SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT 1934
For the quarterly period ended July 31, 2000 Commission File No. 1-11507
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES ACT OF 1934
For the transition period from to
JOHN WILEY & SONS, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 13-5593032
------------------------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
605 THIRD AVENUE, NEW YORK, NY 10158-0012
------------------------------ ----------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (212) 850-6000
--------------
NOT APPLICABLE
Former name, former address, and former fiscal year,
if changed since last report
Indicate by check mark, whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
The number of shares outstanding of each of the Registrant's classes of common
stock as of July 31, 2000 were:
Class A, par value $1.00 - 49,213,285
Class B, par value $1.00 - 11,738,864
This is the first page of a thirteen page document
<PAGE>
JOHN WILEY & SONS, INC.
INDEX
PART I - FINANCIAL INFORMATION PAGE NO.
--------
Item 1. Financial Statements.
Condensed Consolidated Statements of Financial Position - Unaudited
as of July 31, 2000 and 1999 and April 30, 2000..................3
Condensed Consolidated Statements of Income - Unaudited
for the Three Months ended July 31, 2000 and 1999............... 4
Condensed Consolidated Statements of Cash Flow - Unaudited
for the Three Months ended July 31, 2000 and 1999 ........... 5
Notes to Unaudited Condensed Consolidated Financial Statements....6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..........................9-11
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 11-12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...................................12
"Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995.........................12
SIGNATURES ...................................................................13
EXHIBITS
10 Material Contracts
27 Financial Data Schedule
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
July 31, April 30,
------------------------------------
Assets 2000 1999 2000
---------------- --------------- ----------------
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 11,359 4,173 $ 42,299
Accounts receivable 91,050 77,680 68,080
Inventories 47,947 39,606 46,109
Deferred income tax benefits 12,215 3,851 10,999
Prepaid expenses 9,727 8,976 9,624
---------------- --------------- ----------------
Total Current Assets 172,298 134,286 177,111
Product Development Assets 39,741 40,655 39,809
Property and Equipment 37,645 34,364 38,226
Intangible Assets 293,854 308,890 297,085
Deferred income tax benefits 3,756 12,067 3,395
Other Assets 14,048 11,810 13,711
---------------- --------------- ----------------
Total Assets $ 561,342 542,072 $ 569,337
================ =============== ================
Liabilities & Shareholders' Equity
Current Liabilities
Notes payable and current portion of long-term debt $ 32,960 26,000 $ 30,000
Accounts and royalties payable 67,037 54,476 45,816
Deferred subscription revenues 72,839 72,851 112,337
Accrued income taxes 12,112 8,113 6,102
Other accrued liabilities 47,531 41,423 59,795
---------------- --------------- ----------------
Total Current Liabilities 232,479 202,863 254,050
Long-Term Debt 95,000 125,000 95,000
Other Long-Term Liabilities 33,310 31,502 32,109
Deferred Income Taxes 14,293 15,860 15,440
Shareholders' Equity 186,260 166,847 172,738
--------------- --------------- ----------------
Total Liabilities & Shareholders' Equity $ 561,342 542,072 $ 569,337
================ =============== ================
</TABLE>
The accompanying Notes are an integral part of the condensed
consolidated financial statements.
<PAGE>
JOHN WILEY & SONS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands except per share information)
<TABLE>
<CAPTION>
Three Months
Ended July 31,
-----------------------------------
2000 1999
---------------- ----------------
<S> <C> <C>
Revenues $ 150,909 136,980
Costs and Expenses
Cost of sales 47,933 47,542
Operating and administrative expenses 70,889 63,740
Amortization of intangibles 4,144 3,129
---------------- ----------------
Total Costs and Expenses 122,966 114,411
---------------- ----------------
Operating Income 27,943 22,569
Interest Income and Other 526 624
Interest Expense (2,111) (1,833)
---------------- ----------------
Interest Expense - Net (1,585) (1,209)
---------------- ----------------
Income Before Taxes 26,358 21,360
Provision For Income Taxes 9,884 8,010
---------------- ----------------
Net Income $ 16,474 13,350
================ ================
Income Per Share
Diluted $ 0.26 0.20
Basic $ 0.27 0.22
Cash Dividends Per Share
Class A Common $ 0.04 .035625
Class B Common $ 0.04 .031875
Average Shares
Diluted 63,475 65,281
Basic 60,489 61,812
</TABLE>
The accompanying Notes are an integral part of the condensed consolidated
financial statements.
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - UNAUDITED
(In thousands)
<TABLE>
<CAPTION>
Three Months
Ended July 31,
-------------------------------------
2000 1999
---------------- ----------------
<S> <C> <C>
Operating Activities
Net income $ 16,474 13,350
Non-cash items 20,453 21,822
Net change in operating assets and liabilities (53,993) (51,499)
---------------- ----------------
Cash Used for Operating Activities (17,066) (16,327)
---------------- ----------------
Investing Activities
Additions to product development assets (7,971) (6,201)
Additions to property and equipment (2,556) (1,371)
Proceeds from sale of publishing assets 2,500 -
Acquisition of publishing assets (4,116) (139,327)
---------------- ----------------
Cash Used for Investing Activities (12,143) (146,899)
---------------- ----------------
Financing Activities
Purchase of treasury shares (1,663) (6,983)
Net borrowings of short-term debt 2,960 26,000
Cash dividends (2,421) (2,168)
Proceeds from exercise of stock options 867 401
---------------- ----------------
Cash Provided by (Used for) Financing Activities (257) 17,250
---------------- ----------------
Effects of Exchange Rate Changes on Cash (1,474) 1,179
---------------- ----------------
Cash and Cash Equivalents
Decrease for Period (30,940) (144,797)
Balance at Beginning of Period 42,299 148,970
---------------- ----------------
Balance at End of Period $ 11,359 4,173
================ ================
Cash Paid During the Period for
Interest $ 2,721 1,668
Income taxes $ 2,068 3,501
</TABLE>
The accompanying Notes are an integral part of the condensed consolidated
financial statements.
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly the Company's
consolidated financial position as of July 31, 2000 and 1999, and April 30,
2000, and results of operations and cash flows for the periods ended July
31, 2000 and 1999. The results for the three months ended July 31, 2000 are
not necessarily indicative of the results to be expected for the full year.
These statements should be read in conjunction with the most recent audited
financial statements contained in the Company's Form 10-K for the fiscal
year ended April 30, 2000.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
2. A reconciliation of the shares used in the computation of income per share
follows:
<TABLE>
<CAPTION>
Three Months
Ended July 31
---------------------------------------
2000 1999
------------------ -----------------
(thousands)
<S> <C> <C>
Weighted average shares outstanding 60,811 62,331
Less: Unearned deferred compensation shares (322) (519)
------------------ -----------------
Shares used for basic income per share 60,489 61,812
Dilutive effect of stock options and other stock awards 2,986 3,469
------------------ -----------------
Shares used for diluted income per share 63,475 65,281
------------------ -----------------
</TABLE>
3. Inventories were as follows:
<TABLE>
<CAPTION>
July 31, April 30,
----------------------------------
2000 1999 2000
-------------- -------------- ---------------
(thousands)
<S> <C> <C> <C>
Finished goods $42,282 34,873 $40,370
Work-in-process 2,640 3,128 3,537
Paper, cloth and other 6,464 3,519 5,241
-------------- --------------- ----------------
51,386 41,520 49,148
LIFO reserve (3,439) (1,914) (3,039)
-------------- --------------- ----------------
Total inventories $47,947 39,606 $46,109
-------------- --------------- ----------------
</TABLE>
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. Comprehensive income was as follows:
<TABLE>
<CAPTION>
Three Months
Ended July 31,
--------------------------------
2000 1999
-------------- --------------
(thousands)
<S> <C> <C>
Net Income $16,474 13,350
Other Comprehensive
Income (Loss) - Foreign
Currency Translation
Adjustments (577) 56
-------------- ----------------
Comprehensive Income $15,897 13,406
-------------- ----------------
</TABLE>
5. In August, 2000, the Company entered into an agreement to lease
approximately 400,000 square feet of office space in Hoboken, New Jersey.
The term of the lease is 15 years and will commence upon completion of
construction, as defined in the agreement, which is estimated to occur
during fiscal 2003. The future minimum payments under the lease aggregate
to $194 million over the term. Annual rent payments during the first five
years will amount to approximately $12 million per year.
6. The Company is a global publisher of print and electronic products,
specializing in scientific, technical, and medical journals and books;
professional and consumer books and subscription services; and textbooks
and educational materials for undergraduate and graduate students as well
as lifelong learners. The Company has publishing, marketing, and
distribution centers in the United States, Canada, Europe, Asia, and
Australia. The Company's reportable segments are based on the management
reporting structure used to evaluate performance. Segment information is as
follows:
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Three Months Ended July 31,
-------------------------------------------------------------------------------------
2000 1999
------------------------------------------ ---------------------------------------
(thousands)
Inter- Inter-
External segment External segment
Revenues Customers Sales Total Customers Sales Total
-------------- ------------- ------------- -------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Domestic Segments:
Scientific, Technical, and Medical $34,502 1,687 36,189 $33,454 1,622 35,076
Professional/Trade 32,780 3,407 36,187 26,249 3,122 29,371
College 34,298 5,823 40,121 30,532 4,880 35,412
European Segment 33,509 2,640 36,149 32,969 2,692 35,661
Other Segments 15,820 319 16,139 13,776 103 13,879
Eliminations - (13,876) (13,876) - (12,419) (12,419)
-------------- ------------- ------------- -------------- ------------- ----------
Total Revenues $150,909 - 150,909 $136,980 - 136,980
-------------- ------------- ------------- -------------- ------------- ----------
Direct Contribution to Profit
Domestic Segments:
Scientific, Technical, and Medical $16,247 $14,875
Professional/Trade 5,196 4,092
College 15,962 13,273
European Segment 11,808 10,864
Other Segments 3,689 2,540
------------- -----------
Total Direct Contribution to Profit 52,902 45,644
Shared Services and Admin. Costs (24,959) (23,075)
------------- ----------
Operating Income 27,943 22,569
Interest Expense - Net (1,585) (1,209)
------------- ----------
Income Before Taxes $26,358 $21,360
------------- ----------
</TABLE>
Certain prior year amounts have been reclassified to conform to the current
year's presentation.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
During this seasonal period of cash usage, operating activities used $17.1
million of cash, or $.7 million more than the prior year's comparable
quarter. The increase was primarily due to higher expense levels to support
the revenue growth and payments of accrued liabilities. The use of cash
during this period is consistent with the seasonality of the journal
business and the educational sector's receipts cycle that occurs, for the
most part, later in the fiscal year.
Investing activities used $12.1 million during the current quarter, or
$134.8 million less than the comparable prior year's quarter. Prior year
amounts included the acquisitions of Jossey-Bass and certain higher
education titles.
Current year financing activities primarily reflect the purchase of
treasury shares, dividend payments, and short-term borrowings of $3
million.
RESULTS OF OPERATIONS
FIRST QUARTER ENDED JULY 31, 2000
Revenues for the first quarter advanced 10% to $150.9 million compared with
$137.0 million in the prior year period. Operating income for the current
quarter increased 24% to $27.9 million, compared with $22.6 million in the
prior year. Net income advanced 23% to $16.5 million, and income per
diluted share increased 30% to $.26 compared with $.20 in the prior year.
During the quarter, the Company continued to expand its alliances to create
new avenues to distribute its "must have" content. Revenue and income gains
were achieved in all of the Company's core businesses, with particularly
strong results in Professional/Trade and College. Strong frontlist and
backlist sales, including the Jossey-Bass and higher education titles
acquired last year, as well as growth through online accounts, contributed
to the results. Margins continued to improve as a result of productivity
improvements.
Cost of sales as a percentage of revenues decreased to 31.8% compared with
34.7% in the prior year. The improvement was attributable to lower relative
composition costs as a result of technology-driven productivity
initiatives; more efficient print runs; and product mix. Operating expenses
as a percentage of revenues were 47.0% in the current quarter, compared
with 46.5% in the prior year's first quarter. Operating expenses increased
11% over the prior year as the current year included a full quarter of
operations related to the acquisitions made in the prior year's first
quarter. The operating margin improved to 18.5% in the current quarter,
compared with 16.5% in the prior year's first quarter.
The effective tax rate was 37.5% for both periods.
<PAGE>
SEGMENT RESULTS
Domestic Professional/Trade segment revenues of $36.2 million for the first
quarter advanced 23% over the comparable prior year period. The improvement was
due to a strong business publishing program, computer books, and increased
volume through online accounts. The direct contribution to profit advanced 27%
to $5.2 million. The direct contribution margin improved from 13.9% in the prior
year to 14.4%, as a result of improved gross margins. The Professional/Trade
business continues to take advantage of the dramatic growth of e-commerce.
Online selling plays to Wiley's strength as a niche publisher with a deep
backlist serving the professional needs of its customers. There is a growing
demand for electronic products among the professional markets that it serves,
notably computing, accounting, finance, psychology and architecture.
Professional/Trade is capitalizing on these opportunities with a combination of
print and Web-based products and services, as well as through the formation of
strategic alliances. During the quarter, Professional/Trade licensed the Data
Model Resource CD-ROM by Len Silverston to Microsoft for customers to use as a
reference with their next release of the SQL Server Enterprise Edition software.
In addition, J.K. Lasser Your Income Tax was licensed for online excerpting. An
alliance with the Rhode Island School of Design was formed to create complex
architectural graphics for the publication of Interior Graphic Standards, a
major extension of the renowned Architectural Graphic Standards reference work.
A license with My Counsel.com was signed for 21 consumer and small business
titles to be excerpted over the Internet.
Domestic College segment revenues of $40.1 million increased 13% over the prior
year, primarily related to a strong frontlist. The direct contribution to profit
increased 20% to $16.0 million, and the direct contribution margin improved to
39.8% compared with 37.5% in the prior year, as a result of improved gross
margins. College continued to invest in technology to help teachers teach and
students learn. Every major college textbook now has a technology component
designed to facilitate teaching and learning. The College business has over 300
Web sites serving the needs of professors and students. In the distance learning
area, College is working with Caliber Learning Network to provide online courses
for the higher education and corporate lifelong learning markets. Alliances are
also being formed to provide many of our top-selling textbooks in the e-book
format to link course content with interactive tutorial software and simulators.
During the quarter, College published its first version of eGrade, the Web-based
software that facilitates homework assignment management and secure online
testing. College has partnered with the American Museum of Natural History to
launch a joint Web site that links College's geology textbook, The Dynamic
Earth, by Brian J. Skinner and Stephen C. Porter, with the Museum's online
exhibits for the Hall of Planet Earth.
Domestic Scientific, Technical and Medical (STM) revenues of $36.2 million
increased 3% over the prior year. Journals performed well, but year-to-year
growth for books was impacted by the release of a major reference work in the
prior year's first quarter. The direct contribution to profit increased 9% to
$16.2 million. The direct contribution margin improved to 44.9% in the current
quarter compared with 42.4% in the prior year, reflecting higher composition
costs in the prior year related to the aforementioned reference work. The STM
business continued to increase the number of enhanced access license
subscriptions to Wiley InterScience, the company's Web-based service. Monthly
usage and activity for Wiley InterScience continued to grow, as the service
expanded its online offerings of journals and major reference works during the
quarter to include Ullmann's Encyclopedia of Industrial Chemistry. Publishing
systems have been redesigned to increase the speed to publication of journal
articles, and community of interest Web sites are being developed.
European segment revenues of $36.1 million for the quarter were adversely
affected by the stronger U.S. dollar. Excluding foreign currency translation
effects, European revenues advanced 8% over the prior year's first quarter led
by strong STM journal revenues. The direct contribution to profit of $11.8
million increased 9% over the prior year. The direct contribution margin was
32.7% in the current period compared with 30.5% in the prior year, as a result
of lower production costs. During the quarter, the European segment acquired a
majority stake in the Oxford-based business publisher Capstone Publishing Ltd.
Capstone, with annual revenues of approximately $2 million, publishes a broad
array of professional business and management titles. New journal launches, in
conjunction with European chemistry societies, include ChemPhysChem,
ChemBioChem, and Chemistry -A European Journal.
The improvement in the Other segment's results was due to market share gains in
many of the Asian countries including Japan, as well as strong revenues in
Australia. Wiley Australia won all of the education categories in the recent
Australian Publishers Association Design Awards and dominated the Awards for
Excellence in Education Publishing. Wiley's Australian school business won the
Publisher of the Year Award.
<PAGE>
NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and
Hedging Activities", and amendments thereto, SFAS Nos. 137 and 138, which
specifies the accounting and disclosure requirements for such instruments, and
is effective for the Company's fiscal year beginning on May 1, 2001. It is
anticipated that the adoption of this new accounting standard will not have a
material effect on the consolidated financial statements of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
The Company is exposed to market risk primarily related to interest rates and
foreign exchange. It is the Company's policy to monitor these exposures and to
use derivative financial instruments from time to time to reduce fluctuation in
earnings and cash flow when it is deemed appropriate to do so. The Company does
not use derivative financial instruments for trading or speculative purposes.
Interest Rates
The Company had a $125 million variable rate long-term loan and $3 million of
variable rate short-term debt outstanding at July 31, 2000, which approximated
fair value. The weighted average interest rate as of July 31, 2000 was
approximately 6.8%. The Company did not use any derivative financial instruments
to manage this exposure.
Foreign Exchange Rates
The Company is exposed to foreign currency exchange movements primarily in
European, Asian, Canadian and Australian currencies. Consequently, the Company,
from time to time, enters into foreign exchange forward contracts as a hedge
against its overseas subsidiaries' foreign currency asset, liability,
commitment, and anticipated transaction exposures, including intercompany
purchases. At July 31, 2000, the Company had no open foreign exchange forward
contracts.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a)......Exhibits
10 - Material Contracts: Agreement of Lease dated as of
August 4, 2000 between Block A South Waterfront
Development L.L.C., as Landlord, and the Company,
as Tenant
27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
July 31, 2000
"Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995
This report contains certain forward-looking statements concerning
the Company's operations, performance and financial condition.
Reliance should not be placed on forward-looking statements, as
actual results may differ materially from those in any
forward-looking statements. Any such forward-looking statements are
based upon a number of assumptions and estimates that are
inherently subject to uncertainties and contingencies, many of
which are beyond the control of the Company, and are subject to
change based on many important factors. Such factors include, but
are not limited to: (i) the pace, acceptance, and level of
investment in emerging new electronic technologies and products;
(ii) subscriber renewal rates for the Company's journals; (iii) the
consolidation of the retail book trade market; (iv) the seasonal
nature of the Company's educational business and the impact of the
used book market; (v) worldwide economic and political conditions;
and (vi) other factors detailed from time to time in the Company's
filing with the Securities and Exchange Commission. The Company
undertakes no obligation to update or revise any such
forward-looking statements to reflect subsequent events or
circumstances.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOHN WILEY & SONS, INC.
Registrant
By /s/William J. Pesce
-------------------
William J. Pesce
President and
Chief Executive Officer
By /s/Robert D. Wilder
-------------------
Robert D. Wilder
Executive Vice President and
Chief Financial Officer
Dated: September 14, 2000
<PAGE>
AGREEMENT OF LEASE
BLOCK A SOUTH WATERFRONT DEVELOPMENT L.L.C.
as Landlord
- and -
JOHN WILEY & SONS, INC.
as Tenant
Premises: WATERFRONT CORPORATE CENTER
HOBOKEN, NEW JERSEY
BUILDING I
<PAGE>
TABLE OF CONTENTS
PRELIMINARY STATEMENT..........................................................1
DEFINITIONS....................................................................1
ARTICLE 1......................................................................7
DEMISE OF PREMISES; TERM; RENT; ADDITIONAL RENT.............................7
ARTICLE 2.....................................................................10
BASE BUILDING WORK; TENANT IMPROVEMENTS....................................10
ARTICLE 3.....................................................................16
USE........................................................................16
ARTICLE 4.....................................................................17
COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS............................17
ARTICLE 5.....................................................................18
LANDLORD'S OPERATING EXPENSE...............................................18
ARTICLE 6.....................................................................22
RULES AND REGULATIONS......................................................22
ARTICLE 7.....................................................................22
LANDLORD'S RIGHT OF ENTRY..................................................22
ARTICLE 8.....................................................................23
MAINTENANCE BY TENANT AND LANDLORD.........................................23
ARTICLE 9.....................................................................24
ALTERATIONS BY TENANT OR LANDLORD..........................................24
ARTICLE 10....................................................................27
ASSIGNMENT AND SUBLETTING..................................................27
ARTICLE 11....................................................................32
SURRENDER..................................................................32
ARTICLE 12....................................................................33
HOLDING OVER...............................................................33
ARTICLE 13....................................................................33
LANDLORD'S SERVICES........................................................33
ARTICLE 14....................................................................37
QUIET ENJOYMENT............................................................37
ARTICLE 15....................................................................37
DEFAULT....................................................................37
ARTICLE 16....................................................................38
LANDLORD'S RIGHTS UPON TENANT'S DEFAULT....................................38
ARTICLE 17....................................................................40
SUBORDINATION AND ESTOPPEL.................................................40
ARTICLE 18....................................................................42
DAMAGE BY FIRE OR OTHER CASUALTY...........................................42
ARTICLE 19....................................................................44
MUTUAL WAIVER OF SUBROGATION...............................................44
ARTICLE 20....................................................................45
CONDEMNATION...............................................................45
ARTICLE 21....................................................................46
INTENTIONALLY OMITTED......................................................46
ARTICLE 22...................................................................46
NOTICES....................................................................46
ARTICLE 23....................................................................46
NO WAIVER..................................................................46
ARTICLE 24....................................................................47
LANDLORD'S LIABILITY.......................................................47
ARTICLE 25....................................................................48
INDEMNIFICATION............................................................48
ARTICLE 26....................................................................48
TENANT'S INSURANCE.........................................................48
ARTICLE 27....................................................................49
CONSTRUCTION LIENS.........................................................49
ARTICLE 28....................................................................50
DEFINITION OF LANDLORD.....................................................50
ARTICLE 29....................................................................50
DEFINITION OF TENANT.......................................................50
ARTICLE 30....................................................................50
PERSONAL LIABILITY.........................................................50
ARTICLE 31....................................................................51
ISRA COMPLIANCE............................................................51
ARTICLE 32....................................................................52
RENEWAL OPTIONS............................................................52
ARTICLE 33....................................................................54
RIGHT OF FIRST OFFER.............................................. ........54
ARTICLE 34....................................................................56
INTENTIONALLY OMITTED......................................................56
ARTICLE 35....................................................................56
FIRST AND SECOND EXPANSION OPTIONS.........................................56
ARTICLE 36....................................................................59
COMPETING PUBLISHING FIRMS.................................................59
ARTICLE 37....................................................................60
PARKING....................................................................60
ARTICLE 38....................................................................63
ARBITRATION................................................................63
ARTICLE 39....................................................................64
MISCELLANEOUS..............................................................64
Exhibit A-1....... Building
Exhibit A-2....... Premises
Exhibit B......... Work Agreement
Exhibit C......... Rules and Regulations
Exhibit D......... Cleaning Schedule
Exhibit E......... Form of Lender Non-Disturbance Agreement
Exhibit F......... Form of Ground Lessor Non-Disturbance Agreement
Exhibit G......... Form of Estoppel
Exhibit H......... Security Specifications
Exhibit I......... Publishing Firm List
Exhibit J......... Parking Agreement
Exhibit K......... Design Criteria
Exhibit L......... Milestone Dates
Exhibit M......... Reimbursement Guaranty
Exhibit N......... Plans in PRISA in excess of 10%
Exhibit O......... Tenant's Sign
Exhibit P......... Completion Guaranty
.........
<PAGE>
AGREEMENT OF LEASE
AGREEMENT OF LEASE (this "Lease"), dated as of August 4, 2000 between
BLOCK A SOUTH WATERFRONT DEVELOPMENT L.L.C., a Delaware limited liability
company, having an address c/o SJP Properties, One Upper Pond Road, Parsippany,
New Jersey 07054, hereinafter referred to as "Landlord", and JOHN WILEY & SONS,
INC., a New York corporation, having its principal office at 605 Third Avenue,
New York, New York 10158, hereinafter referred to as "Tenant".
PRELIMINARY STATEMENT
Landlord, as the sole owner of the lessee's interest under the Underlying Lease
Agreement (as defined below), is the ground lessee of the parcel of land
(hereinafter referred to as the "Land") lying and being in the City of Hoboken,
County of Hudson and State of New Jersey and identified on the Official Tax Map
of Hoboken as Lots 1 and 2, Block 231.2, which land is more particularly
described in Exhibit "A-1(a)" attached hereto, upon which Landlord is
constructing one (1) thirteen (13) story office building (which may include
retail use) ("Building I"), together with certain related improvements. Tenant
desires to lease space in Building I to be erected on such land which is
identified as Phase "I" on Exhibit "A-1" attached hereto in accordance with, and
subject to, the provisions of this Lease.
NOW, THEREFORE, Landlord and Tenant agree as follows:
DEFINITIONS
For all purposes of the Lease and all agreements supplemental thereto
or modifying this Lease, the following terms shall have the meanings herein
specified:
"Additional Rent" shall mean all sums payable by Tenant to Landlord
pursuant to the various Articles herein in which said term is used and any other
charges, other than Base Rent, as shall become due and payable hereunder.
"Alterations" shall have the meaning given to such term in Section 9.1.
"Base Building" shall mean the Building Systems, the roof of the
Building, the exterior walls of the Building, the exterior windows and doors of
the Building, the interior and exterior Building structure, the Common Areas and
landscaping located on the Land.
"Base Building Plans" shall have the meaning given to such term in the
Work Agreement.
"Base Building Work" shall have the meaning given to such term in the
Work Agreement.
"Base Rent" shall mean the fixed rental payable pursuant to Section
1.2.
"Base Rent Commencement Date" shall mean the later of (i) two hundred
forty (240) days following the Commencement Date, subject to adjustment pursuant
to Section 2.1, or (ii) the earlier of (a) Substantial Completion of the Base
Building Work (as defined in the Work Agreement) or (b) the date upon which the
Substantial Completion of the Base Building Work would have occurred but for any
Tenant Delay.
"Base Year" shall mean the twelve (12) month period commencing on the
Base Year Commencement Date.
"Base Year Commencement Date" shall mean the earliest to occur of (i)
the Base Rent Commencement Date, (ii) the date upon which Tenant occupies the
Premises for purposes other than the construction of Tenant Improvements, or
(iii) the Substantial Completion of Tenant Improvements.
"Building" shall mean the building to be constructed on the Land
designated as Phase "I" on Exhibit "A-1" attached hereto and by this reference
made a part hereof and in which the Premises are located.
"Building Electric" shall mean all electricity used in the operation of
the Building and the exterior of the Building other than Tenant Electric and
electricity consumed for lighting and electric outlets and supplemental HVAC
units in spaces in the Building leased or available for lease to others.
"Building Holidays" shall mean Sunday, New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and the day after, and Christmas
Day, as each of said holidays are celebrated in the State of New Jersey.
"Building Systems" shall mean the Building's elevators, mechanical and
interior and exterior electrical systems (including, without limitation,
heating, ventilation and cooling systems), plumbing systems, fire protection,
life safety and sprinkler systems, computerized building management system (if
any), in each case to the extent the same is brought to (and including), but not
beyond, the point of distribution to the Premises.
