

(ii)           subject to (1) any
currently existing rights, options (including, without limitation, any right of
first refusal or right of first offer), or negotiated agreements (including,
without limitation, any mandatory additional space provision) (collectively the
“Existing Rights”) of tenants leasing space in the Building as of the
date hereof (herein called “Existing Tenants”) and any

 

12

 

renewal rights
and rights which are granted after the date hereof by Landlord to such Existing
Tenants to lease additional space on the same floor that an Existing Tenant is
now occupying or has an existing right to occupy in the future (provided,
however, that Landlord agrees that, as long as Tenant or an Affiliate of
Tenant is leasing the space on the fourth floor of the Building which Tenant is
currently leasing, Landlord will not grant, after the date hereof, to such
Existing Tenants any rights to lease additional space on the fourth floor; and
further  provided, that Landlord shall not grant to an Existing
Tenant, after the date hereof, the right or option to lease additional Offer
Space, which is prior in right to Tenant, on the same floor that an Existing
Tenant currently leases space unless such tenant then leases at least 60% of
the rentable square feet comprising such floor except that if such Existing
Tenant is Unisys Corporation and Unisys Corporation is not occupying at least
60% of the rentable square feet comprising such floor, then Landlord may, after
the date hereof, grant Unisys Corporation the right or option to lease
additional Offer Space on the floor that it currently leases space, if Landlord
shall have first offered such Offer Space to Tenant as . provided herein and
Tenant shall not have added such space to the Premises as herein provided) and
(2) any rights and options granted by Landlord after the date hereof to tenants
leasing space in the Building after the date hereof (herein called “Future
Tenants”) to lease additional space on the same floors of the Building on
which such Future Tenant is then leasing space and to extend the term of such
Future Tenants’ leases (except that Landlord agrees that as long as Tenant or
an Affiliate of Tenant is leasing the space on the fourth floor of the Building
which Tenant is currently leasing, Landlord will not grant, after the date
hereof, to such Future Tenants any right to lease additional space on the
fourth floor of the Building; and  further  provided, that
Landlord will, not grant, after the date hereof, to a Future Tenant any right
or option which is prior in right to Tenant to lease additional Offer Space on
the same floor that such Future Tenant is then leasing space unless such Future
Tenant is then leasing at least 60% of the rentable square feet comprising such
floor), in each case, that could render such unit of space unavailable for
leasing to Tenant, or

 

13

 

(iii)          the subject of
active bona fide lease negotiations as of the date of this Lease.

 

(d)           Tenant shall keep confidential all
information contained in Landlord’s List and shall disclose same only to: (i)
in-house personnel, (ii) Tenant’s attorneys and (iii) Tenant’s consultants, in
each case on an as-needed basis, and Tenant shall require such personnel,
attorneys and consultants to keep all such information confidential.

 

(e)           (i) 
Tenant shall have the option, within the time period as more
particularly set forth in clause (ii) below, to add to the Premises one
or more of the separately leasable units of Available Space designated on
Landlord’s List. Any Additional Space shall be delivered to Tenant vacant and
broom-clean, but otherwise in its “AS IS” condition (unless otherwise specified
in Landlord’s List) but free of all tenancies and occupancies and subject to
the provisions of Section 7.05 hereof in the event of a casualty, and
added to the Premises on the date (herein called the “Additional Space
Inclusion Date”) on which Landlord makes such space available to Tenant.

 

(ii)           Within twenty (20)
days after the giving of Landlord’s List, Tenant shall either:

 

(w)          give to Landlord a notice (herein called
a “Tenant’s Exercise Notice”), in which Tenant shall elect to add to the
Premises one or more of the separately leasable units of Available Space
designated on Landlord’s List in the exact configuration with the same number
of rentable square feet and at the same rental and otherwise on the terms set
forth on Landlord’s List (it being acknowledged and agreed by Tenant that such
space may consist of a combination of more than one contiguous floors); or

 

(x)            give to Landlord a notice (herein
called. a “Tenant’s Counteroffer”) in which Tenant shall inform Landlord
that Tenant is not willing to add to the Premises one or more of the separately
leasable units of Available Space designated on Landlord’s List, in the exact
configuration and with the same number of rentable square feet and for the same
term of years and at the same rental set forth on Landlord’s List, but shall
also inform Landlord that Tenant would be willing to lease space from
Landlord’s List for a specified term of years (“Tenant’s Specified Term”),
for a specified rentable square footage and specified

 

14

 

configuration
(“Tenant’s Specified RSF”) and for a specified rental, which shall take
into account all relevant factors, including any free rent periods,
construction allowances and the base year, base amount and other calculations
in connection with Taxes, Operating Payment, and electricity and other elements
of the economic package offered by Tenant (Tenant’s Specified Rental); provided,
that Tenant’s Specified Term must be in full year increments (e.g., not
9 years and 9 months, rather than 10 years), unless Tenant’s Specified Term is
for a term coterminous with the remainder of the Premises and Tenant’s
Specified RSF must not leave Landlord with an effectively unleasable block of
space (e.g., Tenant shall not specify 38,000 rentable square feet as
Tenant’s Specified RSF if Landlord’s List contains a full floor consisting of
40,079 rentable square feet); or

 

(y)           refrain from giving a Tenant’s Exercise
Notice or a Tenant’s Counteroffer.

 

(iii)          In the event that
Tenant refrains from giving a Tenant’s Exercise Notice or a Tenant’s
Counteroffer, Tenant’s rights with respect to all Available Space described in
such Landlord’s List (herein called the “Waived Space”) shall terminate
and Landlord shall be free to lease all or any portion of such Waived Space to
others at such rental and upon such terms (including, without limitation, size,
configuration and length of term) and conditions as Landlord in its sole
discretion may desire whether such rental terms, provisions and conditions are
the same as those offered to Tenant or more or less favorable. Tenant shall,
within five (5) days after Landlord’s request therefor, deliver an instrument
in form reason-ably satisfactory to Landlord confirming the aforesaid waiver,
but no such instrument shall be necessary to make the provisions hereof
effective; provided, however, that Landlord shall have no
obligation to include on any Available Space Notice any of the Waived Space
which has appeared on any prior Landlord’s Lists unless such Waived Space is
leased to an entity other than Tenant and once again becomes Available Space.

 

15

 

(iv)          In the event that
Tenant gives a Tenant’s Counteroffer, then Landlord, within twenty (20) days
after the giving of such Tenant’s Counteroffer, shall either:

 

(x)            elect to lease to Tenant the space
designated by Tenant from among the separately leasable units of Available
Space contained on Landlord’s List, in a commercially reasonable configuration,
equal in size to Tenant’s Specified RSF for a term equal to Tenant’s Specified
Term, and for a rental equal to Tenant’s Specified Rental in which event such
space shall be added to the Premises on all of the terms and conditions set
forth in this Section 1.06; or

 

(y) elect not
to lease to Tenant the space designated by Tenant from among the separately
leasable units of Available Space contained on Landlord’s List, equal in size
to Tenant’s Specified RSF for a term equal to Tenant’s Specified Term and at a
rental equal to Tenant’s Specified Rental, in which event Landlord shall not
(with respect to the first leasing of the space in question after such space
was offered to Tenant in the Landlord’s List) without first offering the space
in question to Tenant, lease to another tenant the block of space designated by
Tenant from among the separately leasable units of Available Space contained on
Landlord’s List for (A) a term within ten (10%) percent, plus or minus, of
Tenant’s Specified Term, (B) for a rentable square footage within ten (10%)
percent, plus or minus, of Tenant’s Specified RSF or (C) for a rental computed
on a per square foot basis per annum (taking into account all relevant factors
such as free rent periods, construction allowances and the base year, base
amount and other calculations in connection with Taxes, Operating Payments and
electricity and other elements of the economic package) discounted to present
value at the Interest Rate less than 90% of Tenant’s Specified Rental
discounted to present value at the Interest Rate (collectively the “Required
Reoffer Terms”).

 

(v)           For purposes of subsection 1.06(e)(iv)(y)
hereof and this subsection 1.06(e)(v), if, with respect to the first
leasing of the space in question after such space was offered to Tenant in the

 

16

 

Landlord’s
List, Landlord intends to enter into negotiations with a third party to lease
to such third party a block of space from among the separately leasable units
of Available Space contained on Landlord’s List, for the Required Reoffer Terms
(herein called the “Reoffer Space”), Landlord shall provide Tenant with
a notice (herein called a “Reoffer Notice”) which, with respect to such
Reoffer Space, shall contain all of the information required to be contained in
a Landlord’s list including, without limitation, the exact size and
configuration (the “Reoffer Configuration”) and length of term (the “Reoffer
Term Length”) and the rental (the “Reoffer Rental”) for which
Landlord intends in good faith to enter into negotiations for such Reoffer
Space. Tenant shall have twenty (20) days after the giving of the Reoffer
Notice to elect by written notice to Landlord (herein called the “Reoffer
Acceptance Notice”) to add the Reoffer Space to the Premises in the exact
Reoffer Configuration, for the exact Reoffer Term and the exact Reoffer Rental,
and subject to all of the terms and conditions of this Section 1.06 for
the leasing of Additional Space. In the event that Tenant does not give the
Reoffer Acceptance Notice within such twenty (20) day period, Tenant shall be
deemed to have waived its right to lease the Reoffer Space, and Landlord shall
be free to lease all or any portion of such Reoffer Space to others at such
rental and upon such terms (including, without limitation, size, configuration
and length of term) and conditions as Landlord in its sole discretion may
desire whether such rental terms, provisions and conditions are the same as
those offered to Tenant or more or less favorable; provided, however,
Landlord shall not (with respect to the first leasing of the space in question
after such space was offered to Tenant in the Landlord’s List) without first
offering the space in question to Tenant in the manner provided above in this
clause (v), lease the Reoffer Space to another tenant for (A) term within ten
(10%) plus or minus of the Reoffer Term Length, (B) for a rentable square
footage within ten (10%) percent, plus or minus, of the rentable square footage
specified in the Reoffer Configuration or (C) for a rental computed as set
forth in subsection 1.06(e)(iv)(y) above discounted to present value at
the Interest Rate less than 90% of the Reoffer Rental discounted to present value
at the Interest Rate. The term, upon which Landlord shall offer such space to

 

17

 

Tenant shall
be upon the terms which Landlord intends in good faith to enter into
negotiations for such space. Tenant shall, within five (5) days after
Landlord’s request therefor, deliver an instrument in form reasonably
satisfactory to Landlord confirming the aforesaid waiver, but no such
instrument shall be necessary to make the provisions hereof effective.

 

(f)            In the event that (i) Tenant shall
elect pursuant to the terms hereof to lease a separately leasable unit of
Available Space, and (ii) such separately leasable unit of Available Space
shall come available for leasing on an unscheduled basis (e.g., as the
result of a bankruptcy or a leasehold surrender) prior to the anticipated
Additional Space Inclusion Date (herein called “Unscheduled Available Space”),
then Landlord shall give to Tenant a notice (herein called an “Unscheduled
Available Space Notice”) to Tenant setting forth the revised anticipated
Additional Space Inclusion Date for such separately leasable unit of space, and
such separately leasable unit of space shall be added to the Premises on the
later to occur of (i) the date on which Landlord makes such space available to
Tenant and (ii) the earlier to occur of (x) the original anticipated Additional
Space Inclusion Date and (y) the date that is sixty (60) days after the date on
which Landlord notifies Tenant of such revised anticipated Additional Space
Inclusion Date.

 

(g)           Tenant shall lease the Additional
Space upon all of the terms and conditions of this Lease that are in effect
immediately prior to the Additional Space Inclusion Date, except that:

 

(i)            any inconsistency
between the terms and conditions specified in Landlord’s List, the Reoffer
Notice or Tenant’s Counteroffer as applicable, and the terms and conditions set
forth in this Lease shall be governed by Landlord’s List, the Reoffer Notice or
Tenant’s Counteroffer as applicable;

 

(ii)           Tenant shall not be
entitled to any dedicated elevator service, any hours of free services or any
right to use passenger elevators for construction personnel and hand tools or
other special uses in connection with Tenant’s preparation and move into the
Additional Space, or any special services or arrangements unless such terms are
provided for in Landlord’s List, the Reoffer Notice or Tenant’s Counteroffer,
as applicable;

 

18

 

(iii)          the net effective
rental payable by Tenant with respect to the Additional Space shall be the
rental in Landlord’s List, or the Reoffer Notice (or Tenant’ Specified Rental
or the Reoffer Rental, if applicable);

 

(iv)          the Additional Space
shall be added to the Premises in the exact configuration and with the same
number of rentable square feet set forth on Landlord’s List, Tenant’s
Counteroffer or the Reoffer Notice, as the case may be (it being acknowledged
and agreed by Tenant that such space may consist of a combination of more than
one contiguous floors).

 

(h)           If any Additional Space shall not be
available for Tenant’s occupancy on the anticipated Additional Space Inclusion
Date for any reason including the holding over of the prior tenant, then
Landlord shall use commercially reasonable efforts to make such space available
as soon as is reasonably practicable; provided, however, that
Landlord and Tenant agree that the failure to have such Additional Space
available for occupancy by Tenant shall in no way affect the validity of this
Lease or the inclusion of such Additional Space in the demised premises or the
obligations of Landlord or Tenant hereunder, nor shall the same be construed in
any way to extend the term of this Lease, and for the purpose of this Section
1.06 the Additional Space Inclusion Date shall be deferred to and shall be
the date such Additional Space is available for Tenant’s occupancy unleased and
free of tenants or other occupants. The provisions of this Section 1.06
are intended to constitute “an express provision to the contrary” within the
meaning of Section 223-a of the New York Real Property Law. Notwithstanding
anything to the contrary contained herein, the event that Landlord is unable to
deliver possession of any separately leasable unit of Additional Space to
Tenant within one (1) year after the anticipated Additional Space Inclusion
Date therefor, Tenant, as its sole remedy, may elect by written notice given to
Landlord within the twenty (20) day period commencing on the first anniversary
of such anticipated Additional Space Inclusion Date, to revoke its election to
add such Additional Space to the Premises.

 

(i)            Notwithstanding anything to the
contrary contained herein, Tenant shall not have the right to elect to add any
separately leasable unit of Additional Space to the Premises if there would be
less than five (5) years remaining in the term of this Lease for the Blocks as
of the anticipated Additional Space Inclusion Date for such separately leasable
unit of such space provided, Tenant may simultaneously elect to exercise its
right to extend the term of this Lease pursuant to the provisions of Article
9 hereof with respect to the entire Premises (except for Additional Space
previously leased by Tenant which has an expiration date different than the
Expiration Date) leased by Tenant as of the time of such exercise

 

19

 

whereupon, such extension of
the Term shall be included in determining whether less than five (5) years
remain in the term of this Lease.

 

(j)            Time is of the essence of each and
every provision of this Section 1.06.

 

(k)           Promptly after the request of Tenant,
but in no event more than once in any twelve month period, Landlord shall
provide to Tenant, for informational purposes only, a list of the expected
termination dates of all Offer Space.

 

(l)            Any dispute with respect to the
matters set forth in this Section 1.06 shall be resolved by arbitration
pursuant to Section 9.03 hereof.

 

(m)          Landlord represents to Tenant that the
only Existing Rights as of the date hereof with respect to Offer Space which
are superior to Tenant’s right of offering set forth in this Section 1.06
are (i) Alex Brown and Sons Incorporated with respect to the 8th and 9th
floors, (ii) Equitable Life Assurance Society of the United States with respect
to floors 7, 8 and 9, (iii) AT&T Global with respect to floors 4 and 5 and
(iv) Straight Arrow Publishers L. P. with respect to floors 2, 3, 4, 5 and 6.

 

ARTICLE 2

 

Rent

 

2.01        Rent.  “Rent” shall consist of Fixed Rent and
Additional Charges.

 

2.02        Fixed Rent.

 

(a)           The fixed rent (“Fixed Rent”)
for the Blocks shall be at the following rates:

 

(i)            for the period
commencing on the applicable Fixed Rent Commencement Date to and including July
31, 2001, $37.18 per annum per rentable square foot of space in the Blocks from
time to time included in the Premises payable by Tenant in equal monthly
installments;

 

(ii)           for the period
commencing on August 1, 2001 to and including December 31, 2006, $40.18 per
annum per rentable square foot

 

20

 

of space in
the Blocks from time to time included in the Premises payable by Tenant in
equal monthly installments; and

 

(iii)          for the period
commencing on January 1, 2007 to and including the Expiration Date, $44.18 per
annum per rentable square foot of space in the Blocks from time to time
included in the Premises payable by Tenant in equal monthly installments.

 

Each monthly
installment of Fixed Rent shall be payable by Tenant in advance on the Fixed
Rent Commencement Date and on the first day of each calendar month thereafter; provided,
that if the Fixed Rent Commencement Date is not the first day of a month, then
Fixed Rent for the month in which the Fixed Rent Commencement Date occurs shall
be prorated and paid on the Fixed Rent Commencement Date; and  further
provided that if this Lease shall terminate on a date other than the
last day of the month for reasons other than the occurrence of a default by
Tenant, the Fixed Rent for the month in which the Lease terminates shall be
prorated; and any overpayment to Landlord, in excess of amounts payable by
Tenant to Landlord under this Lease, shall be refunded to Tenant. “Fixed
Rent Commencement Date” (A) for the Block A Space, the Block B Space, the
Block C Space, the Block D Space and the Block E Space means July 1, 1997 as
such date may be extended for any Block (other than the Delivered Blocks),
pursuant to Sections 1.03(d) and (e) hereof and (B) for the Block F
Space means a date that is the number of months (including partial months, if
any, as a fraction) after the Stated Block F Commencement Date (or, if the
Block F Notice shall have been given by Landlord, then the Early Block F
Commencement Date), as such dates may be extended pursuant to Section
1.03(d) and (e) hereof, determined by multiplying 17 months by a fraction,
the numerator of which is the number of months (including partial months, if
any, as a fraction) that the Block F Space is included in the demise hereunder
and the denominator of which is 197 months. “Tax and Operating Payment
Commencement Date” means the applicable Fixed Rent Commencement Date as
such date may be extended for any Block (other than the Delivered Blocks),
pursuant to Sections 1.03(d) and (e) hereof. “Rent Commencement Date”
means the applicable Fixed Rent Commencement Date and Tax and Operating Payment
Commencement Date with respect to each Block.

 

(b)           If Tenant’s ability to obtain any
governmental permit required by Tenant to perform Tenant’s initial Alterations
in any Block, or portion of any Block or in the Building with respect to any
Block or portion thereof, is delayed due to (i) the failure of Landlord (by
reason other then Force Majeure or Tenant Delay) to sign applications for
governmental permits in accordance with and within the time period provided in Section
4.02 (j) hereof or (ii) the failure of Landlord (by reason other then Force
Majeure or Tenant Delay) to cure any violation of Law which Landlord has an
affirmative obligation to comply

 

21

 

with pursuant to the terms of
this Lease, then provided in all cases Tenant is using commercially
reasonable prudence and diligence to avoid such delay, Tenant may notify
Landlord of such resulting delay (making specific reference to this Section
2.02(b)) and if Landlord shall not have signed such application within five
days after such notice or shall not have cured such violation within forty-five
(45) days of such notice (if the cure requires the performance of work) or
fifteen (15) days after notice if such violation is a monetary violation then
Fixed Rent and Additional Charges pursuant to Sections 2.04 and 2.05
shall be abated with respect to such Block or such portion of such Block, in
the case of clause (i), for the number of days, that substantial
completion of Tenant’s initial Alterations in such Block or portion of such
Block is delayed due to such inability to obtain any governmental permit beyond
such five day period and, in the case of clause (ii), for the number of
days that substantial completion of Tenant’s initial Alterations in such Block
or portion of such Block is delayed due to such inability to obtain any
governmental permit beyond such forty-five (45) day period if such violation is
a non-monetary violation and for any period beyond the fifteenth day Landlord
receives notice of such violation from Tenant in the event of a monetary
violation; provided, that in each case Rent shall be abated only with
respect to that portion of the Blocks in which substantial completion of Tenant’s
initial Alterations is so delayed.

 

2.03        Additional Charges.  “Additional Charges” means Tax
Payments, Operating Payments and all other sums of money, other than Fixed
Rent, at any time payable by Tenant under this Lease, all of which Additional
Charges shall be deemed to be rent.

 

2.04        Tax Payments.  (a) “Base Tax Amount” means
$15,986,033.

 

(b)           “Taxes” means (i) the real
estate taxes, vault taxes, assessments and special assessments levied, assessed
or imposed upon or with respect to the Project by any federal, state, municipal
or other government or governmental body or authority, and (ii) any expenses
actually incurred by Landlord (or if paid to an Affiliate of Landlord, the
reasonable and customary expenses incurred by Landlord) in contesting such taxes
or assessments and/or the assessed value of the Project, which expenses shall
be allocated to the Tax Year to which such expenses relate. If at any time the
method of taxation shall be altered so that in lieu of or as an addition to or
as a substitute for, the whole or any part of such real estate taxes,
assessments and special assessments now imposed on real estate, there shall be
levied, assessed or imposed (“Substituted Taxes”) (x) a tax, assessment,
levy, imposition, fee or charge wholly or partially as a capital levy or
otherwise on the rents received therefrom (which shall be computed for purposes
of inclusion in Taxes as if the Project were the only property owned by
Landlord), or (y) any other additional or substitute tax, assessment, levy, imposition,
fee or charge which is clearly identifiable as a tax on real estate or the
owner thereof, and not as a

 

22

 

generally applicable business
tax, including without limitation, transportation taxes, fees and assessments,
then all such taxes, assessments, levies, impositions, fees or charges or the
part thereof so measured or based shall be included in “Taxes.” If the
owner, or lessee under a Superior Lease, of all or any part of the Building
and/or the Land is an entity exempt from the payment of taxes described in clauses
(i) and (ii), there shall be included in “Taxes” the taxes described
in clauses (i) and (ii) which would be so levied, assessed or imposed if
such owner or lessee were not so exempt and such taxes shall be deemed to have
been paid by Landlord on the dates on which such taxes otherwise would have
been payable if such owner or lessee were not so exempt. Except as permitted in
this Section 2.04(b), with respect to Substituted Taxes, “Taxes”
shall not include (A) any franchise, capital stock, transfer income, estate,
gift, succession, inheritance, mortgage recording, transfer gains or
unincorporated business tax or commercial rent tax imposed on Landlord, (B) any
penalties or late charges with respect to the payment of Taxes, provided,
penalties and late charges shall not include the failure to take advantage of a
discount for early payment and costs in connection with the payment of Taxes in
installments or (C) any costs or expenses included in Operating Expenses,
including without limitation, water, sewer vault and sales taxes which are
included in Operating Expenses. If any special assessments for public
improvements which are or shall be levied, assessed or imposed upon or with
respect to the Project are payable at the option of Landlord in installments,
then such special assessment shall be included in Taxes as if Landlord shall
have elected to pay such special assessment over the longest period permitted.
Landlord represents and covenants to Tenant that no tax abatement will be in
effect for the Project in the Tax Years included in the calculation of Base Tax
Amount.

 

(c)           “Tax Year” means each period
of 12 months, commencing on the first day of July of each such period, in which
occurs any part of the Term, or such other period of 12 months occurring during
the Term as hereafter may be adopted as the fiscal year for real estate tax
purposes of the City of New York.

 

(d)           “Tenant’s Share” means a
fraction expressed as a percentage, the numerator of which shall be the
rentable square footage of space from time to time included in the Premises and
the denominator of which shall be 1,793,457. Any Change in Tenant’s Share shall
be effective from and after each applicable Tax and Operating Payment Commencement
Date (or other date, with respect to any space other than Blocks on which
Tenant is required pursuant to the terms of this Lease to commence making Tax
Payments with respect to such space) and Tenant’s Tax Payments for any Tax Year
in which such change occurs shall be adjusted accordingly;

 

(e)           If Taxes for any Tax Year, including
the Tax Year in which the Tax and Operating Payment Commencement Date for any
Block occurs, shall exceed the Base

 

23

 

Tax Amount, Tenant shall pay to
Landlord (each, a “Tax Payment”) Tenant’s Share of the amount by which
Taxes for such Tax Year are greater than the Base Tax Amount. The Tax Payment
for each Tax Year shall be due and payable in installments in the same manner that
Taxes for such Tax Year are due and payable by Landlord, whether to the City of
New York or to a Superior Lessor or Superior Mortgagee (unless such Superior
Lessor or Superior Mortgagee is an Affiliate of Landlord (or other entity which
controls the management and operations of Landlord which is not an Affiliate of
Landlord) in which case the Tax Payment shall be due and payable in
installments, in the same manner that Taxes for such Tax Year are due and
payable to the City of New York). If Tenant is required to escrow Taxes with
Landlord pursuant to the preceding sentence due to a requirement of any
Superior Lease or Superior Mortgage, then Landlord will give Tenant a credit
against Taxes equal to any interest that Landlord earns on such funds that Tenant
has escrowed. Tenant shall pay Tenant’s Share of each such installment within
twenty (20) days after the rendering of a statement therefor (a “Tax
Statement”) by Landlord to Tenant, gut in no event shall Tenant be required
to pay Tenant’s Share of any Taxes more than twenty (20) days prior to the date
such Taxes first become due and payable by Landlord. The Tax Statement to be
rendered by Landlord shall set forth in reasonable detail the computation of
Tenant’s Share of the particular installment(s) being billed. If Landlord shall
not have received the relevant bill from the taxing authority (“Tax Bill”)
at the time any Tax Statement is delivered to Tenant, Landlord shall deliver to
Tenant, promptly after receipt thereof by Landlord (and shall endeavor to do so
within one hundred twenty (120) days after receipt of such Tax Bill by
Landlord), a statement setting forth the amount (if any) of any overpayment or
underpayment by Tenant with respect to the Tax Payment paid by Tenant in
accordance with such Tax Statement and the appropriate party shall pay to the
other party the amount of such overpayment or underpayment within twenty (20)
days after such statement is received by Tenant. At the request of Tenant,
Landlord shall deliver to Tenant a copy of the relevant Tax Bill within the
later of sixty (60) days after such demand and sixty (60) days after receipt by
Landlord of such Tax Bill. If there shall be any increase in the Taxes for any
Tax Year, whether during or after such Tax Year, or if there shall be any
decrease in the Taxes for any Tax Year, the Tax Payment for such Tax Year shall
be appropriately adjusted and paid or refunded, as the case may be, in
accordance herewith. In no event, however, shall Taxes be reduced below the
Base Tax Amount.

 

(f)            If Landlord shall receive a refund
of Taxes for any Tax Year, Landlord within thirty (30) days of receipt of such
refund shall pay to Tenant Tenant’s Share (which is in effect during the Tax
Year to which the applicable refund relates) of the net refund (after deducting
from such refund the costs and expenses of obtaining the same (provided,
that if any of such expenses are paid to an Affiliate of Landlord, it shall
only include any such cost and expenses which are reasonable and customary),
including, without limitation, appraisal, accounting and legal fees, to the
extent that such costs and expenses were

 

24

 

not included in Operating
Expenses or in Taxes for such Tax Year or any prior Tax Year and after adding Tenant’s
Share of any interest paid to Landlord by the taxing authority in connection
with such refund); provided, that such payment to Tenant shall in no
event exceed Tenant’s Tax Payment paid for such Tax Year (except to the extent
of added interest). If Landlord fails to pay Tenant the overpayment within
fifteen (15) days after the same is due, then any sum due shall accrue interest
at the Interest Rate until it has been paid in full. If in any Tax Year
included in the Term, the assessed value of the Project on which Taxes are
calculated is increased over the prior Tax Year, Landlord shall cause the
assessed value of the Project to be diligently contested unless in Landlord’s
reasonable judgment such contest would be unsuccessful.

 

2.05        Operating Payments.
(a) “Base Operating Amount” means Operating Expenses for the Base
Operating Year.

 

(b)           “Base Operating Year” means
calendar year 1996.

 

(c)           “Landlord’s Statement” means
an instrument setting forth, in reasonable detail, the calculation of the
Operating Payment payable by Tenant for a specified Operating Year, certified
by Landlord. To the extent Landlord provides operating statements to Superior
Mortgagees or Superior Lessee, which statements are certified by a certified
public accountant, then Landlord will also deliver a copy of such certified
statement to Tenant.

 

(d)           “Operating Expenses” means all
expenses paid or incurred by or on behalf of Landlord in respect of the repair,
replacement, maintenance, operation and security of the Project, including, without
limitation, (i) salaries, wages, medical, surgical, insurance (including,
without limitation, group life and disability insurance), union and general
welfare benefits, pension payments, severance payments, sick day payments and
other fringe benefits of employees of Landlord, Landlord’s Affiliates and their
respective contractors engaged in such repair, replacement, maintenance,
operation and/or security excluding employees of landlord and Landlord’s
Affiliates above the grade of building manager; provided, that with
respect to such employees so engaged in connection with the Project and
properties other than the Project, such expenses shall be equitably allocated
between the Project and the property other than the Project; (ii) payroll
taxes, worker’s compensation, uniforms and related expenses (whether direct or
indirect) for such employees; (iii) the cost of fuel, gas, steam, electricity,
heat, ventilation, air-conditioning band chilled or condenser water, water,
sewer and other utilities, together with any taxes and surcharges on, and fees
paid in connection with the calculation and billing of, such utilities; (iv)
the cost of painting and/or decorating all areas of the Project, excluding,
however, any space contained therein which is demised to tenants; (v) the cost
of casualty, liability, fidelity, rent and all other insurance

 

25

 

regarding the Project; (vi)
except for tools and equipment related to alterations, repairs, replacements
and/or improvements set forth in clause (x) below which shall be
included in Operating Expenses in accordance with clause (x), the cost
of all supplies, tools, materials and equipment, whether by purchase or rental,
used in the repair, replacement, maintenance, operation and/or security of the
Project, and any sales and other taxes thereon, provided, with respect
to leased tools and equipment, if such tools and equipment are customarily
purchased in first class midtown Manhattan office buildings and if purchased by
Landlord would be capitalized pursuant to clause (x), then such tools
and equipment shall be included in Operating Expenses as if purchased in
connection with replacements set forth in clauses (x)(I), (II) or (III), as
applicable, below; (vii) the rental value of Landlord’s Building office and
any other premises in the Building (not to exceed 1,000 square feet in the
aggregate) utilized by the personnel of either Landlord, Landlord’s Affiliates
or Landlord’s contractors, in connection with the repair, replacement, maintenance,
operation and/or security thereof, and all office expenses, such as telephone,
utility, stationery and similar expenses incurred in connection therewith;
(viii) the cost of cleaning, janitorial and security services, including,
without limitation, glass cleaning, snow and ice removal and garbage and waste
collection and disposal; (ix) the cost of all interior and exterior landscaping
and all temporary exhibitions located at or within the Project; (x) the cost of
all alterations, repairs, replacements and/or improvements made at any time
during and after the Base Operating Year by or on behalf of Landlord, whether
structural or non structural, ordinary or extraordinary, foreseen or
unforeseen, and whether or not required by this Lease, and all tools and
equipment related thereto; provided, that if under GAAP, any of the
costs referred to in this clause (x) are required to be capitalized,
then such costs shall not be included in Operating Expenses during and after
the Base Operating Year unless they (I) are required by any Laws enacted after
the date of this Lease, (II) have the effect of reducing expenses that would
otherwise be included in Operating Expenses, or (III) constitute a replacement
which in Landlord’s reasonable judgment is prudent to make in lieu of repairs
to the replaced item(s) (excluding in the case of this clause (III) the
Capital Program Work and any portion of such replacement which consists of
upgrading of the Building electrical, HVAC, telecommunications, or elevator
systems (excluding upgrading which would be included in clauses (I) and (II))
or which are performed for cosmetic or aesthetic purposes)) (the cost of
alterations, repairs, replacements and/or improvements described in clauses
(I) and (III), together with interest thereon at the greater of (A) the
Interest Rate in effect on December 31 of the Operating Year in which such
costs were incurred or (B) the actual costs incurred by Landlord (not to exceed
the Interest Rate) to finance such alterations, repairs, replacements and/or
improvements described in clauses (I) and (III) of this clause (x),
shall be amortized and included in Operating Expenses over the useful life of
the item in question, as determined by Landlord in accordance with GAAP; the
cost of alterations, repairs, replacements and/or improvements described in clause
(II) of this clause (x) plus interest thereon, at the rate set forth
above in this parenthetical, shall be

 

26

 

included in Operating Expenses
in the Operating Year in which such costs are incurred and in each Operating
Year thereafter to the extent of the reduction in expenses resulting therefrom
in such Operating Year until the entire cost thereof and interest thereon shall
have been fully included in Operating Expenses); (xi) management fees equal to
2-1/2% of the aggregate rents, additional rents and other charges (excluding
any amounts payable by other tenants in the Building and Tenant for
miscellaneous charges and expenses such as, without limitations, overtime HVAC
use, supervision charges or the freight elevator) payable to Landlord by
tenants of the Building; provided, if during any relevant period,
including the Base Operating Year, the rent, additional rent or other charges
on which such management fee is calculated is abated, then, in such event, the
management fee to be included in Operating Expenses for such period shall be
increased to reflect the management fee (equal to 2-1/2%) which would have been
included in Operating Expenses if such rent, additional rent or other charges
would not have been abated; (xii) all reasonable costs and expenses of legal,
bookkeeping, accounting and other professional services; (xiii) fees, dues and
other contributions paid by or on behalf of Landlord to civic or other real
estate organizations and any assessments, dues, levies or charges paid to any
business improvement district or similar organization or to any entity on
behalf of such an organization; and (xiv) subject to the limitations set forth
above, all other fees, costs, charges and expenses properly allocable to the
repair, replacement, maintenance, operation and/or security of the Project, in
accordance with then prevailing customs and practices of first class office
buildings in midtown Manhattan, City of New York. Operating Expenses shall
reflect all rebates, credits and similar reductions received by or for the
benefit of Landlord. Notwithstanding the foregoing, “Operating Expenses”
shall not include the following:

 

(1)           depreciation and
amortization (except with respect to the alterations, repairs, replacements,
and/or improvements described in clauses I, II and III of clause (x)
of this Section 2.05(d));

 

(2)           principal and
interest payments and other costs incurred in connection with any financing or
refinancing of the Project or any portion thereof (except as provided in clause
(x) above);

 

(3)           the cost of tenant
improvements made for tenant(s) of the Building;

 

(4)           brokerage
commissions, consultant fees, and marketing, promotion and advertising expenses
incurred in procuring tenants for the Building;

 

(5)           the cost of any work
or service (including, without limitation in connection with a cafeteria or
dining facility, or athletic, luncheon or recreational club)

 

27

 

performed for
any tenant of the Building (including Tenant), whether at the expense of
Landlord or such tenant, to the extent that such work or service is in excess
of the work or service that Landlord is required to furnish Tenant under this
Lease at the expense of Landlord;

 

(6)           the cost of any
electricity consumed in the Premises or in any other space in the Building
demised to tenants;

 

(7)           Taxes;

 

(8)           legal fees incurred
in preparing leases for tenants or in enforcing the terms of any lease;

 

(9)           any cost to the
extent Landlord is reimbursed therefor out of insurance proceeds or otherwise
(Landlord hereby covenants and agrees to use reasonable efforts to collect any
of the aforesaid amounts payable to Landlord, excluding litigation, and to
prosecute such collection with due diligence) other than by means of operating
expense reimbursement provisions contained in the leases of other tenants;

 

(10)         franchise, estate,
gift, mortgage recording, transfer gains, transfer, unincorporated business,
commercial rent or income taxes imposed on Landlord;

 

(11)         all compensation and
fringe benefits of any leasing staff maintained by Landlord to procure tenants
for the Building;

 

(12)         rent concessions
incurred in connection with procuring tenants to lease space in the Building
including any costs related to procuring the surrender or modification of an
existing lease of space in the Project;

 

(13)         all amounts (other
than management fees which shall be governed by Section 2.05(d)(xi)
above) paid by Landlord to Affiliates of Landlord for goods and services in the
Building to the extent the same materially exceed the costs of such goods or
services supplied or rendered by unaffiliated third parties on a competitive
basis in first class midtown Manhattan office buildings;

 

(14)         legal fees and
disbursements and other costs incurred by Landlord which would not have been
incurred but for (i) the negligence or willful misconduct of Landlord including
any judgment or settlement and the arbitration and court costs in connection
therewith and (ii) any bankruptcy of Landlord or similar proceeding;

 

28

 

(15)         rent, additional rent
and other charges payable by Landlord under any lease or sublease of space at
the Building, which is assigned or further sublet to Landlord;

 

(16)         Arbitration expenses
to the extent unrelated to the costs and expenses includable in Operating
Expenses;

 

(17)         all costs incurred in
connection with the acquisition or sale of development rights in connection
with the Project or the conveyance of title to the Project;

 

(18)         the cost to acquire,
maintain, insure or replace works of art which are in the nature of “fine art”
rather than decorative art work with no unusual value;

 

(19)         any costs incurred by
Landlord resulting solely by reason of Landlord’s breach of the terms and
conditions of a lease of space at the Project or any other contract or
agreement in connection with the Building unless in Landlord’s reasonable
business judgment, the breach of such contract or agreement will have the
effect of reducing expenses that would otherwise be included in Operating
Expenses;

 

(20)         all amounts paid by
Landlord under the Superior Lease or any ground lease at the Project (other
than amounts which constitute a reimbursement to the lessor under the Superior
Lease or the ground lessor for items which would have been included in
Operating Expenses under this Lease if the same were paid directly by Landlord)
and all amounts paid by Landlord to consummate such Superior Lease or ground
lease;

 

(21)         all fines, penalties,
interest and other late payment charges (other than as set forth in 2.05(d)(x)
and costs of failing to take advantage of a prepayment discount);

 

(22)         all costs of capital
improvements and any other capital costs other than as expressly provided in Section
2.05(d)(x);

 

(23)         all costs incurred by
Landlord in connection with commercial concessions operated by Landlord to the
extent such costs would not be included in Operating Expenses if such
commercial concessions were operated by an entity other than Landlord;

 

(24)         additions to Building
reserves;

 

29

 

(25)         dues paid for
membership in trade associations or similar organizations other than such
associations and organizations in which owners and managers of first class
Manhattan office buildings are members but such costs will be allocated among
the buildings owned or managed by Landlord or its Affiliates as applicable;

 

(26)         costs of removing
asbestos, PCB’s or other hazardous materials or substances in or about the
Project in connection with a capital abatement program (but excluding such
removal costs incurred in the ordinary course of operating and maintaining the
Project which shall be included in Operating Expenses);

 

(27)         any costs for which
Landlord is reimbursed by Tenant under another category of item included in
Operating Expenses; and

 

(28)         any costs associated
with the sale, transfer or restructuring of the ownership of Landlord or the
Project.

 

(e)           “Operating Year” means each
calendar year in which occurs any part of the Term.

 

(f)            For each Operating Year, including
the Operating Year in which the applicable Tax and Operating Payment
Commencement Date occurs, Tenant shall pay (each, an “Operating Payment”)
Tenant’s Share of the amount, if any, by which Operating Expenses for such
Operating Year exceed the Base Operating Amount.

 

(g)           If during any relevant period (i) any
rentable space in the Building above the ground floor shall be unoccupied,
and/or (ii) the tenant or occupant of any space in the Building above the
ground floor undertook to perform work or services therein in lieu of having
Landlord perform the same and the cost thereof would have been included in
Operating Expenses, then, in any such event, the Operating Expenses for such
period shall be increased to reflect the Operating Expenses that would have
been incurred if such space had been occupied or if Landlord had performed such
work or services, as the case may be.

 

(h)           Landlord may furnish to Tenant, prior
to the commencement of each Operating Year, a statement setting forth
Landlord’s reasonable estimate of the Operating Payment for such Operating
Year. Tenant shall pay to Landlord on the first day of each month during such
Operating Year, an amount equal to 1/12th of landlord’s estimate of the
Operating Payment for such Operating Year. If Landlord shall not furnish any
such estimate for an Operating Year or if Landlord shall furnish any such
estimate for an Operating Year subsequent to the commencement thereof, then (A)
until the first day of the month following

 

30

 

the month in which such
estimate is furnished to Tenant, Tenant shall pay to Landlord on the first day
of each month an amount equal to the monthly sum payable by Tenant to Landlord
under this Section 2.05 in respect of the last month of the preceding
Operating Year; (B) after such estimate is furnished to Tenant, Landlord shall
notify Tenant whether the installments of the Operating Payment previously made
for such Operating Year were greater or less than the installments of the
Operating Payment to be made in accordance with such estimate, and (x) if there
is a deficiency, Tenant shall pay the amount thereof within thirty (30) days
after such notification by Landlord, or (y) if there is an overpayment,
Landlord shall, within thirty (30) days after such notification by Landlord
refund to Tenant the amount thereof; and (C) on the first day of the month
following the month in which such estimate is furnished to Tenant and monthly
thereafter throughout such Operating Year Tenant shall pay to Landlord an
amount equal to 1/12th of the Operating Payment shown on such estimate.
Landlord may, during each Operating Year, furnish to Tenant a revised statement
of Landlord’s estimate of the Operating Payment for such Operating Year, and in
such case, the Operating Payment for such Operating Year shall be adjusted and
paid or refunded as the case may be, substantially in the same manner as provided
in the preceding sentence.

 

(i)            Landlord shall furnish to Tenant a
Landlord’s Statement for each Operating Year (and shall endeavor to do so
within one hundred twenty (120) days after the end of each Operating Year). If
Landlord’s Statement shall show that the sums paid by Tenant, if any, under Section
2.05(h) exceeded the Operating Payment to be paid by Tenant for the
applicable Operating Year, Landlord shall refund to Tenant the amount of such
excess within thirty (30) days after the furnishing of such Landlord’s
Statement; provided, if such excess is not paid within one hundred fifty
(150) days after the end of the applicable Operating Year, Landlord shall pay
to Tenant such excess together with interest thereon at the Interest Rate from
the date which is one hundred fifty (150) days after the applicable Operating
Year through the date the refund is paid by Landlord; and if the Landlord’s
Statement shall show that the sums so paid by Tenant were less than the
Operating Payment to be paid by Tenant for such Operating Year, Tenant shall
pay the amount of such deficiency within thirty (30) days after the furnishing
of such Landlord’s Statement; provided, if such deficiency is not paid
within thirty (30) days after the furnishing of such Landlord’s Statement,
Tenant shall pay to Landlord such deficiency together with interest thereon at
the Interest Rate from the date which is thirty (30) days after the furnishing
of such Landlord’s Statement through the date the deficiency is paid by Tenant.

 

(j)            (i) 
Tenant, upon notice given within one hundred eighty (180) days after
Tenant’s receipt of a Landlord’s Statement, may elect to have Tenant’s
designated (in such notice) agent (who may be an employee of Tenant but who may
not be paid on a contingency fee basis) examine such of Landlord’s books and
records (collectively “Records”)

 

31

 

as are directly relevant to
such Landlord’s Statement and Tenant shall be entitled, at its expense, to make
copies of such Records to the extent relevant to Tenant’s review. Tenant shall
and shall cause its agent to treat all Records as confidential and only for the
purposes herein intended and upon request of Landlord, shall confirm same in
writing. Tenant shall not make any of the Records available, or disclose or
communicate any of the contents of the Records directly or indirectly to any
person or entity other than its agent, and other advisors for the sole purpose
of evaluating and pursuing such disagreement with Landlord. As a condition to
Tenant’s right to review the Records, Tenant shall pay all sums required to be
paid in accordance with the Landlord’s Statement in question. If Tenant shall
not give such notice within such one hundred eighty (180) day period, then such
Landlord’s Statement shall be conclusive and binding upon Tenant. Tenant and
Tenant’s employees, accountants and agents shall treat all Records as
confidential, and, upon request by Landlord, shall confirm such confidentiality
obligation in writing. Notwithstanding the foregoing, within 3-1/2 years after
the expiration of the 1996 Operating Year, Tenant may deliver a notice of its
election to review Landlord’s Statement for the Operating Year 1996 with the
first notice it delivers to Landlord under this Section 2.05(j)(ii)
electing to review Landlord’s statements for any subsequent operating year.

 

(ii)           Tenant, within one hundred twenty
(120) days after the date on which the Records are made available to Tenant,
may send a notice (“Tenant’s Statement”) to Landlord that Tenant
disagrees with the applicable Landlord’s Statement, specifying in reasonable
detail the basis for Tenant’s disagreement and the amount of the Operating
Payment Tenant claims is due (to the extent known to Tenant). If Tenant fails
timely to deliver a Tenant’s Statement, then such Landlord’s Statement shall be
conclusive and binding on Tenant. Landlord and Tenant shall attempt to adjust
such disagreement. If they are unable to do so Tenant shall notify Landlord,
within one hundred fifty (150) days after the date on which the Records are
made available to Tenant in connection with the disagreement in question, that
Tenant desires to have such disagreement determined by an Arbiter, and promptly
thereafter Landlord and Tenant shall designate a certified public accountant
(the “Arbiter”) whose determination made in accordance with this Section
2.05(j)(ii) shall be binding upon the parties. If Tenant timely delivers a
Tenant’s Statement, the disagreement referenced therein is not resolved by the
parties and Tenant fails to notify Landlord of Tenant’s desire to have such
disagreement determined by an Arbiter within the one hundred fifty (150) day
period set forth in the preceding sentence, then the Landlord’s Statement to
which such disagreement relates shall be conclusive and binding on Tenant. If
the determination of the Arbiter shall substantially confirm the determination
of Landlord, then Tenant shall pay the cost of the Arbiter. If the Arbiter
shall substantially confirm the determination of Tenant, then Landlord shall
pay the cost of the Arbiter. In all other events, the cost of the Arbiter shall
be borne equally by Landlord and Tenant. The Arbiter shall be a member of an
independent certified

 

32

 

public accounting firm having
at least three (3) accounting professionals, who are certified public
accountants. If Landlord and Tenant shall be unable to agree upon the
designation of the Arbiter within fifteen (15) days after receipt of notice
from the other party requesting agreement as to the designation of the Arbiter,
which notice shall contain the names and addresses of two or more certified
public accountants who are acceptable to the party sending such notice, then
either party shall have the right to request the American Arbitration
Association (or any organization which is the successor thereto) (the “AAA”)
to designate as the Arbiter a certified public accountant whose determination
made in accordance with this Section 2.05(j)(ii) shall be conclusive and
binding upon the parties, and the cost of such certified public accountant
shall be borne as provided above in the case of the Arbiter designated by
Landlord and Tenant. Any determination made by an Arbiter shall not exceed the
amount determined to be due in the first instance by Landlord’s Statement, nor
shall such determination be less than the amount claimed to be due by Tenant in
Tenant’s Statement, and any determination which does not comply with the
foregoing shall be null and void and not binding on the parties, in which
instance the parties will select a new certified public accountant to act as
the Arbiter. In rendering such determination such Arbiter shall not add to,
subtract from or otherwise modify the provisions of this Lease, including the
immediately preceding sentence. Pending the resolution of any contest pursuant
to this Section 2.05(j)(ii), and as a condition to Tenant’s right to
prosecute such contest, Tenant shall pay all sums required to be paid in
accordance with the Landlord’s Statement in question. If Tenant shall prevail
in such contest, an appropriate refund shall be made by Landlord to Tenant. The
term “substantially” as used in this Section 2.05(j)(ii), shall mean a
variance of 5% or more of the Operating Payment in question. If Tenant shall
prevail in such contest and the Arbiter shall confirm that the Operating
Expenses was overstated by 10% or more of the Operating Expenses on which the
Operating Payment was paid, then Landlord shall pay to Tenant, upon thirty (30)
days demand by Tenant, the reasonable cost of the agent of Tenant which
examined the Records in connection with such Operating Payment.

 

2.06        Tax and Operating Provisions.  (a) In any case provided in Section 2.04
or 2.05 in which Tenant is entitled to a refund, Landlord may, in lieu
of making such refund, credit or allow Tenant to recoup against future
installments of Rent any amounts to which Tenant shall be entitled unless,
after Tenant shall become entitled to such refund, Tenant demands Landlord pay
such refund rather than credit such refund, in which case Landlord shall pay
such refund to Tenant within thirty (30) days after demand by Tenant. Nothing
in this Article 2 shall be construed so as to result in a decrease in
the Fixed Rent. If this Lease shall expire before any such credit or recoupment
shall have been fully applied, then (provided, that Tenant is not in
default under this Lease) Landlord shall refund to Tenant the unapplied balance
of such credit or recoupment. Notwithstanding any provision herein to the contrary,
in the event that Landlord has not made an election to allow Tenant a credit
against the Rent with

 

33

 

respect to any refund due
Tenant under Section 2.04 or 2.05 and Landlord has not paid Tenant within
thirty (30) days after the payment was due, then Tenant on ten (10) days’
notice to Landlord may recoup such amount due with interest at the Interest
Rate by taking a recoupment against the Rent until such payment with all
interest due thereon has been fully recouped.

 

(b)           Landlord’s failure to render or delay
in rendering a Landlord’s Statement with respect to any Operating Year or any
component of the Operating Payment shall not prejudice Landlord’s right to
thereafter render a Landlord’s Statement with respect to any such Operating
Year or any such component, nor shall the rendering of a Landlord’s Statement
for any Operating Year prejudice Landlord’s right to thereafter render a
corrected Landlord’s Statement for such Operating Year, provided, except
with respect to a retroactive application of a Law or a new policy by a
governmental authority, if Landlord shall fail to render a corrected Landlord’s
Statement with respect to any Operating Year or a corrected statement for any
Tax Payment or installment thereof, in each case, within the earlier to occur
of (i) three (3) years after the expiration of the applicable Operating Year or
Tax Year (or in the case of Tax Statements, three (3) years after the last date
on which costs applicable to the Tax Year in question were incurred) and (ii)
five hundred forty-five (545) days after the expiration of the Term, then
Landlord shall be deemed to have waived its claim to receive any additional
Operating Payment or Tax Payment which would have been payable in connection
with such corrected Landlord’s Statement or corrected statement for Tax
Payment. Except as provided in the preceding sentence, Landlord’s failure to
render or delay in rendering any statement with respect to any Tax Payment or
installment thereof shall not prejudice Landlord’s right to thereafter render
such a statement, nor shall the rendering of a statement for any Tax Payment or
installment thereof prejudice Landlord’s right to thereafter render a corrected
statement therefor.

 

(c)           If in connection with a dispute with
a tenant in the Building, a nonappealable decision by a court of competent
jurisdiction, an arbiter in a fmal and binding arbitration or an accountant or
other individual selected by Landlord and/or a tenant of the Building or the AAA
or comparable body pursuant to the terms of the applicable lease which in each
case is final, binding and nonappealable shall provide that Operating Expenses
in any Operating Year included in the Term were overstated, then to the extent
such overstatement resulted in Tenant paying an Operating Payment in excess of
the Operating Payment Tenant would have paid if the Operating Expenses
reflected such court’s or arbiter’s decision, to the extent applicable (a “Final
Decision”), promptly after such decision, Landlord shall furnish to Tenant
a corrected Landlord’s Statement together with payment of such excess; provided,
if such court or arbiter shall finally decide the dispute later than 545 days
after the expiration of

 

34

 

the Term, Landlord shall not be
required to refund such excess to Tenant. Landlord covenants and agrees to
furnish Tenant with redacted copies of all relevant Final Decisions.

 

(d)           Landlord and Tenant confirm that the
computations under this Article 2 are intended to constitute a formula
for agreed rental escalation and may or may not constitute an actual
reimbursement to Landlord for Taxes and other costs and expenses incurred by
Landlord with respect to the Project. If the Building shall be condominiumized,
then Tenant’s Operating Payments and Tax Payments shall, if necessary, be
equitably adjusted such that Tenant shall thereafter continue to pay the same
share of the Taxes and Operating Expenses of the Building as Tenant would pay
in the absence of such condominimization.

 

(e)           Each Tax Payment in respect of a Tax
Year, and each Operating Payment in respect of an Operating Year, which (i)
begins prior to the applicable Tax and Operating Payment Commencement Date, or
other date, with respect to space, other than Blocks, which Tenant is required
pursuant to the terms of this Lease to commence paying Tax Payment and
Operating Payments with respect to such space, and any tax refund pursuant to Section
2.04(f), shall be prorated to correspond to that portion of such Tax Year
and Operating Year occurring after the applicable Tax and Operating Payment
Commencement Date, or (ii) ends after the expiration or earlier termination of
this Lease, and any tax refund pursuant to Section 2.04(f), shall be
prorated to correspond to that portion of such Tax Year or Operating Year
occurring within the Term.

 

2.07        Electric Charges.  (a) If the Premises includes one or more
entire floors, Tenant’s demand for, and consumption of, electricity on such
floors shall be determined by meter or meters installed (or, if existing,
retrofitted) by Landlord at Landlord’s expense. Tenant shall pay for such
electric consumption within fifteen (15) days after rendition of bills therefor
(which bills Landlord shall endeavor to provide monthly), which bills shall be
rendered by or on behalf of Landlord separately for each meter.

 

(b)           The amount payable by Tenant per “KW”
and “KWHR” for electricity consumed within the Premises, whether determined by
meters or as otherwise provided below, shall be 100% of the amount (as adjusted
from time to time, “Landlord’s Rate”) at which Landlord from time to
time purchases each KW and KWHR of electricity for the same period from the
utility company (including all surcharges, taxes, fuel adjustments, taxes
passed on to consumers by the public utility, and other sums payable in respect
thereof). Landlord’s Rate shall be determined by dividing the cost charged by
said utility (averaged separately for KW and KWHRs) during each respective
billing period by the number of KWs and KWHRs consumed by the Project as set
forth on the utility company invoice for such period.

 

35

 

(c)           If (i) the Premises includes one or
more partial floors, (ii) any portion of Tenant’s electric consumption (KW and
KWHR) is measured on a meter that also measures the electric consumption of
another tenant in the Building, (iii) Tenant occupies any full floors in the
Premises prior to the installation of meters, or (iv) if a meter measuring
Tenant’s electric consumption (KW and KWHR) is malfunctioning, then in any such
case Tenant’s consumption (KW and KWHR) of electricity shall be reasonably
estimated by Landlord, and Tenant shall pay 100% of Landlord’s Rate as applied
to such consumption (the “Actual Charge”); provided, that in no
event shall Tenant pay less than $2.50 per rentable square foot per annum
($1.00 per rentable square foot per annum with respect to each Block during the
period of Tenant’s construction of initial Alterations in such Blocks (the “Minimum
Charge”).

 

(d)           The Actual Charge shall be adjusted
by Landlord from time to time if there is a change in Landlord’s Rate, and may
be adjusted by Landlord from time to time if, in Landlord’s reasonable
judgment, Tenant is not paying for the entire cost of Tenant’s demand for, and
consumption of, electricity, including, without limitation, by reason that
additional electrical equipment is installed in the Premises, or if Tenant
increases its hours of operation. If applicable, any adjustment to the Actual
Charge shall be retroactive to the date of the relevant change in Tenant’s
consumption or in Landlord’s Rate.

 

(e)           If Tenant disagrees in good faith
with any such determination or adjustment of the Actual Charge, Tenant shall
notify Landlord thereof within ninety (90) days after landlord gives Tenant
notice of such determination or adjustment or if Tenant believes (i) there is a
change in Landlord’s Rate or (ii) Tenant is paying in excess of the entire cost
of Tenant’s demand for and/or consumption of electricity, including, without
limitation, by reason that electrical equipment is removed or altered in the
Premises or if Tenant decreases its hours of operation, Tenant shall notify
Landlord thereof. And in each case, Landlord shall retain, at Tenant’s expense
or Landlord’s expense if the consultant substantially agrees with Tenant, an
independent electrical consultant reasonably satisfactory to Tenant who shall
survey the demand for, and consumption of, electricity by Tenant and, if applicable,
each other tenant who shares such submeter, and the determination made by such
electrical consultant shall be binding on Landlord and Tenant (provided,
that in no event shall the charge to Tenant be less than the Minimum Charge).
If Tenant fails to so disagree with any such determination or adjustment made
by Landlord, or to request that Landlord obtain an independent electrical
consultant, within such ninety (90) day period, such determination or
adjustment shall be conclusive and binding on Tenant. Pending the determination
of such consultant, Tenant shall pay the Actual Charge determined by Landlord,
and upon such determination by the consultant, appropriate adjustment shall be
made retroactive to the date of the relevant change with interest at the
Interest Rate from the date each payment was made with respect to the relevant
change

 

36

 

(provided, that in the
case of clauses (e)(i) and (ii), no adjustment will be made for any
period which is forty-five (45) days prior to Tenant’s notice to Landlord of
the matters set forth in such clauses (e)(i) and (ii)). Landlord shall refund
to Tenant any over payment as hereinabove provided within fifteen days after
Landlord is notified of such consultants determination. Surveys of Tenant’s
electrical consumption shall be based upon the use of electricity during
Business Hours on Business Days, and on such other days and hours when
electricity is used in the Premises; and if cleaning services are provided by
Landlord, such survey shall include Landlord’s normal cleaning hours of five
(5) hours per day for lighting within the Premises and for electrical equipment
normally used for such cleaning. Surveys of Tenant’s electrical consumption
shall take into account that the Landlord’s Rate or the electric consumption of
Tenant during the period that the survey is conducted may be different than the
Landlord’s Rate or electric consumption of Tenant during the period covered by
the Actual Charge that Tenant is contesting.

 

(f)            Tenant shall at its cost furnish and
install all replacement lighting, tubes, lamps, bulbs and ballasts required in
the Premises.

 

(g)           Landlord shall cooperate, at the sole
cost and expense of Tenant, in Tenant’s efforts to obtain electric utility incentives
for which Tenant may be qualified, provided, that such efforts shall not
in any way adversely impact Landlord, any tenants in the Building or the
operation of the Building.

 

2.08        Manner of Payment.  Tenant shall pay all Rent as the same shall
become due and payable under this Lease either by wire transfer of immediately
available federal funds or by check (subject to collection), drawn on a New
York State bank, in each case at the times provided herein without notice or
demand and without setoff or counterclaim. All Rent shall be paid in lawful
money of the United States to Landlord at its office or such other place as
Landlord may from time to time designate. Except as otherwise specifically
provided herein, if Tenant fails to pay any Fixed Rent or recurring Additional
Charges within five (5) days after the applicable due date or fails to pay any
other Additional Charges within twenty (20) days after the applicable due date,
then Tenant shall pay interest thereon at the Interest Rate from the date when
such payment became due through and including the date such payment is received
by Landlord. Any Additional Charges for which no due date is specified in this
Lease shall be due and payable on the 10th day after the date of invoice.

 

37

 

ARTICLE 3

 

Landlord
Covenants

 

3.01        Landlord Services.  (a) From and after the date that Tenant
receives delivery of any Blocks (or in the case of cleaning from and after the
date that Tenant first occupies the applicable Block for the conduct of
Tenant’s business, and not during any initial Alteration period or during the
performance of Landlord’s work) Landlord shall furnish Tenant with the
following services in connection with such Blocks (collectively, “Landlord
Services”):

 

(i)            heat, ventilation and
air-conditioning to the Premises during Business Hours on Business Days and
from 8:00 a.m. to 1:00 p.m. on Saturday substantially in accordance with the
design specifications set forth in Exhibit I attached hereto; if Tenant shall
require heat, ventilation or air conditioning services through the Building’s
systems at any other times, Landlord shall furnish such service (A) in the case
of a Business Day, upon receiving notice from Tenant by 3:00 p.m. of such
Business Day and (B) in the case of a day other than a Business Day, upon
receiving notice from Tenant by 1:00 p.m. of the immediately preceding Business
Day which notice requirement in clause (A) and (B) above may be
satisfied by delivering such notices to the building manager (who is currently
Ed Fallon) by hand or by telecopy with confirmed receipt to (212) 397-7866 as
such telecopy number may be changed by Landlord by notice to Tenant but during
Business Hours only, and Tenant shall pay to Landlord upon demand Landlord’s
then established charges therefor (which, as of the date hereof is $165 per
hour per zone (floors 23-29 being in the same zone) comprised of 8% for water,
59% for steam and 33% for electric energy and, from and after the date hereof,
will not, unless otherwise required by Law, be comprised of any costs other
than water, steam and electric energy or other utilities and Landlord will not
increase its percentage profit factor in computing any of those components), provided,
if other Building systems servicing the Premises service the premises leased by
any other tenant in the Building and any such other Tenant requests heat,
ventilation or air conditioning services during such time which Tenant is
requesting such services then the charges therefor will be equitably
apportioned by Landlord between such tenant and Tenant. If, as part of Tenant’s
initial Alterations to the Blocks or thereafter, Tenant intends to install a
supplemental air conditioning system to serve the Premises, Landlord shall, at
the request of Tenant, use reasonable efforts to make space available in the
Building’s mechanical areas located on the 25th floor of the Building for the
placement of the mechanical equipment related to such supplemental air
conditioning system. Tenant shall not be required to pay rent to Landlord for
such space. Tenant shall, at its sole cost, maintain and service such system; provided,
if such system is located in any part of the Building other than the Premises,
Tenant shall be accompanied by a representative of Landlord who shall be made
available to Tenant at reasonable times upon reasonable advance notice

 

38

 

from Tenant and, other than
during Business Hours on Business Days in connection with work that is not
structural and does not affect the usage or proper functioning of the Building
Systems, the actual cost incurred by Landlord for such representative shall be
paid by Tenant to Landlord within twenty (20) days after demand by Landlord.
Landlord shall provide up to 100 tons of condenser water for such supplemental
air conditioning system on a year-round basis through the Building’s condenser
water system based on Tenant’s demonstrated need. Tenant shall have the right,
upon payment to Landlord of Landlord’s actual costs, to tap into the Building’s
condenser water system to allow Tenant to receive such condenser water. Tenant
shall pay to Landlord, within thirty (30) days after demand, Landlord’s
reasonable estimate of the actual cost of providing such condenser water
(which, as of the date of this Lease, is $.08 per ton hour comprised of 90% for
electric energy and 10% for water and from and after the date hereof, will not,
unless otherwise required by Law be comprised of any costs other than water,
electric energy or other utilities and Landlord will not increase its
percentage profit factor in computing any of those components). Such condenser
water shall be provided 24 hours a day and shall not exceed 88 degrees
Fahrenheit at the entry point into the Premises. Wet connections to the
Building’s condenser water system are not permitted. Upon forty-five (45) days
prior notice, Landlord shall perform any draindowns and refills required for
Tenant’s connection to the Building’s condenser water system at the cost of Tenant;

 

(ii)           steam in a manner consistent with a
first class midtown Manhattan office building, if required by Tenant for any
additional heating or permitted kitchen use, in which event Tenant shall pay to
Landlord the cost of such steam as well as the cost of piping and other
equipment or facilities required to supply steam to and distribute steam within
the Premises; Landlord may install and maintain, at Tenant’s expense, meters to
measure Tenant’s consumption of steam and Tenant shall reimburse Landlord for the
quantities of steam shown on such meters and Landlord’s charge for the
production or purchase of such steam, on demand;

 

(iii)          (A) passenger elevator service to each
floor of the Premises at all times during Business Hours on Business Days, with
at least two passenger elevators subject to call at all other times, and (B)
except for the freight elevator dedicated to Equitable pursuant to and during
the time periods set forth in that certain Lease dated as of July 20, 1995
between Landlord and Equitable (the “Equitable Lease”), a copy of which
provision Landlord has previously delivered to Tenant, freight elevator service
to the Premises on a first come-first served basis (i.e., no advance
scheduling) during Business Hours on Business Days, and on a reserved basis at
all other times upon the payment of Landlord’s cost therefor (which, as of the
date of this Lease is $65 per hour for the freight elevator and $65 per hour
for the truck elevator comprised of 90% labor and 10% Landlord profit and
which, after the date hereof, unless required by Law, shall be comprised of 90%
labor and 10% profit); provided, during

 

39

 

Tenant’s construction of its
initial Alterations in the Blocks Tenant shall be entitled to receive up to 350
man-hours of such overtime freight elevator and truck elevator usage (for
purposes of calculating such usage, freight and truck elevator time must be
reserved jointly so that one (1) hour of freight elevator use will include one
hour of truck elevator use and one hour of truck elevator use will include one
hour of freight elevator use and 349 hours will remain after one hour of such
use) without charge and the charge after such free usage for freight and truck
elevator service during Tenant’s initial Alterations in the Blocks during times
other than Business Hours, on Business Days shall be comprised of labor only
and no Landlord profit. The use of all elevators by Tenant shall be on a
nonexclusive basis, except as otherwise provided herein. Landlord will maintain
and operate all elevators servicing the Premises in a manner substantially
consistent with Exhibit J attached hereto. Except as required by Law and
except for the Elevator Reconfiguration set forth in Section 8.22,
Landlord represents and warrants that as of the date hereof and covenants and
agrees that throughout the Term the passenger elevators serving floors 23
through 29 of the Building provide service to those floors exclusively and
serve no other floors of the Building above the lobby. Tenant shall be
permitted to (x) install a security desk, in accordance with Exhibit H
attached hereto, in the lobby of the Building adjacent to the elevator bank (4
elevators) serving floors 23 through 29, and (subject to the reasonable
approval of Landlord as to the manner of use and design consistency with the
remainder of the lobby) to maintain, at all times that Tenant is permitted
access hereunder to the Premises, a security guard at such desk and (y) unless
space serviced by such elevator bank serving floors 23 through 29 is leased or
subleased by Landlord to any entity (other than Tenant) who refuses to be
subject to the controlled access of Tenant’s security desk, control access by
persons other than Landlord, its employees, agents and contractors to such
elevators servicing floors 23 through 29 of the Building in the same manner and
subject to the same conditions as Tenant may control access to the Premises
pursuant to this Lease; provided, that with respect to any entities to
which Landlord has leased, or subleased space, such entities shall only be
subject to reasonable controlled access of Tenant’s security desk, at no cost
to such entities; and further provided, that during any period that more
than one full floor of the Blocks is occupied by any one or more entities other
than Tenant, Tenant’s Affiliates or Related Service Providers, at Landlord’s
option exercised by ten (10) days’ notice to Tenant, Tenant’s right to install
and maintain the security desk and the related security guard shall be null and
void and of no force and effect. During the three-year period after the
Commencement Date of each Block, Tenant shall have the right to the exclusive
use, during times other than Business Hours on Business Days, of one (1)
passenger cab in the elevator bank serving such Blocks to transport personnel,
hand tools and furniture in connection with the initial Alterations in such
Blocks, provided, that, notwithstanding the provisions of Section
7.03 hereof, Tenant shall be responsible for all damage caused to such
elevator or the Building lobby arising from such use as provided in this
sentence. Tenant shall install protective coverings reasonably acceptable to
Landlord in the interior of such elevator

 

40

 

and the Building lobby in order
to protect the same from damage. If Tenant intends to move a substantial part
of its furniture, equipment or files into or out of-the Blocks, then provided
Tenant coordinates such move with the building manager and provided
Tenant is not in default of this Lease beyond any applicable notice and cure
period, Tenant shall, from time to time as may be reasonable, be permitted to
use, during times other than Business Hours on Business Days and other than
times that Landlord intends to use such passenger cabs for repairs, maintenance
or otherwise, one passenger cab serving the Blocks in connection with such
moves (or all, except for one, available passenger cabs serving the Blocks
after the Block F Commencement Date). Notwithstanding the provisions of Section
7.03 hereof, Tenant shall be responsible for all damage caused to such
elevator cabs and to the Building lobby arising from such use in connection
with such move. Tenant shall pay to Landlord on demand Landlord’s additional
actual costs (including security and maintenance) of Tenant’s use of the
passenger cabs and Building lobby to transport construction personnel, hand tools
and furniture in connection with the initial Alterations and in connection with
such move. Notwithstanding any provision herein to the contrary, in no event
shall passenger cabs be used to transport building materials or construction
debris;

 

(iv)          reasonable quantities of hot and cold
water to the floor(s) on which the Premises are located for core lavatory,
executive lavatory, pantry, drinking, sprinkler and cleaning purposes only in a
manner consistent with first class midtown Manhattan office buildings; if
Tenant requires water for any other purpose, Landlord shall furnish cold water
at the Building core riser through a capped outlet located on each of the
floors on which the Premises is located (within the core of the Building), and
the cost of heating such water, as well as the cost of piping and supplying
such water to the Premises, shall be paid by Tenant, provided, that
Landlord will not charge Tenant a connection fee for connecting piping within
the Premises to the capped outlet located on each of the floors of the
Premises; Landlord may install and maintain, at Tenant’s expense, meters to
measure Tenant’s consumption of cold water and/or hot water for such other
purposes in which event Tenant shall reimburse Landlord for the quantities of
cold water and hot water shown on such meters (including Landlord’s standard
charge for the production of such hot water, if produced by Landlord), on
demand;

 

(v)           electric energy in accordance with
the specifications attached to this Lease as Exhibit K through presently
installed electric facilities for Tenant’s reasonable use of lighting and other
electrical fixtures, appliances, supplemental air conditioning and equipment;
in no event shall Tenant’s consumption of electricity exceed the capacity of
existing feeders to the Building or the risers or wiring serving the Premises
as set forth on Exhibit L. If Tenant demonstrates the need for
additional electric power for Tenant’s use and occupancy of the Premises for
the use permitted herein, and in Landlord’s reasonable judgment (taking

 

41

 

into account the then existing
and future needs of other then existing and future tenants, and other needs of
the Building), unallocated power is available in the Building, Landlord shall
allocate additional electric energy to Tenant sufficient to provide Tenant with
up to, and if reasonably necessary, more than 8 watts per useable square foot
per floor (inclusive of electric energy already made available to Tenant as
provided in Exhibit L attached to this Lease). Landlord reserves the
right to discontinue the furnishing of electric energy to Tenant in the
Premises at any time, upon prior notice, for a period of time reasonably
necessary for Tenant to obtain electric energy directly from the public utility
furnishing electric service to the Building. If Tenant is permitted by Law to
obtain electric energy directly from the public utility company furnishing the
same, Tenant may request Landlord to discontinue furnishing electric energy to
Tenant in the Premises upon thirty (30) days prior notice. If Landlord or
Tenant exercises such right of termination, this Lease shall continue in full
force and effect and shall be unaffected thereby, except only that, from and
after the effective date of such termination, Landlord shall not be obligated
to furnish electric energy to Tenant. If Landlord so discontinues furnishing
electric energy to Tenant, Tenant shall pay the electric charge, pursuant to Section
2.07 through the date of discontinuance and Tenant shall arrange to obtain
electric energy directly from the public utility company furnishing electric
service to the Building. Such electric energy may be furnished to Tenant by
means of existing Building system feeders, risers and wiring to the extent the
same is available, suitable and safe for such purpose and Landlord will not
impose any additional charge for the use of such facilities;

 

(vi)          cleaning services in accordance with Exhibit
E attached hereto. Tenant shall pay to Landlord on demand the costs
incurred by Landlord for (A) extra cleaning work in the Premises required
because of (x) misuse or neglect on the part of Tenant, its subtenants or their
respective employees or visitors, (y) interior glass partitions or an unusual
quantity of interior glass surfaces and (z) non-building standard materials or
finishes installed in the Premises other than wood and stone flooring,
carpeting or vinyl wall coverings, and (B) removal from the Premises and the
Building of any refuse of Tenant in excess of that ordinarily accumulated in
business office occupancy, including, without limitation, kitchen refuse, or at
times other than Landlord’s standard cleaning times. Notwithstanding the
foregoing, Landlord shall not be required to clean any portions of the Premises
used for preparation, serving or consumption of food or beverages, training
rooms, data processing or reproducing operations, film processing, infirmary,
private lavatories or toilets or other special purposes requiring greater or
more difficult cleaning work than office areas (collectively, “Extra
Cleaning”) and Tenant shall, except as hereinafter provided in this Section
3.01(a)(vi), retain Landlord’s cleaning contractor to perform such cleaning
at Tenant’s expense. Landlord’s cleaning contractor shall have access to the
Premises after 6:00 p.m. and before 8:00 a.m. and not at other hours and shall
have the right to use, without charge therefor, all light, power and water in
the Premises reasonably required to clean the Premises. Tenant shall

 

42

 

submit to Landlord’s cleaning
contractor, Tenant’s specifications for the Extra Cleaning in the Premises and
shall obtain from such contractor a bid for Extra Cleaning in the Premises.
Provided that the bid submitted by such contractor is reasonably competitive,
Tenant shall retain such contractor for the Extra Cleaning in the Premises. If
such bid is not reasonably competitive, Tenant may retain another contractor
reasonably acceptable to Landlord (which will utilize the same union local as
Landlord’s cleaning contractor) for the Extra Cleaning in the Premises; provided,
that if Tenant retains a contractor other than Landlord’s contractor, then (A)
any reasonable out-of-pocket security expenses incurred from time to time by
Landlord in supervising such contractor shall be paid by Tenant within thirty
(30) days after demand therefor, (B) Tenant’s contractor shall store all of its
equipment and supplies and material within the Premises, and Landlord shall furnish
no space therefor, and (C) Tenant shall bag and place all rubbish, garbage,
waste and other debris in an area within the Premises reasonably designated by
Landlord daily prior to 6:00 AM and Tenant will arrange with the contractor
designated by Landlord or at Landlord’s option, Landlord shall arrange, at
Tenant’s expense, for removal of such items from the Premises to the Building
loading dock at such times as are reasonably designated by Landlord. The Extra
Cleaning in the Premises shall be performed in a manner consistent with a first
class midtown Manhattan office building. Tenant shall pay the contractor
retained by Tenant directly for the cost of Extra Cleaning in the Premises and
Landlord shall not be required to perform Extra Cleaning in the Premises; and

 

(vii)         use of the Building’s loading dock, (A)
from 8 a.m. to 6 p.m. on Business Hours or Business Days, on a first come-first
serve basis (i.e., no advance scheduling) and no tenant in the Building,
including Tenant, shall be permitted to advance schedule use of the Building’s
loading dock during such time periods and (B) on a reserved basis at all other
times and Tenant shall pay Landlord’s established charges for such after hours
use of loading dock (which, as of the date of this Lease is $65 per hour for
freight elevator and $65 per hour for the truck elevator comprised of 90% labor
and 10% Landlord profit and which after the date hereof, unless required by
Law, shall be comprised of 90% labor and 10% profit); provided, that
Tenant shall not be required to pay Landlord’s established charges for after
hours use of the loading dock if it is paying Landlord’s after hours charge for
the freight elevator for the same period or is applying its free usage credit
of the freight or truck elevator during its initial Alterations.

 

(viii)        Landlord shall make available at no
additional cost to Tenant reasonable shaft and conduit space in order for
Tenant to receive reasonable and customary telecommunication and cable access
from the companies or public utilities providing such services; provided,
that during such access, Tenant shall be accompanied by a representative of
Landlord who shall be made available to Tenant at reasonable times, upon
reasonable advance notice from Tenant; and except when such representative is
made available during Business

 

43

 

Hours, on Business Days (during
which period the representative shall be made available without charge), the
actual cost to Landlord for such representative shall be paid by Tenant to
Landlord within twenty (20) days after demand by Landlord.

 

3.02        Other Building Services.  (a) Except if and to the extent the following
shall be Tenant’s obligation pursuant to this Lease, Landlord shall, at
Landlord’s cost and expense (subject to reimbursement by Tenant as Operating
Expenses to the extent provided for in Section 2.05 hereof) operate,
maintain, repair and replace (if reasonably necessary) (i) all structural
portions of the Building, such as, by way of example only, the roof,
foundation, footings, exterior walls, load-bearing columns, ceiling and floor
slabs, windows, window sills and sashes, (ii) all common and public service
areas of the Building, including, without limitation, all elevators, corridors
and lobbies, (iii) all Building systems (including, without limitation, the
sprinkler and Class E system), serving the common and public service areas and
the Premises (other than any distribution of such systems located in the
Premises and installed by Tenant), in each case throughout the Term, and in
such manner as is consistent with the maintenance, operation and repair
standards of first class midtown Manhattan office buildings (the areas
described in clauses (i), (ii) and (iii) are collectively called
the “Landlord Obligation Areas”).

 

(b)           Landlord shall provide Building
security in a manner which is consistent with a first class midtown Manhattan
office building and shall maintain a security guard in the main lobby of the
Building at all times.

 

(c)           Landlord shall make available on each
floor of the Blocks a connection to the cable television service providing such
service to the Building.

 

3.03        General Provisions.  (a) Landlord may stop or interrupt any
Landlord Service, electricity, or other service and may stop or interrupt the
use of any Building facilities and systems at such times as may be necessary
and for as long as may reasonably be required by reason of accidents, strikes,
or the making of repairs, alterations or improvements, or inability (other than
the lack of funds) to secure a proper supply of fuel, gas, steam, water,
electricity, labor or supplies, or by reason of any other cause beyond the
reasonable control of Landlord; provided, that (i) Landlord shall not
interrupt service of more than one passenger elevator at any one time during
Business Hours on Business Days for repairs, ongoing maintenance, or
renovations except in the case of an emergency, and (ii) if electric
consumption in the Premises or any part thereof is required to be measured by
meter, then except as provided in this Section 3.03 or Section
3.01(v), Landlord shall not permanently discontinue measuring such
consumption by meter unless required by Law or a public utility tariff. Except
as otherwise expressly provided for in this Lease, Landlord shall have no

 

44

 

liability to Tenant by reason
of any stoppage or interruption of any Landlord Service, electricity or other
service or the use of any Building facilities and systems for any reason. Landlord
shall use reasonable diligence to make such repairs as may be required to
machinery or equipment within the Project to provide restoration of any
Landlord Service and, where the cessation or interruption of such Landlord
Service has occurred due to circumstances or conditions beyond the Project
boundaries, to cause the same to be restored by diligent application or request
to the provider. Landlord shall take all steps as would be taken by owners of
first class midtown Manhattan office buildings to restore such services at the
earliest possible time, and shall conduct all repair and restoration work
relating thereto in such manner as to minimize interference with or
interruption of the conduct of Tenant’s business in the Premises.

 

(b)           Without limiting any of Landlord’s
other rights and remedies, if Tenant shall be in monetary default beyond any
applicable grace period and which default is not being contested by a judicial
proceeding or arbitration if provided for in this Lease. Landlord shall not be obligated
to furnish to the Premises any supplemental service such as after hours
heating, ventilation or air conditioning and Landlord shall have no liability
to Tenant by reason of any failure to provide, or discontinuance of, any such
supplemental service. Landlord shall be obligated to restore such supplemental
services if Tenant cures such default.

 

(c)           “Business Hours” means 8:00
a.m. to 6:00 p.m. “Business Days” means all days except Saturday,
Sundays, New Year’s Day, Washington’s Birthday, Memorial Day, Independence Day,
Labor Day, Thanksgiving, the day following Thanksgiving, Christmas Day and any
other days which are either (i) observed by both the federal and the state
governments as legal holidays or (ii) designated as a holiday by the applicable
Building Service Union Employee Service contract or Operating Engineers
contract (which as of the date of this Lease are Good Friday, Columbus Day and
Martin Luther King’s Birthday).

 

(d)           Any provision of this Lease which
provides that Landlord or employees of Landlord shall perform a service for
Tenant at Tenant’s cost, charge or expense shall be deemed to mean that
landlord or Landlord’s designated contractor shall perform such service and
Tenant shall pay such cost, charge or expense for such service to, at
Landlord’s election, either Landlord or such contractor (subject to the
relevant provision of this Lease with respect to timing of payment, furnishing
of backup and Tenant’s dispute rights).

 

3.04        Additional Covenants.  Landlord shall install the partition wall in
the Building Lobby by the elevator serving the Blocks, in accordance with Exhibit
N attached hereto.

 

45

 

ARTICLE 4

 

Leasehold Improvements; Tenant Covenants

 

4.01        Initial Improvements.  (a) Landlord shall perform or cause to be
performed, in each Block, the work described on Exhibit G (“Landlord’s
Work”). All of Landlord’s Work shall be performed by Landlord at Landlord’s
sole cost and expense. Subject . to delays by reason of Force Majeure and Tenant
Delay, Landlord shall, with respect to each Block (other than the Delivered
Blocks) (A) substantially complete Landlord’s Work which, as set forth in Exhibit
G, is a condition to delivery of such Block, on or before the applicable
Commencement Date and (B) substantially complete such items of Landlord’s Work
which, as set forth in Exhibit G, are not a condition to delivery of
such Block, on or prior to the date set forth in Exhibit G and if no
date is set forth therein, then on the date that Tenant has substantially
completed its Initial Alterations in the applicable Block and shall have given
Landlord thirty (30) days’ notice thereof. Tenant shall remove Tenant’s
Property from the Delivered Blocks and shall vacate and deliver to Landlord
possession of the Delivered Blocks. Any items of Tenant’s Property which remain
in the Block B Space and the Block C Space after delivery of possession thereof
to Landlord may, at the option of Landlord be deemed abandoned, and may be
disposed of by Landlord, without accountability in such manner as Landlord
shall determine at Tenant’s reasonable expense. Tenant is not required to
deliver all of the Delivered Blocks simultaneously to Landlord, but may deliver
the Delivered Blocks in installments, provided, that each such delivery
shall consist of full floor units or any space which was delivered to Tenant by
landlord on the date hereof in less than full floor units. Subject to delay, by
reason of Force Majeure and Tenant Delay, Landlord shall with respect to each
of the Delivered Blocks (x) substantially complete Landlord’s Work which, as
set forth in Exhibit G, is a condition to delivery of such Delivered
Block, within thirty (30) days after the later of fifteen (15)-days after
Tenant shall have notify Landlord of the date it intends to vacate the
Delivered Block and the date Tenant delivers to Landlord vacant session of the
Delivered Block in the condition required in this Section 4.01 (the date
Tenant so delivers to Landlord vacant possession of the Delivered Block is the
“Tenant Delivery Date” and the day after such thirty (30) days is the “Stated
Second Commencement Date”) and (y) substantially complete such items of
Landlord’s Work which, as set forth in Exhibit G, is not a condition to
delivery of such Blocks, on or prior to the date set forth in Exhibit G
and if no date is set forth therein, then on the date that Tenant has
substantially completed its Initial Alterations, in the applicable Delivered
Block and shall have given Landlord thirty (30) days’ notice thereof. On the
applicable Commencement Date and Second Commencement Date, Tenant shall accept
the Blocks in “as is” condition on such date, subject only to the requirements
of this Section 4.01. All initial improvements which do not constitute
Landlord’s Work shall constitute Alterations

 

46

 

and shall be performed by
Tenant at Tenant’s expense in accordance with Section 4.02 and any
applicable provisions of Exhibit D. Possession of the Delivered Blocks
in Delivery Condition, shall, subject to the terms of this Lease, be delivered
to Tenant on the applicable Stated Second Commencement Date. If Landlord is
unable to deliver possession of a Delivered Block to Tenant on or before the
Stated Second Commencement Date in Delivery Condition, (x) the Stated Second
Commencement Date shall be extended by one day for each day that Landlord shall
be unable to deliver possession thereof in Delivery Condition (the Stated
Second Commencement Date as the same may be extended is the “Second
Commencement Date”) and (y) Fixed Rent and Additional Charges payable
pursuant to Sections 2.04 and 2.05 with respect to such undelivered
Delivered Block shall be abated for (x) the number of days equal to the Block C
and B Abatement Percentage, as applicable multiplied by the number of days that
such failure to deliver continues beyond the Stated Second Commencement Date by
reason other than Force Majeure and Tenant Delay (including, without
limitation, the failure of Tenant to deliver possession of the Delivered Blocks
to Landlord in the condition required in this Lease on the date required for
such delivery) and (y) one day for each day that any of the Delivered Blocks
are not delivered to Tenant in Delivery Condition beyond the Stated Second Commencement
Date due to Force Majeure. The “Block C and B Abatement Percentage”
means, with respect to the failure of landlord to deliver to Tenant possession
of the Delivered Blocks on or prior to the Stated Second Commencement Date by
reason other than the Force Majeure and Tenant Delay, (i) for the first thirty
(30) days, 1.1 days, (ii) for the second thirty (30) days, 1.2 days, (iii) for
the third thirty (30) days, 1.3 days, (iv) for the fourth thirty (30) days, 1.4
days and (v) for each day thereafter, 1.5 days. 
From the date Tenant delivers any of the Delivered Blocks to Landlord
and until the applicable Second Commencement Date therefore, Tenant will not be
responsible with respect to such Delivered Block to carry insurance or to
indemnify Landlord, Superior Lessor and Superior Mortgagees for acts or
omissions occurring in such Delivered Block other than the acts, omissions or
negligence of Tenant, its Affiliates and Related Service Providers or any
person claiming through or under Tenant, its Affiliates and Related Service
Providers or any of the respective partners, directors, officers, agents,
employees or contractors but shall otherwise be required to pay Fixed Rent, Tax
Payments and Operating Payments, and perform all obligations it is otherwise
required to perform with respect to such Delivered Blocks, other than
obligations which arise out of Landlord’s use of such Delivered Blocks during
such period such as mechanics’ liens arising from Landlord’s Work, maintenance
and repair of the

 

47

 

Delivered Blocks, costs of
electric consumption, compliance with Law related to Landlord’s Work, and
cleaning of the Delivered Block necessitated by Landlord’s Work.

 

(b)           Tenant shall have the right to
install a supplemental air conditioning system to serve the Premises and,
subject to the prior approval of Landlord, which approval shall not be
unreasonably withheld, to install louvers to service such air cooled
supplemental units in any portion of the exterior curtain wall on the floors
where the Blocks are located except for (i) the west wall facing Avenue of the
Americas, and (ii) the two window bays on the north and south walls nearest the
west wall as more particularly described on Exhibit O attached
hereto.

 

(c)           As part of Tenant’s initial
Alterations to the Blocks, Tenant shall within 365 days after the Commencement
Date or the Second Commencement Date (as the case may be) for each of the
floors constituting Blocks perform the work set forth on Exhibit F
annexed hereto (“Tenant’s Required Work”) with respect to such Blocks.
Landlord shall allow Tenant an allowance in the amount of $20,000 for each full
floor included in the Blocks plus 60 cents for each rentable square foot
included in the Blocks (the “Tenant Required Work Allowance”), which
allowance shall be applied against the cost and expense incurred by Tenant in
connection with Tenant’s Required Work. Tenant shall apply the entire Tenant
Required Work Allowance for each Block only to the Tenant Required Work in such
Block before being used for any other purpose. In the event that the cost and
expense of Tenant’s Required Work shall exceed the amount of the Tenant
Required Work Allowance, Tenant shall be entirely responsible for such excess.
In the event that the cost and expense of Tenant’s Required Work shall be less
than the amount of the Tenant Required Work Allowance, Tenant shall be allowed
to retain any such excess. Tenant Required Work Allowance shall be paid to
Tenant by official bank check drawn on a New York State Bank upon execution and
delivery of this Lease by Landlord and Tenant.

 

(d)           Landlord shall allow Tenant an
allowance in the aggregate amount of $45 per rentable square foot for the
Initial Blocks and an allowance for Block F Space equal to the amount
calculated by multiplying $1,097,100 by a fraction the numerator of which is
the number of months (including any partial months as a fraction) that the
Block F Space is included in the demise hereunder and the denominator of which
is 197 months (hereinafter called the “Work Allowance”), which allowance
shall be solely applied against the cost and expense incurred by Tenant within
three years after the applicable Commencement Date or the Second Commencement
Date, as the case may be, in connection with (i) the performance of Tenant’s
initial Alterations in all or any part of the Blocks including without
limitation permit costs and costs of construction related consultants, (ii)
moving into the Blocks, (iii) services performed by Tenant’s Registered Architect
and Professional Engineer in connection with such

 

48

 

initial Alterations therein,
(iv) the purchase and installation of telecommunication equipment and furniture
therein and (v) such other work, materials and services in connection with
Tenant’s initial occupancy therein which are reasonably approved by Landlord (“Tenant’s
Allowance Work”). Tenant may apply the Work Allowance with respect to any
Block to the Tenant’s Allowance Work incurred by Tenant in any other Block. In
the event that the cost and expense of Tenant’s Allowance Work shall exceed the
amount of the Work Allowance, Tenant shall be entirely responsible for such
excess. In the event that the cost and expense of Tenant’s Allowance Work shall
be less than the amount of the Work Allowance, then the amount of such
difference shall be applied as a credit against the Rent payable hereunder by
Tenant. Twenty-five percent of the Work Allowance for the Initial Blocks shall
be payable on the execution and delivery of this Lease by Landlord and Tenant
by official bank check drawn on a New York State Bank and twenty-five percent
of the Work Allowance for the Block F Space shall be payable on the Block F
Commencement Date by official bank check drawn on a New York State Bank (the “Initial
Work Allowance”). The balance of the Work Allowance shall be payable as
Tenant’s Allowance Work progress within thirty (30) days after Tenant shall
make periodic requisitions for portions thereof not to exceed in the aggregate
the amount of the Work Allowance provided (A) together with the first such
requisition for the Work Allowance for the Initial Blocks and for the Block F
Space as applicable, Tenant shall furnish to Landlord the items required in clauses
(i) and (ii) first appearing below with respect to the portion of the
Tenant Work Allowance paid to Tenant prior to the first requisition for such
Block (including evidence that such Tenant Work Allowance has been spent) and
with respect to the Tenant Required Work Allowance, (B) all such requisitions
shall be submitted no more frequently than once per month and (C) except as
provided for in the next paragraph, no requi­sition shall include the last 10%
of the Tenant Work Allowance until all the requirements for final payment of
Tenant’s Work Allowance as set forth in this Section 4.01(d) with
respect to the Blocks have been complied with. Landlord shall pay directly to
Tenant by a check drawn on a New York State bank an amount equal to the total
cost of the portion of Tenant’s Allowance Work for each Block referenced in
such requisition, provided, that Tenant shall furnish to Landlord
together with such requisition:

 

(i)            copies of invoices
from the contractors, materialmen and others performing the portion of Tenant’s
Allowance Work with respect to the applicable Block referenced in such
requisition; and

 

(ii)           a certificate from
Tenant (executed by an officer of Tenant holding the office of vice-president
or higher) and Tenant’s Registered Architect stating that such portion of
Tenant’s Allowance Work with respect to the applicable Block has been
substantially completed or substantially installed in accordance

 

49

 

with Tenant’s
approved design drawings and specifications and that payment is due and owing
for such work.

 

Prior to the
final payment by Landlord of the last 10% of the Tenant’s Work Allowance for
the Blocks, in addition to the requirements set forth in this Section
4.01(d) above, Tenant shall furnish to Landlord to the extent not
previously furnished to Landlord:

 

(iii)          a certificate from
Tenant and Tenant’s Registered Architect stating that Tenant’s Allowance Work
and Tenant’s Required Work with respect to the Blocks have been substantially
completed in accordance with Tenant’s approved design drawings and
specifications;

 

(iv)          all sign-off
documents with respect to Tenant’s Allowance Work and Tenant’s Required Work
with respect to the Blocks from all agencies having jurisdiction;

 

(v)           written final
unconditional lien waivers, from all contractors, materialmen and others
performing Tenant’s Allowance Work and Tenant’s Required Work with respect to
the Blocks or, if any of such lien waivers cannot be obtained by Tenant,
notwithstanding its reasonable efforts to obtain the same, a written statement
by Tenant, either that it has paid the contractor in question or the general
contractor (in the event that the missing lien waiver is from a subcontractor)
or that a dispute exists with the contractor and Tenant has reserved an amount
sufficient to pay the amount in dispute;

 

(vi)          copies of all
licenses and permits required by governmental authorities for operation and
occupancy of such Block (except to the extent of Tenant’s inability to obtain
such licenses and permits is delayed due to the failure of Landlord to sign
applications, for governmental permits or remove a violation in accordance with
and within the time periods provided in Section 4.02(j) and Section
2.02(b) hereof respectively;

 

(vii)         as-built plans and
specifications, with respect to Tenant’s Allowance Work and Tenant’s Required
Work with respect to the Blocks; and

 

50

 

(viii)        copies of all
guarantees and warranties issued to Tenant in connection with Tenant’s Allowance
Work and Tenant’s Required Work with respect to the Blocks.

 

Notwithstanding the foregoing,
in the event that Tenant has complied with all of the provisions of Section
4.02(d)(i)-(viii), except that Tenant has not been able to obtain a
sign-off document, license or permit (individually or collectively a “Governmental
Approval”) as provided for in Section 4.02(d)(iv) or (vi) and the
sole reason that Tenant has not been able to obtain such Governmental Approval
is that the appropriate agency has not performed its inspection or taken such
other ministerial action; then in such event Landlord will disburse to Tenant
all but the last 2% of the Tenant Work Allowance and will disburse the final 2%
upon receipt of the required Governmental Approval.

 

(e)           If Landlord fails to pay the Work
Allowance or any part thereof which is due and payable under this Lease on or
before the due date therefor and such failure continues for fifteen (15) days
after Tenant notifies Landlord of such failure (which notice shall state that
Tenant intends to set off or recoup such amount against the next installment of
Rent unless Landlord pays such amount to Tenant) (an “Offset Notice”),
then Tenant may, in addition to any other remedies it may have for the failure
to pay such amount, set-off or recoup such amount against Rent payable under
this Lease, together with interest accrued thereon at the Interest Rate from
the date which such amount became due and payable to the date of Landlord’s
payment or Tenant’s recoupment of such amount. Any dispute with respect to
Tenant’s entitlement to all or any portion of the Work Allowance may be
submitted to arbitration pursuant to Section 9.03 hereof. If Landlord
disputes Tenant’s entitlement to all or any part of the Work Allowance,
Landlord may nevertheless pay the amount of the disputed Work Allowance without
prejudice to Landlord’s dispute.

 

4.02        Alterations. 
(a) Tenant shall make no improvements, changes or alterations in or to
the Premises or the Building (“Alterations”) without Landlord’s prior
approval. Provided Tenant is not in default under this Lease beyond any notice
and cure period, Landlord shall not unreasonably withhold its approval to any
Alteration that is not a Material Alteration (or to any Material Alteration to
which it has otherwise in this Lease agreed to not unreasonably withhold its
consent). Notwithstanding the foregoing, (i) Landlord’s consent shall not be
required with respect to work solely involving painting, decorating and/or wall
covering (“Decorating”), provided, that, in each case such work
does not require Tenant to obtain a building permit and (ii) Landlord shall be
deemed not to have unreasonably withheld its consent to any Alteration if such
Alteration requires the consent of any Superior Mortgagee or Superior Lessor
and such consent shall have been withheld by such Superior Mortgagee or
Superior Lessor. “Material Alteration” means an Alteration that (i) is

 

51

 

not limited to the interior of
the Premises or which affects the exterior (including the appearance) of the
Building, (ii) is structural or affects the strength of the Building (except
Landlord will not unreasonably withhold its approval with respect to one floor
cut on each floor of the Premises for an internal staircase, core drill of
slab, treaded rod and isolators for installation of equipment and increasing
the live load), (iii) affects the usage or the proper functioning of any of the
Building systems except if the usage or functioning of the Building System is
not materially or adversely affected and the Alteration is limited to and does
not affect any part of the Building other than the interior of the Premises, or
(iv) requires a change to the Building’s certificate of occupancy unless such
change is limited to the certificate of occupancy for the Premises and is in
connection with an Identified Ancillary use. Notwithstanding the foregoing, if
any Alteration to which Landlord has consented requires access to the
Building’s shafts, risers, conduits, utility closets and machine rooms, then
Landlord shall not unreasonably withhold its consent to reasonable and
customary access and use of the Building’s shafts, risers, conduits, utility
closets and machine rooms in connection therewith subject to the reasonable
requirements of Landlord, including, without limitation, the time periods and
manner of access and supervision by personnel of Landlord; provided,
that during such access, Tenant shall be accompanied by a representative of
Landlord who shall be made available to Tenant at reasonable times, upon
reasonable advance notice from Tenant; and except when such representative is
made available during Business Hours, on Business Days (during which period the
representative shall be made available without charge), the actual cost to
Landlord for such representative shall be paid by Tenant to Landlord within
twenty (20) days after demand by Landlord.

 

(b)           Tenant, in connection with any
Alteration, shall comply with the Alteration Rules and Regulations set forth as
Exhibit D, attached hereto. To the extent any of the provisions contained
in Exhibit D conflict with the provisions of the Lease, the provisions
of the Lease shall govern and control. To the extent any of the provisions
contained in Exhibit D are modified or supplemented by Landlord after
the date hereof, and as a result thereof, there is a conflict between the
provisions of the Lease and the provisions of such modified or supplemented Exhibit
D, the provisions of the Lease shall govern and control; provided, however,
that in no event shall Landlord modify or supplement the provisions of Exhibit
D, relating to the construction supervisory fee. Tenant shall not proceed
with any Alteration which is not Decorating unless and until Landlord approves
Tenant’s plans and specifications therefor. Landlord shall, within twenty (20)
days following receipt of Tenant’s plans and specifications, advise Tenant of
Landlord’s approval or disapproval of such plans and specifications or any part
thereof. If Landlord shall fail to approve or disapprove Tenant’s plans and
specifications or any part thereof within such twenty (20) days, Tenant shall
have the right to give a reminder notice to Landlord and if Landlord fails to
approve or disapprove Tenant’s plans and specifications or any part thereof
within two (2) Business Days after receipt

 

52

 

of such reminder notice,
Landlord shall be deemed to have approved such plans and specifications or the
applicable part thereof. If Landlord shall disapprove such plans and
specifications (or any part thereof), Landlord shall set forth its reasons for
such disapproval in writing and in reasonable detail and itemize those portions
of the plans and specifications so disapproved. Landlord shall advise Tenant
with ten (10) days following receipt of Tenant’s revised plans and
specifications, or portions thereof, of Landlord’s approval or disapproval of
the revised plans and specifications or any portion thereof, and shall set
forth Landlord’s reasons for any such further disapproval in writing and in
reasonable detail. If Landlord fails to approve or disapprove the revised plans
and specifications or any portion thereof within such ten (10) days, Tenant
shall have the right to give a reminder notice to Landlord and if Landlord
fails to approve or disapprove Tenant’s plans and specifications or any part
thereof within two (2) Business Days after receipt of such reminder notice,
Landlord shall be deemed to have approved the revised plans and specifications
or such portions thereof. If Tenant’s Plans and Specifications are in
connection with an Alteration, other than a Material Alteration, Tenant may
submit any dispute with Landlord as to the reasonableness of Landlord’s
disapproval of such plans and specifications to arbitration in accordance with Section
9.03 hereof. Any review or approval by Landlord of plans and specifications
with respect to any Alteration is solely for Landlord’s benefit, and without
any representation or warranty to Tenant with respect to the adequacy,
correctness or efficiency thereof, its compliance with Laws or otherwise.

 

(c)           Tenant shall pay to Landlord upon
demand Landlord’s reasonable out-of-pocket costs and expenses (including,
without limitation, the reasonable and customary fees of any architect or
engineer employed by Landlord or any Superior Lessor or Superior Mortgagee for
such purpose) for reviewing plans and specifications and inspecting Alterations
(other than Decorating).

 

(d)           Except if the Tenant is a Qualified
Tenant, before proceeding with any Alteration that will cost more than $250,000
(exclusive of the costs of Decorating and items constituting Tenant’s
Property), as estimated by a reputable contractor designated by Landlord and
reasonably acceptable to Tenant, Tenant shall furnish to Landlord one of the
following: (i) a cash deposit, (ii) a performance bond and a labor and
materials payment bond (issued by a corporate surety licensed to do business in
New York reasonably satisfactory to Landlord) or (iii) an irrevocable,
unconditional, negotiable letter of credit, issued by a bank and in a form
reasonably satisfactory to Landlord; each to be equal to 110% of the cost of
the Alteration, estimated as set forth above. Any such letter of credit shall
be for one year and shall be renewed by Tenant each and every year until the
Alteration in question is completed and shall be delivered to Landlord not less
than fifteen (15) days prior to the expiration of the then current letter of
credit, failing which Landlord may present the then current letter of

 

53

 

credit for payment. Upon (A)
the completion of the Alteration in accordance with the terms of this
Section 4.02 and (B) the submission to Landlord of (x) proof evidencing the
payment in full for said Alteration, (y) written unconditional lien waivers of
mechanics’ liens and other liens on the Project from all contractors performing
said Alteration and (z) all submissions required pursuant to Section B4
of Exhibit D attached hereto, the security deposited with Landlord (or
the balance of the proceeds thereof, if Landlord has drawn on the same) shall
be returned to Tenant. Upon Tenant’s failure properly to perform, complete and
fully pay for any Alteration, as reasonably determined by Landlord, Landlord
may, upon notice to Tenant, draw on the security deposited under this Section
4.02(d) to the extent Landlord deems necessary in connection with said
Alteration; the restoration and/or protection of the Premises or the Project and
the payment of any costs, damages or expenses resulting therefrom. Any cash
security deposit being held by Landlord pursuant to this Section 4.02(d)
will be held in escrow in an interest bearing account and all interest will
accrue for the benefit of Tenant. Notwithstanding any provision in this Lease
to the contrary as long as Tenant is a Qualified Tenant, no subtenant will be
required to comply with the terms of this Section 4.02(d) unless
Landlord has agreed to provide a nondisturbance agreement to such subtenant.

 

(e)           Tenant shall obtain (and furnish,
prior to commencement and prosecution of Alterations, copies to Landlord of)
all necessary governmental permits and certificates for the commencement and
prosecution of Alterations and for final approval thereof upon completion, and
shall cause Alterations to be performed in compliance therewith, and in
compliance with all Laws and in substantial compliance with the plans and
specifications approved by Landlord. Alterations shall be diligently performed
in a good and workmanlike manner, using new materials and equipment at least
equal in quality and class to the then standards for the Building. Alterations
other than Decorating shall be performed by contractors first approved by
Landlord which approval shall not be unreasonably withheld or by the
contractors listed in Exhibit P hereto; provided, that any
Alterations in and to the base building systems shall be performed only by
contractors designated by Landlord, including, as of the date hereof the
contractors listed on Exhibit P. Landlord may from time to time add and
delete names from Exhibit P. If Landlord shall fail to approve or
disapprove of any contractors within twenty (20) days after Tenant’s request
for Landlord’s approval, Tenant shall have the right to give a reminder notice
to Landlord and if Landlord fails to approve or disapprove such proposed
contractor within two (2) Business Days after receipt of such reminder notice,
Landlord shall be deemed to have approved such contractor. Tenant may submit
any dispute with Landlord as to the reasonableness of Landlord’s disapproval of
such contractors to arbitration in accordance with Section 9.03 hereof.
The performance of any Alteration shall not be done in a manner which would
violate Landlord’s union contracts affecting the Project, or create any work
stoppage, picketing, labor disruption, disharmony or dispute or any
interference with the business of Landlord or any tenant or occupant of the

 

54

 

Building. Tenant shall
immediately stop the performance of any Alteration if Landlord notifies Tenant
that continuing such Alteration would violate Landlord’s union contracts
affecting the Project, or create any work stoppage, picketing, labor
disruption, disharmony or dispute or any interference with the business of
Landlord or any tenant or occupant of the Building.

 

(f)            Throughout the performance of
Alterations, Tenant shall carry worker’s compensation insurance in statutory
limits, “all risk” Builders Risk coverage valued on a replacement cost basis
and written on a completed value basis and general liability insurance with
limits of not less than the limits required in Section 7.02, with
completed operation endorsement, for any occurrence in or about the Project,
under which Landlord and its agent and any Superior Lessor and Superior
Mortgagee whose name and address have been furnished to Tenant shall be named
as additional insureds (except with respect to worker’s compensation and
Builders Risk coverage, provided, that any insurance proceeds of the
Builders Risk coverage covering Improvements and Betterments shall be paid by
Tenant to Landlord as and when required in this Lease), with insurers which
comply with the provisions of Section 7.02. Tenant shall furnish
Landlord with evidence that such insurance is in effect at or before the
commencement of Alterations and, on request, at reasonable intervals thereafter
during the continuance of Alterations.

 

(g)           Should any mechanics’ or other liens
be filed against any portion of the Project by reason of the acts or omissions
of, or because of a claim against, Tenant or anyone claiming under or through
Tenant, Tenant shall cause the same to be canceled or discharged of record by
bond or otherwise within sixty (60) days after notice from Landlord. If Tenant
shall fail to cancel or discharge said lien or liens within said 60-day period,
Landlord may, upon 5 days’ prior notice to Tenant, (which notice may be given
at any time but not earlier than fifty-five (55) days after Landlord shall have
sent the sixty (60) day notice provided above in this clause (g)) cancel
or discharge the same and Tenant shall reimburse Landlord for all costs
incurred in canceling or discharging such liens, together with interest thereon
at the Interest Rate from the date incurred by Landlord to the date of payment
by Tenant, such reimbursement to be made within fifteen (15) days after receipt
by Tenant of a written statement from Landlord as to the amount of such costs.
Tenant shall indemnify and hold Landlord harmless from and against all costs
(including, without limitation, attorneys’ fees and disbursements and costs of
suit), losses, liabilities or causes of action arising out of or relating to
any Alteration, including, without limitation, any mechanics’ or other liens
asserted in connection with such Alteration.

 

(h)           Tenant shall deliver to Landlord,
within thirty (30) days after the completion of an Alteration other than
Decorating, “as-built” drawings thereof. During the Term, Tenant shall keep
records of Alterations other than Decorating costing in excess of

 

55

 

$5,000 including plans and
specifications, copies of contracts, invoices, evidence of payment and all
other records customarily maintained in the real estate business relating to
Alterations and the cost thereof and shall, within thirty (30) days after
demand by Landlord, furnish to Landlord copies of such records.

 

(i)            All Alterations to and Fixtures
installed by Tenant in the Premises shall be fully paid for by Tenant in cash
and shall not be subject to conditional bills of sale, chattel mortgages, or
other title retention agreements.

 

(j)            Provided Tenant complies with the
provisions of this Section 4.02 and Exhibit D in connection with
Alterations, Landlord shall, within ten (10) Business Days (or five (5)
Business Days in connection with Tenant’s initial Alterations in the Blocks)
after request of Tenant, sign such applications for governmental permits as
Tenant may reasonably require in connection with Alterations which have been
consented to by Landlord.

 

4.03        Landlord’s and Tenant’s Property.  (a) All fixtures, equipment, improvements and
appurtenances attached to or built into the Premises, whether or not at the
expense of Tenant other than Tenant’s Property (collectively, “Fixtures”),
shall be and remain a part of the Premises and shall not be removed by Tenant
except that in connection with an Alteration, Tenant may remove such Fixtures; provided,
that such removed Fixtures are replaced with Fixtures consistent with the
Fixtures installed in the Building by other tenants in the Building and all
damage to the Premises caused by such removal is repaired in connection with
such Alteration. All Fixtures constituting Improvements and Betterments shall
be the property of Tenant during the Term and, upon expiration or earlier
termination of this Lease, shall become the property of Landlord. All Fixtures
other than Improvements and Betterments shall, upon installation, be the
property of Landlord. “Improvements and Betterments” means (i) all
Fixtures, if any, installed at the expense of Tenant, whether installed by
Tenant or by Landlord (i.e., excluding any Elevator Reconfiguration Work
and Fixtures paid for by Landlord directly or by way of the Work Allowance or
Tenant Required Work Allowance or any other work allowance paid by Landlord to
Tenant in connection with Additional Space included in the Premises) and (ii)
all carpeting in the Premises.

 

(b)           All movable partitions, business and
trade fixtures, special cabinet work, machinery and equipment, and all
furniture, furnishings and other articles of movable personal property owned by
Tenant its Affiliates, subtenants or Related Service Providers and located in
the Premises (collectively, “Tenant’s Property”) shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided, that if any Tenant’s Property is removed, Tenant
shall repair any damage to the Premises or to the Building resulting from the
installation and/or removal thereof.

 

56

 

(c)           At or before the Expiration Date, or
within fifteen (15) days after any earlier termination of this Lease, Tenant,
at Tenant’s expense, shall remove Tenant’s Property from the Premises (except
such items thereof as Landlord shall have expressly permitted to remain, which
shall become the property of Landlord), and Tenant shall repair any damage to
the Premises or the Building resulting from any installation and/or removal of
Tenant’s Property. Any items of Tenant’s Property which remain in the Premises
after the Expiration Date, or more than fifteen (15) days after an earlier
termination of this Lease, may, at the option of Landlord, be deemed to have
been abandoned, and may be retained by Landlord as its property or disposed of
by Landlord, without accountability, in such manner as Landlord shall
determine, at Tenant’s reasonable expense.

 

(d)           Landlord, by notice (the “Fixture
Notice”) given to Tenant, may require Tenant, notwithstanding Section
4.03(a), to remove all or any Fixtures that do not constitute a standard
office installation, such as, by way of example only, kitchens, vaults, safes,
raised flooring and stairwells. Such notice shall be given (i) together with
Landlord’s consent to the installation of any Fixture (other than a Fixture
installed as part of the initial Alterations in the Blocks), (ii) within thirty
(30) days after Landlord receives Tenant’s Fixture List, with respect to
Fixtures installed in the Blocks as part of the initial Alterations in the
Blocks, (iii) at any time prior to the earlier of (x) sixty (60) days after
notice of Landlord’s obligation to provide a Fixture Notice is delivered by
Tenant to Landlord (which notice by Tenant shall not be delivered earlier than
two hundred seventy (270) days prior to the Expiration Date) and (y) the
Expiration Date or at any time not later than thirty (30) days after any
earlier termination of the Lease, with respect to (A) Fixtures installed as part
of Tenant’s initial Alterations to the Blocks and not included in Tenant’s
Fixture List or (B) Fixtures, the installation of which was not consented to by
Landlord or was not required to be consented to by Landlord. If Landlord shall
give such notice, then Tenant, at Tenant’s expense, shall remove the same from
the Premises, shall repair and restore the Premises to the condition existing
prior to installation thereof and shall repair any damage to the Premises or to
the Building due to such removal prior to the Expiration Date or earlier
termination of this Lease (except that in the event of Fixtures installed as
set forth in clause (iii) in connection with an early termination of
this Lease, within thirty (30) days after the giving of such notice by Landlord)
and the existence of such Fixtures and their removal by Tenant shall not
constitute a holding over by Tenant. Promptly after Tenant completes its
initial Alterations, Tenant shall provide to Landlord a list (the “Fixture
List”) of the Fixtures to be installed by Tenant in the Blocks.
Notwithstanding any provisions herein to the contrary, at the Landlord’s option
Tenant shall remove the Antenna and the 75 Rock Conduit on or prior to the
Expiration Date or within thirty (30) days of an earlier termination of this
Lease.

 

57

 

4.04        Access and Changes to Building.  (a) Landlord reserves the right, at any time,
to make changes in or to the Project as Landlord may deem necessary or
desirable, and Landlord shall have no liability to Tenant therefor, provided,
that any such change does not materially and adversely interfere with Tenant’s
reasonable access to Avenue of the Americas, 51st Street, 52nd Street, the
lobby, the concourse, 75 Rock Passage or the Premises and does not affect the
first class nature of the Project or the services provided to Tenant. Landlord
may install and maintain pipes, fans, ducts, wires and conduits within or
through the walls, floors or ceilings of the Premises; provided, that
same are concealed behind walls, below floors or above ceilings, and do not
reduce the rentable square feet in the Premises beyond a de  minimis
extent in the aggregate. In exercising its rights under this Section 4.04,
Landlord shall use reasonable efforts to minimize any interference with
Tenant’s use of the Premises for the ordinary conduct of Tenant’s business.
Tenant shall not have any easement or other right in or to the use of any door
or any passage or any concourse or any plaza connecting the Building with any
subway or any other building or to any public conveniences, and the use of such
doors, passages, concourses, plazas and conveniences may, without notice to
Tenant, be regulated or discontinued at any time by Landlord, provided,
that, subject to Force Majeure, requirements of Law and to temporary closures
due to among other things, the need for repairs, improvements, maintenance
and/or cleaning, Landlord shall not, during Business Hours on Business Days
during the Term, close the access from the Building to the underground passage
outside the Building (“75 Rock Passage”) which connects the Building to
the underground passage (“Adjacent Passage") providing access to 75
Rockefeller Plaza and the Rockefeller Center Concourse. Landlord makes no
representation as to the permissibility of keeping the 75 Rock Passage or
access thereto from the Building or access to the Adjacent Passage open under
applicable Law or otherwise or the rights of Landlord with respect thereto. If
the 75 Rock Passage or access thereto from the Building or access to the
Adjacent Passage from the Project is closed, then Landlord shall promptly, upon
the request of and cost of Tenant take such reasonable actions as may be
requested by Tenant to cause the 75 Rock Passage, access thereto from the
Building, and access to the Adjacent Passage from the Project, as applicable,
to be reopened.

 

(b)           Except for the space within the
inside surfaces of all walls, hung ceilings, floors, windows and doors bounding
the Premises, all of the Building, including, without limitation, exterior
Building walls, core corridor walls and doors and any core corridor entrance,
any terraces or roofs adjacent to the Premises, and any space in or adjacent to
the Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts,
electric or other utilities, sinks or other Building facilities, and the use
thereof, as well as access thereto through the Premises, are reserved to
Landlord and are not part of the Premises. Landlord reserves the right to name
the Building and to change the name or address of the Building at any time and
from time to time; provided, that if Landlord changes the address of the
Building, then at the

 

58

 

request of Tenant and at
Landlord’s cost, Landlord shall make all appropriate filings with the United
States Post Office, if any such filings are available, to continue delivering
mail to the Building which is addressed to the prior address. Nothing in this
Section 4.04(b) shall be construed to diminish Tenant’s rights under Article
10, Section 4.02 or other express provisions of the Lease which
permit Tenant access to shaft space or other non-Premises space in the Building
nor shall this Section 4.04(b) be construed to prevent Tenant from
making reasonable and customary use of the plenums in the Premises and areas
behind nonstructural walls in the Premises for duct work, wiring and other
customary uses.

 

(c)           Landlord shall have no liability to
Tenant if at any time any windows of the Premises are either temporarily
darkened or obstructed for less than 60 consecutive days or if at any time any
windows of the Premises are temporarily darkened or obstructed by reason of any
repairs, improvements, maintenance and/or cleaning in or about the Building (or
permanently darkened or obstructed if required by Law) or covered by any
translucent material for the purpose of energy conservation, or if any part of
the Building, other than the Premises, is temporarily closed or inoperable.
Landlord shall not permanently close or permanently render inoperable the
entrance to the Building located at 51st Street, 52nd Street and Avenue of the
Americas, the 75 Rock Passage, the elevators servicing the Premises, the truck
elevator or the loading dock and the waiver of liability herein above provided
in this clause (c) shall not apply if the same is permanently closed or
permanently rendered inoperable; provided, that Landlord shall have no
liability to Tenant if the same are required to be permanently closed or to be
permanently rendered inoperable by Law or by condemnation. The phrase “Landlord
shall have no liability to Tenant” as used in this Section 4.04(c) shall
not be interpreted to restrict any right of Tenant to claim a constructive
eviction if otherwise permitted by law.

 

(d)           Landlord and persons authorized by
Landlord shall have the right, upon prior notice to Tenant (except in an
emergency, in which case, upon such notice, if any, which in Landlord’s
reasonable determination is appropriate), to enter the Premises (together with
any necessary materials and/or equipment), to inspect or perform such work as
Landlord may reasonably deem necessary or to exhibit the Premises to
prospective purchasers or lenders or, during the last 24 months of the Term, to
prospective tenants, or for any other reasonable purpose as Landlord may deem
necessary or desirable. Landlord shall use commercially reasonable efforts to
minimize interference with Tenant’s use and enjoyment of the Premises and to
exercise due care in entering and exiting the Premises. During the performance
of any work of Landlord in or about the Premises, Landlord shall have the right
to store in the Premises materials and equipment utilized in connection with
such work, but only so much materials as would be consumed in one day and only
such equipment as is reasonably necessary. Other than in connection with an
emergency, Landlord shall not enter the Premises

 

59

 

unless accompanied by a
representative of Tenant; provided, that Tenant shall have made such
representative available to Landlord upon reasonable prior notice (not to
exceed one Business Day). Notwithstanding the provisions of this Section
4.04(d), except (i) in emergencies, (ii) if required by Law or (iii) if the
inability to gain access would materially and adversely affect another tenant
in the Building or the operation of the Building or (iv) in the event Landlord
has provided Tenant with prior reasonable notice and Landlord is accompanied by
a representative of Tenant which Tenant shall make available to Landlord,
Tenant shall be permitted to exclude Landlord from entering certain secure
areas in the Premises from time to time designated by Tenant to Landlord in
writing, not to exceed in the aggregate 10,000 square feet, provided,
that Tenant shall indemnify and hold Landlord harmless from and against all
costs (including without limitation, reasonable attorney fees and disbursements
and costs of suit) losses, liabilities or causes of action arising out of or
relating to the inability of Landlord to gain access to such secure area).

 

(e)           Subject to the other provisions of
this Lease, including without limitation clause 2 of the Rules and
Regulations attached hereto as Exhibit C, Tenant shall have access to
the Premises 24 hours a day, 7 days a week, 365 days a year.

 

4.05        Repairs.  Tenant shall keep the
Premises (including, without limitation, all Fixtures which are not the
responsibility of Landlord pursuant to this Lease to repair) in good condition
and, upon expiration or earlier termination of the Term, shall surrender the
same to Landlord in the same condition as when first occupied, reasonable wear
and tear excepted (to the extent Tenant pays to Landlord (A) in accordance with
Section 7.05(g) in connection with a casualty damage to Tenant’s
Improvements and Betterments one-half of the sum of (i) the insurance proceeds
covering Tenant’s Improvements and Betterments, (ii) the amount of any
deductible under the policy insuring Tenant’s Improvements and Betterments and
(iii) the amount, if any, by which the cost of repairing and restoring Tenant’s
Improvements and Betterments as estimated by a reputable contractor designated
by Landlord and reasonably acceptable to Tenant exceeds clauses (i) and
(ii) above and (B) in connection with a condemnation proceeding affecting the
Premises or any part thereof, any condemnation proceeds it receives in
connection with Improvements and Betterments in the Premises, then Tenant may
surrender the Premises to Landlord subject to damage by casualty or
condemnation). Subject to the preceding sentence and except to the extent of
the release of liability and waiver of subrogation provided in Section 7.03
hereof, Tenant’s obligation shall include, without limitation, the obligation
to repair all damage caused by Tenant, its agents, employees, invitees and
licensees to the equipment and other installations in the Premises or anywhere
in the Building. Any maintenance, repair or replacement to the windows
(including, without limitation, any solar film attached thereto), the Building
systems, the Building’s structural components or any areas outside the Premises
and which is Tenant’s obligation to

 

60

 

perform shall be performed by
Landlord at Tenant’s expense. Tenant shall be responsible to repair and replace
as necessary any solar film attached to the exterior windows of the Premises,
which repair shall be performed by Landlord at the expense of Tenant, to the
extent such solar film was damaged after the applicable Commencement Date or
Second Commencement Date with respect to the Blocks and with respect to any
other space included in the Premises, on the date possession of such space is
delivered to Tenant. Landlord and Tenant shall, on or promptly after each
Commencement Date or Second Commencement Date or date possession is delivered
to Tenant, as applicable, prepare a punchlist indicating which solar film in
the applicable part of the Premises is damaged as of the date of the
preparation of such punchlist and Landlord shall replace same as set forth in Exhibit
G. Tenant shall not commit or allow to be committed any waste or damage to
any portion of the Premises or the Building.

 

4.06        Compliance with Laws.  (a) Tenant shall comply with all laws, ordinances,
rules, orders and regulations (present, future, ordinary, extraordinary,
foreseen or unforeseen) of any governmental, public or quasi-public authority
and of the New York Board of Underwriters, the New York Fire Insurance Rating
Organization and any other entity performing similar functions, at any time
duly in force (including without limitation, all building and fire codes,
zoning requirements, asbestos law, environmental laws and ADA (collectively “Laws”),
attributable to any work, installation, occupancy, use or manner of use by
Tenant of the Premises or any part thereof. Nothing contained in this Section
4.06 shall require Tenant to make any physical changes to the Premises
(other than Tenant’s initial Alterations which shall include all Alterations
necessary to make the Premises comply with Law, except (x) to the extent that
the failure of the Premises to comply with any Laws applicable to demolished
space on the applicable Commencement Date (with respect to the applicable
Blocks other than the Delivered Blocks) or Second Commencement Date (with
respect to the applicable Delivered Blocks) prevents Tenant from obtaining any
governmental permit required by Tenant to perform its initial Alterations or
materially increases the costs thereof, in which case, Landlord shall make such
physical changes at Landlord’s cost and expense (subject to reimbursement as an
Operating Expense to the extent provided for in Section 2.05)), (y) for
the performance of Landlord’s Work or (z) the removal of any hazardous material
including, without limitation, asbestos containing material) unless the same
are necessitated by reason of (i) Tenant’s manner of use of the Premises (in
contrast to customary office use), (ii) the use by Tenant of the Premises for
purposes other than normal and customary ordinary office purposes, (iii) any
Alteration performed by or for Tenant (other than Landlord’s Work and the
elevator reconfiguration set forth in Section 8.22) or (iv) the breach
by Tenant of any of its obligations under this Lease. Tenant shall procure and
maintain all licenses and permits required for its business at the Premises.

 

61

 

(b)           Anything contained in this Lease to
the contrary notwithstanding, as part of Tenant’s initial Alterations, Tenant
shall perform all work and make all installations necessary in order to fully
sprinkler the Premises in compliance with the provisions of Local Law 5 of the
New York City Administrative Code, as approved January 18, 1973, as amended
from time to time (whether or not the Building is sprinklered or required to be
sprinklered by such law); provided, that Landlord represents to Tenant
that (i) each of the Blocks contain a standpipe tap for sprinkler installation
(including gate valve, flow and tamper switches, and drain connections), (ii)
there is currently a Class E System in the Building and on each applicable
Commencement Date and Second Commencement Date there will be a class E
connection on each floor of the applicable Blocks and (iii) each of the floors
constituting the Blocks contain a valve tap connection to accommodate a
horizontal sprinkler loop.

 

(c)           Except if otherwise the obligation of
Tenant pursuant to this Lease, Landlord shall, at Landlord’s own cost and
expense (subject to reimbursement as Operating Expenses to the extent provided
for in Section 2.06), comply with all Laws affecting the Landlord
Obligation Areas and all Laws that require physical changes in or to the
Premises including without limitation all Laws in connection with Landlord’s
Work. Without limiting the generality of the foregoing: (i) Landlord shall
maintain in effect a certificate of occupancy for the Building that shall allow
the Premises to be used as general, administrative and executive offices (but Landlord
shall have no obligation to modify such certificate of occupancy to permit any
use other than general and executive offices uses (but Landlord will cooperate
with Tenant pursuant to Section 4.02(a) to obtain changes to the
certificate of occupancy for the Identified Ancillary Uses)); and (ii) Landlord
shall comply with all laws imposed by the Occupational Safety and Health
Administration or other governmental agency relating to indoor air quality with
respect to (A) the public and service areas of the Building, and (B) the
heating, ventilating and air-conditioning services and systems furnished by
landlord to the Premises (but only up to the point of delivery of such services
and systems to the supply duct at the core wall on each floor of the Premises).

 

(d)           Tenant, at its expense, after notice
to Landlord, may contest, by appropriate proceedings prosecuted diligently and
in good faith, the validity, or applicability to the Premises, of any Law, provided,
that (a) Landlord shall not be subject to criminal penalty or to prosecution
for a crime, or be required to pay any other fine or charge (unless Tenant pays
such fine or fee) nor shall the Premises or any part thereof or the Project, or
any part thereof, be subject to being condemned or vacated, nor shall the
Project, or any part thereof, be subject to any lien or encumbrance, by reason
of non-compliance or otherwise by reason of such contest; (b) before the
commencement of such contest, Tenant shall indemnify Landlord against the cost
thereof and against all liability for damages, interest, penalties and expenses
(including reasonable attorneys’ fees and expenses), resulting from or incurred
in connection

 

62

 

with such contest or
non-compliance; (c) such non-compliance or contest shall not constitute or
result in any violation of any Superior Lease or Superior Mortgage, or if any
such Superior Lease and/or Superior Mortgage shall permit such non-compliance
or contest on condition of the taking of action or furnishing of security by
Landlord, such action shall be taken and such security shall be furnished at
the expense of Tenant; (d) if Tenant is not a Qualified Tenant, then Tenant
shall furnish to Landlord such security at the expense of Tenant as Landlord
shall reasonably require; (e) such non-compliance or contest shall not prevent
Landlord or any tenant in the Building from obtaining any and all permits and
licenses in connection with the operation of the Building or the performance of
any alteration or improvement by such Tenant; (f) neither Landlord nor any
other tenant in the Building shall be materially adversely affected by such
noncompliance; and (g) Tenant shall keep Landlord advised as to the status of
such proceedings. Without limiting the application of the above, Landlord shall
be deemed subject to prosecution for a crime if Landlord, or its managing
agent, or any officer, director, partner, shareholder or employee of Landlord
or its managing agent, as an individual, is charged with a crime of any kind or
degree whatever, whether by service of a summons or otherwise.

 

(e)           Landlord may defer compliance with
any Law with which it is obligated to comply hereunder, so long as Landlord
shall be contesting the validity or applicability thereof in good faith by
appropriate proceedings, provided, that (i) Tenant shall not be subject
to criminal penalty or to prosecution for a crime, or be required to pay any
other fine or charge (unless Landlord pays such other fine or charge), (ii)
neither the Premises (or any part thereof) nor any part of the Project which
affects the Premises or Tenant’s use and occupancy thereof, shall be subject to
being condemned or vacated, by reason of non-compliance or otherwise by reason
of such contest, (iii) such non-compliance or contest shall not prevent Tenant
from occupying the Premises or obtaining any permits and license required to
enable Tenant to lawfully occupy the Premises or perform any Alterations (other
than Decorations for which Landlord’s consent is not required) approved by
Landlord and (iv) Tenant shall not be materially adversely affected by such
noncompliance.

 

4.07        Tenant Advertising.  Tenant shall not use, and shall cause each of
its Affiliates not to use, the name (other than the street address) or likeness
of the Building or the Project in any advertising (by whatever medium) without
Landlord’s consent (not to be unreasonably withheld or delayed). Tenant shall
not in any way represent, whether in advertising, correspondence or otherwise,
that the Building or the Premises is part of Rockefeller Center or Rockefeller
Plaza.

 

4.08        Right to Perform Tenant Covenants.  If Tenant fails to perform any of its
obligations under this Lease, Landlord, any Superior Lessor or any Superior
Mortgagee (each, a “Curing Party”) may perform the same at the expense
of Tenant (a) after such notice,

 

63

 

if any, that the Curing Party
determines is advisable under the circumstances in the case of emergency or in
case such failure materially and adversely interferes with the use of space by
any other tenant in the Building or with the efficient operation of the
Building or may result in a violation of any Law, in a cancellation of any
insurance policy maintained by Landlord, or a default under any Superior
Mortgage and (b) in any other case if such failure continues beyond any
applicable notice and grace period, and thereafter such failure is not remedied
within three (3) Business Days after notice advising Tenant that the Curing
Party will undertake such performance at Tenant’s expense; provided,
that the Curing Party shall have no obligation to undertake such performance
even after such notice. If a Curing Party performs any of Tenant’s obligations
under this Lease as provided above, Tenant shall pay to the Curing Party (as
Additional Charges) the costs thereof, together with interest at the Interest
Rate from the date incurred by the Curing Party until paid by Tenant, within
fifteen (15) days after receipt by Tenant of a statement as to the amounts of
such costs. If the Curing Party effects such cure by bonding any lien which
Tenant is required to bond or otherwise discharge, Tenant shall obtain and
substitute a bond for the Curing Party’s bond and shall reimburse the Curing
Party for the cost of the Curing Party’s bond. “Interest Rate” means the
lesser of (i) the base rate from time to time announced by Citibank, N.A. (or,
if Citibank, N.A. shall not exist or shall no longer announce its base rate,
the prime rate of such other New York Clearing House Association member bank in
New York, New York, as shall be designated by Landlord in a notice to Tenant)
to be in effect at its principal office in New York, New York (the “Prime
Rate”) plus 2% or (ii) the maximum rate permitted by law. The performance
by any Curing Party of Tenant’s obligation pursuant to this Section shall not
waive any default arising out of Tenant’s failure to perform such obligation.

 

4.09        Noise and Vibration.

 

(a) No noise,
including without limitation, music or the playing of musical instruments,
recordings, radios or televisions, which disturbs other tenants or occupants in
the building, shall be made or permitted within the Premises. If at any time,
any noise or vibration generated within the Premises, shall be audible or
detectable outside of the Premises, and such noise or vibrations shall annoy or
disturb other tenants or occupants of the Building, then:

 

(i)            Landlord may so
notify Tenant (the “Noise Notification”), and

 

(ii)           Upon receipt of a
Noise Notification, Tenant shall immediately take all steps necessary to:

 

64

 

(y)           discontinue or cause
discontinuance of any and all activities or conduct giving rise to such noise
or vibration; or

 

(z)            reduce the noise or
vibrations to such a level that shall not annoy or disturb other tenants or
occupants of the Building.

 

(b)           If Landlord shall give a Noise
Notification regarding a noise or vibration which is similar in location and
general character to a noise or vibration that was the subject of any prior
Noise Notification, within sixty (60) days after the date such prior Noise
Notification was sent (such second notice, the “Repeat Noise Notification”),
then in addition to the obligation of Tenant described in Section 4.09(a)(ii)
hereinabove, Tenant shall, within ten (10) business days of its receipt of the
Repeat Noise Notification, if requested by Landlord in the Repeat Noise
Notification, provide to Landlord a Noise Abatement Plan (the “Tenant’s
Abatement Plan”) which shall include identification of the source and cause
of the noise or vibrations and a timetable for implementation of such Tenant
Abatement Plan, to eliminate the noise and vibration that was subject to the
Repeat Noise Notification. After receipt of the Tenant’s Abatement Plan, and
upon request of the Landlord, Tenant shall immediately permit Landlord
reasonable access to the Premises for the purpose of Landlord and Landlord’s
designated agents inspecting the cause, source and location of the noise and
vibration that is the subject of the Repeat Noise Notification. Landlord shall,
within ten (10) business days after receipt of the Tenant’s Abatement Plan,
either: (i) advise Tenant that the Tenant Abatement Plan is acceptable (which
acceptance shall not be unreasonably withheld); or (ii) advise Tenant that the
Tenant Abatement Plan is not acceptable and set forth such actions which
Landlord believes, in good faith, are necessary to permanently eliminate the
offending noise and vibration (the “Landlord’s Abatement Plan”).

 

(c)           Provided that Landlord and its agents
have been provided with access to the Premises as provided in the prior
paragraph (if Landlord requested such access), Landlord’s failure to respond to
the Tenant’s Abatement Plan within ten (10) business days after receipt thereof
shall be deemed an acceptance of the Tenant’s Abatement Plan. The Landlord’s
Abatement Plan may include, without limitation, installation of soundproofing
materials; except as otherwise provided in this Lease, relocating activities
which are likely to involve generating offending noise or vibrations to
portions of the Premises that are not adjacent, either vertically or
horizontally, to portions of the Building that are occupied by other tenants or
that transfer noise; installing automatic noise limiting governors on sound
systems located in the Premises; and such other actions as Landlord may, in
good faith, deem necessary to abate the noise.