"Business Hours" shall mean 7:00 a.m. to 7:00 p.m. on Mondays through
Fridays, and 8:00 a.m. to 1:00 p.m. on Saturdays, excluding Building Holidays.
"City" shall mean the City of Hoboken.
"Commencement Date" shall mean the date upon which Landlord has
Substantially Completed the Stage I Base Building Work (as defined in the Work
Agreement) and Landlord has made the entire Premises available to Tenant for the
purpose of permitting Tenant to commence the performance of those portions of
Tenant's Improvements consisting of the installation of HVAC duct work,
sprinkler system and other elements of Tenant's Improvements that do not require
the Premises to be an enclosed space.
"Common Area" or "Common Areas" shall mean all portions of the Building
and Land which are not intended to be rented to a tenant, including, without
limitation, interior corridors, elevators, mechanical rooms, stairs, lobbies,
lavatories, washrooms, loading area, sidewalks, plazas, storm drainage
facilities, landscaped areas, exterior walks and ramps, sanitary sewer, domestic
and fire water systems, fire protection installations, security systems,
electric power and telephone cables and lines and other utility connections,
facilities and other improvements (above and below ground) which are owned by
Landlord and are now or hereafter constructed on the Land for use in common by
Landlord, Tenant and other tenants located in the Building or for the common
benefit of the foregoing.
"Construction Completion Date" shall have the meaning set forth in
Section 4.16.1 of the Underlying Lease Agreement such date being the date the
Port Authority certifies the Building is ready for occupancy.
"Default Interest Rate" shall mean the lesser of (i) two (2) percentage
points over the per annum prime or base rate announced from time to time by
Citibank, N.A. and (ii) fourteen percent (14%) per annum.
"Design Criteria" shall mean the criteria for water, electricity,
loadbearing capacity, sprinkler systems and heating and cooling systems for the
Building set forth on Exhibit "K" attached hereto and by this reference made a
part hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Excusable Delay" shall mean a delay caused by governmental action or
lack thereof (provided that such governmental action or lack thereof is not the
result of the breach of any obligation under this Lease by the party claiming
Excusable Delay), shortages or unavailability of materials and/or supplies in
the industry as a whole (giving due regard to the availability of alternative
materials and supplies and appropriate lead time planning), labor disputes,
strikes, slow downs, job actions, picketing, secondary boycotts (provided that
such labors disputes are not caused by Landlord's breach of any of its
obligations under any contract or agreement with its contractors), fire or other
casualty, acts of God, acts of declared or undeclared war, public disorder, or
riot or civil commotion.
"Final Outside Date" shall mean April 1, 2003.
"First Expansion Space" shall mean 39,195 rentable square feet of space
consisting of all of the rentable area on the tenth floor of the Building as
outlined on Exhibit "A-2(i)" attached hereto and made a part hereof.
"Governmental Authority" shall mean any governmental instrumentality,
authority or body (including, without limitation, the City, the Port Authority,
county, state or federal governments, any agency, subdivision or department of
any of the foregoing or any other quasi-governmental agency, or any fire
insurance rating organization) that has jurisdiction over the Property or the
use or operation thereof.
"Gross Annual Rentals" shall mean all income from the operation and
management of the Property, including, without limitation, all Base Rents,
Additional Rents, escalations, amounts received on account of electric and other
utilities, and insurance proceeds during each calendar year of the Term.
"Improvements" shall mean all improvements, exclusive of the Building,
to be constructed by Landlord on the Land.
"Initial Escalation Period" shall mean the period from the expiration
of the Base Year through the balance of the calendar year in which the
expiration of the Base Year occurs.
"Laws" shall mean all rules, orders, laws, regulations and requirements
of any Governmental Authority.
"Land" shall mean that certain tract and parcel of land known and
designated as Lots 1 and 2 in Block 231.2 on the Tax Map of the City of Hoboken,
Hudson County, New Jersey.
"Lease" or "this Lease" consists of this Agreement of Lease and
Exhibits "A" through "P" attached hereto and made a part hereof.
"O & M Costs" shall have the meaning given said term in the Underlying
Lease Agreement.
"Operating Expense Statement" shall have the meaning given such term in
Section 5.1.
"Operating Expenses" shall have the meaning given such term in Section
5.1.
"Permitted Alteration" shall have the meaning given to such term in
Section 9.1.
"Phase II Building" shall mean a building which may be constructed by
an affiliate of Landlord on Lots 3 and 4 in Block 231.2 on the Tax Map of the
City in the event that such affiliate of Landlord enters into a ground lease
with the City and Port Authority granting said affiliate the right to construct
such building. Landlord covenants that in the event any affiliate of Landlord
constructs the Phase II Building, (i) the general character of the design of the
Phase II Building shall be consistent with the character of the design of the
Building (ii) the distance between the tower of the Building and the tower of
the Phase II Building shall be not less than fifty (50) feet, (iii) the height
of the Phase II Building shall not exceed the height of the Building, and (iv)
the base of the Phase II Building shall be at substantially the same height as
the base of the Building.
"Pilot Rental" shall have the meaning given said term in the Underlying
Lease Agreement.
........."Port Authority" shall mean The Port Authority of New York and
New Jersey.
........."Premises" shall mean, collectively, (i) all of the rentable
area located on the second floor of the Building, as more particularly shown
hatched on Exhibit "A-2(a)" attached hereto and by this reference made a part
hereof, (ii) all of the rentable area located on the third floor of the
Building, as more particularly shown hatched on Exhibit "A-2(b)" attached hereto
and by this reference made a part hereof, (iii) all of the rentable area located
on the fourth floor of the Building, as more particularly shown hatched on
Exhibit "A-2(c)" attached hereto and by this reference made a part hereof, (iv)
all of the rentable area located on the fifth floor of the Building, as more
particularly shown hatched on Exhibit "A-2(d)" attached hereto and by this
reference made a part hereof, (v) all of the rentable area located on the sixth
floor of the Building, as more particularly shown hatched on Exhibit "A-2(e)"
attached hereto and by this reference made a part hereof, (vi) all of the
rentable area located on the seventh floor of the Building, as more particularly
shown hatched on Exhibit "A-2(f)" attached hereto and by this reference made a
part hereof; (vii) all of the rentable area located on the eighth floor of the
Building, as more particularly shown hatched on Exhibit "A-2(g)" attached hereto
and by this reference made a part hereof; and (viii) all of the rentable area
located on the ninth floor of the Building, as more particularly shown hatched
on Exhibit "A-2(h)" attached hereto and by this reference made a part hereof
provided, however, that the Premises shall be subject to adjustment as provided
in Articles 32, 33 and 35 hereof;
"Property" shall mean collectively the Land, the Building, the Common
Areas and all other improvements constructed by Landlord on the Land used in
connection with operation of the Building.
"Publishing Firm Revision Date" shall mean the date during the Term
that is one hundred twenty (120) days after the date a Revised Publishing Firm
Exhibit is received by Landlord from Tenant, provided that Tenant's right to
provide a Revised Publishing Firm Exhibit shall be limited to no more often than
once every thirty (30) months.
"Publishing Firms" shall mean, with respect to (a) leases entered into
prior to the Publishing Firm Revision Date, or (b) the limitation on naming the
Building set forth in Section 36.1, the firms listed in Exhibit "I" attached
hereto and by this reference made a part hereof, and with respect to (c) leases
entered into after the Publishing Firm Revision Date or (d) the limitation on
naming the Building if such name is determined by Landlord after the Publishing
Firm Revision Date, the firms listed on the Revised Publishing Firm Exhibit.
"Rentable Area of the Premises" shall be deemed to mean 383,128 square
feet for all purposes of this Lease subject to adjustment as expressly provided
in Section 2.4 hereof and further subject to the expansion or contraction of the
Premises as expressly provided in Articles 32, 33 and 35 hereof.
"Revised Publishing Firm Exhibit" shall mean a revised list of
Publishing Firms specifying entities that (i) have as their primary business the
publishing of books, looseleafs, newsletters and journals (in hard copy or
electronic medium) for the educational, professional, scientific, technical,
medical and consumer markets (but expressly excluding from such definition,
without limitation, the publishing of newspapers, magazines and marketing
materials, (ii) are direct competitors of Tenant and (iii) are of a type similar
to those listed on Exhibit "I", which list is intended to replace Exhibit "I" as
an updated list of Tenant's competitors.
"Rules and Regulations" shall mean the rules and regulations set forth
on Exhibit "C", attached hereto and made a part hereof, as the same may be
amended from time to time by Landlord pursuant to the provisions of Article 6.
"Second Expansion Space" shall mean the space consisting of (i) the
rentable area of the floor in the Building defined as the First Expansion Space
in the event the First Expansion Option was never exercised, or (ii) the
rentable area of the floor in the Building immediately above and contiguous to
the First Expansion Space in the event the First Expansion Option was exercised.
"Structural Repairs" shall mean repairs to the structural members of
the roof, foundation, floor slabs and permanent exterior walls and support
columns of the Building.
"Substantially Completed"/"Substantial Completion" shall have the
meaning set forth in the Work Agreement.
"Taxes" shall mean all real estate taxes and governmental impositions
and any other payments, charges and assessments made in lieu of taxes,
including, without limitation, Annual Pilot Rental (as defined in the Underlying
Lease Agreement), any special assessments, levied against the Property and any
taxes levied against any personal property owned by Landlord used in connection
with the operation of the Property, and any taxes or payments assessed in lieu
of any of the foregoing.
"Tenant Delay" shall mean any act or omission of any nature by Tenant
or Tenant's Visitors which actually delays Landlord's Substantial Completion of
the Base Building Work, including without limitation, any failure by Tenant to
submit plans or other deliverables when due, any failure or delay by Tenant in
supplying information or giving authorizations or approvals, any delay resulting
from changes made by Tenant to its plans for the Tenant Improvements or change
it requests to the Base Building Plans which causes delays in (i) Landlord's
performance of the Base Building Work, or (ii) the issuance of the Permit for
Occupancy and Use (as defined in the Underlying Lease Agreement) by the Port
Authority, or from other non-compliance with Tenant's obligations required by
the Work Agreement. Landlord agrees that it shall not include in any claim of
Tenant Delay a period more than 5 days prior to the date Landlord provides
notice to Tenant of Landlord's claim of an event constituting Tenant Delay,
provided, however, that no such limitation or requirement of notice shall apply
to any Tenant Delay for any failure by Tenant to provide any other plans or
revisions or take any action by a required date as set forth in this Lease or
the Work Agreement.
"Tenant Electric" shall mean electricity consumed for lighting and
electric outlets within the Premises or supplemental HVAC units installed by
Tenant as more particularly described in Section 1.3.
"Tenant Improvements" shall have the meaning given such term in the
Work Agreement.
"Tenant Installations" shall have the meaning given such term in the
Work Agreement.
"Tenant's Proportionate Share" shall mean 65.94%, representing the ratio of
the Usable Area of the Premises (294,714 sq. ft.) to the Usable Area of the
Building (446,970 sq. ft.) as provided in Section 2.4, subject to adjustment as
expressly provided in Section 2.4 hereof and further subject to the expansion or
contraction of the Premises as expressly provided in Articles 32, 33 and 35
hereof. "Tenant's Visitors" shall mean persons invited by Tenant into the
Premises as guests or doing lawful business with Tenant including, without
limitation, Tenant's agents, servants, employees, contractors, invitees and
licensees.
"Term" shall mean the time period commencing on the Commencement Date
and terminating on the Termination Date.
"Termination Date" shall mean the fifteenth (15th) anniversary of the
Base Rent Commencement Date or, if the Base Rent Commencement Date occurs other
than on the first day of a calendar month, the last day of the calendar month in
which the fifteenth (15th) anniversary of the Base Rent Commencement Date
occurs. If the original term is extended pursuant to the provisions of this
Lease, the Termination Date shall mean the last day of any such extended term.
"Underlying Lease Agreement" shall mean that certain Phase I Lease and
Development Agreement by and among the City of Hoboken, the Port Authority and
Landlord, and any amendments thereto, which provides, inter alia, for the ground
leasing of the Land to Landlord. Landlord represents to Tenant that Landlord has
provided to Tenant a certified true and complete copy of the Underlying Lease
Agreement and that no amendments thereto presently exist.
"Work Agreement" shall mean the agreement attached hereto as Exhibit
"B" and made a part hereof setting forth the provisions relating to the Base
Building Work and the Tenant Improvements.
ARTICLE 1
DEMISE OF PREMISES; TERM; RENT; ADDITIONAL RENT
1.1......Landlord, for and in consideration of the covenants
hereinafter contained and made on the part of Tenant, hereby leases to Tenant
for the Term, and Tenant hereby hires from Landlord for the Term, the Premises,
subject to the terms and conditions of this Lease. After the determination of
the Commencement Date, either party, upon request of the other, shall execute an
agreement setting forth the Commencement Date and the Termination Date
1.2......(i) Tenant hereby covenants and agrees to pay to Landlord
during the Term, to the address set forth above or such other place as Landlord
may from time to time designate, without any offset or counterclaim, or
abatement or deduction whatsoever except as expressly provided herein, (x) the
Base Rent specified in paragraph (ii) of this Section 1.2 in monthly
installments on the first day of each month during the Term, commencing as of
the Base Rent Commencement Date, in advance, without notice or demand, (y) all
Additional Rent as herein provided, and (z) all other sums payable by Tenant
hereunder. Landlord shall provide Tenant with invoices for all charges payable
by Tenant to Landlord, other than Base Rent or regularly scheduled monthly
payments of Additional Rent for which Tenant has received notice of the amount
of such recurring Additional Rent charges, prior to such charges becoming due.
.........(ii) If the Base Rent Commencement Date shall fall on a day other
than the first day of a calendar month, the Base Rent and any Additional Rent
payable hereunder shall be apportioned for the number of days remaining in that
month from the Base Rent Commencement Date through the last day of the calendar
month in which the Base Rent Commencement Date occurs. During the Term of this
Lease, Tenant shall pay as Base Rent as follows (subject to adjustment as
provided in Sections 2.4, 33 and 35)
......... (a) Commencing on the Base Rent Commencement Date and
continuing through the day immediately preceding the fifth anniversary of the
Base Rent Commencement, the sum of Twelve Million Sixty Eight Thousand Five
Hundred Thirty Two and 00/100 Dollars ($12,068,532.00) per annum, payable in
equal monthly installments of One Million Five Thousand Seven Hundred Eleven and
00/100 Dollars ($1,005,711.00).
......... (b) Commencing on the fifth anniversary of the Base Rent
Commencement Date and continuing through the day immediately preceding the tenth
anniversary of the Base Rent Commencement, the sum of Twelve Million Eight
Hundred Ninety Two Thousand Two Hundred Fifty Seven and 20/100 Dollars
($12,892,257.20) per annum, payable in equal monthly installments of One Million
Seventy Four Thousand Three Hundred Fifty Four and 77/100 Dollars
($1,074,354.77).
......... (c) Commencing on the tenth anniversary of the Base Rent
Commencement Date and continuing through the expiration of the Term, the sum of
Thirteen Million Seven Hundred Fifty Four Thousand Two Hundred Ninety Five and
20/100 Dollars ($13,754,295.20) per annum, payable in equal monthly installments
of One Million One Hundred Forty Six Thousand One hundred Ninety One and 27/100
Dollars ($1,146,191.27).
1.3......(i) Effective as of the Commencement Date, Tenant shall pay to
Landlord as Additional Rent an amount equal to Tenant Electric. Landlord, at its
expense, shall cause the electrical outlets and lighting for each floor in the
Premises, together with any electrical usage by Tenant for any computer rooms,
supplemental HVAC units or similar improvements, to be submetered from the
balance of electrical energy consumed in the Building and Landlord, as part of
Operating Expenses, shall maintain such submeters in good working order. Tenant
shall pay the cost of Tenant Electric for the submetered amount of electrical
energy consumed at the rates charged to Landlord with out mark up in accordance
with this Section 1.3.
.........(ii) Prior to the Commencement Date, Landlord shall provide
Tenant with a good faith estimate of Tenant Electric ("Estimated Electric
Charges") for the first full month following the Commencement Date. Landlord
shall thereafter provide Tenant with a statement of the Estimated Electric
Charges for each upcoming monthly period (each of which estimate shall be based
upon the actual Electric Charges for the prior month's period, adjusted for any
variances related to seasonal usage). Landlord shall provide Tenant with
documentation reasonably supporting Landlord's Estimated Electric Charges.
Tenant shall pay as Tenant Electric 100% of Landlord's Estimated Electric
Charges on a monthly basis on the first day of each month during the Term,
together with the Base Rent, in advance, without notice or demand, subject to
apportionment if applicable pursuant to Section 1.2(ii).
.........(iii) Each month during the Term, Landlord shall furnish to
Tenant a statement of Landlord's actual electrical charges for the Tenant
Electric for the previous month which shall provide reasonable detail as to the
kilowatt hours consumed and the cost of electricity incurred by Landlord
(including energy charges, demand charges, surcharges, taxes, fuel adjustment
charges and other factors used by the utility company or other provider in
computing its charges to Landlord) during such period (the "Actual Electric
Statement"). If, for any month (or portion thereof in the case of the initial
period) Tenant's payment based on the submetering of such electrical charges,
collected for the prior month, based on Landlord's Estimated Electric Charges
for such month, is in excess of the electrical charges actually due during such
prior month, then Landlord shall credit to Tenant any overpayment against the
next month's Estimated Electric Charges. Likewise, any underpayment with respect
to such prior month shall be added to the next month's Estimated Electric
Charges.
.........(iv) Tenant or its representative shall have the right, at
Tenant's expense, upon reasonable notice and at reasonable times during Business
Hours, within twenty-four (24) months after receipt of any Actual Electric
Statement, to examine the books and records of the Property, so that Tenant can
determine that the electricity charges for Tenant Electric have, in fact, been
incurred as provided herein. Unless Tenant shall give Landlord a notice
objecting to and specifying the respects in which such statement is claimed to
be incorrect within twenty-four (24) months after its receipt of such Actual
Electric Statement, the Actual Electric Statement shall be considered to be
final and accepted by Tenant. If Tenant disputes any Actual Electric Statement,
Tenant shall pay all Additional Rent set forth therein as a condition precedent
to its right to contest the same.
1.4......If any Base Rent or Additional Rent is not paid within ten
(10) business days after written notice that such rents are due and unpaid,
Tenant shall pay to Landlord on demand a late charge equal to two (2%) percent
of the amount unpaid. In addition, any installment or installments of Base Rent
or Additional Rent accruing hereunder, and all other sums payable by Tenant
hereunder (other than the late charge set forth in the preceding sentence),
which are not paid within thirty (30) days after written notice that such rents
are due and unpaid, shall bear interest from the date such payments were due
until paid at a rate equal to the lesser of (i) the maximum legal rate of
interest allowed by law or (ii) the Default Interest Rate, which interest shall
be deemed Additional Rent hereunder, payable upon demand by Landlord.
Notwithstanding anything to the contrary contained in this Section 1.4, Landlord
agrees that it shall not assess the late charge set forth in this Section for
the first two occurrences in any twelve (12) consecutive month period in which
Base Rent or Additional Rent is paid beyond ten (10) days after its due date,
provided that any such payment is received by Landlord within ten (10) days
after notice from Landlord to Tenant of such ten-day delinquency.
1.5......Landlord shall have all the rights and remedies for the
collection of Additional Rent as are available to Landlord for the collection of
the Base Rent.
ARTICLE 2
BASE BUILDING WORK; TENANT IMPROVEMENTS
2.1. The Base Building Work shall be performed by Landlord, at its sole
cost and expense and in accordance with the Work Agreement. Landlord shall keep
Tenant apprised of the status of construction throughout the period of
construction. Landlord's obligation to construct the Base Building Work shall be
guaranteed by SJP Properties Company in the form attached hereto as Exhibit "P".
In the event that Landlord does not construct the Tenant Improvements the
following provisions shall apply:
Landlord shall (subject to Excusable Delay and Tenant Delay) cause the
Base Building Work to progress in accordance with the critical
milestones dates as set forth in Exhibit L (the "Milestone Dates"). If,
for any reason any of the Base Building Work is not Substantially
Completed by the Milestones Date (subject to Excusable Delay and Tenant
Delay), and as a result of such failure to substantially complete such
portion of the Base Building Work as so required by the Milestone Date,
Tenant is actually delayed in the substantial completion of the Tenant
Improvements beyond the date scheduled for completion based upon
Tenant's construction schedule for the T.I. Plans (as defined in the
Work Agreement) then, as Tenant's sole and exclusive remedy therefor,
the Base Rent Commencement Date shall be postponed (beyond the date on
which it would have occurred pursuant to the operation of the provisions
of the definition of such term) for one (1) additional day beyond the
actual Commencement Date for the lesser of (i) the number of days by
which the substantial completion of the portion of the Base Building
Work was delayed beyond the applicable Milestone Date, and (ii) the
number of days by which the Substantial Completion of the Tenant
Improvements was actually delayed beyond the scheduled completion based
upon Tenant `s construction schedule for the T.I. Plans (as defined in
the Work Agreement) as a result of such delay by Landlord beyond the
applicable Milestone Date (a "Milestone Completion Delay"); provided,
however, if, such Milestone Completion Delay exceeds sixty (60) days,
the Base Rent Commencement Date shall be further postponed an additional
one (1) day for each day that the Milestone Completion Delay exceeds
sixty (60) days. For the purpose of calculating the number of days of
delay constituting a Milestone Completion Delay, in the event any
portion of the Base Building Work is Substantially Completed beyond a
scheduled Milestone Date, all subsequent Milestone Dates shall be
extended by the same number of days. For example, if the Substantial
Completion of the work required by a specified Milestone Date occurs
fifteen days after the Milestone Date, and the Tenant Improvements are
Substantially Completed ten (10) days after the scheduled completion
date, the Milestone Completion Delay shall equal ten (10) days, and Base
Rent Commencement Date would be two hundred fifty (250) days (rather
than 240 days) following the Commencement Date. If the Substantial
Completion of the work required by a specified Milestone Date occurs
seventy-five (75) days after the Milestone Date, and the Tenant
Improvements are Substantially Completed seventy (70) days after the
scheduled completion date, the Milestone Completion Delay would equal
seventy (70) days, and the Base Rent Commencement Date would be three
hundred twenty (320) days (i.e. 70 days plus an additional 10 days for
the number of days exceeding 60 days) following the Commencement Date.
If the Substantial Completion of the work required by a specified
Milestone Date occurs fifteen (15) days after the applicable Milestone
Date, and the Tenant Improvements are Substantially Completed twenty
(20) days after the scheduled completion date, the Milestone Completion
Delay would equal fifteen (15) days, the Base Rent Commencement Date
would be two hundred fifty-five (255) days (rather than 240 days)
following the Commencement Date.
2.2. (i) On or before September 30, 2000, Landlord may elect to abandon
the development of the Property. In the event Landlord elects to abandon the
development of the Property, Landlord shall notify Tenant within five (5)
business days of Landlord's election. Upon receipt of Landlord's notice to
abandon the development of the Property, this Lease Agreement shall
automatically terminate; and Landlord shall reimburse Tenant for all reasonable
out-of-pocket costs and fees that have been incurred by Tenant to third parties
for the leasing of the Premises and the construction of the Tenant Improvements,
in an aggregate amount not to exceed $1,500,000.00 (the "Abandonment
Reimbursement") and in the event of such termination Landlord shall be
responsible (i) for any commission which may be due Broker (as defined in
Section 39.3) from Landlord in connection with this Lease pursuant to a separate
agreement between Landlord and Broker and (ii) in the event Landlord has not
elected to abandon the development of the Property prior to September 15, 2000,
Landlord shall reimburse any commission actually paid by Tenant to Insignia/ESG,
Inc in an amount not to exceed $4,250,000.00 pursuant to that certain agreement
between Tenant and Insignia/ESG, Inc dated March 1, 1999. In the event of
termination of this Lease in accordance with this Section 2.2(i), Landlord's
sole obligation to Tenant shall be the payment of the Abandonment Reimbursement
within the time frames set forth in Section 2.3, and thereupon neither party
shall have any further liability to the other, except for those provisions of
this Lease that expressly survive any termination. The remedies set forth in
this Section 2.2(i) shall be Tenant's exclusive remedies in the event Landlord
elects to abandon the development of the Property on or before September 30,
2000.
(ii) In the event Landlord has not closed on its construction
financing for the Building and has not commenced site excavation for the
Building on or before February 28, 2001 (except for Excusable Delay or Tenant
Delay) then Tenant may terminate this Lease by written notice to Landlord served
at any time after February 28, 2001, but prior to the earlier of (i) April 30,
2001 or (ii) the date upon which Landlord has closed on its construction
financing for the Building and has commenced site excavation for the Building.
In the event Tenant elects to cancel this Lease in accordance with the
immediately preceding sentence, Landlord shall be responsible for any commission
which may be due Broker (as defined in Section 39.3) from Landlord in connection
with this Lease pursuant to a separate agreement between Landlord and Broker and
Landlord's sole obligation to Tenant shall be the reimbursement to Tenant for
all reasonable out-of-pocket costs and fees that have been incurred by Tenant to
third parties for the leasing of the Premises and the construction of the Tenant
Improvements, in an aggregate amount not to exceed $2,000,000.00 and the
reimbursement to Tenant of the commission actually paid by Tenant to
Insignia/ESG, Inc in an amount not to exceed $4,250,000.00 pursuant to that
certain agreement between Tenant and Insignia/ESG, Inc dated March 1, 1999 (such
$2,000,000.00 and $4,250,000.00 amounts, collectively the "First Milestone
Reimbursement") within the time frames set forth in Section 2.3, and thereupon
neither party shall have any further liability to the other, except for those
provisions of this Lease that expressly survive any termination. The remedies
set forth in this Section 2.2(iii) and in Section 2.1 shall be Tenant's
exclusive remedies in the event Landlord has not closed on its construction
financing for the Building and has not commenced site excavation for the
Building as provided in the Work Agreement on or before the date set forth
above.
(iii) In the event Landlord does not complete driving the piles
for the Building foundation on or before August 1, 2001 except for Excusable
Delay or Tenant Delay) then Tenant may terminate this Lease by written notice to
Landlord served at any time after August 1, 2001, but prior to the earlier of
(i) October 1, 2001 or (ii) the date upon which Landlord completes driving the
piles for the Building foundation. In the event Tenant elects to cancel this
Lease in accordance with the immediately preceding sentence, Landlord shall be
responsible for any commission which may be due Broker (as defined in Section
39.3) from Landlord in connection with this Lease pursuant to a separate
agreement between Landlord and Broker and Landlord's sole obligation to Tenant
shall be the reimbursement to Tenant for all reasonable out-of-pocket costs and
fees that have been incurred by Tenant to third parties for the leasing of the
Premises and the construction of the Tenant Improvements, in an aggregate amount
not to exceed $3,000,000.00 and the reimbursement to Tenant of the commission
actually paid by Tenant to Insignia/ESG, Inc in an amount not to exceed
$4,250,000.00 pursuant to that certain agreement between Tenant and
Insignia/ESG, Inc dated March 1, 1999 (such $3,000,000.00 and $4,250,000.00
amounts, collectively the "Second Milestone Reimbursement") within the time
frames set forth in Section 2.3, and thereupon neither party shall have any
further liability to the other, except for those provisions of this Lease that
expressly survive any termination. The remedies set forth in this Section
2.2(iii) and in Section 2.1 shall be Tenant's exclusive remedies in the event
Landlord does not complete driving the piles for the Building foundation on or
before the dates set forth above.
(iv) In the event Landlord does not Substantially Complete (as
defined in the Work Agreement) the Stage I Base Building Work (as defined in the
Work Agreement) on or before April 1, 2002 (except for Excusable Delay or Tenant
Delay) then Tenant may terminate this Lease by written notice to Landlord served
at any time after April 1, 2002, but prior to the earlier of (i) June 1, 2001 or
(ii) the date upon which Landlord Substantially Completes the Stage I Base
Building Work. In the event Tenant elects to cancel this Lease in accordance
with the immediately preceding sentence, Landlord shall be responsible for any
commission which may be due Broker (as defined in Section 39.3) from Landlord in
connection with this Lease pursuant to a separate agreement between Landlord and
Broker and Landlord's sole obligation to Tenant shall be the reimbursement to
Tenant for all reasonable out-of-pocket costs and fees that have been incurred
by Tenant to third parties for the leasing of the Premises and the construction
of the Tenant Improvements, in an aggregate amount not to exceed $4,500,000.00
and the reimbursement to Tenant of the commission actually paid by Tenant to
Insignia/ESG, Inc in an amount not to exceed $4,250,000.00 pursuant to that
certain agreement between Tenant and Insignia/ESG, Inc dated March 1, 1999 (such
$4,500,000.00 and $4,250,000.00 amounts, collectively the "Third Milestone
Reimbursement") within the time frames set forth in Section 2.3, and thereupon
neither party shall have any further liability to the other, except for those
provisions of this Lease that expressly survive any termination. The remedies
set forth in this Section 2.2(iv) and in Section 2.1 shall be Tenant's exclusive
remedies in the event Landlord does not Substantially Complete the Stage I Base
Building Work on or before the date set forth above.
(v) In the event Landlord does not Substantially Complete (as
defined in the Work Agreement) the enclosure of the Building (including roof,
exterior walls and windows, provided that the hoist may still be operational) on
or before October 15, 2002 (except for Excusable Delay or Tenant Delay) then
Tenant may terminate this Lease by written notice to Landlord served at any time
after October 15, 2002, but prior to the earlier of (i) December 15, 2002 or
(ii) the date upon which Landlord Substantially Completes the enclosure of the
Building (including roof, exterior walls and windows, provided that the hoist
may still be operational). . In the event Tenant elects to cancel this Lease in
accordance with the immediately preceding sentence, Landlord shall be
responsible for any commission which may be due Broker (as defined in Section
39.3) from Landlord in connection with this Lease pursuant to a separate
agreement between Landlord and Broker and Landlord's sole obligation to Tenant
shall be the reimbursement to Tenant for all reasonable out-of-pocket costs and
fees that have been incurred by Tenant to third parties for the leasing of the
Premises and the construction of the Tenant Improvements, in an aggregate amount
not to exceed $5,500,000.00 and the reimbursement to Tenant of the commission
actually paid by Tenant to Insignia/ESG, Inc in an amount not to exceed
$4,250,000.00 pursuant to that certain agreement between Tenant and
Insignia/ESG, Inc dated March 1, 1999 (such $5,500,000.00 and $4,250,000.00
amounts, collectively the "Fourth Milestone Reimbursement") within the time
frames set forth in Section 2.3, and thereupon neither party shall have any
further liability to the other, except for those provisions of this Lease that
expressly survive any termination. The remedies set forth in this Section
2.2(iv) and in Section 2.1 shall be Tenant's exclusive remedies in the event
Landlord does not Substantially Complete the enclosure of the Building
(including roof, exterior walls and windows provided that the hoist may still be
operational) on or before the date set forth above.
(vi) If, for any reason (except for Excusable Delay or Tenant
Delay) the Substantial Completion of the Base Building Work does not occur on or
prior to the Final Outside Date, then, Tenant may elect to cancel this Lease
upon no less than thirty days written notice to Landlord served at any time
after the Final Outside Date; provided, however, that if the Substantial
Completion of the Base Building Work occurs prior to the effective date of
Tenant's cancellation notice (which effective date shall in no event be less
than thirty (30) days after the date upon which Landlord is deemed to have
received such notice) Tenant's cancellation notice shall be void and of no
further force or effect. In the event Tenant delivers a cancellation notice,
Landlord shall in good faith advise Tenant of Landlord's anticipated date for
the Substantial Completion of the Base Building Work. In the event Tenant elects
to cancel this Lease in accordance with the immediately preceding sentence,
Landlord's sole obligation to Tenant shall be (i) the reimbursement of Tenant of
all reasonable out-of-pocket costs and fees that have been incurred by Tenant to
third parties for the leasing of the Premises and the construction of the Tenant
Improvements prior to the date of such cancellation notice, in an aggregate
amount not to exceed $6,000,000.00, (ii) the reimbursement to Tenant of the
amount by which Tenant's holdover rent for the month of May, 2003 exceeds the
monthly installment of base rent prior to any holdover period under its existing
Lease Agreement for its Premises at 605 Third Avenue, New York, New York, and
(iii) the reimbursement to Tenant of the commission actually paid by Tenant to
Insignia/ESG, Inc. in an amount not to exceed $4,250,000.00 pursuant to that
certain agreement between Tenant and Insignia/ESG, Inc dated March 31, 1999
(collectively, the "Non-Completion Reimbursement"), and in such event Landlord
shall be responsible for any commission which may be due Broker (as defined in
Section 39.3) from Landlord in connection with this Lease pursuant to a separate
agreement between Landlord and Broker and the Landlord's sole obligation to the
Tenant shall be the payment of the Non-Completion Reimbursement within the time
frames set forth in Section 2.3, and thereupon neither party shall have any
further liability to the other, except for those provisions of this Lease that
expressly survive any termination. The remedies set forth in this Section
2.2(vi) and Section 2.1 shall be Tenant's exclusive remedies in the event the
Substantial Completion of the Base Building Work does not occur on or prior to
the Final Outside Date.
2.3. Landlord shall pay to Tenant the Abandonment Reimbursement, the
First Milestone Reimbursement, the Second Milestone Reimbursement, the Third
Milestone Reimbursement, the Fourth Milestone Reimbursement or the
Non-Completion Reimbursement, as the case may be, within thirty (30) days of
receipt of a statement from Tenant detailing such out-of-pocket costs, together
with invoices from third parties for such amounts. If all or any portion of the
Abandonment Reimbursement, the First Milestone Reimbursement, the Second
Milestone Reimbursement, the Third Milestone Reimbursement, the Fourth Milestone
Reimbursement or the Non-Completion Reimbursement is not paid by Landlord to
Tenant within such thirty (30) day period, such delinquent amount shall bear
interest at the Default Interest Rate commencing on the thirty-first (31st) day
after such payment is due through the date such delinquent amount is paid.
Landlord's obligation for the payment of any of the Abandonment Reimbursement,
the First Milestone Reimbursement, the Second Milestone Reimbursement, the Third
Milestone Reimbursement, the Fourth Milestone Reimbursement or the
Non-Completion Reimbursement shall be guaranteed by SJP Properties Company in
the form attached hereto as Exhibit "M".
2.4. (a) Within thirty (30) days after the date on which the floors on
which the Premises are located have been enclosed, Landlord's architect shall
determine the Rentable Area of the Premises consistent with the provisions of
Section 2.4(c) ("Landlord's Initial Measurement"). If Tenant disputes Landlord's
Initial Measurement, within twenty (20) days after its receipt of such
determination, Tenant shall notify Landlord of such dispute and shall provide
Landlord at the time of such notice with Tenant's architect's determination
consistent with the provisions of Section 2.4(c). If Tenant fails to notify
Landlord of any dispute in Landlord's Initial Measurement within said twenty
(20) day period, the determination of Landlord's Initial Measurement shall be
deemed conclusive. If the parties are unable to resolve any discrepancy between
Landlord's Initial Measurement and the determination by Tenant's architect, such
matter shall be submitted to arbitration as provided in Article 38 (provided
that it shall be a requirement that all arbitrators shall be licensed
architects). In the event the Rentable Area of the Premises as determined by
Landlord's Initial Measurement is less than ninety-seven and one-half percent
(97 1/2%) of the Rentable Area of the Premises as defined herein, Tenant shall
have the option, to be exercised by notice to Landlord within twenty (20) days
of Landlord's Initial Measurement of the Rentable Area of the Premises, to
require that Landlord shall provide Tenant with additional space on a floor
contiguous to the Premises in order to provide Tenant with the Rentable Area of
the Premises as defined herein (i.e. 383,128 square feet). In the event Tenant
fails to notify Landlord of Tenant's exercise of its option to take such
additional space within said twenty (20) day period, Tenant shall be deemed to
have irrevocably waived it option to take such additional space.
(b) Tenant and Landlord shall each have the right, within
twenty (20) days after the enclosure of the floors constituting the Premises and
the construction of the permanent walls enclosing the Core Areas (as defined in
Section 2.4(c)) on each of such floors within the Premises, to confirm that the
Usable Area of the Premises is substantially consistent with the Base Building
Plans or the calculation of the adjusted space under subparagraph (a) above, if
applicable. In the event that, as a result of such party's measurement of the
as-built dimensions of the Premises as performed by a licensed architect, the
Usable Area of the Premises as actually constructed is at variance with the
Usable Area of the Premises as calculated from the Base Building Plans (or as
calculated for the adjusted space under subparagraph (a) above, if applicable)
by more than 1%, then (i) the Base Rent and the Construction Allowance shall be
adjusted to reflect the actual Rentable Area (i.e., the Base Rent shall be
adjusted at the rate of $31.50 per square foot for the first five (5) years of
the Term, $33.65 per square foot for the next five (5) years of the Term, and
$35.90 per square foot for the last five (5) years of the Term and the
Construction Allowance shall be adjusted by $47.11 per square foot), and (ii)
Tenant's Proportionate Share shall be adjusted to reflect Tenant's increase or
decrease in the Rentable Area of the Premises, provided that in no event shall
Tenant be responsible for any increase in Base Rent of more than an additional
9,578 square feet of Rentable Area nor shall the Construction Allowance be
increased by more than $451,220 because of any increase in the size of the
Rentable Area of the Premises beyond 9,578 square feet as a result of such
remeasurement. In the event Tenant or Landlord fails to conduct a measurement of
the Premises within twenty (20) days after the enclosure of the floors
constituting the Premises and the construction of the permanent walls enclosing
the Core Areas on each of such floors within the Premises, or the Usable Area of
the Premises is not at variance by more than 1% of the Usable Area as depicted
on the Base Building Plans, such party's right regarding measurement shall
expire, and the Rentable Area of the Premises and Tenant's Proportionate Share
shall not be subject to any revision. In the event Landlord or Tenant disputes
the other party's measurement, such matter shall be submitted to arbitration as
provided in Article 38 (provided that it shall be a requirement that all
arbitrators shall be licensed architects), and Tenant shall pay Rent based upon
the Rentable Area of the Premises as presently provided herein until such
dispute is ultimately resolved, at which time a retroactive adjustment shall be
made and the appropriate payment shall be made by one party hereto to the other.
(c) The Rentable Area of the Premises shall be equal to the
product of the Usable Area of the entire floors constituting the Premises,
multiplied by 1.30. No deduction shall be made for columns necessary to the
Building. The Usable Area of the Premises shall be computed by measuring the
total area of all of the floors comprising the Premises within the dominant
portion of the exterior finished surface of the permanent outer building walls,
excluding from the measurement of each floor the Core Areas within such floor.
The Usable Area of the Building shall be equal to the sum of the Usable Area of
all floors within the Building (exclusive of any parking area within the
Building). For the purpose of this Section 2.4, "Core Areas" shall mean those
major vertical penetrations (i.e., elevator shafts, stairs, pipe shafts and
vertical ducts), mechanical rooms, telephone closets, electrical rooms,
restrooms, janitorial closets, and freight elevator lobbies as shown on the Base
Building Schematic Plans (as defined in the Work Agreement), located on a floor
within the Premises, together with the permanent walls enclosing same, as
constructed by Landlord as part of the Base Building Work.
(d) Within thirty (30) days after the date on which all floors of the
Building have been enclosed, Landlord's architect shall confirm the calculation
of Tenant's Proportionate Share. If Tenant disputes Landlord's determination of
Tenant's Proportionate Share, within twenty (20) days after its receipt of such
determination, Tenant shall notify Landlord of such dispute and shall provide
Landlord at the time of such notice with Tenant's architect's determination
consistent with the provisions of Section 2.4(c). If Tenant fails to notify
Landlord of any dispute in Landlord's determination of Tenant's Proportionate
Share within said twenty (20) day period, Landlord's determination of Tenant's
Proportionate Share shall be deemed conclusive. If the parties are unable to
resolve any discrepancy between Landlord's determination of Tenant's
Proportionate Share and the determination by Tenant's architect, such matter
shall be submitted to arbitration as provided in Article 38 (provided that it
shall be a requirement that all arbitrators shall be licensed architects).
2.5. The Tenant Improvements in and to the Premises shall be installed
by Tenant in accordance with the Work Agreement. Tenant shall be solely
responsible for the cost of Tenant Improvements, subject to the payment by
Landlord of the Construction Allowance in an amount of Eighteen Million Fifty
Thousand Five Hundred Fifty Five and /100 Dollars ($18,050,555.00) in accordance
with the terms and conditions of the Work Agreement, which amount is subject to
adjustment as provided in Section 2.4. Tenant covenants that all Tenant
Improvements shall be performed by Tenant in compliance with the provisions of
Sections 15.3, 15.4 and 15.6 of the Underlying Lease Agreement dealing with Port
Authority construction procedures. In the event any portion of the Construction
Allowance is not utilized by Tenant (and accordingly is not paid by Landlord),
the balance shall be credited against the Base Rent under this Lease. In the
event that after Landlord fails to pay when due any portion of the Construction
Allowance required to be paid by Landlord pursuant to the Work Agreement, Tenant
shall have the right, upon no less than thirty (30) days notice to Landlord, to
set-off any such delinquent amount against the next due payments of Base Rent
under this Lease.
ARTICLE 3
USE
3.1. Subject to the provisions of Section 3.2, the Premises shall be
used by Tenant and by any permitted assignee or subtenant only for offices and
any uses incidental thereto and consistent with a first class office building
(including, without limitation, dining facilities and computer rooms)
("Permitted Use").
3.2. Tenant shall not use, or suffer or permit the use of, the Premises
or any part thereof or the Building or any component thereof or the Property or
any portion thereof in any manner or for any purpose or do, bring or keep
anything, or suffer or permit anything to be done, brought or kept, therein or
thereon (i) which would violate any covenant, agreement, term, provision or
condition of this Lease or is unlawful or in contravention of the Permit to
Occupy or Use (as defined in the Underlying Lease Agreement) to be issued by the
Port Authority for the Building or any certificate of occupancy or other permits
or approvals issued by either the Port Authority or the City for the Building,
the Property or the Premises, or is a contravention of any legal requirement to
which the Building or the Property is subject, or (ii) which would overload or
could cause an overload of the electrical or mechanical systems of the Building
or which would exceed the floor load per square foot which any floor in the
Premises was designed to carry and which is allowed by law, or (iii) which in
the reasonable judgment of Landlord materially adversely affect the proper and
economic heating or air conditioning of the Building, or (iv) which constitutes
a nuisance, or (v) which due to the particular manner of Tenant's use (as
distinguished from general office use) constitutes an unreasonable disturbance
or menace to the other tenants of the Building, or (vi) which due to the
particular manner of Tenant's use (as distinguished from general office use)
invalidates or conflicts with, the fire or public liability insurance on the
Building or personal property of Landlord used in connection with the operation
of the Building, or (vii) which, in the reasonable judgment of Landlord, would
in any way impair the Design Criteria, the structural integrity or the
appearance of the Building, or result in a violation of any provision of the
Underlying Lease Agreement.
3.3. Tenant shall be entitled to access to the Premises on a
twenty-four hour, seven days a week basis, which access shall be subject to
Building security and the rules and regulations.
ARTICLE 4
COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS
4.1. Tenant, at its sole expense, shall comply with all Laws, and all
rules, orders, laws, regulations and requirements the Board of Fire Underwriters
or any other similar body exercising functions similar to those of any of the
foregoing which shall impose any violation, order of duty upon Landlord or
Tenant with respect to the Premises as a result of the particular manner of use
or occupancy thereof by Tenant (as distinguished from general office use) or the
use thereof for any purpose not authorized by the provisions of Article 3 or the
conduct by Tenant of its business in the Premises in a manner different from the
ordinary or proper conduct of such business. Any increase in fire insurance
premiums on the Building or its contents caused by the use or occupancy of the
Premises by Tenant (due the particular nature of Tenant's use of the Premises as
distinguished from general office use) shall be Additional Rent and paid by
Tenant to Landlord within ten (10) days of demand therefor made by Landlord to
Tenant.
4.2. Landlord covenants that as of the Construction Completion Date the
Base Building Work will comply with all Laws, including, without limitation, the
requirements of the Americans With Disabilities Act of 1991, 42 U.S.C. Section
12101 et seq. and all regulations promulgated under or pursuant thereto
(collectively, the "ADA").
4.3. Tenant covenants that as of the date it occupies the Premises, the
Tenant Improvements will comply with all Laws including, without limitation, the
requirements of the ADA.
4.4 (i) To satisfy compliance with ERISA, Tenant represents
and warrants to Landlord that:
(a)Tenant is not an "employee benefit plan"
(as that term is defined in section 3(3) of ERISA);
(b) The assets of Tenant do not constitute "plan
assets" of one or more employee benefit plans within
the meaning of 29 C.F.R. 2510.3-101;
(c)Tenant is not The Prudential Insurance Company of
America, a separate account of Prudential, or an
"affiliate" of Prudential as defined in Section IV(b)
of PTE 90-1;
(d) The terms of this Lease have been negotiated and
determined at arm's length, as such terms would be
negotiated and determined between unrelated parties;
and
(e) Tenant is not a "party in interest" (as that term is
defined in Section 3(14) of ERISA) with respect to any
of the employee benefit plans listed on Exhibit "N"
attached hereto and incorporated herein by this
reference.
(ii) Tenant hereby agrees to execute such documents or provide
such information as Landlord may reasonably require in connection with this
Lease or to otherwise assure Landlord that: (i) the Lease is not a prohibited
transaction under ERISA, (ii) that the Lease is otherwise in full compliance
with ERISA and (iii) that Landlord is not in violation of ERISA by compliance
with this Lease and by closing this Lease. Landlord shall be obligated to
consummate the Lease unless and until the Lease complies with ERISA and Landlord
is satisfied that the Lease complies in all respects with ERISA. The obligations
of Tenant under this section shall survive throughout the full term of the
Lease.
ARTICLE 5
LANDLORD'S OPERATING EXPENSES
5.1. In addition to the Base Rent and Additional Rent on account of
Tenant Electric, Tenant shall pay to Landlord as Additional Rent hereunder
commencing with the first day of the Initial Escalation Period, Tenant's
Proportionate Share of the increase of all Operating Expenses over the Base Year
Operating Expenses during the Term in accordance with the following provisions:
(i) Prior to the expiration of the Base Year, for the Initial
Escalation Period and prior to January 1st for each calendar year thereafter,
Landlord shall provide Tenant with a good faith estimate ("Landlord's Estimated
Excess Operating Expenses") of the amount, if any, by which Operating Expenses
during the Initial Escalation Period or subsequent calendar years, as the case
may be, will exceed Operating Expenses for the Base Year ("Excess Operating
Expenses"). Landlord shall provide Tenant with documentation detailing with
reasonable specificity Landlord's Estimated Excess Operating Expenses. Tenant
shall pay Tenant's Proportionate Share of Landlord's Estimated Excess Operating
Expenses for the Initial Escalation Period and applicable calendar year in equal
monthly installments on the first day of each month of such year after the Base
Year together with Base Rent, in advance, without notice or demand, subject to
apportionment if applicable pursuant to Section 1.2(ii). If, during the course
of any calendar year, Landlord shall in good faith have reason to believe that
the estimated Excess Operating Expenses shall be higher than originally
estimated for such year then Landlord shall have the right, but not the
obligation, to adjust the escalation by a lump sum invoice for the months of
such calendar year which precede the revised projections, and to advise Tenant
of an adjustment in future monthly escalation amounts. Such adjusted projection
shall not be made more frequently than semi-annually. For the purposes of
calculating Landlord's Estimated Operating Expenses and the Excess Operating
Expenses for the Initial Escalation Period, in the event that the Initial
Escalation Period is less than one (1) calendar year, the Landlord's Estimated
Excess Operating Expenses and the Excess Operating Expenses shall be calculated
for the entire calendar year in which the Initial Escalation Period occurs and
said amount shall be multiplied by a fraction, the numerator of which is the
number of days in the Initial Escalation Period and the denominator of which is
three hundred sixty-five (365) days.
(ii) Within (4) months after the expiration of the Base Year
(subject to Excusable Delays), Landlord shall furnish to Tenant a statement in
reasonable detail of Landlord's actual Operating Expenses for the Base Year
prepared by one of the Big Five certified public accounting firms of Landlord's
selection or such other independent certified accounting firm selected by
Landlord and reasonably approved by Tenant, which will establish the actual Base
Year Operating Expenses. For the purposes of this Section 5.1 the term "Big
Five" shall mean the accounting firms of Arthur Anderson, Deloitte & Touche,
Ernst & Young, KPMG, PricewaterhouseCoopers, or any successor to any such firms.
By May 1 of each calendar year of the Term after the Base Year (subject to
Excusable Delays) (or after the expiration of the Term in the case of the last
calendar year or portion thereof of the Term), Landlord shall furnish to Tenant
a statement of Landlord's actual Operating Expenses for the previous calendar
year or the Initial Escalation Period, as the case may be (the "Operating
Expense Statement") prepared by one of the Big Five certified accounting firms
of Landlord's selection or such other accounting firm selected by Landlord and
reasonably approved by Tenant. If, for the Initial Escalation Period or any
calendar year Tenant's Proportionate Share of Landlord's Estimated Excess
Operating Expenses, collected for the prior year is in excess of the Tenant's
Proportionate Share of Actual Excess Operating Expenses for such prior year or
period, then Landlord shall credit Tenant with any overpayment made hereunder
against the sums next due Landlord from Tenant. In the event the remaining
installments of Base Rent and Additional Rent are less than the amount of any
overpayment, then the difference shall be refunded to Tenant within thirty (30)
days after the determination of such overpayment. Tenant shall pay to Landlord,
within thirty (30) days of invoicing, any underpayment with respect to the prior
year. The obligations of Landlord and Tenant pursuant to this Section 5.1(ii)
with respect to underpayments and overpayments shall survive the termination of
this Lease. If Landlord fails to provide the statement of Landlord's Estimated
Excess Operating Expenses, the Statement of Base Year Operating Expenses or the
Operating Expense Statement by the dates provided herein, Landlord shall not
thereby waive its right to thereafter provide such statements, unless such
statement is delivered after three (3) years from December 31 of the calendar
year in question.
(iii) "Operating Expenses" shall mean (to the extent not
excluded under subsection (iv) below) all costs and expenses of Landlord in the
Base Year, the Initial Escalation Period and in each calendar year for the
provision of the services set forth in Article 13 hereof (including without
limitation, water, sewer, and Building Electric), and of such other services
provided by Landlord for the benefit of all tenants of the Building (including
Tenant), and of owning (including, without limitation, Taxes, and any cost or
expense, including attorney's fees, incurred by Landlord in seeking to obtain a
reduction or refund of Taxes) operating, maintaining (including, without
limitation O & M Costs), repairing, managing (including, without limitation,
management fees, which in no event shall exceed three percent (3%) of Gross
Annual Rentals per year) and insuring the Property (including, without
limitation, the insurance set forth in Section 26.4) and the amounts provided in
Section 5.2.
(iv) Operating Expenses shall not include the following: (a)
depreciation of the Building; (b) tenant improvement work; (c) lease
commissions; (d) principal or interest payments on mortgages and any other debts
of Landlord; (e) omitted or additional real estate taxes assessed during the
Term but relating to a period prior to the Commencement Date or after the
Termination Date; (f) expenses which are reimbursed by insurance; (g) the amount
of any refundable deposits; (h) Federal, State or local income, revenue or
excise taxes imposed on Landlord or any inheritance, estate, succession,
transfer, gift, capital stock, franchise, or excess profit taxes (unless imposed
in lieu of Taxes); (i) the cost of any work or service performed for any tenant
at such tenant's cost and expense or any work or service provided to such tenant
in excess of the work or services provided generally to all tenants in the
Building; (j) legal expenses incurred in the preparation of the leases or
enforcing the terms of any lease; (k) management fees in excess of three percent
(3%) of Gross Annual Rentals; (l) Annual Base Rent, Percentage Rental and
Additional Basic Rent under the Underlying Lease Agreement; (m) the cost of
capital improvements except to the extent provided in Section 5.2; (n)
advertising, promotional and marketing expenses, or the cost of maintaining a
leasing or marketing office for the Building; (o) Landlord's overhead not
related to management of the Building (p) Tenant Electric; (q) any amount paid
or incurred to any affiliate of Landlord or any of its agents for the
performance of any services that would be includable in Operating Expenses
(including, without limitation, the cost of any maintenance or repairs performed
by an affiliate of Landlord or any of its agents) to the extent that such cost
is in excess of the amount which would have been paid or incurred for such
services, maintenance or repairs on an open market basis in the absence of such
affiliation;(r) costs or expenses for any sculpture, paintings, or other works
of fine art (other than standard decoration for comparable buildings),
including, costs incurred with respect to the purchase, ownership, insurance,
leasing, repair, and/or maintenance of such works of fine art; (s) salaries and
benefits for officers and executives of Landlord above the grade of building
manager, (t) repairs to the extent covered by warranties; or (u) any category of
Operating Expense that has not been included in the Operating Expenses for the
Base Year and that is not expressly defined herein and which category of
Operating Expense is not of nature that is customary and usual as an Operating
Expense for similar commercial properties. In the event that (i) the
responsibilities of any employee of Landlord include other buildings in addition
to the Building or (ii) Landlord is contractually obligated to compensate an
employee for the performance of duties for more than one building but such
employee's scope of employment has been expressly limited to only the Building,
then the wages paid to such employee(s) shall be appropriately prorated.
(v) If, with respect to Operating Expenses, the Building is
not one hundred percent (100%) occupied during the establishment of the Base
Year, then the Operating Expenses actually incurred shall be adjusted during any
such period within the Base Year so as to reflect one hundred percent (100%)
occupancy. Similarly, if, during any calendar year thereafter or proportionate
part thereof subsequent to the Base Year the Building is less than one hundred
percent (100%) occupied, then the actual costs incurred as Operating Expenses
shall be increased during any such period to reflect one hundred percent (100%)
occupancy so that at all times after the Base Year, the Operating Expenses shall
be actual costs, but in the event less than one hundred percent (100%) of the
Building is occupied during all or part of the calendar involved, the Operating
Expenses shall not be less than that which would have been incurred had one
hundred percent (100%) of the Building been occupied. The aforesaid adjustment
shall only be made with respect to those items that are in fact affected by
variations in occupancy levels.
(vi) In no event shall Tenant be responsible for any
escalations in Operating Expenses for the first twelve months of the Term
hereof.
(vii) Landlord agrees that in the event Landlord elects after
the Base Year of the Lease to change the methodology Landlord uses in
calculating Operating Expenses, Landlord shall recalculate the Base Year
utilizing such methodology for the purpose of applying a consistent methodology
in determining the actual increases in Operating Expenses for the year in
question over the Base Year and provided that no such change in methodology
shall materially increase Tenant's liability hereunder.