 

65

 

(d)           Upon receipt by Tenant of the Landlord’s
Abatement Plan (if Landlord provides a Landlord’s Abatement Plan), Tenant may:

 

(i)            Proceed with Tenant’s Abatement
Plan; or

 

(ii)           Implement Landlord’s Abatement Plan.

 

If Landlord
has presented to Tenant a Landlord’s Abatement Plan, Tenant shall, within ten
(10) days after receipt of Landlord’s Abatement Plan, notify Landlord of its
election with respect to implementing Tenant’s Abatement Plan or Landlord’s
Abatement Plan. Tenant shall diligently pursue implementation of such Tenant’s
Abatement Plan (or Landlord’s Abatement Plan, if so elected by Tenant) to its
completion.

 

(e)           If Tenant fails to provide to
Landlord a Tenant’s Abatement Plan as herein provided, Landlord may provide a
Landlord’s Abatement Plan at any time within thirty (30) days of sending the
Repeat Noise Notification, and Tenant shall diligently pursue implementation of
Landlord’s Abatement Plan.

 

(f)            If Tenant implements the Tenant’s
Abatement Plan and such Plan does not reduce or eliminate the noise or
vibration and the noise or vibration continues to disturb other tenants or
occupants of the Building, Landlord may send a Noise Notification with respect
to such noise or vibration (the “Final Noise Notification”) which shall
be accompanied by Landlord’s Abatement Plan (if not previously furnished).
Provided that Landlord’s Abatement Plan satisfies the criteria in Section
4.09(b)(ii) hereof, Tenant shall promptly implement the Landlord’s Abatement
Plan and diligently pursue implementation of such Plan to its completion. If
Tenant chooses to and does implement the Landlord’s Abatement Plan after the
Repeat Noise Notification, and the noise or vibration that caused the sending
of a Repeat Noise Notification has not been remedied, then Landlord may send a
Final Noise Notification and the parties shall follow the steps and procedures
set forth herein as if such Final Noise Notification was a Repeat Noise
Notification.

 

(g)           Any dispute with respect to the terms
of this Section regarding the source of any noise or vibration, or the good
faith aspects of the Landlord’s Abatement Plan, shall be resolved by
arbitration in accordance with Section 9.03 hereof. Notwithstanding the
foregoing sentence, during such arbitration, Tenant shall be obligated to take
such interim steps as are reasonable and necessary to abate the noise or
vibration.

 

(h)           If Tenant shall fail to comply with
its obligations herein set forth, including, without limitation:

 

66

 

(i)            Promptly, after
receipt of a Noise Notification, discontinuing the activity or reducing the
noise or vibration giving rise to such Noise Notification in accordance with
the provisions of this Section 4.09; or

 

(ii)           Failing to provide
to Landlord the Tenant’s Abatement Plan at such time as is required; or

 

(iii)          Failing to
implement the Tenant’s Abatement Plan or the Landlord’s Abatement Plan in
accordance with the provisions of this Section 4.09 and to diligently
pursue the implementation of such Plan, as applicable,

 

then and in such event,
Landlord shall have all rights provided under this Lease or in law or equity,
including without Limitation landlord shall have the right to seek injunctive
relief baring Tenant from continuing any actions giving rise to such default;
or Landlord shall have the right, but not the obligation, to cure such default
by, among other things, taking any steps reasonably necessary to soundproof the
Premises and eliminate such noise or vibration, all at Tenant’s sole cost and
expense, such sum to be treated as additional rent under the terms of this
Lease. If Landlord should elect to take steps to cure such default as set forth
in this prior sentence, Landlord shall, at all times, upon reasonable advance
notice, (except that no notice shall be required in the event of any emergency such
as where the noise or vibration would be reasonably likely to have a
irreparable material effect on any other tenants or occupants of the Building),
have access to the Premises to conduct any inspections or perform any work, and
the same shall be without liability to Landlord.

 

(i)            Notwithstanding any provision in
Section 6.03 to the contrary:

 

(i)  if Tenant fails in the keeping, observance or
performance of any covenant or agreement of Tenant under Section 4.09(a)(ii)
and if such default continues and is not cured within 3 Business Days after
Landlord gives to Tenant a second notice specifying such failure;

 

(ii)  if Tenant fails to provide to Landlord the
Tenant’s Abatement Plan at such time and as is required hereunder and if such
default continues and is not cured within 7 Business Days after Landlord gives
to Tenant a notice specifying such failure to provide the same; or

 

67

 

(iii)  if Tenant fails to diligently implement the
Tenant’s Abatement Plan or the Landlord’s Abatement Plan in accordance with the
provisions of this Section 4.09 and to diligently pursue the
implementation of such Plan as applicable and if such default continues and is
not cured within 10 days after Landlord gives to Tenant a notice specifying
such failure to diligently implement the same;

 

then, in any of such cases, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall be entitled to give to Tenant a notice of intention to end the
Term at the expiration of 5 Business Days from the date of the giving of such
notice, and, in the event such notice is given, this Lease and the term and
estate hereby granted shall terminate upon the expiration of such 5 Business
Days with the same effect as if the last of such 5 Business Days were the
Expiration Date, but Tenant shall remain liable for damages as provided herein
or pursuant to law. For all purposes of this Lease, including without
limitation Sections 6.04 and 6.05, termination of this Lease pursuant to
this Section 4.09(i), shall be treated as if this Lease were terminated
pursuant to Section 6.03.

 

(j)            The provisions of this Section
4.09 shall not, in any manner, limit the right or remedies afforded to
Landlord in this Lease or otherwise at Law or in equity rising out of a default
by Tenant, including, without limitation, any default arising out of the
emanation of noise or vibration from the Premises.

 

(k)           The provisions of this Section
4.09 shall not govern noise or vibrations generated from Alterations which
are approved by Landlord and which are performed at times other than during
Business Hours during Business Days, provided that such Alterations shall be
performed in a commercially reasonable manner with respect to noise and
vibrations.

 

ARTICLE 5

Assignment and Subletting

 

5.01        Assignment; Etc.  (a) 
Subject to Section 5.02, neither this Lease nor the term and
estate hereby granted, nor any part hereof or thereof, shall be assigned,
mortgaged, pledged, encumbered or otherwise transferred voluntarily,
involuntarily, by operation of law or otherwise, and neither the Premises, nor
any part thereof, shall be subleased, be licensed, be used or occupied by any
person or entity other than Tenant or be encumbered in any manner by reason of
any act or omission on the part of Tenant, and no rents or other sums
receivable by Tenant under any sublease of all or any part of the Premises
shall be assigned or otherwise encumbered, without the prior consent of
Landlord. The sale of all or any part of Tenant’s assets other than in the
ordinary course of business which results in a reduction of Tenant’s

 

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Tangible Net Worth below that
of a Qualified Tenant shall, notwithstanding that the Tenant under this Lease after
such sale is the same Tenant under this Lease as prior to such sale, be deemed
an assignment of this Lease whether such sale is made by one or more
transactions. The dissolution or direct or indirect transfer of control of
Tenant (however accomplished including, by way of example, the admission of new
partners or members or withdrawal of existing partners or members, or transfers
of interests in distributions of profits or losses of Tenant, issuance of
additional stock, redemption of stock, stock voting agreement, or change in
classes of stock) shall be deemed an assignment of this Lease regardless of
whether the transfer is made by one or more transactions, or whether one or
more persons or entities hold the controlling interest prior to the transfer or
afterwards; provided, that the transfer of any such stock, partnership
or other ownership interests of Tenant (other than the transfer of control of
Tenant by one entity which controls Tenant or by several entities which are
Affiliates or are acting under an agreement and collectively control Tenant)
shall not constitute an assignment of this Lease if such stock, partnership or
other ownership interests are listed on a national securities exchange (as
defined in the Securities Exchange Act of 1934, as amended) or is traded in the
“over the counter” market with quotations reported by the National Association
of Securities Dealers; and  further  provided, that any
conversion of the form of entity of Tenant (however accomplished including, by
way of example (i) the conversion of Tenant from a corporation to a limited
liability company, partnership or trust or (ii) the change of jurisdiction of
incorporation or registration) which does not directly or indirectly transfer
control of Tenant, reduce the Tangible Net Worth of Tenant or reduce its
liability for its obligations under this Lease shall not constitute an
assignment of this Lease, provided, that the converted entity assumes by
written instrument in the form of Exhibit Q attached to this Lease all
of Tenant’s obligations under this Lease and such conversion is for a valid
business purpose and not to avoid any obligations under this Lease. No
assignment or other transfer of this Lease and the term and estate hereby
granted, and no subletting of all or any portion of the Premises (in each case
whether or not Landlord’s consent is required thereto) shall relieve Tenant of
its liability under this Lease or of the obligation to obtain Landlord’s prior
consent to any further assignment, other transfer or subletting. Any attempt to
assign this Lease or sublet all or any portion of the Premises in violation of
this Article 5 shall be null and void.

 

(b)           Notwithstanding Section 5.01(a),
without the consent of Landlord, this Lease may be assigned (actually or deemed
assigned) or the entire Premises may be sublet for substantially the balance of
the Term to (i) an entity created by merger, reorganization (including by
dissolution, stock transfer or change of classes of stock) or recapitalization
of or with Tenant, either directly or indirectly, (ii) a purchaser of all or
substantially all of Tenant’s assets, or (iii) an entity which immediately
prior to such assignment or subletting (which in the case of this clause (iii)
such subletting may be for less than substantially the balance of the Term) was
an Affiliate of Tenant and, as an Affiliate of Tenant, was immediately prior to
the

 

69

 

assignment or sublease, in
occupancy of all or substantially all of the Premises in the case of an
assignment or of the space to be demised by its sublease in the case of a
sublease and such entity will no longer be an Affiliate of Tenant immediately
after entering into such sublease or such assignment, provided, that in
the case of clauses (i). (ii) and (iii), that (A) Landlord shall have
received a notice of such assignment or sublet from Tenant, (B) in the case of
an assignment, the assignee assumes by written instrument in the form of Exhibit
Q attached to this Lease all of Tenant’s obligations under this Lease (but,
in the case of clause (i) the same shall only be necessary if Tenant
shall not be the surviving entity), (C) such assignment or sublease is for a
valid business purpose and not to avoid any obligations under this Lease, and
(D) the assignee’s or subtenant’s reputation and character is consistent with
the other tenants in first class midtown Manhattan office buildings and such
assignee or subtenant (except in the case of a sublease pursuant to clause
(iii)) shall be, immediately after giving effect to such assignment or
sublease, a Qualified Tenant. In the case of a sublease pursuant to clause
(iii) the subtenant must have a Tangible Net Worth (whether directly or by a
guarantee as provided in Section 5.04(d)(iv)) to qualify it as a Major
Subtenant. A “Qualified Tenant” shall mean an entity with a Tangible Net
Worth (or whose obligations under this Lease are guaranteed, pursuant to a
guaranty in form and content reasonably acceptable to Landlord, by a guarantor
with a Tangible Net Worth) at least equal to $250,000,000 or an entity (whether
directly or by a guarantee as provided hereinabove) which shall have a Tangible
Net Worth set forth in Article 11 and shall have delivered to
Landlord the required Security pursuant to Article 11. If the Lease
is assigned (actually or deemed assignment) pursuant to Sections 5.01(b) or
(c), then if Warner Communications, Inc. (or any guarantor pursuant to Section
5.01(b)) shall (i) sell all or any part of its assets, other than in the
ordinary course of business, or (ii) dissolve, merge, reorganize, or
recapitalize, and as a result of the events in clause (i) or clause (ii) the
Tangible Net Worth of Warner Communications Inc. (or such guarantor) shall be
reduced below that of a Qualified Tenant, then, unless the Tenant is a
Qualified Tenant, has provided a substitute guarantee in form and content
reasonably acceptable to Landlord by a substitute guarantor with a Tangible Net
Worth at least equal to $250,000,000 or has deposited with Landlord the Security
required pursuant to Article 11, Warner Communications Inc. (or
such guarantor) shall, or shall cause the Tenant to, deposit with Landlord the
Security from time to time required pursuant to Article 11, as if Warner
Communications Inc. (or such guarantor) were the Tenant hereunder.

 

(c)           Notwithstanding Section 5.01(a),
(but subject to compliance with Section 5.01(b)), without the consent of
Landlord, Tenant may assign (by actual assignment and not by deemed assignment
which deemed assignment may be governed by Section 5.01(b) hereof) this
Lease or sublet all or any part of the Premises to an Affiliate of Tenant (with
or without a written agreement in the case of a sublease); provided,
that (i) Landlord shall have received a notice of such assignment or sublease
from Tenant identifying the rentable square

 

70

 

feet intended to be occupied by
such Affiliate, the configuration of such space, and the identity of the
Affiliate; and (ii) in the case of any such assignment, (A) the assignment is
for a valid business purpose and not to avoid any obligations under this Lease,
and (B) in the case of an assignment, the assignee assumes by written
instruments substantially in the form attached to this Lease as Exhibit Q
all of Tenant’s obligations under this Lease. “Affiliate” means, as to
any designated person or entity, any other person or entity which controls, is
controlled by, or is under common control with, such designated person or
entity. “Control” (and with correlative meaning, “controlled by” and
“under common control with”) means actual control or ownership or voting
control, directly or indirectly, of 50% or more of the voting stock,
partnership interests or other beneficial ownership interests of the entity in
question. This Section 5.01(c) shall govern assignments of this Lease
and subletting of all or any part of the Premises to Affiliates of Tenant only
to the extent such assignment or deemed assignment is not governed by Section
5.01(b) hereof.

 

(d)           Notwithstanding Section 5.01(a),
as long as Warner Communications Inc., Time Warner Inc. or any of their
Affiliates whose primary business is the entertainment industry is the Tenant
under this Lease, upon notice given to Landlord (which notice shall contain the
rentable square feet intended to be occupied by the Related Service Providers,
the configuration of such space and the identity of the Related Service
Providers), such Tenant shall have the right, without being required to obtain
the consent of Landlord, to permit portions of the Premises not exceeding
25,000 rentable square feet in the aggregate at any one time to be used for the
uses permitted herein, by a Related Service Provider. The term “Related
Service Providers” shall mean a person or entity which is not an Affiliate
of Warner Communications Inc. or Time Warner, Inc. and (a) with whom Warner
Communications Inc., Time Warner, Inc. or any of their Affiliates whose primary
business is the entertainment industry has a significant ongoing relationship
in connection with any of the permitted activities of Warner Communications
Inc., Time Warner Inc., or any of such Affiliates then occupying all or a
portion of the Premises, or (b) is a foundation or not for profit entity of
which any director or executive officer of Warner Communications Inc., Time
Warner Inc., or of any of their Affiliates whose primary business is the
entertainment industry is a board member or holds a position as an executive
officer. By way of illustration and without limiting the generality of the
foregoing, a significant ongoing business relationship may include an artist’s
production company which may provide artistic services to Warner Communications
Inc., Time Warner Inc., or any of their Affiliates whose primary business is
the entertainment industry from time to time, an investment bank or advisory
firm providing services to Warner Communications Inc., Time Warner Inc., any of
their Affiliates whose primary business is the entertainment industry or
officers or high level employees of Warner Communications Inc., Time Warner
Inc., and their Affiliates whose primary business is the

entertainment industry, a law
or accounting firm providing professional services to Warner

 

71

 

Communications Inc., Time
Warner Inc., or any of their Affiliates whose primary business is the
entertainment industry, a former employee or officer of Warner Communications
Inc., Time Warner Inc., or any of their Affiliates whose primary business is
the entertainment industry who is serving as a consultant or a company that
operates the cafeteria, health club, travel agency or day care center permitted
in Section 1.05.

 

5.02        Landlord’s Right of First Offer.  (a)  If
Tenant desires to assign this Lease or sublet all or part of the Premises
(other than in accordance with Sections 5.01(b), (c) and (d), Tenant
shall give to Landlord notice (“Tenant’s Offer Notice”) thereof,
specifying (i) in the case of a proposed subletting, the location of the space
to be sublet and the term of the subletting of such space, (ii) (A) in the case
of a proposed assignment, Tenant’s good faith offer of the consideration Tenant
desires to receive or pay for such assignment or (B) in the case of a proposed
subletting, Tenant’s good faith offer of the annual rental (taking into account
all relevant factors, including any free rent periods and construction
allowances and unless otherwise indicated assuming that a subtenant will pay
for Taxes, Operating Expenses and electricity in the same manner, and utilizing
the same base year or base amount, as Tenant pays for such amounts under this
Lease) which Tenant desires to receive for such proposed subletting (the “Sublet
Rent”) and (iii) the proposed assignment or sublease commencement date.

 

(b)           Tenant’s Offer Notice shall be deemed
an offer from Tenant to Landlord whereby Landlord (or Landlord’s designee) may,
at Landlord’s option, (i) sublease such space from Tenant (if the proposed
transaction is a sublease of all or part of the Premises), or (ii) have this
Lease assigned to it or terminate this Lease (if the proposed transaction is an
assignment or a sublease of all or substantially all of the Premises). Said
option may be exercised by Landlord by notice to Tenant within twenty (20) days
after a Tenant’s Offer Notice, together with all other information required
pursuant to Section 5.02(a), has been given by Tenant to Landlord.

 

(c)           If Landlord exercises its option
under Section 5.02(b)(ii) to terminate this Lease, then this Lease shall
terminate on the proposed assignment or sublease commencement date specified in
the applicable Tenant’s Offer Notice and all Rent shall be paid and apportioned
to such date.

 

(d)           If Landlord exercises its option
under Section 5.02(b)(ii) to have this Lease assigned to it (or its
designee), then Tenant shall assign this Lease to Landlord (or Landlord’s
designee) by an assignment in form and substance reasonably satisfactory to
Landlord and Tenant, effective on the proposed assignment or sublease
commencement date specified in the applicable Tenant’s Offer Notice. On such
effective date, the appropriate party

 

72

 

shall pay to the other 50% of
the consideration, if any, specified in Tenant’s Offer Notice (less, in the
case of payment of such consideration from Tenant to Landlord, 50% of the costs
referred to in Section 5.05(b)(i)-(iii)). If Tenant assigns this Lease
to Landlord or Landlord’s designee, then Tenant shall have no further liability
under this Lease which arise from and after the effective date of such
assignment.

 

(e)           If Landlord exercises its option
under Section 5.02(b)(i) to sublet the space Tenant desires to sublet,
such sublease to Landlord or its designee (as subtenant) shall be in form and
substance reasonably satisfactory to Landlord and Tenant at the rental set
forth in the applicable Tenant’s Offer Notice with respect to such sublet
space, and shall be for the term set forth in the applicable Tenant’s Offer
Notice (provided, that if the Sublet Rent is greater than Tenant’s
Qualified Sublet Cost, then the rent which Landlord (or its designee) is
required to pay to Tenant in respect of the sublet space shall be reduced by an
amount equal to 50% of the amount by which the Sublet Rent exceeds Tenant’s
Qualified Sublet Cost. For purposes of this Section 5.02(e), “Tenant’s
Qualified Sublet Cost” for any sublet space subleased to Landlord (or its
designee) in accordance with this Section 5.02 means the sum of (1) the
portion of the annual Fixed Rent (and Tax Payments and Operating Payments, but
only if the subtenant is not paying Taxes and Operating Expenses in the same
manner and using the same base year and base amount as Tenant pays for such
amounts under this Lease) which is attributable to such sublet space, plus (2)
the costs referred to in Section 5.05(a)(iii) and (v) plus (3) the
amount of any reasonable brokerage commissions and reasonable legal fees paid
by Tenant in connection with the sublease amortized on a straight-line basis
over the term of the sublease, plus (4) the cost of electricity for such sublet
space at the rate payable by the Tenant under this Lease if the subtenant is
paying for electricity on a rent inclusion basis. Further, the sublease:

 

(A)          shall be subject to all of the terms
and conditions of this Lease except such as are irrelevant or inapplicable, and
except as otherwise expressly set forth to the contrary in this Section
5.02(e);

 

(B)           shall be upon the same terms and
conditions as those contained in the applicable Tenant’s Offer Notice and
otherwise on the terms and conditions of this Lease, except such as are
irrelevant or inapplicable and except as otherwise expressly set forth to the
contrary in this Section 5.02(e);

 

(C)           shall permit the sublessee, without
Tenant’s consent, freely to assign such sublease or any interest therein or to
sublet all or any part of the sublet space provided, that each such
sublease with respect to the Blocks (or the fourth floor which may be leased
pursuant to this Lease in accordance with Section 1.06 hereof) will
contain a covenant

 

73

 

enforceable by Tenant that (I)
if (1) the sublet space includes a partial floor in the Blocks or the fourth
floor and (2) on the commencement date of any such sublease and on the
commencement date of any further sublease by such sublessee or the effective
date of any assignment by such sublessee, Tenant and/or any Affiliate of Tenant
or Related Service Provider occupies any part of such floor, then any such
assignee or subtenant of such partial floor shall not be (i) an entertainment
company whose primary business is the music industry (a “Competitor”) or
(ii) EMI Entertainment World, Inc. or an Affiliate of EMI Entertainment World,
Inc. whose primary business is the music industry and (II) if (1) the sublet
space includes a full floor in the Blocks or the fourth floor and (2) on the
commencement date of any such sublease and on the commencement date of any
further sublease by such sublessee or the effective date of any assignment by
such sublessee, Tenant, any Affiliate of Tenant or any Related Service Provider
occupies the entire floor above and below such full floor, then any such
assignee or subtenant of such full floor shall not be a Competitor, EMI
Entertainment World, Inc. or an Affiliate of EMI Entertainment World, Inc.
whose primary business is the music industry. Landlord may, but shall not be
obligated to, at any time that it is contemplating entering into negotiations
with a subtenant for such sublease space, notify Tenant thereof and if within
ten (10) days after receipt of such notice Landlord has not received a response
from Tenant, Landlord may send to Tenant a second notice specifically
referencing this clause (C) and if within three (3) days after receipt
of such second notice, Tenant has not responded as to whether the proposed
subtenant is a Competitor, Landlord shall, notwithstanding any provision herein
to the contrary, be permitted to sublease such sublease space to the proposed
subtenant. If Tenant shall have timely responded to such notice of Landlord,
advising Landlord that such proposed subtenant is a Competitor, Tenant’s
characterization of such proposed subtenant as a Competitor shall not be
conclusive on Landlord; provided, however, Landlord shall notify
Tenant if Landlord disagrees with Tenant’s characterization of such proposed
subtenant as a Competitor. Any dispute as to whether a proposed subtenant is a
Competitor may be submitted by either party to arbitration in accordance with Section
9.03.

 

(D)          shall provide that any assignee or
further subtenant of Landlord or its designee may, at the election of Landlord,
make alterations, decorations and installations in such space or any part
thereof, any or all of which may be removed, in whole or in part, by such
assignee or subtenant, at its option, prior to or upon the expiration or other
termination of such sublease, provided, that (1) such assignee or
subtenant, at its expense, shall repair any damage caused by such removal and
(2) if such sublease term expires earlier than one year prior to the Expiration
Date then such assignee or subtenant, at its expense, shall remove such
alterations, decorations and installations at the end of the sublease term and
return the sublet space to substantially its condition before commencement of
the sublet term, ordinary wear and tear excepted, unless within ten (10) days
after request of Landlord, Tenant

 

74

 

advises Landlord that all or
any part of such alteration, decoration or installation need not be removed or
Tenant shall have failed to respond to such request of Landlord within such ten
(10) days and Landlord shall have sent a second request specifically
referencing this clause (D) and Tenant shall have failed to respond to
such second request within five (5) days; and

 

(E)           shall provide that (1) the parties to
such sublease expressly negate any intention that any estate created under such
sublease be merged with any other estate held by either of said parties, (2)
any assignment or subletting by Landlord or its designee (as the subtenant) may
be for any purpose or purposes that Landlord shall deem appropriate (subject to
the proviso in clause (C) above and Section 1.05 of the Lease),
and (3) Landlord, at Tenant’s expense, may make such alterations as may be
reasonably required by Landlord to demise separately the subleased space
consistent with Tenant’s Offer Notice and to comply with any Laws relating to
such demise, which are not the obligation of Landlord under this Lease.

 

(F)           (i) Tenant shall not be responsible
for any of Tenant’s obligations under this Lease which arise with respect to
the sublet space to Landlord or its designee during the term of the sublease,
and (ii) to the extent that there is a default in the payment of rent or other
charges (including, without limitation, holdover charges) with respect to the
sublet premises, then Tenant will be allowed a credit against the Rent in such
amounts (without duplication of any benefits conferred under clause (i))
and (iii) unless Tenant has consented to such Alteration of the sublet premises
or Tenant has failed to respond to Landlord’s request that such Alterations not
be removed as provided for in Section 5.02(e)(D), Tenant will not be
required to restore any Alteration made by Landlord (or its designee), or by
any subtenant or assignee of Landlord (or its designee) upon the Expiration
Date or such earlier termination of this Lease.

 

(f)            Tenant shall not sublet the
applicable space to a third party (i) at a rental (taking into account all
relevant factors such as free rent periods, construction allowances and the
base year, base amount and other calculations in connection with Taxes,
Operating Payments and electricity and other elements of the economic package)
discounted to present value at the Interest Rate) which is less (on a per
rentable square foot basis per annum) than 90% of the Sublet Rent set forth in
Tenant’s Offer Notice discounted to present value at the Interest Rate or (ii)
for a term which is ten percent (10%), more or less, than the term specified in
Tenant’s Offer Notice or (iii) is for a rentable square footage which is ten
percent (10%), more or less, than the square footage specified in Tenant’s
Offer Notice without in each case complying once again with all of the
provisions of this Section 5.02 and re-offering such space to Landlord
at such lower rental, other term or other square footage. If Tenant offered in
Tenant’s Offer Notice to assign this Lease to Landlord, Tenant shall not be

 

75

 

permitted to assign this Lease
to a third party where Tenant pays (on a net present value basis computed at
the Interest Rate, if such payments are to be made in installments) greater
consideration or grants a greater concession to such third party for such
assignment than 110% of the consideration offered to be paid or concession
offered to be granted to Landlord in Tenant’s Offer Notice without complying
once again with all of the provisions of this Section 5.02 and re-offering
to assign this Lease to Landlord and pay such consideration or grant such
concession to Landlord.

 

5.03        Assignment and Subletting Procedures.  (a)  If
Tenant delivers to Landlord a Tenant’s Offer Notice with respect to any
proposed assignment of this Lease or subletting of all or part of the Premises
and Landlord does not timely exercise any of its options under Section 5.02,
and Tenant thereafter desires to assign this Lease or sublet the space
specified in Tenant’s Offer Notice, Tenant shall notify Landlord (a “Transfer
Notice”) of such desire, which notice shall be accompanied by (i) a copy of
the proposed assignment or sublease and all related agreements, the effective
date of which shall be at least thirty (30) days after the giving of the Transfer
Notice, (ii) a statement setting forth in reasonable detail the identity of the
proposed assignee or subtenant, the nature of its business and its proposed use
of the Premises, (iii) current financial information with respect to the
proposed assignee or subtenant, including without limitation, its most recent
financial statement, if available (provided, that, if unavailable, such
unavailability shall be deemed a reasonable basis for Landlord’s refusal to
consent to an assignment or subletting), and (iv) such other information as
landlord may reasonably request and Landlord’s consent to the proposed
assignment or sublease shall not be unreasonably withheld, provided,
that:

 

(i)            Such Transfer Notice shall be
delivered to Landlord concurrently with or within one year after the delivery
to Landlord of the applicable Tenant’s Offer Notice;

 

(ii)           In Landlord’s reasonable judgment the
proposed assignee or subtenant will use the Premises in a manner that (A) is in
keeping with the then standards of the Building and (B) is limited to the use
expressly permitted under this Lease;

 

(iii)          The proposed assignee or subtenant is,
in Landlord’s reasonable judgment, of a reputation and character consistent
with the other tenants in the Building, and (A) in the case of a proposed
subtenant to whom Landlord shall have delivered a non-disturbance and
attornment agreement pursuant to Section 5.04(d)(iv), such proposed
subtenant is a Major Subtenant, and (B) in the case of a proposed assignee,
such person or entity is of a Qualified Tenant;

 

76

 

(iv)          In the case where Landlord has, or
within the following six (6) months is scheduled to have comparable vacant
space in the Building available for a comparable term, neither the proposed
assignee or sublessee, nor any Affiliate of such assignee or sublessee, is then
an occupant of any part of the Building;

 

(v)           The proposed assignee or sublessee is
not a person with whom Landlord is then actively negotiating or has within the
prior three (3) months actively negotiated to lease space in the Building;

 

(vi)          The form of the proposed sublease
shall comply with the applicable provisions of this Article 5 and, if
with a Major Subtenant, shall be otherwise reasonably satisfactory to Landlord;

 

(vii)         There shall not be more than four (4)
subtenants (other than Affiliates or Related Service Providers) in each floor
of the Blocks and in any other floor in the Premises other than Blocks, there
shall be not more than one (1) subtenant for every 10,000 square feet leased by
Tenant on such floor;

 

(viii)        Tenant shall not publicly advertise the
rental rate or any description thereof to be paid by the proposed subtenant;
and

 

(ix)           Tenant shall reimburse Landlord on
demand for any reasonable out of pocket costs actually incurred by Landlord in
connection with said assignment or sublease, including, without limitation, the
costs of making investigations as to the acceptability of the proposed assignee
or subtenant, and legal costs incurred in connection with the granting of any
requested consent;

 

(b)           If Landlord consents to a proposed
assignment or sublease and Tenant fails to execute and deliver the assignment
or sublease to which Landlord consented within six (6) months after the giving
of such consent, then Tenant shall again comply with this Article 5
before assigning this Lease or subletting all or part of the Premises.

 

(c)           If Landlord fails to grant or deny
consent to a proposed assignment or subletting within twenty (20) days after
receipt of the relevant Transfer Notice (provided, that if the relevant
Transfer Notice is not accompanied by the proposed assignment or sublease as
provided in Section 5.03(i) but is accompanied by a detailed term sheet,
Landlord’s consent, if given, shall be deemed conditioned upon receipt of such
proposed assignment or sublease which complies with the terms hereof within
sixty (60) days after landlord’s receipt of the Transfer Notice) Tenant shall
have the right to give a reminder notice

 

77

 

to Landlord (which notice shall
state that Landlord shall be deemed to have consented to the proposed
assignment or subletting if Landlord fails to grant or deny consent thereto
within five (5) Business Days) and if Landlord fails to grant or deny consent
to such proposed assignment or subletting within five (5) Business Days after
receipt of such reminder notice, Landlord shall be deemed to have consented to
such assignment or subletting. Landlord shall nevertheless, promptly after the request
of Tenant, confirm in writing that such consent has been given. Any denial of
consent to a proposed assignment or subletting shall be effective only if
accompanied by a statement that sets forth in detail Landlord’s reason(s) for
denying such consent; provided, that in the case of any denial of
consent by reason of a failure of the condition specified in Section
5.03(a)(iii), Landlord shall only be required to cite such Section in order
to comply with this sentence.

 

(d)           Whenever solely under this Section
5.03, a provision shall expressly provide for or require that a consent or
approval or the exercise of a judgment by Landlord or Tenant shall not be
unreasonably withheld or delayed and a dispute or disagreement shall arise
between Landlord and Tenant as to whether or not the withholding of the consent
or approval in question is unreasonable or as to whether or not the exercise of
any such judgment is unreasonable, the sole remedy of either party hereto shall
be to send a notice to the other (“Hearing Notice”) specifying the
consent or approval which it alleges has been unreasonably withheld or delayed
or the judgement which it alleges has been unreasonably exercised
(collectively, “Dispute”) and electing to have the Dispute resolved by
an informal hearing (“Hearing”) upon and subject to the terms and
conditions hereinafter set forth:

 

A.            The Hearing shall be at the offices
of the individual designated in such notice (“Hearing Officer”) from
among the following individuals:

 

(1)           The then Chairman or President of
Galbreath Company, L. P.

 

(2)           The then Chairman or President of
Julien J. Studley, Inc.

 

(3)           The then Chairman or President of
Lassalle Partners

 

B.            The Hearing shall be held on the
date specified in the Hearing Notice (which shall be no less than three (3)
Business Days nor more than five (5) Business Days after the Hearing Notice is
received) and pursuant to substantive and procedural rules to be established by
the Hearing Officer;

 

C.            The Hearing Notice shall be
delivered in the manner set forth in Section 8.01 for notice, to party
on whom it is being served;

 

78

 

D.            The determination by the Hearing
Officer shall be conclusive upon the parties and shall be made within two (2)
Business Days after the Hearing is completed;

 

E.             If the party upon whom the Hearing
Notice is served fails or refuses to participate in the Hearing, the Dispute
shall be deemed resolved against such party;

 

F.             If the Hearing Officer fails or
refuses to participate in the Hearing, or if the party upon whom the Hearing
Notice is served responds at the Hearing that Hearing Officer is not
independent of the party serving the Hearing Notice, the party serving the
Hearing Notice shall have the right to select an alternative Hearing Officer
from the remaining individuals set forth in Paragraph A. If all of the
individuals set forth in said Paragraph A hereof shall (i) fail or refuse to
participate in the Hearing or (ii) fail to be independent, the provisions of
this Section 5.03 shall be void and of no effect and such determination
will be made by an arbitration pursuant to Section 9.03 hereof;

 

G.            The Hearing Officer shall have the
right only to interpret and apply the terms of this Section 5.03, and
may not change any such terms or deprive any party to this Lease of any right
or remedy expressly or impliedly provided in this Lease.

 

(e)           Tenant at its election may deliver
the Transfer Notice concurrently with the delivery of Tenant’s Offer Notice for
the same space and the time period for Landlord’s consent to the assignment or
sublease will run from the date the Transfer Notice is delivered to Landlord.

 

5.04        General Provisions.
(a) If this Lease is assigned, whether or not in violation of this Lease,
Landlord may collect rent from the assignee. If the Premises or any part
thereof are sublet or occupied by anybody other than Tenant, whether or not in
violation of this Lease, Landlord may, after default by Tenant, and expiration
of Tenant’s time to cure such default, collect rent from the subtenant or
occupant. In either event, Landlord may apply the net amount collected against
Rent, but no such assignment, subletting, occupancy or collection shall be
deemed a waiver of any of the provisions of Section 5.01(a), or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the performance of Tenant’s obligations under this Lease.

 

(b)           No assignment or transfer shall be
effective until the assignee delivers to Landlord (i) evidence that the
assignee, as Tenant hereunder, has complied with the requirements of Sections
7.02 and 7.03, and (ii) an agreement in the form attached hereto as Exhibit
Q whereby the assignee assumes Tenant’s obligations under this Lease which

 

79

 

agreement shall not be required
in the case of a deemed assignment pursuant to Section 5.01(a) or, if
Tenant shall be the surviving entity, in the case of the Section 5.01(b)(i).

 

(c)           Notwithstanding any assignment or
transfer, whether or not in violation of this Lease, and notwithstanding the
acceptance of any Rent by Landlord from an assignee, transferee, or any other
party, the original named Tenant and each successor Tenant shall remain fully
liable for the payment of the Rent and the performance of all of Tenant’s other
obligations under this Lease. The joint and several liability of Tenant and any
immediate or remote successors in interest of Tenant shall not be discharged,
released or impaired in any respect by any agreement made by Landlord extending
the time to perform, or otherwise modifying, any of the obligations of Tenant
under this Lease, or by any waiver or failure of Landlord to enforce any of the
obligations of Tenant under this Lease. Notwithstanding the foregoing, in no
event shall Tenant’s continued liability exceed what its continuing liability
would have been had the Lease not been modified except for those modifications
which were consented to by Tenant and nothing in this Section 5.04(c)
shall create liability on the part of Tenant in contradiction to Sections
5.02(d) and 5.02(e)(F).

 

(d)           Each subletting by Tenant shall be
subject to the following:

 

(i)            No subletting shall be for a term
(including any renewal or extension options contained in the sublease) ending
later than one day prior to the Expiration Date.

 

(ii)           No sublease shall be valid, and no
subtenant shall take possession of the Premises or any part thereof, until
there has been delivered to Landlord, both (A) an executed counterpart of such
sublease, and (B) a certificate of insurance evidencing that (x) Landlord is an
additional insured under the insurance policies required to be maintained by
occupants of the Premises pursuant to Section 7.02, and (y) there is in
full force and effect, the insurance otherwise required by Section 7.02.

 

(iii)          Each sublease shall provide that it is
subject and subordinate to this Lease, and that in the event of termination,
reentry or dispossess by Landlord under this Lease Landlord may, at its option,
take over all of the right, title and interest of Tenant, as sublessor, under
such sublease, and such subtenant shall, at Landlord’s option, attorn to
Landlord pursuant to the then executory provisions of such sublease, except
that Landlord shall not be liable for, subject to or bound by any item of the
type that a Successor Landlord is not so liable for, subject to or bound by in
the case of an attornment by Tenant to a Successor Landlord under Section
6.01(a), provided, that any subtenants which are Affiliates or
Related Service Providers of Tenant and are subject to and subordinate to this

 

80

 

Lease shall not be required to
attorn to Landlord, if such subtenant vacates and surrenders the portion of the
Premises occupied by such subtenant to Landlord on.or prior to the termination
of this Lease.

 

(iv)          Notwithstanding clause (iii)
above, Landlord shall, at Tenant’s request execute and deliver to a Major
Subtenant, a nondisturbance and attornment agreement substantially in the form
attached to this Lease as Exhibit B, to Exhibit M attached
hereto; provided, that (I) Tenant is not then in default under this
Lease after notice and beyond applicable grace period, (II) the sublease with
the Major Subtenant is a Qualifying Major Sublease, (III) Tenant has furnished
evidence to Landlord’s reasonable satisfaction that the subtenant is a Major
Subtenant and will continue to be a Major Subtenant after execution and
delivery of the sublease and (IV) such Major Subtenant executes and delivers to
Landlord the subordination and nondisturbance agreement hereinafter referred
to. A “Qualifying Major Sublease” shall mean a sublease from Tenant to a
Major Subtenant to which Landlord shall have actually given its consent (not
including where Landlord’s consent is not required) pursuant to this Article
5, and which (A) consists of at least a full floor of the Blocks in the
Building or at least 30,000 contiguous rentable square feet of space in the
Premises which is on a floor which is not a Block (and in the case where a
sublease includes a portion of a floor, the balance of the floor consists of a
leasable configuration of at least 10,000 rentable square feet), (B) in the
case of a Block, consists of contiguous space in the Blocks which includes the
highest or lowest floor then comprising the Blocks or is in the Blocks and is
contiguous to another floor which has been sublet by Tenant and with respect to
which Landlord has executed and delivered one or more non-disturbance and
attornment agreements hereunder, (C) provides that, at the time when the
attornment provided for in the non-disturbance and attornment agreement
hereinafter referred to becomes effective between Landlord and the Major
Subtenant following the termination of the Lease, the rental payable thereunder,
after taking into account any free rent periods, credits, offsets or deductions
to which the subtenant may be entitled thereunder, will be equal to or in
excess (on a per rentable square foot basis) of the greater of (ww) the Fixed
Rent and the recurring Additional Charges payable by Tenant under the Lease
with respect to such space and (xx) the then fair market fixed rent and the
fair market additional rent that a willing lessee would pay and a willing
lessor would accept in an arms-length transaction as reasonably determined by
Landlord (subject to arbitration in accordance with Section 9.03 hereof)
with respect to such space (D) consists of space that will be demised
separately from the remainder of the Premises in accordance with all applicable
Laws, (E) provides for other obligations of the Major Subtenant at least
substantially identical to the obligations of Tenant under the Lease, (F)
provides that if the Lease is terminated and Tenant has granted to any Major
Subtenant any Major Tenant Right, then such Major Tenant Right shall be null
and void with respect to such Major Subtenant after termination of this Lease
in accordance with Section 8.28 hereof and (G) provides that if the
Tangible Net Worth

 

81

 

of the Major Subtenant (or the
guarantor pursuant to this Section 5.04(d)(iv)) shall be reduced below
that required of a Major Subtenant as a result of (i) the sale of all or any
part of its assets, other than in the ordinary course of business or (ii) a dissolution,
merger, reorganization or recapitalization, then such Major Subtenant (or such
guarantor) shall deposit with Landlord a Security reasonably acceptable to
Landlord and consistent with the provisions of Article 11 hereof (taking
into account that the Tangible Net Worth required of the Major Subtenant is
less than a Qualified Tenant and that the “Remaining Fixed Rent” shall
mean the aggregate of the fixed rent payable for the term of the sublease from
and after the date in question, without giving effect to any abatement,
recoupment, offsets or credits against rent. In no event shall a Qualifying
Major Sublease include a sublease to an Affiliate of Tenant or to a Related
Service Provider. A “Major Subtenant” shall mean a subtenant with an
aggregate Tangible Net Worth (or whose obligations under the sublease are
guaranteed, pursuant to a guaranty, in form and content reasonably acceptable
to Landlord and such guarantor, by a guarantor with a Tangible Net Worth as
hereinafter provided) as determined by Ernst and Young, Coopers & Lybrand,
Price Waterhouse, Deloitte & Touche, KPMG Peat Marwick or Arthur Andersen
& Co. or their respective successors (each a “Big Six Accounting Firm”)
or other certified public accounting firm reasonably acceptable to Landlord
with at least 40 certified public accountants, equal to or in excess of the
amount determined by multiplying $250,000,000 by a fraction the numerator of
which is the number of rentable square feet being subleased pursuant to such
Qualifying Major Sublease and the denominator of which is 157,387 (the “Major
Subtenant Percentage”). Notwithstanding anything to the contrary set forth
in this clause (iv), any non-disturbance and attornment agreement
delivered by Landlord pursuant to this clause (iv) shall, pursuant to
this Lease, be conditional and by its terms expressly contain the condition
such that, in the event of any termination of this Lease (x) other than by
reason of (1) Tenant’s default, (2) a rejection in bankruptcy by Tenant or (3)
a voluntary surrender of the Lease by Landlord and Tenant, but (y) including a
termination of the Lease by reason of casualty, condemnation or pursuant to Section
8.26 hereof, then any non-disturbance and attornment agreement to a Major
Subtenant shall, automatically and without further act of the parties,
terminate and be of no further force or effect from and after the applicable
termination date.

 

(e)           Each sublease shall provide that the
subtenant may not assign its rights thereunder or further sublet the space
demised under the sublease, in whole or in part, without Landlord’s consent in
accordance with Section 5.03(a) and without complying with all of the
terms and conditions of this Article 5, including, without
limitation, Section 5.05, which for purposes of this Section 5.04(e)
shall be deemed to be appropriately modified to take into account that the
transaction in question is an assignment of the sublease or a further
subletting of the space demised under the sublease, as the case may be.

 

82

 

(f)            Tenant shall not publicly advertise
the availability of the Premises or any portion thereof as sublet space or by
way of an assignment of this Lease, without first obtaining Landlord’s consent,
which consent shall not be unreasonably withheld or delayed, provided,
that Tenant shall in no event advertise the rental rate or any description
thereof. Notwithstanding the foregoing, Landlord’s consent shall not be
required for Tenant to list the Premises or any portion thereof with brokers,
subject to the proviso in the immediately preceding sentence.

 

5.05        Assignment and Sublease Profits.  (a)  If the aggregate of the amounts payable as
fixed rent and as additional rent on account of Taxes, Operating Expenses and
electricity by a subtenant under a sublease of any part of the Premises (other
than a sublease pursuant to Sections 5.01(b) (c) or (d) or to Landlord
(or its designee) pursuant to Section 5.02) and the amount of any Other
Sublease Consideration payable to Tenant by such subtenant, whether received in
a lump-sum payment or otherwise shall be in excess of Tenant’s Basic Cost
therefor at that time then, promptly after the collection thereof, Tenant shall
pay to Landlord in monthly installments as and when collected, as Additional
Charges, 50% of such excess. Tenant shall deliver to Landlord within sixty (60)
days after the end of each calendar year and within sixty (60) days after the
expiration or earlier termination of this Lease a statement specifying each
sublease in effect during such calendar year or partial calendar year, the
rentable area demised thereby, the term thereof and a computation in reasonable
detail showing the calculation of the amounts paid and payable by the subtenant
to Tenant, and by Tenant to Landlord, with respect to such sublease for the
period covered by such statement. “Tenant’s Basic Cost” for sublet space
at any time means the sum of (i) the portion of the Fixed Rent, Tax Payments
and Operating Payments which is attributable to the sublet space, plus (ii) the
amount payable by Tenant on account of electricity in respect of the sublet
space, plus (iii) the amount of any costs reasonably incurred by Tenant in
making changes (or paying for the cost of any changes made by the subtenant) in
the layout and finish of the sublet space for the ,subtenant amortized on a
straight-line basis over the term of the sublease; provided, that if
Tenant or such subtenant is not making any such changes or to the extent any
such changes do not change any of the improvements previously installed or made
by Tenant to the sublet space during the prior 12 months, then portion of the
unamortized costs (amortized over the Term on a straight line basis) included
within the sublease term incurred by Tenant for improvements made to the sublet
space within 12 months prior to such subletting, (iv) the portion of the
unamortized costs (amortized over the Term on a straight line basis) incurred
by Tenant for equipment, furniture or other personal property sold to such
subtenant, (v) the amount of any reasonable brokerage commissions and
reasonable legal fees paid by Tenant in connection with the sublease amortized
on a straight-line basis over the term of the sublease plus (vi) the amount
payable by Tenant for New York State Real Property Transfer Gains Tax and Real
Property Transfer Taxes and New York City Real Property Transfer Tax. For

 

83

 

purposes of this Section
5.05(a), the term “Other Sublease Consideration” shall mean all sums
paid by (or for the benefit of) the subtenant for the furnishing of guaranteed
services (in excess of Tenant’s actual out of pocket cost to provide such
services) by Tenant and the sale or rental of Tenant’s fixtures, leasehold
improvements, equipment, furniture or other personal property.

 

(b)           Upon any assignment of this Lease
other than an assignment or deemed assignment pursuant to Section 5.01(b)
(c) (d) or to Landlord (or its designee) pursuant to Section 5.02,
Tenant shall pay to Landlord 50% of the Assignment Consideration received by
Tenant for such assignment, after deducting therefrom (i) customary and
reasonable closing expenses including without limitation any New York State
Transfer Gains or Transfer Tax and New York City Real Property Transfer Tax, (ii)
reasonable brokerage commissions and legal fees, (iii) the portion of the
unamortized costs (amortized over the Term on a straight line basis) of the
excess of the costs of Tenant’s Alterations over Tenant’s Work Allowance and
the Required Work Allowance and (iv) the unamortized costs (amortized over the
Term on a straight line basis) incurred by Tenant for equipment, furniture or
other personal property sold to such assignee. For purposes of this Section
5.05(b), the term “Assignment Consideration” shall mean an amount
equal to all sums and other considerations paid to Tenant by the assignee for
or by reason of such assignment (including, but not limited to, sums paid for
the furnishing of guaranteed services by Tenant and the sale or rental of
Tenant’s fixtures, leasehold improvements, equipment, furniture, furnishings or
other personal property).

 

5.06        Sublease of Space From Other Tenants.  If Tenant desires to
sublease space from a tenant in the Building or to obtain an assignment of such
other tenant’s lease with respect to space in the Building, and such other
tenant is prohibited from subleasing its leased premises or assigning its lease
to another tenant in the Building, then Tenant may, by notice to Landlord,
request that Landlord waive such prohibition and provided no default has
occurred under this Lease beyond any notice and grace period and Landlord does
not have comparable space available to be leased within the following six (6)
months for a comparable term, Landlord shall, within ten (10) days after such
notice from Tenant, waive such prohibition in writing with respect to
subletting or assignment, provided such subletting or assignment is otherwise
consistent with the provisions of such other tenant’s lease. If Landlord shall
fail to respond within such ten (10) day period, Tenant may send a second
notice (which second notice may not be delivered until at least ten (10) days
has elapsed after the delivery of the first notice) specifically referencing
this Section 5.06 to Landlord and if within three (3) Business Days
after receipt of such second notice, landlord has not responded, then Landlord
will be deemed to have waived such prohibition with respect to such subletting
or assignment without further act.

 

84

 

ARTICLE 6

Subordination; Default; Indemnity

 

6.01        Subordination. 
(a)  This
Lease is subject and subordinate to each mortgage (a “Superior Mortgage”)
and each underlying lease (a “Superior Lease”) which may now or
hereafter affect all or any portion of the Project or any interest therein, provided,
that (i) in the case of the Indenture, the Superior Mortgagee under the
Indenture, concurrently with the execution and delivery of this Lease by
Landlord and Tenant, shall have executed, acknowledged and delivered to Tenant
the non-disturbance and attornment agreement attached to this Lease as Exhibit
M-1, (ii) in the case of the Ground Lease (if the Superior Lessor
thereunder shall no longer be Landlord or an Affiliate of Landlord or other
entity which controls the management and operations of Landlord which is not an
Affiliate of Landlord) or any other Superior Lease which may hereafter affect
all or any portion of the Project or any interest therein, the Superior Lessor
shall have executed, acknowledged and delivered a non-disturbance and
attornment agreement containing the same substantive provisions as those set
forth in the form attached to this Lease as Exhibit M-1 modified as
necessary to reflect that the party granting the non-disturbance is a Superior
Lessor rather than Superior Mortgagee and (iii) in the case of any Superior
Mortgage which may hereafter affect all or any portion of the Project or any
interest therein, the Superior Mortgagee thereunder shall have executed,
acknowledged and delivered to Tenant a non-disturbance and attornment agreement
containing substantially the same substantive provisions as those set forth in
the form attached to this Lease as Exhibit M-2. Notwithstanding anything
contained in this Section 6.01(a) to the contrary, if any such Superior
Lessor or superior Mortgagee executes, acknowledges and delivers to Tenant a
non-disturbance and attornment agreement in the form herein required, and
Tenant either fails or refuses to execute and deliver such agreement within twenty
(20) days after delivery of such agreement to Tenant, then this Lease shall
automatically and without further act be deemed to be subject and subordinate
to such Superior Lease or Superior Mortgage, as the case may be, and such
non-disturbance and attornment agreement shall then be deemed to be in effect
with respect to such Superior Lease or Superior Mortgage, as the case may be.
If the foregoing conditions are satisfied, Tenant shall execute, acknowledge
and deliver such instrument as may be reasonably requested by Landlord, a
Superior Lessor or Superior Mortgagee to evidence the subordination described
in this Section 6.01(a), but no such instrument shall be necessary to
make such subordination effective. The lessor under a Superior Lease is called
a “Superior Lessor” and the mortgagee under a Superior Mortgage is
called a “Superior Mortgagee.” Tenant shall execute any amendment of
this Lease reasonably requested by a Superior Mortgagee or a Superior Lessor
(other than the Superior Lessor under the Ground Lease so long as such Superior
Lessor is Landlord or an Affiliate of Landlord or other entity which controls
the management and operations, of Landlord which is not an

 

85

 

Affiliate of Landlord), provided,
that such amendment shall not reduce or extend the Term, increase the Rent,
reduce the area of the Premises, result in an increase in Tenant’s obligations
under this Lease or a reduction in the benefits available to Tenant (other than
to a de minimis extent). In the event of the enforcement by a Superior
Mortgagee of the remedies provided for by law or by such Superior Mortgage, or
in the event of the termination or expiration of a Superior Lease, Tenant, upon
request of such Superior Mortgagee, Superior Lessor or any person succeeding to
the interest of such mortgagee or lessor (each, a “Successor Landlord”),
shall automatically become the tenant of such Successor Landlord without change
in the terms or provisions of this Lease (it being understood that Tenant
shall, if requested, enter into a new lease on terms identical to those in this
Lease for the then remaining Lease Term); provided, that except as
otherwise provided in the nondisturbance and attornment agreement between
Tenant and such Superior Mortgagee or Superior Lessor any Successor Landlord
shall not be (i) liable for any act, omission or default of any prior landlord
(including, without limitation, Landlord); (ii) liable for the return of any
monies paid to or on deposit with any prior landlord (including, without
limitation, Landlord), except to the extent such monies or deposits are
delivered to such Successor Landlord; (iii) subject to any offset, claims or
defense that Tenant might have against any prior landlord (including, without
limitation, Landlord); (iv) bound by any Rent which Tenant might have paid for
more than the current month to any prior landlord (including, without
limitation, Landlord) unless actually received by such Successor Landlord; (v)
bound by any covenant to perform or complete any construction in connection
with the Project or the Premises or to pay any sums to Tenant in connection
therewith; or (vi) bound by any waiver or forbearance under, or any amendment,
modification, abridgement, cancellation or surrender of, this Lease made
without the consent of such Successor Landlord. Upon request by such Successor
Landlord, Tenant shall execute and deliver an instrument or instruments,
reasonably requested by such Successor landlord, confirming the attornments
provided for herein, but no such instrument shall be necessary to make such
attornment effective.

 

(b)           Tenant shall give each Superior
Mortgagee and each Superior Lessor (which is not an Affiliate of Landlord) a
copy of any notice of default served upon Landlord, provided, that
Tenant has been notified of the address of such mortgagee or lessor. If
Landlord fails to cure any default as to which Tenant is obligated to give
notice pursuant to the preceding sentence within the time provided for in this
Lease, then each such mortgagee or lessor shall have an additional thirty (30)
days after receipt of such notice within which to cure such default or if such
default cannot be cured within that time, then such additional time as may be
necessary if, within such thirty (30) days, any such mortgagee or lessor has
commenced and is diligently pursuing the remedies necessary to cure such
default (including, without limitation, commencement of foreclosure proceedings
or eviction proceedings, if necessary to effect such cure), in which event this
Lease shall not be terminated and Tenant

 

86

 

shall not exercise any other
rights or remedies under this Lease or otherwise while such remedies are being
so diligently pursued. Nothing herein shall be deemed to imply that Tenant has
any right to terminate this Lease or any other right or remedy, except as may
be otherwise expressly provided for in this Lease.

 

(c)           Without limiting the generality of
this Section 6.01, this Lease is subject and subordinate to (i) a
certain Superior Lease, dated February 25, 1959, between Martha F. Keeping, as
lessor, and 91078 Corporation, as lessee, a memorandum of which was recorded in
the office of the Register of the City of New York, County of New York in Liber
5068 of Conveyances, Page 489, as assigned by a series of assignments (the “Ground
Lease”), pursuant to which assignments Landlord holds the ground lessor and
ground lessee interest in such Ground Lease as of the date hereof and (ii) a
certain Mortgage Spreader and Consolidation Agreement and Trust Indenture dated
as of March 20, 1984 (the “Indenture”) made between O&Y Equity
Corp., Olympia & York Holdings Corporation, FAME Associates, Olympia &
York 2 Broadway Land Company and Olympia & York 2 Broadway Company
(collectively “Companies”), as mortgagor, and Bank of New York (as
successor to NationsBank of Tennessee, N.A., successor to Manufacturers Hanover
Trust Company), as Trustee, as mortgagee. Section 6.6D(1) and Section 6.6D(3)
of the Indenture provide as follows:

 

“D.          The Companies will not:

 

“(1)         receive or collect, or permit the
receipt or collection of, any rental or other payments under any Lease more
than one month in advance of the respective periods in respect of which they
are to accrue, except that (i) in connection with the execution and delivery of
any Lease or of any amendment to any Lease, rental payments hereunder may be
collected and received in advance in an amount not in excess of three months’
rent and/or a security deposit may be required thereunder in an amount up to
any amount permitted by law (provided, that such deposits are maintained
in accordance with applicable law) and (ii) the Companies may receive and
collect escalation charges in accordance with the terms of each Lease;”

 

“(3) enter
into any Lease that does not contain terms to the effect as follows:

 

(a)           the Lease and the rights of the
tenants thereunder shall be subject and subordinate to the rights of the
Trustee under this Indenture;

 

87

 

(b)           the Lease has been assigned as
collateral security by the landlord thereunder to the Trustee under this
Indenture but that the landlord thereunder is entitled to receive and collect
all rental and other payments thereunder unless and until contrary notice is
received from the Trustee;

 

(c)           in the case of any foreclosure
hereunder, the rights and remedies of the tenant in respect of any obligations
of any successor landlord thereunder shall be nonrecourse as to any assets of
such successor landlord other than its equity in the building in which the
leased premises are located; and

 

(d)           the tenant’s obligation to pay rent
and any additional rent shall not be subject to any abatement, deduction,
counterclaim or setoff as against any mortgagee or purchaser upon the
foreclosure of any of the Properties by reason of any landlord default
occurring prior to such foreclosure.”

 

This Lease falls within the
definition of “Lease” referred to in the above quoted language from the
Indenture. Landlord acknowledges that if Tenant and the Superior Mortgagee
under the Indenture or any Superior Mortgagees or Superior Lessors enter into a
nondisturbance and attornment agreement to which Landlord is a party or to
which Landlord has consented, any terms thereof which are inconsistent with
this Section 6.01 shall be superseded by such nondisturbance and
attornment agreement.

 

6.02        Estoppel Certificate.  Each party shall, at
any time and from time to time, within ten (10) days after request by the other
party, execute and deliver to the requesting party (or to such person or entity
as the requesting party may designate) a statement certifying that this Lease
is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and
stating the modifications), certifying the Commencement Date, the Second
Commencement Date, the Expiration Date and the dates to which the Fixed Rent
and Additional Charges have been paid and stating whether or not, to the best
knowledge of such party, the other party is in default in performance of any of
its obligations under this Lease, and, if so, specifying each such default of
which such party has knowledge, it being intended that any such statement shall
be deemed a representation and warranty to be relied upon by the party to whom
such statement is addressed. Landlord and Tenant also shall include or confirm
in any such statement such other information concerning this Lease as Landlord
or Tenant may reasonably request.

 

6.03        Default.  This Lease and the term and estate hereby
granted are subject to the limitation that:

 

88

 

(a)           if Tenant defaults
in the payment of any Rent, and Tenant fails to cure such default by making such
payment of Rent in immediately available federal funds within ten (10) calendar
days after Landlord gives to Tenant a first notice specifying such default and
two (2) Business Days after Landlord gives Tenant a second notice (which second
notice shall be given no earlier than eight (8) calendar days after the date
such ten (10) day first notice shall have been given) specifying such default; provided,
that if Tenant, prior to the expiration of such two (2) Business Day second
notice, notified Landlord that Tenant disputes all or any part of this Rent
payment, specifying the basis for Tenant’s dispute, Tenant shall nevertheless
pay the full amount of the disputed charge but without prejudice to Tenant’s
dispute), or

 

(b)           if Tenant defaults in the keeping, observance
or performance of any covenant or agreement (other than a default of the
character referred to in Sections 6.03(a) or (c)), and if such default
continues and is not cured within thirty (30) calendar days after Landlord
gives to Tenant a first notice specifying the same and ten (10) Business Days
after Landlord gives Tenant a second notice (which second notice shall be given
no earlier than twenty (20) days after the date such thirty (30) calendar day
first notice shall have been given), or, in the case of a default which for
causes beyond Tenant’s reasonable control cannot with due diligence be cured
prior to the expiration of such ten (10) Business Day second notice, if Tenant
shall not prior to the expiration of such ten (10) Business Day second notice,
(i) advise Landlord of Tenant’s intention duly to institute all steps necessary
to cure such default and (ii) institute and thereafter diligently prosecute to
completion within one year (subject to delay due to Force Majeure not to exceed
sixty (60) days) after receipt of the second notice all steps necessary to cure
the same,

 

(c)           if this Lease or the estate hereby
granted would, by operation of law or otherwise, devolve upon or pass to any
person or entity other than Tenant, except as expressly permitted by Article
5 and such default continues for thirty (30) calendar days after Landlord
gives to Tenant a first notice specifying such default, and for ten (10)
calendar days after Landlord gives Tenant a second notice (which second notice
shall be given no earlier than twenty (20) calendar days after the date such
thirty (30) calendar day first notice shall have been given),

 

then, in any of cases set forth
in clause (a), (b) and (c) above, in addition to any other remedies available
to Landlord at law or in equity, Landlord shall be entitled to give to Tenant a
notice of intention to end the Term at the expiration of five (5) Business Days
from the date of the giving of such notice, and, in the event such notice is
given, this Lease and the term and estate hereby granted shall terminate upon
the expiration of such five (5) Business Days with

 

89

 

the same effect as if the last
of such five (5) Business Days were the Expiration Date, but Tenant shall
remain liable for damages as provided herein or pursuant to law.

 

6.04        Re-entry by Landlord.  If this Lease shall terminate as in Section
6.03 provided, Landlord or Landlord’s agents and servants may immediately
or at any time thereafter re-enter into or upon the Premises, or any part
thereof, either by summary dispossess proceedings or by any suitable action or
proceeding at law, without being liable to indictment, prosecution or damages
therefor, and may repossess the same, and may remove any persons therefrom, to
the end that Landlord may have, hold and enjoy the Premises. The words
“re-enter” and “re-entering” as used in this Lease are not restricted to their
technical legal meanings. Upon such termination or re-entry, Tenant shall pay
to Landlord any Rent then due and owing (in addition to any damages payable
under Section 6.05).

 

6.05        Damages.  If this Lease is terminated under Section
6.03, or if Landlord re-enters the Premises under Section 6.04,
Tenant shall pay to Landlord as damages, at the election of Landlord, either:

 

(a)           a sum which, at the time of such
termination, represents the then value of the excess, if any, of (1) the
aggregate of the Rent which, had this Lease not terminated, would have been
payable hereunder by Tenant for the period commencing on the day following the
date of such termination or re-entry to and including the Expiration Date over
(2) the aggregate fair rental value of the Premises for the same period (for
the purposes of this clause (a) the amount of Additional Charges which
would have been payable by Tenant under Sections 2.04 and 2.05 shall,
for each calendar year ending after such termination or re-entry, be deemed to
be an amount equal to the amount of such Additional Charges payable by Tenant
for the calendar year immediately preceding the calendar year in which such
termination or re-entry shall occur) each discounted to present value at the
Interest Rate, or

 

(b)           sums equal to the Rent that would
have been payable by Tenant through and including the Expiration Date had this
Lease not terminated or had Landlord not re-entered the Premises, payable upon
the due dates therefor specified in this Lease; provided, that if
Landlord shall relet all or any part of the Premises for all or any part of the
period commencing on the day following the date of such termination or re-entry
to and including the Expiration Date, Landlord shall credit Tenant with the net
rents received by Landlord from such reletting, such net rents to be determined
by first deducting from the gross rents as and when received by Landlord from
such reletting the expenses incurred or paid by Landlord in terminating this
Lease and of re-entering the Premises and of securing possession thereof, as
well as the expenses of reletting, including, without limitation, altering and
preparing the Premises for new tenants, brokers’ commissions, and all other
expenses properly chargeable

 

90

 

against the Premises and the
rental therefrom in connection with such reletting, it being understood that
any such reletting may be for a period equal to or shorter or longer than said
period; and further provided, that (i) in no event shall Tenant be
entitled to receive any excess of such net rents over the sums payable by
Tenant to Landlord under this Lease, (ii) in no event shall Tenant be entitled,
in any suit for the collection of damages pursuant to this Section 6.05(b),
to a credit in respect of any net rents from a reletting except to the extent
that such net rents are actually received by Landlord prior to the commencement
of such suit, (iii) if the Premises or any part thereof should be relet in
combination with other space, then proper apportionment on a square foot
rentable area basis shall be made of the rent received from such reletting and
of the expenses of reletting, (iv) if the Premises or any part thereof shall be
relet for a term greater than the unexpired term hereof, then the expenses of
reletting, including the costs of altering the Premises for the new tenant,
broker’s commissions and all other expenses properly chargeable against the
Premises, shall be equitably apportioned, based on the term of such reletting
between the period prior to and after the Expiration Date and (v) Landlord
shall have no obligation to so relet the Premises and Tenant hereby waives any
right Tenant may have, at law or in equity, to require Landlord to so relet the
Premises.

 

Suit or suits
for the recovery of any damages payable hereunder by Tenant, or any
installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall require Landlord to postpone suit
until the date when the Term would have expired but for such termination or
re-entry.

 

6.06        Other Remedies. 
Nothing contained in this Lease shall be
construed as limiting or precluding the recovery by Landlord against Tenant of
any sums or damages to which, in addition to the damages particularly provided
above, Landlord may lawfully be entitled by reason of any default hereunder on
the part of Tenant.

 

6.07        Right to Injunction.  In the event of a breach or threatened breach
by Tenant of any of its obligations under this Lease, Landlord shall also have
the right of injunction. In the event of a breach or threatened breach by
Landlord of any of its obligations under this Lease, Tenant shall also have the
right of injunction. The specified remedies to which Landlord or Tenant may
resort hereunder are cumulative and are not intended to be exclusive of any
other remedies or means of redress to which Landlord or Tenant may lawfully be
entitled, and Landlord or Tenant may invoke any remedy allowed at law or in
equity as if specific remedies were not herein provided for, except that to the
extent any rent offset, recoupment, abatement or credit is provided to Tenant
for the failure of Landlord to perform its obligations under this Lease to
deliver Tenant all or any part of the Premises, such rent offset, recoupment,
abatement or credit shall be the maximum monetary remedy available to Tenant as
a result of Landlord’s failure to perform such obligation or deliver that
portion of

 

91

 

the Premises for which Tenant
is receiving a rent offset, recoupment, abatement or credit. In the event that
the same act or omission by Landlord would entitle Tenant to more than one rent
offset, recoupment, abatement or credit under different provisions of this
Lease, it will be Tenant’s option to elect which rent offset, recoupment,
abatement or credit it will receive. Except as otherwise specifically provided
herein (i) if Tenant is entitled to receive a rent offset, recoupment,
abatement or credit, such rent offset, recoupment, abatement or credit shall be
calculated as if the Fixed Rent payable per rentable square foot was reduced by
18 cents, (ii) if Tenant is entitled to a rent offset, recoupment, abatement or
credit under different provisions of this Lease for the same harm suffered by
Tenant, Tenant shall be entitled to a rent offset, recoupment, abatement or
credit of only one applicable provision.