5.2. Any cost incurred by Landlord (otherwise includable in Operating
Expenses) which, in accordance with generally accepted accounting principles, is
capitalized rather than expensed for (i) any repair or replacement made to the
Property, other than Structural Repairs, or (ii) any improvement made to the
Property (including a Structural Repair) which results in a reduction of other
Operating Expenses, to the extent of the lesser of said reduction or the
amortization of such expense as hereinafter provided, or (iii) any change,
improvements or alteration required to comply with applicable provisions of
laws, rules, regulations or orders of any Governmental Authorities which were
not applicable to the Property as of the Commencement Date shall be included in
Operating Expenses, but for such purposes any of the aforesaid costs as
specified in this Section 5.2 shall be amortized on a straight line basis over
the anticipated useful life (as reasonably estimated by Landlord) of such
repair, replacement or improvement and such annual amortization (together with
interest at the prime or base rate from time to time of Citibank, N.A. per annum
on the unamortized balance) shall be included annually in Operating Expenses
during each calendar year (or portion thereof) of such useful life within the
Term.
5.3. Tenant or its representative shall have the right, at Tenant's
expense, upon reasonable notice and at reasonable times during Business Hours,
within thirty-six (36) months after receipt of the Operating Expense Statement,
to examine the books and records of Landlord and its managing agent (and of any
affiliates of Landlord that shall have supplied any goods or services to the
Building which have been included by Landlord in Operating Expenses) that relate
to Operating Expenses of the Property, so that Tenant can determine that
Operating Expenses have, in fact, been paid or incurred and Landlord is in
compliance with the provisions of this Article 5 and to confirm that all
adjustments made pursuant to Section 5.1(v) to Operating Expenses actually
incurred in order to reflect one hundred percent (100%) occupancy are calculated
in accordance with the provisions of Section 5.1(v). Unless Tenant shall give
Landlord a notice objecting to an Operating Expense Statement and specifying the
respects in which such statement is claimed to be incorrect within thirty-six
(36) months after its receipt of such Operating Expense Statement, the Operating
Expense Statement shall be considered to be final and accepted by Tenant. If
Tenant disputes any Operating Expense Statement, Tenant shall pay all Additional
Rent set forth therein as a condition precedent to its right to contest the
same. In the event that it is established that the Operating Expenses set forth
on the Operating Expense Statement exceeds by at least five percent (5%) the
actual Operating Expenses ultimately determined as a result of Tenant's audit,
Landlord shall pay to Tenant interest on such overpayment at a rate equal to the
per annum prime rate or base rate announced from time to time by Citibank. N.A.
for the period of such overpayment through the date of such reimbursement to
Tenant and reimburse to Tenant the actual and reasonable amount paid by Tenant
to a certified public accounting firm to perform such audit (excluding any costs
of such audit performed on a contingency basis).
ARTICLE 6
RULES AND REGULATIONS
6.1. Tenant and Tenant's Visitors shall comply with the Rules and
Regulations with respect to the Property which are set forth in Exhibit "C"
annexed to this Lease and are expressly made a part hereof. Landlord shall have
the right to make reasonable amendments thereto from time to time for the
safety, care and cleanliness of the Property, the preservation of good order
therein and the general convenience of all the tenants and Tenant shall comply
with such amended Rules and Regulations, after twenty (20) days' written notice
thereof from Landlord. Any changes in the Rules and Regulations shall be
applicable to all tenants. The Rules and Regulations will not materially
interfere with the use and enjoyment of the Premises by Tenant. In the event
there is a conflict between the provisions of this Lease and the Rules and
Regulations, the provisions of this Lease shall govern. Landlord shall not be
liable for the non-performance by any other tenant or occupant of the Building
of any of said Rules and Regulations; however, Landlord shall use reasonable
efforts to apply all Rules and Regulations uniformly to all tenants.
ARTICLE 7
LANDLORD'S RIGHT OF ENTRY
7.1. Landlord and Landlord's agents and representatives shall have the
right to enter the Premises during business hours (except in the case of an
emergency) and upon reasonable notice (which shall be deemed to be no less than
two (2) business days prior notice except for emergencies) for the following
purposes: (i) examining the Premises; (ii) making such repairs or alterations
therein as may be necessary in Landlord's reasonable judgment for the safety and
preservation of the Building or the Premises provided that commercially
reasonable alternatives outside the Premises for any alterations are not
available to Landlord; (iii) erecting, maintaining, repairing or replacing
wires, ducts, cables, conduits, vents or plumbing equipment running in, to or
through the Premises as may be required in Landlord's reasonable opinion
(including as may be required in connection with the construction or alteration
of any other space in the Building) provided that commercially reasonable
alternatives outside the Premises for any alterations are not available to
Landlord; (iv) showing the Premises to prospective new tenants during the last
fifteen (15) months of the Term; or (v) showing the Premises during the Term to
any mortgagees or prospective purchasers of the Property or the Building; or
(vi) curing any default by Tenant in performing its obligations under this Lease
beyond any applicable notice and grace period Tenant may have pursuant to this
Lease or the Work Agreement. Landlord shall give Tenant three (3) business days'
prior notice before commencing any non-emergency repair or alteration.
7.2. Landlord may enter upon the Premises at any time in case of
emergency without prior notice to Tenant.
7.3. Landlord, in exercising any of its rights under this Article 7,
shall not be deemed guilty of an eviction, partial eviction, constructive
eviction or disturbance of Tenant's use or possession of the Premises and shall
not be liable to Tenant for same.
7.4. In connection with any entry by Landlord pursuant to this Article
7, Landlord at Landlord's expense (and included as part of Operating Expenses to
the extent permitted under Article 5) shall use all reasonable efforts to
minimize the disruption of Tenant's use of the Premises and all work performed
by or on behalf of Landlord in or on the Premises including the arrangement of
any separately secured areas within the Premises reasonably required by Tenant
pursuant to this Article 7 shall be performed with as little inconvenience to
Tenant's business as is reasonably possible. With respect to entering and
performing work in the Premises, Landlord shall, to the extent reasonably
possible (except in an emergency), provide Tenant with the right to have a
representative of Tenant accompany Landlord in the Premises.
7.5. Tenant shall not change any locks or install any additional locks
on doors entering into the Premises without first providing Landlord with a copy
of any such lock key. If in an emergency Landlord is unable to gain entry to the
Premises by unlocking entry doors thereto, Landlord may force or otherwise enter
the Premises without liability to Tenant for any damage resulting directly or
indirectly therefrom. Tenant shall be responsible for all damages created or
caused by its failure to give to Landlord a copy of any key to any lock
installed by Tenant controlling entry to the Premises.
ARTICLE 8
MAINTENANCE BY TENANT AND LANDLORD
8.1. Tenant shall take good care of the Premises throughout the Term,
maintain and preserve same in as good a condition as delivered to Tenant on the
Commencement Date, except for normal wear and tear and damage by fire or other
casualty not caused by Tenant, and be responsible for all necessary repairs and
replacements thereto, other than those which it is Landlord's obligation to make
under Section 8.2. Tenant shall be responsible for all damage of any kind or
character to the Property caused by the negligence or willful misconduct of
Tenant or Tenant's Visitors or Alterations performed by Tenant. Tenant shall
make all repairs within the Premises other than structural repairs and repairs
to Building systems for which Tenant is responsible pursuant to this Section 8.1
at Tenant's sole expense. Landlord shall make, at Tenant's expense, all repairs
to any structural components of the Building and Building systems that are
located within the Premises and in all areas outside the Premises for which
Tenant is responsible under Section 8.1, and Tenant shall pay the costs incurred
therefor to Landlord immediately upon demand as Additional Rent.
8.2 Landlord shall maintain and operate the Building in a manner
consistent with a first-class office building (that may include first floor
retail), the cost of which shall be included in Operating Expenses only as and
to the extent provided in Article 5 of this Lease. Landlord shall be responsible
at its own expense for (i) all Structural Repairs and (ii) the cost of any
repairs to the Building to the extent required as a result of the negligence of
Landlord or Landlord's employees; provided, however, that Tenant shall pay as
Additional Rent, the cost of all such repairs resulting from damage caused by
the negligence, or willful misconduct of Tenant or Tenant's Visitors, or
Alterations performed by Tenant to the extent such costs are not reimbursed to
Landlord by the proceeds of insurance maintained by Landlord pursuant to the
requirements of this Lease. Landlord shall maintain the Building in a
first-class condition and consistent with the Design Criteria (including,
without limitation, performing any repairs occasioned by the negligence or acts
of any entity or person, including Landlord, other than Tenant or Tenant's
Visitors), which shall include repairing and replacing all plumbing, heating,
air conditioning, electrical and mechanical fixtures (exclusive of electrical
and mechanical fixtures installed by Tenant) when required to maintain the
Building in first-class condition, and maintaining and making repairs to the
Common Areas, the non-structural elements of the roof of the Building and the
exterior of the Building, the cost of which shall be included in Operating
Expenses only as to the extent provided in Article 5 of this Lease; provided,
however, that Tenant shall pay as Additional Rent the cost of all such repairs
or replacements arising from the negligence or willful misconduct of Tenant or
Tenant's Visitors or Alterations performed by Tenant to the extent such costs
are not reimbursed to Landlord by the proceeds of insurance maintained by
Landlord pursuant to the requirements of this Lease.
ARTICLE 9
ALTERATIONS BY TENANT OR LANDLORD
9.1. (i) Tenant agrees not to make or allow to be made any alterations,
improvements, additions or physical changes in or about the Premises
("Alterations") without first obtaining the written consent of Landlord in each
instance, which consent (A) may be withheld by Landlord in its sole discretion
if the proposed Alterations (i) will adversely affect the structural integrity
of the Building, or (ii) are not designed in conformance with the Building
Design Criteria, and (B) in all other cases, shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, Landlord's consent shall
not be required for any decorative Alterations such as carpeting and painting,
or any other Alterations which in each instance, (i) is not within the
Alterations described under clause (A) of the preceding sentence, and (ii) the
cost of performing which does not exceed $250,000.00 (which amount shall be
increased at the rate of 4% per annum) (collectively, "Permitted Alterations").
Landlord shall grant or deny its consent to any proposed Alteration within ten
(10) business days of receipt of Tenant's written request accompanied by plans
and specifications describing the proposed Alteration. Any denial of Landlord's
consent shall set forth the specific reasons for Landlord's objection thereto.
If Landlord does not grant or deny its consent within such ten (10) business day
period, it shall be deemed to have granted consent. In the event Tenant submits
to Landlord any revisions to plans and specifications to any Alterations
previously submitted to Landlord, Landlord shall approve or disapprove such
revisions within five (5) business days of receipt of Tenant's proposed
revision. Landlord shall be responsible for the cost of Landlord's own review of
any proposed Alterations. If Landlord does not approve or disapprove such
revisions within such five (5) business day period, it shall be deemed to have
approved such revisions. Any and all Alterations to the Premises (exclusive of
Personalty, as hereinafter defined, and exclusive of any Alterations which may
be removed without material damage to the Building or Building Systems) shall be
deemed part of the Premises and to be real property upon completion thereof and
shall remain as the property of Landlord upon termination of this Lease. Any
trade fixtures, movable equipment or furniture owned or leased by Tenant and
other personal property owned or leased by Tenant (collectively, "Personalty")
shall be and remain the property of Tenant throughout the Term of this Lease and
may be removed by Tenant at any time during the Term. Landlord may, nonetheless,
require Tenant to remove any and all Alterations and all fixtures, equipment and
other improvements installed in the Premises which are items not ordinarily
found in office premises of a similar size as the Premises (including items such
as bank vaults, but expressly excluding partitions, finishes, stairwells, slab
reinforcements, kitchen (and related exhaust), wiring, supplemental HVAC and
conduit communications systems and rooftop telecommunication equipment),
provided that Landlord advises Tenant of the requirement to remove the same at
the time Landlord consents to such Alterations. Notwithstanding the foregoing,
Tenant shall have no obligation to remove any of the Tenant Improvements. In the
event the Landlord so elects, and Tenant fails to remove such property, Landlord
may remove the same at Tenant's cost, and Tenant shall pay Landlord on demand
all reasonable out-of-pocket costs incurred in connection therewith. Tenant
shall be responsible for the cost of repairing all damage to the Premises
resulting from the removal of such property. Tenant's obligations pursuant to
this Section 9.1 shall survive the expiration or termination of this Lease for
the later of (i) a period of nine (9) months from such expiration or termination
or (ii) the satisfaction of any obligations of Tenant under this Section 9.1 for
which Landlord has notified Tenant prior to the expiration of such nine month
period.
(ii) Tenant may perform Alterations with any architect,
general contractor, construction manager and subcontractors/trade contractors
Tenant selects that is approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed. Landlord shall be deemed to have
approved any architect, general contractor, construction manager and/or
subcontractors/trade contractors for whom approval is sought, if Landlord,
within 10 days after request by Tenant for such approval, fails to approve or
disapprove the applicable person or entity in writing, setting forth (in the
case of disapproval) an explanation for such disapproval. Tenant agrees that (i)
the contractors and subcontractors performing any Tenant Improvement Work shall
utilize union labor, and (ii) any contractors and subcontractors performing any
future Alterations shall utilize union labor to the extent that Landlord is
generally utilizing union labor in the Building or is requiring the utilization
of union labor by other tenants in the Building.
9.2. Tenant shall submit to Landlord at the time of its request for
Landlord's consent to any proposed Alteration, plans and specifications
(including layout, architectural, mechanical and structural drawings) for such
proposed Alteration (except in the case of a Permitted Alteration for which
Tenant shall submit to Landlord a sketch and description of the proposed
Alteration prior to performing the Alteration). All permits, approvals and
certificates required by all Governmental Authorities in connection with
Tenant's Alterations shall be timely obtained by Tenant at Tenant's expense and
submitted to Landlord. Tenant covenants that all Alterations shall be performed
by Tenant in compliance with the provisions of Sections 15.3, 15.4 and 15.6 of
the Underlying Lease Agreement. Landlord shall, upon Tenant's reasonable
request, join in any application for any required permit, approval or
certificate and shall otherwise cooperate with Tenant in all reasonable respects
in connection with Tenant's prosecution of Alterations. All reasonable
out-of-pocket costs and expenses incurred by Landlord in such joinder in
applications and cooperation in such prosecution shall be paid by Tenant.
Notwithstanding Landlord's approval of plans and specifications for any
Alteration, all Alterations shall be designed by Tenant and shall be made to be
in full compliance with all applicable laws, orders and regulations of
Governmental Authorities and all building codes, rules or regulations and the
Rules and Regulations of this Lease; all materials and equipment to be
incorporated into the Premises as a result of all Alterations shall be
consistent with a first class office building; and no such materials or
equipment shall, following installation, be subject to any lien, encumbrance,
chattel mortgage or title retention or security agreement. To the extent Tenant
elects to bid out any Alterations to be performed by Tenant, Tenant shall
provide Landlord with notice of Tenant's intention to solicit bids for the
performance of such Alterations no less than ten (10) days prior to Tenant
commencing the solicitation of bids therefor. In no event shall Tenant be
obligated to include Landlord on any bid list nor shall Tenant be obligated to
award the bid to Landlord. Upon completion of any Alterations, Tenant shall
provide Landlord with as-built plans (or, in the case of Permitted Alterations
requiring a construction permit, annotated working drawings) depicting said
Alterations or in the case of Alterations not requiring a building permit, a
drawing indicating the work as performed. In the case of Permitted Alterations
not requiring a building permit or construction permit from the Port Authority
or other Governmental Authority, Tenant shall provide Landlord with a narrative
description indicating in reasonable detail the work that was performed.
Landlord shall not be entitled to impose upon Tenant any charges or fees of any
kind (including, without limitation, charges or fees for profit, overhead or
supervision) in connection with any Alterations or with the Tenant's Work.
9.3. Landlord reserves the right to make changes, alterations,
improvements, repairs or replacements in or to the Building (outside of the
Premises) and the fixtures and equipment thereof, as well as in or to the street
entrances, halls located outside the Premises, lobbies located outside the
Premises, passages located outside the Premises, elevators, stairways located
outside the Premises and other parts of the Building (outside of the Premises),
and to erect, maintain and use pipes, ducts and conduits in and through the
Premises (provided that the same shall be completely concealed behind walls or
above the hung ceiling of the Premises); provided, however, that there shall be
no obstruction or material alteration (other than any temporary and de minimis
obstruction) of the means of access to the Premises or interference (other than
any temporary and de minimis interference) with Tenant's use of the Premises;
and further provided that any Material Change to any street entrances, the first
floor lobby and elevator area, and exterior elements of the Building (the
"Public Areas") shall be subject to Tenant's prior approval, which approval
shall not be unreasonably withheld, conditioned or delayed. For the purposes of
this Section 9.3, "Material Change" shall be deemed to be any alteration of the
Public Areas involving the reconfiguration of existing walls, installation of
any new permanent partitions within the Public Areas or any relocation or
closure of any existing entrances (provided that the definition of Material
Changes shall expressly exclude any decorative or cosmetic changes to such
Public Areas). Nothing contained in this Section shall be deemed to relieve
Tenant of any duty, obligation or liability of Tenant under this Lease with
respect to making any repair, replacement or improvement or complying with any
law, order or requirement of Governmental Authority. All work performed by
Landlord pursuant to this Section 9.3 shall be consistent with a first class
office building.
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1. (i) Except as provided in Sections 10.1(ii) and 10.6 below,
Tenant expressly covenants that it will not by operation of law or otherwise
assign, encumber or mortgage this Lease, nor sublet or suffer or permit the
Premises or any part thereof to be used by others, without the prior written
consent of Landlord in each instance. Landlord's consent to any proposed
assignment or subletting shall not be unreasonably withheld, conditioned or
delayed. Any attempt by Tenant without Landlord's prior written consent to
assign, encumber or mortgage this Lease or to sublet the Premises or a portion
thereof (other than as permitted pursuant to Sections 10.1(ii) and 10.6 below)
shall be null and void. Tenant shall not assign this Lease or sublet all or any
portion of the Premises to any party with diplomatic immunity or otherwise not
amenable to service of process in New Jersey. Prior to advising the leasing
market of its desire to sublease any portion of the Premises or assign the
lease, Tenant shall notify Landlord of such desire.
(ii) Notwithstanding anything to the contrary contained herein
(except for and subject to the provisions of Section 10.2(a) which relate to the
ERISA limitation on an assignment), Tenant may from time to time, without
Landlord's consent (but otherwise in compliance with the other provisions of
this Article to the extent applicable), (1) assign this Lease to any Successor
(as defined below) or Business Group (as defined below), (2) assign this Lease
to or sublet all or any portion of the Premises to, or allow the Premises to be
used by, any Affiliate (as hereinafter defined below) and (3) sublet all or any
portion of the Premises to, or allow the Premises to be used by, any Business
Group (as defined below). For the purposes of this Lease, the following terms
shall have the following meanings:
"Affiliate" means any person or entity which controls, is
controlled by or is under common control with Tenant. For purposes of
the preceding sentence, "control" means either (i) 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 or (ii) the legal right to control the actions of an
entity (e.g., general partner of a limited partnership, a managing
member of a limited liability company, or the contractual right to
control the actions of an entity).
"Successor" means any one of the following: (i) an entity
resulting from a merger, consolidation, reorganization or
recapitalization of or with Tenant or (ii) a purchaser (or other
transferee) of all or substantially all of Tenant's assets and all or
substantially all of such Tenant's liabilities (including the
liabilities of Tenant hereunder).
"Business Group" means (i) any entity which acquires all or
substantially all of the business of any division of, or other
operational group within, Tenant, which division or other operational
group (a) with respect to an assignment, is the primary occupant of the
Premises or (b) with respect to a sublease shall be the primary occupant
of the portion of the Premises so subleased, prior to such acquisition
(including an entity created pursuant to a spin-off of such division or
other group, or an entity acquiring such business pursuant to an
out-sourcing program) or (ii) any entity which has an active and ongoing
business relationship with Tenant and in which entity Tenant is the
holder of no less than 15% of such entity's equity interest.
(iii) If Tenant's interest in this Lease is assigned or if the
Premises or any part thereof are sublet to, or occupied by, or used by, anyone
other than Tenant, whether or not in violation of this Article 10, Landlord may,
after default by Tenant, accept from any assignee, sublessee or anyone who
claims a right to the interest of Tenant under this Lease, or who occupies any
part(s) or the whole of the Premises, the payment of Base Rent and Additional
Rent or any portion thereof and/or the performance of any of the other
obligations of Tenant under this Lease, but such acceptance shall not be deemed
to be a waiver by Landlord of the breach by Tenant of the provisions of this
Article 10, nor a recognition by Landlord that any such assignee, sublessee,
claimant or occupant has succeeded to the rights of Tenant hereunder, nor a
release by Landlord of Tenant from further performance by Tenant of the
covenants on Tenant's part to be performed under this Lease; provided, however,
that the net amount of Base Rent and Additional Rent collected from any such
assignee, sublessee, claimant or occupant shall be applied by Landlord to the
Base Rent and Additional Rent to be paid hereunder.
(iv) Tenant agrees to pay to Landlord all reasonable
out-of-pocket fees, costs and expenses, including, but not limited to,
reasonable attorney's fees and disbursements, incurred by Landlord in connection
with any proposed assignment of this Lease or any proposed sublease of the
Premises.
10.2. If Tenant requests Landlord's consent to an assignment of this
Lease or a subletting of all or any part of the Premises, Tenant shall submit to
Landlord: (1) the name of the proposed assignee or subtenant; (2) the terms of
the proposed assignment or subletting; (3) the nature of the proposed assignee
or subtenant's business and its proposed use of the Premises; (4) such
information as to the solvency of such assignee or subtenant and general
reputation of the proposed assignee or subtenant as Landlord may reasonably
require; (5) the proposed boundaries of the portion of Premises being sublet if
less than the entire Premises, and (6) at least thirty (30) days prior to
engaging in any such assignment, a written certification, supported by such
evidence as Landlord may request, that any such assignment, including any
assignment described in section 10.1(ii), will not result in the Lease
constituting a nonexempt, prohibited transaction under the ERISA. If Landlord
gives Tenant written notice, at least five (5) days prior to the date for
consummation of the proposed assignment, that Landlord believes such assignment
would constitute a nonexempt, prohibited transaction, then Tenant covenants and
agrees that it will not engage in such assignment unless and until it obtains,
at its sole expense, an individual ERISA prohibited transaction exemption from
the U.S. Department of Labor, in the form and substance satisfactory to Landlord
in Landlord's sole discretion.".
10.3. (i) Landlord shall grant or deny (together with a reasonably
detailed statement identifying Landlord's grounds for such denial) Tenant's
request for consent to a proposed subletting or assignment within twenty (20)
days after Landlord's receipt of such request for consent together with the
information required pursuant to Section 10.2 above. Any denial of Landlord's
consent shall set forth the specific reasons for Landlord's objection thereto.
If Landlord shall fail to either grant or deny Tenant's request for consent to a
proposed subletting or assignment within such twenty (20) day period, Landlord
shall be deemed to have granted such consent. Landlord agrees that its consent
to a proposed assignment or subletting shall not be unreasonably withheld or
conditioned provided that: (1) the use to be made of the Premises by the
proposed assignee or subtenant is permitted under Article 3 and (2) Tenant has
complied or will comply with all other requirements of this Article 10.
(ii) If Landlord shall consent to an assignment pursuant to
the request from Tenant (or if Tenant shall enter into an assignment pursuant to
the provisions of Section 10.1(ii) above), Tenant shall cause to be executed by
its assignee an agreement to perform faithfully and to assume and be bound by
all of the terms, covenants, conditions, provisions and agreements of this Lease
arising from and after the date of such assignment. If Landlord shall consent to
a sublease pursuant to the request from Tenant (or if Tenant shall enter into a
sublease pursuant to the provisions of Section 10.1(ii) above), the sublease
shall expressly provide that it is subject to all of the terms and conditions of
this Lease, that the subtenant shall not violate any of such terms or conditions
and at the option of Landlord, in the event of the termination of this Lease as
a result of an Event of Default by Tenant hereunder, the subtenant will attorn
to Landlord. An executed counterpart of each sublease or assignment and
assumption of performance by the assignee, shall be delivered to Landlord prior
to the commencement of occupancy set forth in such assignment or sublease. In
the event of any assignment of this Lease, the provision pursuant to which the
assignee agrees to perform faithfully and to assume and be bound by all of the
terms, covenants, conditions, provisions and agreements of this Lease arising
from and after the date of such assignment shall be in form reasonably
acceptable to Landlord. No such assignment or sublease shall be binding on
Landlord until Landlord has received such counterpart as required herein.
(iii) If Landlord shall give (or is deemed to have given) its
consent to any assignment of this Lease or to any sublease (it being expressly
understood that this subsection (iii) shall not apply to assignments and
subleases which do not require Landlord's consent), Tenant shall in
consideration therefor pay to Landlord as Additional Rent the following amounts
less the actual expenses incurred by Tenant in connection with such assignment
or subletting including, without limitation, reasonable legal fees, brokerage
commissions to persons not affiliated with Tenant and costs of making
alterations, any unamortized Tenant Improvements or alterations for which Tenant
was not otherwise reimbursed by the Construction Allowance for the portion of
the Premises sublet or assigned, and any leasing concessions (such as free rent
or tenant improvement allowances) afforded to such subtenant or assignee (or the
dollar value thereof), as the case may be:
(1) in the case of an assignment, an amount
equal to fifty percent (50%) of all sums and other considerations paid to
Tenant by the assignee for or by reason of such assignment; and
(2) in the case of a sublease, fifty percent
(50%) percent of any rents, additional charge or other consideration payable
under the sublease to Tenant by the subtenant which is in excess of the Base
Rent and Additional Rent accruing during the term of the sublease in respect of
the subleased space (at the rate per square foot payable by Tenant hereunder)
pursuant to the terms hereof.
Notwithstanding the foregoing, Tenant shall be entitled to retain any
consideration for any sublease or assignment occurring within the first ten (10)
years of the Term that in the aggregate does not exceed 50,000 rentable square
feet of space.
(iv) Anything in this Article 10 to the contrary
notwithstanding, if any consideration paid to Tenant for the assignment or
subletting shall include an amount for the sale or rental of Tenant's fixtures,
leasehold improvements, equipment, furniture, furnishings or other personal
property, the excess, if any, of such amount over the basis (less accumulated
depreciation) of such property as shown on Tenant's most recently filed Federal
Income Tax return shall be included in calculating the consideration paid to or
payable to Tenant by an assignee or subtenant as provided in subsections 10.3
(iii)(1) and 10.3(iii)(2) above. The sums payable to Landlord under Section
10.3(iii) shall be paid to Landlord as Additional Rent if, as and when paid by
the assignee or subtenant to Tenant.
10.4. In no event shall any assignment or subletting, release or
relieve Tenant from its obligations fully to observe or perform all of the
terms, covenants and conditions of this Lease on its part to be observed or
performed and the fact that Landlord may consent to any assignment or subletting
shall not be construed as constituting such a release of Tenant.
10.5. Notwithstanding anything in this Article 10 or in any other
tenant lease in the Building to the contrary, Tenant shall have the right to
sublease space from any other tenant within the Building without the requirement
of the Landlord's consent thereto.