 

6.08        Certain Waivers.  Tenant waives and surrenders all right and
privilege that Tenant might have under or by reason of any present or future
law to redeem the Premises or to have a continuance of this Lease after Tenant
is dispossessed or ejected therefrom by process of law or under the terms of
this Lease or after any termination of this Lease. Landlord and Tenant each
waive trial by jury in any action in connection with this Lease other than in
connection with an action based in tort.

 

6.09        No Waiver.  Failure by either party to declare any default
immediately upon its occurrence or delay in taking any action in connection
with such default shall not waive such default but such party shall have the
right to declare any such default at any time thereafter. Any amounts paid by a
party hereto may be applied by the recipient, in the recipient’s discretion, to
any items then owing under this Lease. Receipt by a party hereto of a partial
payment shall not be deemed to be an accord and satisfaction (notwithstanding
any endorsement or statement on any check or any letter accompanying any check
or payment) nor shall such receipt constitute a waiver of the obligation to
make full payment. No act or thing done by Landlord or its agents shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept
such surrender shall be valid unless in writing and signed by Landlord and by
each Superior Lessor and Superior Mortgagee whose lease or mortgage provides
that any such surrender may not be accepted without its consent.

 

6.10        Holding Over.  If Tenant holds over without the consent of
Landlord after expiration or termination of this Lease (including by reason of
Force Majeure which is unrelated to the Project), Tenant shall pay as holdover
rental for each month of the holdover tenancy an amount equal to the Holdover
Percentage multiplied by the greater of (i) the fair market rental value of the
Premises for such month (as reasonably determined by Landlord) or (ii) the Rent
which Tenant was obligated to pay for the month immediately preceding the end
of the Term (giving no effect to any rent abatement, offset or other applicable
reduction). No holding over by Tenant after the Term shall operate to extend
the Term. “Holdover

 

92

 

Percentage”
means, with respect to any holdover by Tenant after the expiration or
termination of this Lease (I) for the first thirty (30) days of such holdover
tenancy, 110%, (II) for the second thirty (30) days of such holdover tenancy,
120%, (III) for the third thirty (30) days of such holdover tenancy, 130%, (IV)
for the fourth thirty (30) days of such holdover tenancy, 140%, (V) thereafter
until the first anniversary of such holdover, 150% and (VI) thereafter, 200%; provided,
however, if Tenant advises Landlord within six months prior to the
Expiration Date that it intends to hold over, its reason for such holdover and
its reasonable estimate of the expected holdover period then for the first
ninety (90) days of such holdover tenancy the Holdover Percentage shall be 100%
, and thereafter the Holdover Percentage will increase as hereinabove provided
in clauses (I)-(VI) as if such 91st day was the first day of the
holdover period to a maximum of 200% commencing four hundred fifty (450) days
after expiration or termination of this Lease. Notwithstanding the foregoing,
the acceptance of any rent paid by Tenant pursuant to this Section 6.10
shall not preclude Landlord from commencing and prosecuting a holdover or
summary eviction proceeding.

 

6.11        Attorneys’ Fees.  If either party places the enforcement of this
Lease or any part thereof, or the collection of any Rent or other payment due
or to become due hereunder, or recovery of the possession of the Premises, in
the hands of an attorney, or files suit upon the same, the prevailing party
shall, within thirty (30) days after demand, be reimbursed by the losing party
for its reasonable attorneys’ fees and disbursements and court costs.

 

6.12        Nonliability and Indemnification.  (a) 
Neither Landlord, any Superior Lessor or any Superior Mortgagee, nor any
partner, director, officer, shareholder, principal, agent, servant, employee or
contractor of Landlord, any Superior Lessor or any Superior Mortgagee (whether
disclosed or undisclosed), shall be liable to Tenant, any Affiliate of Tenant,
any Related Service Provider or any partner, director, officer, shareholder,
principal, agent, servant, employee or contractor of Tenant, its Affiliates or
Related Service Providers (collectively the “Tenant Group”) for (i) any
loss, injury or damage to Tenant, the Tenant Group or to any other person, or
to its or their property, irrespective of the cause of such injury, damage or
loss, nor shall the aforesaid parties be liable for any loss of or damage to
property of Tenant or the Tenant Group or of others entrusted to employees of
Landlord; provided, that, except to the extent of the release of
liability and waiver of subrogation provided in Section 7.03 hereof, the
foregoing shall not be deemed to relieve Landlord or any partner, director,
officer, shareholder, principal, agent, servant, employee or contractor of
Landlord (collectively the “Landlord Group”) or any Superior Lessor or
any Superior Mortgagee, respectively, of any liability to the extent resulting
from the negligence of such. party, its agents, servants or employees in the
operation or maintenance of the Premises or the Building, (ii) any loss, injury
or damage described in clause (i) above caused by other tenants

 

93

 

or persons in, upon or about
the Building, or caused by operations in construction of any private (other
than by or on behalf of Landlord), public or quasi-public work, or (iii) even
if negligent, consequential damages arising out of any loss of use of the
Premises or any equipment, facilities or other Tenant’s Property therein.

 

(b)           Tenant shall indemnify and hold
harmless Landlord, all Superior Lessors and all Superior Mortgagees and each of
their respective partners, directors, officers, shareholders, principals,
agents and employees (each, an “Indemnified Party”), from and against
any and all claims arising from or in connection with (i) the conduct or
management of the Premises or of any business therein, or any work or thing
done, or any condition created, in or about the Premises, (ii) any act,
omission or negligence of Tenant, the Tenant Group or any person claiming
through or under Tenant, the Tenant Group or any of their respective partners,
directors, officers, agents, employees or contractors, (iii) any accident,
injury or damage occurring in, at or upon the Premises after the Commencement Date
or the Second Commencement Date, as applicable, (iv) any default by Tenant or
the Tenant Group in the performance of Tenant’s obligations under this Lease,
(v) any brokerage commission or similar compensation claimed to be due by
reason of any proposed subletting or assignment by Tenant or the Tenant Group
(irrespective of the exercise by Landlord of any of the options in Section
5.02(a)), (vi) any exercise of its right of self help pursuant to Section
8.24 and (vii) any noise or vibration generated within the Premises
(including, without limitation, any amounts paid or credited to other tenants,
or occupants of the Building as a result thereof and any lost revenue of
Landlord from other tenants or occupants of the Building (such as in connection
with the termination of a then existing lease as a result of such noise or
vibration) whether such amounts paid or credited or such lost revenue
constitutes direct, consequential or other damages); together with all costs,
expenses and liabilities incurred in connection with each such claim or action
or proceeding brought thereon, including, without limitation, all attorneys’
fees and disbursements; provided, that the foregoing indemnity shall not
apply to the extent such claim results from the negligence or willful
misconduct of the Indemnified Party or its contractor which is not covered by
the waiver of subrogation set forth in Section 7.03 hereof. If any
action or proceeding is brought against any Indemnified Party by reason of any
such claim, Tenant, upon notice from such Indemnified Party shall resist and
defend such action or proceeding (by counsel reasonably satisfactory to such
Indemnified Party or designated by Tenant’s insurance carrier). This clause
(b) is expressly subject to Section 6.13.

 

(c)           Neither any director, officer,
shareholder, principal, agent, servant or employee of Tenant, its Affiliates or
Related Service Providers (whether disclosed or undisclosed), shall be liable
to Landlord or any Indemnified Party for any loss, injury or damage to Landlord,
an Indemnified Party, or to any other person, or to its or their property

 

94

 

which is not caused by the
negligence of such director, officer, shareholder, principal, agent, servant or
employee.

 

(d)           If either Landlord or Tenant, as the
case may be (the “Indemnitee”), receives written notice of any third
party claim or potential claim or the commencement of any action or proceeding
that could give rise to any obligation on the part of Landlord or Tenant, as
the case may be, to provide indemnification (the “Indemnitor”) pursuant
to this Section, the Indemnitee shall promptly give the Indemnitor notice
thereof (the “Indemnification Notice”); provided, however,
that the failure to give the Indemnification Notice promptly shall not impair
the Indemnitee’s right to indemnification in respect of such claim, action or
proceeding unless, and only to the extent that, the lack of prompt notice
adversely affects the ability of the Indemnitor to defend against or diminish
the losses arising out of such claim, action or proceeding. Delivery of the
Indemnification Notice shall be a condition precedent to any liability of the
Indemnitor under the provisions for the indemnification contained in this
Lease. The Indemnification Notice shall include copies of any notice or other
document received from any third party in respect of any such asserted claim.
The Indemnitor shall have the right to assume the defense of a third party
claim or suit described in this Section 6.12 at its own cost and expense
and with counsel of its own choosing; provided, however, such
counsel is reasonably satisfactory to the Indemnitee (except if the counsel is
provided by the Indemnitor’s insurer, in which case the counsel designated by
the insurer will be satisfactory); the Indemnitee is kept fully informed of all
material developments and is furnished copies of all papers; the Indemnitee is
given the opportunity, at its option, to participate at its own cost and
expense and with counsel of its own choosing (which shall be reasonably
satisfactory to the Indemnitor, except if the counsel is provided by the
Indemnitee’s insurer, in which case the counsel designated by the insurer will
be satisfactory) in the defense of such claim or suit; and the Indemnitor
diligently prosecutes the defense of such claim or suit. If all of the
conditions of the foregoing provision are not satisfied the Indemnitee shall
have the right, without impairing any of its rights to indemnification as
provided herein, to assume and control the defense of such claim or suit and to
settle such claim or suit. If the Indemnitor is defending any third party claim
or suit pursuant to this Section, (i) the Indemnitee shall make available to
the Indemnitor any books, records or other documents within its control that
are necessary or appropriate for such defense and (ii) the Indemnitor shall not
be liable for any settlement agreed to by the Indemnitee unless such settlement
is approved in writing by the Indemnitor.

 

6.13        Consequential Damages.  Notwithstanding any
provision herein to the contrary, neither Landlord nor Tenant may collect from
the other consequential damages for any claim arising out of this Lease, except
as otherwise specifically provided in this Lease.

 

95

 

ARTICLE 7

 

Insurance:
Casualty: Condemnation

 

7.01        Compliance with Insurance Standards.  (a) 
Tenant shall not violate, or permit the violation of, any condition
imposed by any insurance policy then issued in respect of the Project and shall
not do, or permit anything to be done, or keep or permit anything to be kept in
the Premises, which would subject Landlord, any Superior Lessor or any Superior
Mortgagee to any liability or responsibility for personal injury or death or
property damage, or which would increase any insurance rate in respect of the
Project over the rate which would otherwise then be in effect or which would
result in insurance companies of good standing refusing to insure the Project
in amounts reasonably satisfactory to Landlord, or which would result in the
cancellation of, or the assertion of any defense by the insurer in whole or in
part to claims under, any policy of insurance in respect of the Project.

 

(b)           If, by reason of any failure of
Tenant to comply with this Lease, the premiums on Landlord’s insurance on the
Project shall be higher than they otherwise would be, Tenant shall reimburse
Landlord, on demand, for that part of such premiums attributable to such
failure on the part of Tenant. A schedule or “make up” of rates for the Project
or the Premises, as the case may be, issued by the New York Fire Insurance
Rating Organization or other similar body making rates for insurance for the
Project or the Premises, as the case may be, shall be conclusive evidence of
the facts therein stated and of the several items and charges in the insurance
rate then applicable to the Project or the Premises, as the case may be.

 

7.02        Tenant’s and Landlord’s Insurance.  (a)  Tenant shall maintain at all times during the
Term (a) “all risk” property insurance covering all present and future Tenant’s
Property and Tenant’s Improvements and Betterments to a limit of not less than
the full replacement cost thereof, and (b) commercial general liability
insurance, including a contractual liability endorsement, and personal injury
liability coverage, in respect of the Premises and the conduct or operation of
business therein, with Landlord and its managing agent, if any, and each
Superior Lessor and Superior Mortgagee whose name and address shall have been
furnished to Tenant, as additional insureds, with limits of not less than
$5,000,000 combined single limit for bodily injury and property damage
liability in any one occurrence and (c) boiler, air conditioning and machinery
insurance, if there is a boiler, supplementary air conditioning or pressure
object or similar equipment in the Premises, with Landlord and its managing
agent, if any, and each Superior Lessor and Superior Mortgagee whose name and
address shall have been furnished to Tenant, as additional insureds, with
limits of not less than the full replacement cost of Tenant’s Property and
Tenant’s Improvements and Betterments if such insurance policy is part of the
insurance policy required to be maintained pursuant to

 

96

 

Section
7.02(a) and otherwise with limits of not less than
$5,000,000 and (d) when Alterations are in process, the insurance specified in Section
4.02(f) hereof and (e) if alcoholic beverages are being sold at the
Premises, liability insurance for sellers of alcoholic beverages with limits of
not less than $1,000,000. Such insurance may be carried under blanket or
umbrella policies covering the Premises and other properties owned or leased by
Tenant; provided, that each such policy shall comply in all respects
with this Section 7.02, shall specify the portion of the total coverage
of such policies that is allocated to the Premises in the amounts required in
this Section 7.02 and shall provide that the amount of coverage afforded
under such policies with respect to the Premises shall not be reduced by claims
under such policies with respect to such other properties. The limits of such
insurance shall not limit the liability of Tenant. Tenant shall deliver to Landlord
and any additional insureds, on or prior to the Commencement Date, such fully
paid-for policies or certificates of insurance, in form reasonably satisfactory
to Landlord issued by the insurance company or its authorized agent. Tenant
shall procure and pay for renewals of such insurance from time to time before
the expiration thereof, and Tenant shall deliver to Landlord and any additional
insureds such renewal policy or a certificate thereof at least fifteen (15)
days before the expiration of any existing policy. All such policies shall be
issued by companies licensed to do business in New York State and rated by
Best’s Insurance Reports or any successor publication of comparable standing as
A-VIII or better or the then equivalent of such rating, and all such policies
shall contain a provision whereby the same cannot be cancelled, allowed to
lapse or modified unless Landlord and any additional insureds are given at
least fifteen (15) days’ prior written notice of such cancellation, lapse or
modification. The proceeds of policies providing “all risk” property insurance
of Tenant’s Property and Improvements and Betterments shall be payable to
Tenant, provided, that any insurance proceeds covering Improvements and
Betterments shall be paid by Tenant to Landlord as and when required in this
Lease. Tenant shall cooperate with Landlord in connection with the collection
of any insurance monies that may be due in the event of loss and Tenant shall
execute and deliver to Landlord such proofs of loss and other instruments which
may be required to recover any such insurance monies. Landlord may from time to
time require that the amount of the insurance to be maintained by Tenant under
this Section 7.02 be increased, so that the amount thereof is equal to
the amount of insurance generally required of tenants by prudent landlords of
comparable first class buildings in midtown Manhattan.

 

(b)           Landlord, at Landlord’s expense
(subject to inclusion in Operating Expense), shall at all times during the Term
maintain with insurance companies licensed to do business in New York State and
rated by Best’s Insurance Reports or any successor publication of comparable
standing as A-VIII or better or the then equivalent of such rating, all risk
insurance to the extent of 100% of the replacement cost of the Building (but
excluding Tenant’s Property and Tenant’s Improvements and Betterments).

 

97

 

7.03        Subrogation Waiver.  Landlord and Tenant shall each include in
each of its insurance policies (insuring the Building in case of Landlord, and
insuring Tenant’s Property and Improvements and Betterments in the case of
Tenant, against loss, damage or destruction by fire or other casualty) a waiver
of the insurer’s right of subrogation against the other party (including such
parties’ employees and Affiliates within the Building and, to the extent a
permitted subtenant waives its insurer’s right of subrogation against Landlord
in the applicable sublease, such subtenant) during the Term or, if such waiver
should be unobtainable or unenforceable, (a) an express agreement that such
policy shall not be invalidated if the insured waives the right of recovery
against any party responsible for a casualty covered by the policy before the
casualty or (b) any other form of permission for the release of the other
party. Each party hereby releases the other party with respect to any claim
(including a claim for negligence) which it might otherwise have against the
other party for loss, damage or destruction with respect to its property
occurring during the Term to the extent to which it is, or is required to be,
insured under a policy or policies containing a waiver of subrogation or
permission to release liability. Nothing contained in this Section 7.03
shall be deemed to relieve either party of any duty imposed elsewhere in this
Lease to repair, restore or rebuild or to nullify any abatement of rents
provided for elsewhere in this Lease.

 

7.04        Condemnation.  (a)  If
there shall be a total taking of the Building in condemnation proceedings or by
any right of eminent domain, this Lease and the term and estate hereby granted
shall terminate as of the date of taking of possession by the condemning
authority and all Rent shall be prorated and paid as of such termination date.
If there shall be a taking of any material (in Landlord’s reasonable judgment)
portion of the Land or the Building (whether or not the Premises are affected
by such taking), then Landlord may terminate this Lease and the term and estate
granted hereby by giving notice to Tenant within sixty (60) days after the date
of taking of possession by the condemning authority; provided, that if
no part of the Premises is subject to such taking, Landlord shall be entitled
to terminate this Lease only if Landlord then terminates substantially all
other leases for office space in the Building. If there shall be a taking of
the Premises of such scope (but in no event less than 20% thereof) that the
untaken part of the Premises would in Tenant’s reasonable judgment be
uneconomic to operate, or a taking of the Building of such a scope that Tenant
is deprived of reasonable access to the Premises or of Landlord services so
that it would be in Tenant’s reasonable judgment uneconomic to operate the
Premises then Tenant may terminate this Lease and the term and estate granted
hereby by giving notice to Landlord within sixty (60) days after the date of
taking of possession by the condemning authority. If either Landlord or Tenant
shall give a termination notice as aforesaid, then this Lease and the term and
estate granted hereby shall terminate as of the date of such notice and all
Rent shall be prorated and paid as of such termination date. In the event of a
taking of the Premises which does not result in the termination of this Lease
(i) the term and estate hereby granted with respect to the

 

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taken part of the Premises
shall terminate as of the date of taking of possession by the condemning
authority and all Rent shall be appropriately abated for the period from such
date to the Expiration Date and (ii) Landlord shall with reasonable diligence
restore the remaining portion of the Premises (exclusive of Tenant’s Property)
as nearly as practicable to its condition prior to such taking.

 

(b)           In the event of any taking of all or
a part of the Building, Landlord shall be entitled to receive the entire award
in the condemnation proceeding, including, without limitation, any award made
for the value of the estate vested by this Lease in Tenant or any value
attributable to the unexpired portion of the Term, and Tenant hereby assigns to
Landlord any and all right, title and interest of Tenant now or hereafter
arising in or to any such award or any part thereof, and Tenant shall be entitled
to receive no part of such award; provided, that nothing shall preclude
Tenant from intervening in any such condemnation proceeding to claim or receive
from the condemning authority any compensation to which Tenant may otherwise
lawfully be entitled in such case in respect of Tenant’s Property, moving
expenses or the unamortized cost (as shown on Tenant’s financial statements) of
all Alterations made by Tenant to the Premises (or if the Lease shall not be
terminated, then to the portion of the Premises so taken by the condemning
authority) at Tenant’s expense (without the use of any work allowance provided
by Landlord with respect to the Premises and less any Rent abatement provided
to Tenant with respect to such Premises upon the commencement of occupancy by
Tenant; provided, that if such taking shall include only a portion of
the Premises and this Lease shall not be terminated by reason thereof, any work
allowance or rent abatement provided by Landlord with respect to such Premises
shall be appropriately prorated based on the rentable area of the taken portion
of the Premises); provided, that the same do not include any value of
the estate vested by this Lease in Tenant or of the unexpired portion of the
Term and do not reduce the amount available to Landlord or materially delay the
payment thereof.

 

(c)           If all or any part of the Premises
shall be taken for a limited period, Tenant shall be entitled, except as
hereinafter set forth, to that portion of the award for such taking which
represents compensation for the use and occupancy of the Premises, for the
taking of Tenant’s Property and for moving expenses, and Landlord shall be
entitled to that portion which represents reimbursement for the cost of
restoration of the Premises. This Lease shall remain unaffected by such taking
and Tenant shall continue responsible for all of its obligations under this
Lease to the extent such obligations are not affected by such taking and shall
continue to pay in full all Rent when due. If the period of temporary use or
occupancy shall extend beyond the Expiration Date, that part of the award which
represents compensation for the use and occupancy of the Premises shall be
apportioned between Landlord and Tenant as of the Expiration Date. Any award
for temporary use and occupancy for a period beyond

 

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the date to which the Rent has
been paid shall be paid to, held (in an interest bearing account) and applied
by Landlord as a trust fund for payment of the Rent thereafter becoming due.

 

(d)           In the event of any taking which does
not result in termination of this Lease, (i) Landlord, whether or not any award
shall be sufficient therefor, shall proceed with reasonable diligence to repair
the remaining parts of the Building and the Premises (other than those parts of
the Premises which constitute Tenant’s Property) to substantially their former
condition to the extent that the same may be feasible (subject to reasonable
changes which Landlord deems desirable) and so as to constitute a complete and
rentable Building and Premises and (ii) Tenant, whether or not any award shall
be sufficient therefor, shall proceed with reasonable diligence to repair the
remaining parts of the Premises which constitute Tenant’s Property, to substantially
their former condition to the extent that the same may be feasible, subject to
reasonable changes which shall be deemed Alterations.

 

7.05        Casualty.  (a)  If
the Building or the Premises shall be partially or totally damaged or destroyed
by fire or other casualty (each, a “Casualty”) and if this Lease is not
terminated as provided below, then (i) Landlord shall repair and restore the
Building and the Premises (including Tenant’s Improvements and Betterments but
excluding Tenant’s Property) with reasonable dispatch (but Landlord shall not
be required to perform the same on an overtime or premium pay basis) after
notice to Landlord of the Casualty and the collection of the insurance proceeds
attributable to such Casualty and (ii) Tenant shall repair and restore in
accordance with Section 4.02 all Tenant’s Property with reasonable
dispatch after Landlord’s restoration provided in clause (i) above is
substantially completed. Except as provided in Section 4.05, upon
Tenant’s receipt from Landlord of (x) a waiver of Landlord’s right to cancel
the Lease as provided in Section 7.05 as a result of such casualty, (y)
confirmation that Landlord has collected the insurance proceeds attributable to
such casualty as provided for in clause (i) above (or has received the first
advance thereof, if such insurance proceeds are paid to Landlord in
installments or has commenced restoration) and (z) a copy of the Estimate;
then, the proceeds of insurance covering Tenant’s Improvements and Betterments
shall be paid to Landlord, and, concurrently with the collection of such
insurance proceeds, Tenant shall pay to Landlord (A) the amount of any
deductible under the policy insuring Tenant’s Improvements and Betterments and
(B) the amount, if any, by which the cost of repairing and restoring Tenant’s
Improvements and Betterments as estimated by the Contractor exceeds the
available insurance proceeds therefor. All such sums will be held by Landlord
(or by Tenant, in the case of insurance proceeds for Betterments and
Improvements until Tenant is required to pay such proceeds to Landlord as
provided herein) in an interest bearing account in a New York State bank in
trust for the benefit of Tenant and Landlord, as applicable, and (except as
otherwise provided herein) may only be utilized by Landlord for the restoration
of Tenant’s Improvements and Betterments. In the event this Lease is terminated
then 50% of any

 

100

 

remaining portion of such
amount, deposited with Landlord by Tenant plus accrued interest, will be
refunded to Tenant by Landlord. In the event that the cost to restore Tenant’s
Improvements and Betterments is less than the amount deposited by Tenant with
Landlord, then, in such event, 50% of the amount of such surplus plus any accrued
interest thereon will be promptly refunded by Landlord to Tenant, and if
landlord fails to do so, then upon ten (10) days’ notice given by Tenant to
Landlord, Tenant may recoup such amount plus interest at the Interest Rate
against the Rents from the date of Tenant’s notice.

 

(b)           If all or part of the Premises shall
be rendered untenantable by reason of a Casualty, the Fixed Rent and the
Additional Charges under Sections 2.04 and 2.05 shall be abated in the
proportion that the untenantable area of the Premises bears to the total area
of the Premises, and the Additional Charges for electricity which are not
billed on a metered basis shall be abated for the portion of the Premises that
is untenantable for the period from the date of the Casualty to the earlier of
(i) the date the Premises is made tenantable (provided, that if the
Premises would have been tenantable at an earlier date but for Tenant having
failed to cooperate with Landlord, as reasonably requested by Landlord, in
effecting repairs or restoration or collecting insurance proceeds (including,
without limitation, by reason of Tenant failing to pay to Landlord the amounts
set forth in clauses (A) and (B) of Section 7.05(a)), then the
Premises shall be deemed to have been made tenantable on such earlier date and
the abatement shall cease) or (ii) the date Tenant or any subtenant reoccupies
a portion of the Premises (in which case the Fixed Rent and the Additional
Charges allocable to such reoccupied portion shall be payable by Tenant from
the date of such occupancy), provided, that Tenant and its subtenants
will not be deemed to be in occupancy during such periods of time solely by
reason of Tenant restoring Tenant’s Property. Landlord’s determination of the
date the Premises is tenantable shall be controlling unless Tenant disputes
same by notice to Landlord within ten (10) days after Tenant receives notice of
such determination by Landlord, and pending resolution of such dispute, Tenant
shall pay Rent in accordance with Landlord’s determination which dispute may be
resolved by arbitration pursuant to Section 9.03 hereof. Notwithstanding
the foregoing, if by reason of any act or omission by Tenant, the Tenant Group,
any subtenant or any of their respective partners, directors, officers,
servants, employees, agents or contractors, Landlord, any Superior Lessor or
any Superior Mortgagee shall be unable to collect all of the insurance proceeds
(including, without limitation, rent insurance proceeds) applicable to the
Casualty, then, without prejudice to any other remedies which may be available
against Tenant, Tenant shall pay to Landlord an amount equal to such
uncollected insurance proceeds within twenty (20) days after demand. Nothing
contained in this Section 7.05 shall relieve Tenant from any liability
that may exist as a result of any Casualty.

 

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(c)           If by reason of a Casualty (i) the
Building shall be totally damaged or destroyed, (ii) the Building shall be so
damaged or destroyed (whether or not the Premises are damaged or destroyed)
that repair or restoration shall require more than two hundred seventy (270)
days or the expenditure of more than 33% of the full insurable value of the
Building (which, for purposes of this Section 7.05(c), shall mean
replacement cost less the cost of footings, foundations and other structures
below the street and first floor of the Building) immediately prior to the
Casualty, each as determined by the Contractor, then in any such case Landlord
may terminate this Lease by notice given to Tenant within one hundred eighty
(180) days after the Casualty; provided, that Landlord may only
terminate this Lease if Landlord then also terminates the leases of all or
substantially all of the other office tenants in the Building. In the event of
any termination of this Lease under this Section 7.05(c), Tenant shall
pay to Landlord the amount, if any, due in accordance with Section 7.06
below.

 

(d)           (i) Within sixty (60) days after
Landlord has actual knowledge of any Casualty, Landlord shall deliver to Tenant
an estimate prepared by a reputable contractor selected by Landlord and
reasonably acceptable to Tenant setting forth such contractor’s estimate as to
the time reasonably required to repair the damage in order to make the Premises
tenantable and to substantially restore access to the Premises by use of the
passenger elevators other than any Long Lead Work which the Contractor
estimates will take more than three hundred fifteen (315) days from the date of
such Casualty to repair (the “Required Restoration Work”) (the
contractor designated by Landlord pursuant to this sentence is called the “Contractor”
and the estimate prepared by the Contractor is called the “Estimate”).

 

(ii)           If at least 25,000 rentable square
feet of space in the Premises shall be rendered untenantable by reason of a
Casualty and the period set forth in the applicable Estimate exceeds three
hundred fifteen (315) days’ from the date of such Casualty, Tenant may elect to
terminate this Lease by notice (a “Termination Notice”) to Landlord
given not later than thirty (30) days following Tenant’s receipt of such
Estimate.

 

(iii)          If Landlord shall not substantially
complete the Required Restoration Work such that more than 25,000 rentable
square feet of space in the Premises remains untenantable by reason of such
Casualty on or before the date (the “Outside Date”) which is four
hundred ten (410) days after the date of such Casualty (provided, that
the Outside Date shall be extended to the extent that Landlord is delayed in
substantially completing the Required Restoration Work by reason of Tenant
Delay and/or Force Majeure; and further provided, that any such
extension of the Outside Date by reason of Force Majeure shall not exceed sixty
(60) days), then Tenant shall have the right to terminate this Lease by giving
a Termination Notice to Landlord on or before the earlier to occur of (x) the
date that

 

102

 

Landlord substantially
completes the Required Restoration Work or (y) the date that is thirty (30)
days after the Outside Date.

 

(iv)          If Tenant timely gives a Termination
Notice pursuant to this Section 7.05(d), this Lease shall terminate on
the 20th day after such notice is given by Tenant and Tenant shall vacate the
Premises and surrender the same to Landlord in accordance with the terms of
this Lease. Upon any such termination, Tenant’s liability for Fixed Rent and
Additional Charges hereunder with respect to the Premises shall cease as of the
date of such termination, and any prepaid portion of Rent with respect to the
Premises for any period after such date shall be refunded by Landlord to Tenant
within thirty (30) days after such termination date. In the event of any
termination of this Lease under this Section  7.05(d), whether as
to all or a portion of the Premises, Tenant shall pay to Landlord the amount,
if any, due in accordance with Section 7.06 below.

 

(v)           Anything to the contrary contained in
this Section 7.05(d) notwithstanding, if any Casualty occurs during the
last three (3) years of the Term, all references in this Section 7.05(d)
to “315 days” and “410 days” shall be deemed to be replaced with the following
number of days (provided, that such number of days shall be extended if
and to the extent Landlord is delayed in substantially completing the Required
Restoration Work by reason of Tenant Delay):

 

(A)          if such Casualty
occurs during the 12-month period commencing on the date that is three (3)
years prior to the last day of the Term, “240 days” and “365 days,”
respectively;

 

(B)           if such Casualty
occurs during the 12-month period commencing on the date that is two (2) years
prior to the last day of the Term, “180 days” and “270 days,” respectively; and

 

(C)           if such Casualty
occurs during the last 12 months of the Term, “120 days” and “180 days,”
respectively.

 

(e)           “Long Lead Work” means any
item of repair to Tenant’s Improvements and Betterments which is not a stock
item and must be specifically manufactured, fabricated or installed or is of
such an unusual, delicate or fragile nature that there is a substantial risk
that (i) there will be a delay in its manufacture, fabrication, delivery or
installation, or (ii) after delivery, such item will need to be reshipped or
redelivered, so that the item of work in question would delay the completion of
the standard items of such work even though the items of Long Lead Work in
question are (A) ordered together with the other

 

103

 

items required for such work
and (B) then installed or performed (after the manufacture or fabrication
thereof) in order and sequence that such Long Lead Work and other items of work
are normally installed or performed in accordance with good construction
practice.

 

(f)            If in case of a Casualty, Landlord
shall be delayed in completing the repair and restoration that Landlord is
obligated to perform under this Section 7.05 by reason of Force Majeure,
Landlord shall promptly notify Tenant of the occurrence of such Force Majeure
and, to the extent possible, Landlord’s good faith estimate of the duration of
such Force Majeure delays and, if requested by Tenant from time to time,
Landlord shall update Tenant as to the status of such Force Majeure delays.

 

(g)           Landlord shall not carry any
insurance on Tenant’s Property or on Tenant’s Improvements and Betterments and
shall not be obligated to repair or replace Tenant’s Property. Tenant shall
look solely to its insurance (which may have been paid to Landlord pursuant to
the terms of this Lease) for recovery of any damage to or loss of Tenant’s
Property or Tenant’s Improvements and Betterments (but subject to Landlord’s
obligation to restore as provided herein). Tenant shall notify Landlord
promptly of any Casualty in the Premises.

 

(h)           This Section 7.05 shall be
deemed an express agreement governing any damage or destruction of the Premises
by fire or other casualty, and Section 227 of the New York Real Property Law
providing for such a contingency in the absence of an express agreement, and
any other law of like import now or hereafter in force, shall have no
application.

 

7.06        Certain Termination Payments.  In the event of any termination of this Lease
as to all or any portion of the Premises pursuant to Sections 6.03, 7.04,
7.05, 8.26 or otherwise by Tenant exercising a right of termination, then
Tenant shall pay to Landlord an amount equal to the excess of (i) Tenant’s Work
Allowance and Tenant Required Work Allowance theretofore paid by Landlord to
Tenant over (ii) the costs and expense incurred by Tenant for construction of
its Tenant’s Allowance Work (excluding Tenant Property but including any
cancellation fee incurred by Tenant as a result of the cancellation of its
purchase order for Tenant Property due to the termination of this Lease) and
Tenant’s Required Work. In the event of a termination of this Lease for any
reason, Tenant shall pay to Landlord a portion of the Fixed Rent equal to
eighteen cents per annum per rentable square foot for the Blocks which would
have been payable by Tenant from the time of such termination through and
including the original Expiration Date set forth in Section 1.03
(without giving effect to any extension of the Term pursuant to Article 9
hereof) had this Lease not terminated discounted to present value at nine
percent (9%) per annum. Any payment required to be

 

104

 

made under this Section 7.06
shall be paid by Tenant to Landlord on or before the date that such termination
becomes effective; provided, that if Tenant claims that no payment is
required to be paid by Tenant under this Section 7.06, Tenant shall so
notify Landlord in Tenant’s termination notice. Any such payment (or notice
that no such payment is required to be paid) shall be accompanied by invoices
or other evidence reasonably satisfactory to Landlord establishing the amount
of such payment or that no payment is due. If Landlord disputes the amount of
any payment by Tenant under this Section 7.06 and it is subsequently
determined that the amount so paid by Tenant was less than the amount due to
Landlord hereunder, then the termination of this Lease as to the applicable
space shall nevertheless be effective and Tenant shall pay to Landlord the
amount of such underpayment together with interest at the Interest Rate from
the date such amount was first due from Tenant through and including the date
paid.

 

ARTICLE 8

 

Miscellaneous
Provisions

 

8.01        Notice.  All
notices, demands, consents, approvals, advises, waivers or other communications
(each, a “Notice”) which may or are required to be given by either party
to the other under this Lease shall be in writing and shall be sent (a) by
United States Mail, certified or registered, postage prepaid, return receipt
requested, or (b) by a nationally recognized overnight carrier (which provides
for receipted delivery in the ordinary course of its business), in each case
addressed to the party to be notified at the address for such party specified
in the first paragraph of this Lease, or to such other place as the party to be
notified may from time to time designate by at least five (5) days’ notice to
the notifying party (with a copy, in the case of each Notice to Landlord, to
Landlord’s Managing Attorney, c/o Olympia & York Companies (U.S.A.), 237
Park Avenue, New York, New York 10017 and with a copy, in the case of each
Notice to Tenant, to (i) Warner Music Group, Inc., 75 Rockefeller Plaza, New
York, New York 10019, Attn: Senior Vice President Business and Legal Affairs,
(ii) Time Warner Inc., 75 Rockefeller Plaza, New York, New York 10019, Attn:
Director of Real Estate Service, and (iii) Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, New York, New York 10019, Attn: Joseph
E. Browdy). Each notice shall be deemed to have been given on the second Business
Day after such notice is deposited in the United States Mail or, in the case of
delivery by a recognized overnight courier, on the Business Day after deposit
(prior to its deadline for overnight delivery) with such overnight courier.
Notices from Landlord or Tenant may be given by their respective attorneys and
Notice by Landlord may be given by Landlord’s managing agent, if any.

 

105

 

8.02        Building Rules. 
Tenant shall comply with, and Tenant shall
cause the Tenant Group, including Tenant’s licensees, employees, contractors,
agents and invitees to comply with, the rules of the Building set forth in Exhibit
C, as the same may be reasonably modified or supplemented by Landlord from
time to time for the safety, care and cleanliness of the Premises and the
Building and for preservation of good order therein. If Tenant disputes the
reasonableness of any such modification or supplement, Tenant shall, unless
compliance will materially and adversely affect Tenant; nevertheless comply
until the dispute is finally resolved in Tenant’s favor by arbitration in
accordance with Section 9.03 or otherwise. Landlord shall not be
obligated to enforce the rules of the Building against Tenant or any other
tenant of the Building or any other party (unless Tenant is adversely affected
with respect to Tenant’s use or occupancy of the Premises in any material
respect and Tenant notifies Landlord thereof, specifying in reasonable detail
the manner in which Tenant’s use or occupancy is being so adversely affected).
Unless Landlord shall willfully fail to use reasonable efforts to so enforce
said rules (and Tenant’s use or occupancy of the Premises is adversely affected
in any material respect by reason of such failure by Landlord, and Tenant notifies
Landlord thereof, specifying in reasonable detail the manner in which Tenant’s
use or occupancy is being so adversely affected), Landlord shall have no
liability to Tenant by reason of the violation by any tenant or other party of
the rules of the Building; provided, that Landlord shall not enforce the
rules of the Building in a manner which discriminates against Tenant. If any
rule of the Building shall conflict with any provision of this Lease, such
provision of this Lease shall govern.

 

8.03        Severability. 
If any term or provision of this Lease, or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected, and each provision of this
Lease shall be valid and shall be enforceable to the extent permitted by law.

 

8.04        Certain Definitions.  (a)  “Landlord” means only the owner, at the
time in question, of the Building or that portion of the Building of which the
Premises are a part, or of a lease of the Building or that portion of the
Building of which the Premises are a part, so that in the event of any transfer
or transfers of title to the Building or of Landlord’s interest in a lease of
the Building or such portion of the Building, the transferor shall be and
hereby is relieved and freed of all obligations of Landlord under this Lease
accruing after such transfer, and it shall be deemed, without further
agreement, that such transferee has assumed all obligations of Landlord during
the period it is the holder of Landlord’s interest under this Lease.

 

106

 

(b)           “Landlord shall have no liability to
Tenant” or words of similar import mean that Tenant is not entitled to
terminate this Lease, or to claim actual or constructive eviction, partial, or
total, or to receive any abatement or diminution of Rent, or to be relieved in
any manner or any of its other obligations. under this Lease, or to be
compensated for loss or injury suffered or to enforce any other right or kind
of liability whatsoever against Landlord under or with respect to this Lease or
with respect to Tenant’s use or occupancy of the Premises unless otherwise
specifically provided in this Lease to the contrary.

 

8.05        Quiet Enjoyment. 
Tenant shall and may peaceably and quietly
have, hold and enjoy the Premises, subject to the other terms of this Lease and
to Superior Leases and Superior Mortgages, provided, that Tenant pays
the Fixed Rent and Additional Charges to be paid by Tenant within the time
periods and grace periods provided for herein and performs all of Tenant’s
covenants and agreements contained in this Lease.

 

8.06        Limitation of Landlord’s Personal Liability.  Tenant shall look
solely to Landlord’s interest in the Project for the recovery of any judgment
against Landlord, and no other property or assets of Landlord or Landlord’s
partners, officers, directors, shareholders or principals, direct or indirect,
disclosed or undisclosed, shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant’s remedies under or with
respect to this Lease. For purposes of the preceding sentence, “Landlord’s
interest in the Project” shall be deemed to include proceeds of a sale (net of
transaction costs), financing or refmancing (but only to the extent the
proceeds of a sale, financing or refmancing exceed (i) the amount of any
indebtedness that was paid with the proceeds of such sale, financing or
refmancing plus (ii) all transaction costs associated with such sale or
refmancing) of the Building or the Project (or any portion thereof), or of
Landlord’s estate or interest therein, provided, that Tenant (A) shall
have delivered a notice to Landlord asserting a claim for a breach of
Landlord’s obligations under this Lease prior to the receipt by Landlord of
such proceeds, (B) shall have commenced an appropriate proceeding against
Landlord asserting such breach within six (6) months after the date such notice
was delivered to Landlord and (C) shall be diligently prosecuting such claim to
completion, and Tenant shall have the right to look to such proceeds only as to
the subject matter of such action.

 

8.07        Counterclaims. 
If Landlord commences any summary proceeding or
action for nonpayment of Rent or to recover possession of the Premises, Tenant
shall not interpose any counterclaim of any nature or description in any such
proceeding or action, unless Tenant’s failure to interpose such counterclaim in
such proceeding or action would result in the waiver of Tenant’s right to bring
such claim in a separate proceeding under applicable law.

 

107

 

8.08        Survival.  Except
as otherwise specifically provided in this Lease, all obligations and
liabilities of Landlord or Tenant to the other which accrued before the
expiration or other termination of this Lease and all such obligations and
liabilities which by their nature or under the circumstances can only be, or by
the provisions of this Lease may be, performed after such expiration or other
termination, shall survive the expiration or other termination of this Lease.
Without limiting the generality of the foregoing, the rights and obligations of
the parties with respect to any indemnity under this Lease, and with respect to
Tax Payments, Operating Payments and any other amounts payable under this
Lease’, shall survive the expiration or other termination of this Lease except as
otherwise specifically provided in this Lease.

 

8.09        Certain Remedies.  If Tenant requests
Landlord’s consent and Landlord fails or refuses to give such consent, Tenant
shall not be entitled to any damages for any withholding by Landlord of its
consent, it being intended that Tenant’s sole remedy shall be an action for
specific performance or injunction, and that such remedy shall be available
only in those cases where this Lease provides that Landlord shall not
unreasonably withhold its consent. Tenant may submit any dispute as to the
reasonableness of Landlord’s failure or refusal to give consent to be resolved
by arbitration in accordance with Section 9.03 hereof. No dispute
relating to this Lease or the relationship of Landlord and Tenant under this
Lease shall be resolved by arbitration unless this Lease expressly provides for
such dispute to be resolved by arbitration.

 

8.10        No Offer.  The
submission by Landlord of this lease in draft form shall be solely for Tenant’s
consideration and not for acceptance and execution. Such submission shall have
no binding force or effect and shall confer no rights nor impose any
obligations, including brokerage obligations, on either party unless and until
both Landlord and Tenant shall have executed a lease and duplicate originals
thereof shall have been delivered to the respective parties.

 

8.11        Captions; Construction.  The table of
contents, captions, headings and titles in this Lease are solely for
convenience of reference and shall not affect its interpretation. This Lease
shall be construed without regard to any presumption or other rule requiring
construction against the party causing this Lease 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 provision of this Lease.

 

8.12        Amendments.  This
Lease may not be altered, changed or amended, except by an instrument in
writing signed by the party to be charged.

 

108

 

8.13        Broker.  Each
party represents to the other that such party has dealt with no broker other
than Jones Lang Wootton USA (“Broker”) in connection with this Lease or
the Building, and each party shall indemnify and hold the other harmless from
and against all loss, cost, liability and expense (including, without
limitation, reasonable attorneys’ fees and disbursements) arising out of any
claim for a commission or other compensation by any broker other than Broker
who alleges that it has dealt with the indemnifying party in connection with
this Lease or the Building. Landlord shall enter into a separate agreement with
Broker which provides that, if this Lease is executed and delivered by both
Landlord and Tenant, Landlord shall pay to Broker a commission to be agreed
upon between Landlord and Broker, subject to, and in accordance with, the terms
and conditions of such agreement.

 

8.14        Merger.  Tenant
acknowledges 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. This Lease embodies the entire understanding
between the parties with respect to the subject matter hereof, and all prior
agreements, understanding and statements, oral or written, with respect thereto
are merged in this Lease.

 

8.15        Successors.  This
Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and permitted assigns.

 

8.16        Applicable Law.  This Lease shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to any principles of conflicts of laws.

 

8.17        No Development Rights.  Tenant acknowledges
that it has no rights to any development rights, air rights or comparable
rights appurtenant to the Project, and consents, without further consideration,
to any utilization of such rights by Landlord. Tenant shall promptly execute
and deliver any instruments which may be requested by Landlord, including
instruments merging zoning lots, evidencing such acknowledgment and consent.
The provisions of this Section 8.17 shall be construed as an express
waiver by Tenant of any interest Tenant may have as a “party in interest” (as
such term is defined in Section 12-10. Zoning Lot of the Zoning Resolution of
the City of New York) in the Project.

 

8.18        Parking.  Landlord
shall make available to Tenant, and Tenant shall hire . from Landlord (or any
person or entity designated by Landlord to operate the indoor parking spaces in
the Building), on a reserved basis, Tenant’s Share of the indoor parking space
in the Building (“Tenant’s Parking Spaces”), provided, that any
fractional parking spaces shall not be

 

109

 

made available to Tenant.
Landlord represents that there are currently 25 indoor parking spaces in the
Building. Tenant shall pay to Landlord (or Landlord’s designated operator)
monthly, as an Additional Charge, on the first day of each month, the
Building’s established charges for Tenant’s Parking Spaces (which charges are
subject to change from time to time and shall be comparable to those charged by
neighboring garages which arc comparable to the Building’s garage). Landlord
may require Tenant to use reasonably visible identification (i.e.,
bumper decal, window sticker, or passes) to evidence authorized use of Tenant’s
Parking Spaces. Tenant shall from time to time furnish Landlord (or Landlord’s
designated operator). with a list of the persons that Tenant has permitted to
use Tenant’s Parking Spaces, together with such other corresponding
identification (i.e., license plates, car models or addresses) as
Landlord (or landlord’s designated operator) may require. Tenant’s use of
Tenant’s Parking Spaces shall be subject to such reasonable rules and
regulations as may from time to time be promulgated by Landlord (or Landlord’s
designated operator) in accordance with the provisions of this Lease (which may
include the obligation to leave the car keys as designated by Landlord (or
Landlord’s designated operator)). Landlord shall not be obligated to police the
use of any elevators or any other points of access which may connect Tenant’s
Parking Spaces with any other areas of the Building. Landlord shall have no
responsibility for loss, theft or damage, howsoever caused, to person or property
arising out of or attributable to Tenant’s Parking Spaces, except to the extent
the same arise out of the gross negligence or willful misconduct of Landlord or
Landlord’s employees.

 

8.19        Emergency Generator.  (a)  To the extent permitted by Law, Tenant may,
at Tenant’s sole cost and expense, install, in order to service (i) the
Premises, (ii) any full floor in the Building leased by Tenant or Affiliates of
Tenant, and (iii) any partial floors in the Building leased by Tenant or
Affiliates of Tenant (provided, that with respect to such partial floors
the electricity closet and distribution equipment shall be located in the space
leased by Tenant or such Affiliate of Tenant), an emergency generator, UPS and
similar back-up systems to service the Premises in the Premises or in the
Building mechanical areas on. the 25th floor or the 8th floor in the location
shown at Exhibit R, together with all required controls, wiring,
distribution and other ancillary equipment normally associated therewith
(collectively, the “Emergency Generator”); provided, however,
if such Emergency Generator is not installed prior to August 1, 1997, then
Tenant may thereafter install the Emergency Generator only in the Premises and,
at the request of Tenant, Landlord agrees to use reasonable efforts to make
available space in the mechanical areas on either the 25th floor or 8th floor
for placement of Tenant’s Emergency Generator. Notwithstanding the above, any
fuel tank shall be located on the sub-cellar level of the Building adjacent to
Landlord’s fuel tanks.

 

110

 

(b)           In any case where, pursuant to the
provisions of this Lease, Tenant is permitted to install the Emergency
Generator or support equipment in connection with the Emergency Generator
outside the Premises, Tenant’s installation of same shall be done as an
Alteration, and shall constitute a Material Alteration (except that Landlord
shall not unreasonably withhold its consent thereto). Any installation,
maintenance, repair and replacement of such equipment shall be done at Tenant’s
expense, and Landlord shall have no liability in respect thereof except for
Landlord’s negligence or intentionally wrongful acts. Any installation shall be
done in a manner to provide that such equipment shall not cause noise,
vibration or other interference with any other occupants of the Building or the
operation of the Building. Any reasonable requirements of Landlord’s structural
engineer required as a result of Tenant’s installation shall be performed by
Landlord at Tenant’s reasonable expense. Landlord may at all times use the
subcellar and mechanical areas of the Building in connection with any cleaning,
maintenance, repair or operation of the Building, and Landlord shall have no
liability to Tenant by reason thereof, provided, that Tenant is not
materially adversely affected. Tenant shall be responsible for all damage to
persons or property which results from Tenant’s use of the subcellar and
mechanical areas of the Building except to the extent caused by the negligence
or willful misconduct of any Landlord Indemnified Party (but subject to Section
7.03). Landlord makes no warranty to Tenant as to the permissibility under,
Laws of using the subcellar and mechanical areas of the Building for such
purpose or as to the suitability of the subcellar and mechanical areas of the
Building for such purpose. Tenant shall comply with all Laws applicable to the
equipment so installed and to Tenant’s use of the subcellar and mechanical
areas of the Building. Tenant shall secure and keep in full force and effect,
from and after the time Tenant begins installation of such equipment, such
supplementary insurance with respect to such equipment as Landlord may
reasonably require, provided, that the same shall not be in excess of
that which would customarily be required from time to time by landlords of
buildings of similar class and character in New York city with respect to
similar installations.

 

(c)           If Tenant is permitted pursuant to
this Section to install the Emergency Generator in the Building mechanical area
on either the 8th floor or the 25th floor, Landlord shall give Tenant
reasonable access thereto (and to the sub-cellar level of the Building if any
fuel tank is installed therein), so as to permit Tenant to install, operate and
repair its Emergency Generator and related fuel tank and to connect the same to
the Premises, provided, that, in each case, Tenant shall be accompanied
by a representative of Landlord who shall be made available to Tenant at
reasonable times upon reasonable advance notice from Tenant and, except when
such representative is made available during Business Hours on Business Days
(during which period the representative shall be made available without charge)
the actual cost incurred by Landlord for such representative shall be paid by
Tenant to Landlord within twenty (20) days after demand by Landlord. If Tenant
installs the Emergency Generator in the Building mechanical areas on the 25th
or 8th floor of the Building, Landlord may at any time and from time to time
during the Term, at Landlord’s expense, temporarily disconnect and remove
Tenant’s generator in order to access the Building or other emergency
generators at such location, in which event, upon completion of Landlord’s
work, Landlord shall, at Landlord’s expense, re-install the same in its
original location.

 

111

 

8.20        Signage/Building Directory.  (a)  Subject to the provisions of Section
8.20(b), Tenant shall have the right to place signs containing Tenant’s
name, Atlantic Records or, subject to the reasonable consent of Landlord, any
other Affiliate of Tenant which is in occupancy of a material portion of the
Premises, (i) on the exterior of the Building in the immediate area of the 51st
Street entrance to the building; (ii) on the Building wall adjacent to the
access to the underground passage connecting the building to 75 Rockefeller
Plaza and on the partition wall installed by Landlord in the Building lobby in
accordance with Section 3.04 hereof; and (iii) if any elevator serving
the Premises is extended down to the concourse level in the Building pursuant
to this Lease, then in such elevator bank on the concourse level; provided,
that all such signage shall be installed only in the locations shown on the
plans attached hereto and shall meet the design criteria set forth on Exhibits
S and T attached hereto. All such signage shall be installed, maintained
and repaired by Landlord at Tenant’s reasonable expense.

 

(b)           The provisions of Section
8.20(a)(i) shall be null and void and of no further force or effect, and
Landlord shall have the right to remove any signage theretofore installed
pursuant to Section 8.20(a), at the cost of Tenant, (i) during any
period that Tenant together with its Affiliates and any Related Service
Providers occupying part of the Premises shall be occupying less than 350,000
rentable square feet in the Building (which right to install such sign as
provided in Section 8.20(a) shall be reinstated when and if such
occupancy requirement is satisfied) or (ii) if the Term shall expire or
terminate.

 

(c)           Upon the expiration or earlier
termination of the Term (or earlier, if required by Landlord under Section
8.20(b)), any signage of Tenant shall be removed by Landlord and Tenant
shall reimburse Landlord for any reasonable costs incurred by Landlord to
remove such signage and to repair or restore the areas from which such signage
was removed.

 

(d)           Landlord shall make available to
Tenant, approximately Tenant’s Share of the listings in the directory in the
lobby of the Building consistent with the Landlord’s existing or then current
standards. The initial listings will be made at Landlord’s expense and any
subsequent changes by Tenant shall be made at Tenant’s expense. The listing of
any name other than Tenant on the doors of the Premises, or the Building
directory or otherwise shall not operate to vest any right or interest in this
Lease or in the Premises in any other person or entity, nor shall such listing
be deemed to be the consent of Landlord to any assignment or transfer of the
Lease or to any sublease of the Premises or any portion thereof by others.

 

(e)           If Landlord shall erect a free
standing monument adjacent to the Building (as opposed to a sign on the
exterior of the Building or a sign naming the Building after a tenant in the
Building) identifying any tenant in the Building, Tenant shall be entitled to a
similar identification on such monument taking into account the proportionate
share of space in the Building occupied by such tenant or tenants and Tenant.
The provisions of this Section 8.20(e) shall be null and void and of no
further force and effect and Landlord shall have the right to remove any
identification of Tenant on such monument theretofore installed pursuant

 

112

 

to this Section      8.20(a), at the cost of Tenant (i)
during any period that Warner Communications Inc. together with its Affiliates
and any Related Service Providers occupying part of the Premises, shall be
occupying less than 350,000 rentable square feet in the Building (which right
to similar identification on such monument shall be reinstated when such
occupancy requirement is satisfied) or (ii) if the Term shall expire or
terminate.

 

8.21        Capital Program. 
(a)  For
purposes of this Lease, the following terms have the following meanings:

 

“Capital
Program Work” means, collectively, the Phase I Capital Program Work and the
Phase II Capital Program Work.

 

“Phase I
Capital Program Work” means the work, substantially similar in scope and
kind to the work described in Exhibit U annexed hereto, it being
acknowledged by Tenant that various elements of such work may change.

 

“Phase II
Capital Program Work” means the work substantially similar in scope and
kind to the work described in Exhibit V annexed hereto, it being
acknowledged by Tenant that various elements of such work may change.

 

“Phase I
Target Date” means September 1, 1996, provided, that the Phase I
Target Date shall be postponed by one day for each day Landlord is delayed in
substantially completing the Phase I Capital Program by reason of either Force
Majeure or Tenant Delay.

 

“Phase II
Target Date” means December 31, 1997, provided, that the Phase II
Target Date shall be postponed by one day for each day Landlord is delayed in
substantially completing the Phase II Capital Program by reason of either Force
Majeure or Tenant Delay.

 

(b)           Landlord, at Landlord’s expense,
shall perform the Capital Program Work. Landlord shall use reasonable good
faith efforts to substantially complete the Phase I Capital Program Work on or
prior to the Phase I Target Date and the Phase II Target Date.

 

(c)           If Landlord shall fail to
substantially complete the Phase I Capital Program Work on or before the Phase
I Target Date, as such date may be extended by one or more events of Force
Majeure and Tenant Delay (the “Phase I Delay”), then as Tenant’s sole remedy
for such failure Tenant shall be entitled to a credit against the Rent equal to
the product of (x) the appropriate Rent Factor in effect from time to time
during the period of the Phase I Delay, (y) the rentable square footage of the
Blocks that comprise the Premises, from time to time, during the occurrence of
the Phase I Delay and (z) 20%. As used herein the term “Rent Factor” shall mean
$37.00 through and including July 31, 2001; $40.00 from August 1, 2001 through
and including December 31, 2006; and $44.00 from January 1, 2007 through and
including the Expiration Date.

 

113

 

(d)           If Landlord shall fail to
substantially complete the Phase II Capital Program Work on or before the Phase
II Target Date as such date may be extended by one or more events of Force
Majeure or Tenant Delay (the “Phase II Delay”) then as Tenant’s sole
remedy for such failure, Tenant shall be entitled to a credit against Rent
equal to the product of (x) the appropriate Rent Factor in effect from time to
time during the period of the Phase II Delay, (y) the rentable square footage
of the Blocks that comprise the Premises from time to time during the
occurrence of the Phase II Delay and (z) 20%. Notwithstanding any provision
herein to the contrary, if Tenant is entitled to a credit against Rent as a
result of a Phase I Delay and a Phase II Delay during the same period of time,
Tenant shall only be entitled to a Rent Credit for the Phase I Delay and no
Rent Credit for the Phase II Delay.

 

(e)           In the event of any dispute between
Landlord and Tenant with respect to the appropriateness of any credit due under
this Section 8.21, such dispute may be submitted by either Landlord or
Tenant to arbitration pursuant to Section 9.03 hereof.

 

8.22        Elevator Reconfiguration.  (a)  Promptly after the request of Tenant,
Landlord shall, at the cost and expense of Tenant, perform or caused to be
performed the work (“Elevator Reconfiguration”) in order to extend down
to the concourse level of the Building the elevators which service the Blocks,
including, without limitation, any appropriate reconfiguration of the areas in
the concourse level of the Building. Landlord shall request bids for the
Elevator Reconfiguration Work from at least three (3) contractors approved by
Tenant. Landlord will review with Tenant all responses to the bid packages and
will cooperate with Tenant in the negotiating and modifying the bids.
Acceptance by Landlord of the contract for the Elevator Reconfiguration Work
will be subject to Tenant’s reasonable approval. Without first obtaining
Tenant’s consent, Landlord may not modify, or consent to any material change to
the contract for the Elevator Reconfiguration Work nor may Landlord dismiss the
contractor except for commercially reasonable cause. Landlord will cooperate
with Tenant and provide status reports as to the Elevator Reconfiguration Work
and will allow Tenant’s consultants to inspect such work from time to time. At
the request of Tenant, the Elevator Reconfiguration may be performed for one or
more elevators which service the Block at one or more times during the Term.

 

(b)           Bills shall be rendered monthly
covering work performed by the Landlord during the preceding month. In addition
to being reimbursed for its. actual out of pocket cost, in connection with the
Elevator Reconfiguration, Tenant shall pay to Landlord a construction
supervision fee of 2% of the amount payable pursuant to the Elevator
Reconfiguration Contract to reimburse Landlord for its internal supervisory
costs in connection with such work. All amounts payable by Tenant for Elevator
Reconfiguration to be done by Landlord pursuant to this Section 8.22
shall be paid by Tenant as required by the contract for the Elevator
Reconfiguration (the “Elevator Reconfiguration Contract”) and otherwise
within fifteen (15) days after the submission to Tenant of statements, bills or
invoices therefore and accompanied by a certificate from Landlord and
Landlord’s Registered Architect or Landlord’s project manager stating that such
portion of the Elevator Reconfiguration Work has been substantially completed
or substantially installed in accordance with Tenant’s approved design

 

114

 

drawings and specifications.
Prior to the final payment by Tenant, in addition to the requirements set forth
in this Section 8.22(b) above, Landlord shall furnish to Tenant to the
extent not previously furnished to Tenant a certificate from an executive
officer of Landlord and Landlord’s Registered Architect stating that the
Elevator Reconfiguration Work has been substantially completed in substantial
conformity with Tenant’s approved design drawings and specifications. Such
statements, bills or invoices shall be conclusive and binding on Tenant unless
Tenant shall notify Landlord within thirty (30) days after its receipt of such
statement, bill or invoice that it disputes the correctness thereof, specifying
the particular respects in which the statement, bill or invoice is claimed to
be incorrect. Pending the resolution of such dispute by agreement between the
parties or otherwise, Tenant shall pay all amounts due in accordance with the
statement, bill or invoice, but such payment shall be without prejudice to
Tenant’s right to dispute same. If the dispute shall be resolved in Tenant’s
favor, Landlord shall, within five (5) days after Tenant’s demand pay Tenant
the amount of the overpayment, if any, resulting from Tenant’s compliance with
such statement, bill or invoice. In the event of any dispute between Landlord
and Tenant with respect to any payment due under this Section 8.22, such
dispute’ may be submitted by either Landlord or Tenant to arbitration pursuant
to Section 9.03 hereof.

 

(c)           Landlord shall not require Tenant to
restore the elevators and the concourse level of the Building to the condition
which existed immediately prior to the reconfiguration thereof.

 

(d)           Notwithstanding any provision herein
to the contrary (i) Tenant will not be required to indemnify landlord or any
other Indemnified Party as a result of any injury or damage incurred as a
result of the performance of the Elevator Reconfiguration Work unless caused by
the negligence of Tenant, its Affiliates, Related Service Providers or the
Tenant Group and (ii) provided, that Tenant pays all sums that are due
for the performance of the Elevator Reconfiguration Work in accordance with the
provisions of Section 8.22, Tenant shall not be required to remove any
mechanics liens that arise out of Landlord’s performance of the Elevator
Reconfiguration Work. Any review or approval by Tenant of plans and
specifications with respect to the Elevator Reconfiguration Work is solely for
Tenant’s benefit, and without any representation or warranty to Landlord with
respect to the adequacy, correctness or efficiency thereof, its compliance with
Laws or otherwise.

 

8.23        Force Majeure. 
If, by reason of strike, lockouts or other labor
or industrial troubles, governmental pre-emption in connection with a national
emergency, any rule, order or regulation of any governmental agency applicable
to the Building or to the party obligated to perform, conditions of supply or
demand that are affected by war or other national, state or municipal
emergency, fire or other casualty, acts of God such as (by way of example only)
tornado, earthquake, hurricane, washout or storm, civil disturbance, act of the
public enemy, riot, sabotage, blockade, embargo, explosion or any other cause
beyond Landlord’s reasonable control, whether or not similar to any of the
causes hereinabove stated (collectively, “Force Majeure”), such party
shall be unable to perform any obligation that such party is obligated to perform,
then such party’s obligation to perform shall be excused for the

 

115

 

duration of such Force Majeure,
and, except as otherwise set forth in this Lease, this Lease and the other
party’s rights and obligations hereunder shall not be affected, impaired or
excused. Notwithstanding anything to the contrary contained in this Section
8.23, any party’s failure timely to fulfill an obligation required to be
fulfilled by such party under this Lease shall not be excused or deemed to be
an event of Force Majeure if (a) said obligation is an obligation to pay money,
(b) said failure shall be attributable to such party’s lack of funds and (c)
the provisions of this Lease expressly limit the extent to which such obligations
shall be limited by Force Majeure.

 

8.24        Tenant’s Right To Perform Landlord’s Obligations.  (a)  If (i) for any reason, (other than (a) a
Casualty (except for any Casualty for which Tenant does not have or has waived
the right to cancel this Lease and Landlord has not restored the Premises or
that portion of the Building which affects the Premises prior to the Outside
Date (as such may be extended by Force Majeure as provided in Section 7.05
hereof or Tenant Delay), or (b) Tenant Delay) there is a failure to furnish any
service or install any improvement, (other than any service or improvement in
connection with the elevators in the Building) which in each case is
exclusively for the benefit of Tenant and services the Premises exclusively (“Exclusive
Services”) and as a result thereof the conduct of Tenant’s normal business
operations in a material portion of the Premises shall be materially impaired
(any or all of the foregoing hereinafter sometimes referred to as an “Interruption”),
(ii) the curing of such Interruption would require payments to be made in
connection with or work to be performed, or otherwise affect any space, outside
the Premises but would not require access to another tenant’s premises (unless
such other tenant shall consent to such access by Tenant or its agents) and
would not adversely affect any other tenant and Tenant obtains the decision of
an arbitrator in accordance with Section 9.03 that an Interruption has
occurred and Landlord does not immediately (as practicable under the
circumstances) after such arbitration decision commence and diligently
prosecute action to remedy such Interruption then, in any such event, and upon
the giving of five (5) days’ notice to Landlord (which notice shall expressly
state that Tenant intends to exercise its self-help remedy in accordance with
this Section 8.24), Tenant shall have the right (but not the obligation)
to furnish any Exclusive Services which Landlord shall have failed to furnish.
Tenant’s cure of any Interruption which will require work to be performed or
otherwise affect any Landlord Obligation Area or elsewhere outside the Premises
shall be effected by Landlord’s staff, its employees or its independent
contractors, unless such staff, its employees or its independent contractors fail
to respond to Tenant’s direction in which event Tenant may secure other
competent independent contractors. Without limiting the generality of any other
provision of this Lease, Tenant shall have no right to perform any obligation
or furnish any service that Landlord has failed to perform or furnish unless
(x) the cure by Tenant of such Interruption will not require Tenant to access
another tenant’s premises (unless such other tenant shall consent to such
access by Tenant or its agents), (y) such failure of Landlord results in an
Interruption and (z) the cure by Tenant of such Interruption would not
adversely affect another tenant. Nothing contained in this Article 8
shall be construed to permit Tenant to cause Landlord’s managing agent for the
Building to be removed or replaced.

 

116

 

(b)           If (i) for any reason (other than
Tenant Delay) there is a failure to furnish any of the services which Landlord
is required to furnish pursuant to this Lease, (ii) the curing of such failure
would not require work to be performed, or otherwise adversely affect any
space, in the Landlord Obligation Areas (other than corridors entirely within
the Premises and windows abutting the exterior of the Premises) or elsewhere
outside of the Premises, (iii) such failure continues for thirty (30) days
after notice by Tenant to Landlord; provided, that if the cure of such
failure cannot with due diligence be performed within such 30-day period, such
30-day period shall be extended for so long as Landlord shall be diligently
prosecuting the performance of such cure and (iv) such failure continues for
ten (10) days after a second notice by Tenant to Landlord (which notice shall
expressly state that Landlord has not performed within the time period set
forth in clause (iii) above and that Tenant intends to exercise its
self-help remedy in accordance with this Section 8.24(b)), then Tenant
shall have the right to furnish any such Landlord’s services as Landlord shall
have failed to perform.