10.6. In the event that during the last three (3) years of the term
hereof Tenant enters into any takeover agreement with a third party pursuant to
which such third party assumes Tenant's obligations for any remaining term of
the Lease, such takeover agreement shall not require the Landlord's consent,
provided, however, that nothing contained herein shall release or relieve Tenant
of its primary liability under this Lease. Tenant's ability to enter into a
takeover agreement without Landlord's consent shall in no event be deemed a
waiver of the requirement for Landlord's consent to any further subletting or
assignment. Notwithstanding the foregoing, in the event Landlord does not
construct the Phase II Building on or before the date that is seven (7) years
after the date of this Lease, the period of time in which Tenant has the right
to enter into a takeover agreement pursuant to this Section 10.6 shall be
extended from three (3) years to five (5) years.
10.7. If the Tenant shall be a corporation, limited liability company
or partnership, and at any time there is a transfer of a majority of the voting
stock of or interest in Tenant, resulting in the person(s) who shall have owned
a majority of such corporation's shares of voting stock, the member's interest
in such limited liability company or the general partners' interest in such
partnership, as the case may be, immediately before such transfer, ceasing to
own a majority of such shares of voting stock, member's interest or general
partner's interest, as the case may be, except as the result of transfers by
inheritance, such transfer shall be deemed to be an assignment of this Lease;
except that the provisions of this Section 10.7 and the restriction on
assignment shall not be applicable to any transfer of the stock of a corporation
which is listed on a national securities exchange (as defined in the Securities
Exchange Act of 1934, as amended) or whose stock is traded in the
over-the-counter market with quotations reported by the National Association of
Securities Dealers through its automated system for reporting quotations or is
otherwise publicly traded.
10.8. Landlord agrees that upon the request of Tenant, and provided
that no default exists as of the date of such request by Tenant, Landlord shall
enter into a non-disturbance, recognition, and attornment agreement
("Nondisturbance Agreement ") with no more than two (2) Qualifying Subtenants
pursuant to which Landlord shall agree that if this Lease is terminated prior to
the scheduled Termination Date as a result of a default by Tenant hereunder
(unless caused by a default by the Qualifying Subtenant), Landlord shall not
disturb the Qualifying Subtenant's possession under the Qualified Sublease and
shall otherwise recognize the Qualifying Subtenant's right to continued
possession of the portion of the Premises subleased to such Qualifying
Subtenant, subject to the terms and conditions set forth herein and pursuant to
the terms and conditions of such Nondisturbance Agreement. For the purposes of
this Section 10.8 the following definitions shall apply:
"Qualifying Subtenant" shall mean a subtenant, as of the date
of the execution of the Nondisturbance Agreement and as of the Lease
termination:
(i) that complies with all requirements of this Article;
(ii) is not an Affiliate, Successor or Business Group of
Tenant;
(iii) is an "investment grade" credit (i.e., BBB+ as rated by
Standard and Poors), or if such subtenant is not otherwise rated, has
at such time a "shadow rating" (as determined using the same criteria
utilized by Standard and Poors, Moodys or in the event neither entity
remains in existence, such other rating agency generally recognized by
the investment banking industry reasonably acceptable to Landlord) that
is an "investment grade" credit.
(iv) is not in default of any of its obligations under a
Qualifying Sublease.
"Qualifying Sublease" shall mean a sublease with a Qualifying Tenant:
(i) that complies with all requirements of this Article;
and
(ii) under which the sublease premises consists of either (i)
all of the Premises, or (ii) one or more full floors within the
Premises consisting of either the top floor(s) or the bottom floor(s)
of the Premises (it being the intent that the balance of the Premises
consists of a contiguous unit).
The Nondisturbance Agreement shall contain the following conditions:
(i) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, the Qualifying Subtenant
shall pay to Landlord a per-square foot Base Rent that shall be the greater of
the per square foot Base Rent otherwise payable by Tenant under this Lease at
the time of the Lease termination, or the per square foot Base Rent otherwise
payable by the Qualifying Subtenant under the Qualifying Sublease at the time of
the Lease termination;
(ii) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, the Qualifying Subtenant
will perform and abide by the same obligations under this Lease as Tenant with
respect to the subleased premises under the Qualifying Sublease, including, but
not limited to, the obligation to pay Base Rent and Additional Rent, provided
however that Subtenant will have no right to exercise any of the options under
Articles 32, 33 or 35 hereof or be entitled to those rights contained in Section
36 hereof;
(iii) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, Landlord's obligations as
sublandlord under the Qualifying Sublease will not be greater than Landlord's
obligations under this Lease; and
(iv) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, Landlord will have the
right, at its option, to require that the Qualifying Subtenant enter into a new
lease directly with Landlord for the sublease premises for the remainder of the
term hereof consistent with the rights and obligations of Landlord and Subtenant
under the provisions of this Section 10.8, in which event the Qualifying
Sublease will become null and void. In the event Landlord and Qualifying
Subtenant enter into a direct lease, Landlord will not be liable for any
commission due to a broker with whom the Tenant or the Qualifying Subtenant has
dealt, and Subtenant shall indemnify, defend and hold harmless Landlord from and
against all threatened or asserted claims, liabilities, costs or damages
(including, without limitation, reasonable attorney's fees and disbursements)
which may be asserted against or incurred by Landlord as a result of any claim
of any broker in connection therewith.
ARTICLE 11
SURRENDER
11.1. Upon the Termination Date, or prior expiration of the Term of
this Lease, Tenant shall peaceably and quietly quit and surrender to Landlord
the Premises, broom clean, in as good condition as on the Commencement Date,
except for normal wear and tear and damage by fire or other casualty not caused
by Tenant, and repairs and replacements other than those which it is Landlord's
obligation to make under Section 8.2, free and clear of tenants and occupants
and with all of Tenant's property removed and, to the extent required by
Landlord in accordance with the terms of this Lease, with Alterations restored
to the extent required by Article 9. Tenant's obligation to observe or perform
this covenant shall survive the Termination Date or prior expiration of the
Term.
ARTICLE 12
HOLDING OVER
12.1. If Tenant holds over possession of the Premises beyond the
Termination Date or prior expiration of the Term, such holding over shall not be
deemed to extend the Term or renew this Lease but such holding over shall
continue upon the terms covenants and conditions of this Lease as a tenant at
will except that Tenant agrees that the charge for use and occupancy of the
Premises for each calendar month or portion thereof that Tenant holds over (even
if such part shall be one day) shall be a liquidated sum equal to one-twelfth
(1/12th) of (i) one hundred fifty percent (150%) of the Base Rent and Additional
Rent required to be paid by Tenant during the calendar year preceding the
Termination Date or earlier expiration of the Term for the first thirty (30)
days of any such holdover, (ii) one hundred seventy-five percent (175%) for the
next thirty (30) days of any such holdover, and (iii) two hundred percent (200%)
for any holdover beyond sixty (60) days after the originally scheduled
Termination Date. The parties recognize and agree that the damage to Landlord
resulting from any failure by Tenant to timely surrender possession of the
Premises will be extremely substantial, will exceed the amount of the monthly
Base Rent and Additional Rent payable hereunder and will be impossible to
accurately measure. Nothing contained in this Lease shall be construed as a
consent by Landlord to the occupancy or possession by Tenant of the Premises
beyond the Termination Date or prior expiration of the Term, and Landlord, upon
said Termination Date or prior expiration of the Term, or at any time thereafter
(and notwithstanding that Landlord may accept from Tenant one or more payments
called for by this Section 12.1), shall be entitled to the benefit of all legal
remedies that now may be in force or may be hereafter enacted relating to the
immediate repossession of the Premises. The provisions of this Article shall
survive the Termination Date or earlier expiration of the Term.
ARTICLE 13
LANDLORD'S SERVICES
13.1. Landlord agrees to provide during the Term the services listed in
Section 13.2. Subject to the provisions of Section 13.2(iii), services provided
during Business Hours are included in Operating Expenses pursuant to Article 5
except as otherwise expressly provided in this Article 13. Subject to the
provisions of Section 13.2(c), services utilized by Tenant during other than
Business Hours shall not be part of Operating Expenses, but shall be billed to
Tenant by Landlord on the basis of Tenant's usage of such services (which shall
be allocated among any other tenants that have also requested overtime services
during the same period), as requested by Tenant from time to time, as the charge
for such services is reasonably determined by Landlord from time to time, based
upon the actual costs incurred by Landlord for such services without mark-up.
Landlord shall make all of the services available to Tenant during other than
Business Hours provided that Tenant gives Landlord sufficient notice of Tenant's
requirement for the additional service (in the case of heating and
air-conditioning, the notice required by Section 13.2).
13.2. (i) Services shall consist of the following:
(a) Hot and cold water at points of supply
provided for general use of the tenants in the Building; central heat and air
conditioning in accordance with the Design Criteria; provided, however, that
heating and air conditioning service to the Premises and to the interior Common
Areas at times other than for Business Hours shall be furnished only upon the
written request of Tenant delivered to Landlord prior to 3:00 p.m. the date
preceding the date for which such use is requested, or by 3:00 p.m. on Friday
for weekend use. Landlord shall use reasonable efforts to provide such services
in the event Tenant shall request such services after the aforesaid deadline.
For the first year of the Term, heating and cooling additional services shall be
billed at the rate of $75.00 per zone per Building floor (each zone comprising
one-half of a floor) for each hour of use or part thereof (thereafter, Landlord
may increase the charge therefor based on any increases in the actual cost of
providing such services without mark-up).
(b) Repair and maintenance and electric
lighting service for all Common Areas including repair and maintenance of the
elevators, repair, maintenance, cleaning and snow removal for the exterior
sidewalks, and care, maintenance and replacement of landscaped areas of the
Property.
(c) Janitor service, as described in Exhibit
"D"; provided, however, if Tenant's floor or wall coverings or other
improvements (including, without limitation, kitchen and dining facilities, if
any) require special treatment and Tenant requests such special treatment,
Tenant shall pay the actual additional cleaning cost attributable thereto as
Additional Rent upon presentation of an itemized invoice therefor by Landlord.
(d) Building security, as described in Exhibit
"H". Landlord shall provide at least one security person in the main lobby area
of the Building twenty-four hours per day, seven days per week.
(e) Building Electric and Tenant Electric in
accordance with the Design Criteria.
(f) All fluorescent and incandescent bulb
replacement in the Premises necessary to maintain the lighting provided as part
of the Tenant's Improvements (provided that Tenant may elect, upon prior notice
to Landlord, to assume the responsibility for such bulb replacement within the
Premises) and fluorescent and incandescent bulb replacement in the Common Areas.
Unless Tenant otherwise elects to assume the responsibility to replace such
bulbs at Tenant's expense, replacement of fluorescent and incandescent bulbs in
the Premises shall be provided by Landlord at Tenant's expense and not included
in Operating Expenses. Replacement of bulbs in spaces leased to other tenants of
Landlord shall be billed to said tenants on an individual basis and not included
in Operating Expenses. Replacement of bulbs in the Common Areas shall be
included in Operating Expenses.
(ii) Notwithstanding anything to the contrary contained in
this Section 13.2 above, Tenant shall have the right to elect, upon no less than
three (3) months notice, to assume all obligations for the performance of
cleaning and/or security services within the Premises ("Assumed Service"). Upon
such election by Tenant, Landlord shall not be required to, and shall not,
furnish the Assumed Service specified in Tenant's notice for the balance of the
Term. Tenant, subject to Landlord's prior approval (which shall not be
unreasonably withheld, conditioned or delayed), may select and hire its own
contractors to perform the Assumed Service for the Premises. Effective as of the
date of the termination of Landlord's provision of the Assumed Services,
Landlord shall provide to Tenant an adjustment in Additional Rent reflecting the
savings in the Base Year Operating Expenses realized by Landlord as a result of
being relieved of its obligation to perform such Assumed Services, and
thereafter Tenant's Percentage of increases in Operating Expenses shall exclude
the costs for the Assumed Services. Landlord agrees to negotiate with its
contractors for the aforesaid services on a unit cost basis.
(iii) Tenant shall have the right to request that Landlord
provide building services to the Premises for up to five (5) Building Holidays
which occur on weekdays during a calendar year, provided Tenant gives Landlord
not less than ten (10) business days prior notice for each such Building Holiday
(except for Thanksgiving and Christmas, for which thirty (30) days notice shall
be required). If Tenant makes such election, the provisions of this Article 13
shall apply to the Building Holiday in such calendar year as if such Building
Holiday were not a Building Holiday with all services that are provided during
Business Hours without additional charge.
(iv) Landlord shall program six passenger elevators consisting of
elevators 1, 2 and 3 in the North Bank and elevators 6.7 and 8 in the South Bank
as indicated on the ground floor plan attached as Exhibit B-1 of the Work
Agreement in order to limit access from the first floor lobby to only the floors
upon which the Premises is located.
13.3. (i) The failure of Landlord to any extent to furnish, or the
interruption or termination of, the services provided for in this Article in
whole or in part resulting from the events described in the definition of
Excusable Delay shall not (except as provided in Section 13.3 (ii) render
Landlord liable in any respect, nor be construed as an eviction of Tenant, nor
(except as provided in Section 13.3 (iii)) work an abatement of rent, nor
relieve Tenant from the obligation to fulfill any covenant or agreement hereof.
Should any of the equipment or machinery used in the provision of such services
cease to function properly for any cause, Tenant shall have no claim (except as
provided in Section 13.3 (iii)) for offset or abatement of rent or (except as
provided in Section 13.3(ii) damages on account of reasonable interruption in
service occasioned thereby or resulting therefrom. Landlord shall proceed with
due diligence to restore any interruption in services. Landlord shall have the
right temporarily to interrupt services in order to make any necessary repairs
or replacements to, or to otherwise service, the Building's systems.
(ii) In the event that the HVAC system, electricity or all
passenger elevator service provided to the Premises shall cease or be
interrupted so as to render the Premises or a portion of the Premises consisting
of no less than 25,000 square feet of space within the Premises untenantable for
the uses permitted under this Lease and thereby prevents Tenant from (and
Tenant, in fact ceases) conducting its business operations therein and such
cessation or interruption has not resulted from a failure by Tenant to perform
any of its obligations hereunder, and such interruption or cessation results
from a cause which is within the Landlord's reasonable control to remedy (such
as repair to the Building Systems), then if such cessation or interruption
continues for ten (10) consecutive business days after Landlord receives notice
of said cessation or interruption from Tenant and Landlord has not commenced
within three (3) business days after receipt of such notice from Tenant and
diligently pursued the necessary repairs thereto (subject to Excusable Delay),
then Tenant shall be entitled to make such repairs or replacements as are
necessary to restore said services to the Premises and Landlord shall reimburse
Tenant for all reasonable costs incurred by Tenant in making such repairs or
replacement within thirty (30) days of written demand therefore by Tenant. In
the event that Landlord fails to make such payment when due, it shall bear
interest until paid at the Default Interest Rate.
(iii) In the event that the HVAC system, electricity or all
passenger elevator service provided to the Premises shall cease or be
interrupted and such interruption renders the Premises or a portion of the
Premises consisting of no less than 25,000 square feet of space within the
Premises untenantable for the uses permitted under this Lease and thereby
prevents Tenant from (and Tenant, in fact ceases) conducting its business
operations therein and such cessation or interruption has not resulted from a
failure by Tenant to perform any of its obligations hereunder, then if such
cessation or interruption and the resulting untenantability continues for a
period of fifteen (15) consecutive days or for twenty-five (25) days over a
thirty (30) day period after Tenant gives Landlord notice of said interruption
or cessation, then Tenant shall be entitled to an appropriate abatement of Base
Rent and Additional Rent (based upon the area rendered untenantable) from (a)
the fifteenth (15th) day for any consecutive fifteen (15) day period, or (b) the
twenty-fifth (25th) day for any interruption occurring for twenty-five (25) days
over any thirty (30) day period after said notice is received, until the service
is restored and the Premises rendered tenantable.
13.4. If Tenant requests that the capacity of the Building's HVAC
system be increased for supplemental air conditioning as a Tenant's Base
Building Change Item as provided in the Work Agreement, Tenant shall have the
right to obtain condenser water in connection with Tenant's independent
supplemental air-conditioning units, in an amount to be designated by Tenant
which shall not exceed 300 tons in the aggregate and which connection shall be
installed in accordance with the provisions of the Work Agreement. Tenant shall
pay Landlord an annual charge for such condenser water at Landlord's then
established rate for condenser water, which charge shall be initially $425.00
per ton per annum, and which charge shall constitute Additional Rent and shall
be payable in equal monthly installments together with Tenant's payment of Base
Rent hereunder, and shall be payable whether or not Tenant utilizes such amount
of condenser water. Landlord shall not be liable to Tenant for any failure or
defect in the supply or character of condenser water supplied to Tenant by
reason of any Law, act or omission of the utility company serving the Building.
<PAGE>
ARTICLE 14
QUIET ENJOYMENT
14.1. Landlord covenants and agrees that, upon the performance by
Tenant of all of the covenants, agreements and provisions hereof on Tenant's
part to be kept and performed, Tenant shall have, hold and enjoy the Premises,
subject to the terms of this Lease, provided, however, that no diminution or
abatement of the Base Rent, Additional Rent or other payment to Landlord shall
be claimed by or allowed to Tenant for reasonable inconvenience or discomfort
arising from the making of any repairs or improvements to the Premises or the
Property, nor for any space taken to comply with any law, ordinance or order of
any Governmental Authority, except as provided for herein. Tenant's rights
hereunder are and shall be subject to the existing state of title to the
Property as of the date hereof, to all existing and future mortgages (subject to
the non-disturbance provisions of Article 17), liens for real estate taxes not
yet due and payable , and to future easements affecting the Property ,
including, by way of illustration and not limitation, easements for storm and
sanitary sewers, drainage ditches and public utilities, provided that the same
will not adversely affect Tenant's ability to use Premises as a first class
commercial office.
ARTICLE 15
DEFAULT
15.1. If during the Term any one or more of the following acts or
occurrences shall happen, it shall constitute an Event of Default hereunder:
(i) Tenant shall fail to pay any Base Rent, Additional Rent or
other sum of money due hereunder when such sum is due and such failure shall
continue for a period of ten (10) days after written notice of such default is
given to Tenant from Landlord that said amounts are due and unpaid; or
(ii) Tenant shall fail to comply with any provision of this
Lease or any other agreement between Landlord and Tenant with respect to the
Premises not requiring the payment of money, and such failure shall continue for
a period of thirty (30) days after written notice of such default is given to
Tenant, provided however, that if such default is capable of being cured within
a reasonable period, but cannot be cured within such thirty (30) day period,
then Tenant shall have such period of time longer than thirty (30) days as is
reasonably required to diligently cure such default; or
(iii) the leasehold hereunder demised shall be taken on
execution or other process of law in any action against Tenant; or
(iv) Tenant shall become insolvent or unable to pay its debts
as they become due, or Tenant notifies Landlord in writing that it anticipates
either condition; or
(v) Tenant takes any action to, or notifies Landlord in
writing that Tenant intends to file a petition under any section or chapter of
the national Bankruptcy Code, as amended from time to time, or under any similar
law or statute of the United States or any State thereof, or a petition shall be
filed against the Tenant under any such statute (which involuntary bankruptcy is
not dismissed within sixty (60) days of filing) or Tenant notifies Landlord in
writing that it knows such a petition will be filed; or
(vi) a receiver or trustee shall be appointed for Tenant's
leasehold interest in the Premises or for all or a substantial part of the
assets of Tenant which is not vacated or stayed within thirty (30) days of such
appointment.
Provided, however, that the conditions described in subparagraphs (iii), (iv)
and (v) above shall not be deemed to be an Event of Default, if Tenant is not
otherwise in default of any of the terms and conditions of this Lease at the
time that such event occurs, and Tenant continues to utilize the Premises in the
usual course of business, and not for the purpose of liquidation or dissolution
of a bankrupt estate, and Tenant fully and faithfully performs all of the terms
and conditions of this Lease during such insolvency, bankruptcy or receivership.
ARTICLE 16
LANDLORD'S RIGHTS UPON TENANT'S DEFAULT
16.1. If any Event of Default occurs, Landlord may, notwithstanding the
fact that Landlord may have other remedies hereunder or at law or in equity, by
notice to Tenant, designate a date, not less than ten (10) business days after
the giving of such notice, on which this Lease shall terminate; and if such
Event of Default remains uncured upon the expiration of said ten (10) business
day period, on such date the Term of this Lease and the estate hereby granted
shall expire and terminate with the same force and effect as if the date
specified in such notice were the Termination Date and all rights of Tenant
hereunder shall expire and terminate but Tenant shall remain liable as provided
in this Lease, and Landlord shall have the right to remove all persons, goods,
fixtures and chattels from the Premises, by reasonable force or otherwise,
without liability or damages to Tenant.
16.2. If this Lease is terminated as provided in Section 16.1, or as
permitted by law, Tenant shall peaceably quit and surrender the Premises to
Landlord, and Landlord may, without further notice, enter upon, re-enter,
possess and repossess the same by summary proceedings, ejectment or other legal
proceeding (except for the possession by a Qualifying Subtenant with which
Landlord has entered into a Nondisturbance Agreement pursuant to Section 10.8
hereof), and again have, repossess and enjoy the same as if this Lease had not
been made, and in any such event neither Tenant nor any person claiming through
or under Tenant shall be entitled to possession or to remain in possession of
the Premises, and Landlord at its option shall forthwith, notwithstanding any
other provision of this Lease, be entitled to recover from Tenant as and for
damages either:
(i) the excess, if any, of (1) all Base Rent and Additional
Rent (conclusively presuming the Additional Rent to be the same as was payable
for the calendar year immediately preceding such termination) reserved hereunder
for the unexpired portion of the Term over (2) the aggregate fair rental value
of the Premises at the time of termination for such unexpired portion of the
Term, discounted at the rate of eight and one-half (8-1/2%) percent per annum to
then present worth plus an amount equal to any Reletting Expenses (as defined in
Paragraph (ii) of this Section 16.2); or
(ii) amounts equal to the Base Rent and Additional Rent which
would have been payable by Tenant from time to time had this Lease not so
terminated, or had Landlord not so re-entered the Premises, payable on the dates
that such payments would have otherwise been payable following such termination
and until the Termination Date; provided, however, that if Landlord shall relet
the Premises during said period, Landlord shall credit Tenant with the net rent
received by Landlord from such reletting, such net rents to be determined by
first deducting in a lump sum (and not on an amortized basis) from the gross
rents as and when received by Landlord from such reletting, the expenses
incurred or paid by Landlord in terminating this Lease or in re-entering the
Premises and in securing possession thereof, as well as the expenses of
reletting (which reletting expenses shall be prorated for any reletting that
extends for a term beyond the remaining Term hereof), including altering and
preparing the Premises for new tenants, brokers' commissions, attorney fees, and
all other expenses properly chargeable against the Premises and the rental
therefrom (collectively, "Reletting Expenses"), it being understood that any
such reletting may be for a period shorter or longer than the remaining term of
this Lease, but in no event shall Tenant be entitled to receive any excess of
such net rents over the sums payable by Tenant to Landlord hereunder, nor shall
Tenant be entitled in any suit for the collection of damages pursuant to this
Subsection 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. If the
Premises or any part thereof should be relet in combination with other space or
otherwise, then proper apportionment on a square foot basis (for equivalent
space) shall be made of the rent received from such reletting and of the
expenses of reletting. Suit or suits for the recovery of such damages, or any
installments of such damages, may be brought by Landlord from time to time at
its election, and nothing contained herein shall be deemed to require Landlord
to postpone suit until the date when the term of this Lease would have expired
if it had not been so terminated under the provisions of Section 16.1, or under
any provision of law, or had Landlord not re-entered the Premises.
16.3. Nothing contained herein shall limit or prejudice the right of
Landlord, in any bankruptcy or reorganization or insolvency proceedings, to
prove for and obtain as damages by reason of such termination or by reason of
disaffirmance of this Lease by Tenant, an amount equal to the maximum allowed by
any bankruptcy or reorganization or insolvency proceedings, or to prove for and
obtain as damages by reason of such termination, an amount equal to the maximum
allowed by any statute or rule of law whether such amount be greater, equal to,
or less than any of the sums referred to in Section 16.2.
16.4. If Tenant shall default in the keeping, observance or performance
of any covenant, agreement, term, provision or condition herein contained,
Landlord, without thereby waiving such default, may perform the same for the
account and at the expense of Tenant immediately or at any time thereafter and
without notice in the case of emergency and in any other case if such default
continues beyond any applicable notice and cure period as provided in this
Lease. All reasonable out-of-pocket costs and expenses incurred by Landlord
(plus interest thereon at the Default Interest Rate, from the date such costs
and expenses were incurred by Landlord until repaid by Tenant) in connection
with any such performance by it for the account of Tenant and also all
reasonable costs and expenses, including reasonable counsel fees and
disbursements incurred by Landlord in any action or proceeding (including any
summary dispossess proceeding) brought by Landlord to enforce any obligation of
Tenant and/or right of Landlord under this Lease or right of Landlord in or to
the Premises, shall be paid by Tenant to Landlord, as Additional Rent, upon
demand.
16.5. No right or remedy conferred upon or reserved to Landlord shall
be exclusive of any other right or remedy, and any right and remedy shall be
cumulative and in addition to every other right or remedy given hereunder or now
or hereafter existing at law. The failure of Landlord to insist at any time upon
the strict performance of any covenant or agreement or to exercise any right,
power or remedy contained in this Lease shall not be construed as a waiver or
relinquishment thereof for the future. A receipt by Landlord of any installment
of Base Rent or Additional Rent with knowledge of the breach of any covenant or
agreement contained in this Lease shall not be deemed a waiver of such breach,
and shall not be deemed to have been waived unless expressed in writing and
signed by Landlord. Landlord shall be entitled to accept less than the full
amount due on account of Base Rent and Additional Rent without thereby waiving
the right to collect the balance due. Landlord shall be entitled, to the extent
permitted by applicable law, to injunctive relief in case of the violation, or
attempted or threatened violation, of any covenant, agreement, condition or
provision of this Lease or to a decree compelling performance or any covenant,
agreement, condition or provision of this Lease, or to any other remedy allowed
Landlord by law.
16.6. Tenant hereby waives all right of redemption to which
Tenant or any person claiming under Tenant might be entitled by law now or
hereafter in force.
16.7. Landlord agrees that i t shall use commercially reasonable
efforts to mitigate its damages.
16.8. Unless expressly provided herein as the exclusive remedy of
Tenant, no remedy conferred upon or reserved to Tenant in the event of a default
by Landlord of its obligations under this Lease shall be exclusive of any other
right or remedy to which Tenant may be entitled at law or in equity.
ARTICLE 17
SUBORDINATION AND ESTOPPEL
17.1. This Lease and all rights of Tenant hereunder are subject and
subordinate at all times to the Underlying Lease Agreement and all other ground
or underlying leases heretofore or hereafter made by Landlord, the City and/ or
the Port Authority (collectively, "Superior Leases") and to all fee leasehold
mortgages which may now or hereafter affect the Building of which the Premises
form a part, and to all renewals, modifications, consolidations, replacements
and extensions thereof. This clause shall be self-operative and no further
instrument or subordination shall be required by any mortgagee. In confirmation
of such subordination, Tenant shall execute promptly any reasonable instrument
that Landlord may request. Landlord shall obtain from any current or future
mortgagee of Landlord, a non-disturbance agreement in the form of Exhibit "E"
attached hereto or in such other form as may be required by such mortgagee and
is reasonably acceptable to Tenant, which shall provide that possession or the
rights of Tenant shall not be disturbed in the event of the foreclosure of any
such mortgage arising out of any default thereunder or by the delivery of a deed
in lieu of foreclosure of such mortgage so long as Tenant shall not be in
default, uncured, pursuant to the terms and conditions of this Lease. Tenant
further agrees at the option of the holder of any such mortgage to attorn to the
holder of any such mortgage following the foreclosure of such mortgage or the
granting of a deed in lieu thereof. Notwithstanding any provision of this
Section 17.1 to the contrary, upon notice to Tenant by a mortgagee, this Lease
shall become superior, in whole or in part, to the lien of any mortgage held on
the property by said mortgagee.