 

(c)           If Tenant exercises its self-help
remedy in accordance with clauses (a) and (b) of this Section 8.24,
Landlord shall pay to Tenant the reasonable costs incurred by Tenant in
furnishing such Landlord’s services which Landlord failed to furnish within
thirty (30) days after receipt by Landlord of a detailed statement as to the
amount of such costs. If Landlord fails to pay such amounts within thirty (30)
days after receipt of Tenant’s statement, then such amounts will accrue
interest at the Interest Rate from the date such costs were incurred by Tenant,
until such amount is either paid by Landlord or recouped by Tenant against the
Rent. If Landlord fails to pay any such amounts when due, Tenant may recoup
such amounts due against the Rents payable hereunder. The rights granted Tenant
under this Section 8.24 shall be in addition to any other remedies
Tenant may have under this Lease and by Law except as provided in Section
6.07 hereof. Tenant will not be deemed to have taken occupancy of the
portion of the Premises solely by reason of Tenant exercising its self help
rights under this Section 8.24 with respect to an Interruption caused by
Landlord’s failure to cure an Interruption resulting from a Casualty for which
Tenant does not have or has waived the right to cancel this Lease pursuant to Section
7.05 of this Lease and Landlord has not restored the Premises or the
Building prior to the Outside Date (as extended by Force Majeure as provided in
Section 7.05 hereof or Tenant Delay.)

 

(d)           For all purposes of Section 8.24
and Section 8.25, a material portion of the Premises shall mean at least
5,000 contiguous rentable square feet of the Premises or at least 10,000
rentable square feet of the Premises (regardless of contiguity).

 

8.25        Tenant Abatement Rights.  If, for any reason
other than a Casualty or Tenant Delay, there is a failure to furnish any of the
services which Landlord is required to furnish pursuant to this Lease, or to
make any repairs or replacements which Landlord is required to make pursuant to
this Lease, or to perform any other obligation of Landlord under this Lease or
if Landlord performs any repair, replacement, alteration, addition, improvement
or installation in or about the Premises which, if any, Landlord is required to
make under this Lease (other than in connection with the exercise by Landlord
of its self-help remedy set forth in Section 4.08) and as a result of any of
the foregoing a material portion of the Premises shall

 

117

 

be untenantable (an “Eviction”)
for five (5) Business Days or ten (10) Business Days in the case of Force
Majeure after notice from Tenant, then Fixed Rent and the Additional Charges
payable under Sections 2.04 and 2.05 and the Additional Charges for
electricity which are not billed on a submetered basis shall abate solely with
respect to the portion or portions of the Premises that are untenantable from
the day after such five (5) Business Day or ten (10) Business Days in the case
of Force Majeure until such space is no longer untenantable. The rights granted
Tenant under this Section 8.25, shall be in addition to any other
remedies Tenant may have under this Lease and by Law except as provided in Section
6.07 hereof. Notwith­standing the foregoing, if Landlord fails to perform
the Elevator Reconfiguration Work, Antenna installation or Emergency Generator
work which Landlord is required to perform pursuant to this Lease, if any,
promptly as determined by an arbitrator pursuant to Section 9.03, hereof
(but subject to extension due to Casualty, Force Majeure or Tenant Delay), then
there will be deemed to be an Eviction for purposes of this Section 8.25
only with respect to 1% of the Premises).

 

8.26        Tenant Termination Rights.  If, by reason of an
Eviction, 50,000 or more rentable square feet of the Premises are untenantable
(A) for reasons other than Force Majeure for sixty (60) or more consecutive
days after notice from Tenant to Landlord, (B) for reasons other than Force
Majeure for ninety (90) or more days in any consecutive 12-month period (such
reference to ninety (90) days being deemed to refer to the number of days that
the applicable space is so untenantable after Tenant has given Landlord notice
of each occurrence of such untenantability), or (C) as a result of Force
Majeure for three hundred sixty five (365) or more consecutive days after
notice from Tenant to Landlord (such sixty (60), ninety (90) and three hundred
sixty five (365) day periods to be extended for up to an additional ninety (90)
days during which time Landlord is diligently prosecuting to cure the cause of
such untenantability), then in each such case Tenant may, by notice given to
Landlord on or before the earlier to occur of (x) the date that the applicable
portion of the Premises is rendered tenantable and (y) the date that is thirty
(30) days after the end of such sixty (60), ninety (90) or three hundred sixty
five (365) day period (as so extended), as applicable, terminate this Lease. If
Tenant timely gives a termination notice in accordance with this Section
8.26, (time being of the essence in connection with such termination
notice) this Lease shall terminate on the 20th day after such notice is given
by Tenant and Tenant shall vacate the Premises and surrender the same to
Landlord in the same manner required for surrender of the Premises on the
Expiration Date in accordance with the terms of this Lease. Upon any such
termination, Tenant’s liability for Fixed Rent and Additional Charges hereunder
with respect to the Premises shall cease as of the date of such termination,
and any prepaid portion of Rent with respect to the Premises for any period
after such date shall be refunded by Landlord to Tenant within thirty (30) days
after Landlord receives Tenant’s termination notice. In the event of any termination
of this Lease under. this Section 8.26, Tenant shall pay to Landlord the
amount, if any, due in accordance with Section 7.06 above. Any notice
given by Tenant pursuant to this Section 8.26 as to the occurrence of an
Eviction which renders all or a portion of the Premises untenantable shall not
be effective unless such notice expressly states that such notice is being
given pursuant to this Section 8.26 and that Tenant may have the right
to terminate this Lease in accordance with the provisions of this Section
8.26. The rights granted Tenant under this

 

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Section 8.26
shall be in addition to any other remedies Tenant may have under this Lease and
by Law except as provided in Section 6.07 hereof.

 

8.27        Effect of Rejection by Landlord.  Landlord and Tenant
acknowledge that this Lease is being executed and exchanged by the parties in
contemplation of a bankruptcy case involving Landlord and Landlord agrees that,
in connection with any bankruptcy case involving Landlord, Landlord shall not
reject this Lease. If, notwithstanding the agreement by Landlord in the
preceding sentence, in connection with any bankruptcy case involving Landlord,
this Lease shall be rejected by Landlord or any legal representative of
Landlord, and if Tenant shall elect to retain its rights under this Lease under
Section 365(h)(1)(A)(ii) or other then applicable provision of the Federal
Bankruptcy Code, then Tenant’s occupancy of the Premises for the remainder of
the Term shall be on all of the same terms and conditions set forth in this
Lease as though such rejection had not occurred.

 

8.28        Major Rights. 
(a)  “Major
Rights” means:

 

(i)            the rights granted
under Section 1.06;

 

(ii)           the right to use
the Premises for the Identified Ancillary Uses (except to the extent used for
such Identified Ancillary Uses by the applicable subtenant prior to the
termination of this Lease);

 

(iii)          the right to permit
any part of the Premises to be used by a Related Service Provider;

 

(iv)          the rights granted
under Section 3.01(a)(vi) allowing Tenant to contract for Extra Cleaning
in the Premises, with a cleaning contractor other than Landlord’s Cleaning
Contractor;

 

(v)           the rights granted
under Section 3.01(iii) with respect to the use of passenger cabs for
other than passenger service and to maintain a dedicated security desk in the
lobby of the Building;

 

(vi)          the right to require
Landlord to execute and deliver a non-disturbance and attornment agreement to a
Major Subtenant;

 

(vii)         the right to maintain
a partitioning of the elevator banks servicing the Block pursuant to Section
3.04;

 

(viii)        the right to
maintain interior signage pursuant to Section 8.20;

 

(ix)           the right to
maintain an Emergency Generator pursuant to Section 8.14 (except to the

extent such emergency generator was

 

119

 

                used by the applicable subtenant prior to the termination
of this Lease);

 

(x)            the rights granted
under Section 8.21 with respect to the Capital Program Work;

 

(xi)           the rights granted
under Section 8.24;

 

(xii)          the rights granted
under Section 8.25;

 

(xiii)         the rights granted
under Section 8.26; and

 

(xiv)        the rights granted
under Section 8.22 (except to the extent such Elevator Reconfiguration
was completed prior to the termination of the Lease).

 

(b)           If this Lease terminates and Tenant
has granted any Major Right to any subtenant subleasing less than all or
substantially all of the Premises, even if such subtenant has received a
non-disturbance and attornment agreement from Landlord (or is a subtenant who
Landlord elects to have attorn to Landlord in accordance with Section
5.04(d)(iii) above), then such Major Rights shall be null and void with
respect to such subtenant after the termination of this Lease.

 

8.29        Memorandum of Lease.  Landlord and Tenant
shall immediately after the execution of this Lease, execute, acknowledge and
deliver to the other a memorandum of lease in recordable form and otherwise in
a form reasonably acceptable to Landlord and Tenant. Upon the request of either
party, a memorandum of any amendment to this Lease shall likewise be executed,
acknowledged and delivered to the other party. Recording, filing and like
charges imposed by any governmental agency to effect the recording of any such
memorandum shall be paid by Tenant. Upon termination of this Lease, Tenant
shall execute, acknowledge and deliver to Landlord on request of Landlord an
instrument in recordable form evidencing termination of this Lease and
sufficient to discharge any memorandum thereof recorded and Tenant shall pay
all recording, filing and like charges imposed by any governmental agency to
effect such recording.

 

ARTICLE 9

 

Renewal
Right

 

9.01        Renewal Right. 
(a) 
Provided that on the date Tenant exercises the Renewal Option (i) this
Lease shall not have been terminated, (ii) Tenant shall not be in default under
this Lease beyond all applicable notice and grace periods, and (iii) Tenant,
together with any Affiliate of Tenant (and any Related Service Provider of
Tenant occupying space leased by

 

120

 

Tenant or an Affiliate of
Tenant), shall be in actual occupancy of not less than 70% of the rentable
square feet of the Blocks, Tenant shall have the option (the “Renewal Option”)
to extend the term of this Lease for one additional five (5) year period (the “Renewal
Term”), to commence at the expiration of the initial Term.

 

(b)           The Renewal Option shall be exercised
with respect to all space then included in the Premises and shall be exercisable
by Tenant giving notice to Landlord (the “Renewal Notice”) at least 18
months before the last day of the initial Term. If Tenant shall not give
Landlord the Renewal Notice at the time and in the manner set forth above, the
Renewal Option shall terminate and be deemed waived by Tenant. Time is of the
essence with respect to the giving of the Renewal Notice.

 

9.02        Renewal Rent and Other Terms.  (a)  The Renewal Term shall be upon all of the
terms and conditions set forth in this Lease, except that (i) Fixed Rent and
Additional Charges for Tax Payments and Operating Payments, shall be as
determined pursuant to the further provisions of this Section 9.02; (ii)
Tenant shall accept the Renewal Premises in its “as is” condition at the
commencement of the Renewal Term, and any provisions of this Lease with respect
to initial work to be performed by Landlord, payment of a work allowance and
any free rent period for Fixed Rent and Additional Charges shall not be
applicable during the Renewal Term, provided, that Tenant’s acceptance
of the Renewal Premises in its “as is” condition at the commencement of the
Renewal Term, shall not relieve Landlord of its obligations under this Lease
except with respect to Landlord’s Work; and (iii) Tenant shall have no option
to renew this Lease beyond the expiration of the Renewal Term.

 

(b)           The per annum Fixed Rent and
Additional Charges for Tax Payments and Operating Payments for the Premises for
the Renewal Term shall be the greater of (i) the annual Discounted Fair Market
Rent and (ii) the annual Fixed Rent (less, with respect to the Blocks, eighteen
cents per rentable square foot per annum) and annual Additional Charges for Tax
Payments and Operating Payments payable immediately prior to the Expiration
Date. “Fair Market Fixed Rent” means the fixed annual rent that, as of
the commencement of the Renewal Term, a willing lessee would pay and a willing
lessor would accept for the Premises during the Renewal term in an arms-length
transaction, taking into account all relevant factors at the time in question
including the Fair Market Additional Rent. “Fair Market Additional Rent”
means (x) the annual Tax Payments which would be payable with a Base Tax Amount
equal to the sum of one-half of the Taxes for the Tax Year commencing on July 1,
2011 and one half of the Taxes for the Tax Year commencing on July 1, 2012, and
(y) the annual Operating Payments which would be payable if the Base Operating
Year were the calendar year 2012. “Discounted Fair Market Rent” means
(i) the Fair Market Fixed Rent multiplied by the Renewal Percentage plus (ii)
the Fair Market Additional Rent. “Renewal Percentage” means 95%.

 

(c)           If Tenant timely exercises the
Renewal Option, Landlord shall notify Tenant (the “Rent Notice”) within
thirty (30) days after Landlord’s receipt of the Renewal Notice of Landlord’s
determination of the Discounted Fair Market Rent (“Landlord’s

 

121

 

Determination”).
If the annual Discounted Fair Market Rent in Landlord’s Determination is less
than the annual Fixed Rent (less, with respect to the Blocks, eighteen cents
per rentable square foot per annum) and Additional Charges payable immediately
prior to the Expiration Date, then Tenant shall pay annual Fixed Rent and
Additional Charges for Tax Payments and Operating Payments for the Renewal Term
in an amount equal to the annual Fixed Rent (less, with respect to the Blocks,
eighteen cents per rentable square foot per annum) payable immediately prior to
the Expiration Date and Additional Charges for Tax Payments and Operating
Payments, using the Same Base Tax Amount and Base Operating Year as prior to
the Expiration Date. If the annual Discounted Fair Market Rent in Landlord’s
Rent Notice is greater than the annual Fixed Rent and Additional Charges for
Tax Payments and Operating Payments payable immediately prior to the Expiration
Date, Tenant shall notify Landlord (“Tenant’s Notice”), within thirty
(30) days after Tenant’s receipt of the Rent Notice, whether Tenant accepts or
disputes Landlord’s Determination, and if Tenant disputes Landlord’s
Determination, Tenant’s Notice shall set forth Tenant’s determination of the
Discounted Fair Market Rent (“Tenant’s Determination”). If Tenant fails
to give Tenant’s Notice within such thirty (30) day period, Tenant shall be
deemed to have accepted Landlord’s Determination.

 

(d)           If Tenant timely disputes Landlord’s
Determination and Landlord and Tenant fail to agree as to the Discounted Fair
Market Rent within twenty (20) days after Landlord’s receipt of Tenant’s
Determination, then the Discounted Fair Market Rent shall be determined as
follows: Such dispute shall be resolved by arbitration conducted in accordance
with the Real Estate Arbitration Rules (Expedited Procedures) of the AAA,
except that the provisions of Section 9.03 shall supersede any
conflicting or inconsistent provisions of said rules.

 

(e)           If Tenant disputes Landlord’s
Determination and if the final determination of Discounted Fair Market Rent
shall not be made on or before the first day of the Renewal Term, then pending
such final determination, Tenant shall pay, as Fixed Rent and Additional
Charges for Tax Payments and Operating Payments for the Renewal Term, an amount
equal to the greater of the annual Fixed Rent (less, with respect to the
Blocks, eighteen cents per rentable square foot per annum) and Additional
Charges for Tax Payments and Operating Payments then payable by Tenant under
the Lease and Tenant’s Determination. If, based upon the final determination of
the Discounted Fair Market Rent, the Fixed Rent and Additional Charges for Tax
Payments and Operating Payments made by Tenant for such portion of the Renewal
Term were less than the Discounted Fair Market Rent therefor, Tenant shall pay
to Landlord the amount of such deficiency within thirty (30) days after demand
therefor together with interest payable from the date such deficiency was due
until the date paid.

 

(f)            Notwithstanding the foregoing
provisions of this Article 9, if, at any time after Tenant’s delivery of
the Renewal Notice and before the commencement of the Renewal Term, this Lease
shall be terminated, then such Renewal Notice shall be null and void and of no
further force and effect and Tenant shall have no further right or option to
extend the Term.

 

122

 

9.03        Arbitration. 
(a)  If
this Lease shall require any dispute (other than as provided in Section
2.05(j)(ii)) between Landlord and Tenant to be settled by arbitration, then
each party shall have the right to submit such dispute to arbitration; which
shall be conducted in Manhattan in accordance with the Commercial Arbitration
Rules (Expedited Procedures) of the AAA, except that the provisions of this Section
9.03 shall supersede any conflicting or inconsistent provisions of said
rules. The party requesting arbitration shall do so by giving notice to that
effect to the other party, specifying in said notice the nature of the
dispute,and that said dispute shall be determined in the City of New York, by a
panel of three (3) arbitrators in accordance with this Section 9.03.
Landlord and Tenant shall each appoint their arbitrator within five (5) days
after the giving of notice by either party. If either Landlord or Tenant shall
fail timely to appoint an arbitrator, the appointed arbitrator shall select the
second arbitrator, who shall be impartial, within five (5) days after such
party’s failure to appoint. The arbitrators so appointed shall meet and shall,
if possible, determine such matter within ten (10) days after the second
arbitrator is appointed and their determination shall be binding on the
parties. If for any reason such two arbitrators fail to agree on such matter
within such period of ten (10) days, then either Landlord or Tenant may request
ENDISPUTE/JAMS (or any organization which is the successor thereto or any other
arbitration or mediation organization, including, without limitation, the AAA,
which will provide an impartial arbitrator that is an active or retired state
or federal judge) to appoint an arbitrator who shall be impartial within seven
(7) days of such request and both parties shall be bound by any appointments so
made within such 7-day period. The third arbitrator (and the second arbitrator
if selected by the other arbitrator as provided above) only shall subscribe and
swear or affirm to an oath fairly and impartially to determine such dispute.
Within seven (7) days after the third arbitrator has been appointed, each of
the first two arbitrators shall submit their respective determinations to the
third arbitrator who must select one or the other of such determinations
(whichever the third arbitrator believes to be correct or closest to a correct
determination) within seven (7) days after the first two arbitrators shall have
submitted their respective determinations to the third arbitrator, and the
selection so made shall in all cases be binding upon the parties, and judgment
upon such decision may be entered into any court having jurisdiction. In the
event of the failure, refusal or inability of an arbitrator to act, a successor
shall be appointed within ten (10) days as hereinbefore provided. In the case
of all disputes to be determined by arbitration in accordance with this Section
9.03, the arbitrator shall be experienced in the issue with which the arbitration
is concerned and shall have been actively engaged in such field for a period of
at least ten (10) years before the date of his appointment. The third
arbitrator shall be an active or retired New York State or federal judge
experienced with the subject matter with which the arbitration is concerned and
shall schedule a hearing where the parties and their advocates shall have the
right to present evidence, call witnesses and experts and cross-examine the
other party’s witnesses and experts. Either party shall have the right, at any
time, to make a motion to the third arbitrator to grant summary judgment as to
any question of law.

 

(b)           Landlord and Tenant agree to sign all
documents and to do all other things necessary to submit any such matter to arbitration
and further agree to, and hereby do, waive any and all rights they or either of
them may at any time have to revoke their

 

123

 

agreement hereunder to submit
to arbitration and to abide by the decision rendered thereunder. For such
period, if any, as this agreement US-arbitrate is not legally binding or the
arbitrator’s award is not legally enforceable, the provisions requiring
arbitration shall be deemed deleted and matters to be determined by arbitration
shall be subject to litigation.

 

(c)           Except as otherwise specifically
provided herein, the losing party shall pay the fees and expenses for all
arbitrators.

 

ARTICLE 10

 

Tenant
Antenna

 

10.01      Tenant Antenna.  (a)  Tenant shall furnish to Landlord a completed
Rooftop Installation Questionnaire substantially in the form of Exhibit X
to this Lease with respect to the Antenna (or any modification thereof). Tenant
may, subject to and in accordance with the provisions of this Section 10.01,
(i) use those portions of the roof of the Building designated on Exhibit Y
attached hereto to install, maintain and operate one satellite dish antenna and
related equipment, mountings and support structures (collectively, with all
wiring and cabling the “Antenna”) in accordance with Exhibit Y
and to run lines therefrom through the Building’s shafts, conduits and plenums
into the Premises in accordance with Exhibit Y as shall be reasonably
required in connection with the operation of the Antenna subject to Landlord’s
prior reasonable approval in all respects and (ii) to run lines through the
Building’s shafts, conduits and plenums (not to exceed two inch conduit) to its
antenna located at 75 Rockefeller Plaza, New York, New York (“75 Rock
Conduit”). Tenant’s use of the roof of the Building is a non exclusive use
and Landlord may permit the use of any other portion of the roof by any other
person for any use including installation of other antennas and related
equipment and support structures. Tenant shall use all reasonable efforts to
ensure that its use of the roof does not impair such other person’s data
transmission and reception via its respective antennas and support equipment
including, without limitation, as a precondition to installation of the
Antenna, Tenant shall cause an intermodulation test to be performed to insure
that the Antenna does not interfere with any other antenna. If Tenant’s
construction, installation, maintenance, repair, operation, or use of the
Antenna shall interfere with the rights of landlord (including, without
limitation, Landlord’s right reasonably to use the remainder of the roof) or
other tenants in the Building or if after the date of this Lease other tenants’
construction, installation, maintenance, repair, operation or use of their
antenna shall interfere with Tenant’s Antenna; Tenant shall cooperate with
Landlord or such other tenants in eliminating such interference, provided,
that the cost of remedying such interference shall be borne by the party which
is causing such interference, unless such party was using the roof in the
manner causing such interference prior in time to the use of the Antenna
causing such interference by Tenant, in which case the cost of remedying such
interference shall be borne by Tenant. Except if Landlord reasonably determines
that another tenant in the Building was using the roof in a manner causing such
interference prior in time to the use of the Antenna by Tenant, Landlord shall
at the request and cost of Tenant use commercially reasonable efforts

 

124

 

(which may include commencement
and prosecution with reasonable diligence appropriate legal proceeding) to
prevent other tenants in the Building from interfering with or impairing
Tenant’s data reception via Tenant’s Antenna. Tenant shall secure and keep in
full force and effect, form and after the time Tenant begins construction and
installation of the Antenna and the 75 Rock Conduit, such supplementary
insurance with respect to the Antenna and the 75 Rock Conduit as Landlord may
reasonably require, provided, that the same shall not be in excess of
that which would customarily be required from time to time by landlords of
first class midtown Manhattan office buildings, with respect to similar
installations.

 

(b)           Tenant shall comply with all Laws
applicable to the Antenna and the 75 Rock Conduit. Landlord makes no.
warranties as to the permissibility of an Antenna and the 75 Rock Conduit under
applicable Laws, the suitability of the roof of the Building for the installation
thereof or the need for consent from the owner of 75 Rockefeller Plaza, New
York, New York or otherwise for the installation thereof. If Landlord’s
structural engineer deems it reasonably necessary that there be structural
reinforcement of the roof or other structural requirements in connection with
the installation of the Antenna, Landlord shall perform same at Tenant’s
reasonable cost within a commercially reasonable period of time taking into
account the nature of the work after Tenant delivers to Landlord final plans
and specifications with respect to the installation of the Antenna and Tenant
shall not perform any such installation prior to the completion of any such
structural reinforcement or other structural requirements; provided,
that, if in connection with such installation any asbestos must be removed from
the shafts and conduits in the Building, landlord shall remove same, at
Landlord’s expense (subject to reimbursement as part of Operating Expenses).
The installation of the Antenna and the 75 Rock Conduit shall be a Material
Alteration subject to Article 4 (except that Landlord shall not
unreasonably withhold its consent thereto). For the purpose of installing,
servicing or repairing the Antenna, Tenant shall have access to the roof of the
Building at reasonable times upon reasonable notice to Landlord and Landlord
shall have the right to require, as a condition to such access, that Tenant (or
its employee, contractor or other representative) at all times be accompanied
by a representative of Landlord whom Landlord shall make available upon
reasonable notice (except that such accompaniment shall be required in the case
of an emergency only if practicable). All work required to be performed to the
roof and other parts of the Building outside of the Premises in connection with
the installation of the Antenna and the 75 Rock Conduit (including, without
limitation, any roof penetrations, structural modifications and reroofing)
shall be performed by Landlord at Tenant’s expense.

 

(c)           Tenant’s consumption (KW and KWHR) of
electricity for use of the Antenna shall be reasonably estimated by Landlord,
and Tenant shall pay the Actual Charge for such consumption. The Actual Charge
for Tenant’s consumption of electricity for use of the Antenna shall be adjusted
by Landlord from time to time as provided in Section 2.07(d) and any
good faith disagreement by Tenant with Landlord’s determinations of the Actual
Charge shall be determined in accordance with Section 2.07(e).

 

(d)           Tenant shall be responsible for all
costs and expenses for repairs and maintenance of the roof or any other part of
the Project which directly result from

 

125

 

Tenant’s use of the roof for
the construction, installation, maintenance, repair, operation, and use or
removal of the Antenna and the 75 Rock Conduit.

 

(e)           Notwithstanding anything to the
contrary contained in this Section 10.01, Landlord may, at Tenant’s
expense (or at Landlord’s expense if Landlord is accommodating another tenant or
benefitting Landlord), on not less than thirty (30) days’ prior notice,
relocate the Antenna to another location on the roof of the Building, provided,
that Landlord does not, except during such relocation, either materially
interfere with or adversely affect the receipt of and/or transmission of
microwaves or other similar signals, and Tenant shall cooperate in all
reasonable respects with Landlord in any such relocations. Tenant shall
reimburse Landlord for the reasonable actual out of pocket cost thereof within
thirty (30) days after receipt of statements therefor.

 

(f)            The rights granted in this Section
10.01 are given in connection with, and as part of the rights created
under, this Lease and are not separately transferable or assignable. Tenant
shall use the Antenna and the 75 Rock Conduit solely in connection with
activities permitted under Section 1.05. Tenant shall not sell any
services arising out of the use of the Antenna and the 75 Rock Conduit (i) to
any other tenant other than Affiliates of Tenant or (ii) to the general public.

 

(g)           If the installation of the Antenna or
any act or omission relating thereto should revoke, negate or in any manner
impair or limit any roof warranty, or guaranty obtained by Landlord, then
Tenant shall reimburse Landlord for any loss or damage sustained or costs or
expenses incurred by Landlord as a result of such revocation, negation,
impairment or limitation with thirty (30) days after receipt of statements
therefor.

 

(h)           In no event shall Tenant run any
lines from Tenant’s Antenna to any location other than space leased by Tenant
in the Building.

 

ARTICLE 11

 

Security
Deposit

 

11.01      The terms defined below shall, for the purposes of this Article
11, have the meanings herein specified:

 

(i)            “Remaining
Additional Charge” shall mean an amount equal to the aggregate of the
Additional Charges pursuant to Sections 2.04, 2.05 and 2.07 payable for
the remainder of the term of this Lease commencing on the date in question,
without giving effect to any abatements of, recoupments of or offsets against
Rent that Tenant may be entitled to pursuant to the terms of this Lease other
than those theretofore determined to be due to Tenant in

 

126

 

accordance
with the provisions of this Lease including, without limitation, the rent
credit provided in Section 2.02(a) hereof (for purposes of computing the
Additional Charges pursuant to Section 2.04, 2.05 and 2.07 payable for
the remainder of the term of this Lease for purposes of this Subsection
11.01(i), the monthly amount of Additional Charges pursuant to Section
2.04, 2.05 and 2.07 payable by Tenant shall be deemed to be the amount of
Additional Charges pursuant to Section 2.04, 2.05 and 2.07 payable by
Tenant and applicable to the month in which the date in question occurs,
without giving effect to any abatement or right of setoff; provided, however,
that if such date occurs during the Base Operating Year or the Tax Year in
which the Base Tax Amount applies, such deemed monthly amount with respect to Sections
2.04 and 2.05 shall be the amount reasonably estimated by Landlord (subject
to arbitration, at Tenant’s election, pending the result of which Landlord’s
estimate shall govern) to be payable by Tenant for the month immediately
following the end of the Base Operating Year and the Tax Year in which the Base
Tax Amount applies, without giving effect to any abatement or right of setoff).

 

(ii)           “Remaining Fixed
Rent” shall mean an amount equal to the aggregate of the Fixed Rent payable
for the remainder of the term of this Lease from and after the date in
question, without giving effect to any abatements of, recoupments of or offsets
against Rent that Tenant may be entitled to pursuant to the terms of this Lease
(other than those theretofore determined to be due to Tenant in accordance with
the provisions of this Lease including, without limitation, the rent credit
provided in Section 2.02(a) hereof).

 

(iii)          “Security”
shall mean the full amount of the Security Deposit or the Security Letter, as
the case may be.

 

(iv)          “Security Deposit”
shall mean a cash deposit made by Tenant pursuant to the terms hereof, together
with any interest earned thereon.

 

(v)           “Security Letter”
shall mean a letter of credit that meets the requirements set forth in Section
11.03(b) hereof.

 

(vi)          “Tangible Net
Worth” shall mean the owner’s equity of the entity in question, computed in
accordance with generally accepted

 

127

 

accounting
principles, specifically excluding goodwill from the calculation thereof.

 

11.02      Tenant shall be required to provide Landlord with, at
Tenant’s option exercised from time to time, a Security Deposit or, at Tenant’s
election, a Security Letter as a condition to the assignment of this Lease or
sublease pursuant to Section 5.01(b) without the consent of Landlord (a
“Section 5.01(b) Assignment”) if:

 

(i)            the then Tenant under this Lease
(whether directly or by a guarantee as provided in Section 5.01(b)) after
giving effect to such Section 5.01(b) Assignment has a Tangible Net Worth of
less than One Hundred Fifty Million ($150,000,000.00) Dollars as of the date of
such Section 5.01(b) Assignment, then, such Tenant shall provide Landlord with
a Security Deposit or a Security Letter in an amount equal to the Remaining
Fixed Rent, measured as of the date of such 5.01(b) Assignment or such later
date on which neither Tenant’s Tangible Net Worth, nor that of any guarantor of
Tenant’s obligations under this Lease as provided in Section 5.01(b),
shall be at least One Hundred Fifty Million
($150,000,000.00) Dollars, for the period commencing on (x) the date
of such 5.01(b) Assignment or such later date on which neither Tenant’s
Tangible Net Worth nor that of any guarantor (nor substitute guarantor) of
Tenant’s obligation under this Lease as provided in Section 5.01(b)
shall be less than One Hundred Fifty Million ($150,000,000.00) Dollars and
ending on (y) the date on which Tenant or any guarantor (or substitute
guarantor) of Tenant’s obligations under this Lease as provided in Section
5.01(b) establishes that it has achieved a Tangible Net Worth of One Fifty Hundred Million ($150,000,000.00) Dollars or more;
provided, however, that Tenant shall again be required to provide
the appropriate Security Deposit or Security Letter, required pursuant to this Section
11.02 if neither Tenant nor any guarantor (or substitute guarantor) of
Tenant’s obligations under this Lease as provided in Section 5.01(b)
shall have a Tangible Net Worth equal to or in excess of One Hundred Fifty
Million ($150,000,000.00) Dollars at any time; or

 

(ii)           the then Tenant under this Lease
(whether directly or by a guarantee as provided in Section 5.01(b)) has
a Tangible Net Worth of One Hundred Fifty Million
($150,000,000.00) Dollars or more, but less than Two Hundred Fifty Million ($250,000,000.00) Dollars as of
the date of such Section 5.01(b) Assignment, then Tenant shall provide Landlord
with a Security Deposit or a Security Letter in an amount equal to the 60% of
the Remaining Fixed Rent, measured as of the date of such 5.01(b) Assignment or
such later date on which neither Tenant’s Tangible Net Worth nor that of any
guarantor of Tenant’s obligations

 

128

 

under this
Lease as provided in Section 5.01(b) shall be at least Two Hundred Fifty Million ($250,000,000.00) Dollars, for the
period commencing on (x) the date of such 5.01(b) Assignment or such later date
on which neither Tenant’s Tangible Net Worth nor that of any guarantor of
Tenant’s obligations under this Lease as provided in Section 5.01(b)
shall be at least Two Hundred Fifty Million
($250,000,000.00) Dollars and ending on (y) the date on which Tenant
or any guarantor (or substitute guarantor) of Tenant’s obligations under this
Lease as provided in Section 5.01(b) establishes that it has achieved a
Tangible Net Worth of Two Hundred Fifty Million
($250,000,000.00) Dollars or more; provided, however,
that Tenant shall again be required to provide the appropriate Security Deposit
or Security Letter required pursuant to Section 11.02 if neither Tenant
nor any guarantor (nor substitute guarantor) of Tenant’s obligations under this
Lease as provided in Section 5.01(b) shall have a Tangible Net Worth
equal to or in excess of Two Hundred Fifty Million
($250,000,000.00) Dollars.

 

At all times
that Security is required to be provided by Tenant to Landlord, the Security
may be (xx) reduced at the end of each calendar year upon written request of
Tenant, provided, that Tenant is not then in default under this Lease
beyond applicable notice and cure period, or (yy) increased by Landlord upon
any Offer Space being added to the Premises upon written notice from Landlord
to Tenant, in each case by recalculating the Security required to be provided
by Tenant in accordance with the formula provided in the applicable clause (i)
and (ii) of this Section 11.02; whereupon, (aa) if Tenant has provided
Landlord with a Security Deposit, Landlord shall return to Tenant the required
reduction in the Security (provided Tenant is not then in monetary or material
nonmonetary default of this Lease, in which case, such Security reduction shall
be returned to Tenant if and when such default is cured) or Tenant shall pay to
Landlord the required increase in the Security, as applicable and (bb) if
Tenant shall have provided Landlord with a Security Letter, such Security
Letter shall be replaced by a new Security Letter in the amount of the required
Security (provided, in the case where the Security Letter is decreased, Tenant
is not then in monetary or material nonmonetary default of this Lease, in which
case, such Security Letter shall be replaced with such new Security Letter if
and when such default is cured). Tenant at any time may substitute a Security
Letter for the Security Deposit or a Security Deposit for a Security Letter. At
any one time, Tenant will only be required to maintain the security provided
under clause (i) or (ii) of this Section 11.02.

 

11.03      (a)  If Tenant defaults beyond
any applicable notice and grace period in the full and prompt payment and
performance of any Tenant’s covenants and obligations under

 

129

 

this Lease, including, but not
limited to, the payment of Fixed Rent and Additional Charges, Landlord may, but
shall not be required to, use, apply or retain the whole or any part of the
Security for the payment of any Fixed Rent and Additional Charges or any other
sums as to which Tenant is in default beyond any applicable notice and grace
period or for any sum which Landlord may expend or may be required to expend by
reason of Tenant’s default, beyond any applicable notice or cure period 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 accrue before or after summary proceedings
or other re-entry by Landlord. If Landlord shall so use, apply or retain the
whole or any part of the Security, Tenant shall within three Business Days
after demand deposit with Landlord a sum equal to the amount so used, applied
or retained, as Security as aforesaid, failing which Landlord shall have the
same rights and remedies as for the non-payment of Fixed Rent beyond the
applicable grace period. The Security, or any balance or portion thereof to
which Tenant is entitled, shall be returned or paid over to Tenant within
thirty (30) days following the occurrence of the applicable event described in Section
11.02 hereof for the return of such Security, the Expiration Date or the
early termination of this Lease, as applicable. In the event of any sale,
transfer or leasing of Landlord’s interest in the Building, whether or not in
connection with a sale, transfer or leasing of the Land to a vendee, transferee
or lessee, Landlord shall have the right to transfer the unapplied part of the
Security to which Tenant is entitled to the vendee, transferee or lessee and,
provide that such transferee shall assume the obligations of Landlord under
this Article 11, Landlord shall be released by Tenant from all liability
for the return or payment thereof, and Tenant shall look solely to the new
Landlord for the return or payment of the same. The provisions of the preceding
sentence shall apply to every subsequent sale, transfer, leasing or other
cessation of the interest of such successors in the Building, whether in whole
or in part, provided such successor pays over any unapplied part of said
Security to any vendee, transferee or lessee of the Building, and that such
transferee shall assume the obligations of Landlord under this Article 11,
whereupon such successor shall be relieved of all liability with respect
thereto. Landlord shall not transfer the unapplied portion of the Security
except as provided in this Section 11.03(a) nor shall Landlord pledge,
hypothecate or otherwise collaterally assign such Security other than a
Superior Mortgagee in which case the rights of such Superior Mortgagee shall be
no greater than the rights of Landlord with respect to such Security. Except in
connection with a permitted assignment of this Lease, Tenant shall not assign
or encumber or attempt to assign or encumber the monies deposited herein as
Security or any interest thereon to which Tenant is entitled, and neither Landlord
not its successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance. In any event, in
the absence of evidence reasonably satisfactory to Landlord of an assignment of
the right to receive the Security, or the remaining balance thereof, Landlord
may return the Security to the original Tenant regardless of one or more
assignments of this Lease. Any Security Deposit made by Tenant hereunder shall
be deposited by Landlord in a separate interest bearing account at a banking
institution located in New York State insured by a federal agency and otherwise
reasonably acceptable to Landlord and Tenant or which is required by the
Superior Mortgagee which is not an Affiliate of Landlord, and at the request of
Tenant, shall be invested in securities issued or guaranteed by the United
States of America, with a term not to

 

130

 

exceed three months. Landlord
shall pay to Tenant annually all interest earned and payments on a Security
Deposit held by Landlord.

 

(b)           (i)            In lieu of the cash Security Deposit
provided for in this Article 11, Tenant may be at any time during the
term hereof deliver to Landlord and, shall, except as otherwise provided
herein, maintain in effect at all times when required hereunder, an
unconditional irrevocable letter of credit, in form and substance reasonably
satisfactory to Landlord in the amount of the Security required pursuant to
this Lease, issued by a banking corporation reasonably satisfactory to Landlord
and having its principal place of business or its duly licensed branch or
agency in the State of New York. Such letter of credit shall have an expiration
date no earlier than the first anniversary of the date of issuance thereof and
shall be automatically renewed from year to year unless terminated by the
issuer thereof by notice to Landlord given not less than thirty (30) days prior
to the expiration thereof and shall be transferable by Landlord without the
consent of Tenant, subject to the limits contained in Section 11.03
hereof, or the issuer of the Security Letter at the cost of the Tenant. Except
as otherwise provided herein, Tenant shall, throughout the term of this Lease
deliver to, in the event of the termination of any such letter of credit,
replacement letters of credit in lieu thereof (each such letter of credit and
such extensions or replacements thereof, as the case may be, is herein referred
to as a “Security Letter”) no later than thirty (30) days prior to the
expiration date of the preceding Security Letter. The term of such Security
Letter shall be not less than one year and shall be automatically renewable
from year to year as aforesaid. If Tenant shall fail to obtain any replacement
of a Security Letter within the time limits set forth in this Subsection
(b)(i), Landlord may draw down the full amount of the existing Security
Letter and retain the same as security hereunder in which case the proceeds
thereof shall be held and applied as a Security Deposit pursuant to this Article
11. Each Security Letter shall provide that such letter of credit may be
drawn down by Landlord upon presentation to the issuing bank of Landlord’s
sight draft drawn on the issuing bank without accompanying memoranda or
statement of beneficiary except a statement that Landlord is entitled to draw
upon such Security Letter pursuant to the provisions of this Lease.

 

(ii)           In the event that Tenant defaults
beyond any applicable notice and grace period in respect of any of the terms,
provisions, covenants and conditions of this Lease and Landlord utilizes all or
any part of the Security represented by the Security Letter, Landlord may, in
addition to exercising all other of its rights provided in this Section
11.03, retain the unapplied and unused balance of the principal amount of
the Security Letter as Security for the faithful performance and observance by
Tenant

 

131

 

thereafter of
the terms, provisions and conditions of this Lease, and may use, apply, or
retain the whole or any part of said balance on all of the same terms and
conditions hereinabove set forth in this Section 11.03. In the event of
a sale of the Building, Landlord shall have the right to require Tenant to
deliver a replacement Security Letter naming the new Landlord as beneficiary, provided,
that such new Landlord has assumed the obligations of Landlord arising after
the date of such sale and, if Tenant shall fail to deliver the same within ten
(10) Business Days after written demand therefor, to draw down the existing
Security Letter and transfer the proceeds as security hereunder to the new
Landlord.

 

(iii)          If Landlord shall present the Security
Letter for payment and be entitled to retain or apply only a portion of the
proceeds as provided herein and this Lease shall have not theretofore been
terminated, then Landlord shall refund to Tenant the balance of such proceeds, provided,
that Tenant shall deposit with Landlord a new Security Letter in the amount of
the Security required pursuant to this Lease.

 

11.04      Wherever in this Article 11 reference is made to
Tenant establishing that it has achieved a Tangible Net Worth of a specified
amount, Tenant shall do so by providing Landlord with an audited consolidated
balance sheet and Statement of Changes in Capital of Tenant prepared by a Big
Six Accounting Firm, in reasonable detail, together with a report by such Big
Six Accounting Firm, setting forth that they have made an examination of
Tenant’s consolidated financial statements and Statement of Changes in Capital
in accordance with generally accepted auditing standards and that, in their
opinion, said consolidated financial statements and Statement of Changes in
Capital present fairly the consolidated financial position, results of operations
and changes in financial position of Tenant in accordance with generally
accepted accounting principles, consistently applied.

 

11.05      The provisions and conditions of this Article 11, shall
apply to and continue to be binding upon the Tenant herein named and any entity
that succeeds to Tenant’s interest in this Lease pursuant to Article 5
hereof, notwithstanding any assignment of this Lease by the Tenant herein named
or any further assignment(s) of this Lease, whether made with or without the
consent of Landlord.

 

132

 

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

 

 

	
  Landlord:

  	
  1290
  ASSOCIATES, L.L.C.

  
	
   

  	
   

  	
  By: O&Y
  Management Corp., As Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Tom
  Falus

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: 
  Tom Falus

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant:

  	
  WARNER COMMUNICATIONS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John A.
  Labarca

  	
   

  
	
   

  	
   

  	
   

  	
  Name: John A. Labarca

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President and Controller

  	
   

  
									

 

Tenant’s Federal Tax I.D. No.:           13-2696809

 

1290 Associates, in its
capacity as the lessor (“Lessor”) under the Ground Lease (as defined in Section
6.01(c)(i) of the within Lease) hereby consents to the within Lease and
agrees, for itself and each of its successors and assigns which is an Affiliate
of the then Landlord, that in the event of the termination of the Ground Lease,
the Lease shall continue in full force and effect as a direct lease between
Lessor and Tenant, and Lessor and Tenant shall be bound to each other under all
of the terms, covenants and conditions of the Lease for the balance of the term
thereof remaining, with the same force and effect as if Lessor were the
Landlord, and Tenant does hereby (i) agree to attorn to Lessor, as its
Landlord, (ii) affirm its obligations under the Lease, and (iii) agree to make
payment to Lessor of all sums required to be paid by Tenant to Landlord under
the Lease, and Lessor does hereby (a) agree to recognize Tenant, as its Tenant,
(b) affirm all of its obligations as Landlord under the Lease, and (c) agree to
make payment to Tenant of all sums required to be paid by Landlord to Tenant
under the Lease whether accruing prior to or subsequent to the termination of
the Ground Lease and shall include all of Tenant’s rights to offset and recoup
rents, said attornment (recognition), affirmation and agreement by Tenant and
Lessor to be effective and self-operative without the execution of any further
instruments, upon Lessor succeeding to the interest of Landlord under

 

133

 

the Lease; provided,
that if Lessor or Tenant requests, without implying any obligation to do so on
either party’s part, Lessor and Tenant shall confirm the attornment and
recognition described herein in writing. Tenant waives the provisions of any
statute or rule of law now or hereafter in effect that may give or purport to
give it any right or election to terminate or otherwise adversely affect the
Lease or the obligations of Tenant thereunder by reason of any termination of
the Ground Lease.

 

	
   

  	
  1290
  ASSOCIATES, L.L.C.

  
	
   

  	
  By: O&Y
  Management Corp., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom
  Falus

  	
   

  
	
   

  	
   

  	
  Name: Tom Falus

  
	
   

  	
   

  	
  Title:  
  Executive Vice President

  

 

134

 

EXHIBIT A

 

DESCRIPTION OF LAND

 

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

 

BEGINNING at
the corner formed by the intersection of the northerly side of West 51st Street
with the easterly side of Avenue of the Americas (formerly Sixth Avenue);
running thence Easterly along the northerly side of West 51st Street 448 feet
to a point distant 472 feet Westerly from the corner formed by the intersection
of the northerly side of West 51st Street with the westerly side of Fifth
Avenue, thence Northerly parallel with Fifth Avenue and part of the distance
through a party wall 100 feet 5 inches to the center line of the block between
West 51st Street and West 52nd Street, thence Westerly along said center line
of the block 2 feet, thence Northerly parallel with Fifth Avenue and part of
the distance through a party wall 100 feet 5 inches to the southerly side of
West 52nd Street, at a point therein distant 474 feet Westerly from the
southwest corner of West 52nd Street and Fifth Avenue; running thence Westerly
along the southerly side of West 52nd Street 446 feet to the easterly side of
Avenue of the Americas, thence Southerly along the easterly side of Avenue of
the Americas 200 feet 10 inches to the northerly side of West 51st Street at
the point or place of BEGINNING.

 

A-1

 

EXHIBIT B

 

FLOOR PLAN

 

 

B-1

 

EXHIBIT
B-1

 

 

 

EXHIBIT
B-2

 

 

 

EXHIBIT
B-3

 

 

 

EXHIBIT
B-4

 

 

 

EXHIBIT
B-5

 

 

 

EXHIBIT
B-6

 

 

 

EXHIBIT
B-7

 

 

 

 

 

 

 

 

EXHIBIT C

 

RULES AND REGULATIONS

 

1.                                       The
rights of each tenant in the entrances, corridors, elevators and escalators
servicing the Building are limited to ingress and egress from such tenant’s
premises for the tenant and its employees, licensees and invitees, and no
tenant shall use, or permit the use of, the entrances, corridors, escalators or
elevators for any other purpose (except for internal corridors where Tenant
leases the entire floor, in which case such corridors may be used for other
purposes provided such use does not violate Law or any insurance requirements).
No tenant shall invite to the tenant’s premises, or permit the visit of,
persons in such numbers or under such conditions as to interfere with the use
and enjoyment of any of the plazas, entrances, corridors, escalators, elevators
and other facilities of the Building by any other tenants. Fire exits and fire
stairways are for emergency use only, and they shall not be used for any other
purpose by the tenants, their employees, licensees or invitees. No tenant shall
encumber or obstruct, or permit the encumbrance or obstruction of, any of the
sidewalks, plazas, entrances, corridors, escalators, elevators, fire exits or
stairways of the Building. Landlord reserves the right to control and operate
the public portions of the Building and the public facilities, as well as
facilities furnished for the common use of the tenants, in such manner as it in
its reasonable judgment deems best for the benefit of the tenants generally.

 

2.                                       Landlord
may refuse admission to the Building outside of Business Hours on Business Days
to any person not known to the watchman in charge or not having a pass issued
by Landlord or the tenant whose premises are to be entered or not otherwise
properly identified, and Landlord may require all persons admitted to or
leaving the Building outside of Business Hours on Business Days to provide
appropriate identification. Tenant shall be responsible for all persons for
whom it issues any such pass and shall be liable to Landlord for all acts or
omissions of such persons. Any person whose presence in the Building at any
time shall, in the judgment of Landlord, be prejudicial to the safety,
character or reputation of the Building or of its tenants may be ejected
therefrom. During any invasion, riot, public excitement or other commotion,
Landlord may prevent all access to the Building by closing the doors or
otherwise for the safety of the tenants and protection of property in the
Building.

 

3.                                       Only
Landlord or persons approved by Landlord (which approval will not be
unreasonably withheld), shall be permitted to furnish to the Premises ice,
drinking water, food, beverage, linen, towel, barbering, bootblacking, floor
polishing, cleaning or other similar services.

 

 

C-1

 

4.                                       No
awnings or other projections shall be attached to the outside walls of the
Building. No curtains, blinds, shades or screens which are different from the
standards adopted by Landlord for the Building shall be attached to or hung in,
or used in connection with, any exterior window or door of the premises of any
tenant, without the prior written consent of Landlord. Such curtains, blinds,
shades or screens must be of a quality, type, design and color, and attached in
the manner approved by Landlord, which approval shall not be unreasonably
withheld.

 

5.                                       No
lettering, sign, advertisement, notice or object shall be displayed in or on
the exterior windows or doors, or on the outside of any tenant’s premises, or
at any point inside any tenant’s premises where the same might be visible
outside of such premises, without the prior written consent of Landlord. In the
event of the violation of the foregoing by any tenant, Landlord may remove the
same without any liability, and may charge the expense incurred in such removal
to the tenant violating this rule. Interior signs, elevator cab designations
and lettering on doors and the Building directory shall, if and when approved
by Landlord (which approval shall not be unreasonably withheld or delayed (i)
for interior signs and lettering in the area, within any Block which is occupied
only by Tenant, its Affiliates and Related Service Providers, which is visible
from the passenger elevator serving such Block, and (ii) the elevator cab
designation in such passenger elevator for Tenant, its Affiliates or Related
Service Providers occupying such Block), be inscribed, painted or affixed for
each tenant by Landlord at the expense of such tenant, and shall be of a size,
color and style reasonably acceptable to Landlord.

 

6.                                       The
sashes, sash doors, skylights, windows and doors that reflect or admit light
and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by any tenant, nor shall any bottles,
parcels or other articles be placed on the window sills or on the peripheral
air conditioning enclosures, if any.

 

7.                                       No
showcases or other articles shall be put in front of or affixed to any part of
the exterior of the Building, nor, except as provided in clause 5, placed in
the halls, corridors or vestibules.

 

8.                                       No
bicycles, vehicles, animals, fish or birds of any kind shall be brought into or
kept in or about the premises of any tenant or the Building.

 

9.                                       Nothing
shall be done or permitted in the premises of any tenant which would impair or
interfere with the use or enjoyment by any other tenant of any space in the
Building.

 

C-2

 

10.                                 No
tenant, nor any tenant’s contractors, employees, agents, visitors or licensees,
shall at any time bring into or keep upon the premises or the Building any
inflammable, combustible, explosive, or otherwise hazardous or dangerous fluid,
chemical, substance or material (except in such amounts and types as generally
used in cleaning first class office buildings in midtown Manhattan, provided
such materials are not stored in the Premises).

 

11.                                 Additional
locks or bolts of any kind which shall not be operable by the Grand Master Key
for the Building shall not be placed upon any of the doors or windows by any
tenant, nor shall any changes be made in locks or the mechanism thereof which
shall make such locks inoperable by said Grand Master Key. Additional keys for
a tenant’s premises and toilet rooms shall be procured only from Landlord who
may make a reasonable charge therefor. Each tenant shall, upon the termination
of its tenancy, turn over to Landlord 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 furnished by Landlord, such tenant shall pay to
Landlord the cost thereof. During the Term, Tenant shall not be required to
furnish to Landlord keys for the Tenant security areas set forth in Section
4.04(d).

 

12.                                 All
removals, or the carrying in or out of any safes, freight, furniture, large
packages, large boxes, crates or any other large object or matter of any
description must take place during such hours and in such elevators, and in
such manner as Landlord or its agent may reasonably determine from time to
time. The persons employed to move safes and other heavy objects shall be
reasonably acceptable to Landlord and, if so required by law, shall hold a
Master Rigger’s license. Arrangements will be made by Landlord with any tenant
for moving large quantities of furniture and equipment into or out of the
Building. Except as otherwise specified provided in the Lease, all labor and
engineering costs incurred by Landlord in connection with any moving specified
in this rule, including, except as otherwise provided in the Lease, a
reasonable charge for overhead shall be paid by tenant to Landlord, on demand.

 

13.                                 Landlord
reserves the right to inspect all objects and matter to be brought into the
Building and to exclude from the Building all objects and matter which violate
any of these Rules and Regulations or the lease of which this Exhibit is a
part. Landlord may require any person leaving the Building with any package or
other object or matter to submit a pass, listing such package or object or
matter, from the tenant from whose premises the package or object or matter is
being removed, but the establishment and enlargement of such requirement shall
not impose any responsibility on Landlord for the protection of any tenant
against the removal of property from the premises of such tenant. Landlord
shall in no way be liable to

 

C-3

 

any tenant for damages or loss
arising from the admission, exclusion or ejection of any person to or from the
premises or the Building under the provisions of this Rule or of Rule 2 hereof.

 

14.                                 No
tenant shall occupy or permit any portion of its premises to be occupied as an
office for a public stenographer or public typist, or for the possession,
storage, manufacture, or sale of narcotics, dope, in any form, or as a barber,
beauty or manicure shop, or as a school. No tenant shall use, or permit its
premises or any part thereof to be used, for manufacturing, or the sale at
retail or auction of merchandise, goods or property of any kind.

 

15.                                 Landlord
shall have the right to prohibit any advertising or identifying sign by any
tenant which makes mention of the Building or is visible from outside the
Premises which, in Landlord’s reasonable judgment, tends to impair the
reputation of the Building or its desirability as a building for others, and
upon written notice from Landlord, such tenant shall refrain from and
discontinue such advertising or identifying sign.

 

16.                                 Landlord
shall have the right to reasonably prescribe the weight and position of safes
and other objects of excessive weight, and no safe or other object whose weight
exceeds the lawful load for the area upon which it would stand shall be brought
into or kept upon any tenant’s premises. If, in the reasonable judgment of
Landlord, it is necessary to distribute the concentrated weight of any heavy
object, the work involved in such distribution shall be done at the expense of
the tenant and in such manner as Landlord shall reasonably determine.

 

17.                                 No
machinery or mechanical equipment other than ordinary portable business
machines may be installed or operated in any tenant’s premises without
Landlord’s prior written consent which consent shall not be unreasonably
withheld or delayed, and in no case (even where the same are of a type so
excepted or as so consented to by Landlord) shall any machines or mechanical
equipment be so placed or operated as to disturb other tenants; but machines
and mechanical equipment which may be permitted to be installed and used in a
tenant’s premises shall be so equipped, installed and maintained by such tenant
as to prevent any disturbing noise, vibration or electrical or other
interference from being transmitted from such premises to any other area of the
Building.

 

18.                                 Landlord,
its contractors, and their respective employees shall have the right to use,
without charge therefor, all light, power and water in the premises of any
tenant while cleaning or making repairs or alterations in the premises of such
tenant.

 

19.                                 No
premises of any tenant shall be used for lodging of sleeping or for any immoral
or illegal purpose.

 

C-4

 

20.                                 The
requirements of tenants will be attended to only upon application at the office
of the Building. Employees of Landlord shall not perform any work or do
anything outside of their regular duties, unless under special instructions
from Landlord.

 

21.                                 Canvassing,
soliciting and peddling in the Building are prohibited and each tenant shall
cooperate to prevent the same.

 

22.                                 Tenant
shall not cause or permit any unusual or objectionable fumes, vapors or odors
to emanate from the Premises which would annoy other tenants or create a public
or private nuisance. No cooking shall be done in the Premises except as is
expressly permitted in the Lease.

 

23.                                 Nothing
shall be done or permitted in any tenant’s premises, and nothing shall be
brought into or kept in any tenant’s premises, which would impair or interfere
with any of the Building’s services or the proper and economic heating,
ventilating, air conditioning, cleaning or other servicing of the Building or
the premises, or the use or enjoyment by any other tenant of any other
premises, nor shall there be installed by any tenant any ventilating, air
conditioning, electrical or other equipment of any kind which, in the
reasonable judgment of Landlord, might cause any such impairment or
interference.

 

24.                                 No
acids, vapors or other materials shall be discharged or permitted to be
discharged into the waste lines, vents or flues of the Building which may
damage them. The water and wash closets and other plumbing fixtures in or
serving any tenant’s premises shall not be used for any purpose other than the
purposes of which they were designed or constructed, and no sweepings, rubbish,
rags, acids or other foreign substances shall be deposited therein. All damages
resulting from any misuse of the fixtures shall be borne by the tenant who, or
whose servants, employees, agents, visitors or licensees shall have, caused the
same. Any cuspidors or containers or receptacles used as such in the premises
of any tenant, or for garbage or similar refuse, shall be emptied (except for
garbage recepticals which are required to be emptied by Landlord in accordance
with the Lease), cared for and cleaned by and at the expense of such tenant.

 

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

 

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

 

C-5

 

27.                                 All
windows in each tenant’s premises shall be kept closed, and all blinds therein
above the ground floor shall be lowered as reasonably required because of the
position of the sun, during the operation of the Building air-conditioning
system to cool or ventilate the tenant’s premises. If Landlord shall elect to
install any energy saving film on the windows of the Premises or to install
energy saving windows in place of the present windows, tenant shall cooperate
with the reasonable requirements of Landlord in connection with such
installation and thereafter the maintenance and replacement of the film and/or
windows and permit Landlord to have access to the tenant’s premises at
reasonable times during Business Hours to perform such work.

 

28.                                 If
the Premises be or become infested with vermin as a result of the use or any
misuse or neglect of the Premises by Tenant, its agents, employees, visitors or
licensees, Tenant shall at Tenant’s expense cause the same to be exterminated
from time to time to the reasonable satisfaction of Landlord and shall employ
such exterminators and such exterminating company or companies as shall be
designated by Landlord, or if none is so designated as reasonably approved by
Landlord.

 

29.                                 To
the extent there is a conflict between the provisions contained in the Lease or
this Exhibit C annexed thereto, the provisions of the Lease shall govern
and control.

 

C-6

 

EXHIBIT D

 

ALTERATIONS RULES AND REGULATIONS

A.                                    General

 

1)                                      Tenant
will make no Alterations as defined in the Lease (except for Decorating), in,
to or about the Premises except in compliance with Sections 4.01 and 4.02 of
the Lease.

 

2)                                      Prior
to the commencement of any Alterations (other than Decorating), Tenant is
responsible for obtaining, from the Building Manager, a base Building
pre-demolition/pre-construction status report noting condition of Premises.

 

3)                                      Prior
to the commencement of any Alterations (other than Decorating), Tenant shall
submit for Landlord’s written approval all required items described in
Paragraphs 1, 2 and 3 of Section B hereof which approval or disapproval must be
given within the time period specified in the Lease.

 

4)                                      Tenant
shall insure that the proposed Alterations comply with The Administrative Code
of The City of New York and all other laws, ordinances, rules and regulations
promulgated by all governmental agencies and bodies having jurisdiction over
such Alterations, including, without limitation, the Americans With
Disabilities Act.

 

5)                                      Tenant
shall insure that all proposed Alterations comply with Building standards
listed in Section C hereof, and are adequately designed to serve Tenant’s needs
while remaining in full conformity with, and not adversely affecting, any
Building systems.

 

6)                                      All
(i) demolition or removal of construction materials, or (ii) moving of
construction materials to or from the Building, or (iii) other categories of
work which may disturb or interfere with other tenants of the Building or
disturb or interfere with Building operations, must be scheduled and performed
before or after Business. Hours. Tenant shall provide the Building Manager with
written notice at least 24 hours prior to scheduling any Alteration, and shall
(except as otherwise provided in the Lease) pay Landlord’s standard charges for
overtime

 

D-1

 

porters,
security, engineers and other costs incurred by Landlord in connection with such
after hours scheduling.

 

7)                                      Pursuant
to Section 4.02(c) of the Lease, Landlord reserves the right, in addition to
being reimbursed for the cost of outside consultants referred to in Paragraph
C(1) below, to (i) impose a construction supervision fee of 2% of Tenant’s
construction costs in connection with Material Alterations set forth in Section
4.02(a) other than in connection with Tenant’s Initial Alterations, the
Emergency Generator, the Elevator Reconfiguration, the Antenna and the louvers
in connection with a supplemental air conditioning system in accordance with Section
4.01(b) to the Blocks or (ii) demand payment for its reasonable out of
pocket costs and expenses, in each case to reimburse Landlord for its internal
costs in providing assistance in design coordination, drawing review, Building
Department document processing and tracking, field inspection, and assistance
in interfacing construction with Tenant’s Material Alterations.

 

8)                                      All
inquiries, Tenant plans, requests for approvals, and all other matters shall be
processed through the Building Manager.

 

B.                                    Tenant
Submittals

 

1)                                      Tenant
to submit, to Landlord, the following information for Landlord’s review and
approval prior to commencement of any Alterations other than Decorating.
Landlord’s review and approval period will not commence until the Building
Manager is in receipt of the following items, as one complete package:

 

a)                                      Letter
of Intent to perform construction. Letter to include a brief description of the
proposed Alterations, Tenant contact, complete list of proposed contractors and
work schedule.

 

b)                                     2
sets of design drawings and specifications noting full scope of work
involved in performing such Alterations. All drawings must be signed and sealed
by Tenant’s Registered Architect or Professional Engineer licensed to conduct
business in the State of New York and approved by Landlord, which approval
shall not be unreasonably withheld or delayed. Part plan drawings will not be
acceptable.

 

(i)                                     If
full height partition walls are being installed in an area that is sprinklered,
the existing sprinkler head locations must be included

 

D-2

 

to show that
new partitions are not in conflict with sprinkler coverage.

 

(ii)                                  If
the area being altered includes existing compartmentation walls, those
compartmentation walls must be indicated on Tenant’s layout.

 

c)                                      A
letter from Tenant’s Registered Architect or Professional Engineer stating that
their design and scope of work complies with all applicable codes, and local
laws, especially noting Local Laws 16/84, 58/87, and 5/73. This letter must
be signed and include their professional seal.

 

d)                                     Proper
New York City Building Department filing applications, as required, for all
Alterations indicated on drawings.

 

e)                                      Valid
Certificates of Insurance and a Contractors Agreement signed by Tenant’s
general contractor (see Insurance Requirements in Section D hereof).

 

2)                                      Upon
completion of Landlord’s review, the following will be returned to Tenant:

 

a)                                      A
letter (i) granting approval to file drawings; or (ii) granting conditional
approval, subject to Tenant incorporating Landlord’s comments and suggested
revisions into a revised set of design drawings (no Alterations will commence
or applications filed until Landlord is in receipt of such revised set of
drawings); or (iii) disapproving such Alterations; and

 

b)                                     If
approved, or conditionally approved, Building Department applications signed by
Landlord.

 

Landlord’s review is for
conformance with Building standards only and is not a review for compliance
with law or a review of the adequacy of Tenant’s design. No such approval, or
comments shall constitute a waiver of the obligation that Tenant’s Alterations
comply with all laws and receive Buildings Department or other governmental
approvals.

 

3)                                      Prior
to commencement of Alterations other than Decorating:

 

Tenant to
submit to Landlord the following:

 

D-3

 

a)                                      A
letter or revised drawings addressing Landlord’s comments, if any.

 

b)                                     Approved
New York City Building Department filing applications, drawings, and all
work permits.

 

c)                                      A
final list of all contractors and subcontractors who will perform the
Alterations.

 

d)                                     A
work schedule noting duration of work.

 

4)                                      Upon
completion of Alterations other than Decorating:

 

Tenant to
submit to Landlord, in a timely manner, the following:

 

a)                                      All
sign-off documents which pertain to work filed from all agencies having
jurisdiction.

 

b)                                     As-built
drawings.

 

c)                                      A
properly executed Air Balancing Report, signed by a Professional Engineer.

 

C.                                    Building
Standard Requirements

 

1)                                      All
structural or floor loading requirements, mechanical (HVAC), plumbing,
sprinkler, electrical, fire alarm, elevator, of any proposed Tenant
installation shall be subject to the prior approval of Landlord’s consultants.
All reasonable expenses incurred by Landlord for outside consultants review and
approval of Tenant’s design shall be at Tenant’s expense.

 

2)                                      All
demolition shall be supervised by Landlord’s representative at Tenant’s
expense.

 

3)                                      Elevator
service for construction work shall be charged to Tenant at standard Building
rates. Prior arrangements for elevator use shall be made with Building Manager
by Tenant. No material or equipment shall be carried under or on top of
elevators. If workmen (including, without limitation, Operating Engineers and
Personnel Carriers), are required by any union regulations for material or
personnel hoisting, such workmen shall be paid for by Tenant.

 

D-4

 

4)                                      If
shutdown of any mechanical or electrical risers are required, such shutdown
shall be performed by Landlord’s contractors at Tenant’s expense or, at
Landlord’s option, supervised by Landlord’s representative at Tenant’s expense.

 

5)                                      Tenant’s
contractor shall:

 

a)                                      have
a Superintendent or Foreman on the Premises at all times;

 

b)                                     police
the job at all times, continually keeping the Premises orderly; protection and
maintenance will be Tenant’s responsibility;

 

c)                                      maintain
cleanliness and protection of all areas, including elevators and lobbies;

 

d)                                     protect
the front and top of all peripheral HVAC units and thoroughly clean them at the
completion of work;

 

e)                                      block
off supply and return grills, diffusers and ducts to keep dust from entering
into the Building air conditioning system;

 

f)                                        protect
all Class “E” fire alarm devices and wiring; and

 

g)                                     avoid
the disturbance of other Tenants.

 

6)                                      Subject
to the notice and grace periods provided in the Lease, if any part of Tenant’s
Alteration is improperly performed, Tenant shall be charged for corrective work
done by Landlord’s personnel or contractors engaged for such purpose by
Landlord.

 

7)                                      All
equipment and installations must be equal to or better than the standards of
the Building. Any deviation from Building standards will be permitted only if
approved by Landlord in writing.

 

8)                                      Tenant
shall pay Landlord for any amounts billed in connection with any Alteration
within thirty (30) days after billing therefor.

 

9)                                      Landlord’s
contract fire alarm service personnel shall be the only personnel permitted to
adjust, test, alter, relocate, add to, or remove equipment connected to the
Class “E” System.

 

D-5

 

10)                                During
such times that Tenant’s alterations or demolition of the Premises require that
fire protection afforded by the Class “E” System or sprinkler system be
disabled, Tenant, at Tenant’s expense, shall maintain fire watch service deemed
reasonably suitable to Landlord, and any governmental authority having
jurisdiction.

 

11)                                Landlord,
at Tenant’s expense, (unless performed by Landlord or by its contractors) shall
repair or cause to have repaired, any and all defects, deficiencies or
malfunctions of the Class “E” System caused by Tenant’s Alterations or related
demolition. Such expense may include expenses of engineering, supervision and
standby fire watch personnel that Landlord deems necessary to protect the
Building during the time such defects, deficiencies and malfunctions are being
corrected.