17.2. Landlord shall obtain for and deliver to Tenant and Tenant
agrees to execute and deliver, an agreement in recordable form and in
substantially the form annexed hereto as Exhibit "F" (or in such other form as
may be reasonably required by the lessor under any Superior Lease and reasonably
acceptable to Tenant, which form shall provide that the possession and rights of
the Tenant shall not be disturbed in the event of the expiration or termination
of the Superior Lease so long as Tenant shall not be in default beyond
applicable cure periods under this Lease), as executed by the City and the Port
Authority or the present or future lessor under any Superior Lease.
17.3. (i) Tenant shall at any time and from time to time within ten
(10) days of receipt of written request therefor, execute, acknowledge and
deliver to Landlord an estoppel certificate, in form attached hereto as Exhibit
"G" or, at Landlord's option, such other form as is reasonably satisfactory to
Landlord and Tenant, certifying (i) whether this Lease is unmodified and in full
force and effect (or, if there have been modifications, whether the same is in
full force and effect as modified and stating the modifications), (ii) the dates
to which Base Rent and Additional Rent have been paid in advance, if any, (iii)
whether any options granted to Tenant pursuant to the provisions of this Lease
have been exercised, (iv) whether or not to the best knowledge of the signer,
Landlord is in default in performance of any of its obligations under this
Lease, and if so, specifying each such default of which Tenant may have
knowledge, (v) whether Tenant has received notice that it is in default in
performance of any of its obligations under this Lease, and if so, specifying
each such default, and (vi) as to any other matters reasonably requested by
Landlord, it being intended that any such certificate delivered pursuant to this
Section 17.3 may be relied upon by a prospective purchaser of Landlord's
interest or a mortgagee of Landlord's interest or assignee of any mortgage under
Landlord's interest in the Property or any other party which Landlord wishes to
receive said estoppel certificate.
(ii) Landlord shall at any time and from time
to time within ten (10) days of receipt of written request therefor, execute,
acknowledge and deliver to Tenant an estoppel certificate in such reasonable
form as is required by Tenant and Landlord, certifying (i) whether this Lease is
unmodified and in full force and effect (or, if there have been modifications,
whether the same is in full force and effect as modified and stating the
modifications), (ii) the dates to which Base Rent and Additional Rent have been
paid in advance, if any, (iii) whether any options granted to Tenant pursuant to
the provisions of this Lease have been exercised, (iv) whether or not to the
best knowledge of the signer, Tenant is in default in performance of any of its
obligations under this Lease, and if so, specifying each such default of which
Landlord may have knowledge, (v) whether Landlord has received notice that it is
in default in performance of any of its obligations under this Lease, and if so,
specifying each such default, and (vi) as to any other matters pertaining to the
terms of this Lease reasonably requested by Tenant, it being intended that any
such certificate delivered pursuant to this Section 17.3 may be relied upon by a
prospective assignee or sublessee or any other party which Tenant wishes to
receive said estoppel certificate.
17.4. Tenant understands that, if by reason of a default on the part of
Landlord in performing its obligations under the Underlying Lease Agreement or
if for any other reason of any nature whatsoever the Underlying Lease Agreement
and the leasehold estate of Landlord are terminated by summary dispossess
proceedings or otherwise, Tenant, at the request of the City or the Port
Authority, shall attorn to and recognize the City and the Port Authority as the
Landlord under this Lease, provided that the City and the Port Authority shall
theretofore have entered into a non-disturbance agreement in reasonable and
customary form which shall provide that the possession and rights of the Tenant
shall not be disturbed in the event of the expiration or termination of the
Underlying Lease Agreement so long as Tenant shall not be in default beyond
applicable cure periods under this Lease (the "Underlying Lease Non-Disturbance
Agreement"). Tenant covenants and agrees to execute and deliver, at any time and
from time to time, upon the request of the Port Authority and the City, any
reasonable instrument which may be necessary or appropriate to evidence such
attornment, provided that it shall theretofore have received the aforementioned
Underlying Lease Non-Disturbance Agreement from the City and the Port Authority.
Provided that the Underlying Lease Non-Disturbance Agreement has been entered
into, Tenant further waives the provisions of any statute or rule of law now or
hereinafter in effect which may terminate this Lease or give or purport to give
Tenant any right of election to terminate this Lease or to surrender possession
of the Premises demised hereby in the event the Underlying Lease Agreement
terminates and agrees that this Lease shall not be affected in any way
whatsoever by any such termination. Unless the Underlying Lease Non-Disturbance
Agreement has been entered into, nothing contained herein shall obligate the
City or the Port Authority to request Tenant to attorn or to accept such
attornment from Tenant. In the event the Underlying Lease Non-Disturbance
Agreement is entered into and the Ground Lease between the Port Authority and
the City (as defined in the Underlying Lease Agreement)expires as a result of
the termination or expiration of the Underlying Lease Agreement, Tenant shall
attorn to the Port Authority.
17.5. Notwithstanding the provisions of Section 17.5, nothing contained
in this Article 17 shall obligate Tenant to attorn to the City or the Port
Authority unless the City, Port Authority and Tenant have entered into the
Underlying Lease Non-Disturbance Agreement.
ARTICLE 18
DAMAGE BY FIRE OR OTHER CASUALTY
18.1. If the Premises or any part thereof shall be damaged by fire or
other casualty, Tenant shall give prompt written notice thereof to Landlord. In
the event of any fire or other casualty to the Building, Landlord shall, within
ninety (90) days of such fire or other casualty, provide Tenant with a written
notice (the "Landlord's Notice") in accordance with this Article 18. If by
reason of a fire or other casualty (i) the Building shall be totally damaged or
destroyed or (ii) the Building shall be so damaged or destroyed (whether or not
the Premises are damaged or destroyed), that, as determined by an independent,
reputable licensed architect or engineer selected by Landlord, the completion of
the Landlord's Work (defined below) shall require both more than one (1) year
and the expenditure of more than seventy percent (70%) of the full insurable
value of the Building (which, for purposes of this Section 18.1, shall mean
replacement cost less the cost of footings, foundations and other structures
below the street and first floors of the Building) immediately prior to the fire
or other casualty, then in any such case, Landlord may at its option terminate
this Lease by so notifying Tenant as part of Landlord's Notice. If Landlord does
not elect to terminate the Lease, Landlord's Notice shall specify the date as
determined by an independent, reputable, licensed architect or engineer selected
by Landlord, by which the Premises and those portions of the Building affecting
the use and enjoyment of the Premises can be reconstructed after the occurrence
of such fire or casualty. In the event Landlord's Notice provides that the
period for restoration is less than 365 days and Tenant reasonably determines
that such restoration period will exceed 365 days, Tenant shall have the right,
upon notice to Landlord given no later than five (5) days after Tenant's receipt
of Landlord's Notice, to submit such dispute to expedited arbitration in
accordance with the provisions of Article 38. If Landlord's Notice indicates
that such reconstruction of the Premises and those portions of the Building
affecting the use and enjoyment of the Premises shall exceed three hundred
sixty-five (365) days and Landlord does not elect to terminate the Lease as
provided in Landlord's Notice, Tenant shall have the right, to be exercised
within thirty (30) days after receipt of Landlord's Notice, to elect, by notice
to Landlord, to cancel this Lease, (hereinafter called "Tenant's Notice"). In
the event the Lease is not terminated by either Landlord or Tenant as
hereinabove permitted, Landlord shall, subject to Excusable Delay, commence and
proceed with reasonable diligence to restore the Premises and the portion of the
Building affecting the use and occupancy of the Premises. If Landlord indicates
in its Notice that the Premises and the portions of the Building affecting the
use and occupancy of the Premises can be restored within three hundred
sixty-five (365) days and such portions of the Building are not restored within
three hundred sixty-five (365) days after Landlord's undertaking such
restoration (except for Excusable Delay), or if Landlord in Landlord's Notice
indicates that it will take a period longer than three hundred sixty-five (365)
days to restore the Premises and said portion of the Building and the Premises
and said portions are not restored within such longer period (except for
Excusable Delay), then this Lease and the Term hereof may at the election of
Tenant be terminated by notice in writing from Tenant to Landlord, providing
Tenant serves such notice on Landlord at any time after expiration of the three
hundred sixty-five (365) day restoration period or such longer period, if
applicable, which notice shall be effective thirty (30) days after the giving of
such notice if the Premises and the portion of the Building affecting the use
and occupancy of the Premises have not been restored by that date. If the
Premises and the portion of the Building affecting the use and occupancy of the
Premises have been restored within said thirty (30) day period from the date the
notice is given, the Lease shall continue in full force and effect. If the Lease
is terminated by either Landlord or Tenant as above permitted, this Lease shall
terminate as if the date of such termination shall have been the Termination
Date as defined herein. Landlord shall not be liable for any inconvenience, loss
of business or annoyance to Tenant or damage to the business of Tenant resulting
in any way from such damage or the repair thereof, except that Landlord shall
allow Tenant a fair diminution (based upon the square footage) of Base Rent and
Additional Rent during the time and to the extent that the Premises is unfit for
occupancy or untenantable for Tenant's Permitted Use (including the period
beyond the completion of Landlord's Work reasonably necessary for Tenant to
substantially complete the restoration of Tenant Improvements to the extent that
Landlord receives the proceeds of rent insurance for such period). Landlord
agrees to maintain rent insurance in connection with Landlord's property
insurance covering a period of not less than eighteen (18) months, provided that
rent insurance for such period is generally available at commercially reasonable
rates. During the period of any reconstruction undertaken by Landlord, Tenant,
after reasonable notice from Landlord, shall be responsible to remove its
personal property, fixtures and equipment from the damaged area prior to
Landlord's institution of reconstruction work. Landlord shall have no liability
to Tenant with respect to any damage, loss or theft of any such personal
property, fixtures and equipment not so removed. If Landlord is obligated to or
elects to restore the Building as herein provided, with respect to the
restoration of the Premises Landlord shall be obligated to restore only those
portions of the Premises which were originally provided at Landlord's expense
("Landlord's Work"), and the restoration of items in the Premises not provided
at Landlord's expense shall be the obligation of Tenant. Landlord shall be
deemed to have met the deadlines contained in this Article if each of the
following conditions is satisfied by such deadlines: (i) Landlord's Work has
been substantially completed except for details of construction, decoration and
mechanical adjustments which are minor in character, the noncompletion of which
will not materially interfere with Tenant's use and enjoyment of the Premises
for the Intended Use; (ii) all of the Building's sanitary, electrical, elevator,
heating, air conditioning, mechanical and other systems, to the extent they
serve the Premises and lobby area, are completed and in good order and operating
condition except for mechanical adjustments which are minor in character and the
non-completion of which will not materially interfere with Tenant's use and
occupancy of the Premises; and (iii) Landlord shall have obtained (a) a
certificate of approval or temporary or permanent certificate of occupancy for
the Premises or (b) all requirements to obtain a certificate of approval or
temporary or permanent certificate of occupancy for the Premises, other than
Tenant Installations therein, shall have been satisfied.
18.2. Tenant waives the benefit of New Jersey Revised Statutes, Title
46, Chapter 8, Sections 6 and 7, and agrees that Tenant will not be relieved of
the obligations to pay the Base Rent or any Additional Rent in case of damage to
or destruction of the Building, except as provided by this Lease.
18.3. Notwithstanding any of the foregoing provisions to the contrary,
Landlord's obligation to repair the damage and restore and rebuild the Building
and/or the Premises pursuant to this Article shall be conditioned on such
restoration being then lawfully permitted and Landlord being granted all
necessary approvals from the Governmental Authorities, which Landlord shall use
reasonable efforts to obtain.
ARTICLE 19
MUTUAL WAIVER OF SUBROGATION
19.1. Landlord and Tenant shall each secure an appropriate clause, or
an endorsement upon any policy of insurance in force, covering the Property, the
Building, or any personal property, fixtures and equipment or Tenant
Installations located therein or thereon, including, without limitation,
casualty, liability and business interruption policies in force, pursuant to
which the respective insurance companies waive subrogation or permit the
insured, prior to any loss, to agree with a third party to waive any claim it
might have against said third party. The waiver of subrogation or permission for
waiver of any claim hereinbefore referred to shall extend to the agents of each
party and also extend to all other persons and entities occupying or using the
Premises in accordance with the terms of this Lease. In the event that either
Landlord or Tenant shall be unable at any time to obtain one of the provisions
referred to above in any of its insurance policies, Landlord or Tenant, as the
case may be, shall promptly notify the other.
19.2. Subject to the foregoing provisions of this Article 19, and
insofar as may be permitted by the terms of the insurance policies carried by
it, and notwithstanding any provision of this Lease to the contrary, each party
hereby releases the other and its partners, agents and employees (and in the
case of Tenant, all other persons and entities occupying or using the Premises
in accordance with the terms of this Lease) with respect to any claim (including
a claim for negligence) which it might otherwise have against the other party
for loss, damages or destruction with respect to its property by fire or other
casualty (including rental value or business interruption, as the case may be)
occurring during the Term covered by (but only to the extent of the limits of
coverage of) such insurance policies.
ARTICLE 20
CONDEMNATION
20.1. If the whole or substantially the whole (which shall be deemed to
be more than 60% of the Rentable Area) of the Building or the Premises should be
taken for any public or quasi-public use, by right of eminent domain or
otherwise, or should be sold in lieu of condemnation, then this Lease shall
terminate as of the date when physical possession of the Building or the
Premises is taken by the condemning authority. If less than the whole or
substantially the whole of the Building is taken, Landlord may terminate this
Lease in the event that the Building requires demolition. If (i) fifteen (15%)
percent or more of the Premises is taken or sold, (ii) any such taking or
conveyance prohibits the use of more than 30% of the Premises for the Permitted
Use, or (ii) Tenant's access to the Premises (unless reasonable alternative
means of access is provided) is so taken or sold, Tenant may terminate this
Lease by giving written notice thereof to Landlord in which event this Lease
shall terminate as of the date when physical possession of such portion of the
Property is taken by the condemning authority. If this Lease is not so
terminated upon any such taking or sale, the Base Rent payable hereunder shall
be equitably adjusted by multiplying the annual Base Rent then in effect by a
fraction, the numerator of which is the number of square feet of Rentable Area
of the Premises after the taking and the denominator of which is the number of
rentable square feet in the Premises prior to such taking, and Tenant's
Proportionate Share shall be adjusted to reflect any change in the Rentable Area
of the Premises and Rentable Area of the Building, and Landlord shall, to the
extent Landlord deems feasible, restore the Building and the Premises to
substantially their former condition, but such work shall not exceed the scope
of the work done by Landlord in originally constructing the Building and
installing the Tenant Improvements in the Premises. All amounts awarded upon a
taking of any part or all of the Property shall belong to Landlord or the holder
of any mortgage affecting the Premises, and Tenant shall not be entitled to and
expressly waives all claim to any such compensation including, without
limitation, any claim for the value of the unexpired portion of this Lease.
20.2. Tenant may make an independent claim in such proceedings for its
personalty, trade fixtures and moving expenses; provided, however, that any such
claim shall in no way affect any portion of any award which the Landlord or the
holder of any mortgage affecting the Premises or the Property shall be entitled
to receive.
ARTICLE 21
[INTENTIONALLY OMITTED]
ARTICLE 22
NOTICES
22.1. Any notice, consent, request or other communication (collectively
"Notices") given pursuant to this Lease must, unless otherwise provided herein,
be in writing, and may, unless otherwise in this Lease expressly provided be
given or be served by depositing the same in the United States mail, postpaid
and certified and addressed to the party to be notified, with return requested,
by facsimile transmission (which shall be followed by hard copy to be delivered
by overnight express mail with a reliable overnight courier) or by overnight
express mail with a reliable overnight courier, or by delivery of the same in
person, or by prepaid telegram, when appropriate, addressed to the party to be
notified, which address for Landlord shall be c/o Steven J. Pozycki at
Landlord's address as hereinbefore set forth (Facsimile No. 973-299-9621) with a
copy to McCarter & English, LLP, Four Gateway Center, 100 Mulberry Street,
Newark, New Jersey 07102, Attention: Martin F. Dowd (Facsimile No.973-624-7070),
and in the case of Tenant shall be at Tenant's address as hereinbefore set
forth; Attn: Director of Corporate Services and Facilities (Facsimile No.
212-850-6772) with a copy at Tenant's address hereinbefore set forth, Attn:
Office of the General Counsel (Facsimile No. 212-983-0529), and a copy to Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention:
Alan J. Pomerantz (Facsimile No. 212-310-8007). Notices delivered by hand shall
be effective upon receipt, and if such delivery is rejected, such rejection of
delivery shall be considered receipt. Notices by mail (except overnight express
mail) shall be effective three (3) days after the date mailed. Notice by
facsimile transmission shall be upon confirmation of transmission, provided that
a hard copy is delivered as provided above. Notices by overnight express mail
shall be effective one (l) day after delivery to the overnight mail service.
Either party may at any time change its address for notices hereunder by
delivering or mailing, as aforesaid, to the other party a notice stating the
change and setting forth the changed address.
ARTICLE 23
NO WAIVER
23.1. No waiver by Landlord or Tenant of any breach by the other of any
of the terms, covenants, agreements or conditions of this Lease shall be
effective unless such waiver is contained in a writing subscribed by the waiving
party and no such waiver shall be deemed to constitute a waiver of any
succeeding breach thereof, or a waiver of any breach of any of the other terms,
covenants, agreements and conditions herein contained.
23.2. No act or thing done by Landlord or Landlord's agents during the
Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid unless in writing and signed
by Landlord.
23.3. The receipt by Landlord of the Base Rent and Additional Rent with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly Base Rent or a lesser amount of the Additional Rent then
due shall be deemed to be other than a payment on account of the earliest
stipulated amount then due, nor shall any endorsement or statement on any check
or payment as Base Rent or Additional Rent be deemed an accord and satisfaction
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such Base Rent or Additional Rent or pursue any
other remedy provided in this Lease.
ARTICLE 24
LANDLORD'S LIABILITY
24.1. Except as otherwise expressly provided in this Lease, Landlord
shall not be liable to Tenant or Tenant's Visitors for any damage, injury, loss
or loss to person or property or interruption in or loss to Tenant's business,
or any claim therefor, based on, arising out of, or resulting from any cause
including, but not limited to, the following: repairs to any portion of the
Premises or the Property; interruption in the use of the Premises; any accident
or damage resulting from the use or operation (by Tenant or any other person or
persons) of elevators, or of heating, cooling, electrical or plumbing equipment
or apparatus; the termination of this Lease by reason of the destruction of the
Premises or the Property; any fire, robbery, theft, mysterious disappearance
and/or any other casualty; the actions of any other tenants of the Landlord or
of any other person or persons; any leakage in any part or portion of the
Premises or Property, or from water, rain or snow that may leak into, or flow
from, any part of the Premises or the Property, or from drains, pipes or
plumbing fixtures in the Property; or any act, omission, or any neglect of
Tenant or Tenant's Visitors in the use of the Premises or Property by Tenant or
Tenant's Visitors.
24.2. Notwithstanding the provisions of Section 24.1, but subject to
the waiver set forth in Article 19 and to the exceptions set forth in Section
24.3, Landlord shall not be released from liability to Tenant or Tenant's
Visitors for any damage, injury, loss, compensation or claim caused by the
willful misconduct or negligence of Landlord or its agents, servants or
employees.
24.3. As an express inducement to Landlord to enter into this Lease,
and notwithstanding any provisions of this Lease to the contrary, Tenant agrees
that any goods, personal property or personal effects, including removable trade
fixtures used or placed by the Tenant or its employees in or about the Premises
or Building, shall be at the sole risk of Tenant, and Landlord shall not in any
manner be held responsible or liable therefor; nor shall Landlord have any
liability to Tenant for any claims based on the interruption of, or loss to,
Tenant's business other than Tenant's express abatement rights as expressly
provided in this Lease. Nor shall Landlord have any liability to Tenant, its
employees, agents, invitees or licensees for losses due to theft or burglary, or
for damage done by unauthorized persons on the Premises and neither shall
Landlord be required to insure against any such losses. Notwithstanding the
foregoing, Landlord shall not be released from liability pursuant to this
Section 24.3 for any damage to Tenant's personal property willfully caused by
any employees of Landlord or its managing agent.
ARTICLE 25
INDEMNIFICATION
25.1. Subject to the waiver set forth in Article 19, Tenant hereby
indemnifies and holds Landlord harmless from all expenses, costs (including
reasonable attorney fees and disbursements), loss, liability and claims based
on, arising out of or resulting from: (i) any act, omission or neglect of Tenant
or Tenant's Visitors or the use of the Premises, Common Areas (or any part
thereof) by Tenant, (ii) any breach by Tenant of its obligations under this
Lease and (iii) any Tenant Installation, Alteration, or other work performed by
Tenant in or about the Premises.
25.2. Subject to the waiver set forth in Article 19 and the exceptions
set forth in Section 24.3, Landlord hereby indemnifies and holds Tenant harmless
from all expenses, costs (including reasonable attorney fees and disbursements),
loss, liability and claims based on, arising out of or resulting from any act,
omission or neglect of Landlord, or Landlord's agents, servants or employees.
25.3. The indemnities set forth in this Article 25 shall survive
the expiration or termination of this Lease.
ARTICLE 26
TENANT'S INSURANCE
26.1. Tenant, at its own expense will maintain with admitted insurers
authorized to do business in the State of New Jersey and which are rated
"A+/XIV" or equivalent in Best's Key Rating Guide, or any successor thereto (or
if there is none, a rating organization having a national reputation) commercial
general liability (in the broadest form then available in New Jersey) against
claims for bodily injury, personal injury, death or property damage occurring
on, in or about the Premises or as a result of ownership of facilities located
on the Premises in amounts not less than $5,000,000.00 per occurrence/aggregate
for bodily injury, personal injury or death, $5,000,000.00 with respect to any
one occurrence, and $3,000,000.00 with respect to all claims for property damage
with respect to any one occurrence with an aggregate of $3,000,000.00. From time
to time during the Term such limits shall be increased to the prevailing level
customarily carried with respect to similar properties in Hudson County, New
Jersey and the surrounding area. Tenant shall be responsible to maintain
casualty insurance on all of its goods, personal property or effects, including
removable trade fixtures located in the Premises.
26.2. The policy of insurance required to be maintained by Tenant
pursuant to Section 26.1 shall name as the insured parties Landlord, Tenant,
Landlord's managing agent, and any mortgagee of Landlord, shall be reasonably
satisfactory to Landlord and shall (a) provide for the benefit of such holder or
holders, that thirty (30) days' prior written notice of suspension,
cancellation, termination, modification, non renewal or lapse or material change
of coverage shall be given to all insured parties and that such insurance shall
be given to all insured parties and that such insurance shall not be invalidated
by any act or neglect of Landlord or Tenant or any owner of the Premises, nor by
any foreclosure or other proceedings or notices thereof relating to the Premises
or any interest therein, nor by occupation of the Premises for purposes more
hazardous than are permitted by such policy, (b) not contain a provision
relieving the insurer thereunder of liability for any loss by reason of the
existence of other policies of insurance covering the Premises against the peril
involved, whether collectible or not, and, (c) include a contractual liability
endorsement evidencing coverage of Tenant's obligation to indemnify Landlord
pursuant to Section 25 hereof.
26.3. Within five (5) business days after the commencement of the Term,
Tenant shall deliver to Landlord original or duplicate policies or certificates
of the insurers evidencing all the insurance which is required to be maintained
hereunder by Tenant certifying that all requirements set forth herein have been
complied with (including, without limitation, a waiver of each insurer's rights
of subrogation pursuant to Section 19.1, the naming of the insureds required
hereunder and the obligation of each insurer to give the notice required
hereunder) and, within thirty (30) days prior to the expiration of any such
insurance, other original or duplicate policies or certificates evidencing the
renewal of such insurance.
26.4. Landlord shall, as part of Operating Expenses, obtain any and all
insurance coverage it deems necessary or appropriate in connection with the use
and operation of the Property, which shall include, but need not be limited to,
"all-risk" property insurance for the full replacement value of the Building
(exclusive of footings and foundations) public liability and any and all other
insurance as Landlord or any mortgagee of Landlord may require. Without limiting
the generality of the foregoing, throughout the Term, Landlord shall maintain
all insurance required under Article 10 of the Underlying Lease Agreement. Any
increase in Landlord's insurance arising solely from any reduction in
deductibles maintained by Landlord in connection therewith after the Base Year
shall not be included as part of Operating Expenses in any subsequent year.
ARTICLE 27
CONSTRUCTION LIENS
27.1. If, because of any act or omission of Tenant, any construction,
mechanics' or other lien, charge or order for the payment of money or otherwise
shall be filed against the Property, the Premises or the Building (whether or
not such lien, charge or order is valid or enforceable as such), Tenant, at
Tenant's expense, shall cause it to be canceled or discharged of record by
bonding or otherwise within thirty (30) days after such filing, and Tenant
shall, in any event, indemnify and save Landlord harmless against and shall pay
all reasonable costs, expense, losses, fines and penalties, including, without
limitation, reasonable attorney's fees and disbursements, related thereto or
resulting therefrom.
ARTICLE 28
DEFINITION OF LANDLORD
28.1. The term "Landlord" as used in this Lease means only the owner
for the time being of the Building. In the event of any transfer of the
Landlord's interest in the Property, the transferring Landlord shall be and
hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder except for liabilities which arose prior to such transfer and
this Lease shall be deemed and construed as a covenant running with the land
without further agreement between the parties or their successors in interest,
and it shall be deemed and construed without further agreement between the
parties or their successors in interest, or between the parties and the
purchaser, grantee, assignee or other transferee that the purchaser, grantee,
assignee or other transferee has assumed and agreed to carry out any and all
covenants and obligations of Landlord hereunder arising from and after the date
of such transfer, subject to the terms of any applicable subordination and
non-disturbance agreement with Tenant.
ARTICLE 29
DEFINITION OF TENANT
29.1. The term "Tenant" as used in this Lease includes Tenant, its
successors and permitted assigns and any person or entity claiming by, through
or under Tenant. Any obligation of or restriction on Tenant imposed by this
Lease shall apply equally to any subtenant or other occupant of the Premises or
any portion thereof.
ARTICLE 30
PERSONAL LIABILITY
30.1. Anything in this Lease to the contrary notwithstanding, the
liability of Landlord to Tenant in the performance by Landlord of its
obligations under this Lease and for any default by Landlord hereunder shall be
limited to the interest of Landlord in the Property and Tenant agrees to look
solely to Landlord's interest in the Property for the recovery of any judgment
from Landlord, it being intended that neither Landlord nor Landlord's agents,
shareholders, officers, directors, partners, principals (disclosed or
non-disclosed) or affiliates shall be personally liable for any judgment or
deficiency.
ARTICLE 31
ISRA COMPLIANCE
31.1. Tenant agrees to comply with all applicable environmental laws,
rules and regulations, including but not limited to, the New Jersey Industrial
Site Recovery Act N.J.S.A. 13:1K-6 et seq. ) ("ISRA"). Tenant represents to
Landlord that it shall not conduct any activity in the Premises which shall
cause it to be considered an "industrial establishment" under ISRA, or otherwise
subject the Premises to the requirements of compliance with ISRA and Tenant
shall not conduct any operations that shall subject the Premises to ISRA.