 

12)                                Should
Tenant desire to install its own internal fire alarm system, Tenant shall
request Landlord to connect such system to the Class “E” System at Tenant’s
expense in such reasonable manner as prescribed by Landlord. Tenant shall, at
Tenant’s expense, have such internal fire alarm system approved by governmental
agencies having jurisdiction, and shall submit to Landlord an approved copy of
plans of such system before initiating any installation of such system. Tenant
must demonstrate that system is in working order prior to requesting tie-in.

 

13)                                Landlord,
at Tenant’s reasonable expense, will be responsible for the maintenance and
proper operation of any Tenant Class “E” Fire Alarm sub-system.

 

14)                                When
Tenant’s use of any space requires a change in the Certificate of Occupancy,
whether a building has a Final Certificate of Occupancy or Temporary
Certificate of Occupancy, or (as in the case of a new Building with a Temporary
Certificate of Occupancy) involves the initial inclusion of the Premises on the
Certificate of Occupancy, the Tenant shall be responsible for coordination with
the Landlord’s consultant, and for all reasonable costs in connection with such
consultant’s services.

 

15)                                The
Tenant will be responsible for keeping a copy of all required Building
Department approved applications, drawings, permits, and sign-offs during and
after completion of construction and shall deliver same to Landlord prior to or
at the expiration of the term of the Lease.

 

D-6

 

16)                                The
following penalties will be assessed to all tenants that do not comply with
submission of Building Department documents and sign-off procedures as outlined
in Section B hereof:

 

a)                                      Future
Building Department documents that require Landlord’s signature with respect to
any floor will not be signed nor will work be allowed to commence until
complete submission of all required past Building Department documents in
connection with such floor have been received.

 

b)                                     Leasehold
improvement allowance (except as otherwise provided in the Lease with respect
to Tenant’s Required Work Allowance and the Work Allowance) will not be
released to Tenant until all Building Department documents and sign-offs have
been received.

 

17)                                The
attachment of any work to Building window mullions, HVAC enclosures, window
soffets, will not be permitted.

 

18)                                Drywall
partitions or installations abutting window mullions must allow for the
operation of pivoting windows where applicable.

 

19)                                Electrical
wire mold will not be permitted without written approval from Landlord.

 

20)                                Chasing
of structural slab or Building masonry walls will not be permitted unless
special consent is given by Landlord.

 

21)                                The
attachment of drywall metal studs or track to mechanical, electrical, plumbing,
sprinkler, or any Building systems will not be permitted.

 

22)                                All
valves or equipment controlling Building systems or Tenant systems must be
tagged and identified.

 

23)                                Access
doors must be provided to all Building equipment and Tenant equipment.

 

24)                                Tenant’s
design consultant is responsible to insure that base Building systems are
adequately sized to meet Tenant’s requirements, but the foregoing will not
relieve Landlord of any responsibility of Landlord set forth in the Lease to
meet the specifications provided for in the Lease. Tenant shall be responsible
for alterations to any existing HVAC ductwork or system in the Premises and
shall

 

D-7

 

ensure that
such work is integrated so as not to adversely affect the Building system.

 

25)                                All
locking devices (other than in security areas) must be keyed and mastered to
Building keying system. Two individual keys must be supplied to the Building
Manager.

 

26)                                All
hardware is to match or exceed Building standards.

 

27)                                Tenant
shall not install any outside louvers without Landlord’s prior written
approval. Detailed sketches of all proposed louvers shall be submitted for
Landlord’s approval which approval may be granted or withheld in Landlord’s
sole discretion (except as provided in the Lease).

 

28)                                In
connection with an Alteration, all unused wiring, conduit, equipment,
materials, or previously installed work, no longer needed, must be removed.

 

29)                                Any
connections to Building systems must be of the same materials or exceed
existing Building standards.

 

30)                                No
exposed piping of any kind will be permitted in the Premises.

 

31)                                Any
signage, window dressing, or Tenant decor visible from outside the Tenant’s
Premises must receive written approval from Landlord prior to installation.

 

32)                                The
modification of any elevator equipment must receive prior written approval from
Landlord. All elevator devices must remain accessible for maintenance and must
conform to or exceed Building standards.

 

33)                                Tenant
is not to mount any equipment in Building Electrical Closets, Telephone
Closets, or Mechanical Equipment Rooms without prior written approval from
Landlord.

 

34)                                Tenant
is responsible to insure that all work is performed in a normal, acceptable,
and safe manner.

 

D-8

 

D.                                    Contractors Agreement; Insurance Requirements

 

[To be retyped on Letterhead of Tenant’s General Contractor, addressed
to Landlord]

 

Tenant: 

 

Premises:

 

The
undersigned contractor or subcontractor (hereinafter called “Contractor”)
has been hired by the Tenant or occupant (hereinafter called “Tenant”)
of the Building named above or by Tenant’s contractor to perform certain work
(hereinafter called “Work”) for Tenant in the Tenant’s Premises in the
Building. Contractor and Tenant have requested the undersigned Landlord
(hereinafter called “Landlord”) to grant Contractor access to the
Building and its facilities in connection with the performance of the Work and
Landlord agrees to grant such access to Contractor upon and subject to the
following terms and conditions:

 

1)                                      Contractor
agrees to indemnify and save harmless the Landlord, any Superior Lessor and any
Superior Mortgagee and their respective officers, employees, agents,
affiliates, subsidiaries, and partners, and each of them, from and with respect
to any claims, demands, suits, liabilities, losses and expenses, including
reasonable attorneys’ fees, arising out of or in connection with the Work
(and/or imposed by law upon any or all of them) because of personal injuries,
including death at any time resulting therefrom, and loss of or damage to
property, whether such injuries to persons or property are claimed to be due to
negligence of the Contractor, Tenant, Landlord or any other party entitled to
be indemnified as aforesaid except to the extent specifically prohibited by law
(and any such prohibition shall not void this Agreement but shall be applied
only to the minimum extent required by law).

 

2)                                      Contractor
shall provide and maintain at its own expense, until completion of Work, the
following insurance:

 

a)                                      Workers’
Compensation and Employers’ Liability Insurance covering each and every workman
employed in, about or upon the Work, as provided for in each and every statute
applicable to Workers’ Compensation and Employers’ Liability Insurance.

 

D-9

 

b)                                     Commercial
General Liability Insurance Including Coverage for Completed Operations, Broad
Form Property Damage “XCU” exclusion if any deleted, and Contractual Liability
(to specifically include coverage for the indemnification clause of this
Agreement) for not less than the following limits:

 

	
  Combined
  Single

  	
   

  
	
  Limit

  	
   

  
	
  Bodily
  Injury and

  	
   

  
	
  Property
  Damage

  	
   

  
	
  Liability:

  	
  $5,000,000

  
	
   

  	
  (written on
  a per occurrence 

  basis)

  

 

c)                                      Comprehensive
Automobile Liability Insurance (covering all owned, non-owned and/or hired
motor vehicles to be used in connection with the Work) for not less than the
following limits:

 

	
  Bodily
  Injury:

  	
  $5,000,000
  per person 

  
	
   

  	
  $5,000,000
  per occurrence

  
	
  Property
  Damage:

  	
  $5,000,000
  per occurrence

  

 

Contractor shall furnish a
certificate from its insurance carrier or carriers to the Building office
before commencing the Work, showing that it has complied with the above
requirements regarding insurance and providing that the insurer will give
Landlord ten (10) days prior written notice of the cancellation of any of the
foregoing policies.

 

3)                                      Contractor
shall require all of its subcontractors engaged in the Work to provide the
following insurance:

 

a)                                      Comprehensive
General Liability Insurance Including Protective and Contractual Liability
Coverage with limits of liability at least equal to the above stated limits.

 

b)                                     Comprehensive
Automobile Liability Insurance (covering all owners, non-owned and/or hired motor
vehicles to be used in connection with the Work) for not less than the
following limits:

 

	
  Bodily
  Injury:

  	
  $5,000,000
  per person

  
	
   

  	
  $5,000,000
  per occurrence

  
	
  Property
  Damage:

  	
  $5,000,000
  per occurrence

  

 

D-10

 

Upon the
request of Landlord, Contractor shall require all of its subcontractors engaged
in the Work to execute an Insurance Requirements agreement in the same form as
this Agreement.

 

Agreed to and
executed
this              day
of               ,
19       .

 

	
  Landlord:

  	
   

  	
  Contractor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
					

 

D-11

 

EXHIBIT E

 

STANDARD CLEANING SPECIFICATIONS

 

All cleaning
services provided below will be performed nightly 5 nights per week. No
Saturday, Sunday or Holiday services. (Holidays are those days stated in the
applicable Building Service Union agreements other than employee birthdays.)

 

SUPERVISION

 

A competent
supervisor will be assigned to the Building both day and night. The nighttime
supervisor is required to verify that the work has been completed in all tenant
areas, that all venetian blinds have been lowered and set in a uniform
appearance, that all lights have been turned off, windows closed, doors locked
and offices left in a neat and orderly appearance for the next day’s business.

 

CLEANING
CREW

 

The cleaning
contractor’s employees have been instructed to work behind locked doors, and
will only open a door for members of their cleaning crew who have been assigned
to remove rubbish or other like material from tenant’s premises during the
nighttime cleaning operation.

 

PORTER
& MATRON SERVICES

 

A daytime
porter and matron will be assigned to the Building to replenish toilet tissue,
sanitary napkins, and to maintain the lavatories in an orderly condition throughout
the day.

 

FLOORING

 

All stone,
ceramic tile, marble terrazzo, wood and other untreated flooring to be swept
nightly; washing or waxing of such flooring shall be done at tenant’s expense.

 

All linoleum,
rubber, asphalt tile and other similar type of flooring that may be waxed or
treated to be swept nightly; waxing or washing of such flooring other than
public corridor belonging to the Building will be done at tenant’s expense.

 

All carpeting
and rugs will be carpet swept or vacuum cleaned nightly. 

 

E-1

 

Shampooing or
spot cleaning of carpets or rugs will be done at tenant’s expense.

 

OFFICE
CLEANING

 

Dust and wipe
clean all furniture, files, fixtures, window sills and convector enclosure tops
nightly; wash said sills and tops when necessary. Horizontal surfaces of window
frames to be dusted nightly.

 

Empty and
clean all normal waste receptacles nightly and deliver the wastepaper material
to locations designated by Landlord.

 

Removal of
cafeteria or kitchen type rubbish or refuse shall be done at tenant’s expense.

 

Empty and
clean all ashtrays and screen clean all cigarette urns nightly.

 

Dust all waste
receptacles as necessary, washing of waste receptacles and the providing of
plastic liners shall be done at tenant’s expense.

 

Wash clean all
water fountains and coolers nightly, remove all fingerprints and smudges
nightly.

 

Dust all chair
rails, trims and baseboards within reach as necessary.

 

Dust all doors
and ventilating louvers within reach nightly.

 

Dust and wipe
clean all telephones nightly.

 

Clean all
unpainted metal and remove finger marks nightly, treat as necessary.

 

Check all
private stairwells throughout the premises and keep in clean condition.

 

Vertical
surfaces, such as walls, partitions, doors and bucks of all public corridors
and lobbies to be dusted, spot cleaned, treated and polished as often as
necessary, but, in the case of public and service elevator corridors on floors
above the ground floor not more than once a month.

 

Washing or
polishing of vertical surfaces, such as walls, partitions, elevator hatch
doors, entrance doors and bucks including service elevator lobbies; and

 

E-2

 

Clean all
vertical surfaces and wash the floors of all elevators cabs weekly.

 

LAVATORIES
(Public Core Toilets)

 

Sweep and wash
lavatory floors nightly, using proper approved disinfectants. Machine scrub
lavatory floors with proper disinfectants once every two weeks or more
frequently when directed by Landlord.

 

Wash and
polish all mirrors, powder shelves, bright work fixtures and enameled surfaces
in lavatories, including flushometer piping and toilet seat hinges nightly.

 

Scour, wash
and disinfect all basins, bowls and urinals throughout lavatory nightly using
an odorless disinfectant. Wash both sides of all toilet seats nightly.

 

Dust and
clean, washing where necessary, all partitions, tile walls, dispensers and
receptacles in lavatories nightly.

 

Wash waste
cans and receptacles in lavatories when necessary but at least once a week.

 

Empty paper
towel receptacles and sanitary disposal receptacles nightly and remove waste
and other material to locations designated by Landlord.

 

Fill all
toilet tissue holders nightly (tissue to be furnished by Landlord).

 

Wash and polish
all wall tiles and stall surfaces of lavatories once every two weeks or more
frequently when directed by Landlord.

 

Soap and paper
towel products for tenant’s use will be furnished and installed by the tenant
at his expense using Landlord’s contractor as required.

 

The cleaning,
maintaining and furnishing of lavatory supplies for private toilets other than
public core units will be done at tenant’s expense.

 

HIGH
DUSTING

 

Do all high
dusting quarterly, which includes the following:

 

Dust all
pictures, frames, charts, graphs and similar wall hangings not reached in
nightly cleaning.

 

E-3

 

Dust all
vertical surfaces, such as walls, partitions, doors and bucks and other
surfaces not reached in nightly cleaning except as otherwise herein provided.

 

Dust all
pipes, ventilating and air conditioning louvers, ducts, high moldings and other
high areas not reached in nightly cleaning.

 

Dust all
exterior surfaces of lighting fixtures including glass and plastic enclosures.

 

Washing and
relamping of all fixtures will be done by Landlord’s contractor at tenant’s
expense.

 

Dust and
inspect all venetian blinds. Washing, restringing, retaping and minor repair or
replacement will be done at tenant’s expense. If tenant fails to maintain
blinds, Landlord may, at its sole option, repair blinds at tenant’s expense.

 

GLASS
CLEANING

 

All interior
glass (other than windows), partition glass and glass doors will be cleaned at
tenant’s expense.

 

Mail chute
glass and floor directory glass will be cleaned once every five weeks.

 

All exterior
windows on office floors will be cleaned, as necessary, approximately once
every five weeks, weather permitting.

 

All interior
glass windows on office floors will be cleaned, as necessary, approximately
once every five weeks.

 

EXTERMINATING
SERVICE

 

Exterminating
service shall be rendered once a month throughout the public areas, equipment
areas and vacant tenant areas in the Building.

 

Exterminating
service required within an occupied tenant’s premises shall be done at tenant’s
expense by Landlord’s contractor who will provide a licensed operator.

 

E-4

 

EXTERIOR
OF THE BUILDING

 

Landlord will
remove all ice, snow and rubbish from the sidewalks adjacent to the Building.

 

E-5

 

EXHIBIT F

 

TENANT’S REQUIRED WORK

 

1)                                      Installation
of one (1) new unisex bathroom per floor in compliance with ADA or renovate
existing core toilets in accordance with ADA.

 

2)                                      Flash
patching of floor slab.

 

3)                                      Refinish
all perimeter convectors.

 

4)                                      Install
fail-safe locks on stairway doors tied to fire safety systems.

 

F-1

 

EXHIBIT G

 

LANDLORD’S WORK

 

I.                                         WORK
AS A CONDITION TO DELIVERY

 

1.                                       Demolition
of existing leasehold improvements on each floor.

 

2                                        Removal
of all asbestos containing material in the Premises on floors 22-29 and deliver
an ACP-5 evidencing such removal.

 

3.                                       Firestop
all penetrations.

 

II.                                     WORK
AS NOT A CONDITION TO DELIVERY

 

1.                                       Installation
of submeters in accordance with provisions of Lease.

 

2.                                       a)                                      Replacement
of missing or damaged mullion caps.

b)                                     Installation
of new window film to replace any damaged window film.

c)                                      Replace
existing or missing window blinds.

d)                                     Repair
and/or replace any missing or damaged controls and perimeter convector covers.

 

3.                                       Fire
pull stations, warden stations, and hall lanterns in the core areas shall
comply with ADA (to be substantially completed by April 1, 1996 except with
respect to Block F which shall be substantially completed within thirty days
after the applicable Commencement Date.)

 

4.                                       Elevator
car buttons, shall comply with ADA and shall be substantially completed by
December 31, 1997.

 

G-1

 

EXHIBIT H

 

 

 

WARNER LEASE

EXHIBIT “ I ”

 

HVAC SPECIFICATION

 

THE BUILDING HEATING,
VENTILATION AND AIR CONDITIONING SYSTEM SHALL BE CAPABLE OF MAINTAINING (A) 74
+/– 2 DEGREES FAHRENHEIT DRY BULB & 50% RELATIVE HUMIDITY WHEN OUTDOOR
CONDITIONS ARE 95 DEGREES FAHRENHEIT DRY BULB AND 76 DEGREES FAHRENHEIT WET
BULB AND (B) 70 DEGREES FAHRENHEIT DRY BULB WHEN OUTDOOR CONDITIONS ARE 0
DEGREES FAHRENHEIT DRY BULB, AND SHALL MAINTAIN VENTILATION FOR MINIMUM OUTSIDE
FRESH AIR MAKE UP RATES OF .25 CFM PER USABLE SQUARE FOOT. TOTAL AIR
DISTRIBUTION SHALL NOT BE LESS THAN 1 CFM PER USABLE SQUARE FOOT. THE ABOVE
DESIGN CRITERIA IS BASED UPON (1) AN ELECTRICAL HEAT LOAD OF 4.5 WATTS PER
USABLE (2) OCCUPANCY RATE OF 1 PERSON PER 100 USABLE SQUARE FOOT, AND VENETIAN
BLINDS DRAWN TO A 45 DEGREE ANGLE IN THE EXPOSURE SUBJECT TO DIRECT SOLAR
RADIATION. INTERIOR CONDITIONS INCLUDE BOTH PERIMETER AND INTERIOR SPACES AND
ANTICIPATE A CEILING HEIGHT OF 8 ft - 0”ABOVE FINISHED FLOOR. THE BASE BUILDING
INTERIOR AIR HANDLING SYSTEM SHALL DELIVER THE SUPPLY AIR AT A TEMPERATURE NOT
TO EXCEED 55 DEGREES FAHRENHEIT AT THE SUPPLY AIR SHAFT. THE SUPPLY AIR SHAFT
SHALL BE MAINTAINED AT A MINIMUM STATIC PRESSURE OF 1.25” w.g.

 

 

EXHIBIT J

 

EXHIBIT J

 

1290 Avenue of the Americas

 

ELEVATOR SPECIFICATIONS

 

	
  Cars # 1 to
  8

  	
  Lobby - 6th
  floor

  
	
   

  	
  4000# @ 500
  F.P.M.

  
	
   

  	
   

  
	
  Cars # 9 to
  16

  	
  Lobby, 7th -
  15th floor

  
	
   

  	
  3500# @ 500
  F.P.M.

  
	
   

  	
   

  
	
  Cars # 17 to
  20

  	
  Lobby, 15th
  - 22nd floor

  
	
  .

  	
  3500# @ 800
  F.P.M

  
	
   

  	
   

  
	
  Cars # 21 to
  24

  	
  Lobby, 22nd
  - 29th floor

  
	
   

  	
  3500# @ 800
  F.P.M.

  
	
   

  	
   

  
	
  Cars # 25 to
  32

  	
  Lobby, 30th
  - 43rd floor

  
	
   

  	
  3500# @ 1000
  F.P.M.

  
	
   

  	
   

  
	
  Freight Cars

  	
   

  
	
  Cars # 33
  & 34

  	
  Sub-cellar
  to 43rd floor

  
	
   

  	
  4000# @ 800
  F.P.M.

  
	
   

  	
   

  
	
  Hydraulic
  Lifts

  	
   

  
	
  #35

  	
  30,000#

  
	
  #36

  	
  10,000#

  

 

Passenger car operating
specifications

 

• Rated speed indicated +/– 6%

 

• Floor to floor time 9.0 sec +/–
5%

(From full
door closure, next floor 3/4 open)

 

• Door operating time 2.0
seconds

 

• Door closure time 3.0 seconds

 

• Car call & hall call dwell
time in accordance with ADA requirements

 

R-1

 

WARNER LEASE

EXHIBITS “K” & “L”

 

ELECTRIC ENERGY SPECIFICATION

CAPACITY OF EXISTING ELECTRIC FEEDERS

 

FLOORS 23 to 29

 

	
  FL

  	
   

  	
  RENTABLE

  AREA

  	
   

  	
  USABLE

  AREA

  	
   

  	
  ELEC

  CLOSET

  	
   

  	
  BASE BLDG

  AMPERES

  	
   

  	
  SUPPL

  AMPERES

  	
   

  	
  “USF”

  WATTS/SQ FT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28

  	
   

  	
  24,278

  	
   

  	
  19,422

  	
   

  	
  1

  	
   

  	
  160

  	
   

  	
  0

  	
   

  	
  5.82

  	
   

  
	
  27

  	
   

  	
  24,278

  	
   

  	
  19,422

  	
   

  	
  1

  	
   

  	
  160

  	
   

  	
  0

  	
   

  	
  5.82

  	
   

  
	
  26

  	
   

  	
  24,277

  	
   

  	
  19,422

  	
   

  	
  1

  	
   

  	
  160

  	
   

  	
  160

  	
   

  	
  11.64

  	
   

  
	
  25

  	
   

  	
  11,598

  	
   

  	
  9,278

  	
   

  	
  1

  	
   

  	
  160

  	
   

  	
  0

  	
   

  	
  12.19

  	
   

  
	
  24

  	
   

  	
  24,277

  	
   

  	
  19,422

  	
   

  	
  1

  	
   

  	
  160

  	
   

  	
  0

  	
   

  	
  5.82

  	
   

  
	
  23

  	
   

  	
  24,278

  	
   

  	
  19,422

  	
   

  	
  1

  	
   

  	
  160

  	
   

  	
  0

  	
   

  	
  5.82

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  132,986

  	
   

  	
  106,388

  	
   

  	
   

  	
   

  	
  960

  	
   

  	
  160

  	
   

  	
  7.85

  	
   

  

 

BASED UPON
USABLE AREA, 85% POWER FACTOR, 80% SWITCH CAPACITY

 

 

EXHIBIT M-1

 

SUBORDINATION NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

THIS AGREEMENT, made as of 
the        day of
          1996 by and between
NATIONSBANK OF TENNESSEE, N.A., a national banking corporation, having an
address c/o The Bank of New York, 101 Barclay Street, 12-E, New York, New York
10286 (Attention: John W. Stevenson and Thomas A. Burrell (hereinafter called “Mortgagee”),
WARNER COMMUNICATIONS INC., a Delaware corporation, having an office at 75
Rockefeller Plaza, New York, NY 10012 (hereinafter called “Tenant”) and
1290 ASSOCIATES, LLC, a New York limited liability company, having an office
c/o Olympia and York Companies (U.S.A.), 237 Park Avenue, New York, New York
10019.

 

W I T N E S S E T H:

 

WHEREAS, Mortgagee is the successor trustee under that certain Mortgage
Spreader and Consolidation Agreement and Trust Indenture dated March 20, 1984
(said Mortgage Spreader and Consolidation Agreement and Trust Indenture, as
amended and supplemented by Supplemental Indenture No. 1 dated as of March 20,
1984, Supplemental Indenture No. 2 dated as of December 30, 1986, Supplemental
Indenture No. 3 dated as of March 30, 1988, Supplemental Indenture No. 4 dated
as of August 17, 1995 and Supplemental Indenture No. 5 dated as of September
18, 1995 and as it may be amended, increased, renewed, modified, consolidated,
replaced, combined, substituted, severed, split, spread or extended, being
hereinafter referred to as the “Mortgage”) between Manufacturers Hanover
Trust Company, predecessor-in-interest to Mortgagee, as trustee, and certain
mortgagors described therein which was recorded on March 20, 1984 in the Office
of the City Register, New York County in Reel 775, Page 1097, and which
encumbers, among other properties, the land and the building located at 1290
Avenue of the Americas, New York, New York and the ground leasehold interest
encumbering such property (collectively, the “Property”) and more
particularly described on Exhibit A annexed hereto,

 

WHEREAS, Tenant and 1290 Associates, LLC (together with any successor
holder of the Landlord’s interest under the Lease, being hereinafter called “Landlord”)
have entered into a certain agreement of lease dated as of January
   , 1996 (the “Lease”) initially covering the 23rd
through 29th floors (said premises, together with any other space which may
hereafter be leased to Tenant pursuant to and in accordance with the express
provisions of Section 1.06 of the Lease being hereafter referred to as the (“Demised
Premises”) in the building forming a part of the Property,

 

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:

 

1.  (a)  Mortgagee hereby consents to the execution
and delivery of the Lease by Landlord. Mortgagee acknowledges that it has
received a copy of the Lease and has no objections to the terms and conditions
thereof.

 

(b)  Tenant covenants and agrees
that the Lease now is and shall at all times continue to be subordinate to the
Mortgage. Tenant, upon request, shall execute and deliver any certificate or
other instrument which the Mortgagee may reasonably request to confirm said
subordination by Tenant.

 

2.  Tenant certifies that (i)
Tenant is the owner and holder of the’tenant’s interest under the Lease, (ii)
the Lease is presently in full force and effect and unmodified, (iii) no rent
or additional rent payable under the Lease has been paid more than one (1)
month in advance of its due date (it being expressly agreed that any rent
abatements, set-offs, recoupment rights, or deductions expressly provided for
in the Lease shall not be deemed an advance payment of rent or additional rent
under this Agreement), (iv) no default exists under the Lease, and (v) there
are no offsets or defenses as of the date hereof to the payment of the rents,
additional rents or other sums payable under the Lease.

 

3.  As long as no default exists
under the Lease which has continued after notice and beyond the expiration of
any applicable grace period as and to the extent provided in the Lease (and
provided that nothing shall imply any right of Tenant to further notice if
Landlord has previously provided such notice), Mortgagee shall not name Tenant
as a party defendant to any action for foreclosure or other enforcement of the
Mortgage (unless required by law), nor shall the Lease be terminated by
Mortgagee in connection with, or by reason of, foreclosure or other proceedings
for the enforcement of the Mortgage, or by reason of a transfer of the
Landlord’s interest under the Lease pursuant to the taking of a deed in lieu of
foreclosure (or similar device) whether in connection with a bankruptcy
proceeding or otherwise, nor shall Tenant’s use or possession of the Demised
Premises be interfered with by Mortgagee (except to the extent permitted under
the Lease), except that the person acquiring, or succeeding to, the interests
of the Landlord in the Property as a result of any such action or proceeding or
taking of a deed in lieu of foreclosure (or similar device) (including, without
limitation, Mortgagee), and such person’s successors and assigns (any of the
foregoing being hereinafter referred to as the “Successor”), shall not
be:

 

2

 

(a)  subject to any credits,
offsets, recoupment rights, defenses or claims which Tenant might have against
any prior Landlord, except that, subject to the terms hereof, a Successor shall
be subject to any credits, offsets, recoupment rights, and defenses to which
Tenant may be entitled pursuant to the express provisions of the Lease; nor

 

(b)  bound by any rent or
additional rent which Tenant might have paid for more than one (1) month in
advance to any prior Landlord other than in accordance with the express
provisions of the Lease (i.e. periodic Operating Payments or escrow payments on
account of Tax Payments), unless such prepayment shall have been made with
Mortgagee’s prior written consent; nor

 

(c)  liable for any act or
omission of any prior Landlord except as expressly provided in this Agreement,
it being understood that the foregoing is not intended to (i) relieve a
Successor of any liability arising by reason of its acts or omissions from and
after the date the Successor succeeds to the rights of the prior Landlord,
including a continuation of the failure of the prior Landlord to perform its
obligations under the Lease, in which case the Successor upon receipt of notice
of such continuation from Tenant shall have a reasonable period of time to
remedy same (it being agreed that to the extent a time period is granted to
Landlord in the Lease for such remedy, such time period shall be deemed a
reasonable period of time for purposes of this clause (i) and if no time period
is specified and the Successor is Mortgagee, in determining a reasonable period
of time, the parties shall take into account that Mortgagee acts as a trustee),
or (ii) deny Tenant the benefit of any rent offset right, recoupment rights,
abatement or credit to which Tenant is entitled under the express provisions of
the Lease, subject to the express terms hereof. Notwithstanding the foregoing,
the Successor shall not be liable to Tenant for any claim Tenant may have
against a prior Landlord under the provisions of Section 6.12 of the Lease (by
way of example, the Successor shall not be liable for any loss or damage to
Tenant caused by the negligence of a prior Landlord or its agents, servants,
employees or contractors); nor

 

(d)  bound by any covenant to
undertake or complete any Landlord’s Work with respect to any Block of space or
any Offer Space or the Capital Program Work (as such terms are defined in the
Lease); provided, however, that if the Successor shall fail to
complete any such work, then Tenant shall have the following rights (which
shall be the sole and exclusive remedies available to Tenant as against the
Successor for such failure): (i) in the case of the Successor’s failure to
complete the Landlord’s Work with respect to any Block of space Tenant shall,
subject to the terms hereof, have the rights described in Section 1.03, 4.01 and
8.24 (with respect to Punch List Work (as defined in the Lease)

 

3

 

only) of the Lease, and (ii) in
the case of Successor’s failure to complete the Offer Space or Capital Program
Work Tenant shall, subject to the terms hereof, have the rights described in
Section 8.21 of the Lease. The Successor’s failure to complete any such. work
shall not constitute a default by the Successor under the Lease giving rise to
any remedies other than as expressly set forth in this paragraph (d); nor

 

(e)  be required to account for
any security deposit other than any security deposit actually delivered to the
Successor; nor

 

(f)  liable for any payment to
Tenant of any sums or the granting to Tenant of any credit in the nature of a
contribution towards the cost of preparing, furnishing or moving into the
Demised Premises or any portion thereof, or otherwise (except to the extent
provided in paragraphs (a) and (d)(i) above), provided, however,
that subject to the provisions of Section 18 hereof the Successor shall be
responsible to pay to Tenant any unpaid portion of the Tenant Work Allowance
and the Tenant Required Work Allowance (as such terms are defined in the Lease
and collectively referred to herein as “Landlord’s Contributions”) as
and when the same are due and payable under the Lease; provided, further,
however, that the sole and exclusive remedy available to Tenant as
against the Successor in the event the Successor shall fail to pay any or all
of the Landlord’s Contributions shall be to exercise the set-off and/or
recoupment rights described in Section 4.01(e) of the Lease and the Successor’s
failure to make any such payment shall not constitute a default by the
Successor under the Lease giving rise to any remedies other than the set-off
and/or recoupment rights expressly set forth in such Section 4.01(e).
Notwithstanding the foregoing, Mortgagee shall have the right (but not the
obligation) if Landlord shall default in funding all or any portion of the
Landlord’s Contributions to pay such amounts to Tenant; nor

 

(g)  bound by any modification of
the Lease made without the written consent of Mortgagee, including without
limitation any agreement by Tenant to surrender the Lease. Mortgagee agrees not
to unreasonably withhold, delay or condition its consent to a modification of
the Lease.

 

4.  (a)  If the interest of the Landlord under the
Lease shall be transferred by reason of foreclosure or other proceedings for
enforcement of the Mortgage in which Tenant has not been named as party
defendant or pursuant to a taking of a deed in lieu of foreclosure (or similar
device) whether in connection with a bankruptcy proceeding or otherwise, the
Lease shall not be terminated or affected thereby but shall continue in full
force and effect as a direct lease between the Successor and Tenant and Tenant
shall be bound to the Successor, and, except as

 

4

 

expressly provided in this
Agreement, the Successor shall be bound to Tenant, under all of the terms,
covenants and conditions of the Lease for the balance of the term thereof
remaining, with the same force and effect as if the Successor were the
Landlord, and Tenant does hereby (i) agree to attorn to the Successor,
including Mortgagee if it be the Successor, as its landlord, (ii) affirm its
obligations under the Lease, and (iii) agree to make payments of all sums due
under the Lease to the Successor, said attornment, affirmation and agreement to
be effective and self-operative without the execution of any further
instruments, upon the Successor succeeding to the interest of the Landlord
under the Lease, provided that if the Successor requests, without implying any
obligation to do so on the Successor’s part, Tenant will confirm the attornment
described herein to the Successor in writing. Tenant waives the provisions of
any statute or rule of law now or hereafter in effect that may give or purport
to give it any right or election to terminate or otherwise adversely affect the
Lease or the obligations of Tenant thereunder by reason of any foreclosure or
similar proceeding.

 

(b)  Provided the Lease has not
been previously cancelled or terminated, if (i) Mortgagee or any other
Successor shall acquire title to the Property or Landlord’s interest therein upon
foreclosure in an action in which Mortgagee shall have been required to name
Tenant as a party defendant, and (ii) Tenant is not in default under the Lease
after notice and beyond the expiration of all applicable cure periods as and to
the extent provided in the Lease (and provided that nothing shall imply any
right of Tenant to further notice if Landlord has previously provided such
notice), then, in such event, Mortgagee or any other Successor (as the case may
be) shall enter into a new lease with Tenant upon the same terms and conditions
as were contained in the Lease, except that (x) the obligations and liabilities
of Mortgagee or other Successor (as the case may be) under any such new lease
shall be subject to the terms and conditions of this Agreement, and (y) the
expiration date of such new lease shall coincide with the Expiration Date
provided for in Section 1.02 of the Lease (as the same may have been extended
in accordance with the terms of Article 9 of the Lease or otherwise consented
to in writing by Mortgagee). Tenant shall execute any such new lease and shall
attorn to Mortgagee or the other Successor (as the case may be) so as to
establish direct privity between Mortgagee or such other Successor (as the case
may be) and Tenant.

 

(c)  If (i) Landlord, as
debtor-in-possession, or any trustee appointed in a bankruptcy case of
Landlord, obtains an order of the Bankruptcy Court authorizing the rejection of
the Lease in accordance with §365 of the Bankruptcy Code (as hereinafter
defined), and Tenant elects to retain its rights under the Lease in accordance
with §365(h) of the Bankruptcy Code, (ii) Mortgagee or any other Successor
shall acquire title

 

5

 

to the Property upon
foreclosure or by the acceptance of a deed in lieu thereof or by any other
means, and (iii) Tenant is not in default under the Lease after notice and
beyond the expiration of all applicable cure periods as and to the extent
provided in the Lease (and provided that nothing shall imply any right of
Tenant to further notice if Landlord has previously provided such notice) then,
in such event, Mortgagee or any other Successor (as the case may be) shall
enter into a new lease with Tenant upon the same terms and conditions as were
contained in the Lease, except that (x) the obligations and liabilities of
Mortgagee or other Successor (as the case may be) under any such new lease
shall be subject to the terms and conditions of this Agreement, and (y) the
expiration date of such new lease shall coincide with the Expiration Date
provided for in Section 1.02 of the Lease (as the same may have been extended
in accordance with the terms of Article 9 of the Lease or otherwise consented
to in writing by Mortgagee) of the Lease. Tenant shall execute any such new
lease and shall attorn to Mortgagee or the other Successor (as the case may be)
so as to establish direct privity between Mortgagee or such other Successor (as
the case may be) and Tenant.

 

5.  (a)  Tenant shall notify Mortgagee of any default,
breach or other failure (a “Default”) by Landlord under the Lease which
would entitle Tenant to cancel or terminate the Lease or abate the rents,
additional rents or other sums payable thereunder or to exercise any self-help
or set-off rights thereunder. If Landlord fails to cure any Default which would
entitle Tenant to cancel or terminate the Lease within the time period, if any,
provided for in the Lease and such Default is of a nature (i) which can be
cured by the payment of money, then Mortgagee shall have an additional 10 days
within which to cure such Default after receipt of Tenant’s notice that
Landlord has failed to cure same and the Lease shall not be cancelled or
terminated unless Mortgagee shall have failed to cure such Default (without
implying any obligation to do so) prior to the expiration of such 10 days, or
(ii) which cannot be cured by the payment of money, then Tenant shall notify
(the “Second Notice”) Mortgagee that Landlord has failed to cure such
Default within such time period as is provided for such cure under the Lease
(or if no such period is provided, within a reasonable period of time) and
Mortgagee shall have an additional 30 days after receipt of such Second Notice
within which to cure such Default or if such Default cannot be cured within
that time with the exercise of reasonable diligence, then such additional time
as may be necessary to cure the same with the exercise of reasonable diligence;
and if, within such 30 days, Mortgagee has either cured such Default or has
commenced or given Tenant notice of its intention to commence and thereafter
diligently commences and diligently pursues the remedies necessary to cure such
Default (including, without limitation, commencement of foreclosure proceedings
or eviction proceedings, if necessary to effect such cure), then and in such
event the Lease shall not be terminated

 

6

 

and Tenant shall not exercise
any other rights or remedies under the Lease or otherwise while such remedies
are being so diligently pursued, other than Tenant’s right to (a) any
abatement, deduction, counterclaim, recoupment right or set-off of any rent or
additional rent expressly set forth in the Lease, or (b) self-help in
accordance with Section 8.24 of the Lease. Notwithstanding the foregoing,
Mortgagee’s additional cure period under clause (ii) above shall not exceed 90
days in the case of Tenant’s termination rights under clauses (A) and (B) of
Section 8.26 of the Lease or 180 days in the case of Tenant’s termination right
under clause (C) of Section 8.26 of the Lease. Nothing herein shall be deemed
to imply that Tenant has any right to terminate the Lease or any other right or
remedy, except as may be otherwise expressly provided for in the Lease.

 

(b)  Tenant’s rights under this
paragraph 5 and under paragraph 3(a) hereof are expressly conditioned upon (i)
Tenant delivering to Mortgagee copies of all notices delivered by Tenant
relating to a Default which is the subject of Tenant’s claim concurrent with
their delivery to Landlord (provided that if Tenant fails to deliver a copy of
the notice of a Default to Mortgagee as required hereby, Tenant’s right to
cancel or terminate the Lease shall not be waived, but Mortgagee’s additional
cure period will be extended for a period equal to-the period of time Landlord
had to cure such Default, such additional cure period shall not be deemed to
have commenced until Tenant shall have delivered the requisite notice to
Mortgagee and Tenant shall not cancel or terminate the Lease prior to the
expiration of such additional cure period without such Default having been
cured), and (ii) Mortgagee being provided the opportunity by Tenant to monitor
and participate in any arbitration or other proceeding related to a Default.
Tenant shall deliver to Mortgagee concurrent with delivery to or receipt from
Landlord or the arbitrators determining any dispute, a copy of any submission,
claim, demand, order or pleading served by or upon Tenant or delivered to or
received from the arbitrators. Mortgagee shall have the right to appear before
and make presentations to the arbitrators determining any dispute.

 

(c)  Any termination of the Lease
by Tenant as the result of any claimed Default by Landlord thereunder without
compliance with the applicable provisions of this paragraph 5 shall be without
force or effect and shall be void ab  initio.

 

6.  Notwithstanding anything to
the contrary contained in this Agreement:

 

(a)  In the event that a
receiver, trustee or any other similar person or entity acting in like capacity
is appointed for the Property or Landlord’s interest therein, in any action or
proceeding, then provided the Lease has not been cancelled or terminated and
for so long as Tenant is not in default under the

 

7

 

Lease after notice and beyond
the expiration of all applicable cure periods as and to the extent provided in
the Lease (and provided that nothing shall imply any right of Tenant to further
notice if Landlord has previously provided such notice), Mortgagee will neither
consent to nor cause or instruct such receiver, trustee or other similar person
or entity to (i) disturb Tenant in its possession of the Demised Premises
(except to the extent permitted under the Lease), (ii) diminish Tenant’s rights
under the Lease, or (iii) terminate the Lease (except to the extent permitted
under the Lease). Without limiting the generality of the foregoing, Mortgagee
will file an objection to such receiver, trustee or other similar person or
entity taking any of the actions described in clauses (i) through (iii) above
provided Tenant shall deliver Mortgagee notice of same and will cooperate with
Tenant in its efforts to oppose and defeat such receiver, trustee or similar
person with respect to such actions;

 

(b)  In the event that (i)
Landlord becomes the subject of a bankruptcy case under the provisions of the
Bankruptcy Code, (ii) Landlord, as debtor-in-possession, or any trustee
approved in the bankruptcy case of Landlord, seeks an order of the bankruptcy
court or other court of competent jurisdiction (the “Bankruptcy Court”),
authorizing the rejection of the Lease, then for so long as Tenant is not in
default under the Lease after notice and beyond the expiration of all
applicable cure periods as and to the extent provided in the Lease, Mortgagee
will file an objection to such party’s motion seeking to reject the Lease;

 

(c)  In the event that (i)
Landlord, or a trustee in bankruptcy of the Landlord, obtains an order of the
Bankruptcy Court authorizing the rejection of the Lease in accordance with §365
of the Bankruptcy Code and Tenant elects to retain its rights under the Lease
in accordance with §365(h) of the Bankruptcy Code, (ii) Mortgagee or any other
Successor shall acquire possession and control of the Property, and (iii)
Tenant is not in default under the Lease after notice and beyond the expiration
of all applicable cure periods as and to the extent provided in the Lease (and
provided that nothing shall imply any right of Tenant to further notice if
Landlord has previously provided such notice) then, in such event, Mortgagee or
such other Successor (as the case may be) shall enter into a new lease with the
Tenant on the then executory terms of the original Lease, as provided in this
Agreement, if and to the extent that Mortgagee or such other Successor has the
legal right and power to do so; and

 

(d)  Mortgagee acknowledges and
agrees that (i) if Landlord, as debtor-in-possession, or any trustee appointed
in the bankruptcy case of the Landlord, obtains an order of the Bankruptcy
Court authorizing the rejection of the Lease in accordance with §365 of the
Bankruptcy Code, and (ii) Tenant

 

8

 

elects to retain its rights
under the Lease in accordance with §365(h) of the Bankruptcy Code, (x) the
provisions of this Agreement shall continue to remain in full force and effect,
and (y) Tenant shall have all of Tenant’s rights and remedies provided under
the Lease, including, without limitation, such right as may be provided in the
Lease to offset or recoup against any and all rents due and payable by Tenant
under the Lease, or under any new lease entered into pursuant to this
Agreement, any damages occurring after the date of rejection caused by the
non-performance of any obligation of Landlord under the Lease or any new lease
entered into pursuant to this Agreement. Tenant’s right of offset or recoupment
provided for in this paragraph (d) shall survive any transfer of the Property
in foreclosure or by deed in lieu of foreclosure or otherwise and shall be
binding upon Landlord, Mortgagee or any other Successor.

 

7.  Provided Tenant is not in
default under the Lease after notice and beyond the expiration of applicable
cure periods as and to the extent provided in the Lease (and provided that
nothing shall imply any right of Tenant to further notice if Landlord has
previously provided such notice) and the Lease has not been cancelled or
terminated, Mortgagee agrees that in the event Landlord shall become the
subject of a case under the Bankruptcy Code, (a) Mortgagee shall consent to the
use of cash collateral (as such term is defined in Section 363(a) of the
Bankruptcy Code) for the performance of the obligations of the Landlord under
the Lease, (b) Mortgagee shall consent to the inclusion in any cash collateral
order or stipulation of an assumption by Landlord of the Lease under §365 of
the Bankruptcy Code (without waiving the right of Mortgagee to object to any
other provision of any cash collateral order or committing Mortgagee to agree
to any other provision of a cash collateral stipulation), (c) Mortgagee will
file and pursue an objection to any rejection by Landlord of the Lease, and (d)
Mortgagee will file and pursue an objection to the confirmation of any plan of reorganization
of Landlord that provides for the rejection of the Lease. The provisions of
paragraph 6 above and of this paragraph 7 shall be of no further force or
effect from and after the date that the principal amount-secured by the
Mortgage has been reduced to an amount not to exceed $500,000,000, provided
that the Mortgage continues to encumber both the Property and the fee interest
in the property known as 237 Park Avenue, New York, New York at that time.

 

8.  Mortgagee agrees that,
provided Tenant is not then in default under this Agreement or the Lease after
notice and beyond the expiration of applicable grace periods as and to the
extent provided under the Lease or otherwise (and provided that nothing shall
imply any right of Tenant to further notice if Landlord has previously provided
such notice), with respect to any sublease (other than a sublease to an
Affiliate of Tenant or Related Service Provider whether pursuant to Sections
5.01(b),

 

9

 

(c) and (d) of the Lease or
otherwise) which (a) consists of at least one full floor of the Blocks (as
defined in the Lease) or at least 30,000 contiguous rentable square feet of
space in the Demised Premises which is on a floor which is not a Block (and in
the case where a sublease includes a portion of a floor, the balance of the
floor consists of a leaseable configuration of at least 10,000 rentable square
feet), (b) in the case of a Block, consists of contiguous space in the Blocks
which includes the highest or lowest floor then comprising the Blocks or is in
the Blocks and is contiguous to another floor all of which has been sublet by
Tenant and with respect to which Mortgagee has executed and delivered one or
more non-disturbance and attornment agree­ments hereunder with respect to all
of such floor, (c) provides for a rental which, after taking into account any
free rent periods, credits, offsets or deductions to which the subtenant may be
entitled thereunder, is equal to or in excess (on a per rentable square foot
basis) of the greater of (i) annual Fixed Rent and the annualized recurring
Additional Charges (as such terms are defined in the Lease) payable by Tenant
under the Lease with respect to such space from time to time throughout the
term, and (ii) the fair market fixed rent and the fair market additional rent,
each of (i) and (ii) above to be valued at the time when the attornment
provided for in the non-disturbance and attornment agreement hereinafter
referred to becomes effective between Mortgagee and the subtenant following the
termination of the Lease (or if the rental to be paid by the subtenant shall be
less (on a per rentable square foot basis) than the greater of (i) and (ii)
above, if such subtenant agrees, in the non-disturbance and attornment agreement
hereinafter referred to, that such rental will automatically and without
condition become so equal to the greater of (i) and (ii) above (subject to
arbitration in the manner provided in Section 9.03 of the Lease if the parties
do not agree on the fair market rent or fair market additional rent within ten
days after such attornment if Landlord claims that clause (ii) is the operative
measure of rent to be paid by the subtenant), if, as and when the attornment
provided for in such non-disturbance and attornment agreement becomes effective
between Mortgagee and the subtenant following the termination of the Lease),
(d) consists of space that will be demised separately from the remainder of the
Demised Premises in accordance with all applicable laws, (e) provides for other
obligations of the subtenant not materially less favorable to Landlord under
such sublease than the obligations of Tenant under the Lease (and shall require
compliance, to the extent applicable, with Sections 5.04(d)(iv)(F) and (G) and
8.28 of the Lease), and (f) Landlord has executed and delivered to such
subtenant a non-disturbance agreement in accordance with the provisions of
Section 5.04(d)(iv) of the Lease, then Mortgagee shall, at Tenant’s request,
execute and deliver to such subtenant a non-disturbance and attornment
agreement substantially in the form attached to this Agreement as Exhibit B
provided and upon condition that (i) Tenant has furnished to Mortgagee
reasonably

 

10

 

satisfactory evidence that the
subtenant has a financial worth sufficient to timely fulfill its obligations
under such sublease as a primary tenant (and not as a subtenant), including any
increase in such financial obligations which may become effective as provided
above but in no event shall such subtenant’s financial worth be less than a
Major Subtenant (as defined in the Lease), (ii) the sublease is in a form
consistent with the requirements of Article 5 of the Lease and otherwise
reasonably satisfactory to Mortgagee, and (iii) the subtenant executes and
delivers to Landlord such non-disturbance and attornment agreement. Any dispute
as to the creditworthiness of a prospective subtenant may be submitted to
determination by arbitration in the manner provided in Section 9.03 of the
Lease as if such provisions were set forth herein and “Mortgagee” were
substituted for “Landlord” therein, and any such determination shall be binding
upon Mortgagee and Tenant. Notwithstanding anything to the contrary set forth
in this paragraph 8, any non disturbance and attornment agreement delivered by
Mortgagee pursuant to this paragraph 8 shall be conditional and by its terms
expressly contain the condition such that, in the event of any termination of
the Lease (x) other than by reason of (1) Tenant’s default, (2) a rejection of
the Lease in bankruptcy by Tenant, or (3) subject to the terms hereof, a
voluntary surrender of the Lease by agreement between Landlord and Tenant, but
(y) including a termination of the Lease by reason of a casualty, condemnation
or pursuant to Section 8.26 of the Lease, then any non-disturbance and
attornment agreement to a subtenant shall, automatically and without further
act of the parties, terminate and be of no further force or effect from and
after the applicable termination date, provided, that if the Lease is
terminated with respect to less than all of the Demised Premises, only such
non-disturbance and attornment agreements to subtenants who sublease any of
such space with respect to which the Lease is terminated shall automatically
and without further act of the parties terminate and be of no further force or
effect from and after the applicable termination date. In addition, to the
extent any such non-disturbance and attornment agreement relates to a subtenant
which is a partnership of professionals (including, without limitation,
attorneys, accountants and investment bankers), such agreement shall provide
that no provision of such sublease providing in substance for the exculpation
from personal liability of the partners of such partnership shall be binding on
Mortgagee or any other Successor unless such subtenant shall, on the date the
attornment provided in such non-disturbance and attornment agreement becomes
effective between Mortgagee and such subtenant, post with Mortgagee or such
other Successor as security for such subtenant’s obligations under its
sublease, cash or a clean, unconditional and irrevocable letter of credit (in
form and from a bank reasonably satisfactory to Mortgagee) in either case in an
amount equal to the greater of (i) the annual fixed rent and annualized
recurring charges (without regard to any abatement,

 

11

 

credits or offsets) payable at
such time (such security to be increased from time to time to reflect increases
in such fixed rent and recurring charges) by such subtenant to Mortgagee, and
(ii) the security required to be provided by the subtenant under the terms of
the Lease, unless such cash or letter of credit was previously delivered to
Landlord in accordance with the provisions of the Lease.

 

9.  Tenant shall deliver to
Mortgagee copies of all notices under the Lease concurrent with delivery to or
receipt from Landlord (including, without limitation, default notices, notices
establishing delivery and commencement dates and notices commencing arbitration
proceedings but excluding routine operational notices such as requests for
overtime services). No notice shall be effective as to Mortgagee unless
properly served upon Mortgagee in the manner provided herein.

 

10.  This Agreement may not be
modified except by an agreement in writing signed by Tenant and Mortgagee or
their respective successors-in-interest. In addition, any modification of this
Agreement which would adversely affect Landlord shall require the consent of
Landlord provided that Landlord is not in default under the terms of the Lease
or the Mortgage beyond any notice and cure period. This Agreement shall inure
to the benefit of and be binding upon the parties hereto, their respective
heirs, representatives, successors and assigns including, without limitation,
with respect to Mortgagee, the grantee under a deed in lieu of foreclosure
and/or the purchaser of the Demised Premises at a foreclosure sale or at any
sale of the Demised Premises following the granting of a deed in lieu of
foreclosure or following foreclosure.

 

11.  Nothing contained in this
Agreement shall in any way impair or affect the lien created by the Mortgage
except as specifically set forth herein.

 

12.  Landlord, Tenant and
Mortgagee agree that this Agreement satisfies any condition or requirement in
the Lease relating to the granting of a non-disturbance agreement by Mortgagee.
Mortgagee and Tenant further agree that in the event there is any inconsistency
between the terms and provisions hereof and the terms and provisions of the
Lease dealing with non-disturbance by Mortgagee or the provisions of the
Mortgage referred to in Section 6.01(c) of the Lease (as they relate to
Tenant’s rights and obligations), the terms and provisions hereof shall be
controlling.

 

13.  All notices, demands,
consents, approvals, advices, waivers or other communications (each, a “Notice”)
which may or are required to be given by either party to the other under this Agreement
shall be in writing and shall be sent (a) by hand, (b) by United States Mail,
certified or registered, postage

 

12

 

prepaid, return receipt
requested or (c) by a nationally recognized overnight carrier (which provides
for receipted delivery in the ordinary course of its business), in each case
addressed to the party to be notified at the address for such party specified
in the first paragraph of this Agreement, or to such other place in the continental
United States as the party to be notified may from time to time designate by at
least 15 days’ notice to the notifying party (with copy in the case of
Mortgagee to Kelley Drye & Warren, 101 Park Avenue, 30th floor, New York,
New York, Attention: David Retter, Esq.). Each Notice shall be deemed to have
been given on the date such Notice is actually received as evidenced by a
written receipt therefor, and in the event of failure to deliver by reason of
changed address of which no Notice was given or refused to accept deliver, as
of the date of such failure. Tenant shall also deliver a copy of any Notice
provided to Mortgagee under paragraph 5 hereof to Landlord at the address and
in the manner provided in the Lease, excluding Notices which Tenant shall previously
or concurrently have delivered to or received from Landlord.

 

14.  Notwithstanding anything to
the contrary contained herein, Tenant acknowledges and agrees that the
provisions of paragraph (3)(c) set forth in Section 6.01(c) of the Lease shall
be effective and run to the benefit of any Successor, including Mortgagee.
Notwithstanding anything to the contrary contained herein, Mortgagee
acknowledges and agrees that the provisions of paragraph (3)(d) set forth in
Section 6.01(c) of the Lease shall be deemed null and void and of no effect as
against Tenant to the extent inconsistent with the express terms of the Lease
and this Agreement.

 

15.  This Agreement shall be
governed by the laws of the State of New York. If any term of this Agreement or
the application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement or the application of
such term to any person or circumstances other than those as to which it is
invalid or unenforceable shall not be affected thereby, and each term of this
Agreement shall be valid and enforceable to the fullest extent permitted by
law. This Agreement may be executed in any number of counterparts, each of
which when executed and delivered will be deemed to be an original and all of
which taken together will be deemed to be one and the same instrument.

 

16.  If at any time this
Agreement is rejected by Mortgagee in any case under the Bankruptcy Code
involving Mortgagee as debtor, then Mortgagee agrees that the Lease shall be
deemed to be superior to the Mortgage and not subordinate thereto.

 

17.  Each party warrants and
represents to the other parties that the execution and delivery of this
Agreement has

 

13

 

been duly authorized by all
necessary actions on the part of the representing party; and that the person
who signs this Agreement on behalf of such party is duly authorized to do so.

 

18.  Anything herein or in the
Lease to the contrary notwithstanding, if Mortgagee shall acquire title to the
Property, or shall otherwise become liable for any obligations of Landlord
under the Lease or hereunder, Mortgagee shall have no obligation, nor incur any
liability, beyond Mortgagee’s then interest, if any, in the Property (as such
interest is defined in Section 8.06 of the Lease) and Tenant shall look solely
and exclusively to such interest of Mortgagee, if any, in the Property for the
payment and discharge of any obligations, imposed upon Mortgagee hereunder or
under the Lease. Tenant agrees that with respect to any money judgment that may
be obtained or secured by Tenant against Mortgagee, Tenant shall look solely to
the estate or interest owned by Mortgagee and the Property (as such interest is
defined in Section 8.06 of the Lease) and Tenant shall not collect or attempt
to collect any such judgment out of any other assets of Mortgagee. Nothing
contained in this Section 18 shall be construed to diminish or impair Tenant’s
abatement, offset, credit or self-help rights under the express provisions of
the Lease.

 

19.  This Agreement may be
executed in one or more counterparts, each of which, when so executed and
delivered, shall be an original and all of which together shall constitute the
same instrument.

 

14

 

IN WITNESS WHEREOF, the parties hereto have hereunto caused this
Agreement to be duly executed as of the day and year first above written.

 

	
   

  	
  Mortgagee

  
	
   

  	
   

  
	
   

  	
  NATIONSBANK
  OF TENNESSEE, N.A.

  
	
   

  	
  By: 

  	
  The Bank of
  New York, as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Tenant

  
	
   

  	
   

  
	
   

  	
  WARNER
  COMMUNICATIONS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Landlord

  
	
   

  	
   

  
	
   

  	
  1290
  ASSOCIATES, L.L.C.

  
	
   

  	
  By: 

  	
  O&Y
  Management Corp., as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
								

 

15

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On this        day of
                    ,
1995, before me personally came                
to me known, who being by me duly sworn, did say that he resides at
                                                                                                    ,
that he is
                      of
The Bank of New York, the corporation described in and which executed the
foregoing instrument as Agent for NationsBank of Tennessee, N.A. as Mortgagee
by order of the board of directors of said corporation; and that he signed his
name thereto be like order.

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On this         day of
                     ,
1995, before me personally came                                to
me known, who being by me duly sworn, did say that he resides at
                                                                                             ,
that (s)he is
                        of
Warner Communications Inc., the corporation described in and which executed the
foregoing instrument as Tenant by order of the board of directors of said
corporation; and that (s)he signed his name thereto be like order.

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

16

 

	
  STATE OF NEW
  YORK

  	
  )

  	
   

  
	
   

  	
  :

  	
  ss.:

  
	
  COUNTY OF
  NEW YORK 

  	
  )

  	
   

  

 

On
the             day
of
                            ,
1996, before me personally came
                                          ,
to me known, who, being by me duly sworn, did depose and say that he resides at
                                                                                              ;
that he is the Executive Vice President of O & Y Management Corp., a
corporation duly organized under the laws of the State of New York, that said
corporation is the agent of 1290 ASSOCIATES, L.L.C., a New York limited
liability company, the limited liability company described in and which
executed the foregoing instrument; and that he signed his name thereto by
authority of the board of directors of said corporation; and that he
acknowledged to me that said instrument was executed by said corporation as
agent of said limited liability company.

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

 

EXHIBIT A

 

DESCRIPTION OF LAND

 

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

 

BEGINNING at the corner formed by the intersection of the northerly
side of West 51st Street with the easterly side of Avenue of the Americas (formerly
Sixth Avenue); running thence Easterly along the northerly side of West 51st
Street 448 feet to a point distant 472 feet Westerly from the corner formed by
the intersection of the northerly side of West 51st Street with the westerly
side of Fifth Avenue, thence Northerly parallel with Fifth Avenue and part of
the distance through a party wall 100 feet 5 inches to the center line of the
block between West 51st Street and West 52nd Street; thence Westerly along said
center line of the block 2 feet, thence Northerly parallel with Fifth Avenue
and part of the distance through a party wall 100 feet 5 inches to the
southerly side of West 52nd Street, at a point therein distant 474 feet
Westerly from the southwest corner of West 52nd Street and Fifth Avenue; running
thence Westerly along the southerly side of West 52nd Street 446 feet to the
easterly side of Avenue of the Americas, thence Southerly along the easterly
side of Avenue of the Americas 200 feet 10 inches to the northerly side of West
51st Street at the point or place of BEGINNING.

 

18

 

DESCRIPTION OF LEASE

 

Lease, dated February 25, 1959, between Martha F. Keeping, as lessor,
and 91078 Corporation, as lessee, a memorandum of which was recorded in the
office of the Register of the City of New York, County of New York in Liber
5068 of Conveyances, Page 489, as assigned by a series of assignments (the “Ground
Lease”), pursuant to which assignments Landlord holds the ground lessor and
ground lessee interest in such Ground Lease as of the date hereof.

 

 

19

 

EXHIBIT B

 

FORM OF SUBTENANT

NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

THIS AGREEMENT, made as of
the               
day of
                       
,
              
by and between NATIONSBANK OF TENNESSEE, N.A., a national banking corporation,
having an address c/o The Bank of New York, 101 Barclay Street, 12-E, New York,
New York 10286 (Attention: John W. Stevenson and Thomas A. Burrell)(1)
(hereinafter called “Mortgagee”),
                                       ,
a                                                                          ,
having an office at
                                                                                                                      (hereinafter
called “Subtenant”), and WARNER COMMUNICATIONS INC., a Delaware
corporation, having an office at 75 Rockefeller Plaza, New York, New York 10012
(hereinafter called “Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, Mortgagee is the successor trustee under that certain Mortgage
Spreader and Consolidation Agreement and Trust Indenture dated March 20, 1984
(said Mortgage Spreader and Consolidation Agreement and Trust Indenture, as
amended and supplemented by Supplemental Indenture No. 1 dated as of March 20,
1984, Supplemental Indenture No. 2 dated as of December 30, 1986 and
Supplemental Indenture No. 3 dated as of March 30, 1988, Supplemental Indenture
No. 4 dated as of August 17, 1995 and Supplemental Indenture No. 5 dated as of
September 18, 1995 and as it may be amended, increased, renewed, modified,
consolidated, replaced, combined, substituted, severed, split, spread or
extended, being hereinafter referred to as the “Mortgage”) between
Manufacturers Hanover Trust Company, predecessor-in-interest to Mortgagee, as
trustee, and certain mortgagors described therein which was recorded on March
20, 1984 in the Office of the City-Register, New York County in Reel 775, Page
1097, and which encumbers, among other properties, the land and the building
located at 1290 Avenue of the Americas, New York, New York [and the ground leasehold
interest encumbering such property](2) (collectively, the “Property”),

 

WHEREAS, Tenant has entered into a certain agreement of lease dated as
of January   , 1996 (the “Overlease”) covering,

(1)           If the identity of the Trustee changes, this form must be
appropriate modified.

(2)           Delete if no longer applicable.

 

20

 

inter alia,
                                          
(the “Sublet Premises”) in the building forming a part of the Property,

 

WHEREAS, Subtenant has entered into a certain agreement of sublease
dated as of
               ,
           with Tenant (the “Sublease”)
covering the Sublet Premises,

 

NOW,
THEREFORE, in consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.  Subtenant covenants and
agrees that the Sublease now is and shall at all times continue to be subject
and subordinate in each and every respect to the Mortgage. Subtenant, upon
request, shall execute and deliver any certificate or other instrument which
the Mortgagee may reasonably request to confirm said subordination by
Subtenant.

 

2.  Subtenant certifies that (i) Subtenant is the
owner and holder of the subtenant’s interest under the Sublease, (ii) the
Sublease is presently in full force and effect and unmodified, (iii) no rent or
additional rent payable under the Sublease has been paid more than one (1)
month in advance of its due date, (iv) no default exists under the Sublease,
and (v) there are no offsets or defenses as of the date hereof to the payment
of the rents, additional rents or other sums payable under the Sublease.

 

3.  As long as no default exists under the
Sublease which has continued after notice and beyond the expiration of any
applicable grace period as and to the extent provided in the Sublease (and
provided that nothing shall imply any right of Subtenant to further notice if
Tenant or the Landlord (as defined below) has previously provided such notice)
and, subject to the provisions of paragraph 5 below, Mortgagee shall not name
Subtenant as a party defendant to any action for foreclosure or other
enforcement of the Mortgage (unless required by law), nor shall the Sublease be
terminated by Mortgagee in connection with, or by reason of, foreclosure or
other proceedings for the enforcement of the Mortgage, or by reason of a
transfer of the landlord’s interest under the Overlease pursuant to the taking
of a deed in lieu of foreclosure (or similar device), nor shall Subtenant’s use
or possession of the Sublet Premises be interfered with by Mortgagee, unless
the Tenant or 1290 Associates, LLC or any successor owner of the Property (the
“Landlord”) would have had such right if the Mortgage had not been
granted, except that the person acquiring or succeeding by or through Mortgagee
to the interests of the Landlord under the Overlease as a result of any such
action or proceeding (including Mortgagee should it acquire or succeed to such
interests), and

 

21

 

such person’s successors and
assigns (any of the foregoing being hereinafter referred to as the “Successor”),
shall not be:

 

	
  (a) 

  	
   

  	
  subject to
  any credits, offsets, defenses or claims which Subtenant might have against
  any prior sublessor or landlord; nor

  
	
   

  	
   

  	
   

  
	
  (b) 

  	
   

  	
  bound by any
  rent or additional rent which Subtenant might have paid for more than one
  month in advance to any prior sublessor or landlord, unless such prepayment
  shall have been made with Mortgagee’s prior written consent; nor

  
	
   

  	
   

  	
   

  
	
  (c) 

  	
   

  	
  liable for
  any act or omission of any prior: sublessor or landlord; nor

  
	
   

  	
   

  	
   

  
	
  (d) 

  	
   

  	
  bound by any
  covenant to undertake or complete any improvement to the Sublet Premises or
  the building forming a part of the Property; nor

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
   required to account for any security deposit
  other than any security deposit actually delivered to the Successor; nor

  
	
   

  	
   

  	
   

  
	
  (f) 

  	
   

  	
  liable for
  any payment to Subtenant of any sums, or the granting to Subtenant of any
  credit, in the nature of a contribution towards the cost of preparing,
  furnishing or moving into the Sublet Premises or any portion thereof; nor

  
	
   

  	
   

  	
   

  
	
  (g) 

  	
   

  	
  bound by any
  modification of the Sublease which results in the Sublease no longer
  conforming to the parameters set forth in the Overlease for the granting by
  Landlord of a non-disturbance agreement to a subtenant made without the
  written consent of Mortgagee.

  

 

4.  If the interest of the Landlord in the
Property shall be transferred by reason of foreclosure or other proceedings for
enforcement of the Mortgage or pursuant to a taking of a deed in lieu of
foreclosure (or similar device) and the Overlease shall have previously
terminated (and the Sublease shall have become a direct lease between Subtenant
and Landlord pursuant to a non-disturbance and attornment agreement between
such parties) or shall be terminated concurrent with or subsequent to such
foreclosure, other enforcement proceeding or taking, then subject to the
provisions of paragraph 5 below, Subtenant shall be bound to the Successor,
and, except as provided in this Agreement, the Successor shall be bound to

 

22

 

Subtenant, under all of the
terms, covenants and conditions of the Sublease for the balance of the term
thereof remaining, with the same force and effect as if the Successor were the
Tenant under the Sublease, and Subtenant does hereby (i) agree to attorn to the
Successor, including Mortgagee if it be the Successor, as its landlord, (ii)
affirm its obligations under the Sublease (subject to the provisions of
paragraph 5 below), and (iii) agree to make payments of all sums due under the
Sublease (as same may be adjusted pursuant to the terms of paragraph 5 below)
to the Successor, said attornment, affirmation and agreement to be effective
and self-operative without the execution of any further instruments, upon the
Successor succeeding to the interest of the Tenant under the Sublease, provided
that if the Successor requests, without implying any obligation to do so on the
Successor’s part, Subtenant will confirm the attornment described herein to the
Successor in writing. Subtenant waives the provisions of any statute or rule of
law now or hereafter in effect that may give or purport to give it any right or
election to terminate or otherwise adversely affect the Sublease or the
obligations of Subtenant thereunder by reason of any foreclosure of similar
proceeding.

 

5.   (a)  
Subtenant agrees that to the extent the Sublease provides for a rental
which, after taking into account any free rent periods, credits, offsets or
deductions to which the Subtenant may be entitled thereunder, is less than the
greater of (on a per rentable square foot basis) (i) the annual Fixed Rent and
annualized recurring Additional Charges (as such terms are defined in the
Overlease) payable by Tenant under the Overlease with respect to the Sublet
Premises (the “Overlease Rent”) and (ii) the fair market fixed rent and
the fair market additional rent (collectively referred to as the “Fair
Market Rent”) as reasonably determined by the Successor with respect to the
Sublet Premises, Subtenant agrees that the rental payable under the Sublease
will automatically and without condition become equal to the greater of the
Overlease Rent and the Fair Market Rent, if, as and when the attornment
provided for herein becomes effective between Mortgagee or any other Successor
and the Subtenant. If Subtenant disagrees with the Successor’s determination of
the Fair Market Rent, then the amount of the Fair Market Rent will be
determined by arbitration pursuant to Section 9.03 of the Overlease, provided
that pending resolution of the dispute, Subtenant shall pay rent based on the
Successor’s determination with appropriate adjustment being made after final
resolution of the dispute. Subtenant further agrees that the Sublease shall at
all times be subject to and comply with the provisions of Sections
5.04(d)(iv)(F) and (G) and 8.28 of the Overlease.

 

[(b)  In addition, Subtenant agrees that no
provision of the Sublease providing in substance for the exculpation from
personal liability of the partners of Subtenant shall be binding

 

23

 

on Mortgagee or any other
Successor unless Subtenant shall, on the date the attornment provided herein
becomes effective between Mortgagee or any other Successor and Subtenant, post
with Mortgagee or such Successor as security for Subtenant’s obligations under
the Sublease, cash or a clean, unconditional and irrevocable letter of credit
(in form and from a bank reasonably satisfactory to Mortgagee or such
Successor) in either case in an amount equal to the greater of (i) the annual
fixed rent and recurring charges (without regard to any abatements, credits or
offsets) payable at such time (such security to be increased from time to time
to reflect increases in such fixed rent and recurring charges) by Subtenant to
Mortgagee or such other Successor as same may be modified in accordance with
the terms of paragraph (a) above, and (ii) the security required to be provided
by Subtenant under the terms of the Overlease, unless such cash or letter of
credit was previously delivered to Landlord in accordance with the provisions
of the Overlease.](3)

 

(c)
Notwithstanding anything to the contrary set forth in this Agreement, the
agreements of the Mortgagee hereunder (on behalf of itself and any other
Successor) shall be effective only in the event the cause of termination of the
Overlease is (x) the default of Tenant thereunder, (y) a rejection of the
Overlease in bankruptcy by Tenant or (z) a voluntary surrender of the Overlease
by agreement between Landlord and Tenant and consented to by Mortgagee (to the
extent required under the Agreement referred to in paragraph 13 below) and if
the Overlease is cancelled, terminated or expires (in whole or in part but
including the Sublet Premises) for any other reason (including, without
limitation, by reason of a casualty or condemnation or the exercise by Tenant
of any termination or cancellation right or remedy provided in the Overlease,
at law or in equity or by reason of Tenant’s failure to exercise the Renewal
Option (as defined in the Overlease)), then this Agreement shall, automatically
and without further act of the parties, terminate and be of no further force or
effect from and after the applicable termination date of the Overlease (or
portion thereof) or the day preceding the commencement of the Renewal Term (as
defined in the Overlease), as the case may be.

 

6.  In the event the Overlease is terminated and
Subtenant becomes a direct tenant of Landlord pursuant to the terms of a
non-disturbance and attornment agreement between such parties, Subtenant shall
notify Mortgagee of any default by Landlord under the Sublease which would entitle
Subtenant to cancel the Sublease or abate the rents, additional rents or other
sums payable thereunder or to exercise any self-help or set-off

 

(3)           To be deleted if Subtenant is not a partnership of
professionals (including without limitation, attorneys, accountants and
investment bankers).

 

24

 

rights thereunder. If Landlord
fails to cure any default as to which Subtenant is obligated to give notice
pursuant to the preceding sentence within the time provided for in the
Sublease, Subtenant shall provide Mortgagee notice of such occurrence and
Mortgagee shall then have an additional 30 days after receipt of such notice
within which to cure such default or if such default cannot be cured within
that time, then such additional time as may be necessary if, within such 30
days, Mortgagee shall give Subtenant notice of its intention to diligently
pursue the remedies necessary to cure such default (including, without
limitation, commencement of foreclosure proceedings or eviction proceedings if
necessary to effect such cure) and thereafter does diligently pursue such
remedies and cure, in which event the Sublease shall not be terminated and
Subtenant shall not exercise any other rights or remedies under the Sublease or
otherwise while such remedies are being so diligently pursued by Mortgagee,
other than Subtenant’s right, subject to Section 8.28 of the Overlease, to (a)
any abatement, deduction, counterclaim or set-off of any rent or additional
rent expressly set forth in the Sublease, or (b) self-help in accordance with
the express provisions of the Sublease, or (c) terminate the Sublease in
accordance with the provisions thereof in connection with a casualty or
condemnation affecting the Sublet Premises or the Property. For purposes
hereof, the term Sublease shall include any successor direct lease between
Subtenant and Landlord.

 

7.  This Agreement may not be modified except by
an agreement in writing signed by the parties or their respective
successors-in-interest. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective heirs, representatives,
successors and assigns.

 

8.  Nothing contained in this Agreement shall in
any way impair or affect the lien created by the Mortgage except as
specifically set forth herein.

 

9.  Subtenant agrees that in the event there is
any inconsistency between the terms and provisions hereof and the terms and
provisions of the Sublease dealing with non-disturbance by Mortgagee or the
provisions of the Mortgage referred to in Section 6.01(c) of the Overlease (as
they relate to Tenant’s rights and obligations), the terms and provisions
hereof shall be controlling.

 

10.  All notices, demands or requests made
pursuant to, under, or by virtue of the Sublease or this Agreement must be in
writing and mailed to the party whom the notice, demand or request is being
made by certified or registered mail, postage prepaid, return receipt
requested, at its address set forth above. Any party may change the place that
notices and demands are to be sent by written notice delivered in accordance
with this Agreement.

 

25

 

11.  Notwithstanding anything to the contrary
contained herein, Subtenant acknowledges and agrees that the provisions of
paragraph (3)(c) set forth in Section 6.01(c) of the Overlease shall be
effective and run to the benefit of Mortgagee or any other Successor.

 

12.  This Agreement shall be governed by the laws
of the State of New York. If any term of this Agreement or the application
thereof to any person or circumstances shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term
to any person or circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each term of this Agreement
shall be valid and enforceable to the fullest extent permitted by law. This
Agreement may be executed in any number of counterparts, each of which when
executed and delivered will be deemed to be an original and all of which taken
together will be deemed to be one and the same instrument.

 

13.  Tenant is executing this Agreement for the
purpose of confirming that this Agreement satisfies any condition or
requirement in the Overlease or the Subordination, Non-Disturbance and
Attornment Agreement dated January     , 1996 between
Tenant, Landlord and Mortgagee relating to the granting of a non-disturbance
agreement by Mortgagee to a subtenant of Tenant.

 

14.  Anything herein or in the Lease to the
contrary notwithstanding, if Mortgagee shall acquire title to the Property, or
shall otherwise become liable for any obligations of Landlord under the Lease
or hereunder, Mortgagee shall have no obligation, nor incur any liability, beyond
Mortgagee’s then interest, if any, in the Property and Subtenant shall look
solely and exclusively to such interest of Mortgagee, if any, in the Property
for the payment and discharge of any obligations imposed upon Mortgagee
hereunder or under the Lease. Subtenant agrees that with respect to any money
judgment that may be obtained or secured by Subtenant against Mortgagee,
Subtenant shall look solely to the estate or interest owned by Mortgagee in the
Property and Subtenant shall not collect or attempt to collect any such
judgment out of any other assets of Mortgagee.

 

26

 

IN WITNESS
WHEREOF, the parties hereto have hereunto caused this Agreement to be duly
executed as of the day and year first above written.

 

	
   

  	
  Mortgagee

  
	
   

  	
   

  
	
  .

  	
  NATIONSBANK
  OF TENNESSEE, N.A

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  The Bank of
  New York,

  as Agent 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Subtenant

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Tenant

  
	
   

  	
   

  
	
   

  	
  WARNER
  COMMUNICATIONS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

27

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On
this                   day
of
                    ,
    , before me personally came
                                                           to
me known, who being by me duly sworn, did say that he resides at
                                                                                                    that
he is
                                                  of
The Bank of New York, the corporation described in and which executed the
foregoing instrument as agent for NationsBank of Tennessee, N.A., Mortgagee by
order of the board of directors of said corporation; and that he signed his
name thereto be like order.

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On
this             day
of
                        ,
    , before me personally came
                                                            to
me known, who being by me duly sworn, did say that he resides at                                                                                                ,
that (s)he is
                                of
                                              ,
the corporation described in and which executed the foregoing instrument as
Subtenant by order of the board of directors of said corporation; and that
(s)he signed his name thereto be like order.

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

28

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On
this                   
day of                         ,
    , before me personally came
                                                         to
me known, who being by me duly sworn, did say that he resides at
                                                                                               ,
that (s)he is
                                                                    of
Warner Communications, Inc., the corporation described in and which executed
the foregoing instrument as Tenant by order of the board of directors of said
corporation; and that (s)he signed his name thereto be like order.

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  

 

29

 

 

EXHIBIT M-2

 

FORM OF SUBORDINATION NON-DISTURBANCE

AND ATTORNMENT AGREEMENT FOR

SUPERIOR MORTGAGES(1)

 

THIS AGREEMENT,
made as of the
                       
day of
                                       ,
1996 by and between
                                     ,
having an office at
                                                           
(hereinafter called “Mortgagee”), WARNER COMMUNICATIONS INC., a Delaware
corporation, having an office at 75 Rockefeller Plaza, New York, NY 10012
(hereinafter called “Tenant”) and 1290 ASSOCIATES, LLC, a New York
limited liability company, having an office c/o Olympia and York Companies
(U.S.A.), 237 Park Avenue, New York, New York 10019.

 

W I T N E S S E T H:

 

WHEREAS,
Mortgagee is the
                                           under
that certain
                                                                      (the
“Mortgage”) between                                                                       
as lender, and
                                                                      
, as borrower, which was recorded on
                                                                      
in the Office of the City Register, New York County in Reel
               ,
Page
               ,
and which encumbers, among other properties, the land and the building located
at 1290 Avenue of the Americas, New York, New York and the ground leasehold
interest encumbering such property (collectively, the “Property”) and
more particularly described on Exhibit A annexed hereto,

 

WHEREAS,
Tenant and 1290 Associates, LLC (together with any successor holder of the
Landlord’s interest under the Lease, being hereinafter called “Landlord”)
have entered into a certain agreement of lease dated as of January   ,
1996 (the “Lease”) initially covering the 23rd through 29th floors (said
premises, together with any other space which may hereafter be leased to Tenant
pursuant to and in accordance with the express provisions of Section 1.06 of
the Lease being hereafter referred to as the (“Demised Premises”) in the
building forming a part of the Property,

 

NOW,
THEREFORE, in consideration of the mutual agreements herein contained and other
good and valuable

 

(1)                                  For
use at or following confirmation of a bankruptcy plan for 1290 Associates, LLC
or its successor.

 

 

consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

1.                                       Tenant
covenants and agrees that the Lease now is and shall at all times continue to
be subordinate to the Mortgage. Tenant, upon request, shall execute and deliver
any certificate or other instrument which the Mortgagee may reasonably request
to confirm said subordination by Tenant.

 

2.                                       Tenant
certifies that (i) Tenant is the owner and holder of the tenant’s interest
under the Lease, (ii) the Lease is presently in full force and effect and
unmodified, (iii) no rent or additional rent payable under the Lease has been
paid more than one (1) month in advance of its due date (it being expressly
agreed that any rent abatements, set-offs, recoupment rights or deductions
expressly provided for in Lease shall not be deemed an advance payment of rent
or additional rent under this Agreement), (iv) no default exists under the
Lease, and (v) there are no offsets or defenses as of the date hereof to the
payment of the rents, additional rents or other sums payable under the Lease
except as disclosed in writing by Tenant in the estoppel certificate being
delivered by Tenant to Mortgagee contemporaneously herewith.

 

3.                                       As
long as no default exists under the Lease which has continued after notice and
beyond the expiration of any applicable grace period as and to the extent
provided in the Lease (and provided that nothing shall imply any right of
Tenant to further notice if Landlord has previously provided such notice),
Mortgagee shall not name Tenant as a party defendant to any action for foreclosure
or other enforcement of the Mortgage (unless required by law), nor shall the
Lease be terminated by Mortgagee in connection with, or by reason of,
foreclosure or other proceedings for the enforcement of the Mortgage, or by
reason of a transfer of the Landlord’s interest under the Lease pursuant to the
taking of a deed in lieu of foreclosure (or similar device) whether in
connection with a bankruptcy proceeding or otherwise, nor shall Tenant’s use or
possession of the Demised Premises be interfered with by Mortgagee (except to
the extent permitted under the Lease), except that the person acquiring, or
succeeding to, the interests of the Landlord in the Property as a result of any
such action or proceeding or taking of a deed in lieu of foreclosure (or similar
device) (including, without limitation, Mortgagee), and such person’s
successors and assigns (any of the foregoing being hereinafter referred to as
the “Successor”), shall not be:

 

(a)                                  subject
to any credits, offsets, recoupment rights, defenses or claims which Tenant
might have against any prior Landlord, except that, subject to the terms
hereof, a Successor shall be subject to any credits, offsets, recoupment

 

2

 

rights, and defenses to which
Tenant may be entitled pursuant to the express provisions of the Lease; nor

 

(b)                                 bound
by any rent or additional rent which Tenant might have paid for more than one
(1) month in advance to any prior Landlord other than in accordance with the
express provisions of the Lease (i.e. periodic Operating Payments or escrow
payments on account of Tax Payments), unless such prepayment shall have been
made with Mortgagee’s prior written consent; nor

 

(c)                                  liable
for any act or omission of any prior Landlord except as expressly provided in
this Agreement, it being understood that the foregoing is not intended to (i)
relieve a Successor of any liability arising by reason of its acts or omissions
from and after the date the Successor succeeds to the rights of the prior Landlord,
including a continuation of the failure of the prior Landlord to perform its
obligations under the Lease, in which case the Successor upon receipt of notice
of such continuation from Tenant shall have a reasonable period of time to
remedy same (it being agreed that to the extent a time period is granted to
Landlord in the Lease for such remedy, such time period shall be deemed a
reasonable period of time for purposes of this clause (i) [and if no time
period is specified and the Successor is Mortgagee, in determining a reasonable
period of time, the parties shall take into account that Mortgagee acts as a
trustee](2), or (ii) deny Tenant the benefit of any rent offset right,
recoupment rights, abatement or credit to which Tenant is entitled under the express
provisions of the Lease, subject to the express terms hereof. Notwithstanding
the foregoing, the Successor shall not be liable to Tenant for any claim Tenant
may have against a prior Landlord under the provisions of Section 6.12 of the
Lease (by way of example, the Successor shall not be liable for any loss or
damage to Tenant caused by the negligence of a prior Landlord or its agents,
servants, employees or contractors); nor

 

(d)                                 bound
by any covenant to undertake or complete any Landlord’s Work with respect to
any Block of space or any Offer Space or the Capital Program Work (as such
terms are defined in the Lease); provided, however, that. if the
Successor shall fail to complete any such work, then Tenant shall have the
following rights (which shall be the sole and exclusive remedies available to
Tenant as against the Successor for such failure): (i) [OMIT IF NO LONGER
APPLICABLE: in the case of the Successor’s failure to complete the Landlord’s
Work with respect to any Block of space Tenant shall, subject to the terms
hereof, have the rights described in Section 1.03, 4.01 and 8.24 (with respect
to Punch List Work (as defined in the Lease) only) of the Lease], [OMIT IF

(2)           Delete if inapplicable.

 

3

 

NO LONGER APPLICABLE: and (ii)
in the case of Successor’s failure to complete the Offer Space or Capital
Program Work Tenant shall, subject to the terms hereof, have the rights
described in Section 8.21 of the Lease.] The Successor’s failure to complete any
such work shall not constitute a default by the Successor under the Lease
giving rise to any remedies other than as expressly set forth in this paragraph
(d); nor

 

(e)                                  be
required to account for any security deposit other than any security deposit
actually delivered to the Successor; nor

 

(f)                                    liable
for any payment to Tenant of any sums or the granting to Tenant of any credit
in the nature of a contribution towards the cost of preparing, furnishing or
moving into the Demised Premises or any portion thereof, or otherwise (except
to the extent provided in paragraphs (a) [and (d) (i)] above), provided,
however, that subject to the provisions of Section 15 hereof the Successor
shall be responsible to pay to Tenant any unpaid portion of the [OMIT ANY THAT
ARE NO LONGER APPLICABLE: Tenant Work Allowance and the Tenant Required Work
Allowance (as such terms are defined in the Lease and collectively referred
to-herein as “Landlord’s Contributions”)] as and when the same are due
and payable under the Lease; provided, further, however, that the sole
and exclusive remedy available to Tenant as against the Successor in the event
the Successor shall fail to pay any or all of the Landlord’s Contributions
shall be to exercise the set-off and/or recoupment rights described in Section
4.01(e) of the Lease and the Successor’s failure to make any such payment shall
not constitute a default by the Successor under the Lease giving rise to any
remedies other than the set-off and/or recoupment rights expressly set forth in
such Section 4.01(e). Notwithstanding the foregoing, Mortgagee shall have the
right (but not the obligation) if Landlord shall default in funding all or any
portion of the Landlord’s Contributions to pay such amounts to Tenant; nor

 

(g)                                 bound
by any modification of the Lease made without the written consent of Mortgagee,
including without limitation any agreement by Tenant to surrender the Lease.
Mortgagee agrees not to unreasonably withhold, delay or condition its consent
to a modification of the Lease.

 

4.                                       (a)
If the interest of the Landlord under the Lease shall be transferred by reason
of foreclosure or other proceedings for enforcement of the Mortgage in which
Tenant has not been named as party defendant or pursuant to a taking of a deed
in lieu of foreclosure (or similar device) whether in connection with a
bankruptcy proceeding or otherwise, the Lease shall not be terminated or
affected thereby but shall continue in full force and effect as a direct lease
between the Successor and

 

4

 

Tenant and Tenant shall be
bound to the Successor, and, except as expressly provided in this Agreement,
the Successor shall be bound to Tenant, under all of the terms, covenants and
conditions of the Lease for the balance. of the term thereof remaining, with
the same force and effect as if the Successor were the Landlord, and Tenant
does hereby (i) agree to attorn to the Successor, including Mortgagee if it be
the Successor, as its landlord, (ii) affirm its obligations under the Lease, and
(iii) agree to make payments of all sums due under the Lease to the Successor,
said attornment, affirmation and agreement to be effective and self-operative
without the execution of any further instruments, upon the Successor succeeding
to the interest of the Landlord under the Lease, provided that if the Successor
requests, without implying any obligation to do so on the Successor’s part,
Tenant will confirm the attornment described herein to the Successor in
writing. Tenant waives the provisions of any statute or rule of law now or
hereafter in effect that may give or purport to give it any right or election
to terminate or otherwise adversely affect the Lease or the obligations of
Tenant thereunder by reason of any foreclosure or similar proceeding.

 

(b)                                 Provided
the Lease has not been previously cancelled or terminated, if (i) Mortgagee or
any other Successor shall acquire title to the Property or Landlord’s interest
therein upon foreclosure in an action in which Mortgagee shall have been
required to name Tenant as a party defendant, and (ii) Tenant is not in default
under the Lease after notice and beyond the expiration of all applicable cure
periods as and to the extent provided in the Lease (and provided that nothing
shall. imply any right of Tenant to further notice if Landlord has previously
provided such notice), then, in such event, Mortgagee or any other Successor
(as the case may be) shall enter into a new lease with Tenant upon the same
terms and conditions as were contained in the Lease, except that (x) the
obligations and liabilities of Mortgagee or other Successor (as the case may
be) under any such new lease shall be subject to the terms and conditions of
this Agreement, and (y) the expiration date of such new lease shall coincide
with the Expiration Date provided for in Section 1.02 of the Lease (as the same
may have been extended in accordance with the terms of Article 9 of the Lease
or otherwise consented to in writing by Mortgagee). Tenant shall execute any
such new lease and shall attorn to Mortgagee or the other Successor (as the
case may be) so as to establish direct privity between Mortgagee or such other
Successor (as the case may be) and Tenant.

 

(c)                                  If
(i) Landlord, as debtor-in-possession, or any trustee appointed in a bankruptcy
case of Landlord, obtains an order of the Bankruptcy Court authorizing the
rejection of thee Lease in accordance with §365 of the Bankruptcy Code (as
hereinafter defined), and Tenant elects to retain its rights under the Lease in
accordance with §365(h) of the Bankruptcy

 

5

 

Code, (ii) Mortgagee or any
other Successor shall acquire title to the Property upon foreclosure or by the
acceptance of a deed in lieu thereof or by any other means, and (iii) Tenant is
not in default under the Lease after notice and beyond the expiration of all
applicable cure periods as and to the extent provided in the Lease (and
provided that nothing shall imply any right of Tenant to further notice if
Landlord has previously provided such notice) then, in such event, Mortgagee or
any other Successor (as the case may be) shall enter into a new lease with
Tenant upon the same terms and conditions as were contained in the Lease,
except that (x) the obligations and liabilities of Mortgagee or other Successor
(as the case may be) under any such new lease shall be subject to the terms and
conditions of this Agreement, and (y) the expiration date of such new lease
shall coincide with the Expiration Date provided for in Section 1.02 of the Lease
(as the same may have been extended in accordance with the terms of Article 9
of the Lease or otherwise consented to in writing by Mortgagee) of the Lease.
Tenant shall execute any such new lease and shall attorn to Mortgagee or the
other Successor (as the case may be). so as to establish direct privity between
Mortgagee or such other Successor (as the case may be) and Tenant.

 

5.                                       (a)
Tenant shall notify Mortgagee of any default, breach or other failure (a “Default”)
by Landlord under the Lease which would entitle Tenant to cancel or terminate
the Lease or abate the rents, additional rents or other sums payable thereunder
or to exercise any self-help or set-off rights thereunder. If Landlord fails to
cure any Default which would entitle Tenant to cancel or terminate the Lease
within the time period, if any, provided for in the Lease and such Default is
of a nature (i) which can be cured by the payment of money, then Mortgagee
shall have an additional 10 days within which to cure such Default after
receipt of Tenant’s notice that Landlord has failed to cure same and the Lease
shall not be cancelled or terminated unless Mortgagee shall have failed to cure
such Default (without implying any obligation to do so) prior to the expiration
of such 10 days, or (ii) which cannot be cured by the payment of money, then
Tenant shall notify (the “Second Notice”) Mortgagee that Landlord has
failed to cure such Default within such time period as is provided for such
cure under the Lease (or if no such period is provided, within a reasonable
period of time) and Mortgagee shall have an additional 30 days after receipt of
such Second Notice within which to cure such Default or if such Default cannot
be cured within that time with the exercise of reasonable diligence, then such
additional time as may be necessary to cure the same with the exercise of
reasonable diligence; and if, within such 30 days, Mortgagee has either cured
such Default or has commenced or given Tenant notice of its intention to
commence and thereafter diligently commences and diligently pursues the
remedies necessary to cure such Default (including, without limitation,
commencement of foreclosure proceedings or eviction proceedings, if necessary
to effect such

 

6

 

cure), then and in such event
the Lease shall not be terminated and Tenant shall not exercise any other
rights or remedies under the Lease or otherwise while such remedies are being
so diligently pursued, other than Tenant’s right to (a) any abatement, deduction,
counterclaim, recoupment right or set-off of any rent or additional rent
expressly set forth in the tease, or (b) self-help in accordance with Section
8.24 of the Lease. Notwithstanding the foregoing, Mortgagee’s additional cure
period under clause (ii) above shall not exceed 90 days in the case of Tenant’s
termination rights under clauses (A) and (B) of Section 8.26 of the Lease or
180 days in the case of Tenant’s termination right under clause (C) of Section
8.26 of the Lease. Nothing herein shall be deemed to imply that Tenant has any
right to terminate the Lease or any other right or remedy, except as may be
otherwise expressly provided for in the Lease.

 

(b)                                 Tenant’s
rights under this paragraph 5 and under paragraph 3(a) hereof are expressly conditioned
upon (i) Tenant delivering to Mortgagee copies of all notices delivered by
Tenant relating to a Default which is the subject of Tenant’s claim concurrent
with their delivery to Landlord (provided that if Tenant fails to deliver a
copy of the notice of a Default to Mortgagee as required hereby, Tenant’s right
to cancel or terminate the Lease shall not be waived, but Mortgagee’s
additional cure period will be extended for a period equal to the period of
time Landlord had to cure such Default, such additional cure period shall not
be deemed to have commenced until Tenant shall have delivered the requisite
notice to Mortgagee and Tenant shall not cancel or terminate the Lease prior to
the expiration of such additional cure period without such Default having been
cured), and (ii) Mortgagee being provided the opportunity by Tenant to monitor
and participate in any arbitration or other proceeding related to a Default.
Tenant shall deliver to Mortgagee concurrent with delivery to or receipt from
Landlord or the arbitrators determining any dispute, a copy of any submission,
claim, demand, order or pleading served by or upon Tenant or delivered to or
received from the arbitrators. Mortgagee shall have the right to appear before
and make presentations to the arbitrators determining any dispute.

 

(c)                                  Any
termination of the Lease by Tenant as the result of any claimed Default by
Landlord thereunder without compliance with the applicable provisions of this
paragraph 5 shall be without force or effect and shall be void ab initio.

 

6.(3)                         Mortgagee
agrees that, provided Tenant is not then in default under this Agreement or the
Lease after notice and beyond the expiration of applicable grace periods as and
to the

 

(3)           Terms of this paragraph may be put in separate, unrecorded
agreement.

 

7

 

extent provided under the Lease
or otherwise (and provided that nothing shall imply any right of Tenant to
further notice if Landlord has previously provided such notice), with respect
to any sublease (other than a sublease to an Affiliate of Tenant or Related
Service Provider whether pursuant to Sections 5.01(b), (c) and (d) of the Lease
or otherwise) which (a) consists of at least one full floor of the Blocks (as
defined in the Lease) or at least 30,000 contiguous rentable square feet of
space in the Demised Premises which is on a floor which is not a Block (and in
the case where a sublease includes a portion of a floor, the balance of the
floor consists of a leaseable configuration of at least 10,000 rentable square
feet), (b) in the case of a Block, consists of contiguous space in the Blocks
which includes the highest or lowest floor then comprising the Blocks or is in
the Blocks and is contiguous to another floor all of which has been sublet by
Tenant and with respect to which Mortgagee has executed and delivered one or
more non-disturbance and attornment agreements hereunder with respect to all of
such floor, (c) provides, for a rental which, after taking into account any
free rent periods, credits, offsets or deductions to which the subtenant may be
entitled thereunder, is equal to or in excess (on a per rentable square foot
basis) of the greater of (i) annual Fixed Rent and the annualized recurring
Additional Charges (as such terms are defined in the Lease) payable by Tenant
under the Lease with respect to such space from time to time throughout the
term, and (ii) the fair market fixed rent and the fair market additional rent,
each of (i) and (ii) above to be valued at the time when the attornment
provided for in the non-disturbance and attornment agreement hereinafter
referred to becomes effective between Mortgagee and the subtenant following the
termination of the Lease (or if the rental to be paid by the subtenant shall be
less (on a per rentable square foot basis) than the greater of (i) and (ii)
above, if such subtenant agrees, in the non disturbance and attornment
agreement hereinafter referred to, that such rental will automatically and
without condition become so equal to the greater of (i) and (ii) above (subject
to arbitration in the manner provided in Section 9.03 of the Lease if the
parties do not agree on the fair market rent or fair market additional rent
within ten days after such attornment if Landlord claims that clause (ii) is
the operative measure of rent to be paid by the subtenant), if, as and when the
attornment provided for in such non-disturbance and attornment agreement
becomes effective between Mortgagee and the subtenant following the termination
of the Lease), (d) consists of space that will be demised separately from the
remainder of the Demised Premises in accordance with all applicable laws, (e)
provides for other obligations of the subtenant not materially less favorable
to Landlord under such sublease than the obligations of Tenant under the Lease
(and shall require compliance, to the extent applicable, with Sections
5.04(d)(iv)(F) and (G) and 8.28 of the Lease), and (f) Landlord has executed
and delivered to such subtenant a non-disturbance agreement in accordance with
the

 

8

 

provisions of Section
5.04(d)(iv) of the Lease, then Mortgagee shall, at Tenant’s request, execute
and deliver to such subtenant a non-disturbance and attornment agreement
substantially in the form attached to this Agreement as Exhibit B. provided and
upon condition that (i) Tenant has furnished to Mortgagee reasonably
satisfactory evidence that the subtenant has a financial worth sufficient to
timely fulfill its obligations under such sublease as a primary tenant (and not
as a subtenant), including any increase in such financial obligations which may
become effective as provided above but in no event shall such subtenant’s
financial worth be less than a Major Subtenant (as defined in the Lease), (ii)
the sublease is in a form consistent with the requirements of Article 5 of the
Lease and otherwise reasonably satisfactory to Mortgagee, and (iii) the
subtenant executes and delivers to Landlord such non-disturbance and attornment
agreement. Any dispute as to the creditworthiness of a prospective subtenant
may be submitted to determination by arbitration in the manner provided in
Section 9.03 of the Lease as if such provisions were set forth herein and
“Mortgagee” were substituted for “Landlord” therein, and any such determination
shall be binding upon Mortgagee and Tenant. Notwithstanding anything to the
contrary set forth in this paragraph 6, any non-disturbance and attornment
agreement delivered by Mortgagee pursuant to this paragraph 6 shall be
conditional and by its terms expressly contain the condition such that, in the
event of any termination of the Lease (x) other than by reason of (1) Tenant’s
default, (2) a rejection of the Lease in bankruptcy by Tenant, or (3) subject
to the terms hereof, a voluntary surrender of the Lease by agreement between
Landlord and Tenant, but (y) including a termination of the Lease by reason of
a casualty, condemnation or pursuant to Section 8.26 of the Lease, then any
non-disturbance and attornment agreement to a subtenant shall, automatically
and without further act of the parties, terminate and be of no further force or
effect from and after the applicable termination date, provided, that if the
Lease is terminated with respect to less than all of the Demised Premises, only
such non-disturbance and attornment agreements to subtenants who sublease any
of such space with respect to which the Lease is terminated shall automatically
and without further act of the parties terminate and be of no further force or
effect from and after the applicable termination date. In addition, to the
extent any such non-disturbance and attornment agreement relates to a subtenant
which is a partnership of professionals (including, without limitation,
attorneys, accountants and investment bankers), such agreement shall provide
that no provision of such sublease providing in substance for the exculpation
from personal liability of the partners of such partnership shall be binding on
Mortgagee or any other Successor unless such subtenant shall, on the date the
attornment provided in such non-disturbance and attornment agreement becomes
effective between Mortgagee and such subtenant, post with Mortgagee or such
other Successor as security for such

 

9

 

subtenant’s obligations under
its sublease, cash or a clean, unconditional and irrevocable letter of credit
(in form and from a bank reasonably satisfactory to Mortgagee) in either case
in an amount equal to the greater of (i) the annual fixed rent and annualized
recurring charges (without regard to any abatement, credits or offsets) payable
at such time (such security to be increased from time to time to reflect
increases in such fixed rent and recurring charges) by such subtenant to
Mortgagee, and (ii) the security required to be provided by the Subtenant under
the terms of the Lease, unless such cash or letter of credit was previously
delivered to Landlord in accordance with the provisions of the Lease.

 

7.                                       Tenant
shall deliver to Mortgagee copies of all notices under the Lease concurrent
with delivery to or receipt from Landlord (including, without limitation,
default notices, notices establishing delivery and commencement dates and
notices commencing arbitration proceedings but excluding routine operational
notices such as requests for overtime services). No notice shall be effective
as to Mortgagee unless properly served upon Mortgagee in the manner provided
herein.

 

8.                                       This
Agreement may not be modified except by an agreement in writing signed by
Tenant and Mortgagee or their respective successors-in-interest. In addition,
any modification of this Agreement which would adversely affect Landlord shall
require the consent of Landlord provided that Landlord is not in default under
the terms of the Lease or the Mortgage beyond any notice and cure period. This
Agreement shall inure to the benefit of and be binding upon the parties hereto,
their respective heirs, representatives, successors and assigns including,
without limitation, with respect to Mortgagee, the grantee under a deed in lieu
of foreclosure and/or the purchaser of the Demised Premises at a foreclosure
sale or at any sale of the Demised Premises following the granting of a deed in
lieu of foreclosure or following foreclosure.

 

9.                                       Nothing
contained in this Agreement shall in any way impair or affect the lien created
by the Mortgage except as specifically set forth herein.

 

10.                                 Landlord,
Tenant and Mortgagee agree that this Agreement satisfies any condition or
requirement in the Lease relating to the granting of a non-disturbance
agreement by Mortgagee. Mortgagee and Tenant further agree that in the event
there is any inconsistency between the terms and provisions hereof and the
terms and provisions of the Lease dealing with non-disturbance by Mortgagee,
the terms and provisions hereof shall be controlling.

 

11.                                 All
notices, demands, consents, approvals, advices, waivers or other communications
(each, a “Notice”) which

 

10

 

may or are required to be given
by either party to the other under this Agreement shall be in writing and shall
be sent (a) by hand, (b) by United States Mail, certified or registered,
postage prepaid, return receipt requested or (c) by a nationally recognized
overnight carrier (which provides for receipted delivery in the ordinary course
of its business), in each case addressed to the party to be notified at the
address for such party specified in the first paragraph of this Agreement, or
to such other place in the continental United States as the party to be
notified may from time to time designate by at least 15 days’ notice to the
notifying party (with copy in the case of Mortgagee
to                                                                                                                                                                                          ).

Each Notice shall be deemed to
have been given on the date such Notice is actually received as evidenced by a
written receipt therefor, and in the event of failure to deliver by reason of
changed address of which no Notice was given or refused to accept deliver, as
of the date of such failure. Tenant shall also deliver a copy of any Notice
provided to Mortgagee under paragraph 5 hereof to Landlord at the address and
in the manner provided in the Lease, excluding Notices which Tenant shall
previously or concurrently have delivered to or received from Landlord.

 

12.                                 This
Agreement shall be governed by the laws of the State of New York. If any term
of this Agreement or the application thereof to any person or circumstances
shall to any extent be invalid or unenforceable, the remainder of this
Agreement or the application of such term to any person or circumstances other
than those as to which it is invalid or unenforceable shall not be affected
thereby, and each term of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered will be deemed to be
an original and all of which taken together will be deemed to be one and the
same instrument.

 

13.                                 If
at any time this Agreement is rejected by Mortgagee in any case under the
Bankruptcy Code involving Mortgagee as debtor, then Mortgagee agrees that the
Lease shall be deemed to be superior to the Mortgage and not subordinate
thereto.

 

14.                                 Each
party warrants and represents to the other parties that the execution and
delivery of this Agreement has been duly authorized by all necessary actions on
the part of the representing party; and that the person who signs this
Agreement on behalf of such party is duly authorized to do so.

 

15.                                 Anything
herein or in the Lease to the contrary notwithstanding, if Mortgagee shall
acquire title to the Property, or shall otherwise become liable for any
obligations of Landlord under the Lease or hereunder, Mortgagee shall have no

 

11

 

obligation, nor incur any
liability, beyond Mortgagee’s then interest, if any, in the Property (as such
interest is defined in Section 8.06 of the Lease) and Tenant shall look solely
and exclusively to such interest of Mortgagee, if any, in the Property for the
payment and discharge of any obligations imposed upon Mortgagee hereunder or under
the Lease. Tenant agrees that with respect to any money judgment that may be
obtained or secured by Tenant against Mortgagee, Tenant shall look solely to
the estate or interest owned by Mortgagee and the Property (as such interest is
defined in Section 8.06 of the Lease) and Tenant shall not collect or attempt
to collect any such judgment out of any other assets of Mortgagee. Nothing
contained in this Section 15 shall be construed to diminish or impair Tenant’s
abatement, offset, credit or self-help rights under the express provisions of
the Lease.

 

16.                                 This
Agreement may be executed in one or more counterparts, each of which, when so
executed and delivered, shall be an original and all of which together shall
constitute the same instrument.

 

12

 

IN WITNESS
WHEREOF, the parties hereto have hereunto caused this Agreement to be duly
executed as of the day and year first above written.

 

	
   

  	
  Mortgagee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Tenant

  
	
   

  	
   

  
	
   

  	
  WARNER
  COMMUNICATIONS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Landlord

  
	
   

  	
   

  
	
   

  	
  1290
  ASSOCIATES, LLC

  
	
   

  	
  By:

  	
  O&Y
  Management Corp., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

 

(ACKNOWLEDGEMENTS TO BE ADDED]

 

13

 

EXHIBIT B

 

FORM OF SUBTENANT

NON-DISTURBANCE

AND ATTORNMENT AGREEMENT’

 

THIS
AGREEMENT, made as of
the                 day
of
                  ,                  by
and between
                                     ,
having an office at
                                                                                      
(hereinafter called “Mortgagee”),                                     ,
a                                     ,
having an office at                                                               (hereinafter
called “Subtenant”), and WARNER COMMUNICATIONS INC., a Delaware
corporation, having an office at 75 Rockefeller Plaza, New York, New York 10012
(hereinafter called “Tenant”).

 

W I T N E S S E T H:

 

WHEREAS,
Mortgagee is
the                                    under
that
certain                                     (the
“Mortgage”) between                        ,
as lender, and
                                     ,
as borrower, which was recorded on
                                 ,
     in the Office of the City Register, New York County in
Reel             ,
Page                     ,
and which encumbers the land and the building located at 1290 Avenue of the
Americas, New York, New York [and the ground leasehold interest encumbering
such property](1) (collectively, the “Property”),

 

WHEREAS,
Tenant has entered into a certain agreement of lease dated as of
January              ,
1996 (the “Overlease”) covering, inter  alia,                                     (the
“Sublet Premises”) in the building forming a part of the Property,

 

WHEREAS,
Subtenant has entered into a certain agreement of sublease dated as
of                                     ,                     with
Tenant (the “Sublease”) covering the Sublet Premises,

 

NOW,
THEREFORE, in consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Subtenant
covenants and agrees that the Sublease now is and shall at all times continue
to be subject and subordinate in each and every respect to the Mortgage.
Subtenant, upon request, shall execute and deliver any

_________________________________

(1)           Delete if no longer applicable.

 

14

 

certificate or other instrument
which the Mortgagee may reasonably request to confirm said subordination by
Subtenant.

 

2.                                       Subtenant
certifies that (i) Subtenant is the owner and holder of the subtenant’s
interest under the Sublease, (ii) the Sublease is presently in full force and
effect and unmodified, (iii) no rent or additional rent payable under the
Sublease has been paid more than one (1) month in advance of its due date, (iv)
no default exists under the Sublease, and (v) there are no offsets or defenses
as of the date hereof to the payment of the rents, additional rents or other
sums payable under the Sublease.

 

3.                                       As
long as no default exists under the Sublease which has continued after notice
and beyond the expiration of any applicable grace period as and to the extent
provided in the Sublease (and provided that nothing shall imply any right of
Subtenant to further notice if Tenant or the Landlord (as defined below) has
previously provided such notice) and, subject to the provisions of paragraph 5
below, Mortgagee shall not name Subtenant as a party defendant to any action
for foreclosure or other enforcement of the Mortgage (unless required by law),
nor shall the Sublease be terminated by Mortgagee in connection with, or by
reason of, foreclosure or other proceedings for the enforcement of the
Mortgage, or by reason of a transfer of the landlord’s interest under the
Overlease pursuant to the taking of a deed in lieu of foreclosure (or similar
device), nor shall Subtenant’s use or possession of the Sublet Premises be
interfered with by Mortgagee, unless the Tenant or 1290 Associates, LLC or any
successor owner of the Property (the “Landlord”) would have had such
right if the Mortgage had not been granted, except that the person acquiring or
succeeding by or through Mortgagee to the interests of the Landlord under the
Overlease as a result of any such action or proceeding (including Mortgagee
should it acquire or succeed to such interests), and such person’s successors
and assigns (any of the foregoing being hereinafter referred to as the “Successor”),
shall not be:

 

(a)                                  subject
to any credits, offsets, defenses or claims which Subtenant might have against
any prior sublessor or landlord; nor

 

(b)                                 bound
by any rent or additional rent which Subtenant might have paid for more than
one month in advance to any prior sublessor or landlord, unless such prepayment
shall have been made with Mortgagee’s prior written consent; nor

 

(c)                                  liable
for any act or omission of any prior sublessor or landlord; nor

 

15

 

(d)                                 bound
by any covenant to undertake or complete any improvement to the Sublet Premises
or the building forming a part of the Property; nor

 

(e)                                  required
to account for any security deposit other than any security deposit actually
delivered to the Successor; nor

 

(f)                                    liable
for any payment to Subtenant of any sums, or the granting to Subtenant of any
credit, in the nature of a contribution towards the cost of preparing,
furnishing or moving into the Sublet Premises or any portion thereof; nor

 

(g)                                 bound
by any modification of the Sublease which results in the Sublease no longer
conforming to the parameters set forth in the Overlease for the granting by
Landlord of a non-disturbance agreement to a subtenant made without the written
consent of Mortgagee.

 

4.                                       If
the interest of the Landlord in the Property shall be transferred by reason of
foreclosure or other proceedings for enforcement of the Mortgage or pursuant to
a taking of a deed in lieu of foreclosure (or similar device) and the Overlease
shall have previously terminated (and the Sublease shall have become a direct
lease between Subtenant and Landlord pursuant to a non-disturbance and
attornment agreement between such parties) or shall be terminated concurrent
with or subsequent to such foreclosure, other enforcement proceeding or taking,
then subject to the provisions of paragraph 5 below, Subtenant shall be bound
to the Successor, and, except as provided in this Agreement, the Successor
shall be bound to Subtenant, under all of the terms, covenants and conditions
of the Sublease for the balance of the term thereof remaining, with the same
force and effect as if the Successor were the Tenant under the Sublease, and
Subtenant does hereby (i) agree to attorn to the Successor, including Mortgagee
if it be the Successor, as its landlord, (ii) affirm its obligations under the
Sublease (subject to the provisions of paragraph 5 below), and (iii) agree to
make payments of all sums due under the Sublease (as same may be adjusted
pursuant to the terms of paragraph 5 below) to the Successor, said attornment,
affirmation and agreement to be effective and self-operative without the
execution of any further instruments, upon the Successor succeeding to the
interest of the Tenant under the Sublease, provided that if the Successor
requests, without implying any obligation to do so on the Successor’s part,
Subtenant will confirm the attornment described herein to the Successor in
writing. Subtenant waives the provisions of any statute or rule of law now or
hereafter in

 

16

 

effect that may give or purport
to give it any right or election to terminate or otherwise adversely affect the
Sublease or the obligations of Subtenant thereunder by reason of any
foreclosure of similar proceeding.

 

5.                                       (a)
Subtenant agrees that to the extent the Sublease provides for a rental which,
after taking into account any free rent periods, credits, offsets or deductions
to which the Subtenant may be entitled thereunder, is less than the greater of
(on a per rentable square foot basis) (i) the annual Fixed Rent and annualized
recurring Additional Charges (as such terms are defined in the Overlease)
payable by Tenant under the Overlease with respect to the Sublet Premises (the
“Overlease Rent”) and (ii) the fair market fixed rent and the fair
market additional rent (collectively referred to as the “Fair Market Rent”)
as reasonably determined by the Successor with respect to the Sublet Premises,
Subtenant agrees that the rental payable under the Sublease will automatically
and without condition become equal to the greater of the Overlease Rent and the
Fair Market Rent, if, as and when the attornment provided for herein becomes
effective between Mortgagee or any other Successor and the Subtenant. If
Subtenant disagrees with the Successor’s determination of the Fair Market Rent,
then the amount of the Fair Market Rent will be determined by arbitration
pursuant to Section 9.03 of the Overlease, provided that pending resolution of
the dispute, Subtenant shall pay rent based on the Successor’s determination
with appropriate adjustment being made after final resolution of the dispute.
Subtenant further agrees that the Sublease shall at all times be subject to and
comply with the provisions of Sections 5.04(d) (iv) (F) and (G) and
8.28 of the Overlease.

 

[(b) In
addition, Subtenant agrees that no provision of the Sublease providing in
substance for the exculpation from personal liability of the partners of
Subtenant shall be binding on Mortgagee or any other Successor unless Subtenant
shall, on the date the attornment provided herein becomes effective between
Mortgagee or any other Successor and Subtenant, post with Mortgagee or such
Successor as security for Subtenant’s obligations under the Sublease, cash or a
clean, unconditional and irrevocable letter of credit (in form and from a bank
reasonably satisfactory to Mortgagee or such Successor) in either case in an
amount equal to the greater of (i) the annual fixed rent and recurring charges
(without regard to any abatements, credits or offsets) payable at such time
(such security to be increased from time to time to reflect increases in such
fixed rent and recurring charges) by Subtenant to Mortgagee or such other Successor
as same may be modified in accordance with the terms of paragraph (a) above,
and (ii) the security required to be provided by Subtenant under the terms of
the Overlease, unless

 

17

 

such cash or letter of credit
was previously delivered to Landlord in accordance with the provisions of the
Overlease.](2)

 

(c)
Notwithstanding anything to the contrary set forth in this Agreement, the
agreements of the Mortgagee hereunder (on behalf of itself and any other
Successor) shall be effective only in the event the cause of termination of the
Overlease is (x) the default of Tenant thereunder (y) a rejection of the
Overlease in bankruptcy by Tenant, or (z) a voluntary surrender of the
Overlease by agreement between Landlord and Tenant and consented to by
Mortgagee (to the extent required under the Agreement referred to in paragraph
12 below) and if the Overlease is cancelled, terminated or expires (in whole or
in part but including the Sublet Premises) for any other reason (including,
without limitation, by reason of a casualty or condemnation or the exercise by
Tenant of any termination or cancellation right or remedy provided in the
Overlease, at law or in equity or by reason of Tenant’s failure to exercise the
Renewal Option (as defined in the Overlease)), then this Agreement shall,
automatically and without further act of the parties, terminate and be of no
further force or effect from and after the applicable termination date of the
Overlease (or portion thereof) or the day preceding the commencement of the
Renewal Term (as defined in the Overlease), as the case may be.

 

6.                                       In
the event the Overlease is terminated and Subtenant becomes a direct tenant of
Landlord pursuant to the terms of a non-disturbance and attornment agreement
between such parties, Subtenant shall notify Mortgagee of any default by
Landlord under the Sublease which would entitle Subtenant to cancel the
Sublease or abate the rents, additional rents or other sums payable thereunder
or to exercise any self-help or set-off rights thereunder. If Landlord fails to
cure any default as to which Subtenant is obligated to give notice pursuant to
the preceding sentence within the time provided for in the Sublease, Subtenant
shall provide Mortgagee notice of such occurrence and Mortgagee shall then have
an additional 30 days after receipt of such notice within which to cure such
default or if such default cannot be cured within that time, then such
additional time as may be necessary if, within such 30 days, Mortgagee shall
give Subtenant notice of its intention to diligently pursue the remedies
necessary to cure such default (including, without limitation, commencement of
foreclosure proceedings or eviction proceedings if necessary to effect such
cure) and thereafter does diligently pursue such remedies and cure, in which
event the Sublease shall not be terminated and Subtenant shall not exercise any
other rights or remedies under the Sublease or otherwise

 

(2)                                  To
be deleted if Subtenant is not a partnership of professionals (including
without limitation, attorneys, accountants and investment bankers).

 

18

 

while such remedies are being
so diligently pursued by Mortgagee, other than Subtenant’s right, subject to
Section 8.28 of the Overlease, to (a) any abatement, deduction, counterclaim or
set-off of any rent or additional rent expressly set forth in the Sublease, or
(b) self-help in accordance with the express provisions of the Sublease, or (c)
terminate the Sublease in accordance with the provisions thereof in connection
with a casualty or condemnation affecting the Sublet Premises or the Property.
For purposes hereof, the term Sublease shall include any successor direct lease
between Subtenant and Landlord.

 

7.                                       This
Agreement may not be modified except by an agreement in writing signed by the
parties or their respective successors-in-interest. This Agreement shall inure
to the benefit of and be binding upon the parties hereto, their respective
heirs, representatives, successors and assigns.

 

8.                                       Nothing
contained in this Agreement shall in any way impair or affect the lien created
by the Mortgage except as specifically set forth herein.

 

9.                                       Subtenant
agrees that in the event there is any inconsistency between the terms and
provisions hereof and the terms and provisions of the Sublease dealing with
non-disturbance by Mortgagee, the terms and provisions hereof shall be
controlling.

 

10.                                 All
notices, demands or requests made pursuant to, under, or by virtue of the Sublease
or this Agreement must be in writing and mailed to the party whom the notice,
demand or request is being made by certified or registered mail, postage
prepaid, return receipt requested, at its address set forth above. Any party
may change the place that notices and demands are to be sent by written notice
delivered in accordance with this Agreement.

 

11.                                 This
Agreement shall be governed by the laws of the State of New York. If any term
of this Agreement or the application thereof to any person or circumstances
shall to any extent be invalid or unenforceable, the remainder of this
Agreement or the application of such term to any person or circumstances other
than those as to which it is invalid or unenforceable shall not be affected
thereby, and each term of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered will be deemed to be
an original and all of which taken together will be deemed to be one and the
same instrument.

 

12.                                 Tenant
is executing this Agreement for the purpose of confirming that this Agreement
satisfies any condition or requirement in the Overlease or the Subordination,

 

19

 

Non-Disturbance and Attornment
Agreement dated
                          ,                      between
Tenant, Landlord and Mortgagee relating to the granting of a non-disturbance
agreement by Mortgagee to a subtenant of Tenant.

 

13. Anything
herein or in the Lease to the contrary notwithstanding, if Mortgagee shall
acquire title to the Property, or shall otherwise become liable for any
obligations of Landlord under the Lease or hereunder, Mortgagee shall have no
obligation, nor incur any liability, beyond Mortgagee’s then interest, if any,
in the Property and Subtenant shall look solely and exclusively to such
interest of Mortgagee, if any, in the Property for the payment and discharge of
any obligations imposed upon Mortgagee hereunder or under the Lease. Subtenant
agrees that with respect to any money judgment that may be obtained or secured
by Subtenant against Mortgagee, Subtenant shall look solely to the estate or
interest owned by Mortgagee in the Property and Subtenant shall not collect or
attempt to collect any such judgment out of any other assets of Mortgagee.

 

IN WITNESS
WHEREOF, the parties hereto have hereunto caused this Agreement to be duly
executed as of the day and year first above written.

 

	
   

  	
  Mortgagee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Subtenant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Tenant

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WARNER
  COMMUNICATIONS INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

20

 

[ACKNOWLEDGMENTS TO BE ADDED]

 

21

 

CONFIDENTIAL INFORMATION

 

WARNER LEASE

EXHIBIT “ O “

 

RESTRICTED OUTSIDE LOUVER LOCATIONS

 

[GRAPHIC]

 

23RD THRU 28TH FLOOR

 

 

CONFIDENTIAL INFORMATION

 

WARNER LEASE

EXHIBIT “P”

 

APPROVED CONSULTANT/ CONTRACTORS LIST

 

	
  STRUCTURAL CONSULTANTS

  
	
  OFFICE OF JAMES RUDERMAN

  	
   

  
	
  RAPHAEL BASSAN CONSULTING ENGINEERS

  	
   

  
	
   

  	
   

  
	
  MECHANICAL/ELECTRICAL/PLUMBING

  
	
  JAROS BAUM & BOLLES

  	
   

  
	
  FLACK AND KURTZ

  	
   

  
	
  EDWARDS & ZUCK INC

  	
   

  
	
   

  	
   

  
	
  CONSTRUCTION MANAGERS/GENERAL CONTRACTORS

  
	
  LEHRER MCGOVERN BOVIS

  	
   

  
	
  STRUCTURE TONE

  	
   

  
	
  TISHMAN INTERIORS

  	
   

  
	
  AJ CONTRACTING

  	
   

  
	
  LEHR

  	
   

  
	
   

  	
   

  
	
  DEMOLITION

  
	
  LIBERTY CONTRACTING CORP

  	
   

  
	
  FORTUNE DEMOLITION CORP

  	
   

  
	
  BIG APPLE WRECKING CORP

  	
   

  
	
  TIFFANY CARTING CO

  	
   

  
	
   

  	
   

  
	
  STEEL/MISC IRON

  
	
  NORTHEASTERN STEEL FABRICATORS

  	
   

  
	
  KRAMAN IRON WORKS

  	
   

  
	
  BURGESS STEEL PRODUCTS

  	
   

  
	
   

  	
   

  
	
  ELEVATORS

  
	
  FLYNN-HILL ELEVATOR CORP

  	
   

  
	
  OTIS ELEVATOR CORP

  	
   

  
	
  MAINCO CORP

  	
   

  
	
  REPUBLIC ELEVATOR

  	
   

  
	
  MILLAR ELEVATOR CORP

  	
   

  
	
   

  	
   

  
	
  ELECTRICAL/DATA COMMUNICATIONS

  
	
  ARC ELECTRIC

  	
   

  
	
  JWP FOREST CORP

  	
   

  
	
  PETROCELLI ELECTRIC

  	
   

  
	
  KLEINKHECHT ELECTRIC

  	
   

  
	
  L.K.COMSTOCK & COMPANY

  	
   

  
	
  NEAD ELECTRIC

  	
   

  
	
  ADCO ELECTRICAL CORP

  	
   

  
	
   

  	
   

  
	
  HVAC

  
	
  BP AIR CONDITIONING

  	
   

  
	
  PENGUIN AIR CONDITIONING

  	
   

  
	
  PJ MECHANICAL

  	
   

  
	
  HENICK LANE CORP

  
	
  PLUMBING

  
	
  LAB PLUMBING

  
	
  ASHLAND PLUMBING

  
	
  GREEN MECHANICAL CORP

  
	
  PAR PLUMBING

  
	
  KAPLAN BRESLAW INC

  
	
   

  
	
  FIRE PROTECTION

  
	
  ABCO PEERLESS

  
	
  LAB PLUMBING

  
	
  TRIANGLE FIRE PROTECTION

  
	
  ACTIVE FIRE PROTECTION

  
	
  RAEL AUTOMATIC SPRINKLERS

  
	
   

  
	
  FIRE ALARM

  
	
  MULIPLEX FIRE ALARM SYSTEMS INC

  
	
   

  
	
  PAINTING

  
	
  HUDSON SHATZ

  
	
  COSMOPOLITAN PAINTING

  
	
  BAXTER PAINTING

  

 

 

WARNER LEASE

 

Exhibit “P”

 

GENERAL CONTRACTORS

 

HRH Interiors

McCann, Inc.

James E.
Fitzgerald

Corbin
Construction Corp.

John Gallin
& Son, Inc.

Henegan
Construction Co. Inc.

Farrell
Construction Services, Inc.

 

FLOORING

 

Soundtone
Floors Inc.

Contract Distributors
Corp.

Lane’s Floor
Coverings & Interiors

Saxony Carpet
Company Inc.

 

CERAMIC TILE

 

Port Morris
Tile & Marble Corp.

Wm. Erath
& Son, Inc.

 

HVAC

 

P.J.
Mechanical Corp.

 

DEMOLITION/LABORER

 

Advanced
Contracting Co., Inc.

 

DRYWALL

 

Partition
Servicing Company

Skyline
Partition Systems Inc.

 

CEILING

 

Wetzel
Contracting Corp.

National
Acoustics

 

P-2

 

PAINTING/WALL-COVERING

 

T.F. Nugent
Inc.

Newport
Painting & Decorating Co., Inc.

Forest
Electric Corp.

E-J Electric
Installation Co.

 

FINISH CARPENTRY

 

Bauerschmidt
& Sons

Superior
Woodcraft, Inc.

Midhattan
Woodworking Corp.

Gale
Woodworking, Inc.

 

HARDWARE

 

Alliance
Architectural Hardware

 

WOOD FLOORING

 

Architectural
Wood Flooring Inc.

Mathusek

 

P-3

 

CONFIDENTIAL INFORMATION

 

EXHIBIT Q

 

FORM OF ASSUMPTION AGREEMENT

 

Assignment and
Assumption of Lease, dated as of
the              of                  ,            between
WARNER COMMUNICATIONS INC. (“Assignor”),
and                        (“Assignee”).

 

W  I  T  N  E  S
S  E  T  H :

 

WHEREAS,
Assignor is the tenant under that certain lease
dated             ,    
between 1290 Associates, L.L.C. as landlord and Assignor, as tenant (the “Lease”),
covering [Insert reference to Premises] the entire 23rd through 29th floors of
a building known as 1290 Avenue of the Americas located in New York, New York;

 

WHEREAS,
Assignor desires to assign all of its interest in the Lease to Assignee and
Assignee desires to assume all Assignor’s obligations under the Lease, on the
terms and conditions hereinafter set forth.

 

NOW,
THEREFORE, Assignor and Assignee hereby agree as follows:

 

c)                                      Assignor
hereby assigns to Assignee all of Assignor’s right, title and interest in, to
and under the Lease, effective as
of                                                (the
“Effective Date”).

 

d)                                     Assignee,
for the benefit of Assignor and the landlord, hereby assumes, and agrees to be
bound by and to perform, all of the covenants, agreements, terms, provisions
and conditions on the part of the tenant under the Lease to be kept, performed
and observed from and after the Effective Date.

 

e)                                      This
Assignment and Assumption of Lease shall be binding upon and inure to the
benefit of the parties’ respective successors and assigns.

 

Q-1

 

IN WITNESS
WHEREOF, Assignor and Assignee have executed this Assignment and Assumption of
Lease of the day and year first above written.

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  WARNER
  COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Q-2

 

CONFIDENTIAL INFORMATION

 

WARNER LEASE 

EXHIBIT “
R “

 

EMERGENCY GENERATOR LOCATION

 

 

 

[GRAPHIC]

 

WEST 51 STREET

not to scale

25TH FLOOR

 

 

WARNER LEASE

EXHIBIT “R”

 

EMERGENCY GENERATOR LOCATION

 

 

[GRAPHIC]

 

WEST 51 STREET

not to scale

8TH FLOOR

 

 

CONFIDENTIAL INFORMATION

 

Exhibits S and T (1 of 4)

 

 

 

[GRAPHIC]

 

 

Exhibits S and T (2 of 4)

 

 

[GRAPHIC]

 

 

Exhibits S and T (3 of 4)

 

 

[GRAPHIC]

 

 

Exhibits S and T (4 of 4)

 

 

[GRAPHIC]

 

 

CONFIDENTIAL INFORMATION

 

WARNER LEASE

 

EXHIBIT U
AND V

 

PHASE I CAPITAL PROGRAM WORK

 

HVAC

 

Landlord shall convert the
existing constant volume air distribution system to variable air volume. The
conversion shall include new variable frequency drive units for each supply and
return fan servicing floors 2 to 43.

 

Each interior
supply duct shall be provided with an isolation damper to enable overtime HVAC
delivery to those floors requesting overtime and reduce overtime cost.

 

ELECTRICAL

 

Landlord shall energize the (2)
future Con Edison service take off located in basement level. Each service take
off shall be provided with a 5000 ampere switch, fused at 5000 amperes. Tenant
sub-distribution panel and risers shall be made available to all tenants on a
first come first serve basis, based on a demonstrated need, all switch and
riser work shall be at tenant’s cost.

 

PHASE II CAPITAL PROGRAM WORK

 

Elevators servicing the Blocks
will be refurbished to be consistent with Cab No. 15 as per plans for Cab No.
15 as described on Elevator Car Details dated 4/17/95 by David Kenneth Specter
& Associates, Architects, P.C., most recently amended on 6/29/95 sheet
#8211.

 

U&V-1

 

EXHIBIT X

 

OLYMPIA & YORK

ROOFTOP INSTALLATION QUESTIONNAIRE

CONFIDENTIAL

INFORMATION

 

	
  1.0

  	
  Applicant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name
  of Organization

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Street

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  City

  	
  State/Prov.

  	
  Code 

  	
   

  	
  Telephone

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Contact

  	
   

  	
  Title

  	
   

  	
  Installation
  Address

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Legal
  Status

  	
   

  	
  City

  	
  State/Prov.

  	
  Code

  
	
   

  	
   

  	
   

  	
   

  
	
  2.0

  	
  Proposed
  System

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1
  

  	
  Type
  of operation: IntraCompany or 3rd Party:

  
	
   

  	
   

  
	
  a.

  	
  Describe
  intened use of rooftop device with specificity, including business purpose of
  transmission/reception. (Attach on separate page if Necessary):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Describe
  the nature and source of the transmission which will be received by the
  rooftop device: 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Describe
  the nature and destination of the transmission which will be transmitted by
  the rooftop device (if applicable): 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.2
  

  	
  Nature
  of transmission/reception:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  Voice?

  	
   

  	
  Yes

  	
  No

  
	
  b.

  	
  Data?

  	
   

  	
  Yes

  	
  No

  
	
  c.

  	
  Facsimile?

  	
   

  	
  Yes

  	
  No

  
	
  d.

  	
  Video?

  	
   

  	
  Yes

  	
  No

  
	
  e.

  	
  Audio?

  	
   

  	
  Yes

  	
  No

  
	
  f.

  	
  Other?

  	
   

  	
   

  	
   

  
													

 

 

	
  2.3 

  	
  Revenue
  Generation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  Will
  service produce revenue directly?

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Yes

  	
  No

  
	
   

  	
  If
  Yes, Yearly Revenues:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  If
  indirectly, explain:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  If
  service is resold, what is basis of the rate structure?

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
  License

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  Class
  of license (if any)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Has
  license been issued:

  	
   

  	
  Yes

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
  Hours
  of Operation:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.0

  	
  Antenna
  and Support Structure

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  Antenna
  Information

  	
   

  	
   

  	
   

  
	
  a.

  	
  type
  of antenna:

  	
  Microwave

  	
   

  	
  Satellite

  
	
   

  	
   

  	
  Two-way
  Radio

  	
   

  	
  Other

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Manufacturer:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Type

  	
   

  	
  Model
  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d. 

  	
  Dimensions:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
  Weight:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
  Vertically
  polarized

  	
   

  	
  or
  horizontally

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
  Feed
  cable type:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  h.

  	
  type
  of other circuits to antenna:

  	
   

  	
   

  	
   

  
	
   

  	
  AC
  Power

  	
   

  	
  Constrol
  Wiring

  	
   

  
	
   

  	
  Intercom

  	
   

  	
  De-icing
  Circuits

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  i.

  	
  For
  microwave antenna, azimuth of beam:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  j.

  	
  For
  directional two-way antenna, azimuth of main

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  k.

  	
  For
  satellite antenna: azimuth

  	
   

  	
  •

  	
  Elevation
  

  	
  •

  
												

 

2

 

	
  l.

  	
  If
  steerable, elevation range:

  	
   

  	
  •

  	
  to

  	
  •

  
	
  m.

  	
  Articulation
  means:

  	
   

  	
   

  	
   

  
	
  n.

  	
  Noise
  and Vibration:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
  Description
  of Antenna Support Structure

  	
   

  	
   

  
	
  a. 

  	
  Support
  required?

  	
  Yes

  	
   

  	
  No

  
	
  b. 

  	
  Tower
  required?

  	
  Yes

  	
   

  	
  No

  
	
  c.

  	
  If
  tower, how supported?

  	
   

  	
   

  	
   

  
	
  d. 

  	
  Height
  of tower/support structure:

  	
   

  	
   

  	
   

  
	
  e. 

  	
  Weight
  of tower/support structure:

  	
   

  	
   

  	
   

  
	
  f. 

  	
  Roof
  area occupied:

  	
   

  	
   

  	
   

  
	
  g. 

  	
  Structure
  certified

  	
  Yes

  	
  No

  	
  N/A

  
	
  h.

  	
  Does
  structure require lighting:

  	
  Yes

  	
  No

  	
   

  
	
  i.

  	
  If
  required, what type of lights?

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
  Structural
  Adequacy

  	
   

  	
   

  	
   

  
	
  a.

  	
  Stiffness
  of support structure adequate?

  	
  Yes

  	
  No

  	
   

  
	
  b. 

  	
  Reaction
  of structure on building within

  	
  Yes

  	
  No

  	
   

  
	
  c.

  	
  With
  125 mph (200km/h Wind:

  	
   

  	
   

  	
   

  
	
   

  	
  axial
  Force

  	
  side
  force

  	
  Moment

  	
   

  	
   

  
	
  d.

  	
  Building
  stiffness adequate?

  	
  Yes

  	
  No

  	
   

  
	
  e.

  	
  Has
  any study been undertaken in the regard?