31.2. Tenant hereby agrees to execute such documents as Landlord
reasonably deems necessary and to make such applications as Landlord reasonably
requires to assure compliance with ISRA; and without limiting the generality of
the foregoing will provide Landlord within ten (10) business days of Landlord's
request for the same, an affidavit in support of a request for a
non-applicability letter by Landlord in the form required under ISRA. Tenant
shall bear all reasonable costs and expenses incurred by Landlord associated
with any required ISRA compliance resulting from the particular nature of
Tenant's use of the Premises (as distinguished from general office use),
including, but not limited to, state agency fees, engineering fees, cleanup
costs, filing fees, and suretyship expenses. As used in this Lease, ISRA
compliance shall include applications for determinations of nonapplicability by
the appropriate governmental authority upon the "closure, terminations or
transfer" of Tenant's operations at the Premises. The foregoing undertaking
shall survive the termination or sooner expiration of the Lease and surrender of
the Premises and shall also survive sale, or lease or assignment of the Premises
by Landlord. Tenant shall immediately provide Landlord with copies of all
written correspondence, reports, notices, orders, findings, declarations and
other materials pertinent to Tenant's compliance with the New Jersey Department
of Environmental Protection's ("DEP") requirements under ISRA as they are issued
or received by the Tenant.
31.3. Tenant shall not generate, store, manufacture, refine, transport,
treat, dispose of, or otherwise permit to be present on or about the Premises,
any Hazardous Substances. except for cleaning products, copy toner and other
products typically used by office tenants, provided such substances are handled
maintained and disposed of in accordance with all Environmental Laws. As used
herein, Hazardous Substances shall be defined as any "hazardous chemical,"
"hazardous substance" or similar term as defined in the Comprehensive
Environmental Responsibility Compensation and Liability Act, as amended (42
U.S.C. 9601, et seq.), the New Jersey Industrial Site Recovery Act, as amended,
(N.J.S.A. 13:1K-6 et seq.), the New Jersey Spill Compensation and Control Act,
as amended, (N.J.S.A. 58:10-23.11b, et seq.), any rules or regulations
promulgated thereunder, or in any other applicable federal, state or local law,
rule or regulation dealing with environmental protection ("Environmental Laws").
31.4. Tenant agrees to indemnify and hold harmless Landlord from and
against any and all liabilities, damages, claims, losses, judgments, causes of
action, costs and expenses (including the reasonable fees and expenses of
counsel) which may be incurred by Landlord, relating to or arising out of any
breach by Tenant of this Article 31 or violation by Tenant of any Environmental
Laws, which indemnification shall survive the expiration or sooner termination
of this Lease. Landlord agrees to indemnify and hold harmless Tenant from and
against any and all liabilities, damages, claims, losses, judgments, causes of
action, costs and expenses (including the reasonable fees and expenses of
counsel) which may be incurred by Tenant, relating to or arising out of any
breach by Landlord of this Article 31 or violation by Landlord of any
Environmental Laws, which indemnification shall survive the expiration or sooner
termination of this Lease.
31.5. Landlord represents and warrants to Tenant that, the Building and
Building systems and improvements shall not be constructed with asbestos or PCBs
or with any Hazardous Substances beyond tolerances permitted under Environmental
Laws and that the New Jersey Department of Environmental Protection has approved
the existing environmental condition of the Land.
ARTICLE 32
RENEWAL OPTIONS
32.1. Provided there is no Event of Default hereunder either as of the
date Tenant notifies Landlord of its interest in extending the Term or as of the
first day of the extension period, Tenant may extend the original Term as it
relates to either (i) the entire Premises, or (ii) a portion of the Premises
consisting of at least sixty percent (60%) of the Rentable Area of the Premises
(the "Renewal Premises"), for two (2) periods of five (5) years each. Tenant
shall notify Landlord of its interest in extending the Term by giving Landlord
notice thereof not less than twenty-one (21) months prior to the expiration of
the Term then in effect, time being of the essence. Tenant's notice of interest
shall specify Tenant's irrevocable election that the renewal apply to the entire
Premises, or a portion of the Premises, and if a portion of the Premises shall
specify the area comprising the Renewal Premises. Any renewal of a portion of
the Premises shall be subject to the following conditions:
(i) the Rentable Area of such portion shall be al least
sixty (60%) percent of the total Rentable Area of the Premises as of the
Commencement Date;
(ii) The portion of the Premises shall consist of entire
floors within the Premises that are a contiguous unit and
(iii) All space within the Premises included within such
Renewal Premises shall be a contiguous unit.
32.2. (i) Upon receipt of Tenant's notice of its interest to exercise
the renewal option, Landlord and Tenant shall determine the annual Base Rent for
the extension period, which shall be equal to ninety-five percent (95%) of the
"fair market rent" (as defined in Section 32.2(ii)) for the Renewal Premises at
the time of the commencement of the extended term.
(ii) The term "fair market rent" shall be the rent that a
willing tenant would pay and a willing landlord would accept in an arms-length
transaction to lease the Renewal Premises for the applicable renewal term,
giving due consideration to the condition of the Renewal Premises as improved,
the fact that the Building is of first class design, the location of the
Building on the waterfront and its proximity to public transportation, the
location of the Renewal Premises in the Building and its quality, the length of
the Term of the Lease, the base year for Operating Expenses, any free rent or
tenant improvement allowances, and all other factors that would be relevant to a
third-party tenant desiring to lease the Renewal Premises for the extended term.
(iii) Within thirty (30) days after Tenant's notice to
Landlord of its interest to extend the Term, Landlord shall notify Tenant of
Landlord's determination of the fair market rent and the annual Base Rent for
the extension period ("Landlord's Rent Notice"). If Tenant disagrees with
Landlord's determination, Tenant shall, within twenty (20) days after receipt of
Landlord's Rent Notice, submit to Landlord Tenant's good faith determination of
the fair market rent and the annual Base Rent for the extension period. If the
parties are unable to agree upon the fair market rent within forty (40) days of
Landlord's Rent Notice, Landlord and the Tenant shall, within fifty (50) days of
Landlord's Rent Notice, mutually agree upon an independent appraiser who is a
member of the American Institute of Real Estate Appraisers, having at least
seven (7) years experience in appraising commercial real estate in Hudson
County, New Jersey (a "Qualified Appraiser") and each submit to such Qualified
Appraiser within sixty (60) days of Landlord's Rent Notice its sealed final
determination of the fair market rental. Each of the Landlord and Tenant may
submit to the independent Qualified Appraiser documentation in support of its
determination of fair market rent. If the parties are unable to agree upon such
independent Qualified Appraiser, either party may request the American
Arbitration Association in Newark, New Jersey, to appoint such independent
Qualified Appraiser which request shall be made no later than fifty (50) days of
the Landlord's Rent Notice. The independent Qualified Appraiser shall, within
thirty (30) days of his/her appointment, select either Landlord's determination
of fair market rent or Tenant's determination of fair market rent as set forth
in each party's sealed bid, which determination shall be binding upon both
Landlord and Tenant; provided that if the lower of Landlord's and Tenant's final
determinations is less than five (5%) percent lower than the higher
determination, then the fair market rents submitted by both shall be averaged.
The parties shall share equally in the cost of any independent Qualified
Appraiser. In the event Tenant fails to submit any information or make any
election by the dates specified (time being of the essence), then Tenant shall
be deemed to have waived its right to dispute the Base Rent as set forth in
Landlord's Rent Notice, and thereupon the Base Rent shall for the extended term
be as set forth in Landlord's Rent Notice. In the event Landlord fails to submit
Landlord's final determination by the date specified (time being of the
essence), then Landlord shall be deemed to have waived its right to dispute the
Base Rent as set forth in Tenant's final determination, and thereupon the Base
Rent shall for the extended term be as set forth in Tenant's final
determination.
32.3 Not later than the date (the "Renewal Date") which is the earlier
to occur of (a) 15 days after the final determination of the Base Rent to be
paid during a particular extension period as hereinabove provided, and (b)
fifteen days after the date which such final determination would otherwise have
been made pursuant to the time periods set forth above but for any delay caused
by Tenant, Tenant shall have the right to give Landlord notice of Tenant's
exercise of the renewal option at the fair market rental as determined above,
time being of the essence. In the event Tenant fails to exercise a renewal
option by the Renewal Date, the renewal option shall be deemed waived and of no
further force or effect. All of the provisions of this Lease shall apply during
the extension period, other than (i) the amount of Base Rent payable hereunder,
which shall be in the amount determined pursuant to Section 32.2 above, (ii) any
reduction in the Premises, the recalculation of Tenant's Percentage and a
pro-rata reduction in parking based upon such reduction in the Premises, as a
result in Tenant's election to renew as to less than the entire Premises as
provided in Section 32.1 above, (iii) the number of renewal options remaining to
be exercised, and (iv) the provisions of the Work Agreement.
ARTICLE 33
RIGHT OF FIRST OFFER
33.1. Provided there exists no Event of Default and subject to (i) any
rights of tenants in the Building and tenants in the Phase II Building (provided
that Landlord or an affiliate of Landlord constructs the Phase II Building) to
extend their respective leases pursuant to an express renewal option provided in
such existing tenant's lease, and (ii) the rights in the Phase II Building of
any tenant in the Phase II Building that leases 200,000 square feet as set forth
in Section 33.9, Landlord grants to Tenant the right of first offer to lease
space in both the Building and the Phase II Building (in the event Landlord or
any affiliate of Landlord constructs and then owns the Phase II Building)
(collectively, the "First Offer Space") which becomes available after the
initial leasing of the First Offer Space, upon the following terms and
conditions set forth in this Article 33.
33.2. Landlord shall give to Tenant a notice (an "Offer Notice") that
such First Offer Space is available or shall become available (the First Offer
Space that is the subject of any Offer Notice is herein called the "Proposed
Space"). Each Offer Notice shall (A) designate the location and set forth the
number of rentable square feet contained within the Proposed Space to which such
notice pertains and shall be accompanied by a floor plan delineating such
Proposed Space), (B) set forth the date after the date of such Offer Notice upon
which Landlord anticipates being able to deliver such Proposed Space to Tenant
(such dated is called the "Anticipated PS Inclusion Date"), (C) set forth
Landlord's determination of the fair market rental for such Proposed Space
("Landlord's PS Rent Determination"), (D) set forth Tenant's time to give an
Acceptance Notice or waive its right, which shall not be less than thirty (30)
days, and (E) set forth the term for which Landlord is willing to lease the
Proposed Space.
33.3 Tenant, by notice ("Acceptance Notice") given to Landlord on or
before the date that is thirty (30) days after Tenant's receipt of an Offer
Notice, may irrevocably elect to include the Proposed Space in the Premises. The
failure by Tenant to furnish an Acceptance Notice to Landlord in a timely
manner, as required above, shall constitute a waiver by Tenant of all of
Tenant's rights under this Article 33 with respect to the next leasing of the
Proposed Space for which Tenant is given notice and shall release Landlord from
any further obligation to offer the Proposed Space to Tenant prior to the next
leasing thereof. Notwithstanding the foregoing, if Landlord either (i) fails to
enter into a lease for such Proposed Space on substantially the same terms and
conditions as set forth in Landlord's notice to Tenant within twelve (12) months
of the date of Landlord's notice to Tenant, or (ii) desires to lease the
Proposed Space for less than ninety percent (90%) of the Landlord's PS Rent
Determination, then Tenant's right of first offer with respect to such Proposed
Space shall be reinstated, and Landlord shall not lease the Proposed Space to a
third party without Landlord again offering such Proposed Space to Tenant
pursuant to the provisions of this Article 33.
33.4 If Tenant timely delivers an Acceptance Notice with respect to any
Proposed Space, then, on the applicable Proposed Space Inclusion Date (as
defined below), such Proposed Space shall become part of the Premises, upon all
of the terms and conditions set forth in this Lease, and in order to give effect
thereto: (a) the rentable area of the Premises shall be increased by the number
of rentable square feet in the Proposed Space in question; and (b) the Base Rent
payable under this Lease shall be increased to include the Base Rent for the
Proposed Space (as determined for the Proposed Space as hereinabove set forth).
"Proposed Space Inclusion Date" as to any Proposed Space, means the date upon
which Landlord delivers to Tenant vacant possession of such Proposed Space in
its "as-is" condition.
33.5 Landlord shall use reasonable efforts to deliver vacant possession
of any applicable Proposed Space to Tenant on the Anticipated PS Inclusion Date
therefor (and, failing which, shall continue to use reasonable efforts to
deliver vacant possession of such Proposed Space to Tenant as soon as reasonable
thereafter). In the event Landlord, despite Landlord's reasonable efforts, is
unable to deliver vacant possession of the Proposed Space within five (5) months
of the Anticipated PS Inclusion Date, Tenant shall have the right, upon notice
to Landlord to be given at any time after the expiration of such five (5) month
period, to revoke its Acceptance Notice, whereupon neither party shall have any
further liability to the other with respect to such Proposed Space.
33.6 If Tenant fails timely to give an Acceptance Notice with respect
to any Proposed Space, then Tenant rights with respect to such Proposed Space
shall expire (except as provided in Section 33.3), and thereafter Landlord shall
have no further obligation to Tenant with respect to the Proposed Space until
such Proposed Space again becomes available after the next leasing thereof.
33.7 Promptly after the occurrence of the Proposed Space Inclusion Date
with respect to any Proposed Space, Landlord and Tenant shall confirm the
occurrence thereof and the inclusion of such Proposed Space in the Premises by
executing an instrument reasonably satisfactory to Landlord and Tenant;
provided, that failure by Landlord or Tenant to execute such instrument shall
not affect the inclusion of such Proposed Space in the Premises in accordance
with this Article 33.
33.8 Nothing contained herein shall be deemed to grant Tenant a right
of first refusal for the leasing of the First Offer Space, it being the
intention of the Landlord and Tenant that the right of first offer granted under
this Article 33 is for the purpose of affording Tenant the opportunity to offer
to lease additional space at the time that such space becomes available.
33.9 Notwithstanding anything to the contrary contained in this Article
33, Tenant's rights to additional space granted under this Section 33 shall be
subject and subordinate to any rights relating to space in the Phase II Building
granted to a entity which at any time leases 200,000 rentable square feet or
more in the Phase II Building, including, without limitation, any expansion
options, right of first refusal to lease additional space, or right of first
offer for additional space granted to such tenant for space in the Phase II
Building.
ARTICLE 34
[INTENTIONALLY OMITTED]
ARTICLE 35
FIRST AND SECOND EXPANSION OPTIONS
35.1 Provided there is no Event of Default hereunder either as of the
date Tenant provides Landlord with either expansion notice as provided in
Sections 35.3 or 35.2 or as of the first day of the lease term for the
applicable expansion space, Tenant shall have the right to exercise two (2)
separate and independent expansion options in accordance with the provisions of
this Article 35. The first expansion option ("First Expansion Option") shall
afford Tenant the right to lease starting at the time determined in accordance
with this Article 35 during the period beginning one hundred twenty (120) months
after the Base Rent Commencement Date and ending one hundred fifty (150) months
after the Base Rent Commencement Date, the First Expansion Space in accordance
with this Article 35. The second expansion option ("Second Expansion Option")
shall afford Tenant the right to lease starting at the time determined in
accordance with this Article 35 during the period beginning one hundred eighty
(180) months after the Base Rent Commencement Date and ending two hundred ten
(210) months after the Base Rent Commencement Date (assuming Tenant has
exercised its option to extend the Term for its first five (5) year extension
period pursuant to Article 32), the Second Expansion Space in accordance with
this Article 35. The First Expansion Option and Second Expansion Option are
sometimes collectively referred to herein as the "Expansion Options" or
individually as an "Expansion Option", the First Expansion Space or Second
Expansion Space are sometimes collectively referred to herein as the "Expansion
Spaces" or individually as "Expansion Space." Landlord shall use good faith
efforts promptly after Landlord's entry into any lease or modification for the
First Expansion Space to notify Tenant and shall, at Tenant's request, advise
Tenant at any time as to the scheduled expiration date for any lease covering
the First Expansion Space or Second Expansion Space for the purpose of affording
Tenant the opportunity to anticipate the approximate date that such space will
become available.
35.2. (i) Landlord shall notify Tenant ("Landlord's First Notice") of
the date that Landlord anticipates that the First Expansion Space will become
available in accordance with Section 35.1 (the "First Anticipated Commencement
Date") no later than eight years and six months after the Base Rent Commencement
Date.
(ii) Tenant shall have the right to exercise the First
Expansion Option by delivering notice ("Tenant's First Notice") to Landlord
electing to lease the First Expansion Space on or before 5:00 p.m. New Jersey
time on the date that is the later of (i) the ninth anniversary of the Base Rent
Commencement Date or (ii) eighteen months prior to the First Anticipated
Commencement Date (time being of the essence). In the event that Tenant has
received or is deemed to have received Landlord's First Notice and fails to
deliver Tenant's First Notice within the timeframe required in this
subparagraph, time being of the essence, it shall be deemed to have waived the
First Expansion Option.
(iii) The lease Term for the First Expansion Space shall
commence on the date that the First Expansion Space is made available to Tenant
free of any prior tenants or occupants, and, at Landlord's expense, broom clean,
vacant and demolished. The lease term for the First Expansion Space shall
terminate on the expiration or earlier termination of the Term of the lease for
the Premises and upon commencement of the Lease Term for the First Expansion
Space it shall be deemed a part of the Premises for all purposes under this
Lease, including without limitation, the renewal options set forth in Article
32. Landlord shall give Tenant ninety (90) days' prior notice of the date that
the First Expansion Space shall be made available to Tenant which date (the
"First Availability Date") shall not be before the First Anticipated
Commencement Date for the First Expansion Space nor later than two hundred
seventy (270) days after the First Anticipated Commencement Date for the First
Expansion Space. If Landlord becomes aware that possession of the First
Expansion Space will not be available for delivery to Tenant on the First
Availability Date, Landlord will use its reasonable, diligent, lawful efforts to
evict any holdover tenant or other occupant of such space including by the
prompt commencement and prosecution of a legal action when appropriate. In the
event Landlord, despite Landlord's reasonable efforts, is unable to deliver
vacant possession of the First Expansion Space within nine (9) months of the
First Availability Date, Tenant shall have the right to (i) withdraw its
exercise of the First Expansion Option by notice to Landlord after the
expiration of said nine (9) month period and (ii) seek damages on account of the
non-delivery of such Expansion Space. Upon the withdrawal of Tenant's First
Exercise Option the three (3) year period for any takeover agreement pursuant to
Section 10.6 shall be increased to five (5) years.
35.3. (i) Provided that Tenant exercised its First Expansion Option
pursuant to Article 35 above and the Lease has been extended for the first
renewal option as provided in Article 32, Landlord shall notify Tenant
("Landlord's Second Notice") of the location of the Second Expansion Space and
the date that Landlord anticipates the Second Expansion Space to become
available (the "Second Anticipated Commencement Date") no later than the
thirteen years and six months after the Base Rent Commencement Date. The Second
Expansion Space shall be made available to Tenant within the time period set
forth in Section 35.1.
(ii) Tenant shall have the right to exercise the Second
Expansion Option by delivering notice ("Tenant's Second Notice") to Landlord
electing to lease the Second Expansion Space on or before 5:00 p.m. New Jersey
time on the date that is the later of (i) the fourteenth anniversary of the Base
Rent Commencement Date or (ii) eighteen (18) months prior to the Second
Anticipated Commencement Date (time being of the essence). In the event that
Tenant has received or is deemed to have received Landlord's Second Notice and
fails to deliver Tenant's Second Notice within the time frame required in this
Section 35.3, time being of the essence, it shall be deemed to have waived the
Second Expansion Option.
(iii) The lease term for the Second Expansion Space shall
commence on the date that the Second Expansion space is made available to Tenant
free of any prior tenants or occupants, and, at Landlord's expense, broom clean,
vacant and demolished. The lease term for the Second Expansion Space shall
terminate on the expiration or earlier termination of the Term of the lease for
the Premises and upon commencement of the Lease Term for the Second Expansion
Space it shall be deemed a part of the Premises for all purposes under this
Lease, including without limitation, the renewal options set forth in Article
32. Landlord shall give Tenant ninety (90) days' prior notice of the date that
the Second Expansion Space shall be made available to Tenant which date (the
"Second Availability Date") shall not be before the Second Anticipated
Commencement Date for the Second Expansion Space nor later than two hundred
seventy (270) days after the Second Anticipated Commencement Date for the Second
Expansion Space. If Landlord becomes aware that possession of the Second
Expansion Space will not be available for delivery to Tenant on the Second
Availability Date, Landlord will use its reasonable, diligent, lawful efforts to
evict any holdover tenant or other occupant of such space including by the
prompt commencement and prosecution of a legal action when appropriate. In the
event Landlord, despite Landlord's reasonable efforts, is unable to deliver
vacant possession of the Second Expansion Space within nine (9) months of the
Second Availability Date, Tenant shall have the right to (i) withdraw its
exercise of the Second Expansion Option by notice to Landlord after the
expiration of said nine (9) month period and (ii) seek damages on account of the
non-delivery of such Expansion Space. Upon the withdrawal of Tenant's Second
Exercise Option the three (3) year period for any takeover agreement pursuant to
Section 10.6 shall be increased to five (5) years.
35.4. Upon the exercise of either Expansion Option, Landlord and Tenant
shall enter into an amendment to this Lease incorporating the terms and
provisions of this Article 35 and such other terms as are necessary and
appropriate providing for the lease of the Expansion Space (it being the intent
that the provisions of the Lease shall apply to the Expansion Space with
appropriate adjustments to such provisions as Tenant's Proportionate Share, the
amount of Expansion Space remaining, and other similar appropriate adjustments
taking into account the term of Expansion Space and the amount of Expansion
Space leased);provided, that failure by Landlord or Tenant to execute such
instrument shall not affect the leasing of such Expansion Space to Tenant in
accordance with this Article 35.
35.5. The annual Base Rent for the Expansion Spaces shall be the "fair
market rent" for such space as defined in Section 32.2(ii) of this Lease. Within
twenty (20) days after the exercise by Tenant of its Expansion Option, Landlord
shall notify Tenant of Landlord's determination of the annual Base Rent for the
Expansion Space (the "Initial Rent Offer"). Tenant shall have thirty (30) days
("Tenant's Review Period") after receipt of Landlord's Initial Rent Offer within
which to accept such offer. In the event Tenant fails to accept in writing
Landlord's Initial Rent Offer, then such proposal shall be deemed rejected, and
Landlord and Tenant shall attempt to agree upon the fair market rent. If
Landlord and Tenant fail to reach agreement within thirty (30) days following
Tenant's Review Period ("Outside Agreement Date"), then each party shall, within
fifteen (15) days of the Outside Agreement Date, mutually agree upon an
independent appraiser who is a member of the American Institute of Real Estate
Appraisers, having at least seven (7) years experience in appraising commercial
real estate in Hudson County, New Jersey (a "Qualified Appraiser") and each
submit to such Qualified Appraiser within twenty (20) days of the Outside
Agreement Date its sealed final determination of the fair market rental. Each of
the Landlord and Tenant may submit to the independent Qualified Appraiser
documentation in support of its determination of fair market rental. If the
parties are unable to agree upon such independent Qualified Appraiser, either
party may request the American Arbitration Association in Newark, New Jersey, to
appoint such independent Qualified Appraiser which request shall be made no
later than fifteen (15) days of after the Outside Agreement Date. The
independent Qualified Appraiser shall, within thirty (30) days of his/her
appointment, select either Landlord's determination of fair market rent or
Tenant's determination of fair market rent as set forth in each party's sealed
bid, which determination shall be binding upon both Landlord and Tenant;
provided that if the lower of Landlord's and Tenant's final determinations is
less than five (5%) percent lower than the higher determination, then the fair
market rents submitted by both shall be averaged. The parties shall share
equally in the cost of any independent Qualified Appraiser. Both Landlord and
Tenant agree to be irrevocably bound by the final decision in arbitration, and
Tenant shall not have the right to withdraw the exercise of its Expansion
Option. Pending resolution of the issue of fair market rent, Tenant shall pay to
Landlord as of commencement of the term for the Expansion Space, the Base Rent
and Additional Rent as established by Landlord, subject to adjustment upon final
determination. In the event that it is established that the Base Rent is less
than the Base Rent as established by Landlord, Landlord shall reimburse Tenant
any overpayment of Base Rent within thirty (30) days of such final determination
or at Tenant's option offset such overpayment against the next due payment(s) of
Rent, together with interest on such overpayment at a rate equal to the per
annum prime rate or base rate announced from time to time by Citibank. N.A. for
the period of such overpayment through the date of such reimbursement to Tenant
or offset by Tenant, as applicable.
ARTICLE 36
COMPETING PUBLISHING FIRMS
36.1. Landlord represents and warrants that it has not as of the date
hereof entered into any direct leases for space in the Building with any
Publishing Firms. Landlord agrees that it shall not enter into any direct leases
for space in the Building with any Publishing Firms. Landlord shall include in
all leases entered into for space in the Building during the Term a provision
expressly prohibiting subleasing or assigning to any Publishing Firm as listed
on either Exhibit "I" or the Revised Publishing Firm Exhibit in effect as of the
date of the execution of such lease, and a covenant by the tenant to the effect
that it shall not by lease, assignment, sublease, license, use and occupancy
agreement or otherwise permit a Publishing Firm as listed on either Exhibit "I"
or the Revised Publishing Firm Exhibit in effect as of the date of the execution
of such lease other than Tenant to occupy for the conduct of its business any of
its space in the Building. Landlord shall use reasonable efforts to attempt to
enforce such term in any lease in the event of a violation thereof by seeking
injunctive relief and actual damages (using counsel reasonably satisfactory to
both parties) with outside counsel fees and disbursements and court costs
reasonably incurred by Landlord in connection with the enforcement of any such
prohibition to be Tenant's expense. The Building shall not be named after any
other Publishing Firm.
ARTICLE 37
PARKING
37.1. Throughout the term of this Lease, Tenant shall have the right to
use for parking up to .92 automobile parking spaces per 1,000 square feet of
Rentable Area comprising the Premises (i.e. 352 spaces based upon a Rentable
Area of the Premises of 383,128 square feet) 35% of which spaces shall be in the
valet parking lot contained within the Building (the "Building Lot"), and 65% of
which shall be on an unreserved basis in Municipal Parking Garage B located on
Second Street between River Street and Hudson Street, Hoboken, New Jersey
(hereinafter referred to as the "Garage") in accordance with and subject to the
provisions of this Article, subject to a pro-rata increase in the number of
spaces in the event of Tenant's exercise of the Initial Expansion Option, the
First Expansion Option or the Second Expansion Option, or pro-rata decrease in
the number of space in the event of Tenant's exercise of the Initial Contraction
Option. Whether or not Tenant shall actually use all of such parking spaces
provided for herein, Tenant shall be obligated to pay Landlord the fees and
charges for all of such parking spaces as determined by Section 37.4 below.