  	
  Yes

  	
  No

  
	
  f.

  	
  Will
  Olympia & York be named in the insurance policy regarding the structure?

  	
  Yes

  	
  No

  
																			

 

3

 

	
  3.4 

  	
  Radiation
  Information

  	
   

  	
   

  	
   

  
	
  a.

  	
  Receive
  only antenna?

  	
  Yes

  	
  No

  	
  If
  yes, answer c,f,g, and 1 only

  
	
  b.

  	
  Proposed
  Effective Radiated Power (ERP):

  	
   

  	
  W

  	
  DBW

  
	
  c.

  	
  Frequency
  band of operation:

  	
   

  	
   

  	
   

  
	
  d.

  	
  Type
  of radiation:

  	
  Continuous

  	
  Pulse

  	
   

  
	
  e. 

  	
  Transmitter
  Power:

  	
  W

  	
  DBW

  	
   

  	
   

  
	
  f. 

  	
  Feed
  Line Loss:

  	
  DB/ft.

  	
  DB
  Total

  	
   

  	
   

  
	
  g.

  	
  Antenna
  Gain:

  	
  DB

  	
   

  	
   

  	
   

  
	
  h.

  	
  Maximum
  power density near radiator:

  	
   

  	
  mw/cm2

  	
   

  
	
  i.

  	
  At
  what distance does it present hazard, in accordance with OSHA specifications?

  	
  (10mw/cm2)

  
	
  j.

  	
  Predicted
  coverage contours available?

  	
  Yes

  	
  No

  	
   

  
	
  k.

  	
  List
  of transmit frequencies:

  	
  MHz

  	
   

  
	
  l.

  	
  List
  of receive frequencies:

  	
  MHz

  	
   

  
	
   

  	
  sandwidth
  and type of emission:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.0 

  	
  Technical
  Plant

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Technical
  Plant Equipment

  	
   

  	
   

  	
   

  
	
   

  	
  Full
  description of all equipment to be installed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Manufacturer

  	
   

  	
  Type

  	
   

  	
  Model No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attach
  manufacturers’ data sheets.

  	
   

  	
   

  	
   

  	
   

  
															

 

4

 

	
  4.2

  	
  Technical
  Plant Requirements

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.
  

  	
  Floor
  area for technical plant:

  	
   

  	
  ft2

  
	
   

  	
   

  	
   

  	
   

  	
  lb

  
	
   

  	
  b.
  

  	
  Maximum
  floor loading:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  lb

  
	
   

  	
  c.

  	
  Average
  floor loading:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  lb

  
	
   

  	
  d.

  	
  Loads
  on ceiling or walls:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ft

  
	
   

  	
  e.
  

  	
  Proximity
  to roof structure:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  Access
  required: 

  	
  Yes

  	
  No

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  If
  Yes, frequency:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  Primary
  AC requirements:

  	
  Voltage

  	
  VAC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Peak
  Power

  	
  W

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Average
  Power

  	
  W

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  h.
  

  	
  Standby
  power required?

  	
  Yes

  	
  No

  	
   

  
	
   

  	
   

  	
  If
  yes, from landlord?

  	
  Yes

  	
  No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Or,
  provided by tenant? 

  	
  Yes

  	
  No

  	
   

  
	
   

  	
   

  	
  What
  type?

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Water
  or any fluids used or stored:

  	
  Yes

  	
  No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  j.

  	
  Hazardous
  chemicals used or stored:

  	
  Yes

  	
  No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  k.

  	
  Fire
  detection system:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Manufacturer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Type

  	
  Model
  No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  l.

  	
  Fire
  extinction system:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Manufacturer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Type

  	
  Model
  No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  m.

  	
  HVAC
  required?

  	
  Yes

  	
  No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  n.

  	
  Heat
  loads from equipment:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  o.

  	
  Bow
  vented or exhaused?

  	
   

  	
   

  	
   

  
															

 

5

 

	
  5.0

  	
   

  	
  System
  Interconnection

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
   

  	
  Means
  of interconnecting to other facilities:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  If
  radio link (UHF, VHF, Microwave), give details:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  If
  wireline, present cable/trunking requirements:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  Future
  cable/trunking requirements:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
   

  	
  Sensitive
  to interference?:  

  	
  Yes

  	
  No

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
   

  	
  Generatee Interference?:

  	
  Yes

  	
  No

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.0

  	
   

  	
  Undertakings

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Applicant
  is prepared to undertake whatever action is necessary to protect existing
  tenants from any interference from the proposed operation to the extent of
  absorbing all costs of such protection or ceasing operation and removing
  offending apparatus from the premisses.

  
	
   

  	
   

  	
   

  
	
  7.0

  	
   

  	
  Specifications

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All
  manufacturer’s data available on proposed installation(s) and roof drawing
  showing desired location of installation are attached

  
								

 

6

 

	
  8.0

  	
   

  	
  Application
  Fee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  $500.00 non-refundable application fee payable to “Olympia & York is enclosed.
  The decision to accept or reject the within request remains entirely within
  the sole and exclusive discretion of Olympia & York, notwithstanding the
  receipt of this questionaire and the $500.00 application fee.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  	
   

  	
  Signature
  of Applicant

  

 

7

 

CONFIDENTIAL INFORMATION

 

WARNER LEASE

EXHIBIT “Y”

 

ANTENNA ROOF LOCATION

 

 

[GRAPHIC]Exhibit
10.28

 

 

 

EXECUTION COPY

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.

 

US PICK, PACK AND SHIPPING SERVICES AGREEMENT

 

between

 

WARNER-ELEKTRA-ATLANTIC CORPORATION (“WEA”)

and

 

CINRAM  DISTRIBUTION LLC (“Company”)

 

Dated as of October 24, 2003

 

Capitalized terms not defined where they appear in the text are defined
in Paragraph 13.

 

1. Appointment. (a)

 

(i)    WEA hereby appoints Company to render, and
Company shall render, PP&S Services for one hundred percent (100%) of
Products in accordance with the terms hereof.

 

(ii)   Notwithstanding anything to the contrary
contained in Paragraph 1(a)(i), from and after the effective date of a Recorded
Music Major Transaction (the “RMMT Effective Date”), the appointment of
Company hereunder shall instead be to render, and Company shall render,
PP&S Services for at least the Specified Percentage (and, at WEA’s
election, more than the Specified Percentage) of Products in accordance with
the terms hereof. WEA shall use commercially reasonable efforts to provide that
the Combined Entity’s use of PP&S Services hereunder (i.e., mix of New Releases
and Catalog Titles) following the RMMT Effective Date remains generally
consistent with WEA’s use of PP&S Services hereunder prior to the RMMT
Effective Date. The “Specified Percentage” equals the fraction,
expressed as a percentage: (A) the numerator of which shall be one hundred
percent (100%) of the number of units of Products picked, packed and shipped in
the Territory by Company for WEA under this Agreement (and/or by WEA on its own
behalf, if applicable) during the twelve (12) complete calendar months
immediately preceding the RMMT Effective Date (the “WEA Output”); and
(B) the denominator of which shall be the WEA Output plus one hundred
percent (100%) of the number of units of Records in physical formats picked,
packed and shipped for sale in the Territory by or for the recorded music
business of the applicable Major during the same twelve (12)-month period. For
the avoidance of doubt, in calculating the WEA Output no units of products
picked, packed and shipped by Company (and/or WEA, if applicable) for WHV or
its affiliates shall be included.

 

 

(iii)  WEA shall be solely responsible for: (A) all sales solicitation of
Products; (B) processing of all orders of units of Products by customers; (C)
invoicing and collection of customer accounts; and (D) the processing and
issuance of credits to customers.

 

(b)   Reservation of Rights. WEA hereby
reserves all rights in and to Products not otherwise expressly granted to
Company herein.

 

(c)   Reports. Company shall prepare for WEA
all of the same shipments, returns and inventory reports in the same format and
detail that WEA’s systems provided as of the date of this Agreement (it being
understood that Company shall not be required to prepare for WEA any reports
that would require Company to incur additional out-of-pocket expenses in order
to provide them, unless WEA agrees to pay any such actual out-of-pocket
expenses) and shall supply WEA with such reports on at least a monthly basis
during the Term. If Company provides more detailed reports to any other party
during the Term, Company shall, at WEA’s request, provide such more detailed
reports to WEA hereunder as of the date that Company commences providing such
more detailed reports to such other party, but subject to the same terms and
conditions under which such reports are provided to such other party (e.g., any
additional fees or amounts charged to such party for such more detailed
reports). Monthly and quarterly shipments and return reports shall include at
least the following information: selection number, artist name, selection
title, product configuration, gross units shipped, units actually returned, net
units and Fees. Nothing in such reports shall impart any
competitively-sensitive information about Company, Company’s affiliates or any
third parties for which Company renders any services or any personal data
possessed by Company.

 

(d)   Facilities. Company shall utilize “first-class”
facilities either directly or, subject to WEA’s prior approval, by subcontract,
for the prompt, timely, and satisfactory performance of the PP&S Services
committed hereunder. All distribution center locations used by Company in
connection with Products shall be subject to WEA’s prior approval (which
approval shall not be unreasonably withheld). WEA hereby acknowledges that
those distribution facilities owned and/or leased by WEA in the Territory
immediately prior to the commencement of the Term and which are being acquired
by Company pursuant to the Stock Purchase Agreement (the “Acquired
Facilities”) currently constitute “first-class” facilities and shall be
deemed. approved by WEA for Company’s use hereunder in connection with
Products. For the avoidance of doubt, WEA shall have no right to require
Company to provide Services hereunder at any Facility other than the Acquired
Facilities and Company shall have the right to close or relocate any of the
Acquired Facilities so long as Company ensures no degradation to Service Level
Requirements, shipping time, turnaround times or increased costs to WEA as a
result of such closure or change in location. Company acknowledges that
warehouses included in the Acquired Facilities permit [*] of all units of

 

2

 

Products
Ordered to be delivered as required pursuant to such Order in the Territory
within [*] using standard shipping methods.

 

(e)
Company’s Undertakings.

 

(i)    Company shall render Services for WEA  to all
locations throughout the Territory for all orders for Products as designated by
WEA. The Services: (A) shall be rendered on a so-called “label blind” basis;
(B) shall be rendered in at least the same general manner, subject to at least
the same general standards and in at least the same general quality as provided
by Company to all other parties whose products are distributed by Company in
the Territory, but if any such services are not part of the standard Services
otherwise provided to WEA hereunder and the provision of such services is at a
higher cost to Company, then if WEA requests such services, such services shall
be provided to WEA hereunder, but subject to the same terms and conditions
provided to such other party. [*] provided, however, that nothing
contained in this clause (B) shall limit Company’s obligations set forth in
Paragraph 7 hereof; (C) shall be rendered in at least the same manner, subject
to at least the same standards and in at least the same quality as was provided
to WEA’s affiliates for the products of WEA’s affiliates immediately prior to
the commencement of the Term; (D) shall be rendered in accordance with “first-class”
standards that meet the highest quality available in the industry; and (E)  shall
be rendered in accordance with, or exceed, each of the service level
requirements set forth on Schedule A hereto (the requirements set forth on
Schedule A hereto being the “Service Level Requirements”);  provided,
however, that to the extent that the standards set forth in clauses (B)
and (D) of this Paragraph are not being met as of the commencement of the Term,
Company shall have a period of [*] from the commencement of the Term in which
to meet such standards.

 

(ii)   Company shall ship each Product without alteration in the same
configuration and format designated by WEA.

 

(iii)  Company shall accept the return of all units of Products previously
distributed by or on behalf of WEA  in the Territory prior to the
commencement of the Term.

 

(f)    Compliance with Law; Code of Conduct.
Company shall comply (i) with all laws and regulations in connection with
Company’s undertakings under this Agreement, except where the failure to do so
individually or in the aggregate is

 

3

 

immaterial; and (ii) subject to relevant local laws including privacy
laws, with the code of conduct attached as Schedule B hereto.

 

(g)   Quarterly Meetings.
At least once every calendar quarter, WEA may meet with Company’s Chief
Executive Officer (or equivalent) and Chief Financial Officer (or equivalent)
to assess Company’s performance under this Agreement and its ongoing ability to
perform its obligations under this Agreement.

 

(h)   Shipping. If WEA is
responsible for shipping expenses, should WEA so elect, WEA shall have the
right to: (i) select the shipping agent(s) utilized by Company for shipping of
units of Products and/or other materials hereunder (and, in doing so, assume
the risk of loss for such units of Products in transit); or (ii) in lieu of
selecting such shipping agent(s), require that Company submit to WEA any
proposed shipping agent(s) which Company wishes to utilize hereunder for WEA’s
prior written approval. If, in a particular instance, WEA is not responsible
for shipping expenses or WEA does not exercise its rights pursuant to the
preceding sentence, Company shall utilize the same shipping agent(s) utilized
by Company for the shipping of a majority of the other products shipped by or
on behalf of Company.

 

(i)    Additional Services.
At WEA’s reasonable request, Company shall provide WEA with assembly, packing
and shipping services for “point of sale,” promotional and merchandising materials
to be utilized in connection with Products. Such services shall be provided by
Company to WEA on a non-exclusive basis only (and only to the extent that WEA
so requests any such services) and, to the extent so requested, shall be
provided to WEA [*].
Notwithstanding this Paragraph 1(i), Company shall only be required to provide
such services if either WEA (either itself or through any of its affiliates)
provided such services on its own behalf prior to the commencement of the Term
or if Company then-currently provides such services to any party (in which
case, if WEA requests such services and Company is not contractually prohibited
from providing such services to WEA, they shall be provided to WEA on the same
terms and conditions as are provided to such other party).

 

2. Title. Title to units of Products hereunder (including all
copyrights and trademarks contained therein) shall remain in WEA or WEA’s
affiliates. Company acknowledges that Products (including all intellectual
property contained therein and relating thereto) are protected under copyright
laws and that WEA is the rightful owner or license holder of such copyrights.
Company acknowledges that any removal of any such materials from Company’s approved  facilities
without WEA’s written approval, and any distribution of any such materials in
the Territory without WEA’s written approval, is an infringement of WEA’s
copyright. Company shall bear the risk of loss for units of Products in Company’s
possession, under Company’s control or in transit during any shipping of
Products between Facilities (to the extent that Company is responsible for
paying such shipping expenses).

 

4

 

3.     Ordering Products. WEA shall cause
the manufacture of and delivery to Company of such stocks of Products as shall
be determined by WEA in WEA’s sole discretion.

 

4.     Company’s Financial Obligations. WEA
shall not be responsible for payment of any of Company’s (or Company’s
affiliates’) indirect or general overhead charges or the salaries of Company’s
(or Company’s affiliates’) employees or agents. All costs associated with the
rendering of Services shall be borne by Company. All charges for all packaging
materials (including boxes and filler materials) are at the cost of Company.
All actual, out-of-pocket,  non-overhead freight charges
incurred by or on behalf of Company for shipping of units of Products from
Company’s distribution warehouse facilities to WEA’s customers or otherwise at
WEA’s request shall be borne by WEA. To the extent that any shipping costs
hereunder are to be borne by WEA, WEA shall only be required to pay Company’s
actual, documented, out-of-pocket costs charged by such shipping company for
the shipment of units of Products and/or other materials hereunder, and such
costs shall be reimbursed to Company by WEA within [*] following Company’s
rendition of such invoice to WEA [*]. Company shall be solely responsible for
all costs or expenses related to the shipping of units of Products from WEA’s
manufacturer to the extent that Company or Company’s affiliate is
then-currently WEA’s manufacturer to Company’s distribution Facilities and for
the cost of any shipping between any Facilities (except if such shipping was
requested by WEA).

 

5.     Terms of Sale of Products. WEA shall
determine all terms of sale for Products.

 

6.     Other Obligations. (a) Storage.
Company shall accept and store all units of Products delivered to or otherwise
held by Company hereunder at no charge; provided, however, that
with respect to any particular Product, Company shall not be required to store
more units of such Product than is necessary to satisfy the next [*] demand
(such determination as to what constitutes [*] demand shall be made jointly by
WEA and Company based, where possible, upon actual, gross units of Products
ordered during the prior [*] and shall be made for all Products no more
frequently than semi-annually during the Term commencing no sooner than [*]
after the commencement of the Term). With respect to units of Products so
determined to be in excess of a [*] demand therefor, Company shall notify WEA
of the specific units of Products constituting such excess and within [*]
following WEA’s receipt of such notice, WEA shall (in WEA’s sole discretion)
either: (i) remove such excess units of Products (at WEA’s expense); (ii) direct
Company to destroy such excess units of Products (at WEA’s expense); or (iii) direct
Company to store such excess either: (x) at a Facility at a cost to WEA of [*]
or (y) offsite at Company’s or Company’s

 

5

 

affiliates
leased facility approved in advance, in writing, by WEA and the actual,
documented, out-of-pocket expense charged by such facility to Company for such
storage shall be reimbursed to Company by WEA. Amounts owing under this
Paragraph 6(a) shall be invoiced by Company at month end and shall be payable [*]
from the date of the rendition of such invoice, [*]. Products shall be kept
segregated from all of Company’s other products or merchandise. The risk of
loss, due to any reason, of units of Products in Company’s possession or
control shall be borne by Company, as further described herein; provided,
however, that to the extent any such loss was directly caused by a WEA
Employee, Company shall not bear the risk of loss except to the extent such
loss is or would have been covered by Company’s property insurance as required
under this Agreement and as set forth on Schedule C hereto.

 

(b)   Insurance. During the Term, Company
shall: (i) comply with all provisions set forth on Schedule C hereto; and (ii)
at Company’s sole cost and expense, maintain adequate insurance coverage for:
(A) all Products while such Products are in Company’s possession, under Company’s
control or in transit to or from Company or its designees to any Facility; and
(B) the other matters set forth on Schedule C hereto. The insurance required
hereunder is not intended to limit Company’s liability as otherwise provided in
this Agreement.

 

(c)   Computer Access. In order that WEA be
able to monitor daily shipment, returns and inventory activity of Products,
Company shall give WEA access to Company’s computer system for the purpose of
providing WEA with real-time information stored therein relating to Products at
Company’s expense (but no access shall be allowed to information relating to
any other party’s products or any personal data possessed by Company). Such
system shall provide WEA with all of the same types of reports and information
currently provided by, and as may be available from, Company’s computer systems
in connection with other products distributed by Company. In connection
therewith, Company shall work with WEA to ensure that WEA is provided with at
least the same level of reports and information that WEA’s own systems provided
as of the commencement of the Term. Nothing in such reports or information
provided shall impart any competitively-sensitive information about Company,
Company’s affiliates or any third parties for which Company renders any
services or any personal data possessed by Company. Such access shall be
available to WEA [*] a day, [*] days a week, at all times during the Term.
Notwithstanding anything herein to the contrary, Company may perform system
maintenance and upgrades during which such systems may not be available; provided,
however, that such downtime does not exceed [*] per week. [*]

 

6

 

(d)   Inspection. Subject
to the provisions set forth below, during the Term and for a period of [*] following the expiration or termination
of the Term, WEA shall have the right to inspect each WEA Facility and any
other facility utilized by Company in connection with Products, or the
provision of Services hereunder, during regular business hours (utilizing
either WEA’s own employees, third-party advisers or representatives, insurers,
or other experts retained by WEA). WEA may conduct such inspections of each
Facility or other facility up to [*].
During any such inspection, WEA may conduct physical inventories of units of
Products in Company’s possession or under Company’s control. WEA shall not have
access to any competitively-sensitive information relating to any other party’s
products, or any personal data possessed by Company during the inspections
permitted under this Paragraph 6(d).

 

(e)   Security. Company
shall maintain security standards that are at least equivalent to those
provided by other “first-class” distributors in the Territory, both in the
segregated area of the WEA Facilities for Products and throughout the WEA
Facilities, and shall at all times employ the utmost care and diligence to
prevent loss, damage, theft, disappearance, unauthorized destruction or usage
of Products. Company’s security procedures shall be subject to WEA’s prior
written approval. Company shall maintain such procedures as approved by WEA and
as may reasonably be given to Company from time to time throughout the Term. Notwithstanding
the foregoing, Company’s security measures (which shall include closed-circuit
television monitoring, pass-protected access, employee checking and spot
searching, etc.) shall be sufficient to ensure that Products and the
intellectual property embodied in such Products are in no way compromised,
stolen, “leaked” to the public (e.g., copying of recordings embodied on
Products which may lead to the availability of such recordings to the public
via the Internet or similar means) or otherwise
made available to any
unauthorized parties; provided, however, that for a period of
[*] from
the commencement of the Term, such security measures need be no more stringent
than those currently in place at the Acquired Facilities. Upon discovery of (i)
loss, damage, theft, disappearance, or destruction of Products exceeding [*]; or (ii) any unauthorized usage of
Products, Company shall notify WEA as soon as reasonably possible, and in any
event within [*] following such
discovery, and shall include in such notification sufficient detail to allow
WEA to investigate such incident (each, a “Security Breach Notice”).
Regardless of Company’s

 

7

 

compliance with all security
measures set forth herein or with procedures approved by WEA, Company shall be
liable as provided herein for the loss, damage, theft, disappearance,
destruction or unauthorized usage of any Products.

 

(f)    Salvage. At all
times and regardless of whether Company or its insurers are required to
compensate WEA for loss as required under this Agreement, WEA shall retain the
sole right to salvage for damaged Products. Company shall not surrender damaged
Products to insurers or any other party for destruction or disposal without
obtaining WEA’s prior written consent.

 

(g)   WEA Employees.. Company shall
throughout the Term, at the request of WEA, provide up to a maximum of [*]
full-time employees of WEA or its affiliates (the “WEA Employees”)
with, at Company’s expense: (i) reasonable office accommodations at such WEA
Facilities utilized for distribution and/or warehousing as may be specified
from time to time by WEA; (ii) individual computers; (iii) copy services and
any other similar office services in order to permit them to carry out their
functions; and (iv) all other
reasonable support functions as provided to them as of the date of this
Agreement. Company shall also provide telephone, Internet and fax access for
each WEA Employee, and WEA shall reimburse Company for Company’s actual,
documented, out-of-pocket costs therefor. Amounts owing under this Paragraph
6(g) shall be invoiced by Company at month end and shall be payable [*] from
the date of the rendition of such invoice; [*] WEA shall be responsible for the
direction of, and all compensation and related obligations for, the WEA
Employees. The WEA Employees shall operate in accordance with WEA’s code of
conduct and Company’s standard code of conduct contained in its employee policy
manual at the applicable WEA Facility (which code of conduct shall be subject
to WEA’s reasonable approval) and all other lawful policies adopted by Company
from time to time governing the conduct of all of its employees and
contractors. In the performance of their tasks, the WEA Employees shall not
have access to any competitively-sensitive information relating to any other
party’s products or any personal data possessed by Company.

 

7. Technology. Company shall reasonably update the WEA
Facilities at Company’s cost to keep up with new technology requirements,
including investing in technology, systems, equipment and processes to automate
distribution processes, packaging and assembly to provide at least the same
level of quality and service provided by other “first-class” distributors of
Records in the Territory. In the event that any investment in a fundamental new
technology (e.g., the conversion to automated systems) results in a decrease in
Company’s net costs (i.e., taking into account the cost of Company’s said
investment in implementing such new technology) by more than ten percent (10%),
the Fees shall be adjusted so that the net cost benefit is shared equally
between WEA and Company. Company shall maintain and update its information and
technology capabilities, at Company’s reasonable

 

8

 

cost, to meet reasonable WEA requirements and maintain competitive
services for WEA and its customers.

 

8.
Invoices and Payments. (a) Rendition of Invoices. For each month
of the Term, Company shall prepare and render invoices to WEA on a weekly basis
setting forth all Fees owed by WEA hereunder for such week. Except with respect
to shipping charges to be borne by WEA as provided in Paragraph 4, the amount
due to Company pursuant to each such invoice shall be due and payable by WEA to
Company in US dollars on or before [*] following Company’s rendition of such
invoice; [*] Company shall submit all such invoices to WEA electronically
pursuant to instructions given by WEA to Company from time to time (and in
paper form, to the extent WEA so requests) and to the extent that Company’s and
WEA’s computer systems do not already provide for the electronic submission of
all such invoices, Company shall use Company’s reasonable efforts to work with
WEA starting upon the commencement of the Term to create a system whereby all
such invoices can be submitted electronically to WEA.

 

(b)
Audits. WEA shall have the right, at WEA’s sole expense, to examine
(and/or to appoint representatives to examine) Company’s (and Company’s
affiliates’) books and records in order to: (i) verify the correctness of any
invoice prepared and rendered by Company in accordance with Paragraph 8(a);
(ii) establish the applicability of the provisions contained in Paragraphs 11
and/or 14; or (iii) otherwise establish compliance by Company with its
obligations under this Agreement; provided,  however, that only independent, third-party auditors
(i.e., auditors other than WEA’s then-current outside auditor) shall be
utilized for the review of Company’s
books and records. Independent
third party auditors shall have access to all information necessary to
perform their duties, however nothing in any report provided to WEA or its
affiliates by any such independent third party auditors shall impart to WEA or
its affiliates any competitively-sensitive information about Company, Company’s
affiliates or any third parties for which Company renders any services. If any
such audit reveals that WEA and/or WEA’s affiliates have been overcharged,
Company shall reimburse WEA in the amount of the overcharge. If any such audit
reveals that WEA has been overcharged by an amount exceeding [*] for the audit
period, Company shall reimburse WEA in the amount of the overcharge plus
all fees paid by WEA to the auditors concerned in connection with such audit
and any other actual, documented, out-of-pocket expense incurred by WEA in
connection with such audit. [*] Regardless of the number of audits conducted
hereunder revealing the same specific overcharge to WEA, Company shall not be

 

9

 

required
to repay to WEA the amount of any such overcharge more than once. WEA’s audit
right shall survive the expiration or termination of the Term for [*] Company
shall retain all books and records related to the performance of Services
hereunder after the expiration or termination of the Term for so long as WEA
may need to perform audits hereunder, but in no event for more than [*] after
the rendition of the invoice with respect to the Services to which such invoice
relates; provided, however, that before Company destroys any
books or records, Company shall deliver written notice of such intent to
destroy to WEA not more than [*], and not less than [*], before the intended
date of destruction. WEA shall have [*] after receipt of such notice to request
copies of the books and records to be destroyed, in which case Company shall
make copies of such books and records and deliver the same to WEA (but
excluding information related to other customers of Company) at WEA’s expense
(but at Company’s expense if such copies are of electronic files). As used
herein, “books and records” shall include, without limitation, physical data
and data stored in any electronic, magnetic or optical format.

 

9.     Post-Term Procedures. (a) Upon the
expiration or termination of the Term, Company shall immediately cause the
cessation of all Services and shall have no further rights or obligations with
respect to Products except as provided herein; provided,  however,
that upon WEA’s request, Company shall fill any then-currently outstanding
orders for units of Products pursuant to the terms of this Agreement. Within [*]
following the expiration or termination of the Term, Company shall provide WEA
with a list of all units of Products in Company’s possession or control on such
date. The mere expiration or termination of the Term shall not affect any
obligations of WEA to pay for Services rendered by Company prior to such
expiration or termination or any other obligation that is expressly provided
herein to survive the expiration or termination of the Term.

 

(b)
Within [*] following the expiration of the Term or [*] following the early
termination of the Term, WEA shall remove from the Facilities, or order at WEA’s
expense the destruction of all units of Products in Company’s possession or
control. The determination whether to remove or destroy such units of Products
shall be made by WEA in WEA’s sole discretion.

 

10.   Warranties, Representations, Covenants and
Indemnities. (a) Company warrants, represents and/or covenants, as the case
may be, that: (i) Company has the right, power and authority to enter into and
fully perform this Agreement; (ii) no agreement of any kind heretofore entered
into by Company shall interfere in any manner with the complete performance of
this Agreement; and

 

10

 

(iii)
subject to WEA’s rights in the Products and WEA’s warranties and
representations set forth below, any items prepared by or otherwise furnished
by Company in connection with Products and Company’s performance of Services
hereunder will not violate any law or infringe upon the rights of any party.

 

(b)   Company agrees to and does hereby indemnify,
save and hold WEA and its affiliates, and each of their respective officers,
directors and employees (collectively, for the purposes of this Paragraph 10(b)
only, “WEA”) harmless to the maximum extent permitted by law from any and
all loss and damage (including court costs and reasonable attorneys’ fees as
and when incurred) arising out of, connected with or as a result of: (i) any
inaccuracy, inconsistency with, failure of, or breach or threatened breach by
Company of any warranty, representation, agreement, undertaking or covenant
contained in this Agreement; and/or (ii) any and all damages or injuries of any
kind or nature whatsoever (including death resulting therefrom) to any persons,
whether employees of Company or otherwise, and to any property caused by,
resulting from, arising out of or occurring in connection with the execution of
the work under this Agreement (including as a result of product liability
claims) whether such damages or injuries are or are alleged to be based upon
Company’s active or passive negligence or participation in the wrong or upon
any breach of any statutory duty or obligation on the part of Company (except
to the extent such damages or injuries directly result from any act of WEA’s
employees located at Company’s facilities and are not otherwise covered by the
property insurance Company is required to maintain hereunder as set forth on
Schedule C hereto, or result from a breach of any warranty, representation,
agreement, undertaking or covenant of WEA contained herein). The foregoing
indemnity shall be applicable only to such claims as have been reduced to
judgment or settled with Company’s written approval. WEA shall give Company
prompt notice of any claim to which the foregoing indemnity applies and Company
shall assume the defense of any such claim through counsel of Company’s choice
and at Company’s sole expense. WEA shall have the right to participate in such
defense through counsel of WEA’s choice and at WEA’s expense.

 

(c)   WEA warrants, represents and/or covenants, as
the case may be, that: (i) WEA has the right, power and authority to enter into
and fully perform this Agreement; (ii) no agreement of any kind heretofore
entered into by WEA shall interfere in any manner with the complete performance
of this Agreement; and (iii) Material embodied in Products as supplied by WEA
shall not violate any law or infringe upon the rights of any third party. As
used herein “Material” shall include all musical compositions, names,
biographical materials and likenesses, photographic, video or motion picture
images, sound recordings, intellectual properties, packaging and artwork.

 

(d)   WEA agrees to and does hereby indemnify, save
and hold Company and its affiliates, and each of their respective officers,
directors and employees (collectively, for the purposes of this Paragraph 10(d)
only, “Company”)

 

11

 

harmless
to the maximum extent permitted by law from any and all loss and damage
(including court costs and reasonable attorneys’ fees as and when incurred)
arising out of, connected with or as a result of: (i) any inaccuracy,
inconsistency with, failure of, or breach or threatened breach by WEA of any
warranty, representation, agreement, undertaking or covenant contained in this
Agreement; (ii) any and all damages or injuries of any kind or nature
whatsoever (including death resulting therefrom) to any persons, whether
employees of Company or otherwise, and to any property caused by, resulting
from, arising out of or occurring in connection with any act of WEA’s employees
located at Company’s facilities, except to the extent such damages and injuries
are covered by the property insurance Company is required to maintain hereunder
as set forth on Schedule C hereto; and/or (iii) any products liability claims
for manufacturing defects directly related to Products not manufactured by
Company, any affiliate of Company or on behalf of Company. The foregoing
indemnity shall be applicable only to such claims as have been reduced to
judgment or settled with WEA’s written approval. Company shall give WEA prompt
notice of any claim to which the foregoing indemnity applies and WEA shall
assume the defense of any such claim through counsel of WEA’s choice and at WEA’s
sole expense. Company shall have the right to participate in such defense
through counsel of Company’s choice and at Company’s expense.

 

11.
Breach, Cure and Termination. (a) WEA may terminate the Term by written
notice to Company following either: (i) a breach of this Agreement by Company
that is specified in Paragraph 11(b); or (ii) any other material breach of this
Agreement by Company. [*] There shall be a cure period of [*] following written
notice to Company, for any breach referred to in Paragraph 11(a)(ii).

 

(b)
The breaches of this Agreement referred to in Paragraph 11 (a)(i) are any of
the following: [*]

 

(ix) any willful and malicious breach by Company of
any material provision hereof.

 

(c)
In addition, WEA may terminate the Term:

 

(i) by written notice to Company within [*]
following the later of: (A) a Change of Control; and (B) written notice to WEA
from Company that a Change of Control has occurred;

 

(ii) by written notice to Company following an
Insolvency Event;

 

(iii) by written notice to Company following either:
(A) the termination of the term of the US Manufacturing Agreement other than as
a result of a breach by WEA or the expiration of the term thereunder by passage
of time or (B) any material breach by Company under the US Manufacturing
Agreement (i.e., a breach which would then-currently

 

12

 

permit WEA to terminate the term thereof and with respect to which WEA’s
right to terminate has not been waived); and

 

(iv) upon [*] written notice to Company, following
the occurrence of a Recorded Music Major Transaction; provided, however,
that in no event shall any termination under this clause (iv) be effective
prior to the date which is eighteen (18) months from the commencement of the
Term.

 

(d) Any termination of this Agreement under this Paragraph 11 will not
relieve Company of liability for breaches hereof arising prior to such
termination nor shall it relieve WEA from any liability to pay for Services
rendered prior to such termination.

 

(e)

 

(i)    If
because of an “act of God”, inevitable accident, fire, lockout, strike or other
labor dispute, riot or civil commotion, act of public enemy or other cause of a
similar nature not reasonably within Company’s control (a “Force Majeure
Event”), Company is materially hampered in the performance of its
obligations under this Agreement, or its normal business operations are delayed
or become impossible or commercially impracticable, then Company shall have the
option, by giving WEA written notice, to suspend its obligations under this
Agreement affected by such Force Majeure Event, effective upon receipt by WEA
of such notice, for the duration of any such contingency. Should Company
suspend its obligations under this Agreement pursuant to this Paragraph 11(e),
such suspension shall not constitute a breach hereunder and Company shall not
be subject to price rebates under Paragraph 14 with respect to any occurrences
during the pendency of such suspension. Immediately upon Company’s assertion of
its right to suspend its obligations under this Agreement, WEA shall have the
right to distribute Products itself or through third parties during the
pendency of such suspension. Further, should Company suspend its obligations
under this Agreement, WEA shall, on and. from the date which is [*] months after the occurrence of (which may be earlier than Company’s assertion of suspension under) a
Force Majeure Event, have the right to terminate the Term of this Agreement by
notice in writing to Company unless prior to the date of such termination
Company has by notice in writing to WEA ended the suspension of Company’s
obligations under this Agreement. For the avoidance of doubt, should WEA
exercise its right of termination under this Paragraph 11(e), no cure period
shall be associated with Company’s failure to perform its obligations
hereunder.

 

(ii)   In
addition, within [*]
of becoming aware of any circumstance or event which may reasonably be
anticipated to cause

 

13

 

or constitute a Force Majeure Event, Company
shall notify WEA of such circumstance or event. For the avoidance of doubt,
such notice shall not constitute an assertion by Company of its right to
suspend its obligations hereunder.

 

(iii) If for any reason, Company is unable to
provide any Services hereunder in connection with any Order(s) for a period
exceeding [*]
and such inability is reasonably likely to result in Company being unable to
meet the Service Level Requirements set forth herein, WEA shall have the right
to immediately contract with a third party to provide all or any portion of
such services for such period of time as may be reasonably necessary for WEA to
obtain the services required to fulfill any such Order(s). Once WEA is
reasonably satisfied that Company is again able to provide the required
Services, WEA shall return the contracted Services to Company as soon as it is
reasonably able to do so, provided, however, that the return of
such Services to Company shall be subject to any reasonable commitment WEA has
made to the applicable third party that such Services would remain with such
third party for a period of time. Company shall reimburse WEA upon demand for
any and all incremental out-of-pocket charges that WEA reasonably incurs as a
result of transferring its Services under this Paragraph 11(e)(iii).

 

(f) If WEA purports to terminate this
Agreement under this Paragraph 11, each party hereto shall have the right to
seek any remedy or other relief available under applicable law (except as
limited by Paragraph 15(o)), and each party hereto shall have the right to
assert any defenses available under applicable law; provided, however,
that under no circumstances shall any party from whom WEA obtains services in
substitution for any or all Services to be provided hereunder have any
liability whatsoever to Company arising out of or related to any actual or
purported termination of this Agreement by WEA, even if in violation of this
Agreement and Company shall take no action against any such party in connection
with the provision of such services by such party to WEA.

 

12. Confidentiality. (a) Each of
Company and WEA shall, and shall cause its affiliates, and its and its
affiliates’ directors, officers, employees and agents (each, a “Recipient”)
to, maintain in confidence the material terms of this Agreement, except that
WEA may disclose this Agreement on a confidential basis in connection with a
potential Recorded Music Major Transaction, to a potential assignee under
Paragraph 15(c) or to third parties and WEA affiliates as may be necessary in
the ordinary course of business (provided, that any such disclosure shall be
limited to those persons who agree to be bound by the provisions of this
Paragraph). The restriction in the preceding sentence shall not apply to information
that: (i) becomes generally available to the public other than as a result of
disclosure by such Recipient contrary to this Agreement; (ii) was available to
such Recipient on a non-confidential basis prior to its disclosure to such
Recipient; (iii) becomes available to such

 

14

 

Recipient on a non-confidential basis from a source other than any
other Recipient unless such Recipient knows that such source is bound by a
confidentiality agreement or is otherwise prohibited from transmitting the
information to such Recipient by a contractual obligation; (iv) is
independently developed by such Recipient without reference to confidential
information received from any other party; (v) is required to be disclosed by
applicable law or legal process; provided that any Recipient disclosing
pursuant to this clause (v) shall notify the other party at least five (5) days
prior to such disclosure so as to allow such other party an opportunity to
protect such information through protective order or otherwise; (vi) is
required to be disclosed by any listing agreement with, or the rules or
regulations of, any security exchange on which securities of such Recipient or
any of its affiliates are listed or traded; or (vii) is required to be
disclosed by a party in order to perform its obligations under the Agreement; provided
that any such disclosure shall be limited to those persons who have a need to
know such information and who agree to be bound by the provisions of this
Paragraph 12. No party hereto shall make a press release or public announcement
concerning this Agreement without the prior written consent of the other party
hereto.

 

(b) Company shall, and shall cause its
affiliates, and its and its affiliates’ directors, officers, employees and
agents to, maintain in confidence all information that: (i) is in its or their
possession by reason of Company’s performance of Services hereunder; and (ii)
relates to the Products (including, without limitation, shipment and return volumes,
shipping destinations, pricing information and other terms of sale). WEA shall,
and shall cause its affiliates, and their directors, officers, employees and
agents to, maintain in confidence all information that: (x) is in its or their
possession by reason of Company’s performance of Services hereunder; and (y)
relates to the pricing, methods of distribution or other proprietary
information of Company. The restrictions in the two preceding sentences shall
not apply to information that: (A) becomes generally available to the public
other than as a result of disclosure by such Recipient contrary to this
Agreement; (B) was available to such Recipient on a non-confidential basis
prior to its disclosure to such Recipient; (C) becomes available to such Recipient
on a non-confidential basis from a source other than any Recipient unless such
Recipient knows that such source is bound by a confidentiality agreement or is
otherwise prohibited from transmitting the information to such Recipient by a
contractual obligation; (D) is independently developed by such Recipient
without reference to confidential information received from any other party;
(E) is required to be disclosed by applicable law or legal process; provided
that any Recipient disclosing pursuant to this clause (E) shall notify the
other party at least five (5) days prior to such disclosure so as to allow such
other party an opportunity to protect such information through protective order
or otherwise; or (F) is required to be disclosed by any listing agreement with,
or the rules or regulations of, any security exchange on which securities of
such Recipient or any of its affiliates are listed or traded. Notwithstanding
anything to the contrary above, WEA and its affiliates  shall be permitted to disclose any
information on a confidential basis in connection with a potential Recorded
Music Major Transaction,

 

15

 

to a potential assignee under  Paragraph 16(c) or to third parties and WEA
affiliates as may be necessary in the ordinary course of business (provided,
that any such disclosure shall be limited to those persons who agree to be
bound by the provisions of this Paragraph).

 

(c) The obligations of WEA and Company under
Paragraphs 12(a) and 12(b) shall survive for [*] years following the expiration or
termination of the Term.

 

(d)

 

(i)    Notwithstanding
anything to the contrary set forth in this Paragraph 12, the parties hereby
agree that, as of the earliest of: (A) the date of the public announcement of
discussions relating to the transactions contemplated by the Stock Purchase
Agreement (the “Transaction”); (B) the date of the public announcement
of the Transaction; and (C) the date of the execution of an agreement (with or
without conditions) to enter into the Transaction, each party (and each
employee, representative or other agent of such party) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax
structure of the Transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to such party relating to such tax
treatment and tax structure.

 

(ii)   The
parties acknowledge that: (A) (x) the identity of any existing or future party
(or any affiliate of such party) to the Transaction; and (y) any specific
pricing information or other commercial terms, including the amount of any
fees, expenses, rates or payments arising in connection with the Transaction,
are not included in the meaning of the terms “tax treatment” and “tax structure”
as referred to in clause (i) of this Paragraph 12(d); and (B) nothing in this
Agreement shall in any way limit any party’s ability to consult any tax advisor
(including a tax advisor independent from all other entities involved in the
Transaction) regarding the tax treatment or tax structure of the Transaction.

 

13. Definitions. (a) Certain Terms.

 

(i)    “Acquired
Facility” shall mean any of the United States facilities which are being
acquired by Company in connection with the Stock Purchase Agreement.

 

(ii)   “Armed
Forces Post Exchanges” shall mean United States military posts, ships’
stores or other United States armed forces facilities.

 

16

 

(iii) “Business Days” shall mean
Monday through Friday inclusive except for any United States national public
holiday which shall fall on any of those days.

 

(iv)  “Catalog
Titles” shall mean any (Product or Component thereof) following such
Product’s “street date.”

 

(v)   “Change
of Control” shall mean (i) any merger or consolidation of Company or Parent
with a Major or its affiliates or any sale, transfer, issuance or other
disposal (in one transaction or in a series of transactions) of all or more
than [*] of
the shares of capital stock, partnership interests, membership interests in a
limited liability company or other equity ownership interests (“Equity
Interests”) of Parent or Company (or any subsidiary of Parent or Company
engaged in the business of providing PP&S Services, in each case, whether
now owned or hereafter acquired) to a Major or its affiliates; (ii) the failure
by Parent to own, directly or indirectly, beneficially and of record, Equity
Interests in Company representing at least [*] of each of the aggregate ordinary voting power and aggregate
equity value represented by the issued and outstanding Equity Interests in
Company; (iii) Parent or Company sells all or substantially all of its assets;
or (iv) any other event which results in Parent no longer controlling the
direction or management of Company.

 

(vi)  “Combined
Entity” shall mean the entity or entities formed as a result of any
Recorded Music Major Transaction.

 

(vii) “Contract Year” shall mean each
separate, consecutive one (1)-year period of the Term, the first such period to
commence on the first day of the Term.

 

(viii) “Facility” shall mean any
facility owned and/or leased and controlled by Company or one of Company’s
affiliates.

 

(ix) “Fees” shall be in US dollars and
shall mean the pick, pack and ship fees and the various amounts set forth on
Schedule D hereto, in each case, subject to adjustment as provided in this
Agreement.

 

(x)    “Hit
Titles” shall mean Catalog Titles designated by WEA as such based upon
current or anticipated sales and delivery requirements. [*]

 

17

 

(xii) “International Manufacturing
Agreement” shall mean the International Manufacturing and Packaging
Agreement between WMI and Company dated as of the date hereof.

 

(xiii) “International PP&S Agreement”
shall mean the International Pick, Pack and Shipping Services Agreement between
WMI and Company dated as of the date hereof.

 

(xiv) “Key Release” shall mean a New
Release of which greater than [*] and less than [*]
units have been Ordered.

 

(xv) “Key Release Date” shall mean the
date by which the Orders for a Key Release are required to be shipped pursuant
to Schedule A hereto.

 

(xvi) “Major” shall mean any one of
the following companies: Sony Music Entertainment Inc., Bertelsmann Music
Group, EMI Group plc or Universal Music Group (or their successors).

 

(xvii) “New Release” shall mean any
Product (or Component thereof) prior to and including such Product’s “street
date.” For the purposes of Schedule A hereto, all promotional units of Products
shall be treated as New Releases.

 

(xviii) “Order” shall mean a request
made by WEA for the rendering of any PP&S Services in connection with units
of Products or other materials hereunder. An “Order” may be for individual
Products or other materials, may be for multiple Products or other materials
and may specify multiple quantities of the same Product or other materials to
be delivered to single and/or multiple locations.

 

18

 

(xix) “Order Cycle Time” shall mean
the period from the date and time that Company receives an Order to the date
and time Company actually ships such Order.

 

(xx) “Parent” shall mean Cinram
International Inc.

 

(xxi) “Platinum Release” shall mean a
New Release for which greater than [*] have been Ordered.

 

(xxii) “Platinum Release Date” shall
mean the date by which the Orders for a Platinum Release are required to be
shipped pursuant to Schedule A hereto.

 

(xxiii) “PP&S Services” shall mean
(i) physical distribution; (ii) processing of returns for scrap or return to
inventory; (iii) inventory control and warehousing; and (iv) shipping services
for units of Products; in all cases, in orders and quantities as requested and
approved by WEA to all locations in the Territory as designated by WEA. For the
avoidance of doubt, all determinations regarding the handling of units of
Products and other materials hereunder, including the handling of returns,
stickering, preparation for shipment (e.g., boxing, etc.) and shipment
of units of Products shall be made solely by WEA.

 

(xxiv) “Products” shall mean all
Records for which WEA requires PP&S Services to be performed during the
Term in the Territory and for which WEA has the unilateral right to control the
identity of the party who renders such PP&S Services. Following a Recorded
Music Major Transaction, “Products” shall mean all Records for which the
Combined Entity requires PP&S Services to be performed during the Term in
the Territory and for which the Combined Entity has the unilateral right to
control the identity of the party who renders such PP&S Services. It has
been WEA’s general custom to use its commercially reasonable efforts to acquire
the unilateral right to control the identity of the party who renders PP&S
Services in connection with Records. WEA shall continue to do so during the Term,
in accordance with past practice. “Products” shall not include Records to be
distributed during the Term in the Territory by Word Entertainment.

 

(xxv) “Recorded Music Major Transaction”
shall mean a joint venture, merger, or other combination of all or a
substantial portion of the recorded music businesses of Warner Music Group with
all or a substantial portion of the recorded music businesses of any Major.

 

(xxvi) “Records” shall mean all
physical forms of recording and reproduction by which sound may be recorded now
known or which may hereafter become known, manufactured or sold primarily for
home use,

 

19

 

jukebox
use, or use on or in means of transportation, including magnetic recording
tape, film, electronic video recordings and any other physical medium or device
for the production of artistic performances manufactured or sold primarily for
home use, jukebox use or use on or in means of transportation, whether
embodying: (i) sound alone; or (ii) sound synchronized with visual images, e.g.,
“sight and sound” devices, but only so long as such forms of recording and
reproduction contain performances of works by recording artists.

 

(xxvii) “Services” shall mean the PP&S
Services and all other services to be provided by Company under this Agreement.

 

(xxviii) “Stock Purchase Agreement” shall
mean the Stock Purchase Agreement among AOL Time Warner Inc., Parent and
Company dated as of July 18, 2003.

 

(xxix) “Term” shall mean the three (3)-year
period commencing on the Closing Date, as such term is defined in the Stock
Purchase Agreement, subject to earlier termination in accordance with Paragraph
11.

 

(xxx) “Territory” shall mean the United
States, its territories and possessions, including Puerto Rico, and Armed
Forces Post Exchanges serviced from distribution points in the US.

 

(xxxi) “US Manufacturing Agreement” shall
mean the US Manufacturing and Packaging Agreement between WEA and Company dated
as of the date hereof.

 

(xxxii) “WEA Facility” shall mean any Facility
at which Company provides Services to WEA hereunder.

 

(xxxiii) “WHV” shall mean Warner Home Video
Inc.

 

(xxxiv) “WMI” shall mean WEA International
Inc.

 

(b) Other Definitional and Interpretative Provisions.

 

(i)    The
words “hereof’, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Paragraph and Schedule references
are to this Agreement unless otherwise specified.

 

(ii)   The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

 

20

 

(iii) Unless the context requires otherwise, other
grammatical forms of defined words or expressions used herein have
corresponding meanings. [*]

 

This
Paragraph 14 shall not limit WEA’s other rights against Company for breach
hereof, but any amounts paid by Company pursuant to this Paragraph 14 shall
reduce any amounts otherwise payable by Company with respect to such breach.

 

15.
Miscellaneous. (a) Entire Agreement, Modification. This Agreement
contains the entire understanding of the parties hereto relating to the subject
matter hereof and supersedes all previous agreements or arrangements between
the parties, both written and oral, hereto relating to the subject matter
hereof, except that nothing in Paragraph 3 shall limit the obligations of
Company under the US Manufacturing Agreement. This Agreement cannot be changed
except by an instrument signed by the authorized signatories of the parties
hereto.

 

(b) Waiver. Any party to this Agreement may: (i) extend the time
for the performance of any of the obligations or other acts of the other party
hereto; (ii) waive any inaccuracies in the representations and warranties of
the other party contained herein or in any document delivered by the other
party pursuant hereto; or (iii) waive compliance with any of the agreements or conditions of the
other party hereto contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party to be
bound thereby. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. The
failure of either hereto party to assert any of its rights hereunder shall not
constitute a waiver of any of such rights.

 

21

 

(c) Assignment. Company shall not have
the right without WEA’s prior written consent (which consent may be granted or
withheld in the sole discretion of WEA) to assign this Agreement or any of the
rights granted to Company hereunder; provided, however, that Company shall
be permitted to assign this Agreement to Parent and any wholly owned subsidiary
of Parent. WEA shall have the right without Company’s consent to assign this
Agreement, in whole or in part, to any subsidiary, parent company or affiliate
of WEA, or to any third-party acquiring all or substantially all of WEA’s
assets or equity; provided, however, that, in each case,
notwithstanding such assignment, WEA at all times shall remain directly and
fully liable to Company for the performance of the obligations of WEA
hereunder. [*]

 

(e) Further Assurances. Company and WEA each agree to execute
and deliver all such other and additional instruments and documents and to do
such other acts and things as may be necessary to more fully effectuate this
Agreement.

 

(f) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of, and shall be enforceable by, each of the parties
hereto and their respective permitted assigns.

 

(g) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Paragraph 15(g)):

 

WEA:                                       c/o Warner Music Group Inc.

75
Rockefeller Plaza

New
York, New York 10019

Attn:
EVP & CFO

Fax:
(212) 258-3121

 

22

 

with a copy to:

 

Warner Music Group Inc.

75 Rockefeller Plaza

New York, New York 10019

Attention:
EVP & General Counsel

Fax:
(212) 258-3092

 

Company:                                          Cinram International Inc.

2255 Markham Road

Scarborough, Ontario M1B 2W3

Canada

Attn:
Dave Rubenstein

Fax:
(416) 298-0612

 

with a copy to:

 

Ervin, Cohen & Jessup
LLP

9401 Wilshire Boulevard, 9th Floor

Beverly
Hills, California 90212

Attn:
Howard Z. Berman, Esq.

Fax:
(310) 859-2325

 

(h)   Headings. The
descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

(i)    Severability. If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any federal, state, local or foreign statute, law, ordinance,
regulation, code, order, other requirement or rule of law or by public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties hereto as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.

 

(j)    No Agency. WEA and
Company each shall have the status of an independent contractor and nothing
herein contained shall contemplate or constitute WEA as Company’s agent or
employee or Company as WEA’s agent or employee. This Agreement does not
constitute or acknowledge any partnership or joint venture between WEA and
Company.

 

23

 

(k) No Third Party Beneficiaries.
Except for the provisions of Paragraphs 10(b) and 10(d) relating to indemnified
parties, this Agreement shall be binding upon and inure solely to the benefit
of the parties hereto and their permitted assigns and nothing herein, express
or implied, is intended to or shall confer upon any other party any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

(l) GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN
THAT STATE. EXCEPT AS PROVIDED ON SCHEDULE C HERETO, ALL ACTIONS AND
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE HEARD AND
DETERMINED IN ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE CITY OF NEW
YORK, AND THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING AND IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH
ACTION OR PROCEEDING. EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
OF SUCH PROCESS TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN PARAGRAPH 15(g). THE
PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS PARAGRAPH
15(l) SHALL AFFECT THE RIGHT OF EITHER PARTY HERETO TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. THE CONSENTS TO JURISDICTION SET FORTH IN
THIS PARAGRAPH 15(l) SHALL NOT CONSTITUTE GENERAL CONSENTS TO SERVICE OF
PROCESS IN THE STATE OF NEW YORK AND SHALL HAVE NO EFFECT FOR ANY PURPOSE
EXCEPT AS PROVIDED IN THIS PARAGRAPH 15(l) AND SHALL NOT BE DEEMED TO CONFER
RIGHTS ON ANY PARTY OTHER THAN THE PARTIES HERETO.

 

(m) WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY. EACH PARTY HERETO: (i) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,

 

24

 

EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; AND (ii)
ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS PARAGRAPH 15(m) .

 

(n)   Consents.
Except as specifically provided to the contrary herein, if any consent,
approval or authority is required from either party hereto, such consent,
approval or authority shall not be unreasonably  withheld or delayed. [*]

 

(p)   Counterparts. This
Agreement may be executed in one or more counterparts, and by the parties
hereto in separate counterparts, each of which when executed shall be deemed to
be an original but all of which taken together shall constitute one and the
same agreement.

 

25

 

If the foregoing is acceptable, please acknowledge the same by signing
in the appropriate places below.

 

	
   

  	
  WARNER-ELEKTRA-ATLANTIC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David H. Johnson

  	
   

  
	
   

  	
   

  	
   Name:
  David H. Johnson

  
	
   

  	
   

  	
   Title:
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CINRAM
  DISTRIBUTION LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lewis Ritchie

  	
   

  
	
   

  	
   

  	
   Name:
  LEWIS RITCHIE

  
	
   

  	
   

  	
   Title:
  TREASURER

  

 

 

List of Attached Schedules

 

Schedule
A: Service Level Requirements

Schedule
B: WEA’s Code of Conduct for
Third-Party Service Providers

Schedule
C: Insurance Coverage

Schedule D: Fees 

 

Schedule A

 

Service Level Requirements

 

[*]

 

Schedule B

 

WEA’s Code of Conduct For Third Party Service
Providers

 

1.     Company will not (without
WEA’s written consent) manufacture merchandise utilizing any properties the
copyright or trademark to which is owned or licensed exclusively by WEA or its
wholly owned or controlled affiliates other than Products in accordance with
this Agreement.

 

2.     Company shall not use child
labor in the manufacturing, packaging or distribution of Products. The term “child”
refers to a person younger than the local legal minimum age for employment or
the age for completing compulsory education, but in no case shall any child
younger than fifteen (15) years of age (or fourteen (14) years of age where
local law allows) be employed in the manufacturing, packaging or distribution
of Products.

 

3.     Company shall only employ
persons whose presence is voluntary. Company shall not use any forced or
involuntary labor, whether prison, bonded, indentured or otherwise.

 

4.     Company shall treat each
employee with dignity and respect, and shall not use corporal punishment,
threats of violence, or other forms of physical, sexual, psychological or
verbal harassment or abuse.

 

5.     Company shall not
discriminate in hiring and employment practices, including salary, benefits,
advancement, discipline, termination, or retirement on the basis of race,
religion, age, nationality, social or ethnic origin, sexual orientation,
gender, political opinion or disability.

 

6.     Company recognizes that
wages are essential to meeting employees’ basic needs. Company shall comply, at
a minimum, with all applicable wage and hour laws, including minimum wage,
overtime, maximum hours, piece rates and other elements of compensation, and
shall provide legally mandated benefits. If local laws do not provide for
overtime pay, Company shall pay at least regular wages for overtime work.
Except in extraordinary business circumstances, Company shall not require
employees to work more than the lesser of (a) forty-eight (48) hours per week
and twelve (12) hours overtime or (b) the limits on regular and overtime hours
allowed by local law, or, where local law does not limit the hours of work, the
regular work week in such country plus twelve (12) hours overtime. In addition,
except in extraordinary business circumstances, employees will be entitled to
at least one (1) day off in
every seven (7)-day period. Company agrees that, where local industry standards
are higher than applicable legal requirements, it will meet the higher
standards.

 

7.     Company shall provide
employees with a safe and healthy workplace in compliance with all applicable
laws, ensuring, at a minimum, reasonable access to potable water and sanitary
facilities, fire safety, and adequate lighting and ventilation. Company also
shall ensure that the same standards of health and safety are applied in any

 

 

housing it provides for employees. Company shall provide WEA with all
information WEA may request about manufacturing, packaging and distribution
facilities for the Products.

 

8.     Company
shall respect the rights of employees to associate, organize and bargain
collectively in a lawful and peaceful manner, without penalty or interference,
in accordance with applicable laws.

 

9.     Company
shall comply with all applicable laws, including those pertaining to the
manufacture, pricing, sale and distribution of Products.

 

10.   Company
shall comply with all applicable environmental laws.

 

2

 

Schedule C

 

Insurance Coverage

 

NOTE: The following insurance requirements are intended to provide
insurance coverage under this Agreement and each of the other service
agreements being entered into between the parties hereto and their affiliates
as of the date hereof. Accordingly, to the extent any such other agreements
require insurance coverage thereunder that is duplicative of the insurance
coverage provided for below, such insurance coverage need not be duplicated
under such other agreements.

 

Property Insurance, Including Extra Expense and Business Interruption:
Company at all times and at its own cost and expense shall insure WEA’s
property as defined and required in this Agreement under so-called “all risk”
policies of insurance, including but not limited to coverage for extended
perils, earthquake, windstorm, flood, and collapse; open cargo, war risk cargo
and terrorism. Company shall purchase an insurance policy that indemnifies WEA
for non-physical damage to source material, if available on a commercially
reasonable basis and is warranted by the risk profile of the Company. WEA’s
property shall consist of and not be limited to source material, finished goods
and inventory, returned stock, master recordings, digital files, DVDs, CDs and all printing and packaging material.

 

Either dedicated policies or portfolio (blanket) coverage forms may
provide the “all risk” property insurance, providing that the per occurrence
limit of insurance available with respect to the WEA property at any Company
location for property damage, business interruption, and extra expense shall
not be less than [*]
except, that coverage for California Earthquake shall be no less than [*] per occurrence and in aggregate;
and Terrorism for WEA Manufacturing Alsdorf shall be no less than [*] per occurrence and in aggregate.
Further, the limits of insurance applicable to the extended perils and the
perils of earthquake, flood and terrorism shall be an annual aggregate. The
deductible on said policies shall be the sole responsibility of Company and be
of no greater amount than is commercially reasonable for a company of its
financial standing. These policies shall be primary to any policy maintained by
or on behalf of WEA. WEA may, at any time, review the amount of insurance
required hereunder, and may, from time to time, but in no event more than
annually, require a lower or higher amount depending on the best available
estimate of the aggregate exposure to loss arising from damage to WEA’s
property under this Agreement.

 

The open cargo and war risk cargo insurance policies shall provide per
shipment limits of indemnity of no less than [*] and contain a warehouse coverage
endorsement. In the event that the [*]
limit of insurance is not adequate to fully insure any given shipment under
this Agreement, Company shall purchase additional insurance to cover the full
replacement cost of the shipment. The deductible
on these policies shall be no greater than what is commercially
reasonable for an enterprise with Company’s financial

 

 

standing. The deductible shall be the responsibility of Company and
this coverage shall be primary to any coverage maintained by WEA.

 

All policies shall provide for a reimbursement value with respect to
WEA’s property at replacement cost for new property of like kind and quality,
with no deduction for depreciation, and shall include WEA, its partners,
officers, employees, and affiliates as loss payees under the policies as their
interest may appear, and shall provide that no act or omission on the part of
Company as the title insured shall prejudice a direct claim by the additional
insured. All property policies shall include a waiver of subrogation in favor
of WEA. Further, Company agrees to secure terms with its insurer that in the
event that Company fails to pay premium resulting in a cancellation of coverage
that WEA will be given the opportunity to maintain coverage for its insured
property under the policy; and Company will reimburse WEA within [*] of notice for the expense
incurred.

 

Public Liability Insurance:
Company shall also be required to obtain and maintain comprehensive general
liability insurance and a follow-form “umbrella liability” policy, providing
insurance against claims for bodily injury, including death, property damage,
personal and advertising injury, blanket contractual liability, broad form
property damage liability, explosion, collapse and underground hazard, and
products and completed operations, for such claims occurring or alleged to have
occurred in the course of any operations or activities contemplated by this Agreement,
in such amounts as from time to time are carried by prudent owners of
comparable operations, but in no event less than [*] per occurrence and [*]
in the annual aggregate, and covering as additional insureds all the WEA
individuals and entities for which and to the extent it is responsible under
this Agreement.

 

Workers’ Compensation and Employers’
Liability Insurance:

 

The Workers’ Compensation policy shall include the following coverage:

 

	
  1.

  	
  Coverage A

  	
  Statutory

  
	
  2.

  	
  Coverage B

  	
  Employers’ Liability

  
	
   

  
	
  Bodily Injury by Accident

  	
  [*]
  each accident

  
	
  Bodily Injury by Disease

  	
  [*]
  policy limit

  
	
  Bodily Injury by Disease

  	
  [*]
  each employee

  

 

Company shall maintain any other employment related insurance coverage
required by any jurisdiction having control over any employees or operations
used in connection with this Agreement.

 

Automobile Liability Insurance:
Company shall purchase and maintain automobile liability and follow-form “umbrella
liability” insurance for all owned, non-owned and hired vehicles with limits of
not less than [*] combined
single limit for bodily injury and property damage. This insurance coverage
must include all automotive and truck equipment used in the

 

2

 

performance of the work under this Agreement, and must include the
loading and unloading of same.

 

Environmental Liability Insurance:
In the event Company encounters and must perform or engage a contractor to
perform work related to the remediation or abatement of “hazardous material”
which includes, without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous waste, hazardous or toxic substances,
or related materials defined in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et
seq.), the Superfund Amendments and Reauthorization Action of 1986 (Pub. L. No.
99-499, 100 stat. 1613 (1986)), the Hazardous Material Transportation Act, as
amended (49 U.S.C. Section 1801, et seq.) and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule, or regulation (or applicable law in any
jurisdiction outside the US), Company, or any contractor performing such work
on behalf of Company, shall provide “contractor’s pollution liability”
insurance, as applicable to the work to be performed, covering claims from
third party injury and property damage as a result of pollution conditions
emanating from on-site, under the site, or off the site arising out of its
operations and completed operations. Completed operations coverage shall remain
in effect for no less than [*].
Minimum liability limits, including excess liability coverage, shall be [*] each occurrence and [*] in the aggregate.

 

The automobile liability insurance must contain provisions for thirty
(30) days prior written notice of cancellation, nonrenewal, material change or
reduction of insurance sent by certified mail return receipt requested, and
waiver of subrogation in favor of WEA, additional insureds and all other such
entities, as maybe reasonably requested by WEA.

 

3

 

Provisions Applicable to All
Policies of Insurance Required Hereunder: Policies of insurance shall be underwritten
by an insurer with an AM Best rating of no less than A- and a financial size
class of VII or better (or an equivalent rating from an alternate rating
agency), and may be an admitted or non-admitted carrier. Any insurer not meeting
these criteria must be approved in writing by WEA’s risk management department
whose authorization shall not be unreasonably
withheld. Satisfactory evidence of insurance shall be provided before
the commencement of this Agreement and shall be evidenced at each renewal by a
binder and certificate of insurance at least ten (10) days before expiration of
coverage and upon request of WEA, on an annual basis or as necessitated by a
material change in coverage or legal action. Company shall forward to WEA a
copy of all required policy forms upon request. With respect to property
located outside the U.S, any loss payable to WEA shall be adjusted and paid in
the currency of the United States of America, subject to the rate of exchange
published in The Wall Street Journal on the date of the loss. If Company elects
to maintain insurance for property located outside the US, where the policy is
denominated in a currency other than the US dollar, such policy limits and deductibles shall at all times be
sufficient to meet the US dollar denominated requirements set forth on this
Schedule C.

 

Each of WEA and Company agrees to negotiate
in good faith to attempt to resolve any disagreement which in any way affects
any insurance required to be carried hereunder. In the event that such good
faith negotiation does not result in the resolution of any such disagreement
within a fifteen (15) day period, the parties shall retain an arbitrator to
make a fair and reasonable determination as to any such disagreement (the “Insurance
Arbitrator”). The Insurance Arbitrator shall be a retired executive or attorney
with substantial experience in the insurance industry, preferably in the field
of manufacturing, shall be independent of each of WEA and Company, and shall
endeavor to provide a determination of any dispute among the parties within
thirty (30) days of being retained, but in each case, as quickly as possible.
The parties shall jointly appoint the Insurance Arbitrator and the identity of
the Insurance Arbitrator shall be satisfactory to each of the parties. The
parties shall share equally in the cost and expense of retaining the Insurance
Arbitrator. If the parties cannot agree upon a person to act as the Insurance
Arbitrator within thirty (30) days of the expiry of the fifteen (15) day
negotiation period specified in this Paragraph
6, then the Arbitrator shall be selected by the American Arbitration
Association. Any arbitration hereunder shall be conducted in conformance with
the rules established by the American Arbitration Association. Any
determination made by the Insurance Arbitrator shall be final and binding on
each of the parties. For the avoidance of doubt, Company shall at all times
including during the pendency of any dispute and until such time as such
dispute is resolved be required to continue to procure insurance policies at
its sole expense in full force and effect as required in this Agreement and as
specified herein.

 

4

 

Schedule A

 

Service Level Requirements

 

[*]

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