Notwithstanding the foregoing, in the event Tenant does not intend to initially
utilize all of the parking spaces allocated to Tenant hereunder, Tenant shall
notify Landlord prior to the Commencement Date of actual number of parking
spaces which Tenant elects to initially use (which shall be subject to the
percentage allocation between the Building Lot and the Municipal Lot as set
forth above), and Tenant shall only be responsible for the fees and charges for
such number of spaces. Thereafter, Tenant shall have the right, by notice to
Landlord prior to December 1 of each year, to (i) increase the number of parking
spaces for the following calendar year up to the full number of spaces allocated
to Tenant hereunder, which allocation shall continue for such calendar year, or
(ii) decrease the number of parking spaces for the following year, provided that
if Tenant elects to decrease the number of space in any year, the total
allocated spaces to which Tenant is entitled shall be reduced by such amount
(for example, if Tenant reduces the number of space in a year by 20 spaces the
total allocation of 352 spaces shall be reduced to 332 spaces) and Tenant shall
not be entitled to increase its spaces thereafter. The spaces by which Tenant
elects to decrease its space shall consist of 65% Garage spaces and 35% the
Building Lot Spaces; provided that at such time as Tenant's spaces within the
Building Lot have been reduced to 90 spaces applying the aforesaid proportion,
any further decrease in Tenant's spaces may, at Tenant's election be solely to
the Garage spaces or is such pother proportion as Tenant may elect, in order
that Tenant may maintain no less than 90 spaces in the Building Lot regardless
of any further reduction of spaces in the Garage. Nothing shall prohibit Tenant
from reducing is spaces in the Building Lot below 90 spaces. In the event Tenant
has elected to decrease its number of spaces in the Building Lot after the
Commencement Date, Tenant shall have the right, by notice to Landlord prior to
December 1 of each year, to thereafter increase the number of spaces in the
Building Lot up to the number of space it previously elected to surrender,
provided that at the time of such notice from Tenant Landlord has spaces in the
Building Lot available to provide to Tenant. If Landlord does not have such
spaces in the Building Lot available at the time Tenant gives notice to Landlord
electing to increase its spaces, Landlord agrees to provide to Tenant any spaces
up to such number that are then currently available, and thereafter to provide
the balance of such spaces if and when spaces become available for Landlord to
provide to Tenant. Such parking spaces shall not be considered a part of the
Premises. Tenant understands and agrees that Tenant shall have no right to
require Landlord to provide Tenant with more parking spaces at the Garage or in
the Building Lot than the number to which Tenant is entitled as set forth above
at any time (except as a result of the exercise of the Initial Contraction
Option, Initial Expansion Option, First Expansion Option or Second Expansion
Option), regardless of whether one (1) or more of the parking spaces in the
Garage are then unassigned or unused.
37.2. Tenant shall observe all rules and regulations adopted by
Landlord or any operator of the Garage or the Building Lot, which rules and
regulations adopted by Landlord shall be reasonable and applied to all tenants
of the Building in a non-discriminatory manner. Landlord or any operator of the
Garage will not be required to allow any vehicle to be brought into the Garage
or the Building Lot unless the driver of such automobile shall produce suitable
identification showing that such driver is authorized by Tenant to park such
automobile therein. Tenant covenants and agrees that such parking spaces shall
be used exclusively by Tenant or Tenant's designated employees. Notwithstanding
the foregoing, Tenant shall have the right to designate all or a part of its
parking spaces within the Building Lot as "Visitors Parking", subject to the
establishment of procedures reasonably acceptable to Landlord and the operator
of the Building Lot for providing access to the Building Lot by Tenant's
visitors. The operator of the Garage or garages or any Municipal Parking Garage
or garages referred to herein and the Building Lot shall have the right to
establish uniform regulations governing the use and occupancy of any garage or
garages operated by it and to make determinations with respect to the bona fide
tenant status of any person claiming the right to use one of the parking spaces
pursuant to the provisions of this Article 37, and Tenant covenants and agrees
to cooperate fully with the Landlord and the operator of the Garage or garages
to provide all information reasonably necessary to the making of such
determination. Landlord and/or the operator of the Garage or garages shall be
entitled to terminate the parking privileges granted herein as to any person for
violation of any regulations established by the operator of the Garage or
garages beyond any applicable notice or cure periods set forth in the agreement
attached hereto as Exhibit "J" or such other notice and cure periods as such
operator establishes for the Garage or garages.
37.3. The parking spaces, all other parking areas and the roadways and
driveways used in connection therewith by Tenant and its invitees shall be used
at their own risk, and Landlord shall not be liable for loss or damage to any
vehicle or its contents, resulting from theft, collision, vandalism or any cause
whatsoever, it being understood that Landlord has no operation or management
rights in said Garage or garages. Except as set forth in the security
specifications attached hereto as Exhibit "H", Landlord shall have no obligation
to provide a guard or other personnel or device to patrol, monitor, guard or
secure any parking area, and if Landlord does provide such personnel or device
Landlord shall have the right to terminate or withdraw such personnel or device
at any time. Landlord shall have no liability for any acts or omissions of such
personnel or device in failing to prevent such theft, vandalism, or loss or
damage by any cause whatsoever.
37.4. Tenant shall pay to Landlord as Additional Rent the monthly
payment in advance of all charges, costs and expenses applicable to said parking
spaces at the rental rate per space per month (i) for spaces in the Building Lot
at the initial rate of $325.00 per month per space, subject to escalation as
provided in Section 37.7, and (ii) for spaces in the Garage at the rates set
forth in the parking agreement attached hereto as Exhibit J. Landlord covenants
that provided that Tenant has paid to Landlord the Additional Rent as provided
in the preceding sentence on a timely basis, Landlord shall pay all charges for
Tenant's spaces in the Garage in accordance with the parking agreement attached
hereto as Exhibit "J". In the event Landlord fails to pay the Garage charges for
Tenant's parking spaces allocated hereunder, which charges have been received by
Landlord from Tenant in accordance with this Section 37.4, Tenant shall have the
right, upon no less than five (5) business days notice to Landlord, to make such
monthly payment for Tenant's spaces directly to the Garage operator, and
Landlord shall reimburse Tenant for the amount of such payment within thirty
(30) days of written demand therefor by Tenant. In the event Landlord fails to
make such payment when due, it shall bear interest until paid at the Default
Interest Rate, and Tenant's right to recover such amounts shall include the
right to set-off the amount of such payment against and to the extent of those
Garage charges and expenses thereafter billed to Tenant by Landlord as
Additional Rent under this Section 37.4.
37.5. If reasonably necessary for maintenance or repairs the operator
of Garage B wishes to substitute space during the period of such maintenance or
repairs in Municipal Parking Garage D (on Hudson Street between Second Street
and Third Street) or Municipal Parking Garage G (on Hudson between Third Street
and Fourth Street) for the space in Garage B provided for herein, said operator
shall have the right to do so, without limitation. Nothing contained in this
Article 37 shall be deemed to confer upon the Tenant, or any person or persons
claiming by or through the Tenant, any right to utilize any parking space in any
of the Municipal parking Garages or other facility operated by the Parking
Authority of the City of Hoboken except as and to the extent expressly provided
herein.
37.6. Notwithstanding anything contained in this Lease to the contrary,
the provisions hereof relating to parking other than the Building Lot are
subject to that certain Agreement with the Parking Authority of the City of
Hoboken, as the same may have been or may hereafter be modified or amended, a
copy of which is annexed hereto and made a part hereof as Exhibit "J".
37.7. In the event the Consumer Price Index (as hereinafter defined) in
effect for the month in which the two year anniversary date of the date upon
which the Substantial Completion of the Base Building Work occurs and on each
two year anniversary thereafter (an "Adjustment Date") shall exceed the Consumer
Price Index figure in effect for the month in which the Substantial Completion
of the Base Building Work occurs, the monthly charge per space of $325.00
("Initial Rate"), commencing on each such Adjustment Date, and continuing
thereafter until the next Adjustment Date, shall be increased to an amount equal
to the product of (a) one plus the percentage increase in the Consumer Price
Index figure in effect in the month in which such Adjustment Date occurs over
the Consumer Price Index in effect in the month in which the Substantial
Completion of the Base Building Work occurs and (b) the Initial Rate. The term
"Consumer Price Index " shall mean the Consumer Price Index for All Urban
Consumers for the New York, Northern New Jersey are as published by the Bureau
of Labor Statistics (1982-1984=100) for the New York, Northern New Jersey area.
In the event said index is discontinued, then the index having the same or
generally similar functions then in use shall be employed by Landlord for the
purposes of this Section 37.7.
ARTICLE 38
ARBITRATION
38.1. In any case in which this Lease expressly provides that a matter
is to be determined by arbitration and does not otherwise provide a mechanism
for arbitration, such arbitration shall be conducted in the City of Newark, New
Jersey, in accordance with the Commercial Arbitration Rules (Expedited
Procedures) of the AAA, except that the provisions of this Article 37 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 Newark, by a panel of up to 3 arbitrators in
accordance with this Article 38. Landlord and Tenant shall each appoint their
own arbitrator within 20 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 20 days after such party's failure to appoint. The arbitrators so
appointed shall meet and shall, if possible, determine such matter within 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 10 days, then either Landlord or Tenant may
request the AAA to appoint an arbitrator who shall be impartial within 30 days
of such request and both parties shall be bound by any appointment so made
within such 30 day period. The third arbitrator shall subscribe and swear to an
oath fairly and impartially to determine such dispute. Within 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 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 10 days as hereinbefore
provided. The third 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 10 years before the date of his or her appointment
hereunder. If the second arbitrator is appointed by the first arbitrator as
provided above, such second arbitrator shall also be experienced in the issue
with which the arbitration is concerned and have been actively engaged in such
field for a period of at least 10 years before the date of his or her
appointment hereunder. The third arbitrator shall apply the laws of the State of
New Jersey without giving effect to any principles of conflicts of laws. The
third arbitrator 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. The losing party shall
pay the fees and expenses of all arbitrators acting under this Article 38.
ARTICLE 39
MISCELLANEOUS
39.1. Entire Agreement. This Lease contains the entire agreement
between the parties, and any attempt hereafter made to change, modify, waive,
discharge or effect an abandonment of it in whole or in part shall be void and
ineffective unless in writing and signed by the party against whom enforcement
of the change, modifications, waiver, discharge or abandonment is sought.
39.2. Jury Trial Waiver. To the extent permitted by law, Landlord and
Tenant do hereby waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matter
whatsoever arising out of or in any connection with this Lease, the relationship
of Landlord and Tenant, Tenant's use or occupancy of the Premises, and/or any
claim, injury or damage, or any emergency or statutory remedy.
39.3. Broker. (a) Tenant and Landlord each warrant and represent to the
other that it has not dealt with any real estate broker or sales representative
in connection with this Lease except SJP Corporate Real Estate Services, Inc.
and Insignia/ESG, Inc. (collectively, the "Broker"). Each party agrees to
indemnify, defend and hold harmless the other from and against all threatened or
asserted claims, liabilities, costs or damages (including, without limitation,
reasonable attorney's fees and disbursements) which may be asserted against or
incurred by the other as a result of a breach of its warranty and
representation. This representation shall survive the expiration or sooner
termination of this Lease.
(b) Subject to Landlord's reimbursement obligation as expressly
provided in Section 2.2, Tenant shall be solely responsible for, and shall pay
directly to Insignia/ESG, Inc., all amounts which are or may become due and
payable to Insignia/ESG, Inc. pursuant to the terms of that certain agreement
between Tenant and Insignia/ESG, Inc. dated as of March 1, 1999 or any other
commission or other compensation to which Insignia/ESG, Inc. may otherwise be
entitled in its representation of Tenant in connection with this Lease. Tenant
shall provide documentation reasonably satisfactory to Landlord of all payments
made to Insignia/ESG in connection with this Lease. Tenant agrees to indemnify
and hold Landlord harmless from and against all threatened or asserted claims,
liabilities, costs or damages (including, without limitation, reasonable
attorney's fees and disbursements) which may be asserted against or incurred by
Landlord by Insignia/ESG or any of its agents in connection with this Lease,
including, without limitation, all amounts may be due or claimed by Insignia/ESG
under that certain agreement between Tenant and Insignia/ESG, Inc. dated as of
March 1, 1999.
39.4. Separability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable, shall not be affected thereby and all other
terms and provisions of this Lease shall be valid and enforced to the fullest
extent permitted by law.
39.5. Interpretation.
(i) Whenever in this Lease any words of obligation or duty are
used, such words or expressions shall have the same force and effect as though
made in the form of covenants.
(ii) Words of any gender used in this Lease shall be held to
include any other gender, and words in the singular number shall be held to
include the plural, when the sense requires.
(iii) This Lease shall not be strictly construed either
against Landlord or Tenant, regardless of whether any provision thereof has been
drafted by Landlord or Tenant (or their respective attorneys).
(iv) The headings and captions contained in this Lease are
inserted for convenience of reference only, and are not to be deemed part of or
to be used in construing this Lease.
(v) The covenants and agreements herein contained shall,
subject to the provisions of this Lease, bind and inure to the benefit of
Landlord, its successors and assigns, and Tenant, its successors and permitted
assigns except as otherwise provided herein.
(vi) This Lease has been executed and delivered in the State
of New Jersey and shall be construed in accordance with the laws of the State of
New Jersey.
(vii) Landlord has made no representations or promises with
respect to the Premises or the Property, except as expressly contained herein.
39.6. No Offer, Option, etc. The submission of this Lease to Tenant for
examination does not constitute by Landlord a reservation of, or an option to
Tenant for, the Premises, or an offer to lease on the terms set forth herein,
and this Lease shall become effective as a lease agreement only upon execution
and delivery thereof by Landlord and Tenant.
39.7. Force Majeure. Whenever a period of time is herein prescribed for
the taking of any action by Landlord, which action does not involve (i) the
payment of money or other monetary obligations on the part of Landlord, or (ii)
any failure or delay by Landlord in supplying information or giving any
authorization, consent or approval by a date specified under the Work Agreement,
Landlord shall not be liable or responsible for, and such period of time shall
be extended by any delays due to Tenant Delay or Excusable Delay. Whenever a
period of time is herein prescribed for the taking of any action by Tenant,
which action does not involve: (i) the payment of money or other monetary
obligations on the part of Tenant; (ii) any failure or delay by Tenant in
supplying information or giving any authorization, consent or approval by a date
specified under the Work Agreement; or (iii) furnishing to Landlord timely
notice of the exercise by Tenant of its Renewal Options, Right of First Offer,
Initial Contract Option, Initial Expansion Option, First Expansion Option and
Second Expansion Option, such period of time in which Tenant is obligated to
perform shall be extended by any delays due to Excusable Delay.
39.8. Recording. This Lease shall not be recorded, except that upon the
request of either party, the parties shall execute in recordable form, a short
form memorandum of this Lease, provided that such memorandum shall not contain
any of the specific rental terms set forth herein. Such memorandum may be
recorded in the land records of the Hudson County Clerk's office and the party
desiring such recordation shall pay all recording fees. Upon the expiration or
earlier termination of this Lease, Tenant shall execute and deliver to Landlord,
in recordable form, an instrument which terminates of record the memorandum of
Lease. Tenant hereby appoints Landlord its attorney-in-fact to execute such
instrument on Tenant's behalf. The provisions of this Section 39.8 shall survive
the expiration or termination of this Lease.
39.9. Signage. (i) Tenant shall be provided with not less than one
hundred (100) listings on any lobby directory and exterior directional signage
which lists the identities of the tenants in the building generally (such
exterior listing shall be proportionate in size given the size of the Premises
in proportion to space leased under other leases in the Building), and shall, as
a part of the cost of Tenant Improvements, be entitled to an identification sign
located on each floor of the Premises and at the entrance to the Premises, the
size, location and design of which shall be subject to Landlord's approval, not
to be unreasonably withheld, conditioned or delayed. Signage for other office
tenants may not be more prominent that the signage for Tenant. Subject to
compliance with all applicable Laws, Tenant shall have the right to install and
maintain an exterior sign identifying the name of the Building as provided in
subsection (ii) below over the entrances to the Building on Sinatra Drive and
River Street, provided that the size and design of such signs shall be subject
to Landlord's approval, not to be unreasonably withheld, conditioned or delayed,
it being agreed that Landlord approves the sign depicted on Exhibit O attached
hereto. Landlord shall not be permitted to place any sign on the exterior of the
Building above the second floor of the Building. Landlord agrees that Tenant
shall be permitted to install and maintain an exterior sign identifying Tenant
at street level and that any exterior signs identifying other office tenants in
the Building shall be at street level, the size of which other tenants' signs
shall not be more prominent than the signage to which Tenant is entitled
hereunder, and which other tenants' signs shall be sized by Landlord taking into
account the size of the space leased to such other tenant and the appropriate
dimensions of such a sign. Subject to the provisions of Section 39.12 regarding
retail signage, all exterior signage shall be tastefully designed in order to
reflect the first-class character of the Building. Landlord shall endeavor to
provide Tenant with a copy of any plans submitted by any other tenant in the
Building for its proposed signage prior to the installation of same, in order to
afford Tenant with the opportunity to provide Landlord with any comments or
suggestions which Tenant may have thereto, provided that Landlord shall have no
duty or obligation to accept or comply or require compliance with such comments
or suggestions, to incorporate any of Tenant's comments or suggestions in any
consent, approval, denial or conditions issued by Landlord in connection with
any request for approval requested by any other tenant.
(ii) Subject to the provisions of Article 13 of the Underlying Lease Agreement,
during the Term of this Lease, and provided that the John Wiley & Sons, Inc.
(together with its Affiliates and Business Groups under any sublease) remains in
possession of at least 75% of the Premises, at Tenant's option the Building may
be identified by Tenant as the "Wiley Building" or the "John Wiley & Sons
Building" (as constituted on the Commencement Date) and Tenant, at its expense
and subject to its obtaining any required governmental permits and approvals,
shall have the right to install on the Building's exterior a sign identifying
the Building as the "Wiley Building" or the "John Wiley & Sons Building" and to
maintain, repair and replace, such exterior sign ("Tenant's Building Exterior
Sign"). Tenant shall install, maintain, repair and replace Tenant's Building
Exterior Sign in compliance with all applicable Laws. The locations and
specifications for Tenant's Building Exterior Sign shall be subject to the prior
written approval of Landlord, which approval shall not unreasonably be withheld,
conditioned or delayed. Landlord makes no representations or warranties
whatsoever as to the permissibility under applicable Laws of installing Tenant's
Building Exterior Sign. Landlord, at Tenant's reasonable expense, shall
cooperate with Tenant's efforts to obtain any such required permits and
approvals, including, without limitation, executing and delivering any documents
or instruments reasonably required by Tenant in connection therewith. In the
event that John Wiley & Sons, Inc. shall change its name, Tenant shall have the
right, upon no less than one (1) month notice, to change the Building Exterior
Sign to reflect such name change.
(iii) Landlord shall cooperate with Tenant in the design and
installation of an appropriate lobby reception facility, which shall include the
exclusive right to maintain a sign directly behind the Building reception desk
prominently displaying the name of the Building as provided in subsection (ii).
Landlord shall have the right to maintain other less prominent signs in other
areas of the lobby identifying other tenants in the Building, consistent with
building standards and the aesthetics of the lobby.
39.10. Telecommunications Equipment.
(i) If legally permitted, Tenant shall have the right to erect or place
a telecommunications dish antenna or similar telecommunications equipment (the
"Telecommunications Equipment") for the exclusive use of the occupants of the
Premises on the roof of the Building, in accordance with the following
provisions, which Telecommunications Equipment shall be designed in accordance
with the specifications to be provided by Tenant and approved by Landlord with
respect to the size, weight, location, screening, mounting and connection of the
Telecommunications Equipment, such approval not to be unreasonably withheld or
delayed, and any rejection by Landlord shall specify its basis for such
rejection. In the event Landlord fails to respond to any request by Tenant for
Landlord's approval of any Telecommunications Equipment specifications within
ten (10) business days of Tenant's request, Landlord shall be deemed to have
approved such specifications. Tenant covenants that the Telecommunications
Equipment shall comply with the provisions of Article 43 of the Underlying Lease
Agreement. It is expressly understood and agreed, in any event, that the design
specifications shall include such modifications to the roof as shall be
incorporated in the cost of installation as herein provided. In the event such
design or operation shall, in the reasonable opinion of Landlord, impair the
structural integrity of the roof and/or Building, Landlord reserves the right to
disapprove Tenant's plans and specifications until the same shall be redesigned
to eliminate Landlord's objection. With respect to any such redesign of the
roof, any cost in connection with maintenance or repair which may thereafter be
occasioned as a direct result of the installation or operation of the
Telecommunications Equipment shall be paid for at the sole cost and expense of
the Tenant and shall not be included as part of the Operating Expenses. Tenant
shall furnish detailed plans and specifications for the Telecommunications
Equipment to Landlord for its approval, which approval shall not be unreasonably
withheld or delayed, provided Landlord may condition its consent by requiring
that the Telecommunications Equipment be adequately screened or enclosed (at
Tenant's sole expense) on the roof within the location approved by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed, and
which shall be in the least conspicuous location of all acceptable locations on
which the Telecommunications Equipment might be located.
(ii) Upon approval of Tenant's plans and specifications, the
Telecommunications Equipment shall be installed by Tenant at Tenant's expense.
subject to reasonable supervision by Landlord with respect thereto; provided
that any penetration of the roof shall be performed by Landlord's roofing
contractor at Tenant's expense, at competitive prices. Such cost and expense
shall include obtaining any special permits that may be required by any
Governmental Authority in connection with such installation, including any cost
attributable to the processing thereof. Subsequent to the installation of the
Telecommunications Equipment, Tenant shall comply with all applicable laws and
keep the Premises, Building and Land free and clear from liens arising from or
related to Tenant's installation. Any cables, conduits or other physical
connections between the Telecommunications Equipment and the Premises shall be
concealed within permanent walls, floors, columns and ceilings of the Building
and in the shafts of the Building provided for such installations, not damaging
the appearance of the Building or reducing the usable or rentable space of the
Building. Any installation or maintenance work performed by Tenant, or at
Tenant's direction, shall be performed without interfering with Landlord's or
any other tenant's use of the Building (provided that Landlord shall use
reasonable efforts to provide temporary access, which may be under the
supervision of Landlord, to another tenant's space solely for such installation
and maintenance subject to the rights of such tenant occupying such space), and
upon completion of such installation and maintenance (initially and from time to
time) Tenant shall restore such portions of the Building to a condition
reasonably comparable to that existing prior to such installation or
maintenance. Tenant shall be responsible for procuring whatever licenses,
approvals or permits may be required for the installation and use of the
Telecommunications Equipment and the related support systems or operation of any
equipment served thereby, and Landlord makes no warranties whatsoever as to the
permissibility of such systems under applicable laws. Landlord shall reasonably
cooperate with Tenant in procuring such licenses, approvals and permits at no
expense to Landlord. Tenant's Telecommunications Equipment shall not constitute
a nuisance, or interfere with the operations of Landlord or other tenants of the
Building. Upon termination or expiration of this Lease, Tenant shall remove any
Telecommunications Equipment installed by it, at its expense, and shall repair
and restore the Building to a condition comparable to that existing prior to
such installation. Landlord reserves the right to relocate said
Telecommunications Equipment at Landlord's sole expense at competitive prices,
provided that such relocation shall have no adverse impact on the operations of
the Telecommunications Equipment.
(iii) If the Telecommunications Equipment utilizes
electricity, Landlord agrees to permit Tenant to utilize the Building
electricity, such electricity shall be submetered, and Tenant shall pay to
Landlord all electricity and other charges, if any, directly resulting from the
operation of the Telecommunications Equipment, which sum shall be deemed
Additional Rent hereunder.
39.11. Financial Information. Within ninety (90) days of the end of
each fiscal year of Tenant during the Term, Tenant shall provide Landlord with a
copy of its financial statements for such year audited by an independent
certified public accountant; provided that so long as Tenant is a publicly
traded company, Tenant's obligation to provide financial information shall be
limited to providing to Landlord, upon Landlord's request, with copies of the
most current 10Q and 10 K filings or financial reports or information otherwise
made available by Tenant to the public in general unless such filings or
financial reports or information are available electronically from the
Securities and Exchange Commission or an affiliated organization. Landlord may
provide such financial statements to its consultants, lenders and investors, but
otherwise shall not provide the financial statements to third parties without
the prior consent of Tenant.
39.12 Retail Leasing. Landlord shall not, without the prior consent of
Tenant, enter into a lease for any of the retail space within the Building which
permits the use of such space for any purposes which are in violation of law
which reasonable persons would deem to be pornographic or similarly offensive,
check cashing, off-track-betting or similar gambling establishments, fortune
tellers, psychic advisors, tattoo parlors, Methadone treatment centers or
similar facilities primarily for drug addiction treatment, "soup kitchens" for
the homeless or indigent, operations involved in the handling and treatment of
hazardous substance on-site (such as on-site dry cleaning operations but
excluding dry cleaning services that do not actual perform dry-cleaning on
premises) provided that such limitation on operations involved in handling and
treatment of hazardous substances on-site shall not exclude any operations such
as photo-copying services or other businesses that utilize de minimus amount of
hazardous substances in their operations. Landlord acknowledges that it is
desired that the retail establishments on the first floor of the Building
reflect the first-class nature of the Building, and Landlord shall use
reasonable efforts to market the available retail space in the Building to
entities consistent with such nature (including, without limitation and by way
of example, drugstores, delis, coffee shops, newsstands, barber/hairdressers,
banks, restaurants, fitness centers, eyeglass stores); provided that Landlord
shall have no obligation to provide for such retail operations at the Building.
In addition, Landlord shall require all retail signage to be consistent, in
Landlord's reasonable discretion, with the standards of the Building (provided
that nothing herein shall prohibit any retail tenant from utilizing its standard
logos, trademarks and tradenames and standard style of signage or to prohibit
any posting of advertisements or similar materials in any retail windows).
39.13 Notification of Sale. If Landlord decides to sell the Building
during the Term Landlord will provide Tenant with notice of Landlord's potential
interest in selling the Building and will, if requested by Tenant, provide
Tenant with the opportunity to meet with Landlord regarding any interest Tenant
may have in acquiring the Building. Landlord will provide to Tenant with any
marketing materials that Landlord makes generally available to potential
purchasers of the Building. This notification shall not constitute a right of
first refusal, right of first offer or option for the purchase of the Building.
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39.14 Cafeteria Flue. Tenant shall have the right, subject to the
provisions of Article 8 hereof and the terms of the leases covering any affected
space, to install and maintain an exhaust flue from the cafeteria kitchen within
the Premises in such location as reasonably approved by Landlord, provided that
such flue shall be concealed within permanent walls, floors, columns and
ceilings of the Building, not damaging the appearance of the Building or
reducing the usable or rentable space of the Building. Any work in connection
with such flue may, at the option of Landlord, be performed by Landlord
contractors at Tenant's expense. Landlord agrees to use reasonable efforts to
obtain access for Tenant (which may be under the supervision of Landlord) in
order for Tenant to perform any required maintenance of such flue. Any
installation or maintenance work performed by Tenant, or at Tenant's direction,
shall be performed without unreasonably interfering with Landlord's or any other
tenant's use of the Building, and upon completion of such installation and/or
maintenance (initially and from time to time) Tenant shall restore such portions
of the Building to the same condition that existing prior to such installation
or maintenance.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
date first above written.
LANDLORD:
BLOCK A SOUTH WATERFRONT DEVELOPMENT L.L.C.
By: HOBOKEN WATERFRONT, LLC,
as Manager
WITNESS: By: SJP PROPERTIES COMPANY,
as Manager
___________________________ By:_________________________________
Name:
Title:
TENANT:
WITNESS: JOHN WILEY & SONS, INC.
___________________________ By:_________________________________
Name:
Title:
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